GoshawK Insurance Holdings revealed a net loss of ?45 million in its interim six-month report released on Friday.

The worse-than-forecasted results from the UK-based company which set up Bermuda-based reinsurer GoshawK Re in 2001, followed on the heels of several earnings warnings made this year.

Although the company's Bermuda unit, GoshawK Re, posted a good result - operating profit of ?14.2 million for the first half of the year - it was not enough to bail out the company, which is under the strain of poor results over the last two and a half years from its Lloyd's Syndicate 102.

GoshawK attributed its loss to the company's boosting of its reserves.

The need to boost reserves stems from costs, legal expenses and cargo-insurance business for “prior years,” GoshawK said. The company was also a lead insurer on a Columbia shuttle policy for $10 million.

One of the consequences of its poor financial position was the forced resignation of chairman David Hooker ahead of schedule.

Earlier reports from the company had indicated Mr. Hooker would step down at the end of the year.

But there have also been consequences for the Bermuda unit which this month saw its financial strength rating put under review on the back of its parent company's lingering financial woes.

Leading rating agency A.M. Best announced on Friday that its A- (Excellent) rating for GoshawK Re had been put under review with negative implications - signalling a possible downgrade - following Goshawk Insurance Holdings' announcement that it may breach its banking covenants in order to boost reserves at its Lloyd's Syndicate 102.

GoshawK said in July that it might put itself up for sale because higher-than-expected claims and unexpected reinsurance shortfalls from business written in 2002 had led it to increase payouts for its cargo-insurance business.

But the company indicated to Bloomberg on Friday that it may be able to return to profitability without a sale: “The board is now confident of Goshawk's ability to trade profitably on its continuing business during the second half of 2003,” chief executive officer Chris Fagan said in a telephone interview.

In July, Goshawk said the failure this year of Accident Group, a UK personal injury claims company, might hurt its legal expenses business.

Accident Group's Manchester-based parent, Amulet Group Ltd., was placed in administration in May with the loss of 2,400 jobs. Goshawk insured clients of Accident Group and in July said it might have to boost its reserves to pay claims.