ANOTHER Bermuda insurer has run into problems, although this one is less well-known than Centre Solutions - which went into run-off earlier this month.

Sage Life Bermuda is a subsidiary of South Africa's largest life companies. Facing massive losses in its overseas operations, the company said it would suspend the writing of any new life policies in its US and Bermuda operations from January 1, 2003.

Partly as a result of the cash-sapping foreign operations, Sage issued what was in effect a profit warning, saying that "a number of factors" would "significantly affect" the group's results for the nine months to the end of this month.

The announcement caused Sage's shares to lose 14 per cent in value in yesterday's trading.

Having failed in its efforts to attract a partner willing to pump capital into its cash-guzzling overseas business, Sage will now try to sell that business. Chairman Louis Shill said the group was in talks with "about six or seven interested parties".

Leaving the door open for a rescuer at the 11th hour, Sage said that it would suspend its US and Bermuda operations and cease all new business and marketing activity on January 1 only if "additional sources of capital are not secured" by then - but Mr. Shill conceded that "the prospects are not very good". Since it bought into the US, Sage has accumulated debts of $106 million in attempting to launch its foreign operations, with those businesses draining more than $15 million in the first nine months of this year alone. Analysts had raised concerns about the liquidity of the US operations and the effect this might have on the South Africa-based group.

Sage has been seeking a partner urgently to introduce capital into the foreign operations. Shill said that "having searched the markets for nearly a year" no partner could be found willing to invest capital.

At the rate it was burning cash, Sage US was likely to have run out of funds by June next year. It said existing US policy-holders would still be serviced, but all new business and marketing overseas would be suspended.

Mr. Shill admitted that if the company was sold "it is inevitable that we will not do well out of the sale", given the huge initial expenditure.

There are about 60 staff employed overseas, and Sage admitted that there would be retrenchments, but the number of people affected would be known only next month. It is not known whether Sage Life Bermuda directly employs anyone on the island.

The company said a number of factors would "impact on the net asset values, and the embedded values of Sage Life and the group". It said it would write down the international activities out of reserves, and make further provisions against amounts owing under Sage's share purchase schemes as a result of the declining share price.