One of the Island's newest reinsurers may play a significant role in insuring the next World Cup.

That announcement came yesterday as Bermuda-based reinsurer, ESG Re Ltd., declared net income of $3.2 million for the second quarter to June 30 and $6.5 million for the first six months.

The new reinsurer also declared a 7.5 cent dividend per common share, payable September 1 to shareholders of record August 20.

ESG Re is the parent to European Specialty Group Holding AG, a firm which until the end of last year, was a managing agent arranging reinsurance for other companies -- but now is reinsuring for its own account.

ESG Re has taken a significant stake in a company involved in establishing insurance cover for the World Cup, the international soccer competition which climaxes every four years.

Insurance executive John C. Head III took ESG Re public last December with a $160 million IPO, filing to sell million common shares at $20 each.

ESG Re provides medical, personal accident, credit life and disability, and special risks reinsurance to insurers and selected reinsurers on a worldwide basis.

The company offers "intelligent reinsurance'' products and services that help its ceding clients better manage their risks.

These include software solutions to particular underwriting problems (including software developed by reinsurance and health care professionals to predict future severity of medical conditions based on current diagnoses), actuarial support, product design, and, in the field of medical expense reinsurance, loss prevention and disease management.

For the six month period to June 30, the company underwrote a book of $118.6 million of gross premiums, $13.1 million of which was allocated to a strategic alliance of co-reinsurers.

Total revenues for the first six months was $50.1 million, which included net earned premiums of $41.3 million, net investment income of $6.2 million, net realised gains of $1.3 million and management fee revenue of $1.2 million.

For the same period, expenses totaled $43 million, including $27 million in losses and loss expenses, $9.7 million in acquisition costs and $6.3 million in administrative expenses.

At June 30, total assets were $399.8 million, a 46.4 percent increase from six months before. In that same period, total shareholders' equity grew marginally from $234.4 million to $238.3 million.

Managing director and CEO of ESG Re Ltd., Wolfgang M. Wand, said the results demonstrated ESG's ongoing ability to deliver profitable growth.

He said: "Traditionally a light quarter, second quarter volume reflects the seasonal nature of our business, with $21 million of managed premium, 47 percent of which was generated by our North American operation.

"On a year-to-date basis, our growth continues to track our targets for both product and geographic mix.

"Three key accomplishments mark ESG's progress in the second quarter. First ESG incorporated Accent Insurance Co. Ltd. in Dublin, Ireland, and received a direct writing license that enables us to offer pan-European products directly to selected distribution sources.

"Second, ESG increased its ownership interest in SportSecure, an insurance and reinsurance specialist in the sports and entertainment field. This investment secures ESG's position as a leading reinsurer in this exciting, high growth market.

"SportSecure has received a firm order to structure and arrange for the coverage of the 2002 World Cup to be held in Japan and Korea, having a total sum insured in excess of two billion Swiss Francs.''