million, or $1.68 per share, for the third quarter.

A reinsurance underwriting loss of $14.0 million was incurred, primarily as a result of deterioration of certain specific accounts in North America. These losses, plus additional reserve strengthening associated with these accounts contributed $11.7 million of underwriting losses to the quarter.

Losses of $8.7 million were incurred in establishing ESG Health and in repositioning its health care products. A provision of $5.8 million was established for an outstanding loan and receivables due from COMED, the ESG-sponsored German health care association, incurred since its formation.

The Company also incurred $1.3 million in prepaid expenses relating to its unsuccessful launch of heart-monitoring technology services. ESG will exit the heart-monitoring business.

ESG also announced the departure of Renate Nellich, the president and chief executive of ES North America, ESG's marketing and underwriting manager in Toronto, Canada, effective November 5, 1999. Marty Hatfield, senior vice president, marketing, underwriting and claims, will assume the role of regional executive for North America.

Commenting on the developments, John C Head III, chairman and chief executive officer of ESG Re Limited, said: "We are extremely disappointed with the quarter's performance. Our North American business was not as profitable as we had expected. However, we moved quickly to increase rates, renegotiate terms on accounts, exit certain local markets and appoint new management. Absent these accounts, our North American book would carry a loss and acquisition ratio of 97.1 percent for the year.'' Looking ahead, Mr. Head added: "We have recently completed our plans for ESG Health `Intelligent Health Care'.

"ESG Health will pursue the growth of membership in COMED by promoting its benefits through the public health care carriers in Germany. ESG Health will continue to research opportunities in disease management in the US market and expects to launch programmes in Germany next year. However, we expect all of ESG Health's initiatives to ultimately be funded externally, and therefore have minimal impact on the ESG consolidated reinsurance results in future years.''