After years of stellar gains on the stock markets, shares of many Bermuda-based insurance and reinsurance companies have taken a battering in recent months.

The effects of investors concerns about the state of the sector can be seen in the performance of the Bermuda Insurance Index Fund which tracks the performance of ten companies based on the Island. In the 20 weeks since the fund was launched at an opening value of $10 a share, the price has fallen to $9.774.

Ann Kast of Kast Investment Management, co-manager of the fund along with Mutual Risk Management, said the flat performance was an indication of investor concerns about increased competition and the effects of the high levels of claims experienced last year from storms.

She said many of the stocks had peaked in price in July last year and were on a downturn when the fund started, allowing investors to get in at a cheaper price. "The stocks are at a temporary low,'' she said yesterday. "These are great companies. Fundamentally nothing has changed the quality of these companies. This is a buying opportunity.'' The fund started with $5.5 million invested and is now up to $6.3 million.

The fund tracks the Bermuda Insurance Index set up on July 15 last year by the Bermuda Stock Exchange and London's FTSE International. The index tracks the 10 companies weighted according to their market capitalisation.

The index is made up of ACE Ltd., Exel Ltd., Annuity & Life Re, IPC Re Holdings, LaSalle Re Holdings, Mutual Risk Management, PartnerRe, RenaissanceRe Holdings, Stirling Cooke Brown Holdings, and Terra Nova (Bermuda) Holdings.

Some of the stocks have shown wide swings in price over the past year. On Friday IPC holdings warned that fourth-quarter earnings will be "significantly lower'' than forecasts because of losses from Hurricane Georges and other storms last year. The company said it had $25 million in weather-related losses in the quarter.

IPC's stock price has fallen from a high of $27.75 in July last year to about $22 1 , a fall of about 20 percent. The company went as low as $19 1/16 October.

Meanwhile due to Exel Ltd. said it's board had authorised the repurchase of as much as $500 million of its own stock following a recent drop in the company's share price. Exel's stock price has dropped 15 percent since January 4. The company's stock has gone from a high of $81.50 in August to a low of $62 1 in September. It last traded at about $64 1 .

ACE's stock price has trading between a high of $37.75 in July to a low of $25 7/16 in October. The shares were trading at about $29 yesterday.

LaSalle has fallen steadily in price from a high of $36 1 to about $19 5 yesterday, a drop of about 46 percent in almost six months. RenaissanceRe has also fallen steadily from a high of $47 5 in August to a current price of about $34.75, a fall of about 27 percent. Stirling Cook has recovered somewhat from a low of $11 1 in October to $16.25. It was at $24.75 in July.

Terra Nova has fallen from a high of $32 7/16 to $25 1 while startup Annuity & Life has gone from a high of $27 in April to $20 7 after falling to $17 in September. PartnerRe went from a high of $50 in July to a low of $34 in October, before gaining back ground to the current price of about $45 7/16.

Mutual Risk stock has not suffered as much as the others. The company went from a high of $39 7 in December to the current price of $37 23/32.

TAKING KNOCKS -- The insurance index fund (above) tracks the performance of ten companies based in Bermuda.