quarter as it reported an improvement in operating income and a reduction in realised losses.

Everest Re, which moved to Bermuda last year from the US, said third quarter after-tax operating income, which excludes realised capital gains and losses, was $47.7 million or $1.03 per diluted share, a 13.2 percent increase in earnings per share compared to $44.2 million, or $0.91 per diluted share in 1999.

Net income was $47.7 million, or $1.03 per diluted share, a 28.8 percent increase on a per share basis compared to $39.2 million, or $0.80 per diluted share, in the third quarter of 1999.

For the nine months ended September 30, 2000, the Company's after-tax operating income was $135.3 million or $2.93 per diluted share, an 11.4 percent increase in earnings per share compared to $129.7 million or $2.63 per diluted share for the first nine months of 1999. Net income for the nine months ended September 30, 2000 was $135 million or $2.92 per diluted share, an increase of 21.2 percent on a per share basis compared to $118.5 million or $2.41 per diluted share in the same period in 1999.

Everest also completed its purchase of insurer Gibraltar, which resulted in it taking $105 million of funds being held by Everest Re for Gibraltar's benefit on which interest was being paid to Gibraltar at approximately seven percent into its own hands. The investment income on these funds will now belong to the Everest Re Group.

Everest Re chairman and chief executive officer Joseph V. Taranto said: "The Company turned in another solid performance this quarter. With the Gibraltar transaction having closed and with our Bermuda operation up and running, we are focusing our product and distribution capabilities on taking advantage of the opportunities presented in an improving marketplace.'' The company said gross premiums written for the third quarter were $355.6 million in 2000, an 18.7 percent increase compared to $299.5 million in 1999.

The Company's GAAP combined ratio was 102.6 percent for this quarter compared to 102.8 percent in 1999. Net investment income for the third quarter was $78.9 million, an increase of 26.8 percent compared to $62.2 million in the third quarter of 1999.

Cash flow from operations for the quarter before federal income tax was $41.7 million and after federal income tax payments was $25.2 million compared with $40.3 million and $24.3 million respectively for the third quarter of 1999.

An additional $349.7 million of cash was received in the quarter as the net proceeds from the Gibraltar acquisition.