The shortfall in earnings is due to slower growth and lower margins in the Company's Program Business segment and in particular at its underwriting management subsidiary, Small Business Underwriters ("SBU"). SBU, which typically has a significant impact in the third quarter of each year, has experienced an increase in competition for its small business workers' compensation product and lower workers' compensation rates especially in Massachusetts. These factors led to a decrease in SBU's fee income when its reinsurance program was renewed in the third quarter. In addition, during the quarter a number of the Company's programs were not renewed due to various factors including competition, low premium levels and unprofitable results.
Mutual Risk Management Ltd. provides risk management services to clients in the United States, Canada and Europe seeking alternatives to traditional commercial insurance for certain of their risk exposures, especially workers' compensation. Mutual Risk Management Ltd. (MM) Common Shares are listed on the New York and Bermuda stock exchanges. This release may contain forward-looking statements. These statements, which reflect management's beliefs and expectations, are subject to risks and uncertainties that may cause actual results to differ materially. For a discussion of the risks and uncertainties that may affect the Company's future results, please see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's 1998 Annual Report to Shareholders and in the Company's Quarterly Reports on Form 10-Q for 1999.