================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                -----------------


                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 12 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended March 31, 2000
                        Commission file number 000-23481
                                -----------------

                                 ESG RE LIMITED
             (Exact name of Registrant as specified in its charter)


         Bermuda                                              Not Applicable
(State or other jurisdiction of                             (I.R.S. Employer
incorporation of organization)                              Identification No.)

                                16 Church Street
                             Hamilton HM11, Bermuda
                    (Address of executive offices, zip code)

                            Telephone (441) 295-2185
              (Registrant's telephone number, including area code)

                                -----------------

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports,  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days. Yes {X} No {_}

The  number of the  Registrant's  common  shares  (par  value  $1.00 per  share)
outstanding as of May 11, 2000, was 11,853,108.


================================================================================


<PAGE>


                                 ESG RE LIMITED
          1.1 Index to the Condensed Consolidated Financial Statements



                                                                            PAGE
                                                                            ----

Condensed Consolidated Balance Sheets as of  March 31, 2000 (unaudted)        1
   and December 31, 1999
Condensed Consolidated Statements of Operations for the three months
   ended March 31, 2000 and 1999 (unaudited)                                  2
Condensed Consolidated Statements of Cash Flows for the three months
   ended  March 31, 2000 and 1999 (unaudited)                                 3
Condensed Consolidated Statements of Comprehensive Income for the three
   months ended March 31, 2000 and 1999 (unaudited)                           4
Notes to the Condensed Consolidated Financial Statements (unaudited)          5
Independent Accountants' Review Report                                        8


<PAGE>

<TABLE>
<CAPTION>
                         PART I - FINANCIAL INFORMATION
               ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
                                 ESG RE LIMITED
                      Condensed Consolidated Balance Sheets
           (U.S. dollars in thousands except share and per share data)


                                                                               March 31,      December 31,
                                                                                  2000            1999
                                                                              ----------------------------
<S>                                                                           <C>              <C>
ASSETS                                                                        (Unaudited)
     Investments - available for sale, at fair value
        (cost: $178,784 and $184,767)                                           $174,697       $181,155
     Cash and cash equivalents                                                    25,668         28,278
     Other Investments                                                            11,585         12,116
                                                                              ----------------------------
         Total investments and cash                                              211,950        221,549

     Accrued investment income                                                     3,132          3,367
     Management fees receivable                                                    1,158          1,303
     Reinsurance balances receivable                                             318,317        276,112
     Reinsurance recoverable on incurred losses                                   12,940         11,462
     Funds retained by ceding companies                                           19,462         15,541
     Prepaid reinsurance premiums                                                 13,091          9,108
     Deferred acquisition costs                                                   75,406         57,807
     Receivable for securities sold                                                   --             --
     Other assets                                                                 12,391          6,071
     Cash and cash equivalents held in a fiduciary capacity                        3,628          3,364
                                                                              ----------------------------
TOTAL ASSETS                                                                    $671,475       $605,684
                                                                              ============================
LIABILITIES
     Unpaid losses and loss expenses                                            $144,725       $136,935
     Unearned premiums                                                           229,996        181,127
     Acquisition costs payable                                                    85,948         73,055
     Reinsurance balances payable                                                 35,419         26,025
     Payable for securities purchased                                                 18            241
     Accrued  expenses,  accounts  payable,  and other liabilities ($120 and       7,779          8,122
     $125 due to related parties)
     Fiduciary liabilities                                                         3,628          3,364
                                                                              ----------------------------
         Total liabilities                                                       507,513        428,869
                                                                              ----------------------------
SHAREHOLDERS' EQUITY
     Preference shares, 50,000,000 shares authorized; no shares issued and
         outstanding for 2000 and 1999                                                --             --
     Class B common shares, 100,000,000 shares authorized; no  shares
         issued and outstanding for 2000 and 1999                                     --             --
     Common shares, par value $1 per share; 100,000,000 shares authorized;
         11,853,108 shares issued and outstanding for 2000 and 11,598,799
         shares issued and outstanding for 1999                                   11,853         11,599
     Additional paid-in capital                                                  211,545        211,225
     Accumulated other comprehensive income:
         Foreign currency translation adjustments, net of tax                     (1,156)        (1,702)
         Unrealized (losses) on securities,  net of reclassification
              adjustments and tax                                                 (4,087)        (3,612)
                                                                              ----------------------------
     Accumulated other comprehensive income:                                      (5,243)        (5,314)
                                                                              ----------------------------
     Retained (deficit)                                                          (50,920)       (40,695)
                                                                              ----------------------------
     Deferred compensation                                                        (3,273)            --
                                                                              ----------------------------
         Total shareholders' equity                                              163,962        176,815
                                                                              ----------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                      $671,475       $605,684
                                                                              ============================
</TABLE>

               The accompanying notes are an integral part of the
                       consolidated financial statements.


<PAGE>


                                 ESG RE LIMITED
                 Condensed Consolidated Statements of Operations
           (U.S. dollars in thousands except share and per share data)
                                   (Unaudited)

                                                     Three Months Ended
                                            ---------------------------------
                                            March 31, 2000     March 31, 1999
                                            ---------------------------------
REVENUES

     Net premiums written                   $    104,648        $    143,566
     Change in unearned premiums                 (46,668)            (85,442)
                                            --------------------------------

     Net premiums earned                          57,980              58,124
     Management fee revenue                          549                 817
     Net investment income                         2,927               3,300
     Gain on equity investments                      334                  --
     Net realized investment losses               (1,415)                 --
                                            --------------------------------
                                                  60,375              62,241
                                            --------------------------------
EXPENSES
     Losses and loss expenses                     45,301              34,751
     Acquisition costs                            14,698              18,810
     Administrative expenses                      10,601               4,523
                                            --------------------------------
                                                  70,600              58,084
                                            --------------------------------
NET (LOSS) INCOME BEFORE TAXES                   (10,225)              4,157
     Income tax expense                               --                 166
                                            --------------------------------

NET (LOSS) INCOME                           $    (10,225)       $      3,991
                                            ================================

  PER SHARE DATA
     Basic net (loss) income per share      $      (0.88)       $       0.29
                                            ================================
     Diluted net (loss) income per share    $      (0.88)       $       0.29
                                            ================================

     Weighted average shares outstanding
        Basic                                 11,575,898          13,923,799
        Diluted                               11,575,898          13,933,547
                                            ================================

     Dividends declared per share           $       0.08        $       0.08
                                            ================================


               The accompanying notes are an integral part of the
                       consolidated financial statements.


<PAGE>

<TABLE>
<CAPTION>
                                 ESG RE LIMITED
                 Condensed Consolidated Statements of Cash Flows
                           (U.S. dollars in thousands)
                                   (Unaudited)


                                                                   Three Months Ended
                                                          ---------------------------------
                                                          March 31, 2000     March 31, 1999
                                                          ---------------------------------

<S>                                                        <C>                    <C>
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash provided by (used in) operating activities        $  2,084                $ (3,297)
                                                          ---------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
     Cost  of  fixed maturity investments                   (50,086)                (66,888)
         acquired - available for sale
     Proceeds from sale of fixed  maturity                   53,821                  78,812
        investments - available for sale
     Funding of strategic investments                        (4,340)                 (5,000)
     Purchases of fixed assets                                 (450)                   (704)
     Purchases of intangible assets                            (690)                   (920)
                                                          ---------------------------------
Net cash provided by investing activities                    (1,745)                  5,300
                                                          ---------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
     Dividends paid                                          (1,009)                 (1,114)
     Repurchase of common shares                             (1,940)                     --
                                                          ---------------------------------
Net cash used in financing activities                        (2,949)                 (1,114)
                                                          ---------------------------------
Net (decrease) increase in cash                              (2,610)                    889
Cash and cash equivalents at January 1                       28,278                  17,831
                                                          ---------------------------------
Cash and cash equivalents at March 31                      $ 25,668                $ 16,923
                                                          =================================
</TABLE>

               The accompanying notes are an integral part of the
                       consolidated financial statements.



<PAGE>

<TABLE>
<CAPTION>
                                 ESG RE LIMITED
            Condensed Consolidated Statements of Comprehensive Income
                           (U.S. dollars in thousands)
                                   (Unaudited)


                                                                 Three Months Ended
                                                         March 31, 2000        March 31, 1999
                                                        -------------------------------------

<S>                                                           <C>                     <C>
Net (loss) income                                             $(10,225)               $3,991
                                                        -------------------------------------
Other comprehensive income, net of tax:
  Foreign currency translation adjustments                         546                     7
  Unrealized losses on securities:
    Unrealized holding (losses)/gains arising during
        the period                                              (1,890)               (1,479)
    Less reclassification  adjustment  for losses
        included  in net income                                  1,415                    --
                                                        -------------------------------------
Other comprehensive income                                          71                (1,472)

Comprehensive (loss) income                                   $(10,154)               $2,519
                                                        =====================================


               The accompanying notes are an integral part of the
                       consolidated financial statements.


<PAGE>


NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.   BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of ESG Re Limited
(together with its subsidiaries, the "Company") have been prepared in accordance
with generally accepted accounting principles in the United States of America
("U.S. GAAP") except pursuant to the rules and regulations of the Securities and
Exchange Commission which do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, these unaudited financial statements
reflect all adjustments considered necessary for a fair presentation of
financial position, results of operations and comprehensive income as of and for
the periods presented. The results of operations for any interim period are not
necessarily indicative of the results for a full year. These unaudited
consolidated financial statements should be read in conjunction with the audited
consolidated financial statements, and related notes thereto, included in the
Company's 1999 Annual Report on Form 10-K.

The preparation of financial statements in accordance with U.S. GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period as well as the disclosure of such amounts. Actual results
could materially differ from those estimates and assumptions.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company's condensed consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America ("U.S GAAP"). The Company's significant accounting policies include the
following:

     (A) PREMIUM REVENUES
Premiums written are estimated and recognized at the inception of the
reinsurance contract, based upon information received from intermediaries and
ceding companies. The Company compares estimated written premiums to actual
premiums as reported by ceding companies on a periodic basis. The timeliness and
frequency of ceding company reports vary considerably by ceding company, line of
business and geographic area, which means that the actual ultimate premium
written may not be known with certainty for prolonged periods. Differences
between such estimates and actual amounts as reported by ceding companies are
recorded in the period in which the actual amounts are determined.

The reinsurance contracts entered into by the Company are primarily of short
duration. Premiums written are recognized as earned over the coverage period in
proportion to the amount of protection provided. Unearned premium reserves are
established to cover the unexpired contract period.

     (B) RESERVE FOR LOSSES AND LOSS EXPENSES
The reserve for unpaid losses and loss adjustment expenses includes an estimate
of reported case reserves and an estimate for losses incurred but not reported.
Case reserves are estimated based on ceding company reports and other data
considered relevant to the estimation process. The liability for losses incurred
but not reported is based to a large extent on the expectations of ceding
companies about ultimate loss ratios at the inception of the contracts,
supplemented by industry experience and the Company's specific historical
experience where available. As the Company has limited specific historical
experience on a significant number of its programs on which to base its estimate
of losses incurred but not reported, its reliance on ceding company expectations
and industry experience is necessarily increased, which increases the
uncertainty involved in the loss estimation process.

The reserves as established by management are reviewed periodically, and
adjustments are made in the periods in which they become known. Although
management believes that an adequate provision has been made for the liability
for losses and loss expenses, based on all available information, there can be
no assurance that the ultimate losses will not differ significantly from the
amounts provided.

<PAGE>

     (C) INVESTMENTS
Fixed maturity securities are classified as available for sale and are reported
at estimated fair value. Investments that are available for sale are expected to
be held for an indefinite period but may be sold depending on interest rates and
other considerations. Other investments over which the Company exercises
significant influence are accounted for under the equity method . Other
investments are accounted for at the lower of cost or estimated realizable
value. Unrealized investment gains and losses on investments available for sale,
net of applicable deferred income tax, are reported as a separate component of
"accumulated other comprehensive income". Realized gains or losses on sale of
investments are determined on the basis of average cost. The carrying values of
investments available for sale and other investments are adjusted for
impairments in value that are considered to be other than temporary.

     (D) USE OF ESTIMATES
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period as well as the disclosure of such amounts. Actual results,
particularly for premiums written, premiums earned and loss reserves could
materially differ from those estimates and assumptions.

     (E) FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of the Company's investments approximates their fair value
and is based on quoted market prices. Due to the uncertainty with respect to
both the timing and amount of the proceeds to be realized from the Company's
other investments, it is not practicable to determine the fair value of these
other investments. The carrying value of other financial instruments, including
cash and cash equivalents, accrued investment income, and other receivables and
payables approximate their estimated fair value due to the short term nature of
the balances.


3.   COMMITMENTS AND CONTINGENCIES

     (A) EMPLOYMENT CONTRACTS
The Company has entered into employment contracts with several employees for
terms of one to five years which have total minimum commitments of $7.0 million
excluding any performance bonuses that are determined by the Board of Directors
of the Company. The contracts include various non-compete clauses following
termination of employment.

     (B  LEASE COMMITMENTS
The Company and its subsidiaries have various obligations under operating
leases. The future minimum commitments under lease and employment agreements are
as follows:

                                    Employment         Lease
U.S. dollars in thousands           Commitments     Commitments         Total
--------------------------------------------------------------------------------
Years Ending December 31,
     2000                             $ 2,307            $ 761         $ 3,068
     2001                               2,713              813           3,526
     2002                               1,754              446           2,200
     2003                                 216              228             444
     2004                                  --              114             114
     Thereafter                            --              698             698
                              -------------------------------------------------

Total                                 $ 6,990           $3,060        $ 10,050
                              =================================================


<PAGE>


     (C) LOAN COMMITMENTS
The Company and its subsidiaries have unfunded loan commitments outstanding of
$10.4 million of which $8.4 million is to COMED, the German healthcare
association which the Company helped to establish in December 1998. A further $2
million is to a third party which is a significant ceding company to ESG. Under
the terms of the loan agreement with COMED, the Company has the right to refuse
any further disbursements, when the ability of COMED to repay the loan is in
doubt.

    (D)  LETTERS OF CREDIT
Letters of Credit in the amount of $67.1 million have been issued in favor of
ceding companies secured against the Company's investment portfolio.

    (E)  PENSION OBLIGATIONS
Certain subsidiaries of the Company are obligated to make defined contributions
to pension plans for their employees. As of March 31, 2000, there were
outstanding liabilities for pension contributions of $471 thousand.


4.  RELATED PARTIES

Included in net investment income for the three months ended March 31, 2000,
were related party investment expenses of $120 thousand.


<PAGE>




                     INDEPENDENT ACCOUNTANTS' REVIEW REPORT

To the Board of Directors and Shareholders of ESG Re Limited

We have reviewed the accompanying condensed consolidated balance sheet of ESG Re
Limited and subsidiaries as of March 31, 2000, and the related condensed
consolidated statements of operations, comprehensive income and cash flows for
the three month period ended March 31, 2000. These financial statements are the
responsibility of the Company's management.

We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.

Based upon our review, we are not aware of any material modifications that
should be made to such condensed consolidated financial statements for them to
be in conformity with accounting principles generally accepted in the United
States of America.

We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheet of ESG
Re Limited and subsidiaries as of December 31, 1999, and the related
consolidated statements of operations, comprehensive income, changes in
shareholders' equity and cash flows for the year then ended (not presented
herein) and in our report dated March 10, 2000, we expressed an unqualified
opinion on those consolidated financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated balance sheet
as of December 31, 1999, is fairly stated, in all material respects, in relation
to the consolidated balance sheet from which it has been derived.

Deloitte & Touche
Chartered Accountants
Dublin, Ireland
May 11, 2000

<PAGE>


ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
        OPERATIONS.

The following is a discussion and analysis of the financial condition as of
March 31, 2000 and the results of operations of ESG Re Limited and subsidiaries
(the "Company" or "ESG") for the three months ended March 31, 2000 as compared
to the three months ended March 31, 1999. This discussion and analysis should be
read in conjunction with the attached unaudited consolidated financial
statements and notes thereto and the audited consolidated financial statements
of the Company as of and for the year ended December 31, 1999 and notes thereto
included in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999. The unaudited consolidated financial statements as of and for
the three months ended March 31, 2000 and for the three months ended March 31,
1999 and notes thereto have been reviewed by independent accountants in
accordance with standards established by the American Institute of Certified
Public Accountants.

The results of operations and cash flows for any interim period are not
necessarily indicative of results for the full year. In addition, this quarterly
report contains forward-looking statements regarding future profit levels,
premium growth, cash flows and other matters, which involve risks and
uncertainties that may affect the actual results of operations of the Company.
The following important factors, among others, could cause actual results to
differ materially from those set forth in the forward-looking statements: claims
frequency, claims severity, economic activity, competitive pricing and the
regulatory environment in which the Company operates.


GENERAL

The Company has two business segments, Reinsurance and Health Care. The
Reinsurance division is a specialty reinsurance enterprise providing accident,
medical, credit, life and special risk reinsurance to insurers and selected
reinsurers on a worldwide basis, and underwriting management services to
co-reinsurers. In June 1999, the company launched a business unit focused on the
growing health care management and technology field. The "Intelligent Health
Care" division is aimed at developing and distributing disease management
programs, cardiovascular and other telemedicine applications worldwide.


RESULTS OF OPERATIONS



CONSOLIDATED RESULTS

Consolidated results of operations for the three months ended March 31, 2000,
and 1999, are presented below. Consolidated results of operation for the periods
ended March 31, 2000, reflect the combined results of operation of the Company's
reinsurance and health care divisions.


<PAGE>


                                                            Three Months Ended
                                                                 March 31
                                                                 --------
U.S dollars in thousands except per share data             2000            1999

Gross managed premium                                  $117,095        $159,532
Net premium written                                     104,648         143,566
                                                       --------        --------
Net premium earned                                       57,980          58,124
Less:
Losses & loss adjustment expenses                       (45,301)        (34,751)
Acquisition costs                                       (14,698)        (18,810)
                                                       --------        --------
Total underwriting expenses                             (59,999)        (53,561)
                                                       --------        --------
(Loss)/profit from underwriting                          (2,019)          4,563
Administrative expenses                                 (10,601)         (4,523)
Net Investment Income                                     2,927           3,300
Net realized investment (losses)                         (1,415)             --
Gain on equity investments                                  334              --
Management fee revenue                                      549             817
                                                       --------        --------
Net (loss)/income before taxes                          (10,225)          4,157
Income tax expense                                           --             166
                                                       --------        --------
Net (loss)/income                                      $(10,225)       $  3,991
                                                       --------        --------
(Loss)/income excluding realized investment (losses)
and gain on equity investment                            (9,144)          3,991
Basic net (loss)/income per common share                 $(0.88)          $0.29
Diluted net (loss)/income per common share               $(0.88)          $0.29

</TABLE>

     The decrease in net income is primarily attributable to $7.5 million in
     additional losses recognized on certain contracts in North America, Latin
     America and Europe from the 1998 and 1999 underwriting years, together with
     further expenditure of $2.9 million relating to the Company's health care
     division. Additionally, operating expenses in the Company's reinsurance
     division increased by $3.2 million over the comparative prior quarter due
     to the investment in key personnel and increase in professional fees
     associated with supporting the growing complexity of the Company's
     operations.


<PAGE>

SEGMENT RESULTS

     The Company is organized into two divisions; reinsurance and health care.
     Results of operations by division, for the three months ended March 31,
     2000 and 1999, are presented below.

REINSURANCE DIVISION
                                                           Three Months Ended
                                                                March 31,
                                                                ---------
U.S dollars in thousands except per share data               2000         1999

Gross Managed Premium                                    $117,095     $159,532
Co-Reinsurance                                              5,327       12,399
                                                        ---------     --------
Gross Premium Written                                     111,768      147,133
Retroceded                                                  7,120        3,567
                                                        ---------     --------
Net Premium Written                                       104,648      143,566

Net Premium Earned                                         57,980       58,124
Less:
Losses & Loss Adjustment Expenses                         (45,301)     (34,751)
Acquisition Costs                                         (14,698)     (18,810)
                                                        ---------     --------
Total Underwriting Expenses                               (59,999)     (53,561)
                                                        ---------     --------
(Loss)/Profit from Underwriting                            (2,019)       4,563
Operating Expenses                                         (7,678)      (4,523)
Net Investment Income                                       2,927        3,300
Net realized investment (losses)                           (1,415)          --
Gain on equity investment                                     334           --
Management Fee Revenue                                        541          817
                                                        ---------     --------
Net (loss)/income before taxes                            $(7,310)      $4,157
                                                        ---------     --------




     Net Underwriting Income

     Gross managed premium decreased by $42.4 million, or 26.6%, for the three
     months ended March 31, 2000, compared to the corresponding prior year
     period. A medical account for the transition of group health insurance
     coverage sold through affinity groups to alternative providers, which
     provided $35 million in managed premium in the prior quarter, related to
     medical reinsurance for the transition of group health insurance coverage
     sold through affinity groups to alternative providers and which was not
     expected to renew. In addition, a loss making account in Europe, which
     contributed $12 million in premium in 1999, was not renewed.


     Underwriting results for the three months ended March 31, 2000 and 1999, by
     line of business and in total were as follows:

<TABLE>
<CAPTION>

Three months ended March 31, 1999                    Personal
U.S. dollars in thousands              Medical       Accident      Credit       Life         Other       Total
-----------------------------------------------------------------------------------------------------------------
<S>                                    <C>           <C>           <C>          <C>          <C>         <C>
Gross premiums written                 $70,379       $31,350       $3,808       $3,275       $2,956      $111,768
                                       ==========================================================================
Net premiums written                    65,676        29,387        3,653        2,999        2,933       104,648
                                       ==========================================================================
Net premiums earned                     38,861        14,003        1,981        2,054        1,081        57,980
Losses and loss expenses               (31,495)      (11,264)        (257)      (1,003)      (1,282)      (45,301)
Acquisition costs                       (9,386)       (3,084)      (1,230)        (587)        (411)      (14,698)
Operating costs                         (4,619)       (1,664)        (236)        (244)        (128)       (6,891)
                                       --------------------------------------------------------------------------

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

<S>                                    <C>           <C>             <C>          <C>         <C>         <C>
Net underwriting income (loss)         $(6,639)      $(2,009)        $258         $220        $(740)      $(8,910)
                                       ==========================================================================

Three months ended March 31, 1999                    Personal
U.S. dollars in thousands              Medical       Accident      Credit       Life         Other        Total
------------------------------------------------------------------------------------------------------------------

Gross premiums written                 $90,719       $40,808       $5,324       $6,863       $3,419       $147,133
                                       ===========================================================================

Net premiums written                    88,420        40,001        5,116        6,704        3,325        143,566
                                       ===========================================================================

Net premiums earned                     45,175         9,201          499        2,100        1,149         58,124
Losses and loss expenses               (27,579)       (4,858)         281       (2,025)        (570)       (34,751)
Acquisition costs                      (14,554)       (3,292)        (148)        (319)        (497)       (18,810)
Operating costs                         (3,230)         (658)         (36)        (150)         (82)        (4,156)
                                       ---------------------------------------------------------------------------
Net underwriting income (loss)           $(188)         $393         $596        $(394)        $ --           $407
                                       ===========================================================================

</TABLE>


Operating Ratios

The operating ratios for the three months ended March 31, 2000 and 1999, by line
of business and in total were as follows:

<TABLE>
<CAPTION>
                                                        Personal
Three months ended March 31, 2000    Medical  Accident  Credit    Life    Other   Total
---------------------------------------------------------------------------------------
<S>                                   <C>      <C>      <C>       <C>     <C>     <C>
Loss ratio                             81.0%    80.5%   13.0%     48.8%   118.6%  78.1%
Acquisition expense ratio              24.2%    22.0%   62.1%     28.6%    38.0%  25.4%
---------------------------------------------------------------------------------------
Loss and acquisition expense
  Ratio                               105.2%   102.5%   75.1%     77.4%   156.6% 103.5%
---------------------------------------------------------------------------------------
Operating expense ratio                                                           11.9%
                                                                                -------
Combined ratio                                                                   115.4%
                                                                                =======



                                                        Personal
Three months ended March 31, 1999    Medical  Accident  Credit    Life    Other   Total
---------------------------------------------------------------------------------------

Loss ratio                             61.1%    52.8%  (56.3)%    96.4%   49.6%   59.7%
Acquisition expense ratio              32.2%    35.8%   29.6%     15.2%   43.3%   32.4%
---------------------------------------------------------------------------------------
Loss and acquisition expense
  Ratio                                93.3%    88.6%  (26.7)%   111.6%   92.9%   92.1%
---------------------------------------------------------------------------------------
Operating expense ratio                                                            7.2%
                                                                                -------
Combined ratio                                                                    99.3%
                                                                                =======


</TABLE>


Medical underwriting results were impacted by $4.4 million of additional losses
and loss expenses due to the negative development on accounts in Latin America
and in North America.

Personal accident underwriting results are impacted by $2.4 million of
additional losses and loss expenses due to negative development of prior
underwriting accounts on accounts in North America and in London.

Credit results reflect a reduction in loss reserves on a 1998 underwriting
account, which was cancelled in the third quarter of 1999.

<PAGE>

Other business represents special risks business and automobile warranty
business ceded by a German company in which ESG made a 10% equity investment in
1998. Underwriting results were impacted by losses of $0.7 million on a Special
Risk account, written in Europe.

The operating expense ratios for the three months ended March 31, 2000 and 1999,
respectively, were calculated by expressing total administrative expenses less
corporate office expenses and health care division expenses, as a percentage of
net premiums earned. Total operating expenses for the three months ended March
31, 2000 represent 7.3% of net premiums written and 13.2% of net premiums
earned, compared to 3.2% and 7.8%, respectively, for the prior year.

Geographical Distribution

The distribution of gross written premiums for the three months ended March 31,
2000 and 1999 and for the year ended December 31, 1999, is as follows:

<TABLE>
<CAPTION>
                    Three months ended      Three months ended         Year ended
                      March 31, 2000          March 31, 1999        December 31, 1999
-------------------------------------------------------------------------------------
<S>                      <C>                    <C>                      <C>
Western Europe            20.9%                  29.0%                    21.2%
North America             46.3%                  55.2%                    63.5%
Latin America             29.5%                  11.1%                     9.8%
Other                      3.3%                   4.7%                     5.5%
-------------------------------------------------------------------------------------
Total                    100.0%                 100.0%                   100.0%
-------------------------------------------------------------------------------------

</TABLE>


The Company has experienced significant growth in Latin America business in the
first quarter associated with growth in the portfolio of its principal ceding
company in the region. The decline in the percentage of gross written premiums
written in the North American region in the first quarter reflects the change in
focus initiated by the Company early in the fourth quarter of 1999. The
Company's decision to cease actively seeking North American medical business
through the London market in February 2000 will continue this trend in future
quarters.

Product Mix

The distribution of gross premiums written by line of business for the three
months ended March 31, 2000 and 1999, and for the year ended December 31, 1999
was as follows:


<TABLE>
<CAPTION>
                    Three months ended      Three months ended         Year ended
                      March 31, 2000          March 31, 1999        December 31, 1999
-------------------------------------------------------------------------------------
<S>                      <C>                    <C>                    <C>
Medical                   63.0%                  61.7%                  75.7%
Personal Accident         28.0%                  27.7%                  19.9%
Credit                     3.4%                   3.6%                   0.6%
Life                       2.9%                   4.7%                   2.1%
Other                      2.7%                   2.3%                   1.7%
-------------------------------------------------------------------------------------
Total                    100.0%                 100.0%                 100.0%
-------------------------------------------------------------------------------------

</TABLE>

Management Fee Revenue

Management fee revenue for the quarter was $541 thousand, a reduction of $276
thousand from the corresponding prior period due to the Company retaining more
business for its own account. The Company's third party administration units in
Indonesia and Thailand contributed $212 thousand of fee income in the current
quarter.


<PAGE>

Operating Expenses

Total reinsurance operating expenses for the three months ended March 31, 2000
were $7.7 million, compared to $4.5 million for the three months ended March 31,
1999 and $8.8 million for the three months ended December 31, 1999.

Personnel expenses increased by $0.1 million over the three months ended
December 31, 1999 due to the continued investment in key personnel at the
holding company and various representative offices. Professional service fees
decreased by $0.9 million for the three months ended March 31, 2000 from $2.9
million in the three months ended December 31, 1999. The decrease was due to
reduced expenditure in legal fees associated with forensic audits and
standardization of policy contracts and management agreements and acquisitions.

Travel expenses decreased by $0.3 million to $0.5 million for the three months
ended March 31, 2000 from $0.8 million in the three months ended December 31,
1999. Depreciation & amortization decreased by $0.8 million to $0.3 million for
the three months ended March 31, 2000 from $1.1 million in the three months
ended December 31, 1999, following the recognition of an impairment loss of $0.7
million in the fourth quarter in respect of the goodwill recognized by the
Company on its investment in SportSecure, a company in which the Company took
majority ownership of in 1998.


Exposure Management

The Company manages its underwriting risk exposures through geographic
distribution, an excess of loss reinsurance program, and co-reinsurance. The
Company's excess liability insurance policy generally provides limits up to a
maximum of $30 million per occurrence, with a minimum attachment point generally
of $1 million. The Company increased its retention from $100 thousand to $1
million for calendar year 2000, effective January 1, 2000.

The Company's non-North American business is subject to co-reinsurance and
retrocessional reinsurance with two other reinsurance companies that have
participation with underwriting lines totaling 12.5%. The co-reinsurance
arrangements on North American business written through the Toronto office
changed effective January 1, 2000, with a reduction in external participation
from 15% to 5%.


<PAGE>

HEALTH CARE DIVISION

Through its health care division, ESG Health, the Company currently offers
medical referral, second opinion and disease management services to the German
market. The division includes COMED, a non-profit German healthcare association
which the Company helped to establish and IPT (Institut fuer Praeventivmedizin &
Technologie GmbH), a provider of doctor's referral and second opinion services.
In February 2000, the Company incorporated VBB Bermuda Limited, a holding
company in Bermuda. This company will be the holding company of the Company's
health care division. During March 2000, the Company completed the acquisition
of Innovacare GmbH, a disease management company based in Munich, Germany, in
order to complete its portfolio of medical and disease management product
offerings. The purchase price was $5.9 million.

Results

U.S dollars in thousands except           Three Months ended  Three Months Ended
 per share data                               March 31, 2000      March 31, 1999

Management fee income                                $     8             $ --
Investment income                                         --               --
                                                     -------             ----
Total income                                              --               --
                                                     -------             ----
Less:

Personnel expenses                                      (335)              --
Professional service fees                             (1,956)              --
Expenses associated with COMED                          (340)              --
Other expenses                                          (292)              --
                                                     -------             ----
Total expenses                                        (2,923)              --
                                                     -------             ----
Net (loss)                                           $(2,915)            $ --
                                                     -------             ----

Professional service fees of $1.5 million were incurred primarily in
establishing the market position of ESG Health. A provision of $0.3 million was
established for additional loans to COMED under the $12 million loan facility
provided by ESG in December 1998. At March 31, 2000, $3.6 million is outstanding
under this facility and is fully provided for. The ability of COMED to repay the
loan is dependent on its ability to generate sufficient revenues from members.
Under the terms of the loan agreement, the Company has the right to refuse any
further disbursements where the ability of COMED to repay the loan is in doubt.
The initial marketing strategy of COMED was to carry out direct marketing
programs to the general public, which failed to develop significant members. In
recent months COMED has attempted to attract members through direct contact with
public and private sick funds, the German equivalent of HMO's. In May, COMED
secured a contract with one private sick fund to pilot its services to a group
of 20,000 members.

The Company expects to divest itself of its Health Care Division mid year 2000.


Investment Results

For the three months ended March 31, 2000, net investment income totaled $2.9
million and net realized investment losses totaled $1.4 million. For the three
months ended March 31, 1999, net investment income totaled $3.3 million.


<PAGE>


The investment results for the three months ended March 31, 2000 and 1999 were
as follows:

<TABLE>
<CAPTION>
                                                            Net       Annualized    Net Realized
March 31, 2000                            Average       Investment     Effective     Investment
U.S dollars in thousands                Investments      Income(1)       Yield         Losses
----------------------------------------------------------------------------------------------
<S>                                        <C>           <C>              <C>       <C>
Investments - available for sale           $ 177,926     $ 2,659          6.0%      $ (1,415)
Other investments                             11,851         128          4.3%            --
Cash and cash equivalents                     26,973         140          2.1%            --
----------------------------------------------------------------------------------------------
Total                                      $ 216,750     $ 2,927          5.4%      $ (1,415)
----------------------------------------------------------------------------------------------


                                                            Net       Annualized    Net Realized
March 31, 1999                            Average       Investment     Effective     Investment
U.S dollars in thousands                Investments      Income(1)       Yield         Gains
------------------------------------------------------------------------------------------------
Fixed maturity investments                 $ 206,523     $ 2,804          5.4%            --
Other investments                              8,271          65          3.2%            --
Cash and cash equivalents                     16,928         197          4.7%            --
------------------------------------------------------------------------------------------------
Total                                      $ 231,722     $ 3,066          5.5%            --
------------------------------------------------------------------------------------------------

</TABLE>

(1)  Net investment income is net of investment-related expenses


Liquidity and Capital Resources

As of March 31, 2000, total investments and cash were $212.0 million compared to
$221.5 million at December 31, 1999. Cash flow from operating activities for the
three months ended March 31, 2000 was $2.1 million. All fixed maturity
securities in the Company's investment portfolio are classified as available for
sale and are carried at fair value. Additionally, the Company holds $4.0 million
in foreign currency equities matched to liabilities related to a long-term
European medical account. The fixed maturity investment portfolio as of March
31, 2000, and December 31, 1999, were as follows:

<TABLE>
<CAPTION>
March 31, 2000                                                                    Average
U.S. dollars in thousands                            Fair     Duration   Market   Credit
                                                     Value    (Years)    Yield    Rating
----------------------------------------------------------------------------------------
<S>                                                  <C>        <C>      <C>      <C>
Corporate securities                                 $94,798    3.8      7.4%     A+
U.S. treasury securities and obligations of
     U.S. government corporations and
     agencies                                         26,517    3.1      6.7%     AAA
Mortgage & Asset backed securities                    25,213    1.5      7.6%     AAA
Obligations of states and political
     subdivisions                                     11,244    2.1      7.3%     AAA
Foreign currency debt securities                      12,869    3.7      4.7%     AAA
---------------------------------------------------------------------------------------
Total                                               $170,641    3.0      7.2%     AA
---------------------------------------------------------------------------------------

</TABLE>


<PAGE>

<TABLE>
<CAPTION>
December 31, 1999                                                                 Average
U.S. dollars in thousands                            Fair     Duration   Market   Credit
                                                     Value    (Years)    Yield    Rating
----------------------------------------------------------------------------------------
<S>                                                  <C>        <C>      <C>      <C>
Corporate securities                                 $102,355   3.0      7.2%     A+
U.S. treasury securities and obligations of
     U.S. government corporations and
     agencies                                          21,329   2.7      6.2%     AAA
Mortgage & Asset backed securities                     23,486   1.0      7.8%     AAA
Obligations of states and political
     subdivisions                                      16,281   2.3      7.1%     AA+
Foreign currency debt securities                       13,719   3.7      4.7%     AAA
----------------------------------------------------------------------------------------
Total                                                $177,170   2.7      7.0%     AA
----------------------------------------------------------------------------------------

</TABLE>

The Company's investment policy objective is to maximize long-term investment
returns while maintaining a liquid, high-quality portfolio. To this end, the
investment policy requires that the portfolio have an average credit quality
rating of AA, no more than 3% of the portfolio invested in the securities of a
single issuer (other than issues of sovereign governments with a rating of AA or
better), and a target duration of 2.75 years. The Company's investment portfolio
reflects its investment policy and guidelines.

The Company expects that its financial and operational needs for the foreseeable
future will be met by funds generated from operations and from liquidating a
small percentage of its investment portfolio. The Company expects to remain
highly capitalized after any near-term investment portfolio liquidation.

Shareholders' equity as of March 31, 2000 was $164.0 million compared to $176.8
million at December 31, 1999. The major factors contributing to the decrease in
shareholders' equity included $10.2 million of net losses, the repurchase of
common shares at a cost of $1.9 million and the Company's declaration of
dividends of $0.08 per common share. Book value per common share decreased to
$13.83 as of March 31, 2000 from $15.24 as of December 31, 1999.

<PAGE>

Current Developments

A quarterly cash dividend of $0.08 per share was declared on May 11, 2000 by the
Company's Board of Directors, payable June 29, 2000 to common shareholders of
record on June 15, 2000.

In February 2000, Odyssey Re instituted an action in England against a broker,
Stirling Cooke Brown, alleging fraud and conspiracy on the reinsurance placement
of 1997 and 1998 Personal Accident and Workers Compensation "carve out" business
with Odyssey Re. These proceedings mirror earlier proceedings commenced in New
York which were dismissed on jurisdictional grounds. During 1998, ESG accepted a
25% quota share reinsurance treaty with Odyssey Re (UK) retroactive to January
1, 1998. This treaty covers various reinsurance contracts underwritten by
Odyssey Re (UK) and retroceded to ESG. Among these ceding companies are various
insurance companies involved in the litigation Odyssey Re instituted in New York
over 1997 and 1998 business. This treaty terminated as of December 31, 1998 but
ESG renewed its participation for 1999 directly to one of those ceding
companies. In December 1999, the Company gave notice to rescind its contract
with Odyssey Re (UK) for misrepresentation and failure to disclose material
facts. In early May 2000, ESG wrote to Odyssey Re setting out its detailed case
for rescission and inviting Odyssey Re to agree to its entitlement in that
regard within twenty eight days failing which ESG would initiate litigation. The
Company continues to investigate its position regarding the 1999 account
regarding possible misrepresentation and failure to disclose material facts. At
this time, the Company is unable to determine the amount of its exposure and the
possible effect upon the Company's business, financial condition or results of
operation from these two contracts.

On February 25, 2000, a restricted stock plan "2000 Restricted Stock Plan" was
approved by the Board of Directors. The purpose of the Plan is to provide an
incentive to the officers and certain other key employees of the Company and its
affiliates (as determined by the Compensation Committee of the Board of
Directors) to contribute to the Company's fu.ure success and prosperity by
making available to them an opportunity to acquire a proprietary interest or to
increase their proprietary interest in the Company and to enhance the ability of
the Company and its affiliates to attract and retain qualified individuals upon
whom, in large measure, the sustained progress, growth, and profitability of the
Company depend. The Compensation Committee has discretionary authority to
interpret the 2000 Restricted Stock Plan and to determine the terms of any
awards, when, if and to whom awards are granted, and the number of Common Shares
covered by each award. An S-8 Registration Statement was filed and became
effective on March 13, 2000 covering this Plan. The Board of Directors made
grants to 25 key employees of the Company on March 14, 2000, totaling 616,400
shares. The shares vest over four years and are recorded as compensation expense
on a straight line basis. As at March 31, 2000, the value of the unvested
portion was $3.2 million and is recorded as deferred compensation in
shareholders' equity.

On March 8, 2000, the Company was notified that Standard & Poor's lowered the
long term counterparty credit and insurer financial strength ratings of the
Company's reinsurance subsidiaries to double-B-plus from triple-B. Standard &
Poor's cited the Company's continued weak earnings performance, concerns over
internal control mechanisms and the Company's early departure from its original
business development strategy. In addition, the reduced capitalization resulting
from the loss in the fourth quarter was also raised as a concern. The Company is
returning to its original business development strategy by refocusing its
underwriting efforts on certain markets other than the North American market.
The Company has no plans to exit the North American medical market but will
reduce its risk exposure through developing an alternative fee-based revenue
stream. As part of the refocus of the group, the Company ceased actively seeking
North American medical business through its London market operation from
February 2000 with all such business being handled through the Company's North
American subsidiary. On May 12, 2000, Standard & Poor's indicated that ESG's
risk bearing entities would be placed on credit watch with negative implications
citing concerns over poor operating results.

On May 9, 2000, the Board of Directors approved the additional repurchase of
1,000,000 common shares under the Company's share repurchase program.

In January 2000, the Company appointed Alasdair Davis as Chief Underwriting
Officer of the Company. On April 17, 2000, the Company announced the resignation
of Joan H. Dillard, its Chief Financial Officer, and the appointment of Najib
Nathoo as Senior Financial Officer of the Company, both effective May 15, 2000.


MARKET RISK

The Company is subject to market risk arising from the potential change in value
of its various financial instruments. These changes may be due to fluctuations
in interest rates or foreign exchange rates, or both in the case of foreign

<PAGE>

currency investments. The Company monitors its exposure to interest rate and
currency rate risk on a quarterly basis and currently does not believe that the
use of derivatives to manage such risk is necessary. The Company intends to
reevaluate the need for a formal hedging strategy on a periodic basis, and may
determine that such a strategy, including the use of derivative instruments, is
appropriate in the future.

INTEREST RATE RISK

The largest source of market risk for the Company is interest rate risk on its
portfolio of fixed maturity investments, especially fixed rate instruments. In
addition, the credit worthiness of the issuer, relative values of alternative
investments, liquidity and general market conditions may affect fair values of
interest rate sensitive instruments.

The Company's general strategy with respect to fixed maturity securities is to
invest in high quality securities while maintaining diversification and to avoid
significant concentrations in individual issuers' industry segments or
countries.

FOREIGN CURRENCY RISK

The Company's functional currency is the U.S. dollar. However, the Company
writes reinsurance business in numerous geographic regions and currencies,
giving rise to the risk that the ultimate settlement of receivables and payables
on reinsurance transactions will differ from the amounts currently recorded as
assets and liabilities in the financial statements. The Company intends to hold
investments in currencies in which it will collect premiums and pay claims, thus
creating a partial natural hedge against exchange rate fluctuations. The Company
believes that its exposure to foreign currency risk is not material.

INFLATION

Inflation has not had a material impact on the Company's operations for the
periods presented. The Company has commenced writing reinsurance business in
Latin America, particularly in Brazil, which has experienced periods of high
inflation. It is possible that future inflationary conditions may impact
subsequent accounting periods.

<PAGE>

THE EURO

On January 1, 1999, a single currency, the "euro" was adopted as the national
currency of the 11 participating countries in the European Monetary Union,
including Germany and Ireland, two of the countries in which the Company
operates and in which the Company maintains a significant presence. The
Company's German and Irish subsidiaries will not be required to use the euro for
accounting purposes prior to January 1, 2002. Due to uncertainties related to
the euro conversion, the impact of the conversion is not known. To date, the
impact of the conversion has had no material impact on the Company's operations,
accounting systems or financial reporting.



PART II   OTHER INFORMATION

                            ITEM 1. LEGAL PROCEEDINGS

No material litigation is pending, to which the Company or any of its
subsidiaries or affiliates is a party or of which any of their properties is
subject other than the routine litigation incidental to the business.

                          ITEM 2. CHANGES IN SECURITIES

Not applicable.

                     ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

          ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

No matters were submitted to a vote of stockholders during the first quarter of
this fiscal year.

                           ITEM 5. OTHER TRANSACTIONS

Not applicable.

                     ITEM 6. EXHIBITS AND REPORT ON FORM 8-K

(a)  Exhibits

          Exhibit 11.1 Computation of Earnings Per Share

          Exhibit 15.1 Consent of Deloitte & Touche

          Exhibit 27.1 Financial Data Schedule

(b)  Report on Form 8-K

The Company filed two reports on Form 8-K during the reporting period. The first
report was filed on January 4, 2000 with regard to its positive position
relative to a quota share treaty with Odyssey Re, whereby ESG rescinded this
treaty on December 22, 1999. The second report was filed on March 14, 2000 and
disclosed ESG's fourth quarter 1999 financial results, recent stock repurchases,
a quarterly dividend and the downgrade of the Company's long-term counterparty
credit and insurer financial strength ratings by Standard & Poors.


<PAGE>


                                   SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

May 15, 1999

                                        ESG RE LIMITED


                                        By:  /s/  Cormac Treacy
                                             ----------------------------------
                                        Nmae:  Cormac Treacy
                                        Title: Chief Accounting Officer