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BADEN-BADEN, Germany-Timing is everything.

London's newest reinsurer, Liberty Re Ltd., got formal authorization from U.K. regulators just in time to market itself at this year's annual reinsurance meeting in Baden-Baden, Germany.

But the reinsurer also is launching itself at a time when the reinsurance market is awash with capacity and falling rates.

Liberty Re, with $400 million in paid-up capital and the backing of Liberty Mutual Insurance Co. of Boston, aims to underwrite in four major classes of business: prop-erty/casualty, life, health, and financial-oriented products.

John Engestrom, chief executive of Liberty Re, explained that setting up Liberty Re has been a long-term project and that it had to first await regulatory approval, making it impossible to time its entry into the market.

Mr. Engestrom, previously group chief executive of Mercantile & General Reinsurance Co. P.L.C. until its 1996 acquisition by Swiss Re Group, said Liberty Re received a very positive reception in Baden-Baden. People welcome "a different player who comes with a different message," he said.

Liberty Re sees its main difference from other reinsurers in its desire for "long-term, risk-carrying partnerships" with clients, Mr. Engestrom said.

Taking risks off clients won't just mean assuming traditional property/ casualty or life/health insurance risks. Asset liability management, foreign exchange and credit risks, and operations risks-such as information technology systems, product development, distribution and claims handling-are all part of the package Liberty Re is offering, Mr. Engestrom said.

This would be achieved partly by using "networking partners"-such as consulting actuaries, investment bankers and information technology specialists-that it can call in as needed.

Keith Scott, Liberty Re's general manager, added that people he talked to in Baden-Baden find the company's approach "quite radical" but are receptive to it.

Given overcapacity in the market, Liberty Re is not keen to offer another conventional product. However, it will do that as a means "of building a first step in a partnership in which we are offering unconventional support," Mr. Scott added.

On the pricing side, Liberty Re promises "a transparent dialogue" regarding risk assessment and risk pricing.

Clients will be told how the company prices its products, its margins and what returns it expects.

Liberty Re Director Wayne Daniel said Liberty Re will be "declaring its view on pricing" and turning away business if the rates are too low. Plans are to use about 60 million pounds ($100.3 million) of its capital in the first year, though "there is no slavish adherence to the plan," and if returns are not sufficient, additional business will not be accepted, Mr. Daniel said.

Mr. Engestrom said, "We are trying to go for long-term, high-value-added service, and that doesn't mean lowest price."

Martyn Hooper, managing director-non-marine division of reinsurance broker Kininmonth Lambert Ltd. in London, said it remains to be seen how Liberty Re's claim to establishing a long-term partnership actually translates into doing business.

He said Liberty Re will have to offer something new to gain a foothold in the current competitive market.

However, other reinsurers have maintained that Liberty Re's concept of long-term partnerships is nothing new.

Susan Gwynne, planning and marketing director for Eagle Star Reinsurance Co. Ltd. in London, agreed. "I think reinsurers generally hope that they can build up a partnership with their clients," she said.

With regard to Liberty Re, she added, "Maybe it's the one-stop shopping approach that might be new. . .but our view is that ceding companies are generally reasonably comfortable having a number of reinsurers and perhaps a little uncomfortable if that reduces significantly."

Despite the competitive market, Mr. Daniel is confident Liberty Re will be able to reach its target of generating a 15% aftertax return on capital in three to five years. This will be achieved through a long-term pricing strategy across all its lines of business, he said.

Initially, the company is directing its efforts at acquiring business from Europe and Asia.

Nordic countries are served by a representative based in Stockholm, and the reinsurer's London office will write other European business.

Liberty Re has 50 staff members, a number expected to grow to 60 by the end of the year.

A number of the current employees are from corporate finance, investment banking or actuarial banking backgrounds and are working on the financial products side of the organization, he said.

Sarah Goddard also contributed to this report.