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The latest covey of reinsurers to nestle in Bermuda face a tougher task than the group of catastrophe reinsurers that flocked to the island in 1993.

Back then, in the tight market for property reinsurance, the highly capitalized cat reinsurers needed to do little more than open their doors and wait for large amounts of highly profitable business to flood in.

The mixed bag of specialty reinsurers that set up over the past year, by contrast, are trying to drum up business in a nearly universally soft market, intermediaries say.

Each of the reinsurers is targeting a different niche.

Latin American Reinsurance Co. Ltd. is taking on risks solely from Latin America; RAM Reinsurance Co. Ltd. is a financial guarantee reinsurer; Annuity & Life Re (Holdings) Ltd. is a life reinsurer; Oracle Re is an employee benefits reinsurer and rent-a-captive facility; and Arrow Reinsurance Co. Ltd. and Lehman Re Ltd. are seeking to securitize risks (see related story).

"They can't just go down there, raise their hands and say, 'Send me business.' They will have to work very hard for it," said Willis King, vice chairman in charge of sales at Guy Carpenter & Co. Inc. in New York.

The property and casualty reinsurance market remains soft, the life market is over-capitalized, and investors, insurers and reinsurers are still figuring out securitization, he said.

Nevertheless, the new Bermuda reinsurers have as good a chance as any other start-up reinsurers in the soft market, said Steven Bolland, senior vp at Gill & Roeser Inc. in New York.

The reinsurers in Bermuda also have a tax advantage over their onshore competitors because they do not have to pay federal income tax, Mr. Bolland said.

The tax break provides a significant competitive advantage for Annuity & Life Re, said Lawrence Doyle, president and chief executive officer. "We can offer a lower price because we have very low overheads and a favorable regulatory environment," he said.

Annuity & Life Re set up in April with about $350 million in capital, and in its first quarter made a $3.6 million profit. "I think that is pretty good for a start-up," he said.

The continued consolidation in the life reinsurance business over the past two years, with Swiss Reinsurance Co. taking a dominant position, has helped the Bermuda company, as buyers want to spread what are often huge contracts around several reinsurers, Mr. Doyle said.

The absence of federal income tax was also a significant factor in the decision to domicile RAM Re in Bermuda, said Robert A. Meyer, chief executive officer. "We needed to capitalize the company, and given the demands of the private market today, it seemed that the only way we could provide the returns they wanted was by domiciling in Bermuda," he said.

The company was established in February with $88 million in capital. Its four largest investors are Greenwich Street Partners, the venture capital arm of the Travelers Group; PMI Group; Continental Illinois Venture Capital, a unit of Bank of America Corp.; and London Reinsurance Group in London, Ontario.

But aside from tax advantages, Bermuda also is a sophisticated insurance market and geographically a good location for the financial guarantee reinsurer, which is seeking to attract business initially in the United States and Europe, Mr. Meyer said.

Latin American Re also enjoys the favorable tax environment in Bermuda, said Keith Shroyer, senior vp and chief underwriting officer. But it is relying more on its network of contacts in Latin America to win business, he said.

Mr. Shroyer previously headed the Latin American department at American Re-Insurance Co. in Princeton, N.J.

EXEL and Risk Capital Reinsurance Corp. in September 1997 established Latin American Re, which has surpassed its projected premium volume for its first year, Mr. Shroyer said. The projection was for $17.5 million in gross premiums; the reinsurer already has written $20 million, he said.

"We have been progressing quite satisfactorily considering the situation the reinsurance market is in right now," Mr. Shroyer said.

Ninety-nine percent of the business Latin American Re has written so far is proportional treaty business because the pricing for facultative reinsurance and catastrophe excess of loss business in Latin America is significantly underpriced and "not worth touching," he said.

When the market turns, Latin American Re's proportional business likely will make up about 80% of the book, Mr. Shroyer said.

Latin American Re also will write financial reinsurance, he said.

The bulk of its business currently comes for Colombia, where Latin American Re has an office; Chile, where Mr. Shroyer lived and worked for several years; and Puerto Rico.

The company plans to open offices in Argentina and Mexico later this year and in Brazil next year.

Oracle Re has written about $120 million in gross premiums since is set up in March, said Colin O'Connor, president and CEO. Most of the business is derived from the reinsurer's U.S. affiliates Safety National Casualty Corp. and Reliance Standard Life Insurance Co.