reinsurance company, rose as much as 60 percent in their first day of trading on Thursday, reflecting optimism for the prospects of reinsurers with the tax advantages of a Bermuda home.

The company rose $8 5/16 to $23 5/16 in late trading and was the biggest gainer and most active stock in US markets with 17.2 million shares changing hands in the Nasdaq Stock Market. The stock rose as high as 24 after the company sold 17.1 million shares at $15 each.

"A lot of the Bermuda property and casualty insurers and reinsurers have done well,'' said Ira L. Zuckerman, an analyst with Nutmeg Securities Ltd. in Westport, Connecticut. ''People are thinking this is the next way to play that.'' Annuity & Life intends to reinsure mortality and investment risks of life insurance and annuities sold by other insurance companies. It plans to concentrate on reinsuring large blocks of business so it will need to make fewer evaluations of the risks it assumes.

The company stock sold through securities firms led by Prudential Securities Inc. and Merrill Lynch & Co.

Zuckerman said Bermuda offers reinsurers such as Annuity & Life -- expected to be known as Annuity Re -- a roughly 35 percent advantage over domestic reinsurers because of the absence of a corporate-level tax, as well as an easier regulatory environment.

The reinsurance industry is benefiting from strong demand among insurers for new products that reduce risk, said Colin Devine, an analyst at Salomon Smith Barney Inc. ''The Street values predictable earnings,'' he said. "Reinsurance can be used to help increase the predictability of earnings'', for the insurance companies who spread their risks to reinsurers.

Reinsurers assume part of other insurers' risks, allowing insurance companies to take on larger policies or more business than they could carry alone.

Annuity & Life said it will take advantage of the growth potential of the annuity and life reinsurance market. It said US annuity assets totalled about $919 billion, and about $17.6 trillion of life insurance was in force in the US at year end 1996.

Annuity & Life and its wholly owned operating subsidiary, Annuity & Reassurance Ltd., were formed on December 2 to sell low-cost reinsurance, and have no operating history. Annuity & Life said it expects to benefit from the absence of a corporate-level tax in Bermuda on its revenue and earnings.

"Is the Bermuda tax domicile an advantage? Yes, it is,'' Devine said. "But against that, life reinsurance is a business that's built around long-term relationships. And companies such as Lincoln National, American United Life have been in the business for a very long time.'' In addition to the public stock sale, Annuity & Life sold about 5.9 million shares directly to an investor group consisting of Prudential Insurance Company of America, Exel Ltd., Risk Capital Reinsurance Co., Insurance Partners LP, and Insurance Partners Offshore (Bermuda) LP. The sale raised about $79.5 million.

Annuity & Life said its plan to sell low-cost annuity reinsurance presents an attractive opportunity because of the large potential size of the market coupled with the limited number of companies selling such reinsurance on a third-party basis.

The company will contribute most of the proceeds from both sales to Annuity & Reassurance to support its reinsurance underwriting capacity.

Annuity & Life trades under the symbol "ALREF.'' BT Alex. Brown, CIBC Oppenheimer Corp., and Schroder & Co. helped Prudential and Merrill sell the shares. -- Bloomberg SOARING STOCK -- Annuity Re, whose stock was priced at $15, jumped to $24 when trading opened on Thursday.