Odyssey Re (Bermuda) Ltd.'s key alternative risk transfer underwriter and set him up to compete with his previous employer.

ACE announced yesterday it was establishing a newly created captive reinsurance facility within the group. In a similar move Chubb Atlantic Indemnity Ltd. announced yesterday it has formed a subsidiary in Bermuda to compete in the same alternative risk transfer (ART) market (see story below).

ACE has appointed Bermudian Bruce Jones as head of its new captive facility.

Mr. Jones resigned from Odyssey Re last week along with underwriter Richard Asprey.

In his previous position, Mr. Jones was president of Sphere Drake Underwriting Management (Bermuda) Ltd,. which became part of the Odyssey Re Group when Sphere Drake was purchased in December last year by Fairfax Financial Holdings.

Now he is working in direct competition with his former employer. ACE Insurance Co. Ltd. president Dominic Frederico said the establishment of the facility was a further step for the company into the alternative risk transfer market.

The division will target captives with a predominantly casualty portfolio, on both a single and multi-line basis.

"ACE has successfully established a significant presence in the alternative risk transfer market through our Financial Lines division,'' Mr. Frederico stated in a press release. "But the formation of this division within ACE devoted specifically to captive reinsurance allows us to concentrate personnel and resources on developing a sector of the market with great growth potential.'' He said the division would focus on providing reinsurance to captives, risk retention groups, pools, rent-a-captives and other risk retention vehicles.

"Given that the captive pools and rent-a-captives are the fastest growing segment of this market sector, we feel that this represents an excellent opportunity for business development,'' he said.

An ACE spokeswoman said further details about the division were forthcoming once these had been worked out.

ACE Insurance senior vice president for business development Roger Gillett said the division helps fill a void in the Bermuda market.

"This is another step toward enabling risk managers to meet their entire risk financing needs in Bermuda -- something that the market has needed for years.'' Julian Griffiths, director of broker Griffiths & Wanklyn, welcomed the moves as a further offering of services in the Bermuda marketplace.

"There has been a lack of responsive reinsurance facilities here in Bermuda,'' he said. "There has been Sphere Drake -- but that's it really -- providing the type of specific and aggregate type reinsurance that many of the captives, in particular rent-a-captives, need. You would have to go to Sphere Drake or you would have to go off Island.'' Bob Hodson, regional manager of Preferred Reinsurance Intermediaries' New York State office, said he has done "quite a bit of business'' with the individuals forming ACE's new division.

"With all of the capacity in the reinsurance arena today, particularly in Bermuda, most of the emphasis is on property and property related capacity,'' he said.

"For quite a number of years the individuals who are forming this (ACE's) venture really have a unique niche carved out for themselves in that they took the time and effort to understand some of the alternative risk vehicles that are being utilised in the States -- particularly the smaller group and association captives as opposed to the large Fortune 1000 single parent captives.''