the Bermuda insurance market over the next ten years.

And he endorsed the move by the Bermuda Stock Exchange (BSX) to develop a catastrophe index for trading `Cat' derivative securities.

Norman L. Rosenthal, managing director of Morgan Stanley & Co. Inc. and Norman L. Rosenthal & Associates, was speaking during a seminar in Cancun, Mexico hosted by Bermuda broker, Park International.

In conjunction with Park, market leading Bermuda companies that included ACE, XL, Starr Excess, Chubb and Mutual Risk Management Ltd. (MRM) took part in sessions focused on the Bermuda market, Park's parent company MRM, excess liability, D&O, property and finite risk.

Mr. Rosenthal said that Bermuda will be able to participate in most of the favourable trends impacting the world-wide property casualty industry -- trends such as reinsurance consolidation, while avoiding many adverse developments such as chronic loss reserve strengthening and declining service.

Bermuda's impact on the insurance and reinsurance industries over the last ten years is astounding, he said.

Bermuda has become the leading market for excess casualty insurance to Fortune 1000 companies, the leading worldwide market for catastrophe reinsurance, the leading worldwide market for finite insurance and reinsurance, the leading domicile for captive and rent-a-captive insurance companies, and a major owner of Lloyd's capacity, while boasting ten publicly traded insurance and insurance-related entities.

"And I am convinced,'' he said, "that in the next ten years, Bermuda will become an important worldwide market for marine, aviation, satellite, and excess property insurance as well as casualty reinsurance.

"Supporting my prognostications, it is interesting to note that Bermuda-based underwriters have taken the lead in writing holistic casualty coverages for major international corporations, a trend, I believe, that will exhibit dramatic expansion during the next several years.'' He also sees Bermuda with a "fabulous future'' as the domicile for mono-line or specialty insurers such as First Line and Shoreline Mutual, or insurers which do little else but support insurance securitisation or generate funds for highly sophisticated investment management.

Mr. Rosenthal said: "These firms will house the most innovative approaches to risk management and risk transfer that current technology and brain power are capable of producing.

"Such a development seems to me to be a natural extension of the tradition established by Bermuda's specialty reinsurers, which ushered in the use of highly technical analytical models for underwriting their property catastrophe reinsurance line.'' Mr. Rosenthal forecasts that in ten years "there will be a flourishing insurance capital market with Bermuda underwriters playing a key role as originators, purchasers, traders and price validators of these innovative securities. It isn't surprising, therefore, that the Bermuda Stock Exchange is working to develop a catastrophe index for trading Cat derivative securities.

"I believe it is a credit to the creativeness and professionalism of this market that so many of its participants are taking an active role in the development of insurance securities rather than viewing these products as something to fear and oppose.

"The growth of this new capital market should further spur the expansion of Bermuda as an international financial centre, a trend that I believe will gain significant momentum during the next several years.'' BUSINESS BUC