Bermuda market, but could also lead to the emergence of new, independent brokerage houses, a long-time market executive has observed.

Former chairman of Aon's Bermuda operations Robin Spencer-Arscott said that the local market still hadn't fully recovered from the last round of mergers, which saw Aon acquire A&A, and Marsh & McLennan absorb J&H.

All four brokerage and captive management companies had Bermuda operations, leading to significant changes including lay-offs and other consolidation-related departures.

He said, "Bermuda hasn't even felt the full and final effects of those two mergers. And now Marsh is taking on Sedgwick?'' The new J&H Marsh Mac is proposing to buy out London-based Sedgwick Plc for more than $2 billion, on the heels of a series of acquisition moves by Aon.

It also comes several weeks after US management buy-out specialist, Kohlberg Kravis Roberts (KKR) bid $1.4 billion for UK broker Willis Corroon.

"Personally,'' said Mr. Spencer-Arscott, "I feel that the Marsh Mac thing with J&H was all done very badly. But then, egos got in the way. If it would have been done properly, there wouldn't have been a quarter of the fall-out that they have had with people leaving, and business leaving.

"Actually, I thought that Aon and J&H would have been a better fit.'' He pointed out that he knew little of the proposed J&H Marsh Mac deal to acquire Sedgwick, but he said his first thought was that he couldn't see how it would be better for Bermuda.

J&H Marsh Mac chairman A.J.C. Smith described his new merger as beneficial for clients, employees and shareholders. "Who is he kidding?'' laughed Mr.

Spencer-Arscott. And he said, "It is hard to say, but I can't see how it would be better for Bermuda clients. If I was a Sedgwick client, I'm not sure that I would like to become a Marsh client. They run their operations differently.

"I may have been with Sedgwick, thinking that I was getting more personalised service, and suddenly, I'm in with one of the two big ones. I think that it will open the door for smaller spin-offs, with departing executives taking some of the business with them, when they go.'' Mr. Spencer-Arscott left Aon after the last merger last year to pursue similar strategies with other business interests.

His plans to start a new $300-million reinsurer were stymied when key investors moved on. His latest venture was temporarily on hold in recent weeks when he travelled to the US for a successful heart bypass operation.

And now on the mend, he has formed a consultancy firm and advertised for a management company.

He said, "I saw the need for new, independent brokers with the J&H Marsh Mac, and Aon and A&A, mergers. If the latest ones go through, there is even more reason for me to start a captive management and brokerage operation. I want to fill the void that is being created.'' Mr. Spencer-Arscott noted: "You could end up with just two major international insurance and reinsurance brokers.''