Recent moves by Bermuda's insurance and reinsurance sector to adjust to increasing competition has strengthened the prominence of the Island in the global market, a Price Waterhouse survey shows.

And while Bermuda is still considered "young'' in the context of insurance markets, the third annual survey indicates that the sector is "different enough and strong enough to endure as a meaningful part'' of the global scene, according to Global Reinsurance magazine.

The survey and other articles about the Island are contained in a special edition of the UK publication focusing solely on Bermuda. This year's survey has been expanded to 35 companies from the initial 15 covered in the first year.

"The results of this third Price Waterhouse survey are further evidence that some of the most rigorously managed insurance and reinsurance companies in the world are based in Bermuda,'' the magazine states. "Bermuda should be proud, but not complacent.'' The factors that could help keep Bermuda in contention as one of the world's leading domiciles for the industry are: Attractiveness as a holding company headquarters for diverse, world-wide insurance group, helped in part by tax status that creates a "poison pill'' against takeover by onshore companies; Good capitalisation, rapid deployment of up to date risk analysis and capital utilisation tools, low overhead costs and a beneficial tax regime coupled with freedom from some of the problems that beset older companies in the past; Talent for innovation through new products and new initiatives; and Recent changes in Bermuda's laws that make the deployment of capital market resources into the industry attractive despite the soft market.

"Some of the obvious geographical and human resource constraints which affect the ability of Bermuda's companies to expand on the Island will diminish in importance as systems and telecommunications improve,'' the magazine's editor Lee Coppack warns. Bermuda's companies -- notably ACE Ltd. and Exel Ltd. -- have responded to onshore competition by going to the primary sources of business.

"The more of their income they get from onshore subsidiaries, mostly in the United States and in Lloyd's, the greater effect local tax could have on the parent company results, even though it does not have to pay corporation tax itself,'' Ms Coppack states.

Richard Patching, Tim Harris, Neil McConachie and Melanie Kearns of Price Waterhouse in Bermuda put the survey together.

The team concludes that the level of activity in the Bermuda market throughout the year (see graph produced by Global Reinsurance) reflects the development and consolidation of the industry worldwide.

"We fully expect the trend in acquisition and mergers to continue,'' the analysts state. "There is clearly still a long way to go in an industry one of whose problems, in contrast to the early 1990s appears to be an excess rather than a shortage of capital.'' The Bermuda edition also includes a roundtable discussion with Bruce Abrams of American International Company, David Brown of Centre Solutions, Michael Butt of Mid Ocean RE, Don Kramer of Tempest Re, and Graham Pewter of Commercial Risk Partners. Kymn Astwood, Bermuda's Registrar of Companies, contributes an article.

Other articles look at competitors ACE, Exel and Starr Excess Liability Insurance Co., Ltd. strategies in the market, the Bermuda Stock Exchange and the creation of an insurance index, and the technological sophistication of the Island.

HIGHLIGHTS -- The above Global Reinsurance magazine chart underlines the main events in the Bermuda insurance market in 1997 8.

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