There are no soft words about the insurance industry and the way its staff and management have behaved in recent years from this industry veteran.

He pulls no punches and spares no one from the criticism of an industry that had been lagging before the events of September 11.

In fact John Charman, the chief executive officer of Axis Specialty, one of the new reinsurers on the block, says that this recent time was the worst he has seen in his 30-year long career.

"I think it has been a combination of complacency, inability, lack of management, lack of focus, lack of strategic overview, and if you put them all together into a melting pot, you can come up with some pretty average businesses.

"You only have to look at the industry insurance sector against the other commercial sectors over the last five to ten years and you can see it."

But there is a light at the end of the tunnel with the industry re-grouping, many here in Bermuda, and changing the way they work.

With the zeal of a man who has seen that light very clearly, he said: "So that is why I was saying about transformational, because this loss will really change the structure and the nature of the business as well. I think there will be a much greater focus on commercial activity, lifting up all the drones so to speak ,in every aspect of activity which I think is incredibly important.

"And businesses will re-focus, they will re-group and they will be much stronger for it in the future and it means that the staff will be much better. They will be better trained, they will be more able, so everybody will benefit, but the near-term dislocation is going to be huge."

Charman is an interesting character. He first came into contact with Bermuda in 1968 through a captive and since the 1980s has been a regular visitor.

He has a strong underwriting background, having served with Charman Underwriting Agencies, Tarquin, Scottish Lion Insurance, and Sturge Marine before joining ACE. He was also deputy chairman of Lloyds.

He joined the ACE hierarchy in 1998 when the company bought Lloyd's agent Tarquin Plc for $500 million, when Mr. Charman was managing director of the UK company.

But ACE boss Brian Duperreault had a legendary fall-out earlier this year. He had been made Chief Executive Officer of ACE International Group as part of a reshuffle.

Little is known about the dispute but ACE had to pay out huge sums of money to smooth things over and last month took out legal action (which was quickly settled) in London to make sure he was not breaking the terms of his departure from ACE by becoming CEO of Axis.

Mr. Charmin said about his leaving ACE: "I hadn't been out of work for 30 years. I spent three months licking my wounds."

But he was not to remain idle for long and quickly had plans for a new company. He said: "I then chose people that I thought possessed the right intellectual capital and the right attitude, with whom I wanted to partner with. So we had begun to discuss in general terms in the middle of the year, looking at a vehicle to begin trading in the middle of next year. But that was just part of a normal cyclical play and the insurance industry has been in the worst cycle in my 30-year career."

But the events of September 11 changed all that, and out of the ashes of the World Trade Centre, grew Axis Specialty.

He said: "We are different from the other companies - not only were we the first ones to nail our hat and say that we're coming to Bermuda, but also that we have aligned and extremely strong capital base with a strong proven management and excellent underwriters, and nobody has got that combination.

"It's a great cocktail. I haven't thought of a name for it. I'm not going to call it the Axis cocktail, I'm going to ask a barman on the Island. but it is a great cocktail. It's the business model really for the future. We don't have to look after our shoulders. I know it sounds old hat, but it is real. I think we are going to demonstrate, along with a few others, a divergence between the past and the future, and it will open up quite rapidly. But we are within a market. And one of the things I would like to stress is that we hope we are viewed as complimentary to it and will work within it as part of the market. But I hope that we will be leading it from the front."

Axis is to be a lean, mean fighting machine, with many of its services farmed out to companies around the Island. Its IT and back office support and policy processing are no longer done in house, and Charman believes that this is the way ahead for the business.

He said: "If you look at most of the major insurance and reinsurance businesses globally, are overwhelmed by infrastructure - huge infrastructure.

There are huge populations of people, workers so that the reality of managing and focusing at the same time on proper business activities is extraordinarily difficult. What we are trying to do is to use a fundamentally different business model which relies less on people but the people that are employed are going to be the best in their field.

"Therefore the concentration on wealth creation without the drag of those infrastructure issues and then driving in the economies of scale that you get through having substantial turnover but with limited number of people, but with high degrees of excellence with everything that we do.

"The whole concept of Axis was not creating an opportunistic response to the tragic events of September 11 by way of reinsurance. It was actually creating something that I don't think Bermuda has really seen yet, which is a combination of a major reinsurer aligned with a global specialty insurance business. And that gives us such long term viability because it then becomes a value added business through the different cycles that naturally occur on the commercial world, let alone the insurance world. So our business model is materially different from the others and as we progress, as we strengthen, I think that differential will be clearly shown. I think we can really concentrate on things that we are very good at."