The future of Bermuda, and, by definition, Hamilton, as an international business centre, has never looked rosier. But many businesses catering strictly for a local market continue to face a struggle to make ends meet.

There is little doubt that Hamilton has become the "in'' place to be for new international insurance and reinsurance companies.

Well over $1 billion worth of new insurance capital is expected to flood into the city this year with the formation of at least five companies, largely in the area of property catastrophe reinsurance.

As insurance markets in other parts of the world, most notably London, contract further and report record losses, even more opportunities could come Bermuda's way.

And another boost to the city's economy has come from Government's decision a few years ago to allow foreign trust companies to operate on the Island.

Blue-chip trust companies such as Coutts & Co., bankers to The Queen, no less, Schroders and Lombard Odier have set up operations here.

"The sheer quality of these companies gives Bermuda that country club atmosphere,'' said Finance Minister the Hon David Saul.

"Right now, Bermuda is the last word in kudos for a company. There's no doubt about that.

"Hardly a month goes by without someone telling me that there's more prestige attached to Bermuda than any other jurisdiction.'' But this rush of new development in the city has also brought with it new problems. One of the most pressing of these is where to house all the new companies.

Commercial property dealers say there is plenty of office space around at the moment, but many of the buildings are too old to fit in with the quality image of potential renters.

Dorchester Realty manages some of Hamilton's most prestigious office space, such as Cumberland House, Craig Appin House, Chevron House and Dorchester House.

The firm's managing director, Mr. Duncan McBeath, said: "All these new insurance entities and trust companies are concerned about their image.

"They want top shelf space like that offered at Cumberland House, but there is a shortage of capacity in this quality range. The older buildings simply will not do for them.'' New international companies typically start off with commercial space of about 2,000 square feet but the hugely successful ones, such as ACE and XL, grow quickly and soon require ten times that size, he said.

Mr. McBeath suggested that the Bermudiana Hotel, which has been empty for several years, would be an ideal site to develop new blue-chip office space.

More space should also become available when the Bank of Bermuda moves into its new home on the corner of Gorham Road and Bermudiana Road.

Other people, like Mr. Bobby Rego, head of Bermuda Chamber of Commerce's retail division, are concerned about a lack of space of a different kind -- parking space.

Mr. Rego said increased traffic congestion in the city is a growing problem and urged planners to make more parking space available for workers and shoppers.

Ironically, this problem could be worsened by one of Mr. Rego's other suggestions for improving the shopping environment in the capital -- the introduction of selective pedestrianisation.

"I believe that within the next three to five years, the area of Reid Street from its junctions with Parliament Street and Queen Street will be closed to traffic, at least for a large part of the day,'' he said. Mr. Rego also suggested that local retailers had to become more efficient in order to survive in a modern business environment.

"They've got to be more innovative and creative in merchandising their goods,'' he said.

"In the future, the successful stores in Hamilton are going to be leaner and meaner.'' He advocates late-night shopping, similar to that which already exists at Dockyard, and forecasts that some stores in Hamilton will stay open until 9 p.m. to cater to visitors.

But his support of additional hours does not extend to condoning Sunday opening.

"I don't believe there are the resources around to man the shops properly on Sundays,'' he said.

"You've also got to remember that Bermuda is a very church-going society. You will be impeding on people's church services.'' Dr. David Saul.