economy. Despite the well-publicised collapses of the Telecheck group and Bermuda Fire & Marine, the local economy showed strong signs of recovery as a result of growth in international business and an improved Tourism industry picture. Here, Business looks at the major events of the period.

The last six months of 1993 saw the fruition of Bermuda's reinsurance market as an internationally recognised centre.

Widespread media attention focused on the remarkable market growth experienced within a small economy.

Nine reinsurers and one excess liability company, Starr Excess have set up in Bermuda -- many consolidating plans in the second six months of 1993. Bermuda hosted the Seventh International Reinsurance Congress in October, which did have a "supercharged'' atmosphere as anticipated by local insurance bosses.

It was the first congress since the injection of in excess of $4 billion additional capital to support the new property catastrophe writers.

However, plans by French insurance giant Scor SA to set up a property catastrophe reinsurer Compass Re, with capital and surplus of $300 million, were dropped because the sponsor, did not want to be "a small player in a playground for the big''.

Yet at the most popular Bermuda congress held to date, Mr. Donald Kramer, chairman of Tempest Re, predicted that the highly capitalised new catastrophe reinsurers could expect to reap substantial profits from the 1993 fiscal year.

Mid Ocean Ltd., which owns property catastrophe reinsurer Mid Ocean Re, has reported a profit of $67.68 million for its first fiscal year, which ended on October 31.

EXEL Ltd's subsidiary XL Insurance announced in October its intention to enter the excess property insurance business. It plans to write high layer risks for large commercial corporations, which are current XL excess liability insurance policyholders.

In December, property catastrophe reinsurer Renaissance Reinsurance raised its capital and surplus to $270 million after receiving an extra $100 million capital commitment from its initial investors.

The euphoric mood in the insurance sector was deflated in November by news of the voluntary winding-up of Bermuda Fire & Marine.

Creditors are said to be concerned by the 1991 split of the company's profitable domestic business and its loss-making international division, and threatened legal action.

However, Bermuda Fire & Marine directors insist that adequate reserves were retained by the company. After selling its domestic business to BF&M, Bermuda Fire & Marine had $10 million in excess of its liabilities, according to chairman the Hon. Charles Collis.

In December, court action by aggrieved creditors of Bermuda Fire & Marine was put on hold for three months, according to joint provisional liquidators Mr.

Gareth Hughes and Mr. Anthony Joaquin.

Legal orders in the US, the UK and Bermuda prevent any court action while the company's finances are being investigated. An application to wind-up Bermuda Fire & Marine was adjourned until March, 1994 by Bermuda Supreme Court in December.

It emerged that a congressional sub-committee called the Oversight and Investigations sub-committee, chaired by Republican John Dingall, is monitoring the collapse of Bermuda Fire & Marine.

And the UK's Department of Trade and Industry is also investigating the company collapse -- because of the publicity focused on the company, rather than because of any evidence of wrongdoing, according to Mr. Collis.

No sooner had the dust settled on the Bermuda Fire & Marine controversy than the Island was hit by the sudden news in December that the Telecheck group of companies were to be liquidated.

Naturally many local investors, who had poured more than $6 million into the companies, were angered. Televest had promised investors seven to nine percent annual returns on "deposits'' exchanged for preferred shares.

The company opened as a cheque guarantee service, which later moved into debt collection and credit cards.

Another insurance failure during the six months under review was Bermuda-based property reinsurer Bristol Re, which went into run off due to continued heavy losses sus tained in the 1989-91 underwriting years.

A loss of $9.39 million during the last fiscal year left the firm with capital and surplus of just $1.125 million at December 31, 1992.

Bristol Re is owned by Greek shipping magnate Mr. Stavros Niarchos.

The largest liquidation of a captive insurance company, Mentor Insurance, drew to a close at end of July. The company, formed in Bermuda in late 1960s, ran into major financial difficulties when it began writing third party business for tax reasons. In January 1985, it stopped underwriting.

A blow for the captive insurers was the National Association of Insurance Commissioners' decision to adopt the Model Fronting Act at its December executive meeting.

One implication of the Act is that it will increase the cost of operating offshore captives who use fronting companies.

Despite the gloom, Bermuda showed strong signs that the economy was easing out of protracted recession.

According to the Bermuda Monetary Authority, the 4.4 percent increase in money supply at last year's Cup Match figures compared to 1992 showed that confidence is up.

At the end of the year, Bermuda's banks and deposit companies were under increased pressure to reduce interest rates because of a build-up in savings.

Lending institutions recorded significant increases in Bermuda dollar deposits in the third quarter of the year.

The tourism industry improved on a disastrous 1992, recording 568,141 visitors during the year, with a 10.4 percent increase in air arrivals, and a 17.5 percent jump in cruise visitors.

Occupancies in the Island's hotels were also healthier, but not enough to lift the Island's eight major hotels into profit. They announced a combined unaudited loss of $5.37 million.

Mr. Michael Collier, president and chief executive officer at the Bank of Butterfield, saw clear signs of recovery in the real estate market.

Bermuda Financial Centre appeared to be striding forward in its mission to demolish the empty Bermudiana Hotel and develop a $130 million business and hotel complex.

The Four Seasons Hotel has issued a letter of intent to enter into a management agreement for the hotel. The developers successfully raised more than its $1 million minimum target in a local public offering, which closed in mid-October, and later in the last quarter of 1993 bought the Bermudiana from Forte for $14.5 million.

Another indicator of the health of the domestic economy came at Christmas when the Bermuda Monetary Authority announced that the 1993 Christmas dollar supply was the highest ever recorded dollar supply figure to date.

However retailers cautioned that business is still not as brisk as it was four years ago.

The banks fared well in 1993. Bermuda Commercial Bank reported stronger fiscal results, the first posted since Barclays Bank plc sold its shares to First Curacao International Bank, which is owned by Mr. John Deuss. The bank showed a $509,597 for fiscal 1993 -- up 66 percent on the previous year.

The Bank of Bermuda reported a profit of $35.9 million for fiscal 1993 -- 26 percent up on the previous year and the largest ever profit by a local company.

In July, the Bank of Bermuda and lawyer Mrs. Lynda Milligan-Whyte launched a highly praised reference guide to Bermuda's international sector entitled "Bermuda -- Your Bridge to International Business''.

The Bermuda Stock Exchange is currently drafting regulations intended to protect investors.

Exchange president Mr. Charles Gunn anticipated that local investment firms would be joining the Exchange, and predicted the number of trading members would increase early this year.

In July, the Exchange, under the chairmanship of Mr. Bill Dolan, had announced that non-bank securities dealers are likely to be permitted to apply for membership.

Mr. Dolan, former investment manager at the Bank of Bermuda, joined other former Bank of Bermuda managers at a new trust company Grosvenor Management.

He also resigned as chairman of the Stock Exchange in October.

Mr. Peter Mellor, the Bank of Bermuda's chief investment officer and managing director of its investment division, has overseen a comprehensive shake-up of this area, and set up a new corporate finance department called Financial Advisory Services.

A flurry of share offerings by international shipping companies, eager to raise capital for fleet expansion, was dominated by a number of Bermuda-registered companies.

First Olsen Tankers, Benor Tankers, London and Overseas Freighters (Bermuda), Bona Shipholding and Smedvig Tankships undertook international roadshows to stimulate interest in share offerings.

Mr. John Sharpe, a partner at Conyers, Dill & Pearman, partly attributed the spate of high profile public offerings to cautious bank lending policies.

It was also uncovered that Bermuda's popularity as a site for international investment funds had been quietly growing apace.

The total net asset value of some 300 funds registered here stood at $6.79 billion in July last year.

Some well-known local businessmen were in the limelight late in the year.

Businessman Mr. Mark Hardy, the former boss of Focus Insurance, was purged of contempt of court in November, enabling him to pursue an action in the UK to have his bankruptcy discharged.

In early December, Bermuda Cablevision founder Mr. Gavin Wilson sold his 41.5 percent stake in the company said to be worth $3.5 million. He is no longer president and a director of Cablevision. Other directors were also voted out of office and replaced.

One of the new directors, First Bermuda Securities president Mr. Jeff Conyers has an action pending at the Supreme Court against the company and its directors about whether it is illegally controlled by non-Bermudians.

A new generation of senior managers prepared to take over at BELCO at the end of the year, and to contend with major challenges facing the utility.

Outgoing senior vice president and assistant to the president Mr. Eugene Cox said he and Mr. Alfred Oughton, president and chief executive officer had laboured hard to minimise the effects of falling demand for electricity and anticipated high capital expenditure.

New BELCO president Mr. Garry Madeiros said falling demand by leading energy users, and the environmental demands of the Clean Air Act would be dealt with by close communication and negotiation with customers and regulators.

In December, Mr. Richard Butterfield completed his tenure as Bermuda International Business Association (BIBA) chairman, having galvanised the organisation and laid the foundations for a large scale marketing campaign.

Mr. Cummings Zuill was elected the new chairman.

BUSINESS BOOK -- Mrs. Lynda Milligan-Whyte.

RETIRING TYPES -- Bermuda Electric Light Company chiefs Mr. Eugene Cox, left, and Mr. Alf Oughton left the utility after long careers, while Mr Bill Brewer, right, retired from Container Ship Management.

MID OCEAN RE chairman Mr. Michael Butt.

PUBLICITY -- Bermuda Fire & Marine chairman the Hon. Charles Collis.

TELECHECK TRIO -- Directors of the troubled group leave Supreme Court last week after contesting winding-up orders. From left to right, Mr. Thomas Burns, Mr. Christopher Donnachie and Mr. Richard Burns.