keeping a close watch on the movements of Hurricane Georges, after its devastating visit to the Caribbean islands.

Chairman and CEO of Tempest Re, Donald Kramer conceded there was some anticipation of a more severe year of catastrophe claims than in 1997.

"It definitely will be a more active year,'' he said. "We're all watching to see how this hurricane develops. The next 24 to 48 hours will give us a better feeling of what that will be. It did substantial damage in the Caribbean and Puerto Rico.

"As regards the other storms this year, most didn't hit the Island's big catastrophe reinsurers. This one probably will attract attention among all the Island's cat companies.

"We've had various kinds of claims of different types, including the Canadian ice storms and the Midwest storms. But this one should be more interesting.'' Exel Ltd. senior vice president, Gavin Arton, said, "I would have thought that most of the catastrophe writers in Bermuda would have some exposure. We at XL Mid Ocean Re are expecting involvement because we do have a book of business in the Virgin Islands and Puerto Rico.'' Already there are estimates that insured losses in the Caribbean from Hurricane Georges will likely exceed $1 billion.

Risk Management Solutions Inc. estimated Georges as one of the worst Caribbean basin hurricane losses for the insurance industry. Hurricane Hugo in 1989 caused the region's worst hurricane loss for the insurance industry, with $1.2 billion in insured losses.

The relatively high levels of insured exposures in Puerto Rico will make it the focus of insured loss for Georges. Puerto Rico was estimated to have over $50 billion in total insured values.

Risk Management's $1 billion-plus projection included losses in the US Virgin Islands, Antigua and other Leeward Islands, and the Dominican Republic.

A local primary writer expecting to face losses is Colonial Insurance.

Managing director Alan Peacock said, "We're operating mostly in the Cayman Islands and the Bahamas, and are starting to write business in the British Virgin Islands (BVI). There are a few losses in BVI, but it doesn't appear to be too bad at this point, although we did lose communications with them for a while.

"We're waiting to see what happens in respect of the Bahamas, where we do have some exposure, mainly in New Providence around Nassau. We don't do business in Puerto Rico or the Dominican Republic.

"We're in BVI, but our understanding from our Tortola office is that the damage is not too severe.

"We don't have any problems yet, but we are waiting to see where the hurricane goes next.'' President and chief operating officer of RenaissanceRe, William Riker, said that Bermuda reinsurers were generally writing some business in Puerto Rico and other parts of the Caribbean.

"You'll definitely see losses in the reinsurance market from this event,'' he confirmed. "It probably is not going to be a huge news making event, though.

But it is not over yet. We'll keep an eye on it.

"It should be heavier than last year, for sure, when there were no losses.'' Mr. Kramer also pointed out, "Of course, not all of us are in the Caribbean.

Prices weren't particularly attractive. A lot of people didn't do much in the Caribbean. It wasn't considered to be a preferred market.

"Puerto Rico, on the other hand, is a market. There are some people who are probably there. The real key is to see where the hurricane goes in the next couple of days. If it goes to Florida, and makes landfall, and if so, how it makes landfall and how strong it is, if it does.'' Said Mr. Arton, "There is no question that Bermuda companies will face exposure. XL Mid Ocean Re, which includes the Global Capital Re portfolio, has exposures particularly in Puerto Rico and the Virgin Islands.

"It is way too soon to put a number on it. A hurricane of this magnitude, we can expect some losses.'' See story, Page 6 HURRICANES HUR