ERROR RG P4 1.9.1999 Yesterday's Business story on Standard & Poor's listing of the 125 largest reinsurers at December 31, 1998 omitted to name PartnerRe, the second-largest Bermuda insurer, which appeared at number 21 on the S&P list. In the article, PartnerRe was identified as a unit of SAFR; the reverse is true.

TWELVE Bermuda-based companies are listed among the top 125 reinsurers in the world, based on capital and surplus at December 31, 1998, according to a comprehensive listing compiled by Standard & Poor's (S&P).

The shareholding structures of many international reinsurers means that several large Bermuda companies do not appear on the list, companies such as Commercial Risk Partners (part of SCOR, which placed 19th) and PartnerRe, part of SAFR, which placed 31st, although PartnerRe's US operations placed 56th in the S&P list.

S&P estimates, based on where companies are headquartered, that Bermuda has a four percent share of the global reinsurance market. A larger percentage of the total market would result if companies' centres of operations were used as a basis for the calculation.

But Bermuda companies score most dramatically in an accompanying listing of the top ten reinsurance companies based on the lowest combined ratio, which pulls together a company's expenses and claims during the year under review.

Seven Bermuda companies dominate the top ten list, suggesting that they are among the best-managed companies in the world.

Other factors affect a company's combined ratio, a local broker said on Sunday.

For one thing, Bermuda companies, generally, have "a higher than average incidence of low-frequency, high-severity loss characteristics.'' Their concentration on "big risks'' means, he said, that Bermuda companies can have a very good year, with a low combined ratio, if the number of catastrophes in that year is low or none. By contrast, a year in which several disasters took place would increase a company's combined ratio and, perhaps, even stretch its ability to pay claims.

"Plus, most Bermuda companies are here for a purpose, or have had to raise capital,'' the broker said. "They have not grown old over the years with old-fashioned and inefficient systems. Then, too, Bermuda companies have attracted a core of very intelligent staff, among the best in the world.'' The listing and an accompanying analysis by Donald Watson, a director of S&P, appears in the latest edition of the respected magazine, Reinsurance , published in London.

Two Bermuda companies make the top ten listing for largest increase in net written premiums during 1998: European Specialty Re Bermuda, up 119.8 percent on 1997's performance, and Terra Nova, ahead 101 percent.

Odyssey Re (Bermuda) makes a less desirable top ten listing, finishing ninth worst on the table of companies with the largest decrease in net written premiums in 1998, down 31.9 percent.

The Bermuda companies which made the S&P list of the 125 largest reinsurance companies in the world are: Overseas Partners (10th), XL Mid Ocean Re (14th), Tempest Re (20th), Centre Solutions (24th), Renaissance Re (32nd), IPC Re (35th), LaSalle Re (37th), Stockton Re (40th), Terra Nova (57th), Scandinavian Re (69th), Odyssey Re (Bermuda) (104th) and European Specialty Re (108th).

One problem with a listing of this sort is the amount of time it takes to prepare. Since the list was compiled, the continuing soft insurance market has changed the corporate structure of many of the companies on the list. For example, Terra Nova is to be taken over by a US insurer and Overseas Partners has lost a good chunk of its reinsurance business now that it is no longer to reinsure UPS packages.

Similarly, the shareholders of PX Re are about to vote on a potential relocation of the company to Bermuda, which, if passed, would place the company on the Bermuda list in time for next year's tables.

WORLD'S LARGEST REINSURERS World's largest reinsurers Top Ten 1. Munich Re, Germany, 1998 paid-up capital and surplus $48.0 billion; 2. Allianz, Germany, $46.6 billion; 3. National Indemnity, US, $27 billion; 4. AMB Aachen and Munich, Germany, $6.6 billion; 5. General Re, US, $5.5 billion; 6. Employers Re, US, $4.1 billion.

7. Swiss Re, Switzerland, $3.9 billion; 8. Bavarian Re, Germany, $2.8 billion; 9. American Re, US, $2.5 billion; 10. Overseas Partners, Bermuda, $2.5 billion.

Bermuda-based/out of 125 14. XL Mid Ocean Re 20. Tempest Re 24. Centre Solutions 32. Renaissance Re 35. IPC Re 37. LaSalle Re 40. Stockton Re 57. Terra Nova 69. Scandinavian Re 104. Odyssey Re (Bermuda) 108. European Specialty Re Source: S&P, December 31, 1998