bringing more than half a billion dollars in premium to the Bermuda marketplace annually.

Yet chairman, president and CEO, Patrick Ryan, told the Bermuda Insurance Symposium: "While that is obviously a large commitment to this marketplace, we want to expand that. We have a major league commitment down here. We come here to place insurance risks, reinsurance risks, finite risks, and blend with capital markets.

"A major part of our strategy is the blending of insurance, reinsurance and capital markets to get out the right funding mechanisms, balancing income statements.'' As the second largest captive manager in the world, reasons for Aon's commitment to Bermuda include quality underwriting skills, fresh capital unfettered by excess regulation, onerous taxation or the underwriting problems of the past.

He said: "We're obviously looking for cost effective capital, sophisticated and secure capital for our clients. And, very importantly, a low cost of operational capital. The load on this premium is very low.

"So when you look at what you can provide, Bermuda is a very attractive package.

"Additionally, we have found that the level of specialisation down here gives you some very unique opportunities to find real quality for your money.

"It's good for our clients and our shareholders. There is value-added and low cost funding of the risks. But also there is an ability of this market to react very quickly.

"Another very important factor is that as a market, you can put together a pooling of large amounts of capital for very large risks.'' He said the Bermuda market gives insurers the opportunity to be creative and develop new products.

Chicago-based CNA Insurance Companies has also had significant participation in the local market. CNA chairman and CEO, Dennis Chookaszian, remarked that Bermuda will be both a supporter and a competitor to the Lloyd's market.

Mr. Chookaszian said: "Lloyd's is so much more positive than a few years ago.

Lloyd's will be a vibrant market again, but no where near the importance of so many years ago.'' Mr. Ryan said: "Lloyd's has great underwriting talent there that serves our global marketplace quite effectively.'' But he said: "There is so much capital now, that I hope that they don't start buying market share to the detriment of capacity.'' Mr. Ryan said the ongoing consolidation of insurers and reinsurers does not diminish competition, but creates more efficiency and better resources. It will mean new players in the market and more cost effective service organisations. He forecast more capital and better service to the end user.

Mr. Chookaszian said there will be more rational consolidation in the future.

He said in terms of property casualty, it has been within the top 20 firms were consolidation has been occurring.

He forecast no more than three more consolidations in the next five years out of that top 20 list.

He also believes that securitisation will dramatically change the industry in the next ten to 20 years. He questioned how effective investment banks will be in their deeper solo moves into insurance products.

In terms of joint efforts with insurers, Mr. Ryan agreed that investment banks will lead the move into the securitisation of insurance products. He noted that a lot of money is already lining up.

He said: "Up to now, there's been more smoke and mirrors than conversation, but the smoke is beginning to clear and I think that you will see more action in the future.'' The panel discussion on Bermuda's role in the world market was moderated by Western General Insurance Ltd. chairman, Peter Rackley, and included Geoff Saunders, chairman and CEO of Strategic Risk Management.

BUSINESS BUC