Berkshire Hathaway Inc.'s announcement it agreed to buy General Re Corp. for $23.5 billion.

And Bermuda reinsurance companies could benefit from the rise in the stocks, analysts said.

The stock move reflected observers' belief that further combinations in the sector are likely.

"The deal should highlight the value in other well-run reinsurance and insurance organisations and may cause other small or mid-sized reinsurance companies to seek partners,'' Merrill Lynch & Co. analyst Jay Cohen said in a research note.

Cohen said other reinsurers with "solid balance sheets and good relationships'' with their clients could benefit from the Gen Re news. In particular, he cited NAC Re Corp. and Everest Reinsurance Holdings Inc.

"Obviously this puts a much bigger premium on size,'' said Michael Frinquelli, partner in Renaissance Fund Advisors, which specializes in the insurance industry. "I don't know where all the smaller companies are going to go, but they'd better hurry up and find a home.'' General Re already was the biggest reinsurer in the US, and Berkshire Hathaway's financial strength will make it even more powerful. However, as Gen Re Chairman Ron Ferguson said in a news conference on Friday, the reinsurance market probably will continue to expand.

Robert Bowes, portfolio manager of the Bowes Bank & Insurance Fund, said he was considering investing in reinsurers after Friday's announcement. "Even though Gen Re has a greater capacity to write bigger blocks of business, there will continue to be a need'' for reinsurance, he said.

The Bermuda reinsurers, such as Ace Ltd., Exel Ltd., PartnerRe Ltd. and RenaissanceRe Holdings Ltd., could be especially attractive because of the tax advantages of doing business there, Bowes said.

Ace's stock rose 3 to 383/16, XL fell 1 to 7211/16, PartnerRe gained 11/16 to 851 and RenaissanceRe fell 1 to 431 .