Bermuda was a possible blip on the horizon which could threaten London's stubborn clinch on the international insurance market, a new study has found.

But the UK Insurance Report, published by consulting group British Invisibles, concluded that for now the London market reigned supreme as the world's biggest centre for internationally traded insurance.

Foreign insurers continue to enter the British market which in 1997 had premium income exceeding 14 billion pounds or $22.4 billion, contributed around 7.4 billion pounds to the UK balance of payments and employed 367,000.

The report found London was successfully fighting off the extra competition from centres, but it noted the serious threat posed as younger centres like Bermuda jostled for a bigger slice of the well-iced insurance cake.

Paris was identified as a rival for marine, aviation and space insurance.

Bermuda and Ireland were also seen as threats, worsened by the move by some major multi-nationals toward captive insurance -- of which Bermuda already has snared the largest share of the market.

The report was published to coincide with a visit to the US of the just-established joint forum representing both the International Underwriting Association of London and Lloyd's.

The visit was set up to promote London's new single insurance voice via the forum which has plans to particularly target the US -- which provides the bulk of Bermuda's insurance business.

One of the authors of the report, Henrietta Royle, outlined the findings yesterday and called on the British market to remain vigilant of its younger more aggressive rivals like Bermuda.

"London still accounts for a huge percentage of the United States' outwards insurance and reinsurance, and the efforts of the joint forum can only enhance its reputation with the US market,'' she explained.

"The UK market is more than holdings its own against the other insurance centres such as Bermuda and Frankfurt.

"However, we cannot be complacent. The market is changing and opportunities for new business are emerging all the time.'' It was vital the London market kept its eye on the ball in the game to catch the new business being generated by the emerging economies if it was to continue as the world's biggest international insurance market.

"There is little doubt that it has the expertise, the profile and the infrastructure to compete with any of its numerous rivals,'' Ms Royle said.

"The London market is seeking to ensure it stays one step ahead of the rest in what is a very demanding and competitive sector.'' But Ms Royle -- who earlier this month joined Lloyd's chairman Max Taylor in a visit to Atlanta to promote the UK insurance sector -- was quick to point out strong points of the British market.

"The London international insurance market is unique, it has a huge skill base concentrated in a small area which is able to accept risk from all over the world.

"Lloyd's and the International Underwriting Association form twin pillars in this market and the responsive approach in creating a joint forum should see London better positioned to expand market share.

"While the bulk of the international business continues to derive from the developed world, it is very encouraging to see the emerging market's share is growing.

"Lloyd's is viewed as very much a one-stop shop for insurance.

"In other markets there is a feeling that you can often place your business with a company and when it comes to a claim have to speak to another area of the insurer or reinsurer's operation which can often have no detailed knowledge of the policy or the policyholder.

"Lloyd's is seen as a place where the person who underwrites the business is often fully involved in the claims processes.

"The London market is also seen as the place to insure what to many would seem the uninsurable.

"There are tailored policies which can be drawn up in a very short space of time and there is so much expertise in the market as a whole.'' Lloyd's was known for quickly identifying problems and finding solutions to address them, she said.

And the study also made it clear how much the insurance sector contributed to the UK economy, as well as its importance in the global marketplace.

Insurance was found to account for more than a third of all financial services employment within the UK and 1.3 percent of the country's total workforce.

More than a third of all general insurance business was underwritten by UK insurers.

And the London market also led the world in marine and aviation business with 22 percent of the world's marine business conducted in London and 27 percent of aviation business.

The report found 75 percent of the premium income generated by the London market originated from North America and western Europe.

Latin America, Asia and Eastern Europe were playing a growing role.

Every single one of the world's biggest 20 insurers and reinsurers were active in London and more than 75 percent of companies in the market were foreign owned, it found.

MAGAZINE NJ