Bermuda in 1993 and 1994 played a major role in reducing London's significance as an international insurance centre, according to a report in the Financial Times.

From 1993 to 1994, London experienced a 12 percent drop in premium income, which followed a smaller drop from 1992 to 1993.

The decline highlights "increased competition from other insurance centres, particularly in the tax haven of Bermuda, which by 1994 was making significant in-roads into London's traditional business'', the publication, in its Saturday London edition, said.

The Financial Times was reporting on a study commissioned by the London Insurance Market Strategy Committee study, which was set up in March 1995 to review the international market's future strategy.

For 1994, the latest year for which figures are available, London's total premium fell to $23.5 billion from $26.8 billion in 1993.

The peak year for London was 1992 when premium income was $27.9 billion.

The trend of large companies buying less insurance, opting instead to set up captive insurance companies, was also linked to the overall premium decline.

Non-marine treaty reinsurance business showed the greatest decline with written premiums falling 16 percent to $6.8 billion.

From 1993 to 1994, Lloyd's lost five percent of its treaty reinsurance market share with gross premiums written dropping 27 percent to $2.5 billion.

Lloyd's future: Page 12 BUSINESS BUC