The chief executive officers of 29 US reinsurers, some of the largest in the world, begin their annual two-day conference in Bermuda today with a wide-ranging discussion on geo-political trends and technology.

The 50 delegates at the Reinsurance Association of America tomorrow will then turn to discussing natural catastrophies and the "human dimension'', association president Frank Nutter said yesterday.

Asked about whether the group was concerned about increased competition in the US market from Bermuda insurers and reinsurers he said the additional expertise was a welcome addition.

Bermuda-based ACE Ltd. and EXEL Ltd. have recently set up US subsidiaries to compete in the North American market.

"Bermuda reinsurers have, since their formation, been competitors in the US market,'' he said. "The fact that they are coming onshore is a welcome addition to the US capacity. They are taking advantage of the great opportunity to add capacity. Our only concern is that they are doing so at a time when most lines are so soft and most companies are robust in their capacity. More competition might make things worse.'' He said, however, that the long term benefit was the additional capacity in the US market. Bermuda companies US forays were part of the trends in the industry toward globalisation and consolidation.

The reinsurance association acts as a lobby group for the industry in state legislatures and at the federal level. The association opposes the recent trend toward state sponsored reinsurance programmes as set up in California, Florida and Hawaii and as proposed by a number of other legislatures.

Bermuda companies are heavily involved in the California reinsurance programme.

Reinsurance Conference to open Mr. Nutter said the organisation believes there is enough private capacity to find a solution to the problems of insurance in those states, including turning to the capital markets.

However the group is in favour of the US government sponsoring a megacapacity programme which would provide a layer of coverage above what the private market is able to finance.

Mr. Nutter also briefed insurance industry representatives about US policy issues affecting the industry at an informal lunch session held at the Bermuda Insurance Institute yesterday.