The Bermuda market, as a leading controller of capacity in the Lloyd's insurance market, is a key reason why Lloyd's is no longer calling itself Lloyd's of London, a UK-based reinsurance magazine, The Review has said.

Five Bermuda insurers and reinsurers have combined for more than 1.89 billion, or 18.31 percent of Lloyd's market capacity.

They are followed, in terms of capacity by UK-based trusts/spread vehicles and several US groupings.

Apart from Bermuda, the largest chunk of Lloyd's capacity is held by integrated Lloyd's vehicles (ILVs), many of which are quoted companies held by management, institutional investors and diverse shareholders.

The magazine article points out the thirst for capacity by insurers and reinsurers, and uses as an example, Bermuda-based ACE Ltd. which has invested in Lloyd's through its managing agency, Methuen Underwriting.

Subsidiary, ACE Capital, last year provided 24.5 million of capacity to its Methuen syndicates, supported by 12.25 million of funds at Lloyd's. Then ACE arranged to put 50 million at Lloyd's for this underwriting year and the future.

By last year, ACE had control of 125 million of Methuen capacity. It also had another 15.3 million on former Ockham syndicates. ACE then had to use a letter of credit to increase its funds at Lloyd's to 72.1 million.

It now has combined the operations to create ACE London Aviation and ACE London Underwriting and intends to improve its capacity position by levelling capacity held by each syndicate.

The article also suggests another round of buying of managing agencies is anticipated this year.

MAGAZINE NJ