to expand by buying up other companies.

A Reuters report has stated that Bermuda-based ACE Ltd. and EXEL Ltd. may both be interested in buying NAC Re Corp., the 14th largest reinsurer in the US based on premiums written.

"Speculation in the market is that ACE may be interested in making a bid for either NAC Re or Capital Re Corp. with which it already has a joint venture relationship,'' the report stated. "An ACE spokeswoman said the company plans to grow though diversification and strategic acquisition, but declined any more specific comment.'' The buy would give ACE a huge presence in the US. The Reuters report stated that EXEL is also rumoured to be interested in NAC Re and possibly Trenwick Group Inc. The news agency said none of the companies involved commented on the rumours.

This year both ACE and EXEL entered the US market, going after business directly there. EXEL Ltd. entered the US through the purchase of shell company Folksamerica General Insurance Co., the former Great Lakes American Reinsurance Co.

ACE earlier this year made its move into the US with the purchase of Atlanta-based Westchester Specialty Group, Inc., now operating as ACE USA.

While EXEL essentially started up a new company in the US, ACE bought an operation that wrote premiums of $125 million in 1996 and has about 210 employees.

The two companies went head to head in the Bermuda market when ACE made a play at bidding for catastrophe reinsurer Mid Ocean Ltd. EXEL, which already owned about 27 percent of the company, blocked the move by eventually buying Mid Ocean for $2.1 billion. ACE ended up buying CAT Ltd.