Bermuda-based EXEL Ltd. has bought its way into the US market. The company announced yesterday it was purchasing all outstanding shares of Folksamerica General Insurance Co., which is based in the State of New York.

The company is licenced as a property and casualty insurer in 20 states and as a reinsurer in 11 states, and had total assets of $7.3 million at September 30.

"This acquisition represents the first step towards establishing a platform in the United States from which we can reach customers who traditionally have not accessed the Bermuda market,'' president and chief executive officer Brian O'Hara stated in a press release. "...Through a combination of selective acquisition and organic growth, we believe that we can economically build a lean, highly customer focused US operation free from many of the problems which traditionally have affected US insurers.'' EXEL plans to add staff to the US operation over the next six months and will apply for additional licences in other states not currently covered by Folksamerica.

EXEL is "actively exploring opportunities to add an excess and surplus lines licenced company as part of its US platform,'' the release stated.

To avoid tax liabilites on the Bermuda operations the US subsidiaries will be operated as independent entities. EXEL also owns 27 percent of US-based Risk Capital Holdings. EXEL recently sent out a letter to brokers that the move into the US would not impact on their operations here.

"The advantages offered by Bermuda -- infrastructure, intellectual capital, tax and regulatory -- are too compelling to ignore,'' Mr. O'Hara stated in the letter.

About 85 percent of the company's business comes from the US. An EXEL spokesman said management felt a lot of business was not being offered to the company because it was based offshore.

"It should run parallel to our Bermuda book and should not impact business here,'' the spokesman said.