In its June 17 edition, the magazine argues that the influx of big insurers has come at a price ? rents have soared, traffic is dreadful and life for many residents anything but idyllic ? and that many captive insurers are opting to set up in competing domiciles instead.

"The island, just 21 square miles, is simply too small to handle another post-disaster wave of insurers," reads an article, .

"The downtown of Hamilton, the capital, is already packed with gleaming new buildings such as those belonging to ACE and XL Capital, two of Bermuda's insurance giants. Office space is extremely dear ? top properties go for up to $70 a square foot, a quarter more than the average in midtown Manhattan . . .

"The trend is even truer of housing. Rents have soared, to $1,800 a month for a one-bedroom apartment. The influx of expatriates with whopping expense accounts is driving locals out of Hamilton and away from some of the choicer seaside spots. Landlords are doing a bustling business, and condominiums have been built at a great rate.

"All this has taken a toll on the island's infrastructure. Despite Bermuda's one-car-per-household rule, traffic along the one-lane roads is dreadful even before schools finish for the day. Private schools all have waiting lists . . . The strains are starting to show ? chief executives say that they need more actuaries and other professionals, as there are not enough skilled islanders to fill the gap."

Industry leaders devoted considerable time debating whether the island was "stretched" in terms of available office, housing and school space at the Professional Liability Underwriting Society (PLUS) conference last month.

At that time, XL Capital's chief executive officer Brian O'Hara said he believed the market had reached its limit: "I am not sure there is room for another big wave," he said. "I do think it is reaching capacity and growth will be with capital elsewhere. There is a finite amount of space."

A later question raised by Paul Scope, chairman and chief executive officer of The Park Group, was whether Bermuda could "sustain the success it has achieved".

In an April interview with the , Premier Alex Scott said he felt it could.

"The question speaks to sustainable growth," he said then. "And while I don't feel that our technical officers and heads of department feel we are there yet or are in danger of reaching that point, it is certainly a question that we will have to consider, as we will have to consider the design of our economy down the road."

The consensus reached by however, was that that life in Bermuda is "becoming a difficult place to live" for locals and foreigners.

According to the magazine, many expatriates now see their stay as a short-term proposition ? a view hardened by the Department of Immigration's six-year work permit law ? and rivals are eager to absorb their skills along with the island's lucrative business.

However, the publication was informed that solutions do exist, and mentioned some of those proffered by David Ezekiel, head of the Association of Bermuda International Companies.

"Some big companies, such as ACE and the Bank of Bermuda, owned by Britain's HSBC Bank, are encouraging young Bermudians (who are cheaper to employ than foreigners), to become interns during university summer holidays.

"As for the space and traffic worries, (Mr. Ezekiel) thinks companies could squeeze a bit more room out of Hamilton, especially if government offices consolidate. Some of Bermuda's well-capitalised insurers might merge. More underground parks, thinks Mr. Ezekiel, would help save space."

Yesterday Mr. Ezekiel expanded on his comments: "At this stage I certainly don't think we're anywhere near capacity. Is it somewhere in the future? That depends on the ebbs and flows that come with this business," he explained. "As one sector expands, another one might contract. That's been the case over the years."

The trade-off, he said occurs where companies business plans mature and others find they are no longer required.

"There's always space created, both physically and in terms of the ability of companies to handle more stuff," he added. "I think there's nothing at this stage that would suggest that anyone shouldn't come here. Is the potential that all the space in Hamilton will disappear in sight? If absolutely nothing goes away, that day has to come. But I think it's a long way off."

According to , when that day comes, Bermuda's competitors will be ready.

"If Bermuda cannot cope, plenty of rivals will be eager to absorb the business," the article concludes. "Reinsurers, Bermuda's speciality, would probably not move back to London, but they might choose to expand in, say, Dublin rather than Bermuda.

"Already plenty of captive insurers ? small companies formed to provide insurance for their parent firm, essentially a form of corporate self-insurance ? have set up in the Cayman Islands (where the traffic is also bad) and the American state of Vermont, which last year licensed 77 captives, its most ever. Beaches and golf are not everything."

A call to Deborah Middleton, CEO of the Bermuda International Business Association, was not returned by press time yesterday.