Management of a batch of new reinsurance start-ups are being warned not to poach staff from companies already active in the Bermuda insurance market.

John Charman, chief executive of Bermuda reinsurer Axis Capital, told the Island?s reputation as an insurance Mecca could be undermined if the seven new start-ups recently licensed to join the Bermuda market aggressively try to hire away highly-qualified staff from established rivals.

Mr. Charman, a veteran of the Lloyd?s of London market who moved into the Bermuda market with the 2001 wave of start-ups following the September 11 terrorist attacks on Washington and New York, said he believed the 2005 companies were taking a more aggressive approach to hiring than he and his peers did when forming four years ago.

Axis has lost one employee to one of the new companies coming online, and Mr. Charman said he knew it to be a problem that other companies were also grappling with.

?We all tried very hard to not poach staff from existing companies,? Mr. Charman said on Monday in a telephone interview. ?We wanted to add value to the market, not destroy it.?

He said he and Axis chairman Michael Butt were ?concerned? that the cost of doing business in Bermuda could rise creating a ?substantial extra burden? on the sector. And he called on Government to stamp out poaching attempts.

Other insurance companies spoke with also indicated losing staff to the new companies but were not willing to comment further.

The latest wave of insurance companies are being formed on Bermuda to take advantage of an expected rise in post-Katrina pricing when most policies are renewed on January 1. The August 29 storm devastated the Gulf Coast region is expected to hurt insurance balance sheets by up to $60 billion. The 9/11 attacks drained about $35 billion out of the industry.

Louisa Freisenbruch, an associate director with recruiting agency the James Partnership, said the new companies are actively seeking to hire staff for their fledgling establishments. ?Some of them have pretty aggressive growth plans,? she said, with one company having an eye on ramping up to 65 staff over time. Another plans to have about a dozen staff by early December.

Britt Reiss, managing director of the James Partnership, said she thought the new companies were hiring responsibly, and were looking as much as possible to hire Bermudians. ?They are not looking to break good relationships by actively poaching people,? she said.

The James Partnership works closely with many of the companies through its reinsurance recruiting arm, bermudaREcruit, a unit that specialises in placing senior and middle management staff.

Mrs. Freisenbruch said while demand for staff was high it had not reached the fever pitch it did after the September 11, 2001 terrorist attacks ? an event that proved the single biggest booster of insurance incorporations at any one time.

Mrs. Reiss said it was important this latest wave of companies was encouraged, and could get off the ground as quickly as possible ? especially since the development creates opportunities for young Bermudians working in the sector.

?They are looking everywhere to get staff, inside and outside of Bermuda, as fast as they can.?

And she didn?t think the new companies were behaving any differently than the 9/11 companies did when they were looking to hire staff. ?It is always a bit like robbing Peter to pay Paul,? she said.

Mrs. Reiss argued that you can?t steal an employee away who is happy in their job. ?People stay because they are given the opportunity to progress; for most people in a career it is about the job, not all about the money.?

While employee practices differ from company to company, Mrs. Freisenbruch pointed out that it would not be easy to hire away staff from some of the Island?s insurance and reinsurance companies. This would be especially true for underwriters, with some insurers more or less locking in these professional staff for the term of their contracts.

For companies to lose staff at this time, especially underwriters and senior management, could be critical with this being the busiest time of the year for reinsurers who typically renew policies on January 1. As well, companies ? both new and old ? are gearing up to sell policies at higher prices on January 1, and need all hands on deck.

?It is very disappointing to see start-ups, at year end, throwing principles out the window,? Mr. Charman said.

Investors are putting money into the reinsurance sector because rates, particularly for property-catastrophe policies, are expected to increase as much as 40 percent after an estimated $75 billion in claims so far this year.

The start-ups being formed are to have combined initial capital in the region of $6 billion. And established Bermuda insurers have also rushed to raise money in the capital markets so far securing new capital in excess of $5 billion. A number of the established companies are also looking to ramp up staffing, particularly in their property-catastrophe units.

So far, seven new reinsurance and insurance companies have been granted Class 4 licenses ? reserved for highly-capitalised ventures ? from financial services regulator, the Bermuda Monetary Authority. And at least two more companies are in the midst of forming.