Max Re will raise new capital to write more property business if rates increase sufficiently in the wake of Hurricane Katrina, said chief executive Robert Cooney.

The company could also hire teams of underwriters to boost this part of its business, he told Reactions magazine in a Monte Carlo interview.

Max Re writes predominately casualty business with less than five percent of its reinsurance portfolio consisting of property business. But Mr. Cooney believes now is a good time to diversify. He may try to raise as much as $100 million of new capital to pump into selling property reinsurance policies. Max Re also has some excess capital it can use, he said, with the possibility of ramping up its property-catastrophe business from five percent to counting for one quarter of its total book of business.

Max Re may also target property insurance. It formed its primary insurance division just three years ago. It now represents about 30 percent of its total business generating around $300 million of premium. But this part of Max Re?s business is heavily weighted towards casualty business with property business only accounting for about eight percent of its insurance book.

?It is better to move into new areas when rates are adequate, and, if we are going to do this, the faster the better,? he said.

What happens with pricing of these kinds of reinsurance policies will ultimately determine the extent to which Max Re will target property business.

?Over the next month we will get an idea of the magnitude of the loss, how that will effect reinsurers and the retrocession market and what needs to happen to rates.?

In contrast to other major catastrophes ? like 1992?s Hurricane Andrew and the September 11, 2001 terrorist attacks ? Mr. Cooney does not believe many new reinsurers will be formed to take advantage of hardening rates.

Other industry executives, in the fortnight since Katrina, have also said they don?t expect a wave of start-up companies, as there have been after previous events.

Instead existing companies will either redirect capital towards property business or raise new capital, he said.

?There may be a couple of new specialty companies formed, but nothing like we have seen before.?

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