There will be no Bermuda (re)insurance start ups as a result of Hurricane Katrina, according to industry experts at this year?s Monte Carlo?s Rendez Vous.

In a post-Spitzer environment, brokers are unlikely to be seen to hand over cash to new businesses and venture capitalists are not seen as willing to invest in risky start ups.

Instead extra capital will be placed with existing, established players to cope with the estimated $40 to $60 billion cost of Katrina.

It is believed there will be a spate of mergers and acquisitions, with some of the smaller post September 11, 2001 start-ups being swallowed up by bigger players.

?I do not think we will see the kind of activity there was after Hurricane Andrew and post September 11,? said Henry Keeling, chief executive officer of XL Re. ?There are not the same issues facing the market. I don? think there is the catalyst for this from the brokers to establish new companies in a post-Spitzer environment.?

Attorney General Eliot Spitzer has been involved in a long-running investigation into insurance and brokers. One of the issues he has been looking at closely has been brokers having too close ties with reinsurance companies and doing business with them.

But Mr. Keeling said he did not think that Bermuda would be wiped out by the billions of dollars of claims that are headed towards the reinsurers? doors.?Personally I think that Bermuda will come out better,? he said.

And he added that instead of any extra capital being put in a new company, it would go into established catastrophe players who could be trusted.

?We deal with uncertainty every day,? he added. ?That is all about why people buy reinsurance, to take away that uncertainty.?Mark Geoghehan, editor of Reinsurance, a leading industry publication , said he had also interviewed many people who believed there would not be a new wave of Bermuda re/insurers.?This is the first time we have had something like this during a soft market,? he said.

?It is a different proposition. People are not talking about huge three digit price rises, which would give the need for more capital.

?There is plenty of capital around. So no, I don?t think there will be any new players setting up in Bermuda.?

This was backed up by Nigel Allen, editor of Global Reinsurance.

He said that there was no talk about new entrants. ?We spoke to PriceWaterhouse Coopers and we asked them about that, and they said no, they did not think it would happen. ?That is the word on the street. There is a feeling there is not the need out there. At the moment ? but if there is another catastrophe before the end of the year, that might all change.?

There is a feeling in general that Katrina will not wipe out too many companies ? but may dent confidence in the smaller players ? leading to them merging with other companies or being swallowed up to give a broader capital base.

?I expect what we will see is a set of mergers and acquisitions,? said Mr. Keeling.

?Some of the larger players will tap the smaller companies on the shoulders.?

But he insisted that XL had no intentions of any more mergers and acquisitions. One senior Bermuda executive attending the conference, who asked not to be named, laughed at the suggestion there would not be any more start ups.

?Well it has happened every time there has been a big disaster ? I see no reason why it should not happen again. I think many people underestimate just how much Katrina is going to cost.

?This thing has a tail, and a long one at that.

?I think it will throw up opportunities, and there will be people out there, ready and waiting in Bermuda to seize them.?