will be at the forefront of ongoing initiatives to converge the capital markets with the insurance and reinsurance markets.

They are spending the coming weeks establishing office space and putting together a staff of eight to ten people, president Michael Gelband said yesterday from New York.

Lehman Re is the latest venture of publicly-listed, global investment banker Lehman Brothers Holdings, which is pumping $500 million, or ten percent of the firm's equity capital, into the new reinsurer.

It will write policies covering a variety of risks that corporations face, but package them and re-sell them to investors.

It follows the Arrow Re formation in Bermuda two months ago by Lehman rival, Goldman Sachs, to securitise insurance risks.

Mr. Gelband, who at present runs the company's fixed-income derivatives division, said Lehman Re will be the first insurer to bring together the insurance and capital markets on a large scale.

Lehman Brothers plans to use its expertise in underwriting, managing, securitising and distributing risk to capital markets in the insurance and reinsurance market.

Mr. Gelband said: "We expect to be fully operational in the next few months.

Two or three staff will be underwriters in the Bermuda office. We want to do as much as possible from the Bermuda office.

"It's just a matter of finding people. There seems to be a large talent pool down there and we want to be a part of that.'' Mr. Gelband doesn't subscribe to the view that Lehman Re will be taking business away from companies like Centre Re and EXEL Ltd.

He said: "My view is that we are approaching this very differently. And over time, I think, the other reinsurers will view us as something very different, because of our capital markets access and the way we'll operate.

"I'm very confident that we will end up having good relationships with the reinsurers, providing certain products to them that are mutually beneficial.

That's my goal anyway.

"I'm not looking to run a reinsurance company in the traditional way, or the way they are. We're not looking to compete with them. We're looking to create something a little different.'' He said: "We've been thinking about how to be involved in this market for a long time. We've spent more than a year with the planning and analysis. "We intend to use our capabilities that we developed in all these other businesses applying to insurance -- our capital markets expertise and our distribution capability.

"We have capital markets people all over the world. We want to tap into that.'' Among a range of positions, Lehman Re is advertising in The Royal Gazette for a finite/financial risk underwriter to underwrite, maintain and manage a growing book of finite property & casualty and capital markets business.

The successful candidate is expected to be involved in all stages of the underwriting process, including: marketing, evaluation of client financial objectives, risk analysis and contract negotiation.