Life Re (Holdings), Ltd., according to a report on the industry by A.M. Best Co.

And while others are gearing up for the increased competition in a hot market, Annuity & Life plans to leverage Bermuda's tax advantages to compete on price.

The demand for life reinsurance has grown 49 percent in 1997 compared to 1996 according to a market survey by the American Council of Life Insurers, as quoted in Best's Review magazine.

Competitive pricing and a flat primary life insurance market are some of the factors driving the demand for reinsurance. The magazine quotes sources predicting the trend to continue for the next 12 to 18 months.

As the newest entrant into the market Annuity & Life plans to compete using Bermuda's tax advantages. The treaty reinsurer raised $297 million in an initial public offering in April.

"Annuity & Life is the first publicly traded Bermuda-based reinsurer to focus principally on writing annuity and life reinsurance,'' the magazine states.

"CEO Lawrence Doyle expects to attract business by stressing the company's status as a noncontrolled foreign corporation exempt from US federal taxes.'' Mr. Doyle is quoted as saying the tax advantage gives the company an up to three percent on yearly renewable term insurance, two percent on single-premium-deferred annuities and up to seven percent on structured settlement annuities.

"Life reinsurance is a long-term return business but Doyle plans to be able to return investment income on capital and surplus to shareholders in the first year because the company is operating with minimal overhead,'' the magazine states.

This week the company reported net income of $3.6 million for its first ten weeks of operations to June 30, or 16 cents per common share on a fully diluted basis.