property insurance facility that would provide property cover for public electric utilities globally.

The facility, Transform, is underwritten by the world's largest sources of net insurance capacity, and utilises captive insurance company arrangements, including client captives or fronting arrangements.

Facility management services are provided by International Risk Management (Bermuda) Ltd. (IRMG) and the new product is blessed with financial stability and security of capital through Bermuda-based ACE Insurance Co. Ltd. and XL Insurance Co. Ltd., and, Europe's Swiss Re. Swiss Re owns 70 percent of IRMG.

IRMG said this week the worldwide electric utility industry is in a state of transition driven by deregulation which is forcing utilities into an increasingly competitive environment.

IRMG said: "Transform has been created to address the changing needs of the utility industry and provide a near friction-less method to access premier international underwriting capacity.'' IRMG vice president Anna Summers, said, "This is a facility to offer electric utility companies a structured policy that is broader than they can buy on the commercial market, with a set panel of reinsurers who have already agreed the policy wording and are prepared to underwrite it if the price is right.'' The front company keeps no risk, because the Transform policy is all fully reinsured by the panel of reinsurers.

IRMG president, John English, said, "There is no similar product in the market that can offer a broad based policy with these types of block limits.

Previously, these companies couldn't get this broad cover from a single source. They had to go to different insurers which meant different terms and conditions in each case.

"Here they have an attractive broad based policy form with additional covers that are not available in the market at any competitive terms. This is a one-stop shop, as such.

Local insurers behind facility to provide new cover "If the utility has an existing captive, it would be suggested that they route the risk through their captive and it would be reinsured by this facility.

"If they don't have a captive, we would put a fronting arrangement in place which would issue the policy and it would be reinsured by the panel.'' The move comes as dramatic changes are expected in the electric power industry around the globe.

Industry experts place the size of the power generation market in the developing world alone over the next 20 years as high as a trillion dollars.

And that change is coming against a backdrop of significant dependence on electricity in industrialised nations.

There's already evidence of regulatory changes leading to the elimination of monopolies and the reduction of government intervention in the electric power industry.

Reforms include the reduction of price controls and tariff restrictions and the elimination of subsidies. Meanwhile, ownership is changing, too. There is more emphasis on privatisation and commercialisation.

Transform's features and benefits include: Up to $325 million occurrence limit. Certain catastrophic event sublimits apply.

Financially stable and secure capacity. The facility encompasses the financial stability of ACE, XL and Swiss Re.

Multi-year agreements. Three to five year agreements are available.

Specialised coverage terms. The company offers broad "all risks'' property and boiler machinery coverages in a streamlined format specifically designed for the utility industry. Optional time element coverages include both business interruption and extra expense.

Dedicated underwriting. All underwriting is conducted by a dedicated team of senior underwriters experienced in the utility and power generation industry.

A network has been created to effectively streamline the underwriting process.

Customised engineering services. Transform will allow the utility to choose specifically their own provider of engineering services. Alternatively, American Risk Consultants Corp. can provide engineering services. The utility can customise its engineering services to meet its need in conjunction with or in lieu of the current engineering service provider.

Single source underwriting and claims adjustment. Appropriate premium credits are available for substantial self insured retentions. Transform offers the ability to meet growing capacity and a growing demand and underwriting access to non-traditional covers.

Speed and competitive terms. Because only senior decision makers are involved, utilising only their net capacity, frictional costs are minimised.