Bermuda market on July 15.

The FTSE/BSX index is based on the stock market performance of Bermuda-based insurers and reinsurers. A mutual fund tracking the index will also be launched at the same time. Investors will be able to invest in Bermuda's insurers in one shot by investing in the fund.

BSX chief executive officer William Woods said launch of the index was delayed due to recent acquisitions by ACE Ltd. and EXEL Ltd., Bermuda-based companies which together make up about 40 percent of the index's weighting.

The insurance index was created by FTSE International -- owned by the London Stock Exchange and the Financial Times. It is designed to help investors make performance comparisons between insurance companies operating in Bermuda with those based in the US and Europe.

The BSX eventually plans to create options based on the index. The options will allow investors to buy into the overall performance of the Bermuda insurance market.

"The index is a proxy for the health of the Bermuda industry,'' Mr. Woods said. "It won't be a perfect proxy.'' He said the BSX hopes to licence the index and list catastrophe bonds.

Although a lot of the catastrophe bonds being issued are done through the Cayman Islands he said the BSX can attract the listing of those bonds on the BSX.

The index seeks to demonstrate the "Bermuda effect'', a theory that insurance companies operating in a low tax location like Bermuda perform better than those based in onshore locations.

The performance of the index will be published in the Financial Times, Bloomberg, Reuters, the BSX website (www.bsx.com), and The Royal Gazette .

Initially the index will track 11 companies operating in Bermuda: Annuity & Life Re Ltd., ACE Ltd., EXEL Ltd., IPC Re Holdings Ltd., LaSalle Re Holdings Ltd., Mid Ocean Re Ltd., Mutual Risk Management Ltd., Partner Re Ltd., Renaissance Re Holdings Ltd., Stirling Cooke Brown Holdings Ltd., and Terra Nova (Bermuda) Holdings Ltd.

The index is market capitalisation weighed. It is compiled using prices taken from the primer markets. Mutual Risk Management chairman Robert Mulderig will supervise the design and management of the index.

Mr. Woods said he hopes the relationship develops with FTSE so that further indexes can be created for more specialised sectors of the insurance industry.

For example an index can be created for marine insurance risks.

The BSX is also working to create a catastrophe risk exchange with US-based Catastrophe Risk Exchange Inc. sometime this year. CATEX International will be Bermuda's first fully electronic trading and communications system through which members can cede, exchange or purchase risk, Mr. Woods said.