increased demand. Salvation may be at hand for reinsurers who have long complained of declining rates. Many reinsurance executives expect that it will take a catastrophic event, or a series of them, to cause increased demand and a check on the downward spiral of pricing. And now a Bermuda reinsurer has said that the 1997/98 El Nino could prove to be the largest ever recorded, having significant implications for various communities and the insurance industry. While there have been others since then, the 1982/83 El Nino affected more than a billion people globally and caused a thousand deaths, as catastrophic storms, floods and droughts racked up estimated costs of $13 billion. Bermuda-based reinsurer PartnerRe's quarterly newsletter PartnerRe views , indicated that there were signs that the current El Nino could be the largest in the last 150 years, possibly even larger than the 198 2/83 event.

The publication said that the latest El Nino began last year earlier than normal, and is already so large in terms of warmed sea area, that it is unlikely to dissipate "without having a damaging impact upon the world's climate and economy.'' Prepared by a research team of the Bermuda reinsurer, the report concedes that the current EL Nino period is drawing to a close. But the quarterly reflected predictions for a persistence of warm episodic conditions through to April, with a weakening by May to July. It also provided a layman's explanation for what El Nino events are. Typically, Pacific winds blow east along the equator, raising the water surface in the western Pacific.

In the eastern Pacific, deeper, colder water is pulled up from below to replace the warmer surface water being pushed to the west. So there is warm water in the west and cold in the east Pacific. Low sea-level pressures occur over the relatively warmer water, while higher pressures occur over the cooler regions of the tropics. The pressure difference between the two, creates moisture-laden ocean winds, which blow toward the low pressure areas. This causes air to converge and form organised patterns of heavy rainfall. These "convergence zones'' also generate convective cloud systems in the form of thunderstorms, tropical storms or hurricanes. But in an El Nino period (once on average every three or four years), the winds which normally push the water, weaken. And some of the water piled up in the west slumps back east, and less cold water is pulled up from below, making the eastern Pacific water warmer. Increased ocean temperatures in this region further weaken the easterly winds, which in turn further warms the ocean. And as a result, areas where there is a maximum sea temperature shift around the ocean. Peru, Ecuador, the central Pacific and southern US are directly affected by these changes with increased precipitation and flooding. The 1982/83 event caused drought and wildfires in many nations of the western and south western Pacific Rim, southern Africa, southern India, and Sri Lanka, Spain, Portugal, northern Africa and parts of south and Central America; flooding over wide areas of South America, Western Europe, the Gulf coastal states and some Caribbean islands; and severe storms in the western and northeastern US.