The Bermuda insurance/reinsurance market is comprised of companies with good fundamentals, supportive regulation and active managers that make it attractive as a place to locate.

That is the view of Ted Collins, managing director of Moody's Investors Service, property & casualty reinsurance.

Mr. Collins pointed out: "It's been a very focused, specialised market, but is changing and providing a more broader-based emphasis. It is increasingly not just a specialised market. A number of companies have been quite successful here and are evolving as the market changes.'' Mr. Collins is here for the Bermuda Angle meetings and the 11th International Reinsurance Congress.

Moody's rates six Bermuda companies: Terra Nova (Bermuda) Ltd., Mutual Risk Management Ltd., PartnerRe, LaSalle Re, Renaissance Re and Oil Insurance Ltd.

Moody's has just published an analytical review of the transformed Lloyd's market and Mr. Collins said it was significant how Bermuda companies have emerged as a leading provider of corporate capacity to Lloyd's.

The review discusses some of the credit issues that the Lloyd's market is now facing and analyses business and financial fundamentals of the market.

Mr. Collins noted that the slow going in the move toward securitization of risk has occurred for good reason.

He said, "These things take time. The conditions at the moment are not conducive to that type of market development. Rates are very low in the reinsurance markets, which are the primary competitors for that type of vehicle. At this point in the cycle, it's not the opportune time for the capital market development in a meaningful competitive vehicle.'' He also said, "So far it hasn't proven to be the huge market that it has been, for some time, forecasted to be. There's been a lot of talk and not much action. If you look at the development of other markets, these things don't happen overnight.

"I don't think it would be prudent to write-off the phenomenon of securitization as potentially realising a significant share of capacity in the future. At least in the current environment, that doesn't appear likely to happen without a dramatic shifting in underlying pricing. And you have a number of reinsurers -- all of whom realise that securitization can potentially impact in a dramatically negative way their business prospects going forward -- who are reacting by being competitive on price.

"They've also reacted, in some cases, by embracing securitization and ensuring that they will have a continuing role.

"The hard thing for securitization is to convince the investors that they are getting adequately remunerated for the risks they are taking.'' Mr. Collins said that players in the capital markets will eventually figure out how to get involved by hiring the appropriate underwriting talent and co-venturing with reinsurers who will provide that underwriting expertise.

He added, "And when the price part of the equation comes into line, I think you will see more activity, certainly than you've seen up to now.'' BUSINESS BUC