reinsurance industry, reports Ahmed ElAmin . Offering a wide range of products is key to survival. And Bermuda is a leader in creating new products.

When reinsurers meet in Monte Carlo next week, they will be discussing an industry undergoing dramatic change, according to rating agency A.M. Best Co., Inc.

One trend is the securitisation of risk -- the convergence of the capital market and the insurance industry -- and Bermuda is leading the way, the agency stated in a special report timed to coincide with the annual meeting.

"In a relatively short period of time, the island of Bermuda has become a leading international insurance and financial market and venue of choice for underwriting large, complex risks,'' A.M. Best stated. "The convergence of the capital markets and the insurance industry can be traced to the roots of many of the Bermudian reinsurers, which were started by Wall Street opportunists looking to capitalise on the drought of catastrophe reinsurance capacity.'' And the innovation continues. One sign of this was the commitment by two major financial firms to the Island in their efforts to develop securitisation products from Bermuda. This year Goldman Sachs former Arrow Reinsurance Co., Ltd. while Lehman Brothers formed Lehman Re in Bermuda to offer such products.

Other established companies in Bermuda's relatively young market are also exploring risk securitisation.

"Bermuda seems destined to continue its leading international role as a creator and innovator of new products, risk management techniques, and distribution systems,'' A.M. Best concludes.

Meanwhile the worldwide trend of consolidation and globalisation remains the major trend in the industry.

"Reinsurers are taking a decidedly entrepreneurial stance in their quest for top line growth,'' the agency stated. "Their business strategies are global, yet focused on specific markets. Today's reinsurer is dynamically and irrevocably redefining the market.'' The change is being pushed along by the competition for shares of static, and sometimes contracting markets as global reinsurers transcend their boundaries.

"Reinsurers that lack diversification, global scope or resources that distinguish them in the marketplace will continue to come under pressure and will, in all likelihood, lose the battle of independence,'' A.M. Best stated.

In its list of the top 25 global reinsurers by gross premiums written Bermuda-based Partner Re ranks 21st, while XL Mid Ocean Reinsurance Ltd. ranks 23rd.

Centre Reinsurance (Bermuda) Ltd. appears as part of the Zurich Group subsidiaries which collectively are ranked as 8th in the list. Odyssey Re (Bermuda) Ltd.

A.M. Best concludes the reinsurers best positioned to survive and grow are those that offer a broad array of products, including financing risk covers and securitisation; provide capital management expertise; differentiate themselves in the marketplace; and attract and deploy capital. Rendez-vous de Septembre, an annual meeting, begins on Monday in Monte Carlo.