Japanese trading house Sumitomo Corp. hopes to launch a joint venture rent-a-captive facility on the Island this month called Bluewell Reinsurance Co. (Bermuda) Ltd., according to Insurance Day.

Takashi Okubo, of Sumitomo's insurance business department, told Insurance Day the operation plans on generating about $10 million of annual premium volume within three years.

The Royal Gazette previously reported Sumitomo was setting up a company in Bermuda but the Insurance Day story contains further details of the venture.

"Sumitomo Corporation intends to help middle-sized companies and or insurance agencies to enjoy the merits of a captive through this rent-a-captive facility supported by well-secured reinsurers such as the Zurich Financial Group,'' Mr.

Okubo said.

"While large corporations are capable of establishing their own captives, many middle-sized corporations and or insurance agencies find it very difficult to have their own facilities either because they do not have enough volume of premium to justify them or they have no personnel who have the ability to manage them.'' Through the company's alliance with Zurich Financial Group, Sumitomo plans on introducing various alternative risk transfer methods, particularly the captive concept, to companies in Japan.

Bluewell will be incorporated later this year and will be managed by Zurich International (Bermuda) Ltd. Sumitomo will own 90 percent of the new Bermuda company, while Tokyo-based insurance intermediary New Network Insurance will hold the rest.

Bluewell will be capitalised at $1 million and target companies with insurance premiums of about $500,000 and claims it could reduce costs for mid-sized companies by about half, according to Insurance Day.

With head offices in Tokyo and Osaka, Japan, Sumitomo Corp. is an integrated trading company made up of more than 600 companies and had capital at April 1 of $1.3 billion and turnover of about $95 billion.