The move by the giant Zurich Insurance Group to substantially increase its presence here is an acknowledgement of the rising prominence of the Bermuda insurance market, a top company executive confirmed.

Zurich Global Energy Ltd. is an agency set up to manage the petrochemical business that Zurich will write in the Bermuda market.

But the group also sought approval for a Zurich Insurance Company branch, which would be the primary underwriting vehicle in Bermuda, writing the worldwide petrochemical business for the Global Energy unit and writing for Zurich International (Bermuda) Ltd. which markets direct life business and direct non-life business from Cedar Avenue.

Chief financial officer, Chris Festog, conceded that with more potential clients traveling to Bermuda to discuss cover with ACE, XL and Oil Insurance's OCIL, a Zurich petrochemical office in Bermuda makes sense as a competitor.

Mr. Festog said from New York, "There are no other defined plans for the branch at this point in time. It doesn't mean to say that nothing else will develop.

"The driving force for getting the branch in Bermuda now is to facilitate the global energy initiative of Zurich. This will give us a presence in the three major markets for this business. Zurich Global Energy will write international petrochemical business, but the major markets are the US, Bermuda and London.

We believe it is to our advantage to have a presence in all three of those major markets.

"Centre Re (a wholly-owned subsidiary of the Zurich Group) is finite risk focused and we really needed enough surplus to write the limits of business that we are writing, so we needed more than what Centre Re (Bermuda) had. The natural progression was to seek to get a branch on the Island.

"I'm not sure yet if there will be a change in the limits for next year. But the limits for this year were $100 million onshore property, $100 million exploration and production and $50 million liability. Those are all excess layers. We're clearly competing with some of the Bermuda market and as such we felt that we should have a stronger presence on the Island.'' Four former Heddington Insurance employees led by former Heddington president and CEO, Bob Golden, are involved with the new firm.

Mr. Golden has been overseeing the group's energy business in Zurich for the last 18 months and it is expected that he will have to spend some time back in Bermuda as president of the new company. Mr. Festog said, "Bob Golden knows the Bermuda market and he would know what is needed to firm up our competitive position in Bermuda.

"He's been working on developing this business in Switzerland since leaving Bermuda, working on building a customer focus and a business plan that will approach the markets effectively.

"Zurich has been writing petrochemical business for a long time, but it has only been since Bob was brought on board that Zurich has been focusing on it, marketing and selling the business globally.

"We've been refining the underwriting and how we approach markets. There's a difference between a company that sells petrochemical business internationally and one that manages the business internationally.'' The chief underwriting officer is Tim Mathieson. Also hired is Cathy Duffy (formerly with Starr Excess and XL) as senior vice president of liability and Witold Bzdel, former Heddington controller.

It is expected that total staffing will involve between 12 and 15 employees.

In January, Zurich will be moving out of temporary quarters and onto the third floor of the Mintflower Place, the Par-La-Ville Road building that is under construction and nearing completion.

Zurich already lists in their 1995 report nine companies in Bermuda, generating almost $450 million in gross premiums last year. And while significant growth is evident in key companies, the latest two could add significantly to the volume of combined premium. All but one of those companies is wholly owned, although the ninth (Zurich Asia Holdings) is controlled by Zurich.

Centre Re (Bermuda), with assets of $2.062 billion had capital and surplus of $784.1 million and wrote gross premiums of $312 million (an increase of 6.7 percent).

Zurich International (Bermuda) had capital and surplus of $149.6 million, total assets of $926.9 million and wrote gross premiums of $99 million (a 32 percent increase over 1994).

Zurich Insurance Group made record profits of $691 million last year on total premium of $20.898 billion.

BOB GOLDEN -- "Knows (local) market''.