The creation of Bermuda's reinsurers was all a big mistake, according to Scor chairman and chief executive officer Jacques Blondeau.

In an interview with French business daily La Tribune, Mr. Blondeau said the market had made an error in seeking to resolve its temporary shortage of catastrophe reinsurance capacity by setting up permanent companies in Bermuda.

The result was that in the soft market of today the companies were overcapitalised and had "mediocre'' turnovers, Mr. Blondeau said. Some sought to diversify into direct insurance in Europe, others sought buyers or merged among themselves.

"The principal lesson to be learned, in my view, is that the next world capacity crisis should be resolved by other means, for example by turning to the financial market and issuing cat bonds,'' Mr. Blondeau is quoted as saying, as translated in Insurance Day.

Paris-based Scor, provides treaty and facultative reinsurance to property-casualty and life insurers.

BUSINESS BUC