When Jeffrey Greenberg and Ed Noonan got together last September to brainstorm on setting up a new reinsurer, where to form the company was pretty much a given.

?The people were here, the business was here: This was the logical place to come,? Mr. Noonan, chief executive and chairman, said of forming the company in Bermuda ?People used to think of Bermuda as an offshore tax haven. But, in truth, for our industry Bermuda has become a knowledge centre, first and foremost.?

Validus, a $1 billion reinsurer licensed by the Bermuda Monetary Authority in October to join the ranks of the Island?s biggest reinsurers, was one of a wave of ten companies that formed to be in line to take advantage of opportunities in the post-Katrina market. Claims from the August 29 storm could sap up to $60 billion from the industry, pushing premium rates higher and creating opportunity for new capacity.

Validus previously said it sold $220 million in policies during the January 1 renewal season ? a pivotal business period for reinsurers ? which ?exceeded expectations?.

Yesterday Mr. Noonan said he took a more conservative view than some others in the market on the rate of price increases and found they were ?better than expected?.

He also expects rates to harden further through the year, as more policies come up for renewal. Property-catastrophe policies in hurricane prone areas are typically renewed in early summer, while some other policies internationally renew in April.

?When Hurricane Katrina hit my first reaction was ?gee there is an opportunity here?. Jeff Greenberg had the exact same reaction. In September Jeff called, we talked about it a bit and decided there might be reason to start a company. It took off from there.?

Mr. Greenberg, who was ousted as chief executive of giant insurance broker Marsh & McLellan in 2004 amid an investigation into allegations of illegal bid-rigging practices between Marsh brokers and insurers, was looking for investment opportunities, having recently, with partners, formed private equity firm Aquiline Capital Partners. Reinsurance seemed a good place to be after Katrina, so Aquiline sponsored the new company and continues to play an active role. Three of Validus? board members come from Aquiline: Mr. Greenberg, Matt Grayson and Chris Watson.

Validus, which is currently based in the Mintflower Place building on Par-La-Ville Road and has signed a lease to move across the road when construction of the new Bermuda Commercial Bank building finishes, also got private equity backing from Goldman Sachs Capital Partners, Vestar Capital Partners, New Mountain Capital, and Merrill Lynch Global Private Equity.

Richard Friedman of Goldman Sachs, Mandy Puri of Merrill Lynch, Alok Singh of New Mountain Capital, Sander Levy of Vestar Capital, John Hendrickson of SFRI, and Jean-Marie Nessi, formerly of PartnerRe, also sit on Validus? board. Mr. Noonan is chairman and George Reeth, deputy chairman.

?We have an extraordinary board of directors, and it is a good and active board. We?ve had two formal board meetings in Bermuda already and the intellectual firepower around the table is an extraordinary asset to the company.?

Validus was formed to sell short-tail policies, including property catastrophe, per risk, marine and energy, aviation, retrocession and other specialty lines.

Validus was able to get up and running within eight weeks of the first conversations. Mr. Noonan credits the Island?s pool of reinsurance professionals as being a key element. ?The talent pool is here. That was maybe the most critical issue for us? he said, conceding that Bermuda?s tax advantages also weighed in on the decision. ?The tax issue matters a great deal in generating returns.?

Validus won an A- rating from A.M. Best ? as did most of the others in the so-called ?Class of 2005? ? by the time it threw open its doors for business on December 12. The company has 18 employees, comprised of both expatriate workers and Bermudians. ?We think it is important to be a good citizen in the community, both in the business and in the broader community: We have hired a number of Bermudians and will continue to look to do so,? he said.

Getting up and running quickly was helped by the fact Validus was able to hire locally. Mr. Noonan and Mr. Reeth, Validus? president and deputy chairman, are relocating to the Island, most other staff were already here, Mr. Noonan said.

?We hired to the greatest extent possible on the Island,? he said. ?Hiring on Island raised a few hackles [of the Island?s already established reinsurance companies. We tried to be a good citizen and not go and hire lots of people from one company.?

Mr. Noonan said he expects to ramp us Validus? staffing over time but not ?wildly?. He said hiring up to ten more staff by the end of the year was a reasonable estimate.

Stuart Mercer, formerly chief executive of Capital Risk, Inc., is Validus? chief risk officer. Mr. Mercer had previously worked at Willis Re where Mr. Reeth was chairman and CEO through last year. And Conan Ward, a founding executive of Axis Capital, is chief underwriting officer.

?This is not a 100-person business, it is much smaller than that. On our current business plan we don?t need to hire a tonne of staff but we do have some more hiring to do.?