Industry veteran Michael Morrison may have handed over the reins of his start up, Allied World Assurance Company, to young-gun Scott Carmilani, but he has no intention of putting his feet up or going fishing all day.

At the age of 73, he will keep on an active role at the company as director and vice chairman and intends to blaze a trail through Europe and bring in more big bucks and a way into what he sees as an untapped market for his billion dollar fledgling insurance company.

“We have seen pretty substantial growth and have a very good loss ratio and very good expense ratio - so yes, we have done very well,” said Mr. Morrison.

Under his watch he has seen the company, which was set up to take advantage of the capital crunch following the September 11 attacks, grow from four staff - one in London, two underwriters in Bermuda and himself - to 102 with offices not only in Bermuda but also in Boston, Dublin and London.

The company, which was set up by heavyweights American International Group, Inc. (AIG), Chubb Corporation and GS Capital partners 2000, L.P, an investment fund managed by Goldman Sachs & Co., has gone from no income to $923 million in its first year and $1.570 billion in 2003.

AIG chairman and chief executive officer, Maurice (Hank) Greenberg, who is also chairman of the AWAC board, hand picked Mr. Carmilani from his own stable at AIG as Mr. Morrison's right hand man, and probable successor when the firm was set up at the end of 2001.

Mr. Morrison said: “Well, I'm not getting any younger you know, and realistically, I have been fortunate to have a lot of good people working for me. We have done very well, and it is time to hand it to someone who is going to take it to greater heights.”

When asked if it was hard to let go and hand over to the 39-year-old Mr. Carmilani, Mr. Morrison said: “No. Scott and I have worked together for about two years now, and we are a good team. No, I don't have any difficulty.”

And he said he thinks he can still offer something to the company - and fully intends to give it.

“I personally hope to spend a little more time developing our European business,” he said. “I see great opportunities for this company - we both do - in Europe.

“There are several opportunities. One is the European market as a whole and particularly the European major reinsurance market, which is in turmoil and has been for some time.”

He pointed to the number of downgrades by the rating agencies in Europe and pointed out that a lot of the companies there had either withdrawn or reduced their capacity writing certain lines.

“French business was always entirely written in France, German business was always written entirely in Germany,” he said. “Some of it leaked out to London, but that was all. That will still leak out to London and we will write it there, but if you go into Europe and make direct contact with the brokers there you are going to be able to generate business that has never left France,Germany or some of the other countries. So it is a question of going to get it.”

And he said that the company had already had a great January renewals season, thanks in part to its European campaign.

“We have got off to a great January - and I think that more than a few people were surprised by how much was written out of Europe,” Mr. Morrison said.

But Mr. Morrison was keeping his cards close to his chest and would not say how much more business had been written or what percentage of business was now in Europe.

Mr. Carmilani shares Mr. Morrison's passion for the European way. He said: “We have been actively building and working on those relationships already and now we have a full staff in place. I think Mike is right, having a physical presence and working on relationships in an up-front and personal way, we will be in a better position in 2004/2005.

“The market cycle lagged there compared to the North American cycle, so the hard market per se was stronger after the US hard market was stronger.”

It just hit stride in the last half of last year and the first half of this year so the opportunities are there now.”

For the moment AWAC will leave Asia and Latin America alone until those areas look like they can generate more income for their business.

Mr. Morrison said: “Bermuda as a market has certainly established itself well in the last couple of years, and with all due respect to ACE and XL, it is much broader than it ever was with just the two of them.

“AWAC as a company I think is recognised in many, many cities throughout the world, a surprising number of cities. Whether or not we are recognised in Asia does not mean we are going to go off trotting off to Asia. We go to where the opportunities are.”

When asked if AWAC had aspirations to become the next ACE or XL, both Mr. Morrison and Mr. Carmilani said that was not the way they wanted to go - and they certainly did not want to end up with the difficulties facing the two insurance giants.

Both ACE and XL have faced problems with policies written in companies they acquired that have forced them to up their reserves.

Mr. Morrison said: Lets see, ACE has how much in reserve and XL... so don't talk to us about being them in ten years.” Mr. Carmilani added: “We hope not.”

But Mr. Morrison said: “We don't intend to be a little teeny weeny player, either. No.”

Mr. Carmilani said: “Who knows how that is going to pan out ten years from now. We look at more of a three- to five-year plan and in order to get that size would require acquisitions of large US infrastructures, and we are not prepared to do that. We are more of the idea that we would grow organically.

“When you acquire there is usually a surprise and it is usually not a pleasant one, as they (ACE and XL) are finding out the hard way. And we don't want to make some of those same mistakes, so we will grow in a more controlled, organic manner.”

Mr. Carmilani said that as he took over the helm, the company's direction would not change under his watch.

“The strategy or visions for the company going forward are no different now than they were two months ago. From the word go the idea was to grow a strong reputable insurance company that had staying power through multiple market cycles.

“I think we have come a long way towards doing that. The company may be going through its second generation or sophomore year, where now the company of this size, the growth plans in terms of strategy and underwriting are not going to change at all, nor is the strategy on how we take the company forward from here. It is really just to keep on the same path and through the changes in the insurance market.”

Mr. Carmilani is determined to make sure the company survives past its first few years and said it will, in the near term, solidify by strengthening the IT infrastructure and hone in on process tools such as servicing our clients and our policies and establishing and building a strong claims team.

“You constantly work to improve your processes and make the company more efficient,” said Mr. Carmilani. “We will be working on that in a big way.”