The new wave of Bermuda companies has yet to deliver, according to one leading analyst.

Michael Pritula of McKinsey & Co., speaking at the seventh annual Property/Casualty Joint Industry Forum, said he had been surprised by how little impact the new Bermuda companies had had on the market.

"Twelve months ago, everyone was talking about the amount of money being raised.

"At that time they were confident they would earn a sure-fire 40 percent compounded return over the following two or three years, yet I haven't heard a robust assessment of what they've done," he said.

Experts at the Joint Industry Forum also focused on the poor investment climate, citing low interest rates as well as new transparency regulations as a continuing cause of poor return on equity levels.

Another top analyst, Morgan Stanley managing director Alice Schroeder, warned that companies are unlikely to get a 20 or 30 percent return on equity.

And Vincent Dowling, Jr., managing partner and senior stock analyst of Dowling & Partners Securities LLC, said: "You need to have a combined ratio in the low 90s."

In other words, for every dollar collected in premiums, insurers should be paying 90 cents in claims, instead of the $1.05 they paid out in the first months of 2002.

Sources from the Bermuda, start-ups, however contended that they have had a very positive start.

Michael Morrison of Allied World Assurance Company said: "It's too early to judge.

"We started from scratch with staff and built during the year, consequently this year 2003 when we are more adequately staffed would be a better year to judge the Bermuda new start-ups on."

Russell Fletcher III, chief reinsurance officer at Montpelier Re Holdings Ltd. said: "The newly capitalised Bermuda reinsurers all have had impressive starts.

"Reinsurance buyers have chosen to be very accepting of these entities (they have clearly had other options) due to: strong, clean balance sheets; experienced management; and technical quoting and large-line capabilities."

Of the ten post 9/11 Bermuda start-ups, four out of the five entities have now received A.M. Best's ratings of "A-" and Allied World Assurance received an "A+" .

Mr. Fletcher said: "Obviously, these companies have deeper management and more diverse business platforms than those of the classes of

`92-'94. The market is well ahead of the rating agencies in recognising the quality of these new reinsurers, and the market is usually right.