reinsurers of the past may return to haunt the market again.

The big `cat' companies will soon conclude the January renewal season with Bermuda again staking a leadership role in the market.

There are already indications that Bermuda's firms will have maintained, if not increased, its world market share by the end of the renewal season.

However, PartnerRe president and CEO, Mr. Herbert Haag, stated, "Outside the US, the `cat' market is excessively competitive. And I would even say that the sins which the reinsurers had committed prior to the disasters of 1991-92 are back again. We will probably be faced with the same problems (security of capital) in a couple of years after big catastrophes happen.

"I think we know that some reinsurers have gone too far just to secure or maintain business. It will again endanger capital.'' Mr. Haag would not be specific about which reinsurers he was referring to, but he made it clear that he was looking at the worldwide reinsurance market as a whole.

The `cat' reinsurers have prowled for more than a year through a soft market, especially in terms of exposures outside the US. Excessive competition has led to rating declines, but nothing Bermuda companies can't accommodate.

Mid Ocean Re president and CEO, Mr. Michael Butt, typified the positive attitude held by local companies.

He remarked, "The brokers have a tendency to talk the market down before the renewal season and they have been busy doing that.

"But the market, in my view, for the main buyers has held sensibly. The rates have come down somewhat, but they are sensible. It is at the better end of the range of expectations.'' Mr. Haag agreed there is a clear trend of stability in US renewals where there is exposure to earthquakes (California) and coastal exposure to storms (Florida and the east coast).

But he said, "The story is quite different outside of the US. In the rest of the world the rates are under heavy competition. Some markets actually almost collapsed. They are under heavy attack, and we have seen excessive rate reductions in some markets, probably fuelled by the desire of many players to have more business in other areas than the US.

"They are going into adventurous areas, where they do not know the risks, causing the rates to fall. There are also reinsurance brokers, of course, fighting for their share of the market and driving the prices down. The responsibility is with the reinsurers who quote or accept the prices.

"You see it particularly on the continent of Europe, France and Germany, but even to far greater extent in the small markets like Israel, Portugal, Mexico -- areas where one would not have expected suddenly so much appetite for this kind of capacity cover.'' Centre Cat CEO, Mr. Paul Hasse, said last week that the renewal season was going fine.

He said, "We'll seek growth, but a lot of the signings haven't come back yet, so its a little early to see all the trends.

"Most of the programmes in the UK are very late. A lot of the national US programmes seem very late. We've just received submissions for some of them, but we are comfortable where the process is. There have been some rating declines but it's not unacceptable.'' Mr. Hasse added, "We've seen unreasonable quotes that weren't supported by the market so, it's not the case that people aren't still underwriting intelligently.'' Mr. Butt pointed out, "There is a lot of negotiations and some business we are walking away from, where we think they are taking too steep a cut. We happened to have had two and a half years of relatively loss free business.

But the sensible buyers know that losses are going to happen.

"The encouraging thing is that people are buying more cover at the top again this year. So there's new business coming into the market, if you want to look at it that way.

"Most of the responsible markets are holding the line pretty firm, so pricing has not gone down a slide.

"London is aggressive. Our aviation reinsurance count is one of the areas where rates are definitely holding. In marine and energy there is pressure on rates and one has to be very selective. But, happily as I say, responsible buyers are wanting to buy our capacity. So we are having to be increasingly selective, but I think we are writing some good business.'' Concluded Mr. Hasse: "Some companies are buying more. Some clients are thinking very hard about reinsurer security and having concerns about other markets, other players. And I think that's working to the benefit of Bermuda.'' Mid Ocean Re and Centre Cat have been expanding their lines and are seeking new business, as well as growth with their current clients.

At PartnerRe, still a pure property `cat', Mr. Haag said the shake out has already begun, as some companies refuse to support programmes because of the low rates. He said there may not be a lot of sign downs, as there may be fewer companies involved in such programmes. And capital security could be a real issue.

He said, "There are some markets where the rates have fallen 30 percent, added to last year's reduction of maybe a 15 percent average. So this shows a tremendous reduction in the rates, an unjustified reduction in some markets.'' MR. HERBERT HAAG -- `Some reinsurers have gone too far.'