Bermuda is the top place to raise capital following the devastation of Hurricane Katrina, according to Ernst & Young partner Jonathan Reiss.

Mr. Reiss presented his views on the current state of the reinsurance industry in his address yesterday at the Ernst & Young Outlook for property and casualty insurers at the Fairmont Hamilton Princess.

?Hurricane Katrina was the biggest insurance disaster that has ever impacted the industry, causing catastrophic damage to New Orleans and the offshore energy industry,? Mr. Reiss said.

He said Bermuda insurance industry will have sustained $15 billion to $20 billion in losses from the three most recent major hurricanes.

?What does it mean for the industry?

?Eight major hurricanes have hit the US in the last eighteen months.

?We are not expecting any major insolvencies and we not aware of major players in the Bermuda market unable to pay claims but there will be some major changes in the industry.

?Clearly diversification is the in trend which is being driven by the rating agencies requirements,? he said. ?Clearly there are companies in this market trying hard to decrease their exposure to high severity events and are trying to branch out into other areas.?

But Mr. Reiss said Bermuda had proved again that it could respond to problems in the world insurance industry.

?The Bermuda market has responded to a big need in the insurance industry,? he said.

?The Bermuda market has a very significant track record in helping to get things done quickly so the market dislocations can be addressed by the industry.

?There should be an increase in demand for reinsurance and this bodes well for the Bermuda industry.

?London-based organisations are shifting significant amount of business lines to Bermuda such as Amlin Bermuda Limited, Omega Specialty Insurance Limited and Hiscox.?

Mr. Reiss said over the past 15 years significant London players have shifted all or some of their business to Bermuda.

He said they are doing so because Bermuda is the best place to raise new capital and it is attractive to have an operation in Bermuda.