A new player in the burgeoning Bermuda reinsurance industry was unveiled yesterday, as Harbor Point Limited announced the formation of retro vehicle New Point Re Limited.

New Point, a Bermuda Class 3 reinsurance company, will be capitalised with approximately $250 million, with much of the new capital coming from hedge fund managers attracted to the potentially high returns of the reinsurance market.

The new entity was formed specifically for writing collateralised retrocessional contracts, including collateralised industry loss warranties (ILWs), Harbor Point announced yesterday.

Harbor Point, a Bermuda-based global property casualty reinsurance company, was founded in November 2005, in the aftermath of a devastating hurricane season.

Harbor Point will be a minority investor in New Point Limited, the parent company of New Point Re. Harbor Point also announced the formation of a wholly-owned subsidiary, Harbor Point Agency Limited, to provide all underwriting and management services to New Point Re. Harbor Point?s chief executive officer John Berger said that raising the necessary capital for New Point Re had not been problematic.

?The hedge fund managers are extremely smart people who learn very quickly,? Mr. Berger said. ?They learn why this is an opportunity and they see it right away. They ask themselves: Do the economics work? Do I have confidence in these people? Or should I take my money elsewhere and support someone else?

?Once we had the first investor in, everything flowed quite quickly. I wouldn?t say it was easy to raise the capital for New Point Re. But when you look at the companies being bought by hedge funds for billions, it?s clear the capital is out there.? Harbor Point Re?s chief financial officer Andrew Cook expressed what he saw as the attraction of reinsurance for hedge fund managers. ?The hedge fund community makes returns from volatility on the market and lately, the financial markets have been pretty flat,? Mr. Cook said. ?There has been greater volatility in the reinsurance market, so from their standpoint, there are greater opportunities for good returns.?

The formation of New Point Re was simply to meet demand in the market. ?From all our discussions with clients and the brokerage community, we can see there is a shortage of retrocessional capacity moving into 2007,? Mr. Cook added.

Mr. Berger said: ?New Point Re will provide needed capacity to the retro marketplace, serving as an effective vehicle for Harbor Point to deliver this product to the market. This is another opportunity for us to leverage our underwriting expertise while meeting client-specific needs.?

Despite a quiet 2006 hurricane season, Mr. Berger said reinsurance rates were still relatively hard and the industry?s immediate future looked bright.

?The hurricanes of 2005 are still fresh in everybody?s mind,? Mr. Berger said, adding that his confidence in Bermuda was ?unshakeable?.