The Island's newest reinsurer, Alternative Re Ltd. will target the rent-a-captive market, going after the same sort of business as Bermuda-based Mutual Risk Management.

The backers of the new company are Bermuda-based Exel Ltd., The Trident Partnership L.P., Risk Capital Reinsurance Co., and Marsh & McLennan Risk Capital Holdings Ltd.

The group is providing $35 million in capitalisation to a new holding company, Altus Holdings Ltd. which will provide underwriting management services and compete in the rent-a-captive segment of the alternative insurance market.

Alternative Re targets rent-a- captive market Altus Holdings has created Altrisc Services, a US subisidiary based in Stamford, Connecticut, and Alternative Re Holdings, based in Bermuda.

Alternative Re Holdings will have as subsidiaries Alternative Re, the operating reinsurance company, and Alternative Underwriting Services.

The company's business will be controlled through Altrisc, which will have about 12 employees and will provide underwriting management services.

David May, formerly a managing director of Marsh & McLennan, has been appointed as president of Altus and of Altrisc. Frank Pellegrino, former president of the Homestead Insurance Co., has been appointed as executive vice president of Altrisc. Both executives will be based in Stamford.

"Our view is that there is substantial opportunity in the rent-a-captive market,'' Mr. May told The Royal Gazette yesterday.

Altrisk will work through brokers to arrange licensed or approved insurers and provide structuring advice for programme and agency property and casualty business through rent-a-captives.

A captive is a type of insurance company which usually writes only the business of its parent company. With a rent-a-captive, groups of companies can share administrative costs in meeting their insurance needs through the same facility.

According to a market survey by A.M. Best it's a rapidly growing segment of the insurance and reinsurance industry.

Many insurers are setting up such facilities to attract the business.