insurance prices, according to local property catastrophe insurance bosses.

The earthquake, which measured 6.6 on the Richter scale, could end up costing local catastrophe insurers billions of dollars.

However, one reinsurer tentatively assessed the quake to be less severe than Hurricane Andrew -- "not the type of event that will shake the market'', he said.

The abundance of natural disasters already this year, such as the Australian fires, the flooding in Europe, and now the earthquake in California, have reinforced the need for the extra coverage provided by Bermuda's reinsurers.

Mr. James Bryce, senior vice-president for underwriting at IPC Re, said although it was premature to comment on the effect of the earthquake, it could cause prices to hold, or even increase.

The disaster will reinforce the fact that the premium is not money to put in the bank, said Mr. Bryce.

"It will give high credibility to the fact that there is a loss potential,'' he said.

"It will create an awareness to all the catastrophe market of the control of aggregate, and the fact there is real exposure out there with the premium dollars that we are collecting.'' Yesterday's disaster comes only shortly after the insurance industry celebrated a calm, crisis-free year-end renewal season -- mainly because of the large limits being offered by Bermuda's catastrophe reinsurers.

This contrasted with capacity shortages and price increases last year. Mr.

Paul Hasse, chief executive officer at Centre Cat, said the renewal season went ahead as expected. Centre Cat takes a different approach by targeting a number of regional reinsurers that have different buying needs from nationwide companies, according to Mr. Hasse.

Overall in the market he found 1993 rates were slightly higher than the previous year, but held reasonably consistently even though many programmes were over-subscribed.

Mr. James Stanard, chairman, president and CEO of Renaissance Re, which opened for business in June last year, said the majority of Renaissance's renewal activity was completed before Christmas. "Programmes were placing more easily than last year, which was a late season,'' he said.

Prices are clearly up over the previous 12 months, said Mr. Stanard. The majority of the quoting was done in London, with a handful of Bermuda companies quoting prices, he said.

"We sometimes see quotes that aren't priced right, but with limited exceptions, we do not see price competition,'' added Mr. Stanard.

Renaissance Re's average line per programme is $3 million. Three-quarters of the time, the reinsurer wrote lines less than $5 million, but some ranged from $5 to $10 million.

IPC Re, which like Mid Ocean Re has a representative office at Lloyd's of London, found the renewal season "interesting''.

"Capacity has come back,'' said Mr. Bryce. "There was some over-capacity.

The London presence gave us a very advantageous position as far as balancing international accounts is concerned.'' Reinsurers disagreed that the London market and Bermuda were fighting over market share. "We are not leading open market programmes so we do not see any fighting,'' said Mr. Stanard.

A large number of programmes are led by London, and the market will continue to be preeminent for catastrophe business, he said.

Reports claim the London market catastrophe capacity has probably dropped by 20 percent since the January, 1993, renewal season.

The end of January will see certain Bermuda reinsurers depart from the end of the Japanese and Korean renewal season.