Reinsurance Company has been a runaway success since it began operations last November with a capitalisation of over $360 million.

Any company which makes a profit of $13.23 million in its first five months of business can hardly be called anything else.

Total revenues for the period from November 1, 1992, to March 31, 1993, came to $37.26 million, including $166.88 million of net premiums written.

Mid Ocean came into the property catastrophe market at a time when premiums were hardening.

Since then, a glut of new companies have followed suit and brought new capital of over $2 billion to Bermuda, catapulting the Island to the forefront of the world's reinsurance industry.

A glut of natural disasters over the past few years has caused a massive shrinkage in the `CAT' market, as it is known.

This has made it an attractive investment opportunity for serious investors, who can expect to receive excellent returns on their money from a professionally managed CAT company...

Mid Ocean Re's president and CEO, Mr. Michael Butt, said: "About $7.5 billion worth of capital has been withdrawn from the reinsurance markets over the last three years.

"That represents over 25 percent of the capital available to the world's reinsurance markets.'' Some 300 separate entities, including individual Lloyd's of London syndicates, have stopped underwriting property catastrophe over the last three years.

"Some are going out in coffins and others are saying `let's get back into something we know','' said Mr. Butt. "This is a highly specialised area.'' Mid Ocean Re's senior vice-president and chief underwriting officer, Mr. Henry Keeling, added: "The marketplace is made up of leaders and followers.

"Most of the people who have withdrawn were followers and did not have the dedicated expertise in the business.

"They believed they could come in and reap high returns and they were demonstrated to be very wrong.'' Mr. Butt believes that Mid Ocean Re's strong start is largely due to the quality of people and organisations involved with the company, including blue-chip investors such as EXEL, its largest shareholder; Marsh & McLennan and J.P. Morgan.

The firm's chairman is Mr. Robert J. Newhouse, Jr., former president and vice chairman of Marsh & McLennan.

Mr. Butt also praised Mid Ocean Re's London-based underwriting policy consultant Mr. Charles Skey.

He said: "The quality of Mid Ocean's original investors and sponsors was such that, once Mid Ocean was set up, it was immediately accepted in the world as being credible.

"The fact that Charles Skey and Henry Keeling were the underwriters made it instantly acceptable in the professional sense in the reinsurance world. "We, as a company, were able to get our capital to work at an uncanny speed. Within six months of being in business, we had written $200 million of premiums.

That's a significant achievement.'' He added: "Our business, like many other professional businesses, is about selling credibility and putting a price on it.

"These factors matter much more than, say, manufacturing businesses, where you have to have a tangible product.'' The fact that some ten percent of Mid Ocean Re's premiums come from Japan, a notoriously difficult market to break into, was proof of the standing of Mid Ocean in the world marketplace, said Mr. Butt.

He said: "It's well known in the business world that it's very difficult to break into Japan and get them to accept you and do business with you. they are extremely cautious about whom they do business with.

"The Japanese renewal period for treaty business is April. Henry Keeling went to Japan in January with our first president Ian Heap and we were totally accepted by the Japanese market in our first year of business.'' MAKING PLANS -- Mid Ocean Re CEO Mr. Michael Butt, left, and Mr. Henry Keeling are looking to quickly expand Mid Ocean Re.