oldest captive insurers to cease underwriting and enter run-off.

Hopewell International Insurance Ltd. will cease underwriting on June 30 and transfer the unexpired portion of its current property and marine business on July 1 to Harrington International Insurance Ltd., a company in the process of incorporation.

Hopewell's managers, International Risk Management (Bermuda) Ltd., will manage the run-off.

Mr. Ron Peschon, vice president of Hopewell, stated: "Hopewell's decision to cease writing business was not taken lightly. Many of the shareholders and clients have supported the organisation since its inception. Hopewell is pleased that Harrington International Insurance Ltd. has been formed to meet the needs of Hopewell's clients.'' The announcement came as International Risk Management Group (IRMG) said Harrington is being formed to write engineered property risk business for major industrial groups in the alternative risk transfer market (ART). It will have capital of $70 million to $100 million.

IRMG said that, subject to final terms and conditions, Harrington will cover Hopewell's losses incurred on or after July 1.

Hopewell was one of the oldest and the largest property captive reinsurance pools for industrial risks, with 50 percent of those risks in the US and 50 percent in the rest of the world. It operated for the benefit of subsidiary insurance companies, the majority of which are managed by IRMG companies, and is owned by 23 of those companies.

The business underwritten by Hopewell is shared with about 105 professional reinsurance companies and Hopewell's shareholder retrocessionaires. Mr.

Bradburn said: "The appetite of the reinsurance market has changed from being one of proportional or, in our particular case, quota share, to one of non-proportional or excess of loss.

"This is one of the main reasons behind having to discontinue the operations at Hopewell, because we don't feel that we could renew Hopewell this coming treaty renewal, purely because we have a difficult job trying to find enough quota share reinsurance. There is plenty of excess of loss reinsurance out there, but there's not very much quota share or proportional reinsurance.

"And, Hopewell is just not capitalised, with a capital of approximately seven million dollars, to retain much risk itself.'' Following three consecutive profitable years, Hopewell incurred a loss of $2.8 million in its financial year to June 30, 1994.

The manager's operating report said that the company suffered several significant claims in the first quarter of the 1993/94 underwriting year including a major fire at a chicken processing plant in Hereford, England. It was the second largest loss in the company's 23-year history.

Total assets and liabilities of the company were placed at $88 million. Mr.

Bradburn said the 1994/95 year has so far been free of any major losses.

Harrington will be a Bermuda exempted insurance company and will be initially capitalised with approximately $70 million provided by Swiss Reinsurance Company and Winterthur Swiss Insurance Company. Swiss Re has a 70 percent stake in IRMG.

It is expected that additional capital will be sought in the future, with the goal of increasing capitalisation to a total of over $100 million.

Mr. Gareth Bradburn, president and CEO of IRMG, stated: "From a timing stand point, in order to get as close to a seamless transition as we possibly can from the one company to the other, we just haven't physically had the time to go out and speak to all of the other interested parties, with a view to investing.

"What we said was we would launch the company and then go out and speak to the other people who want to invest. There is no problem with the interest.

"Hopewell has always been a vehicle where the policyholders were the shareholders. The large multi-national industrial, Fortune 500 and Fortune 1,000 clients were the shareholders. We would like to continue that, but now because we want a more heavily capitalised vehicle, joining them will be some of the big insurance and reinsurance groups.'' In examining the reasons behind the change, Mr. Bradburn said: "The ART property market had developed to a point where it needed a new strategic direction not only to adapt to the ever-increasing needs of sophisticated multinational corporations, but also to adapt to structural changes that have occurred within the insurance and reinsurance industry.

"Harrington International Insurance Ltd. will be able to retain a meaningful amount of risk, and purchase more reinsurance on an excess of loss basis for which there is a far larger market. The capital base available to this new company, when further leveraged with the reinsurance support of the principle sponsors and other important reinsurers, will provide a greater measure of operational flexibility to the substantial benefit of its clients.''