There is no war between Bermuda and Lloyd?s of London, Lloyd?s chairman Lord Levene, said yesterday, citing the two insurance centres as rival markets that complement each other.

And he scuppered the notion that a new three-year plan, installed in January, to cut Lloyd?s costs and improve efficiency was anything more than a step to modernise the 300-year-old market.

He said the idea that the plan was put in place to ward off competition from rival domiciles, such as Bermuda, was ?rubbish?. ?The plan is a serious document to make us more efficient,? Lord Levene, 64, said, in an interview. ?Is it to make us more efficient vis ? vis Bermuda, yes, absolutely, but not only just Bermuda.?

Late last year, Lloyd?s saw two insurers active in its market ? Amlin Plc and Hiscox Plc ? move $1.5 billion into newly-formed Bermuda entities.

The two companies joined seven other major reinsurance and insurance ventures that set up in the Bermuda market to take advantage of an expected rise in premium pricing when 2006 policies come up for renewal.

The so-called ?Class of 2005? attracted in the region of $10 billion, and other established companies in the Bermuda market raised a further $9 billion. Lloyd?s has attracted about $2 billion in new capital since Hurricane Katrina, the August 29 storm that could cost the industry as much as $60 billion, making it the most expensive insured catastrophe ever. The market has also increased its capacity for the coming year by eight percent to ?14.7 billion ($25.6 billion), 15 percent higher than planned before the 2005 catastrophes, Lord Levene said.

In recent years Lloyd?s has taken steps to contain its exposure to losses, including business plans of the market?s 62 member underwriters being scrutinised by a franchise performance director every three months. If the plans aren?t likely to be profitable they can be turned down. ?There is a lot more discipline in the market,? Lord Levene said. Lloyd?s total losses from the 2005 storms was in excess of $5 billion. Bermuda?s losses were about double that.

While Lloyd?s has made strides since its days of being the haven of private capital that could underwrite unlimited risks ? the market is not only more disciplined, it is also more corporate with only 15 percent of its total capital now held by private members ? some say Bermuda attracted greater investment than other markets because of its stature as an established reinsurance market, minimal tax regime and friendly regulatory environment.

?Bermuda is a fast growing reinsurance market which now sees business not shown in London, and has pricing advantages and a favourable regulatory regime,? Hiscox chairman Robert Hiscox said as Hiscox set up its Bermuda unit. Both Amlin and Hiscox remain active in the Lloyd?s market. Hiscox has said it could redomicile to Bermuda but would continue to have significant operations in London.

Bermuda, a $100 billion insurance and reinsurance market, now ranks as the fourth largest global insurance market after Germany, the US and Switzerland, according to Standard & Poor?s Global Reinsurance Highlights Report 2005. Thirteen of the world?s top 40 reinsurers are based on the Island.

If anything, Lord Levene, who is on the Island to join other insurance leaders on a panel discussion being held at this week?s World Insurance Forum, says the Bermuda insurance market ?has done a very good job?.

?Why would you have an insurance market in the middle of nowhere with so few people,? he said of a financial services centre sprouting on a mid-Atlantic island, 21-square feet in size and having a population of 64,000.

He?s witnessed the transformation first hand having first visited 40 years ago as he and his wife celebrated their honeymoon, and a half-dozen times since. ?You would expect to find that in London, you expect to find that in New York, you don?t expect to find (a big insurance market) in Bermuda.?

Seven percent of Lloyd?s capacity comes from the Bermuda insurance industry, which collectively contributes enough capital to be the London market?s third-biggest investor.

And Lord Levene said he?d like to see more involvement of Bermuda companies in the market. He?s meeting with some companies while on the Island but said the talks were friendly, not necessarily geared at targeting more business for the market.

?When you look at it there is a huge amount of cross business,? he said. ?I don?t see any kind of trade war; the two markets are inter-dependent.

?We have been doing business for years and it is very successful. If some in our market want to come and do business here, then fine, what?s the problem??

And he says he doesn?t have quiet conversations to try and dissuade those who want to do business here. ?My personal view is that we are a market and anybody who tries to disturb a market, it doesn?t work.?

Lloyd?s may not have to worry in the short-term about losing more business to any other domicile. A recent report from ratings firm Standard & Poor?s said most of the market?s insurers are not in a position to ?operate meaningfully? outside of Lloyd?s at this time.?

?In ten years time Bermuda will have a strong insurance industry, as will Lloyd?s,? Lord Levene said.