A veteran reinsurance executive who said he has enjoyed a long history as a client of the Bank of Bermuda was yesterday named to sit on its board of directors.

John Charman, CEO and president of AXIS Capital, now becomes the newest Bank of Bermuda board member, with the bank creating a new seat for him.

The move follows the announcement earlier in the year that AXIS had included the Bank of Bermuda in a $750 million credit facility from a syndicate of lenders.

AXIS is one of a wave of re/insurers to set up in Bermuda after a void in capacity following the September 11, 2001 terrorist attacks.

The credit facility ? an unsecured three-year facility capped at $750 million ? was said to allow AXIS to issue letters of credit and also gives the company leave to borrow up to $300 million for capitalisation or cash flow needs.

Bermuda-based reinsurers writing business for US companies often use this kind of arrangement when they are required to post security on behalf of clients, usually in the form of a letter of credit.

At the time AXIS chief financial officer Andrew Cook told the company had involved the Bank of Bermuda in negotiations early on, being keen to deal with a local institution it was already familiar with ? and knowing that negotiations were being made with HSBC. Although AXIS had done business with the bank previously, it was at a much lower level than this time around.

An amount was not put on the bank's involvement, but it was said to be "at the highest level" possible.

Although credit facilities are standard practice for reinsurers, AXIS Capital's announcement signalled the first major deal involving the Bank of Bermuda to be made public following its sale in February to multinational banking giant HSBC Plc. In the run up to the sale ? which was first announced last October, but did not close until after shareholder approval was received on February 16 ? bank management predicted that under HSBC they would be able to do much more business with the Island's international business sector.

At the time, then chief operations officer and now CEO Philip Butterfield said the bank's sale to HSBC would change the bank's capital profile and give it the financial standing to draw more business from the Island's booming insurance industry.

"The Island's international insurance and reinsurance sector, as an industry has well over $100 billion in assets yet less than four percent of those assets are domiciled in Bermuda banks ? whether with us and other banks on the Island.

"The reason (for that) is that the treasurers and CFOs of those companies choose to have a cap on the extent to which they will use local banks as depositories because of our capital position. It is a prudent choice," he said.

Yesterday, Mr. Butterfield said that in the five months since its sale to HSBC, the bank had seen lucrative opportunities in the reinsurance sector pan out, as it had predicted it would under HSBC.

Mr. Charman pointed out that the AXIS deal was a clear example of the business opportunities that could be harnessed by the bank now.

He added that the bank had done an impressive job meeting the needs of this sector, especially on the technology front with its online banking platform for corporate clients ? Global Connect ? which he said was the best he had seen.

He pointed out that that comparison was made against any number of international banks.