Bermuda's financial services regulator has licensed six major insurance start-ups to sell policies ? and more are on the doorstep seeking permission to join the Island's burgeoning insurance market.

Those granted Class 4 licences ? reserved for highly capitalised companies ? in October were Amlin Bermuda Ltd., Arrow Capital Reinsurance Company Limited, Harbor Point Re Limited, Hiscox Insurance Company (Bermuda) Limited, Lancashire Insurance Company Limited and Validus Reinsurance, Ltd., according to a Bermuda Monetary Authority bulletin issued on Friday.

The companies, between them are expected to have in the region of $6 billion in capital but other entrants already in the works could bring the combined capitalisation of Bermuda's newest companies closer to $8 billion.

At least two more, both understood to be property-catastrophe reinsurers, are in line to enter the Bermuda market ? one from investors led by reinsurance veteran Don Kramer, and the second being formed by hedge fund guru Ken Griffin's Citadel Investment Group Llc. The latter is the first off the marks with a strong financial strength rating, something seen as a prerequisite to growing a company that will attract a steady flow of business.

Citadel's new reinsurer, New Castle Reinsurance Company Ltd., is its second Bermuda reinsurance venture focused on property risks. It formed CIG Re Ltd. in September 2004, hiring away Chris McKeown from ACE Tempest Re.

Mr. McKeown is to head New Castle, according to an AM Best statement on Friday. The company has earned an A- (Excellent) financial strength rating, and will be capitalised with $500 million and plans to sell property-catastrophe reinsurance as well as workers comp catastrophe and terrorism reinsurance.

Less is known about Mr. Kramer's new venture. He and investors are to buy parts of Rosemont Re, a Bermuda reinsurer which recently bowed out of the market after unprecedented losses from this year's hurricane season, from troubled UK parent Goshawk Insurance Holdings Plc. The purchase was made as part of a plan to set up a new Bermuda-based reinsurer. It is expected to have capital of at least $750 million. Mr. Kramer is a highly respected insurance executive who founded Bermuda-registered Tempest Re in 1993 in the wake of Hurricane Andrew, which sent catastrophe insurance premiums soaring.

A ninth reinsurer is also likely in the works, although it is not known if it will be Bermuda based, after reaching an agreement to take on some of XL Capital's property risks.

XL, one of Bermuda's larger global insurance companies, has said little about the new company. It did reveal that the lead investor was an alternative asset management firm that XL has worked with through the years. And the company is expected to draw between $500 million and $1 billion in initial capitalisation.

It isn't the first time a Bermuda reinsurer has joined forces with an alternative investment company to form a reinsurer.

Hedge fund manager West End Capital Management, a Bermuda company, and Montpelier Re formed Rockridge Re in the Cayman Islands in June with $90.9 million of capital. The company was set up to offer retrocessional coverage solely to Montpelier , giving the reinsurer the capacity to write attractive high-layer, excess of loss contracts in peak catastrophe zones, such as Florida, California and Japan.

Now West End may seek additional capital for Rockridge Re, and expand its business profile.

And West End marketing manager Brent Slade on Friday said the company was "looking at options" in the reinsurance sector, but could not say any more on any plans to invest further in the reinsurance sector.

Cash-rich hedge funds have been moving into the property-catastrophe reinsurance market in recent years, and continue to be bullish on the sector. In addition to Citadel forming its new venture, and West End looking at its options to invest in the sector, George Soros' Swiss-based Glacier Re ha also seen a capital boost.

The surge in insurance incorporation activity can be linked to widespread expectations that insurance and reinsurance rates are going to rise when policies come up for renewal on January 1.

A tightening market is expected because scientists have said weather patterns are changing and storm activity is predicted to be more frequent. Under that scenario, insurers and reinsurers need to charge more for policies. As well, the industry needs to recoup losses after an estimated $75 billion in claims so far this year, primarily because of heavy Atlantic storm activity. Of that, losses from Hurricane Katrina, the August 29 storm that devastated the Gulf Coast region, is expected to make the largest dent on insurance balance sheets. Estimates for Katrina's costs, the most expensive catastrophe in history, range as high as $60 billion, although a final figure isn't likely to be known until 2006 or beyond.

Market sources speaking with predicted up to 12 new Bermuda start-up insurance and reinsurance ventures, with at least eight in the final stages of getting off the ground.

"I would predict there will be a dozen companies with capital each north of $500 million," said one executive close to the latest activity, as well as being instrumental to the establishment of some of Bermuda's older companies.

Bermuda has long been a leading reinsurance market but in recent years has expanded into a strong insurance and reinsurance market. Reinsurers effectively contract to insure reinsurers, in a bid to spread the risk in policies sold by the primary company to individuals and corporations.