Leading insurers ACE and XL continue to lead the way in the Bermuda market, with the latest figures in a quarterly sector report showing the two to have collectively captured 50 percent of the total business written by Bermuda-based companies in the first quarter.

The report, from the research division of UK-based Benfield Group, revealed that first quarter data showed that ACE "remained the dominant player" with 28 percent share of the aggregate gross premiums written total, while XL placed second with 23 percent.

Although the report showed the level of business had grown year on year to $15.7 billion in gross premiums written, it showed the rate of growth in the business being seen by these companies had slowed quite substantially year on year, with growth standing at 17 percent compared to a rate of 51 percent a year ago.

Benfield, in compiling its quarterly report, follows the performance of 14 of the Island's front-running players in the re/insurance sector ? ACE, XL, PartnerRe, AXIS Specialty, Arch Capital, RenaissanceRe, Endurance Specialty, Aspen, Allied World Assurance Company (AWAC), Platinum, Max Re, Montpelier Re, IPC Re and PXRe.

Although all of the re/insurers looked at by Benfield are public companies, there are a number of other Bermuda-based listed re/insurers that do not feature in what Benfield calls its 'Benfield Bermuda Quarterly'.

Collectively, the 'Benfield 14' saw $15.7 billion in business, up from $13.5 billion a year ago.

The Island's newest companies ? with a wave of reinsurers setting up in Bermuda following the void in capacity after the September 11, 2001 terrorist attacks in the US ? saw much of the business in the quarter flow to them with the report finding that six of these (AXIS, Arch, Endurance, Aspen, AWAC and Platinum) placed within the top ten.

Taking up third place, after ACE and XL, was PartnerRe, with its business written in the quarter accounting for ten percent of the total $15.7 billion aggregate, followed by AXIS at seven percent, Arch with six percent, Renaissance and Endurance's business written totalled five percent each, Aspen weighed in with four percent of the total while AWAC, Platinum and Max Re were reported to have written three percent respectively. In addition, Montpelier's gross written premiums total was reported by Benfield as accounting for two percent of the total, while IPC Re and PXRe each wrote one percent of the total.

The Benfield report revealed that together the 14 companies had seen net income surge 57 percent to $2.3 billion.

It said the strong results were clearly a benefit of the first quarter being "the tenth successive quarter of benign natural catastrophe losses, continued technical price adequacy and increased investment income from enlarged financial bases".

It added that the stellar earnings could be seen in the balance sheet with aggregate shareholders' funds growing eight percent to $38.6 billion.

The Benfield quarterly weighted average combined ratio, which is a measure of underwriting profitability, stood at 83.6 percent, indicating costs of 83.6 cents for each dollar of underwriting business written ? a figure well below industry averages.

Net investment income was said to have increased by ten percent to $833 million collectively, reflecting the "increased base of assets available for investment but continued low yields."

The Benfield report also found that the Island's re/insurers were amongst the most highly rated for financial strength with "a quarter of the world's principal reinsurance business with 'AA' grade ratings are domiciled in Bermuda".

The Benfield report findings backed up what many have been saying in the industry ? that rates are strongest for casualty lines. "The January, 2003 renewal season was disciplined, with property catastrophe rates flat or modestly lower and casualty rates firm or gently rising," the report said.

It added that "there were clear differences between the property catastrophe and casualty sectors" and cited this as a "response to the continued existence of harder pricing conditions" in the casualty segment.

Specifically, the report said Platinum had grown its casualty book by 57 percent, and RenaissanceRe, a company set up to provide property catastrophe reinsurance after devastating Hurricane Andrew in 1992, had "continued its diversification into non-catastrophe lines" with its book of casualty business growing 24 percent while it reduced its property catastrophe volume by three percent.

The same held true for some of the other Bermuda re/insurers with casualty business accounting for 51 percent of Arch's book and 54 percent at Aspen.

Benfield said: "There was a general expectation that 2004 would see the peak of the hard market, but that price stability and rational underwriting would remain for the rest of the year.

"Continuing repairs to legacy balance sheet items and the trend towards more conservative reporting fostered by the Sarbanes-Oxley legislation provides market support; whilst an end to the exceptionally long absence of large catastrophe losses may, as always, be just around the corner to absorb some of Bermuda's enlarged capital base."