The ability for locals to invest in Bermuda-based insurance companies just expanded with the Bermuda Stock Exchange this week saying it had increased the number of companies listed on its Bermuda Insurance Index by three to 19.

Alea Group Limited, Quanta Capital Holdings Ltd. and Catlin Group Ltd. have joined 15 other constituent Bermuda-based companies listed on the Index. In addition, PXRe has been reinstated on the Index after being removed in 2002.

As well, shares of all four of the companies are now being included with the other 15 in the Bermuda Insurance Index Fund (BIIF) ? a mutual fund that invests in the stocks that comprise the BSX Insurance Index.

Anne Kast, president of Kast Investment Management Ltd., which manages the BSX-listed fund, told The Royal Gazette the additions could be appealing to those who want a little more diversification.

The fund has reached an all-time high with the market capitalisation of the companies the fund holds reaching $62.7 billion as of February 18.

Ms Kast said that although the now 19 constituent companies are all listed on major international exchanges (the majority on the New York Stock Exchange, while two of the brand-new additions, Alea and Catlin, trade in pounds sterling on the London Stock Exchange), the fund offers Bermuda investors a way to invest in these companies from home.

Kast have been the sole managers of BIIF since 2002 when the company took on total responsibility for the fund.

Previously the fund ? which was launched in 1998, two months after BSX Bermuda Insurance Index was itself formed ? was co-managed by both Kast and Mutual Risk Management (MRM) but the latter sold off its founder shares to Kast about three years ago after financial woes began to drag MRM down.

Ms Kast cited the fund as a good investment option for investors who like to ?know? their investments because the companies are in Bermuda but investors also have the comfort of knowing there is a high level of transparency as each insurer is bound by US or UK disclosure rules.

The BIIF only invests in re/insurers that meet certain criteria, including having their global headquarters in Bermuda, they must be listed on a major international stock exchange, the mind and management must be on the Island and each must have a market capitalisation of $100 million of more.

Only five of the original constituent companies ? ACE, XL, PartnerRe, RenaissanceRe and IPC Re ? remain.

In contrast, the BIIF is invested in eight of the Island?s newest wave of re/insurers, the so-called ?Class of 2001? when capital flowed into Bermuda to back ventures set up to take advantage of a void in capacity and improved pricing following the September 11 terrorist attacks.

The companies in the fund ? XL, ACE, PartnerRe, PXRe (reinstated), Everest Re, PartnerRe, RenaissanceRe, IPC Re, Montpelier Re, Max Re, Endurance Specialty, Arch Capital, Platinum Underwriters, Scottish Annuity, AXIS Capital and White Mountain Insurance Group and the three just added: Quanta Capital Holding Ltd., Catlin Group Ltd. and Alea Group Ltd. ? are weighted in the fund according to size of market capitalisation.

In total, the 19 in the fund have a combined market capitalisation of nearly $63 billion, with the largest investment being in ACE Limited (17 percent) because it currently has the highest market capitalisation at $10.6 billion (February 18).

Last year, the fund was said to have appreciated by 5.7 percent ? up at $13.23 compared to $12.52 at the end of 2003 ? with a particularly good fourth quarter seeing the fund rise 10.54 percent. The Index itself appreciated 6.75 percent, compared to the S&P 500 Index being up 6.75 percent at December 31, 2004, while the S&P 500 Insurance Index was up 7.25 percent at the end of the year.