Without the huge amount of capital flowing into the insurance and reinsurance world in Bermuda there would be a global insurance crisis, according to Robert Hartwig, chief economist at the Insurance Information Institute in Washington, DC.

Mr. Hartwig also believes that the Bermuda market is coming of age and can now be counted as a global force in both the reinsurance world and insurance world.

He said: "The money flowing into Bermuda is essential. Without that flow of capital there would be an unprecedented crisis in the US and world insurance markets."

Mr. Hartwig is vice president of the Insurance Information Institute which collates information on events, issues and trends in the US property and casualty insurance industry as well as insurance legislation, court cases and studies and history of insurance.

Mr. Hartwig was speaking after more than $10 billion in new capital has flooded into Bermuda in the wake of the contraction of insurance capacity after the events on September 11.

The money has been brought in by seven new companies which have set up shop on the Island with a total of $6.9 billion in new capital and over $3 billion raised by existing insurance companies on the Island and a further $2.5 billion more is expected to come to the Island in the near future.

The boom has brought in a huge number of top executives from around the world and 120 or more jobs will be created directly from the boomlet.

The new insurers include Arch Re Ltd, which will write broad-based multi-line reinsurance and was set up by Arch Capital Group Ltd. and backed by two private equity firms, Warburg Pincus and Hellman & Friedman with a total capital of $1 billion.

Axis Specialty will deal in property, aviation, war and other and was set up by insurance broker Marsh & McLennan Cos. with capital of $1.6 billion.

RenaissanceRe's new venture, DaVinci Re, will deal with property/catastrophe and is backed by investors, including State Farm, the largest U.S. insurer and has a capital of $500 million.

Endurance Specialty Insurance Ltd. will deal with commercial property/casualty insurance and reinsurance and was started by Aon Corporation and Zurich Financial Services and "affiliated entities and others" with capitalisation of $1.2 billion. Montpelier Re will deal with property/casualty and was set up by White Mountains with $1 billion in capital.

Allied World Assurance Company (AWAC) will deal in property/catastrophe and was set up by American International Group, Chubb Corp and GS Capital Partners with capital of $1.5 billion.

Goshawk Re, set up by Goshawk Insurance Holdings Ltd. is the furthest behind in the race, with so far no announcements made about its business plans, CEO or office space. But it has been granted a licence and will be writing excess liability and property/catastrophe. It has raised $140 million so far and plans to raise a total of $200 million in new capital.

Mr. Hartwig said: "The Bermuda market really came of age post-Hurricane Andrew. Now it is proving it can be a global force not only in reinsurance but also in primary insurance as well."