The Island?s insurance market is poised to see a surge of incorporation activity as investors from both sides of the Atlantic line up to take advantage of an expected increase in reinsurance pricing.

So far, US and UK insurance veterans and investors have lined up behind six new reinsurance ventures with combined start-up capital in the region of $6 billion between them.

The proposals are coming from such industry stalwarts as former ACE vice-chairman Donald Kramer and ousted Marsh & McLennan Cos. chief executive Jeffrey Greenberg, who was once in line to succeed his father at the helm of commercial insurance giant American International Group Inc.

On the UK side are the likes of Richard Brindle, a leading underwriter out of the Lloyd?s of London market.

The money backing the companies can also be taken seriously, with investments planned from Capital Z Financial Services Partners and Trident III, L.P., as well as a new private equity fund run by Mr. Greenberg and partners from Venturion Capital, as well as others. Hedge funds are also believed to be putting more money into the sector, continuing to see reinsurance as an attractive investment because it offers opportunities outside the normal asset classes of equities and bonds.

Overall, the flurry of activity makes it official that Bermuda is in the grips of its fourth wave of reinsurance start-up activity, despite speculation after Hurricane Katrina that incorporation activity would be stymied by the strength of the ?Class of 2001?. That wave of start-up came after a severe void in insurance capacity following the September 11, 2001 terrorist attacks. And it followed another surge in company incorporations in 1993, when losses from Hurricane Andrew proved a catalyst. And then in the mid-1980s, there was another wave, with excess liability reinsurers forming to address a capacity crunch based on a broken US legal landscape.

The money that is understood to be being raised by the new companies is nearly half the $15 billion in capital that went to established Bermuda insurers and post-9/11 companies in 2001.

Today?s interest in forming new reinsurance ventures follows a flood of property-catastrophe claims after unprecedented Atlantic storm activity, with up to $75 billion in claims expected to hit the global insurance and reinsurance market.

The biggest hit is coming from Katrina, the August 29 storm that devastated the Gulf Coast region, and is expected to sap up to $60 billion out of insurers and reinsurers.

Katrina, which is expected to go down in the record books as the most costly catastrophe ever, is taking a big bite from reinsurers? bottom line because the costly event was a single event meaning there is only one deductible that has to be borne by insurers before filing reinsurance claims.

Reinsurance, commonly thought of as insurance for insurers, is bought by insurers who want to spread the risk in policies sold to corporations and individuals.

While $75 billion isn?t expected to undermine the overall financial strength of the industry ? which has combined capital in the region of $430 billion ? it is expected to constrain reinsurers who hold only a fraction of the industry?s total capital.

So far, Bermuda?s reinsurance and insurance companies have seen combined third quarter losses in the region of $5 billion, but that total does not include the losses from a handful of privately-held companies known to have high exposure to storm losses, including mutual insurer Oil Insurance Co. Ltd., and Olympus Re Holdings Ltd.

So far, in 2005, the $5 billion-plus that has been raised by established companies has done little more than replenish coffers hit by losses.

Overall, the wide industry losses create ripe opportunity for new reinsurance companies, who are backed by clean capital that can?t be tapped by any storm claims, including from Hurricane Wilma, a late storm expected to take a bite of insurance profits in the fourth quarter.

?If you are a CEO arguing all day with a reinsurer in London [over claims, and there is a new guy sitting across the street with clean capital ... that is going to be a distraction to your clients,? said Andy Barile, a reinsurance veteran who runs a private consulting business.

Reinsurance disputes, already commonplace to the industry, are expected to peak in the post-Katrina environment with insurers coming under US political pressures to pink up on flood claims, even though this coverage is excluded from most home and business policies.

Reinsurers are balking, saying they won?t pay claims when they relate to events excluded from the policy.

?A new reinsurance company may have computer issues but it is also sitting there with all this capital ? and without a loss,? said Mr. Barile, who thinks that will be compelling to clients who seek to buy reinsurance coverage from companies? that are financially strong enough to meet future claims.

An announcement from Bermuda Monetary Authority on October insurance incorporations, including how many class four insurance licenses ? which are given to major players with high capital levels ? have been issued, is expected shortly. The Authority would also not reveal how many applications are under consideration.