London insurer Hiscox has serious intentions for its new $500 million Bermuda reinsurer of the same name.

Hiscox, an active participant in the Lloyd?s of London market for a century, says its new Bermuda operation is ?not a three-year play to go public?.

A dozen highly capitalised insurers are currently working to get a foothold in the Bermuda market.

The companies are being formed in anticipation of insurance and reinsurance premium pricing rising when most policies are renewed on January 1.

The money going into the new ventures is partly coming from private equity, hedge fund and insurance investors in the US while several are being established by London insurers and reinsurers.

Typically investors will expect to cash in on their investments in new insurers when each goes public on a major stock exchange.

Hiscox, which is already listed on the London stock exchange, won?t follow that model, chief executive Bronek Masojada said.

While some of the start-ups are backed by ?opportunistic capital?, Mr. Masojada says Hiscox Bermuda is designed to become an integral part of the group, including about half of its business expected to be by way of quota-share insurance contract with Hiscox in London.

Chairman Robert Hiscox has even hinted that the company could move its parent company to the Island.

But Robert Childs, Hiscox?s director of underwriting who is now moving to Bermuda to head up the new unit, said the group doesn?t expect its Bermuda staff to grow beyond 15.

Cost was one factor, Mr. Masojada said, and the group also wants to maintain an underwriting foothold in London.

?We?ll write $350 million in business in Bermuda next year, and in Lloyd?s we?ll write $1 billion,? Mr. Childs said.

Because the insurance sector expects market conditions to improve after a wave of costly catastrophes could wipe as much as $80 billion from insurance balance sheets, Hiscox has not only formed its new Bermuda company, but has also boosted capital at its Lloyd?s operation.

Mr. Childs has been instrumental to Hiscox, seeing significant underwriting growth since the last ?hard market? in 2001. In industry parlance, a hard market indicates when insurance capacity hits a crunch and pricing rises.

While Hiscox Bermuda plans to keep its numbers small ? Mr. Childs is being joined by a few underwriting and modeling staff from the London operation ? it plans to hire locally, over time.

?We like to homegrow our own staff,? said Mr. Childs, with the company following that policy in the US and European operations.

The company would like to hire young Bermudians who are driven and eager tolearn. ?Brain power is only good if applied,? said chief executive Bronek Masojada, who was in Bermuda with Mr. Childs last week.

Mr. Masojada, who is also deputy chairman of the Lloyd?s market, joined Hiscox from consulting firm McKinsey & Co. Mr. Childs is a veteran of the Lloyd?s market, and has worked in insurance since 1973.

Mr. Childs said Hiscox Bermuda is expected to be officially open for business by sometime this week.

And the fledgling company hopes to have an A- financial strength rating from leading ratings agency AM Best by mid-month. It is also in talks with Standard & Poor?s, another company that rates insurance companies? ability to meet claims. It hopes to achieve and S&P rating by mid-2006.

An insurance company?s rating is key to its business prospects as commercial clients will generally only do business with a company rated at A- or higher.

Mr. Childs, who has leased an apartment in one of Hamilton?s few apartment blocks, Atlantis, said he has a two-minute walk to the new office, which is temporarily at the IAS Building on Church Street, a welcome change from the three-hour commute he had in the UK.

Over the next nine months or so the company expects to find more permanent space. For now it has a contract with IAS that will help it get off the ground with few staff. Under the agreement, Hiscox outsources certain areas to IAS, and it also is able to use space in the building until it finds its own.

While Hiscox is moving into the Bermuda market at the same time as numerous others new insurers and reinsurers Mr. Masojada thinks there is room for everyone.

While about $15 billion in new capital has gone into established and new Bermuda companies, Mr. Masojada points out that is only a fraction of the $80 billion that could be wiped from insurance balance sheets by the unprecedented catastrophe activity in the US this year.