Bermuda reinsurers may look to merge or buy Lloyd?s of London insurers in the wake of the disastrous 2005 hurricane season, the chief executive of Hiscox said yesterday.

Bronek Masojada, whose company has just set up a Bermuda subsidiary, said some Bermuda reinsurers that had focused on the property casualty catastrophe market may now move to diversify by buying up Lloyd?s businesses, according to an article in The Scotsman newspaper.

?One area of M&A in this sector that could occur is Bermuda companies looking at Lloyd?s businesses,? Mr. Masojada said. ?Lloyd?s businesses have fared better this year than some of the Bermuda companies because they have better diversified business platforms. I wonder if some of those Bermuda players will re-evaluate their positions.?

Bermuda?s insurers and reinsurers were particularly badly affected by the storms as much of their exposure is linked to property. Between them Katrina, Rita and Wilma could cost the industry ?40 billion, with Hiscox?s liabilities stated at around ?138 million.

That, Mr. Masojada believes, could see them looking to cut future potential liabilities by spreading their underwriting portfolio, and buying Lloyd?s more risk-diversified businesses would be the ideal vehicle for that.

Lloyd?s comprises a pool of individual syndicates, with Hiscox underwriting as Syndicate 33 ? one of Lloyds? largest syndicates.

?Back in the 1990s, Bermuda players like ACE bought Lloyd?s businesses to diversify. I do see that happening again, to get the wider spread of business and extra distribution that Lloyd?s offers,? Mr. Masojada told The Scotsman.

Potential buyers, he said, would possibly come from the ?class of 2001?, a group of Bermuda companies set up in the aftermath of the World Trade Centre attacks.

These include Aspen Insurance Holdings, Axis Capital Holdings and Montpelier Reinsurance Holdings, among others.

But newer insurers that were set up this year on the Atlantic island, backed by huge amounts of private equity capital, may also look to buy at Lloyd?s to limit their exposure to earthquakes, flood and hurricanes, he said.

Asked whether Hiscox, which recently set up a Bermuda-based division, may be an acquisition target, Mr. Masojada said: ?We?re a publicly traded company. That?s part of the thrills and spills of being a plc.?

Hiscox forecasts premium volume for the unit of around ?187 million in 2006.

The group said it would seek to avoid crippling claims from natural disasters at its Bermuda unit by limiting the volume of property catastrophe risks it underwrites to half of its overall premium revenue.

Mr. Masojada said: ?We recognise that lesson very clearly.?

He said he remained optimistic that prices for risk cover would be pushed higher by the storms.