In the wake of the September 11 attacks on the United States, Bermuda is becoming the world centre for reinsurance, according to the head of one of the new companies to set up on the Island.

And the Island could see more and more Lloyds business coming to these shores.

This is according to the management of Montpelier Re, White Mountains' new Bermuda-based reinsurer which has just raised its $1 billion of capital.

Chief executive officer of Montpelier Re Tony Taylor said: "Bermuda is becoming the centre for reinsurance business for the world."

Mr. Taylor is currently with Wellington Management Group, and will be taking up his post as CEO and chief underwriting officer at the beginning of January.

Jack Byrne, who will become chairman of the new company and is currently chairman of White Mountains and OneBeacon Insurance Group, praised Bermuda.

He said: "You guys have turned out a very fine place to do reinsurance business in and you now have a collection of mass there in Bermuda that it is a separate reinsurance market - we might even see more and more parts of Lloyds develop over there. Bermuda should congratulate itself on being a welcoming place for a complicated capital business like reinsurance."

The company is one of six new insurance companies to set up on the Island since the September 11 attacks and have a joint target capital of $5.7 billion.

Mr. Bryne added: "There is so much insurance already done in Bermuda. It is the obvious place to try to do business - the convenience of the brokers, the convenience of the business."

Mr. Taylor said the company had already been granted a licence to operate and were expecting to close on the overall transaction on December 10.

Mr Taylor said: "We have obviously been interested to see them, there are number of other operations have started or are going to start up, but this is all really in response to the World Trade Center event and probably we are looking at a gross insured loss in the area of $40 billion, maybe more.

"A large proportion of that is actually reinsured so we could be looking at $30 billion-plus reinsurance market. In addition to the actual loss, a number of groups that have been primarily insurance groups, but have done some reinsurance, have decided to pull out of reinsurance for the future. So whilst there is a fair amount of new capital coming into the reinsurance market, I think it needs it."

Mr. Byrne added: "We intend to focus on property reinsurance for the first couple of years and a more general book later. And we also intend to be available for retrocession insurance.

"The insurance industry in the United States and in London also really badly need some reinsurance players to lubricate the market. And so we think there will be plenty of room for new capital and very careful underwriting."

Mr. Taylor was deputy chairman of Wellington Holdings plc, a publicly traded Lloyd's underwriting vehicle, and has 25 years of experience in the worldwide reinsurance business.

Bank of America Securities LLC and Benfield Advisory Limited, part of the Benfield Group plc, are acting as financial advisers to the company.