A wave new of insurance companies flocking to Bermuda has put the Island on the front page of Best's Review, a well established US business magazine.

The March issue's cover story, "Bermuda bound", states that the Island is once again the hub of renewed insurance activity, after a "second wave" of new insurers and reinsurers landed on its shores following September 11.

Within weeks of September 11, seven reinsurers headed for Bermuda and at the moment the figure stands at 11.

March & McLennan formed Axis Specialty, through its private equity subsidiary MMC Capital, and Bermuda-based RenaissanceRe Holdings Ltd. started DaVinci Reinsurance to address an industry's capacity shortage. The article stated that nine new insurers have moved into Bermuda since the terrorist attacks.

The other seven are Allied World Assurance, Endurance Specialty Insurance, Arch Reinsurance, Montpelier Reinsurance, Goshawk Reinsurance, Olympus Reinsurance and Queens Island Reinsurance.

But missing from the list are the new start-ups, Michigan Re and Catlin Insurance.

It is believed that Michigan Re is being set up by Trenwick and Catlin Insurance by WestGen, which is owned by JP Morgan. Capital Z and Warburg Pinctus and both are said to be moving into the Swan building on Victoria Street.

The article stated that, with rates rising 50 percent to 100 percent or more, the new companies and their backers, equity firms, existing insurers and brokers, are trying to take advantage of a hardening insurance market. But it added that some analysts wondered how many will survive and for how long, even though established and start-up insurers and reinsurers claim there is room for more competition.

"Clearly, you're going to have some winners come out as a result," said Robin Albanese, an equity analyst with Lehman Bros. "You're going to have some losers."

The article stated that experts said some of the factors that will determine which new companies will reap long-term success include a strong management, a clear exit strategy, alliances with other insurers, good underwriting, claims-paying ability, market flexibility, timing and luck.

And it said that those same experts were pointed to parallels with and lessons learned from Hurricane Andrew in 1992 for clues on what might happen over the long term in the property/casualty market.

For instance, the August 1992 storm caused an immediate spike in prices because of a shortage in capacity, said Robert Steinhoff, presiding chairman of Bermuda's Insurance Advisory Committee.

Rates increased 20 percent to 70 percent, and would have risen even higher if not for the large amount of capital that was invested in the industry in Bermuda, he told the magazine.

After Andrew insurers learned that underwriting was the key to profitability. "I guess the lesson that I hope we've learned is you've got to maintain your underwriting discipline," Michael Morrison, chief executive officer of Allied World Assurance said in the magazine.

But discipline was the one thing that was lacking in the years leading up to September 11, becoming a lost art in the soft market that dominated the late 1990s, the article said.

"We had reached a trough in the market," said Elizabeth Farrell, vice president of global financial services at A.M. Best. "They were basically giving insurance coverage away."

Best said the big question, according to Matt Mosher, group vice president of property/casualty at A.M. Best, was which of the new start-up companies would be autonomous in the long run and which would be swallowed up by other companies. Most in the industry, however, are confident that prices will continue to harden for the rest of 2002, and perhaps beyond the article said.