Marsh & McLennan Cos., the world?s largest insurance broker, has formed a Bermuda-based venture with investors to bring as much as $1 billion in new insurance coverage to clients in disaster-prone areas in the next year.

MaRI Ltd., created with investors including Lehman Brothers Holdings Inc., will offer much-needed property coverage to Fortune 1000 companies in vulnerable parts of North America, said Phil Moyles, an executive vice-president at New York-based Marsh.

Bermuda-based MaRI will pay out any claims from hurricanes and earthquakes, and partner ACE Ltd., also based on the Island, will cover other losses.

This new facility provides large corporate clients of Marsh with access to insurance capacity intended to fill gaps that are creating instability and shortfalls in property catastrophe risk coverage.

Traditionally, this form of extra risk capital ? commonly referred to in the industry as a ?sidecar? ? allows reinsurers to offer more capacity to their clients, the retail insurers. What makes the MaRI structure innovative is that it provides Marsh clients with direct access to the capital markets through a highly-rated ACE delivery vehicle.

?In the wake of the 2005 US hurricane season and growing concerns about natural disasters in the years ahead, obtaining sufficient insurance coverage for catastrophic loss has been extraordinarily difficult for many of our clients,? said Brian Storms, chairman and chief executive officer of Marsh.

?The capacity MaRI provides could only be produced by a firm with deep intellectual capital, an integrated approach, and excellent industry relationships ? as evidenced by our important collaboration with a highly-rated carrier like ACE.?

Insurers scaled back coverage and raised prices for coastal properties after Hurricane Katrina struck the US Gulf Coast in 2005, costing the industry a record $40.6 billion. Many of Marsh?s clients have been able to buy only a fraction of the coverage they need since then, Moyles said.

?We?re trying to fill the gaps,? he said in a telephone interview. ?There?s not enough capacity for anyone right now.?

MaRI gives investors a bigger role in the underwriting process and a bigger share of the risks than other ventures that have been set up since Katrina, Moyles said. The first policies take effect on February 1.

Marsh?s biggest business is helping corporate clients find insurance. The company, which invested in MaRI through its Risk Capital Holdings unit, will tell clients what it earns from the venture to reduce concern about conflicts of interest, said Robert Howe, a managing director.

?We disclose every bit of revenue that we make on any placement,? he said.

Morgan Stanley advised on the project.