Max Re Limited has been generating a lot of news lately.

In October 2002 in response to improved insurance rates and a difficult investment climate, it expanded its product lines.

The original business model focused on alternative investments and underwriting structured reinsurance products, but Max Re has now branched out into traditional property and casualty reinsurance and alternative risk transfer.

In the past month it has also moved from solely reinsurance into direct insurance as well.

Just yesterday, the company announced a bit of a coup - they have swiped an excess general liability team from XL Insurance (Bermuda) Ltd.

Bernard Anckner and Michael Morgan, who wrote excess liability together for several years at XL, have now joined Max Re as senior vice presidents and Angelo Guagliano will be the executive vice president and chief underwriting officer of the new Max Re direct insurance practice.

The insurance division will have US $25 million in available capacity focusing initially on healthcare, transportation, industrial and pharmaceutical clients. They will also add professional lines insurance in the second quarter of 2003.

"We are pleased to be entering the excess general liability business with such a distinguished and experienced team of underwriters. Clients should expect rapid underwriting response and an innovative approach," said Robert J. Cooney, chairman, president and chief executive officer of Max Re Capital Ltd.

However Max Re has kept fairly quiet about one of its subsidiaries formed in May 2001 in which it invested $15 million.

Unlike the other 2001 Bermuda start-ups, Grand Central Re Limited has kept a very low profile. But they are still very much in business. The reason why they have not courted publicity is simple, says Keith Hynes, chief financial officer of Max Re and president of Grand Central Re: "Unlike the other start-ups, we have no intention of taking it public."

Asked how Grand Central Re came into being, Mr. Hynes explains that it is a joint venture with Hypovereinsbank, the world's sixth largest bank, based in Germany. In fact, Hypovereinsbank invested $185 million and owns 92.5 percent and Max Re only own 7.5 percent. Max Re acts as underwriting manager while Hypovereinsbank manages the asset side of the company.

Like Max Re, Grand Central's investment portfolio is a mix of high quality fixed maturity securities and a fund of hedge funds and it writes substantially the same business of life and structured products.

The board includes Max Re's Robert Cooney and Keith Hynes as well as four executives from Hypovereinsbank: Stephen Bub, Dr Michael Kemmer, Mark Cutis and Thomas Glynn.

According to Mr. Hynes, Grand Central is Hypovereinsbank's only reinsurance activity.

Asked how they originally hooked up, Mr. Hynes says that Hypovereinsbank had carried out a strategic study about entering the reinsurance business and were thinking about copying Max Re's business model. "Originally they looked at starting a competitor to Max Re, but in the end they decided that a joint venture would be the best route and commenced negotiations with us."

Mr. Hynes confirms that Grand Central generates purely fee income for Max Re. He would not be drawn on exactly how much profit it makes for Hypovereinsbank.

As Grand Central is a joint venture and not publicly owned, the company is not required to make their results public. However, Mr. Hynes revealed that it has made a profit for the past year. "Grand Central Re Limited had over 100 million in premiums in 2001 and over 50 million in premiums in 2002. Both years produced positive net income."

Both Grand Central and Max Re cut back on life and annuity lines last quarter. Unlike Max Re, Grand Central has decided against diversification and has stuck to the original business plan of life and structured reinsurance. The difficult life and annuity market meant an overall decrease in premiums for Grand Central Re last quarter whereas Max Re has did well with its traditional property and casualty reinsurance capabilities and wrote $78 million gross written premiums in that segment for the quarter.