The Bermuda market has peaked and cannot take many more new companies setting up on its shores as the Island is running out of space and reaching capacity, according to Brian O'Hara, chief executive officer of XL Capital.

Mr. O'Hara said that existing companies would continue to grow - but internationally instead of seeing new companies actually setting up here.

"I am not sure there is room for another big wave," said Mr. O'Hara, speaking at the PLUS, the Professional Liability Underwriting Society, conference on "The Bermuda Perspective" yesterday. "I do think it is reaching capacity and growth will be with capital elsewhere."

Mr. O'Hara was speaking as a panellist on the opening talk of the day, 'Yesterday, Today and Tomorrow: The relevance of Bermuda in the World Insurance Market' when the panel was asked if the Bermuda market had peaked in terms of a global market by moderator Donald Bailey.

Mr. O'Hara told the 250 delegates from Bermuda and the US that the Bermuda market would never be all things to all people as it was mainly an excess market. And he said he always had a problem defining what the Bermuda market was - whether it was the Bermuda model or the business done by Bermuda companies.

"There is a finite amount of space," he said of Bermuda, and cited the difficulty in finding housing and office space as examples of there being a crunch.

He said that capital gravitated towards the best treatment and Bermuda was the place where it got the best treatment.

On the same panel, Scott Carmilani, chief executive of Allied World Assurance Co. Ltd., said that Bermuda's growth would slow, but was not over.

He said the Island had moved from number three or four in the world on insurance to number two, and agreed that Bermuda was stretched in terms of space and would never take on the US in terms of size and capacity.

"But there are many benefits to being in Bermuda," he said. "I would not use the word "peaked". It should certainly stay where it is, it just cannot grow as fast."

Paul Scope, chairman and chief executive officer of The Park Group said he thought Bermuda could sustain the success it had achieved, despite running out of space.

He said the Island was stretched, with housing a particular problem and a lack of spaces for private schooling making it difficult to attract business people with children.

"There is a problem with housing, but then again we were saying that back in 1983," he said. "It seems to me the only problem is can Bermuda sustain the success it has achieved."

And he said that Bermuda more and more was attracting people at the peak of their careers who were coming to the Island for between three and 10 years, which was a sign of the health of the market.

"I am very bullish about Bermuda," he told delegates. "It will never be as big as the US... but I don't think the market has peaked yet."

Ralph Jones, chief executive officer of Arch Insurance Group, said that six new insurance companies had chosen Bermuda, not the US and London, to set up shop in, showing Bermuda still had a lot to offer.

"You have to remember that in Bermuda you don't have to cope with 50 state legislatures as you do on the mainland," he said. "Bermuda has got some great potential."

And he said that Bermuda had a great future with an intellectual capital which should allow Bermuda to continue to grow.