Bermuda is the place for a new breed of insurance and reinsurance company looking to set up shop with high-tech solutions in a changing industry, according to one of the worlds' top insurance executives.

John Charman, chief executive officer of Axis Speicaly, one of the seven new reinsurers to set up on the Island with nearly $7 billion in capital, said that the industry is going through a transformation after a period of inefficiencies and bad management.

But events of September 11 have turned the industry around and forced changes that have long been needed to re-focus companies on becoming better businesses and providing shareholder value.

And Mr. Charman believes that Bermuda could be the perfect place for the new stream-lined businesses growing up in the wake of the World Trade Center disaster.

"The great thing for Bermuda, is that it is absolutely created for a high tech solution for the insurance and reinsurance world because you can't put five million people on the Island." he told The Royal Gazette when he arrived in Bermuda this week.

"So if ever there was an opportunity to substantially build on this great franchise, by capturing that technology and really propelling it forward, I think now is the time. It's got to be."

Axis Specialty Ltd was set up just nine weeks ago as an insurer and reinsurer backed by Marsh and McLennan Ltd. It had hoped to raise $1 billion in capital, but demand from both investors and businesses have led to it raising $1.6 billion in capital.

It has as its chairman Bob Newhouse, a man who has a long history with insurance in Bermuda at ACE, XL and Mid Ocean, and the company is now set up in the former Partner Re building on Pitts Bay Road and the former OPL site at the Mayflower building on Par-la-Ville.

Business has already been flooding in and the company now has about ten staff. If business goes well, it could have 30 employees within a few years.

But Bermuda was the only choice for this start-up. Andrew Cook, chief financial officer of the company, explained the attraction of Bermuda. He said: "I think regulatory overview, stability is incredibly important and an acceptability from the global commercial community. The infrastructure has really strengthened itself in the last five to ten years in terms of the expertise the service providers are brining to their clients."

Mr. Charman, who was previously a senior executive with ACE after the Lloyds company he founded was bought over by the insurance giant, added: "That is why we are embracing technology at the highest levels and taking advantage of what Bermuda has to not only offer, but keeping our staff and resources limited.

Mr. Charman said that the insurance business had been through one of the worst times it had ever seen. He said: "It is the most dangerous cycle that I have been in. I think the trading conditions were extraordinary in their extremes. I think the lack of professionalism that overwhelmed the underwriting activity globally was obvious and will become obvious by the huge financial losses.

"I think that it is indicative that both the managements of the businesses and also the staffing of those businesses. I think there has been too much complacency within the industry and not enough regard to shareholder value. There is an arrogance in the industry which I believe has been substantially detrimental to shareholders and we certainly don't subscribe to that."

The lead investor in AXIS Specialty is Trident II, L.P., a private equity fund managed by MMC Capital with other investors including Marsh and McLennan Companies, Inc., the parent company of MMC Capital, and private equity funds managed by J.P. Morgan Chase, Thomas H. Lee Partners, The Blackstone Group and Credit Suisse First Boston.