UK publication Insurance Day has highlighted a report that said Bermuda's reinsurers gross premiums have soared this year, which when combined with low catastrophe losses, have more than compensated for sluggish international investment markets.

The report, written by Benfield ReMetrics, said new and established Bermudian reinsurers' premiums written in the first half of 2002 were higher by 49 percent compared to the same period last year.

The report said this compared with an increase of 27 percent between the same periods in 2000 and 2001.

Insurance Day reported that the six established companies that the broker surveyed - Ace, IPC, PartnerRe, RenaissanceRe and XL - reported net losses of $405 million in the first half of this year compared with gains of $60 million in the first half of 2001. The report said, however, that the impact on capitalisation was slight and offset by the big improvement in earnings.

Among the group of six, capitalisation actually increased and Benfield said total consolidated shareholder funds rose by 4.9 percent in the first half of this year from $15.9 billion in 2001 to $16.6 billion.

The Insurance Day article pointed out, however, that it was likely that the nominal solvency of the market could fall because of the large increase in premium on the solvency margin ration denominator.

The Benfield report said this raises further questions about the efficacy of current risk-based capital models that were used in the business.