ElAmin . The company's next plan is to target the US With the agreement for a merger with Mid Ocean Ltd., reinsurer Exel Ltd.

effectively blocked another Bermuda-based insurer from doing the same thing, according to a US analyst.

Dowling & Partners Securities of Hartford, Connecticut has made a recommendaton of "buy'' on Exel's stock based on what it says is the company's next strategy of expanding in the US.

Exel announced this week it had reached agreement to buy the remaining 75 percent of Bermuda-based Mid Ocean Ltd. for $2.2 billion in stock.

The analyst's report, labelled "A bold move sets the stage for round II -- US expansion'', is supportive of the merger. Dowling bases its analysis on a conference call held between Exel and Mid Ocean executives with investors.

Mid Ocean did what "we have argued others should do in a sellers market for quality properties and create `greater shareholder value at greater speed' by selling out'', Dowling states.

By making the merger Exel "effectively blocked -- since Cayman Island law requires a 75 percent affirmative vote -- a proposed acquisition of Mid-Ocean by another acquisition-minded Bermuda insurer''.

Mid Ocean company policy is not to comment on analysts' reports.

The analyst also has high praise for the management team Exel is bringing into its fold, singling out Keeling & Brockbank as examples.

The US, which Exel president and chief executive officer Brian O'Hara calls "a clear target of ours'', will be the area where recently appointed chief financial officer Robert Lusardi "earns his keep and the one with the earnings kick, in our view''.

Mr. O'Hara has said Exel was going to pursue "middle market business'' in the US through the acquisition of New York-based Folksamerica General Insurance Co., which it is in the process of buying.

The merged company would also attempt to increase its participation in Mid Ocean's Lloyd's managing agency The Brockbank Group from the current level of 38 percent, as a means of boosting growth internationally.

The company also wants to increase the sales of bonds linked to catastrophes and other financial products.

Mid Ocean's president and chief executive officer Michael Butt said during the conference call the merger would allow the companies to compete from a position of strength. The recent mergers of some brokerage houses has put pressure on smaller players.

Initially it (the merger) enables us to withstand the negative fallout that is going on in our respective markets,'' he said. "Looking down the road in the future, we hope the combined strength, both financially and intellectually can lead to the building of a new product line and also expansion of existing product line but that would be heroic to imagine under current market conditions...It's quite clear in the last year, two years, that if you're not a 1,000 pound gorilla in the world's market you're not going to make it.'' Mr. O'Hara also stated that due to overlapping business the merger would result in a combined loss of about $50 million worth of business.