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As the latest Bermuda-based catastrophe reinsurer to try to expand its business though a US subsidiary, PartnerRe Ltd. is attempting to solidify its position in the market.

In an interview company president and chief executive officer Herbert Haag said while he doesn't rule out any more acquisitions he believes the company has the structure in place to take advantage of future market changes.

PartnerRe's expansion began last year with the acquisition of Paris-based Societe Anonyme Francaise de Reassurances (SAFR) for about $950 million. The acquisition gave PartnerRe direct access to European markets, and through a New York subsidiary access to the US.

In April this year the company completed a reorganisation of the global business to integrate the group. PartnerRe divided the world into six geographical areas allowing clients to deal with one contact at any of their subsidiaries while having access to all of the group's services and its $2 billion in equity.

It's what the company refers to as a "client partner'' relationship, an attempt to have the client access the group's resources through one point of contact.

The company also added a new division to its lines of business -- labelled as "new solutions'' -- an indication of PartnerRe's plan to ride on the coming wave of insurance securitisation, the melding of reinsurance and capital market products.

This month the company beefed up its presence in the US market by pumping an additional $100 million into the New York subsidiary raising PartnerRe US's capitalisation to about $230 million.

Mr. Haag said PartnerRe is not out to make one acquisition after another like other Bermuda insurers and reinsurers such as ACE Ltd. and EXEL Ltd.

"We do not have the need to make one acquisition after another,'' he said.

"With the acquisition of SAFR we established a presence in Europe as well as gaining a client base of 1,000 insurance companies which are all top companies in each market. The idea was we do not need necessarily to do something else because we can build on these relationships. ACE and EXEL don't have that yet.

They do not have access as of yet to such a broad client base as we achieved with the acquisition of SAFR. That's the benefit of our acquisition. That was the meaning of the acquisition.'' PartnerRe also aspires to strengthen its US presence. Mr. Haag sees the US subsidiary as not only focusing on traditional reinsurance, but also as a means of launching the Group into the provision of securities type insurance products. The US subsidiary has a volume of about $30 million worth of business currently.

"The way in which risks are financed may change considerably in the future, including the possible convergence of reinsurance and the capital markets,'' he said of the US market. "We intend to invest in the resources needed to ensure that we continue to be the sought-after discussion partner for the risk financing needs of our clients -- present and future.'' He believes the company's strategy in the US will be to grow the business organically rather than by acquisition.

"We feel growth in ourselves is a better strategy rather than acquisition although I don't rule out an acquisition,'' he said. "But not at these prices. We believe the prices paid in these acquisitions are really too high so we will wait until the prices get better. If this doesn't happen then we just have to rely on our own strength.

"We are very confident people. We believe we know what we have to do to build the business even if it takes longer. The market conditions in the States are not so attractive at the moment. It's best to prepare the ground so when the market opportunities do improve we will be able to benefit from it. That is our idea.'' New opportunities lie in the area of risk securitisation but Mr. Haag is not convinced the time has arrived in which the convergence of the capital and insurance markets can be successful.

"We are committed to developing securitisations,'' he said. "We are not convinced today which product will be successful. People are making attempts left and right. Securitisation is in the evolution phase. All these are attempts to find an alternative solution to the traditional insurance market.

These are evolutionary steps and we believe there could be another programme which we have not yet discovered. We will work very intensively on finding the solution so we will not to be left out when or if the market converges.'' A major catastrophe would help speed the process along, forcing insurers and reinsurers to evaluate how to provide capacity which is not volatile in pricing.

"A freedom of these bonds from the traditional insurance market at any of the next market crises would clearly speed up such a convergence and I could easily imagine the next major catastrophe crunch where the reinsurers would like to increase premiums at the same magnitude as happened in the 1992-1993 renewal,'' Mr. Haag said. "Then the clients will be looking for cheaper and more predictable coverage. This could be the big swing which could aid this market to converge. Extreme volatility is no longer tolerated.'' And he stands staunchly behind the view that reinsurance remains the most efficient method of risk transfer.

"Everything is about risk transfer and risk transfer can be achieved in many different ways,'' he said. "So far reinsurance is probably the most efficient and also the most closely correlated to a company's risk. Reinsurance is a perfect hedge for anybody who needs risk transfer.'' He also believes the Bermuda market will continue to hold opportunities as the jurisdiction of choice for insurers and reinsurers to set up operations here.

He laughs at criticisms made by Scor Group chairman and chief executive officer Jacques Blondeau that the Bermuda market was a mistake and will "never, ever become a large insurance or reinsurance centre.'' As head of a French-based reinsurer Mr. Blondeau was really reacting to PartnerRe's move into the European market, Mr. Haag said.

"The acquisition of the most profitable French reinsurer prompted him to try to discredit the company as its main competitor in the French market,'' he said. "That is my feeling. It's a little joke. We are successful. He is a little bit successful -- but not as successful as here.'' However Mr. Blondeau's criticism does have a point to some extent.

"These acquisitions in the Bermuda market and others coming kind of indirectly confirm what he said,'' Mr. Haag added. "He said these companies have no right to exist and you will see them disappear. While they didn't disappear, they just were put into a bigger structure. It causes disruption with the client base. As a client I would like to chose who is my reinsurer.

So if I chose Mid Ocean as my reinsurer and EXEL takes them over I feel a little uncomfortable because I didn't choose EXEL. Suddenly I have to make a new choice. These kind of changes will occur.'' He doesn't believe the Bermuda market will consolidate to such an extent that there will be any one dominant player in each sector of business.

Consolidations were matched by new companies setting up on the Island.

"There will not be one Bermuda reinsurance company,'' he said. "But it will be healthier if Bermuda came with stronger players into the world market. I think one major reinsurance company in Bermuda will fit better. There is one major reinsurance company in Switzerland and one in Germany and two in the US.

Bermuda doesn't need too many major reinsurers. On the other hand this market has limitations in terms of infrastructure. I could imagine that one day Bermuda will have one liability insurer, ACE or EXEL or a combination, one financial reinsurer, a Centre Re type of company, and a multi-line reinsurer like Partner Re.

"But I don't think this will happen. Too many interested parties are looking at Bermuda to form new ventures again...Bermuda will always remain the focus of reinsurance arrangements because of the specialisation, expertise and infrastructure here. Clearly proximity to the US is key.'' CONFIDENT -- Herbert Haag