Bermuda-based Centre Solutions, and its Bermuda parent, Zurich Centre Holdings Ltd. have grown significantly since 1988.

And now Zurich Centre is undergoing a reorganisation of its US operations, which include Bermuda.

President and CEO designate Paul E. Hellmers, however, said this week that with the talent employed at Centre Solutions the company had become a "hunting field for other firms who are looking to replicate our successes.'' Centre Solutions is a victim of its own prosperity.

"If you develop really good people, they can be wooed away by other organisations,'' he observed. "The only way to deal with that is to have a cohesive culture, where people enjoy what they do, always learn new things and are well compensated. And you try to develop a deep bench.

"We have all those things. We have operations and deep talent in Zurich, Hong Kong, London, Australia. It is growing.

"I'm coming to Bermuda from New York. It's not as much a shock as having brought someone new in from outside of the company. Our global reach and global staff helps.'' The financial troubles occurring in Asia, Latin America and Russia are not expected to adversely impact the profitability of Centre Solutions, but in fact should provide opportunities for the company to seek further profitability.

Said Hellmers, "When everybody is running for the exit, running for safety, when no one wants to buy something; that is the time to spend money. So I would think that there are interesting opportunities for our people in Hong Kong right now. Things are cheaper.

"The same thing applies to our operations in Bermuda, as it relates to South America, or in the US as it relates to any number of collateralised lending and securitisation opportunities. They are all significantly cheaper than they were just a few months ago.'' Centre Solutions' exposure to the Millennium Bug or Y2K is being extensively studied by a special unit, as it relates to internal systems, customers and clients and direct or indirect exposures.

Mr. Hellmers expects Y2K will cause some problems, but not the global financial meltdown that has been predicted.

He suggested, "The credit crunch and some of the over-exposed Asian countries, in terms of the banking system, present significant more risks to the global financial market's health than the Y2K issue.'' His view is that Centre Solutions has new, interesting growth opportunities in its near future, especially in areas relating to its pioneer work in finite risk reinsurance and because of the huge capital flows at present. He noted, "There may be an awful lot of finite risk competitors, but look at the dislocations that are going on right now in the capital markets, whether it is in South America or Asia.

"There is enormous currency outflows. You look at borrowing spreads for structured products: They've literally doubled in the last three months.

Fall-outs like that spawn opportunities for companies, like ourselves, that take advantage of capital market dislocations.'' Mr. Hellmers has come to Bermuda from the group's New York office, in the Zurich Structured Markets division.

That is a vehicle that is using insurance contracts and insurance balance sheets to boost the debt capacity of real estate projects. It hasn't really been recognised as a form of insurance securitisation, but it is the fusion of an insurance capability with the capital markets.

The company never set out to be so heavily involved in real estate, but a few successful real estate transactions led to more. And actually, it has virtually snowballed, leading to a self-perpetuating process.

The company's forecast includes a search for non-competitive markets, where solutions have not yet been found for clients who need additional risk taking, or capital capacity.

It could continue to be in the finite risk sphere or the corporate financing/capital markets world. The latter area may have enormous potential for depth and growth.

"Certainly,'' he said, "some of the real estate activities that I have grown in New York, we will try to export down to Bermuda, to do it more efficiently, and other parts of the world.

"There is a list of opportunities, from the low investment grade tranches supporting commercial mortgage-backed securities to a variety of financial guarantee products in Asia for companies that really need a combination of debt and equity.'' Mr. Hellmers sees a future for different forms of securitisation that will require specific skills.

They include understanding what large pools of capital want and whether it should be sourced from the stock market, a corporate borrower, an insurance contract or in other ways to twist and blend certain streams of cash flows in order to place it to money's lowest cost provider.

Under that premise, securitisation may not need a hard market to succeed, especially if its definition is not confined. Right now, it is narrowly defined as the packaging of insurance risks with a fixed income product -- hence cat bonds.

In order for trades to cross between the insurance and capital markets, there has to be relative value, one way or the other. It doesn't preclude trading in a soft market.

His view is that the definition of securitisation of risk is expanding, as more people understand what is possible.

Said Hellmers, "If you can define it to include things that are not just straight forward cat bonds, but to include the use of insurance products to source additional capital for clients, or to solve borrowing/lending needs for clients and investors, that is a tremendous market opportunity.

"It is one that our company is spending an awful lot of resources on, and most of our growth is coming from it.

"There is a fusion of the capital markets, the insurance markets and the derivative markets. They are coming together with one, pricing off another.

It's not just taking an insurance contract, grafting a fixed income instrument on to it, and then selling a new fixed income instrument.

"That straightforward securitisation process is relevant, but it is just one channel of a number of other opportunities that exist, as all these different markets come together.'' Company growth is increasingly aimed at the need to service opportunities to source lower cost debt, reduce the cost of funds and increase the rate of returns. More of the work being done by Centre Solutions is now addressing financial needs for borrowers to achieve the lowest cost of capital and for lenders to achieve the highest return.