yesterday after two insurance giants joined forces.

Intrepid Re Limited is expected to have market capitalisation of $300 million and reinsure alternative risk transfer insurance underwritten by other companies.

ACE Bermuda Insurance Ltd. cooperated with British-based Royal & Sun Alliance Insurance Group and Chicago-based Aon Corporation in forming the reinsurer, the three companies announced yesterday.

Both Intrepid Re and its holding company parent Intrepid Re Holdings Limited will be based in Bermuda where the risk financing market has grown rapidly through the 1990s.

Alternative risk insurance allows large companies to bundle risk into one policy.

A large corporation could, for example, buy a single policy covering foreign exchange risks along with property liability, automobile and disability insurance.

And by forming the joint venture to open up this new avenue of business it appears ACE, Royal & Sun Alliance and Aon are betting on it expanding even further.

ACE and Royal & Sun will effectively be the underwriters of policies while Aon will provide marketing and sales expertise.

Bermuda's Insurance regulations classify property and casualty insurers into one of four classes depending on their risk profile.

Intrepid Re's Class 4 category is the most stringently regulated level and to be admitted a company must maintain at least $100 million in capital and surplus.

ACE Bermuda Insurance Ltd. CEO Dominic Frederico, Royal & Sun Alliance Insurance Group chief executive Bob Mendelsohn and Aon Corporation president Michael O'Halleran outlined the new company's purpose in a joint statement.

"We are pleased to establish a Class 4 insurance company in Bermuda that will provide alternative risk capacity,'' the statement said.

"It is our expectation that Intrepid Re will serve to benefit our current and potential clients, as well as the Bermuda broker community.'' The three companies have also formed a Princeton-based joint venture company called Custom Risk Solutions which will sell and underwrite alternative risk transfer insurance.

And it is understood Intrepid Re will reinsure some of the policies written by Custom Risk Solutions along with alternative risk transfer insurance underwritten by other companies.

The three chiefs said it was expected that their investment in Custom Risk Solutions would assist insureds, agents and brokers seeking US-based alternative market expertise.

"By creating and supporting these two independent markets, we will provide separate, yet complementary alternative market services to the broadest possible clientele,'' the statement said.

With $8.9 billion in assets and $4 billion in shareholders' equity, the ACE group of companies provides insurance and reinsurance through operating subsidiaries in Bermuda, the US, the UK and the Republic of Ireland.

By July it is expected to have completed the $3.45 billion cash purchase of the international and domestic property and casualty businesses of CIGNA Corp.

In forming Intrepid Re, ACE partnered up with Royal & Sun Alliance which operates in more than 55 countries and had worldwide net premium income last year of $16.1 billion and assets of $107.5 billion.

The third member of the joint venture is Aon Corporation -- a giant holding company that comprises a family of insurance brokerage, consulting and underwriting subsidiaries.

ACE, Royal & Sun and Aon establish $300m insurer