property catastrophe reinsurer.

The unnamed reinsurer is backed by a trio of investors -- Chicago-based holding corporation Aon Corporation, insurance and reinsurance company CNA Insurance Companies, also based in Chicago, and an investment affiliate of Lazard Freres & Co, Corporate Partners.

The three investors are providing minimum capitalisation of $200 million. The partnership is seeking additional capital from international investors and expects market capital of about $500 million.

The operation will be named this week, once the Bermuda authorities have given their permission for the chosen name.

The company will be located in Cumberland House and will only be staffed by a chief executive officer. According to Aon Risk Consultant president Mr. Laurey Hoffman, the new company will be principally serviced from Chicago, but will also be assisted by Mr. Robin Spencer-Arscott at Rollins Hudig Hall (Bermuda), an Aon subsidiary, and also a new Bermuda-based underwriting management company CNA (Bermuda) Ltd.

The latter will start operations by October 15 -- at the same time as the property catastrophe company. It will have a two-man team. Two underwriters from CNA Insurance Companies have been in Bermuda looking for accommodation in Bermuda last weekend.

"Timing is important as want to get in at the beginning of the market. We want to begin marketing the product two or three months before the underwriting year begins,'' said Mr. Hoffman.

The new company will concentrate on property catastrophe reinsurance but also specialty casualty and quota share reinsurance.

It has been designed so that it can adapt to different lines of business in the future.

Bermuda is the chosen domicile because: "The tax structure is obviously useful for corporate participants,'' said Mr. Hoffman. "Quite frankly, the jurisdiction appeals for all the reasons that Bermuda advertises. It can be difficult to get people to move and if they do they would rather go to Bermuda because of its high standards.'' The new company is expected to take a leading role as an underwriter, writing larger lines than some of the other new reinsurance operation recently established in Bermuda.

Mr. Hoffman speculated that other local reinsurers may not be writing larger lines because they have differing objectives.

"Either the quality of the other players is not as good or they have not attracted as much capital. They may have other objectives, such as producing more business for the brokerage companies that originally backed the operation,'' said Mr. Hoffman.

"The new company is backed by investors, who want the best return on their capital.'' The new company will favour quota share arrangements as an effective means of getting a "world-wide spread of reinsurance''.

"For instance, most business from the Far East is handled via the London market. One way to grow quickly is to get access to it directly from London through a quota share arrangement with a London syndicate.'' Aon Corporation, which initiated the unnamed Bermuda reinsurer's incorporation, is the holding company for insurance enterprises including life, accident and health, specialty property and casualty and insurance brokerage. It also provides financial advice to the insurance industry.

Aon has $15 billion in assets and has 12,000 staff in 40 countries.