head of the Paris-based Scor Group. Quite simply there are not enough people on the Island. David Fox reports The top executive for the giant French reinsurer which unsuccessfully established a Bermuda reinsurer during the capital rush of the early nineties, has said that Bermuda will "never, ever become a large insurance or reinsurance centre.'' Jacques Blondeau, chairman and CEO of the Scor Group, had already told French business daily, La Tribune, some weeks ago that the creation of the Bermuda reinsurers was a property catastrophe reinsurance market mistake.

Paris-based Scor has for years owned 65 percent of Bermuda-based Commercial Risk Reinsurance, which last year wrote $300 million in premium.

But Scor gave up in November 1993 a plan to operate a $300-million cat reinsurer, Compass Re, which they had just incorporated here three months before.

And in July 1994 at an adjourned special general meeting, a decision was taken to wind up the reinsurer, amid speculation that Scor's business plan was flawed. Conyers, Dill & Pearman insolvency specialist Robin Mayor was named as liquidator.

Some critics thought Scor was overwhelmed by the hugely capitalised companies that were begun here, and were worried they would not be able to compete with the likes of PartnerRe and Mid Ocean Re.

Mr. Blondeau told London publication Insurance Day, in articles published yesterday, that when the Bermudian catastrophe market began in 1993/94, his reaction was that it was "absolute nonsense.'' His view has been that it was a market mistake to try to solve the temporary capacity shortage by establishing permanent structures in Bermuda.

But he said this week, "When you look at the accounts today of all these pure cat (Bermuda) companies, it is absolutely pathetic. They are totally, grossly over-capitalised and they are running a very small amount of business.'' Asked about suggestions that his criticisms of the Bermuda market were based on Scor's own failure with Compass Re, Mr. Blondeau explained Scor's unusual plan at the time to establish a Bermuda reinsurer with a life expectancy of just four years.

Scor's view was that the need for capacity in property catastrophe reinsurance would last only for two to four years. "What we were looking for,'' he told Insurance Day, "was financial partners to work this market, take advantage of the shortage of capacity for, say, up to four years, and as a private company to send money back to shareholders and then do something else.

"We decided not to go ahead when we saw what was happening was all these listed companies being put on the market by the brokers and the banks because we thought the whole process was an absolute total nonsense and that at the end of the day, they would have a major problem, which I think is clearly the case today.'' He dismissed criticism that Scor took a short term view, when a longer term view was required for Compass Re.

"No,'' he said, "because you cannot take a long-term view of anything from Bermuda. Bermuda is a speck in the Atlantic Ocean.

"The first problem in Bermuda is that they don't have the people. I am not saying that in a negative way, it is a very, very small country.

"You look at most of the Bermudian companies and the total number of employees is about 30 or 40, which is good when you are dealing as a very highly specialised company in a very specific segment which is the cat business. Then you don't need a lot of technology, computers, underwriters, etc.

"We have our own operation in Bermuda and we know what it means trying to recruit one person. It is hell; there is no market.

"In this respect it is very possible that Bermuda will become a financial centre because of all the money which has been accumulated there, but it will never, ever become a large insurance or reinsurance centre.'' Asked if he felt the Bermuda reinsurers would have a pretty short life-span, he said, "The reality of what we are seeing is that most of the specialised cat operations have already been merged or sold and the rest are on the block.

"It's not me saying this, but the bankers who come to me and say `we want to buy'. I think the process is fairly normal.'' NEWSPAPER NJ