Terra Nova (Bermuda) Holdings chairman and CEO William Bailey said yesterday.

"Lloyd's won't soon become the dominant insurance and reinsurance market in the world, rather it will be one of the major centres and it can be enormously successful,'' he said.

He suggested part of the change will be to look at what the competition is doing while there efforts should be made to remove enormous delays in getting from A to B.

Lloyd's should also recognise that it has a competitor in the London Company market, though this segment is not as well-defined as the Bermuda market or Lloyd's itself. And though it has contracted considerably, the London market survivors have emerged strong and will become increasingly influential.

Lloyd's bureaucracy must also accept the market's reputation has been tarnished, he said.

On the Reconstruction & Renewal (R&R) acceptance, Mr. Bailey said: "I think the plan that was ultimately put forth was best possible solution...there was no other alternative except to have Lloyd's suffer irreparable damage.'' But, he added: "The game is only half over, there is a chance to improve the process (and) resolution of the problems of the past don't suggest it's clear sledding for the future.'' He said the fact that premium volume has held up despite Lloyd's difficulties, comes as a surprise after Lloyd's reputation has been tarnished.

Mr. Bailey also said that corporate capital will be over half of Lloyd's capital in the next few years and ultimately account for 75-90 percent of capital.

Terra Nova's London insurance origins date back 25 years. The company, which also has a Bermuda subsidiary, recently increased its London presence and stake in Lloyd's by acquiring Octavian Syndicate Management Ltd. which manages five Lloyd's syndicates. Terra Nova has two new Lloyd's syndicates in formation. Mr. Bailey has served as chairman of the American Insurance Association, the Health Insurance Association of America and the Property Casualty Insurance Council.

DOUG ASHBURY