future because they focus too much on shareholders who want a fast return, according to a leading industry magazine.

The October issue of The Review focuses on the issues of "shareholder value'', and tries to examine the effect on market leaders.

The article, by Pia Perkins, states that reinsurance and shareholder value have not gelled because reinsurance is a "long term game'', while share prices focus on short term results.

It goes on to state: "Bermuda's reinsurers are perceived as prime examples of enterprises with a doubtful future as they pander too much to their shareholders who want a fast return.'' The focus of the article is a book by Allan Kennedy called The End of Shareholder Value, and quotes him extensively.

He is quoted as saying: "The adoption of shareholder value thinking to the exclusion of everything else has likely affected the prospects of US companies.'' The article says his findings, which do not focus exclusively on the US, cannot be ignored.

"He illustrates his points by painstakingly plotting the possible fall of great American business empires such as General Electric, which has a reinsurance arm. According to his research, almost one third of the 100 largest US market capitalisation companies followed GE's lead in pursuing shareholder value maximisation.'' Ms Perkins says companies from General Motors, IBM, Sears, K-Mart, Boeing, Hewlett-Packard, Caterpillar, Xerox, to Colgate followed suit.

Kennedy is quoted as saying that while the revenues of these companies make up five percent of the US's GDP and he asks how much over-inflation is built into their stock prices.