The insurance cycle has taken the industry through some dramatic ups and downs over the years — but the near future at least could be a much smoother ride.

That is the view of Andrew Turnbull, who heads up the Bermuda operation of 2008 start-up Torus Insurance Holdings, who is also optimistic for the Island's future as an insurance centre.

As Torus' chief operating officer in Bermuda, the Briton heads up a staff of 24, a figure that is expected to grow in the near future.

He is helping the company to take advantage of extraordinary opportunities in the wake of 2008, when billions of dollars of industry capital was wiped out in investment losses and through larger-than-normal catastrophe claims.

"I'm very positive about the future of the industry," Mr. Turnbull told The Royal Gazette. "There is clearly increasing discipline in the market and I think that will continue.

"We have a nasty reputation as an industry sector that is rather cyclical, but I am more positive this time that we will see a much shallower cycle going forward."

Traditionally, hardening insurance rates have sparked the rapid formation of new companies and new capacity. The extra competition then forces rates down again to the point where some companies have taken business at unrealistic rates to maintain or grow market share.

But Mr. Turnbull believes that one of the repercussions of the global economic downturn could be a more stable insurance environment.

"What has fundamentally changed is that there is more transparency, both in terms of regulation and financial statements," Mr. Turnbull said. "I think that those factors will lead to improved financial performance for the sector over time."

Increasing attention was now being paid to underwriting profitability, because insurers could no longer rely on the consistent returns they had enjoyed from investments in previous years. "Cash-flow underwriting" was no longer an option, he added, applying more pressure on the market to find realistic pricing.

Torus was launched last June with $720 million in capital from private-equity firm First Reserve Corporation. It has a substantial operation in London and a growing presence in the US, where it expects to open offices in several cities this year, as well as its Bermuda platform and holding company.

Mr. Turnbull, who joined Torus in October after nine years with Bermuda business insurer XL Capital Ltd., said the events of the past year had led to an acceleration of the Torus business plan.

The destruction wreaked by Hurricane Ike in the Gulf of Mexico last year had brought significant rate increases in the offshore energy sector which is a major focus for Torus, Mr. Turnbull said, as well as good prospects in property-catastrophe and specialty lines.

The difficulties suffered by some major firms had caused many insurance buyers to spread their business around among more carriers, offering opportunities for smaller and mid-sized players. Also an extraordinary number of highly experienced insurance managers have become available for hire, because of the upheavals at rivals that have caused some to question their job security.

At Torus, head of US unit Torus Specialty Insurance, Bob Klepper joined from XL, like Mr. Turnbull. Chief executive officer Clive Tobin, the former CEO of XL Insurance, came out of retirement ot head up Torus. Others, including head of global casualty David Perez and operations director John Williams have been lured from AIG.

Also, Torus' reinsurance platform was given a boost last December when it took over the reinsurance operations of the Citadel hedge fund, which moved out of the business as it scrambled to raise cash to meet a rush of redemptions. In taking over the renewal rights of New Castle Re and providing run-off services for its affiliate CIG Re, Torus also took 14 of the company's staff, nine of them Bermudians.

Purely by coincidence, New Castle was based on a higher floor of the same office block — the AS Cooper Building in Reid Street — as Torus had moved into. So a convergence of favourable factors has helped Torus come out of the blocks much faster than the company's founders could have hoped for.

Mr. Turnbull said he expected the Mr. Turnbull said he expected the Bermuda operation, which writes insurance and reinsurance business, to grow in the coming months. "From a staffing perspective, I would expect to see us have in excess of 30 people before the end of this year," Mr. Turnbull said. "We're also looking to expand the lines of business here, particularly additional specialty lines."

Torus is a technical lines insurer, focusing on large, complex risks. Bermuda, a centre of technical underwriting excellence, was therefore an ideal choice for its home, Mr. Turnbull said. And he expected the Island to stand up well to the challenges it faces.

"The Bermuda Monetary Authority is doing important work with mutual recognition of regulatory standards and that will stand Bermuda in good stead as we move forward," Mr. Turnbull said.

"I'm also confident that Bermuda will meet the OECD's requirements on tax transparency rules [to move off the 'grey list'] within a short period.

"Overall, I'm very positive about Bermuda continuing to be a leading insurance and reinsurance centre. It has a significant talent pool, both local and international, and it's known for delivering innovative products in a timely way. It has served the market well historically and I believe it will continue to do so."