Lloyd's by The Financial Times.

The paper is the second major international publication this week to focus on the influx of new reinsurers into the Bermuda market.

"The flow of insurance capital into Bermuda must be galling for Lloyd's of London as it tries to attract new blood of it own,'' said the paper's "Lex Column''.

"The benign Bermudan tax regime and the opportunity to invest in a new venture with a clean sheet is proving a powerful attraction.

"In contrast, Lloyd's is still struggling with prior year losses and the threat of litigation.'' As an example, the paper mentions Partner Re, the new Bermuda-based property catastrophe reinsurer, backed by Swiss Re which was formed this week. It suggests that Swiss Re may have sponsored Partner Re, together with John Head & Partners and other institutional investors, to spread risks that have become harder to predict recently.

"Whether catastrophe rates are now sufficient to cover the risk remains a moot point,'' Lex said. "One reading of the recent claims record is that climatic change has made the world altogether more risky than in the past.'' At first the FT describes Bermuda as "complementing'' the London market at a time when capital is scarce. But it later describes Bermuda as a serious competitor, emerging at a time when Lloyd's has been busy seeking extra capital to shore up its capacity.

Recently formed Bermuda-based quota share reinsurer Underwriters Capital (Merrett) is said to be a potential incorporated Lloyd's Name.

The Financial Times reported in the same issue that Underwriters Capital (Merrett) (UCM), managed in Bermuda by Marsh & McLennan Management Services is hoping to be able to convert into a fully fledged incorporated Name as soon as Lloyd's rules permit.

Marsh & McLennan senior vice-president Mr. Bryan Thompson said he was unaware of this plan. UCM was set up in June to provide reinsurance to its syndicates.

"True captives can't become Lloyd's names because they have their own liabilities,'' said Mr. Thompson. "Captives could form a subsidiary in order to become Lloyd's names.'' UCM is sponsored by Marsh McLennan Risk Capital Corporation, a member of the Marsh McLennan Group, and JP Morgan.

Merrett syndicates have exclusive access to UCM to provide whole account quota share reinsurance on an annual basis with a minimum commitment of five years.

UCM is designed to share the overall costs of underwriting and as a result reduce the expenses of individual Names, who are intended to to benefit from profit commission earned from UCM.