MIAMI–New capital vehicles helped temper the Jan.1 reinsurancerenewal price increases, a reinsurance broker said yesterday at theNational Association of Insurance Commissioners conference.

Steve Goldberg, vice president for Benfield Insuranceintermediaries, said reinsurance sidecars and catastrophe bondshelped moderate margins below the June and July renewal seasonslast year.

“Capital markets will become increasingly involved in thereinsurance market,” Mr. Goldberg said. “They have put their toe inthe water and seem to like it.”

That is one reason why evidence now indicates reinsurance priceshave peaked following spikes after the 2004-05 hurricane seasons,he said. “That is barring another major event, of course,” henoted.

Overall, pricing for catastrophe covers rose 20 percent comparedto January of 2006. “But pricing is well below risk loads andmargins of July 1 of last year,” he said.

Most capital market players prefer to invest in start-ups andrecapitalization of existing carriers, Mr. Goldberg said, ratherthat going into sidecars and catastrophe bonds.

“These people are not comfortable with catastrophe modeling andthe like. They would rather put their funds with people who are,”he said.

In the same vein, Nebraska Insurance Director Tim Wagnerexpressed concern about the evanescent nature of such new capital,believing it could pose future problems of stability.

Bermuda is playing an increasingly important role in funnelingnew capital into the reinsurance markets, said the island's chiefinsurance regulator, Jeremy McCarter. He noted that Standard andPoor's lists 12 of the world's top 40 reinsurers as based in theformer British colony.

Part of the reason for Bermuda's growth has been an acceptancethat the Bermuda Monetary Authority maintains rigorous oversight ofthe companies domiciled there.

“We continue to have higher levels of scrutiny for largereinsurers,” Mr. McCarter said.

Within a few weeks, the Authority will release an enhancedrisk-based capital model to further solidify its reputation in thisarea, he said.

While property-catastrophe covers remain the island's mainstay,Bermuda's companies also offer casualty reinsurance cover andprimary coverage in greater quantities, said Mr. McCarter.