(Bloomberg) -- Axis CapitalHoldings Ltd., the reinsurer seeking to grow its business afterlosing a bidding war for PartnerRe, is looking for morepartnerships and may try another comparable takeover, its chiefexecutive officer said.

“PartnerRe was an example of a possible acquisitionthat might have worked, there are others,” Albert Benchimolsaid in an interview in Monte Carlo on Sunday. “They may not bepure reinsurance companies and they may not be the size ofPartnerRe, but there are certainly interesting companies out there.Whether they want to be acquired is another question.”

Axis, a specialty insurer and reinsurer, is among carriers thathave been hurt by falling rates for property and casualtyreinsurance amid rising competition from money managers seekingweather-related bets. Last year, Benchimol lost a bidding war forPartnerRe to Italy’s Exor SpA, the investment firm of the Agnellifamily. Exor agreed in July last year to pay $6.9 billion forPartnerRe. Axis and PartnerRe have said their merger would havecreated the world’s fifth-largest property-and-casualtyreinsurer.

“Life is about always keeping an eye out for opportunities; youalways have to screen the market for targets, but our focus is toexpand organically through joint ventures and partnerships,” theCEO said, declining to say whether any talks are taking place.

Bigger targets

Axis could “do anything in the $3 billion to $5 billion range,”Benchimol said. “PartnerRe showed that we could, under the rightcircumstances, pursue a $5 billion company.”

Axis would probably be drawn to an insurer or reinsurer thatwould allow it expand selective business lines including accidentand health and create a more efficient underwriting platform, saidJonathan Adams, an analyst at Bloomberg Intelligence.

“Companies such as reinsurer Aspen or insurer Navigators Groupare two examples of relatively smaller companies that might meetthese goals, but it’s a broad field and many insurers are lookingfor ways to obtain operating leverage,” he said.

Excess capacity in the industry means that large companies withhealthy balance sheets will mostly rely on acquisitions for growth,Fitch Ratings said in a report on Monday. Weak profits means morecompanies will be vulnerable to takeover next year, the ratingscompany said.

‘More M&A’

“There will certainly be more M&A in the reinsurance market,”Hannover Re Chief Executive Officer Ulrich Wallin said at a pressconference, adding that the world’s third-biggest reinsurer iscurrently not holding any talks. “Since last year, there hasn’tbeen that much M&A activity and because valuations are not veryhigh, it’s quite expensive to buy a competitor with your ownshares.”

The biggest deal last year was Ace Ltd.’s purchaseof Chubb Corp. in July. Other transactions included XLGroup Plc’s purchase of Catlin Group Ltd. and MS&ADInsurance Group Holdings Inc. buying Lloyd’s of London insurerAmlin Plc.

“We expect fairly large deals to happen in the future because asmargins contract, you are going to see transactions that improvescale,” said Paul Schultz, head of investment banking at AonBenfield, the reinsurance broker of Aon Plc.

Related: Insurance M&A may continue amid some 'patchy'results, S&P says

Bermuda-based Axis in July completed a $600 million capitalincrease for a new reinsurance startup named Harrington Re,increasing its underwriting scope with the help of third-partycapital. Axis will manage the underwriting for the company andinvest $100 million while Blackstone Group LP, the world’s largestmanager of alternative assets, will invest $50 million. Otherinvestors provided the rest.

Further similar deals could follow, Benchimol said. WhileHarrington Re focuses on mid-to longer-term risk coverage, “you canexpect us to be raising more capital to access more short-termlines,” he said, adding that it’s too early to talk about details.“It’s an important part of our strategy.”

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