Axis Capital and Partner Re are merging to create a reinsurance giant that can compete against the ongoing influx of alternative reinsurance capital.

The merger, announced last week, will create a $US11 billion ($13.86 billion) reinsurer – the fifth-largest in the world. See earlier story.

The deal follows XL Capital’s takeover of Lloyd’s operator Catlin.

Axis does not write reinsurance here, so the merger is unlikely to affect the company’s Australian operations.

Both groups’ reinsurance operations are managed from Singapore.

Axis Capital CEO Albert Benchimol will lead the merged company.

He says the currently unnamed new group will be a global leader in specialty insurance and reinsurance, with a leading position in the broker channel. It will write more than $US2.5 billion ($3.15 billion) in specialty premium and have more ability to invest in growing specialty franchises and partner with other capital providers.

The combined group will have gross written premium of $US10.7 billion ($13.48 billion), of which 62% will come from property and casualty reinsurance, 24% from insurance and 14% from life, accident and health.