Graduate students are in danger of being caught unprepared when they step into the world of insurance and need to be ready for change, according to Brian O'Hara, chairman and chief executive officer of XL Capital.

Mr. O'Hara gave the warning in a speech on the future of insurance professionals to the graduates of the class of 2000 at the College of Insurance in New York last week.

During his address, he picked out the names of the twelve Bermudians graduating this year and thanked Premier Jennifer Smith for attending the ceremony at St. Paul's Chapel in New York.

In front of hundreds of graduates he said: "Nothing endures quite like change. Sometimes it is a friend and sometimes a foe. But change is always a challenge.'' In reference to the changing face of the job market Mr. O'Hara said: "Our chief information officer told me recently that your generation will have up to five careers and that three of them haven't been invented yet. The issues for those who have decided on a career in insurance is not how can I get off a sinking ship, because it's not sinking. The issue is one of recognising the new direction and anticipating the skill sets that are going to be required.'' He added that many insurers see claims handling as a core skill, far fewer believe it will be important by 2005. Mr. O'Hara said that the successful insurers of the future will want to retain dealings with customers while out-sourcing more routine processing work to outside bodies.

He said that marketing and customer segmentation will become far more important in the future than they are today.

He added: "With microprocessors doubling performance every 18 months and reducing in price at the same time that digital bandwidth is rapidly expanding, the insurance industry's use of the Internet for e-business opportunities can be expected to accelerate sharply.'' He said that there was a consensus in the industry that customer service organisations needed to be redesigned for the Internet.

Speaking on changes to the insurance industry, he said: "It should come as no surprise to anyone here that one of the major emerging liability risks of the new century isn't electro-magnetic fields or tobacco. It's cyber liability attaching to global e-commerce and e-business activities.'' He said that despite fears that the Internet appears to be creating no more wealth than a chain letter, the truth was that businesses were piling into cyberspace with conviction.

He said that this would have a direct effect on those entering the market.

Finally he offered some advice to the graduates: "Don't be afraid to think the unthinkable. You need to be able to risk trying something new and taking the chance of getting it wrong.'' Premier Jennifer Smith congratulated the twelve young Bermudian men and women graduating this year. Mr. O'Hara was joined by ACE president Brian Duperrault and chairman of the Bermuda Foundation for Insurance Studies Brian Hall.

`Don't be caught off guard' Mr. Hall said: "It is very gratifying to see these students grow in both knowledge and stature from when they first entered Bermuda College four years ago -- the same time that Bermuda Foundation for Insurance Studies was established -- until now when they are ready and able to pursue careers in international insurance.'' Bachelor of Arts degrees were awarded to Terjuan Lister, Serena Paul, Brandi Harford and Akilah Albuoy, Master of Business Administration were awarded to Jaquita Ingham, Meredith Head, Ross Webber, Sandra Richards and Leah Richardson. Master of Science Degrees were awarded to Shanna Tyrrell and Angelika Rohlmann.

Photo/XL Class act: President and CEO of XL Capital Brian O'Hara (left), next to Premier Jennifer Smith, XL director Robert Clement and College of Insurance president Dr. Ellen Thrower, at the graduation ceremony of the College of Insurance in New York last week.

Valedictorian: Gino Smith (centre), a scholarship student from the Bermuda Foundation for Insurance Studies, was named valedictorian, or top student of his class. Here he is flanked by Bermuda Foundation for Insurance Studies chairman Brian Hall and Brian O'Hara, president and CEO of XL.

UNIVERSITY COLLEGE EDC