diversify its investments.

The transition coincides with the promotion of EXEL's Mr. Brian O'Hara to president and CEO of the company, and as chairman of the company's operating subsidiary XL Insurance Company.

Mr. O'Hara replaced Mr. Michael Kevany in those positions. Mr. Kevany remains chairman of EXEL Ltd.

"We are going through a change and it didn't necessarily have to do with Mr.

Kevany or myself, but more to do with the development of the business from an initial stage of solving the liability capacity crisis that occurred in the mid-80s,'' said Mr. O'Hara.

"Now, after eight years, we have demonstrated that we have put together what we think is a lasting solution that is acceptable to both buyer and seller.'' While the company will still seek to expand its core business, it is also looking for areas of expansion that are compatible with its original core mission.

The company has built its capital base and new product lines could result.

They won't rule out the possibility of new investments, along the lines of the substantial stake they hold in Bermuda-based property catastrophe reinsurer, Mid Ocean Ltd., which has worked well in contributing to their bottom line.

Mr. O'Hara said: "In the beginning we didn't know what to expect in many areas, so that led to a conservative approach in areas like investments. We didn't know what our cash flow needs would be, what our loss experience would be.

"Now after eight years, we have a better picture and a little more confidence. We are conducting strategic studies that could lead to diversification and change of asset mix, like in our investment portfolio, with the aim of increasing our reserves without increasing risk.

"We think the current mode is not necessarily appropriate any more and actually you can have higher risk by having all your eggs win one basket, even though it looked like the most conservative approach eight years ago. It isn't necessarily the case now.'' The company is analysing the differences between the climate then and now, with a possible view toward new investment opportunities.

Mr. O'Hara said the company had a temporary limitation to growth in its more than 80 staff, which was rectified last weekend, when it took possession of a third floor (10,000 square feet) of Cumberland House on Victoria Street.

The company has occupied the fourth and ninth floors for some time, and is now designing an internal staircase to link the ninth floor with the newly-acquired eighth.

At least ten more professional and clerical staff will come on line.

Mr. O'Hara has been vice chairman of EXEL Ltd. since 1987 and a director of the company since 1986. He has also served as president and CEO of XL Insurance Company Ltd. since 1992, having previously been president and chief operating officer since 1986.

Since taking over his new duties, Mr. O'Hara is slowing divesting himself of some of the old duties. He said that he is beginning to delegate more responsibility to a number of people.

"I'm definitely going to have to step back and let other people take over some duties,'' he said. "One of the things that I'm focusing on now is that strategic effort, working with the board in that regard.'' Mr. O'Hara said XL Europe has grown 40 percent per annum over the last several years and EXEL will look to Russia and Eastern Europe for future expansion when the time is right.

"As those places develop, if you think long term, it is a pretty exciting opportunity.

"I'm leaving on Sunday for a two week trip to China, Hong Kong and Tokyo, following up on marketing efforts we've put out there several times in the past year.

"It's longer term, but we are laying the groundwork now. We hope to be a significant global company. We are among the better capitalised companies in the world and are developing one of the better professional staffs to do the business and have the best place in the world to operate from.

"If you add it up, we just have terrific advantages that we wish to build on, on a global basis.'' Mr. O'Hara said international business success in Bermuda has been helped along by the telecommunications revolution.

"Fifteen years ago, when I first came here, they'd say that the phones would go out when it rained.

"It's a lot different world now, you can be tied in via video phones around the world. Communications are just getting so good, and it enables an operation such as ourselves from a tiny place like Bermuda to run a worldwide business. That was unthinkable 15 years ago.'' Mr. O'Hara and EXEL see the importance of continuing to play a role in the development of Bermuda's insurance industry by taking an active role in Education. EXEL has begun an annual scholarship award programme with New York's College of insurance.

"I remember starting EXEL's awards programme three or four years ago and it was funny. We actually couldn't find a student interested in insurance at the College of Insurance.

"So we gave it to a pre-med student at the University of the West Indies.'' "But now we have a scholarship programme that helps four or five students in college who are pursuing actuarial-related or insurance-related credentials.

"It is becoming clearer and clearer to Bermudians the kinds of opportunities that exist here in relation to our industry. All the new companies that have formed are going to find more and more that they are going to need access to qualified Bermudians.

"You just can't run and expand here on bringing people in. The economy doesn't work that way and it is too difficult.'' Mr. O'Hara, a CPCU since 1975, is a director of Mid Ocean Ltd., the Captive Fixed Income Fund and is a trustee of the Angus Robinson Jr. Memorial Fund.

A graduate of the University of Santa Clara with a BSc in economics, he served as the first president of the Bermuda Independent Underwriters Association and has been active on several Government committees, including the Insurance Advisory Committee and Insurance Admissions Committee and has chaired the Council of Advisory Committees.

EXEL Ltd. provides general liability, directors and officers liability, professional liability and property insurance coverage to companies around the world.

Mr. Brian O'Hara.