London market as that jurisdiction regroups, said the president and CEO of the OIL group of insurance companies.

"The Bermuda insurance market has developed well and has become extremely successful,'' said Oil Insurance Ltd. (OIL) president and CEO Mr. Doyle Stephens, who is set to retire next year.

But the London market will try to "claw back'' business lost to Bermuda, he said.

As a result, pressure will build on rates as companies are faced with the need to "service shareholders'', he added.

"I would hope the market would avoid underwriting for volume,'' he said.

Mr. Stephens, 61, who is also president and CEO of Oil Management Services Ltd. and Oil Casualty Insurance, Ltd. (OCIL) as well as president of TOPS Insurance Ltd., on Wednesday announced he will retire at the end of first quarter of 1996 from Bermuda-based OIL which services the petroleum industry.

Mr. Stephens, OIL president and CEO since 1988, said he was proud of the accomplishments of the company, noted for its huge loss experiences like those associated with the Ocean Ranger and Piper Alpha disasters.

"When a loss occurs it is not our objective to find a way to deny the claim,'' he said. "We cannot forget we were organised to pay losses.'' The company paid out more than $250 million for the 1988 Piper Alpha disaster.

But the largest insured loss the company experienced was in connection with the 1989 destruction of a Phillips Petroleum plant in Houston.

The chemical plant was destroyed by an explosion and the loss topped $300 million.

The company has paid out more than $100 million in insurance over a dozen times, he said.

Over the past 25 years, OIL has incurred $2.9 billion in net losses and earned net premium of $2.8 billion.

Although OIL has not retained any premium, it has amassed investment income of $1.2 billion over that same period.

And as a mutual insurer, the company does not have to pay dividends to stockholders.

"We were able to accumulate a solid amount of investment income when interest rates were high and recently we have experienced another spell of better than average loss experience,'' he said.

"I think it is the most efficient operation in the business,'' he said. "We have to be competitive, we feel we have a great story to tell, other companies could sell similar products for less price but we believe it cannot be done, we sell the product at cost.

"We are very proud of the fact that there have been only two situations which required third party involvement and we have never been in litigation with our policyholders,'' he said.

The three operating insurance companies and one management company conducts operations from the ACE Building on Front Street with about 30 employees.

Mr. Stephens joined the management services company in 1986 as a senior vice president after 20 years with Shell Oil Company In Houston.

He has asked the executive committees of both OIL and OCIL to find a replacement to take over his responsibilities by the end of the first quarter.

He said he has no feelings of regret or loss because the companies are in "excellent shape and he has accomplished what he set out to do''.

The petroleum industry's needs are being serviced, he added, but conditions can change, history has shown that it repeats itself, cycles will continue, he said.

"I have no doubt our (shareholder companies) will take whatever steps are needed to fill the needs,'' he said.

After leaving OIL, the Oklahoma native will return to Houston where he spent many years prior to coming to Bermuda.

His 20 year career with Shell included two years in Bermuda as president of Shell's insurance subsidiary, Pico Ltd.

OIL commenced operations in Bermuda in 1971.

The company was formed at a time when the commercial market had ceased to provide petroleum companies with adequate insurance coverage limits, particularly in the area of pollution liability.

A group of 16 petroleum companies joined together and formed OIL to provide catastrophic insurance coverage to members of the petroleum industry.

OIL's capital and surplus at January 1, 1972 was $160,000.

At the end of its first year, OIL earned premium of $27.5 million, capital and surplus of $21.7 million and total assets were $28.4 million.

Membership now includes 44 companies from around the world.

Participants in OIL have available limits of coverage up to $200 million per occurrence and $300 million in aggregate.

The principal risks covered by OIL are losses and costs arising from physical damage to onshore and offshore property, well control costs and third party pollution liability.

At December 31, 1994, OIL's capital and surplus was $1.08 billion while total assets were $1.83 billion. Capital and surplus was $1.31 billion through June 1995.

No caption