15-year history.

Company president and CEO Brian O'Hara said the action was "painful'' but necessary for the business to increase profitability and keep the shareholders happy.

Only three Bermudians were affected by the downsizing as a total of six people were made redundant in the Bermuda office. The local XL office has 257 employees, 75 percent of whom are Bermudian.

A total of 120 people worldwide were made redundant in the change. The former Intercargo, Lloyd's and Nac Re operations were the most affected.

The cuts were a result of a reorganisation of the company announced in July and the decision to abandon lines of business that were losing money.

"Our industry has been in a prolonged downturn in pricing and a period of rising expenses,'' Mr. O'Hara said.

"As a specialist insurance, reinsurance and financial services organisation, it is critical that we concentrate on those things we do well and continuously look for ways to improve our productivity and reduce operating expenses,'' he continued.

"We regret having to take the unprecedented action of reducing head-count at XL but believe that this will make us stronger as we move forward.'' More than $200 million of annual gross premium written is associated with the business lines that are being wound up.

A release from XL said that the cost of the changes is expected to be in the region of $100 to $125 million. The expenses will be reflected in the fourth quarter of 2000 as a one-time charge.

The company also announced yesterday, plans to rename several units bringing most of its business into a common XL brand identity.

The principal reinsurance operations of the company will operate under the common name XL Re, while other major product lines such as The Brockbank Group plc and Brockbank Insurance Services, will operate as XL Brockbank and XL Aerospace respectively.

Full coverage: Business, Page 17