The man at the top of Bermuda's second biggest insurance and reinsurance company XL Capital is to retire from the post in the middle of next year.

Brian O'Hara will step down mid-2008, but remain as chairman for a final year, XL announced late yesterday just after the company revealed it had seen a 13 percent slip in its third quarter profits due to a losses on investments.

Despite the lower profit XL made a three-month net income of $371 million. The financial results are not thought to have had any bearing on Mr. O'Hara's decision.

XL chairman Michael Esposito intends to retire at the same time that Mr. O'Hara ends his term as CEO and president.

He said: "Over the last two decades, including the last 13 years as CEO, Brian has developed a formidable global business franchise, with a values-based culture built on integrity, which has established a record of strong performance. The Board is both very proud and most grateful for all he has done. Brian will leave big shoes to fill and we are determined to select the right person to fill them. XL is most fortunate to have outstanding internal candidates to succeed Brian and they will be carefully considered together with other highly qualified outside candidates."

Mr. O'Hara said: "I have been privileged to spend the last 20 years of my career working with extraordinary talent to build a unique and highly successful global enterprise. Given our current position of strength and our positive momentum, I believe it is the right time to begin to hand over leadership to the next generation. Mike and I are committed to a smooth and successful transition as we continue to deliver value to our shareholders."