XL Capital now appears to have put the worst of its exposure to bond reinsurer Security Capital behind it, and is now saying that it can get off to a fresh start.

That may well be so, and there will be many who hope it is, but the whole episode is a timely reminder that growth in the international business sector, and the insurance sector in particular, is not guaranteed.

Indeed, it should always be borne in mind that insurance in particular is a business which is all about taking on risk, and there will always be times when companies will lose money, or even go out of business.

That can come at a personal cost, as XL demonstrated last week when it made some 47 staff in its Bermuda office redundant, along with another 100 or so worldwide.

New chief executive officer Michael McGavick made it clear that this was not due to the Security Capital debacle, but to the general "soft market" in insurance, a period in which premium rates are generally weak.

It may be that some segments of this market may improve in the coming months, particularly in directors and officers' liability insurance and, possibly in catastrophe insurance as the hurricane season heats up.

But generally, weakness in the US economy, and in parts of Europe means that businesses will be unwilling to pay high premiums.

Insurers depend on investment returns for the balance of their income, and the picture there remains poor as well.

So it stands to reason that the Island's insurance sector may not see the kind of growth to which Bermuda has become accustomed.

Indeed, it is not impossible that more redundancies may well come as businesses adjust to a weaker market. It is worth noting that international insurance brokers Willis and Aon both reduced staff around the world in the last quarter as a result of reduced business.

Bermuda has already seen a flattening of employment levels in the last couple of years as even those businesses that were expanding were tending to outsource elsewhere.

That's not necessarily a bad thing for an economy that already enjoys over-employment and has seen strains on its infrastructure. But care must be taken that we do not reach a tipping point.

This newspaper has warned previously about the Island's high costs and lack of competitiveness, and it is likely that employers looking to reduce costs will do so where there appears to be the most fat.

Bermuda needs to control its costs and must also ensure that those Bermudians and non-Bermudians working in international business are there not simply to "make up the numbers" but to bring real value to their employer.

To some extent, organisations like the Bermuda Insurance Institute and the Bermuda Foundation for Insurance Studies already do great work in these areas, but that does not mean more cannot be done.

It is worth remembering that job cuts in the international business sector do not simply affect that sector. They have a knock-on effect through the whole economy and it is critical that Bermuda should do everything it can to maintain the health of this critical industry.