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CALGARY, Alberta -- Disparate forces are remolding insurance markets around the world, and insurers must change their structures to successfully fit the new molds, insurance executives say.

Consolidation, excess capacity, reconstituted capital and the global demands of customers are all affecting different insurers in different ways.

But all insurers must respond to the changes if they are to thrive, concurred the executives, who spoke during a session at the Canadian Risk & Insurance Management Society conference earlier this month.

Insurers are operating in an increasingly difficult market, said Dean O'Hare, chairman and chief executive officer of Chubb Corp. in Warren, N.J.

"But you can maintain your integrity and independence and you can grow and prosper," he said.

To do that, insurers need to make sure their organizations home in on what it takes to succeed in a difficult market, said Mr. O'Hare. He said insurers should:

* Concentrate on specialties where they have expertise and discard operations in markets where they have only a marginal impact.

For example, Chubb focuses on specialty property and casualty business and in the past several years has sold its life insurance and real estate operations.

Although some organizations say they can offer their customers "one-stop shopping," it is very difficult for one large organization to offer the best products in all areas of its operations, Mr. O'Hare said.

* Maintain disciplined financial management.

That can be achieved through acquisitions that add to the value of insurers or through the return of capital to shareholders, he said.

* Exercise effective cost control measures.

Expenses in the insurance industry are generally too high and should be lowered, Mr. O'Hare said.

Although it is difficult to state a desired level for expense ratios, as each line of business demands different levels of expenses, Chubb has a target of reducing its expense ratio to less than 25% by 2005, he said.

"It does not mean that everyone should strive to be a low-cost producer. It does mean that your operations are as lean as possible consistent with your business strategy," Mr. O'Hare said.

* Increase their premium income, in order to increase earnings.

"Profitable premium growth is still the No. 1 challenge facing the industry," Mr. O'Hare said.

While it is difficult to grow premiums, those insurers with the ability to grow with their customers globally and have global operations are the most likely to succeed, he said.

European insurers are changing radically, in part to be able to service the global needs of their clients, said Charles-Francois Walckenaer, chairman and CEO of AXA Global Risk, a unit of AXA Group in Paris.

"The future will belong to the quickest and the most innovative," he said.

Over the past several years, Europe has radically changed due to political and economic changes, and that has been reflected in the operations of the continent's insurers, Mr. Walckenaer said.

Instead of many small insurers operating in individual markets, often under the auspices of pricing cartels, European insurers are now consolidating and expanding their operations throughout the world, he said.

Industrial and commercial insurers need to be global to survive and they also need to be well-capitalized, offer significant capacity, and offer innovative coverage that meets the changing needs of policyholders, said Mr. Walckenaer.

The Bermuda market is youthful compared with most other insurance markets, but it, too, is significantly changed from its original form, said Robert J. Cooney, president and CEO of X.L. Insurance Co. Ltd., a unit of EXEL Ltd. in Bermuda.

From its beginnings as an excess liability market in the mid-1980s, the Bermuda market has expanded to offer numerous coverages, from finite risk to catastrophe reinsurance, he said.

This is due in part to increased capacity outside Bermuda, Mr. Cooney acknowledged. When X.L. and ACE Ltd. were established, they filled a void for policyholders, but now they must offer a wide variety of products to compete with insurers outside of Bermuda.

"Our focus is not so much as an excess insurer selling products, but as a risk solutions partner," he said.

And its partners will often be "chief risk officers," a post Mr. Cooney said many organizations are likely to create over the next five years.

Insurers will have to offer a wide array of financial services if they are to succeed in the future, he said.

"We will have to evolve as quickly as our clients' expectations as far as risk financing and risk partnering go," Mr. Cooney said.

Lloyd's of London also has faced significant changes over the past few years, said Ronald Sandler, Lloyd's chief executive officer.

But the market still has managed to maintain its fundamental characteristic as a market led by underwriters, he said.

Lloyd's continues to have a structure where new capital can be easily accessed, and that structure will help ensure that Lloyd's maintains entrepreneurial culture, Mr. Sandler said.

Mark DeLillo, vp-risk management at Celotex Corp. in Tampa, Fla., and president of the Risk & Insurance Management Society Inc., moderated the session.