HAMILTON, Bermuda—The trickle of insurers redomesticating from Bermuda to Switzerland appears to be developing into a steady flow, but the moves don't signal an immediate decline in the island's status as major insurance market, experts say.

While the desire to expand globally and uncertainty over Bermuda's tax status are behind some of the moves, the island remains a key insurance and reinsurance center and a gateway to the U.S. market, they say.

Allied World Assurance Co. Holdings Ltd. announced Sept. 30 that it would move its corporate headquarters to Switzerland nearly 10 years after the insurer and reinsurer was formed in Bermuda. Allied World's move was the latest of several by Bermuda-based insurers and reinsurers that redomesticated to the Central European country or established operations there.

Amlin P.L.C. last week completed the redomestication of its Amlin Bermuda Ltd. subsidiary to Switzerland and renamed the company Amlin A.G.

In addition, Flagstone Holdings Ltd. redomesticated to Luxembourg this year after the reinsurer in 2008 merged its Bermudian and Swiss operating units into one Martigny, Switzerland-based company. In the same year, ACE Ltd., which was domiciled in the Cayman Islands but headquartered in Bermuda, redomesticated to Zurich.

More such moves could be in the offing, experts say.

“There could be more,” said Laline Carvalho, a director with Standard & Poor's Corp. in New York. “The redomestication issue is always on the table.”

In addition to the redomestications, several Bermuda companies have launched subsidiaries or opened offices in Switzerland in recent years. Those include Endurance Specialty Insurance Ltd., Montpelier Re Holdings Ltd. and Arch Reinsurance Ltd.

Catlin Group Ltd. and Aspen Insurance Holdings Ltd. are awaiting final regulatory approval to begin underwriting at new Swiss operations.

The trend has sparked debate on whether Bermuda might be losing its appeal as an insurance and reinsurance hub as Switzerland fattens its corporate register with new players looking to expand in Europe.

Sources say insurers and reinsurers are attracted to Switzerland because of its status as a growing, well-regulated insurance center that has access to a large pool of qualified employees. In addition, its central European location makes it easy to do business in other parts of Europe, they note.

Experts say that the relocations are simply smart business strategies, rather than efforts to abandon Bermuda. The damage to Bermuda from the relocations will be insignificant, they say, because the redomestications largely leave the companies' Bermuda operations intact.

“I don't think we've seen a complete migration from Bermuda. It's more of a business extension,” said Jane Portas, regulatory director at KPMG L.L.P. in London.

“They are not just picking up and leaving; it's just a domicile change,” said Ms. Carvalho of S&P.

Redomestications do not mean that companies are abandoning the island, she said, because “the operating companies in Bermuda may remain very large” even if the headquarters has moved. “Some companies enjoy being in Bermuda. They feel the regulators there are doing a great job and as a business center it is well-respected.”

Ms. Carvalho pointed out that Bermuda continues to offer advantages to insurers and reinsurers that locate there. In an S&P report she authored last month, she noted that the island's location means the companies have easy access to the U.S. market. Companies are able to form quickly there and can have the ability to “rapidly change their policies and prices, which means they can respond quickly to changing market conditions,” she wrote.

Such features have positioned Bermuda as “one of the most important centers for global reinsurance over the past decade,” according to the report.

Ms. Carvalho conceded, though, that strong regulatory regimes in Europe and the uncertainty around Bermuda's tax status with the United States have caused some companies to consider moving from the island to Switzerland or other European jurisdictions.

Bermuda has come under scrutiny in the United States as being among so-called “tax havens” on which President Obama has called for a crackdown.

Creating further uncertainty around taxes is H.R. 3424, a bill introduced by Rep. Richard E. Neal, D-Mass., that seeks to limit deductions for reinsurers that cede large portions of their U.S. premiums to offshore affiliates. The proposed legislation says current law allows U.S. affiliates of foreign-based companies to avoid paying some U.S. taxes by reinsuring their business offshore.

Heinz Eggenberger, general manager of Aspen's new Zurich-based general insurance unit that will operate as a branch of Aspen Insurance U.K. Ltd., agreed that Switzerland's well-regulated market is an attractive feature.

“We have a very committed regulator” and a thorough licensing process that helps ensure the quality of companies locating in the country, he said. “It takes time to get a license here.”

That's not to say that Bermuda's regulation is not thorough, Mr. Eggenberger and others said.

Sources said that both jurisdictions are well-positioned with solvency regulations that are expected to be recognized as equivalent to the risk-based Solvency II framework scheduled for implementation in the European Union in 2012.

Still, some Bermuda reinsurers are “starting to look at Europe as potentially offering a more sophisticated regulatory environment based on planned changes” in Solvency II, Ms. Carvalho said in the report.

Switzerland, which is not a member of the E.U., has in place a solvency test widely regarded as among the most stringent in Europe.

Some companies have cited the need for certainty in tax matters as reasons for moving from Bermuda to Switzerland. Flagstone and ACE said tax treaties with the United States in their new domiciles were the primary reason they left Bermuda, which has no such treaty.

But insurers and reinsurers should not expect any tax savings by redomesticating, sources said (see related story).

Allied World's stated reason for moving to Switzerland was the same as that given by many companies that set up shop there: global expansion.

Scott Carmilani, president and CEO of Allied World, said, “the time has come to increase our focus on global distribution as well as global product capabilities. This redomestication will allow us to better manage our position in local markets around the world, as well as maintain a strong presence in the Bermuda market,” he said in a statement.

The decision on whether to move corporate headquarters from Bermuda or to open a branch or subsidiary in Switzerland is determined by a company's intentions, sources said.

“If groups want to enhance their European books of business, that's one driver for establishing a stronger presence in Switzerland,” said Ms. Portas.

There are other “softer” reasons that companies consider when deciding whether to leave Bermuda for Switzerland, Ms. Portas and others said.

Employment issues, such as whether enough qualified employees are available, are among those considerations, Ms. Portas said. “It's a relevant factor, but not necessarily the driver.”

Companies in Switzerland, with access to talent throughout the European Union, would appear to have the upper hand over tiny Bermuda when it comes to recruiting qualified personnel. That is particularly true since restrictions on hiring E.U. residents were eased in recent years for members of the European Free Trade Assn., to which Switzerland does belong.

“That's a definite advantage for us,” said Aspen's Mr. Eggenberger. “We have access to top-notch employees who are often multilingual. If you are going to be successful in Europe, you need staff that is highly qualified and can speak one, two or more languages.”