BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Bermuda insurer Lancashire to move tax base to U.K.


HAMILTON, Bermuda (Reuters)—Insurer Lancashire Holdings Ltd. said on Wednesday it would move its tax base from Bermuda to Britain as it reported forecast-beating quarterly profit thanks to limited exposure to recent natural disasters.

Lancashire said it did not expect its tax bill to rise as a result of the move, as it would qualify for a three-year exemption from British rules on the tax treatment of companies with overseas interests, pending their reform.

Jonny Creagh-Coen, Lancashire's head of investor relations, said the change of domicile would give the company greater flexibility in making strategic decisions.

"Board meetings can now be held in London," he told Reuters. "Every time we have to make a serious decision, it doesn't mean the CEO has to go offshore to make that decision."

London-listed Lancashire's move to the United Kingdom goes against a trend of British insurers redomiciling abroad, with Brit Insurance Holdings B.V. moving to the Netherlands and Beazley P.L.C. relocating to Ireland in 2009.

Many international insurers and reinsurers are based in Bermuda, benefiting from the island's favorable tax regime.

Espirito Santo analyst Joy Ferneyhough said Lancashire's move would cast doubt over whether the company can maintain its current tax rate of close to 0% in the long term.

"Given that at 0% the tax rate can only move in the wrong direction ... we expect there will be some concern from investors that the tax rate may edge up," she wrote in a note.

Lancashire, which insures aircraft, oil rigs and ships, also said it made a pretax profit of $91 million in the three months to June 30, compared with $84.5 million a year earlier.

Analysts had expected a profit of $71 million, according to the average of 12 forecasts compiled by the company.

The improvement came after a big drop in insurance losses relative to a year ago when some in the industry faced big payouts as a result of the Gulf of Mexico Oil spill.

That drop in losses helped offset a 10% reduction in premium revenues.

Lancashire also said the U.S. tornadoes in April and May had had a minimal effect on its business.

Read Next

  • Lancashire first to return cash as insurance prices fall

    LONDON, (Reuters)—London-listed insurers Lancashire Holdings Ltd. and Hiscox Ltd. on Monday confirmed insurance prices are still falling, and Lancashire said it would return £213 million ($344 million) to investors rather than deploy it in a softening market.