Another Lloyd's insurer is understood to be following in the wake of Hiscox and Omega and preparing to redomicile to Bermuda.

While the identity of the company is not clear, senior sources said the move was set to be announced in the "near future".

Suggestions have been made that it could be Brit or Hardy Underwriting, although both companies have strongly denied this.

Speculation that Brit may be considering a change of domicile increased this week with the news that it will set up its first offshore underwriting operation on Bermuda. Norton Re will write catastrophe retrocession business.

The company denied that the formation of Norton Re was the first step towards re-domiciling. A spokesman told Insurance Times that it was "not on the agenda".

Since Hiscox and Omega announced in September plans to change their domiciles from London to Bermuda, there has been fevered speculation as to whether other insurers would follow suit.

Bermuda is an attractive venue given its favourable tax and regulatory regimes.

Andrew Green, tax partner at financial adviser Mazars, said at the time that he expected all Lloyd's insurers to be considering it.

Lloyd's chairman Lord Levene has warned that more companies will abandon London in favour of a Bermuda domicile unless the government takes action.

Dane Douetil, chief executive officer of Brit Insurance, said: "This will be our first investment in an offshore underwriting business and a further significant step in Brit Insurance's evolution into a widely diversified insurance group.

"We believe that this innovative structure is attractive to capital markets and is a potential blueprint that we can consider for other classes of business with similar characteristics."

Brit has a 19.6% stake in the reinsurer, having invested $21.1m of the initial $107.7m capital. The remainder is owned by international institutional investors. The venture has been approved by the Bermuda Monetary Authority.

Beazley could be the next Lloyd's insurer to expand its operations to Bermuda, according to insurance analyst Numis.

In a report this week, it said Beazley had two options - the potential to acquire further capacity from Names or expand to Bermuda.