Hardy might not be the only company considering a redomiciliation

The Bermuda question, which must have been on the mind of many an insurance executive since that market’s inception, was brought into sharp focus by the Treasury’s recent, very public, refusal to budge on the tax issue.

Hardy chief executive Barbara Merry was frank when she told Insurance Times about her disappointment with the Treasury’s decision, and about her recent visit to Bermuda.

“The Treasury says the London market is competitive enough, but this will make the situation worse”, she said. “I think that they have pretty much closed the door on any type of help.”

She also pointed out that around half of the listed insurers in Lloyd’s have now decamped to Bermuda – the venue for her fact-finding tour, during which she spoke to numerous participants in the growing market.

However, while there may not be a headline tax break from the Treasury, there is still the potential for liberalising legislation that would allow for reductions in the background rather than in the foreground.

Highly technical legislation is believed to have formed part of the discussions between the Treasury and Lord Levene at the recent insurance summit in Whitehall. It is believed that certain provisions in next year’s Finance Bill could be amended to allow the London market to benefit in a more discreet fashion.

But simply waiting for things to happen, when they may not in fact happen anyway, will not make good business sense for many. It seems that if nothing is done with tax rates soon, other companies will be jetting off to Bermuda on their own excursions.