Insurer's decision linked to tax and regulatory advantages
Hiscox is abandoning London in favour of Bermuda to take advantage of a more favourable tax and regulatory regime.
The Lloyd's insurer will re-domicile to Bermuda by the end of the year, subject to a number of regulatory approvals.
Robert Hiscox, chairman, said that following the establishment of Hiscox Bermuda in 2005 and the completion of detailed work, the board had concluded that there were "significant advantages" in moving the group's domicile to Bermuda.
Hiscox will become the second Lloyd's insurer to leave London in favour of Bermuda after Catlin in 2002.
At the time the chief executive Stephen Catlin said a Bermuda domicile provided the company with additional flexibility, including tax and other financial benefits.
Some industry experts have suggested that Hiscox' decision to move to Bermuda, where corporation tax is 0% compared to 30% in the UK, could lead others to follow.
But, Andrew Green, tax partner at financial adviser Mazars, said: "When it comes to competitiveness, the tax regime is only one consideration. Regulatory requirements, infrastructure and human resource are also very important."
Marketing campaign drives direct growth up 75%
Hiscox UK's direct operations have grown by 75% in the first half of 2006 on the back of the insurer's £10m marketing campaign, the company said.
The insurer said that demand had surged following the last run of adverts, settling at 50% above pre-campaign levels.
Chairman Robert Hiscox said: "Brokers also reported a greater ease of selling our policies so, combined with the strengthening of the Hiscox brand, the early stages of this campaign have proved a great success.
"Our direct activities complement our broker account."
Hiscox UK's combined ratio deteriorated to 95.2% from 90.2% due to some large specie losses and the advertising spend.
Premium income was up 8.8% to £112.2m.
Overall, Hiscox announced a fall in profit for the first six months of 2006, due to the impact of a weak dollar. Profit before tax fell to £61.3m compared to £88.1m in the same period last year.