Lloyd’s insurer follows Hiscox, Omega and Kiln to the low tax domicile; will establish Class 3 reinsurer Hardy Re
The Board of Hardy has announced its proposal to move the domicile of the group to Bermuda in order to improve its strategic positioning in the global insurance and reinsurance market.
It is the view of the directors that Bermuda represents an important complementary market to London.
The directors also believe that the group will be better placed to deliver its longer term plan if it is able to access the Bermuda insurance market and develops a platform for underwriting third party business there.
In order to facilitate this move, there will be a corporate reorganisation involving the establishment of a new Bermuda based holding company, Hardy Underwriting Bermuda Limited, which will acquire via a scheme of arrangement, Hardy Underwriting Group plc.
A listing for the shares of Hardy Underwriting Bermuda Limited will be sought on the London Stock Exchange and shareholders of Hardy Underwriting Group plc will become shareholders in Hardy Underwriting Bermuda Limited in the same proportions as they own Hardy at the relevant time.
Dealings in the shares will be in sterling and the company accounts and the par value of the shares will also be denominated in Sterling.
The redomiciliation and establishment of Hardy’s presence in Bermuda will be done in two distinct phases as follows:
Phase 1: as part of the reorganisation referred to above, Hardy Re will be established as a Class 3 reinsurer to underwrite a quota share reinsurance of Hardy Underwriting Limited.
The board expects that the authorisation for Hardy Re to conduct business will be granted by the BMA in order for Hardy Re to begin underwriting in the first half of 2008; in principle approval of its business plan was received from the BMA on 14 November 2007; and
Phase 2: during the next 18 months, subject to market conditions, Hardy intends to set up a further wholly owned subsidiary to function as a managing general agent.
This company is expected to underwrite third party business via a binding authority on behalf of Hardy’s managed syndicates 382 and 38Twenty.
Commenting on the proposed move to Bermuda, David Mann, chairman of Hardy Underwriting Group plc, said: “This is an exciting time for Hardy and its shareholders.
“This reorganisation is a key development for the Group and represents a measured step towards delivering our longer term strategic plan. The redomiciliation and establishment of a Class 3 reinsurer is only being undertaken on the basis that there will be a second phase to develop third party business. We believe that, market conditions permitting, we will be underwriting new business in approximately 18 months time.”