Bermuda insurer to move tax base to UK

By added on 27/07/2011

Lancashire Holdings plans to move its tax base to Britain from Bermuda to benefit from planned reforms to the UK tax system, the insurer said on Wednesday as it posted better than expected second quarter profits thanks to limited exposure to recent US tornadoes and other natural disasters, reports Reuters.

"Lancashire welcomes the UK government's wish to explore ways of treating business written in the UK, but with limited UK connection, more favourably," the company, which will remain incorporated in Bermuda, said in a statement.

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

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

The profit rise came after a big drop in insurance losses relative to a year ago when some in the industry faced big payouts following the Gulf of Mexico Oil spill. That drop in losses helped offset a 10 per cent drop in gross premiums written.

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

"After the considerable losses in Japan, Australia and New Zealand, the second quarter saw further industry losses arising from a series of US tornadoes, which caused significant but localised damage. We are pleased to report that these have had a minimal effect on Lancashire," Chief Executive Richard Brindle said in a statement.

Lancashire shares closed at 689 pence on Tuesday, valuing the company at about 1 billion pounds. The stock has climbed 24.4 per cent so far this year, outpacing a 7 per cent rise in the FTSE non-life insurance index.