Robert Hiscox, chairman of Hiscox, one of the largest listed insurance firms in Lloyds of London, has cited the UK government's unhelpful tax policies as one of the primary reasons why the company has announced a new venture in Bermuda, a report in The Times has revealed. According to Mr Hiscox, the government's overzealous attitude towards taxation and regulation is forcing increasing numbers of London insurers to jump ship and set up in more business-friendly jurisdictions.
“The Government has never made one move to do anything but tax the insurers,” Mr Hiscox was quoted as observing.
“They’ll never back a winner and now the London market is drifting away to better financial and regulatory climates," he added.
On Tuesday, Hiscox announced a £170 million (US$300 million) rights issue to help finance a $500 million operation in Bermuda to exploit strong demand for insurance in the wake of this year's hurricanes.
Hiscox has warned that the recent spate of hurricanes would cut its profits by £60 million this year, although it is expecting a brighter outlook because insurance prices surged in the wake of the storms. The company anticipates premiums of US$325 million in 2006.
"We have watched the growing market in Bermuda and for some time considered that we need to underwrite there to increase the spread, balance and distribution of both our global reinsurance and retail accounts," Mr Hiscox noted in a company statement.
"Bermuda is a fast growing reinsurance market, which now sees business not shown in London, and has pricing advantages and a favourable regulatory regime," he added.
