Allied World Executive: Move to Switzerland Offers ‘Centralized Base’

Allied World Assurance Co. Holdings Ltd. is the latest company to announce plans to redomicile from an island jurisdiction to one in Europe.

Allied World said it plans to move its holding company from Bermuda to Switzerland.

"Switzerland is an attractive location for Allied World at this stage because of our continued growth internationally, particularly in Europe and Asia, and through our Lloyd's Syndicate 2232. As we look to grow our presence in these regions, Switzerland serves as a better, more centralized base for operations," Faye Cook, vice president for marketing and communications, said in an e-mail.

The company said the decision to redomesticate was unrelated to any challenges in Bermuda. "Allied World's decision to redomesticate is due to strategic business reasons and additional growth opportunities. We believe Bermuda continues to be an exemplary offshore jurisdiction, and will continue to support and promote Bermuda as such moving forward," Cook said.

While some of Allied World's Bermuda-based executives may relocate to Switzerland or other geographic regions, "Our Bermuda office will remain an important insurance and reinsurance platform. We remain committed to the Bermuda marketplace," Cook said.

Holders of Allied World's voting and nonvoting common shares will vote on the proposal at special shareholders meetings expected to be scheduled for later this year.

Allied World has formed a new Swiss company, Allied World Assurance Co. Holdings AG, that will replace Allied World Assurance Co. Holdings Ltd. as the ultimate holding company of the group. Under the proposed redomestication, all outstanding common shares of Allied World will be replaced by new shares of Allied World Switzerland on a one-for-one basis. The proposed redomestication will be subject to approval by the company's shareholders and the Supreme Court of Bermuda, as well as the satisfaction of other conditions that will be described in the proxy statement the company will file with the U.S. Securities and Exchange Commission.

Allied World expects the redomestication to be effective by the end of 2010.

The group's stock (NYSE: AWH) is expected to continue to trade on the New York Stock Exchange.

The company will remain subject to SEC reporting requirements, the mandates of the Sarbanes-Oxley Act of 2002 and the corporate governance rules of the NYSE. The company will continue to report its consolidated financial results in U.S. dollars and under U.S. generally accepted accounting principles.

Other companies that have announced redomestications this year include XL Group, which moved from Cayman Islands to Ireland (BestWire, July 1, 2010).

In May, Flagstone Reinsurance Holdings S.A. completed the planned redomestication of its corporate domicile from Bermuda to Luxembourg (BestWire, May 19. 2010).

Also, United America Indemnity Ltd., the parent company of excess and surplus and speciality property/casualty insurers, including Bala Cynwyd, Pa-based Penn-America Group and United National Group, said its board approved a plan to redomicile to Ireland from the Cayman Islands (BestWire, Feb. 17, 2010).

Allied World Assurance Co. Ltd. and its underwriting subsidiaries currently have Best's Financial Strength Ratings of A (Excellent). The company's stock was trading at $55.58 a share at closing on Oct. 4, down 0.75% from the previous close.

(By Meg Green, senior associate editor, BestWeek: [email protected])