Bermuda-based insurer Ironshore has lured a long-serving American International Group executive to be its new chief executive officer.

Kevin Kelley has left the role of CEO at Lexington Insurance Company, to take over as CEO of Ironshore. Mr. Kelley will work closely with Bob Deutsch, who has shifted roles from CEO to president.

Mr. Deutsch, who has been CEO of Ironshore since it set up on the Island in early 2007, with around $1 billion in capital, described the hiring as a "world-class coup".

"Ironshore's singular focus has always been to create shareholder value by building a world-class specialty insurance company," Mr. Deutsch said yesterday. "Attracting Kevin Kelley, one of the most talented insurance executives in the last two decades, significantly increases our ability to take advantage of the changing insurance marketplace. I welcome the opportunity to work alongside him.

"We want to get into all of the lines of business Lexington is in. There are areas that are ripe for another player."

Mr. Kelley, who built up Lexington into the largest excess and surplus lines insurer in the world, said: "I am excited to join Ironshore and am impressed with what has been accomplished in its first two years. I look forward to working with Bob and his talented colleagues to grow Ironshore into a large, specialty company as it moves from its initial development stage."

Bob Clements, a director and a founder of Ironshore, said: "Ironshore has accomplished a great deal under Bob Deutsch's leadership these past two years, including establishing successful platforms in Bermuda, the US and London. We thank Bob for his complete support of Kevin and his future role as Kevin's partner."

Privately-held Ironshore writes property catastrophe and property all-risk coverage for small to mid-sized commercial risks. The company underwrites specialty coverages at Lloyd's through Ironshore's Pembroke Syndicate 4000.

And its US operations consist of IronPro, IronHealth, IronBuilt and IronSelect, serving the professional liability, health care liability, construction and excess casualty specialty market sectors, respectively.

Also yesterday, AIG announced that Peter Eastwood, Boston-based Lexington's executive vice-president, will replace Mr. Kelley as CEO of the unit. Mr. Eastwood joined AIG in 1991, the New York-based company said yesterday.

"Kelley built up an extremely profitable organisation, and the concern is that business could follow such a high-profile departure," said Joyce Sharaf, an analyst at ratings firm AM Best.

AIG was rescued by the US Government, which took a near 80-percent stake in the company, in September.