Lloyd's of London insurer Hardy Underwriting has made an underwriting profit for every one of its more than 30 years in business.

And chief executive officer Barbara Merry believes its move of domicile from the UK to Bermuda will help it to keep that winning streak going.

Hardy Underwriting Bermuda Ltd. held its first annual general meeting on the Island yesterday and afterwards, Ms Merry explained that the specialty insurer and reinsurer had not chosen to come to Bermuda purely because of the Island's zero-percent corporate tax rate.

"If it was just about the tax advantages we could have gone to Guernsey," Ms Merry said.

"While the tax advantages of Bermuda are welcome, we came for a business advantage which will help us to develop our long-term plan. Bermuda is the biggest market for US property risk — bigger than the London market by some degree — and if you want to underwrite there, then you have got to be here.

"We believe a Bermuda presence will be very complimentary to what we do in London."

Ms Merry said Hardy was now looking for a home and four employees for its Bermuda office, which she hopes will open in the first half of next year. In the event of a major catastrophe in the US over the next few months, Hardy would seek to open its office sooner to take advantage of the resulting market opportunity.

The company hopes to fill at least two of the Island office posts with Bermudians and will seek a graduate trainee underwriter.

Hardy writes specialty lines and is best known for its aviation coverage, particularly helicopters and small aircraft. It also insures ships and their cargoes, as well as offering property, terrorism and health insurance.

Hardy said yesterday in its trading statement to the London Stock Exchange that market conditions are broadly in line with its expectations, and added that first-quarter gross premium volume was £51.8 million compared to £42.1 million a year ago, largely because the accounts written by its syndicate 38Twenty were not fully established at this point in 2007.

The insurer said it has decided to merge syndicate 38Twenty into syndicate 382 with effect from January 1, 2009. Adrian Walker will become the director of underwriting, and will remain the named active underwriter, for the enlarged syndicate 382.

Hardy said it had loss exposures related to the Australian flood events in the first quarter and the Severstal blast furnace explosion in the US. The company has accounted for these on a worst case scenario basis.

Hardy also said its investment portfolio has performed well in the first quarter, with a return for the quarter of £2.1 million. Many insurance companies saw their investment income plunge in the first quarter, with hedge fund investments and equity interests particularly hard hit.

Hardy has adopted an conservative policy on investment that has served it well amid the market turbulence of recent months.

"What we think we know about is underwriting," Ms Merry said. "We don't profess to be investment experts. We have had some small interests in equities, but at this point in the market, we don't believe we know enough to be able to gauge the markets.

"So we sold off our equity portfolio during the first quarter, at a small profit."

Hardy has decided to concentrate on building a secure portfolio in order to reduce the risk of investment losses impacting on financial results. The aim is to achieve a reasonable investment yield, whatever the stock markets are doing, and to take risk away from the assets side of the balance sheet. The company may invest in equities again in future, if and when it believes it to be prudent.

Seven Hardy directors have flown from England to take part in the company's first board meeting on the Island. Last night, the Hardy delegation attended a cocktail reception with local dignitaries to officially launch the newly domiciled company.