Lancashire Holdings Ltd has announced the company will switch its tax base from Bermuda to the UK as it reported forecast-beating quarterly profit thanks to limited exposure to recent natural disasters.Lancashire said it did not expect its tax bill to rise as a result of the move, as it would qualify for a three-year exemption from British rules on the tax treatment of companies with overseas interests, pending their reform.Speaking to The Royal Gazette, Neil McConachie, Lancashire Group Holdings' president, said that the move would make senior management decision-making faster and easier while reducing risks.He said that the Bermuda operation would be largely unaffected by shift in tax base, but Dan Soares, CEO of Lancashire Insurance Company Ltd and group head of operations, said that a few of the senior Group executives might move to London as a result.“From a Bermuda perspective it really highlights that competing jurisdictions are alive to the fact that they need to change policy and legislation to be attractive,” said Mr Soares.Mr McConachie said that while Lancashire Holdings would become tax resident in the UK, its Bermuda arm would continue to operate under the Bermuda tax regime and to be regulated by the Bermuda Monetary Authority.He said that between Tuesday July 19 when the UK legislation was finalised and the date of its announced intention to move its tax base there, Lancashire received written approval from HMRC that it qualified for the exemption.Jonny Creagh-Coen, Lancashire's head of investor relations, said the change of domicile would give the company greater flexibility in making strategic decisions.“Board meetings can now be held in London,” he told Reuters.“Every time we have to make a serious decision, it doesn't mean the CEO has to go offshore to make that decision.”London-listed Lancashire's move to the UK goes against a trend of British insurers redomiciling abroad, with Brit Insurance moving to the Netherlands and Beazley relocating to Ireland in 2009.Many international insurers and reinsurers are based in Bermuda, benefiting from the island's favourable tax regime.Lancashire, which insures aircraft, oil rigs and ships, also said it made a pretax profit of $91 million in the three months to June 30, compared with $84.5 million a year earlier.Analysts had expected a profit of $71 million, according to the average of 12 forecasts compiled by the company.The improvement came after a big drop in insurance losses relative to a year ago when some in the industry faced big payouts as a result of the Gulf of Mexico Oil spill.That drop in losses helped offset a 10 percent reduction in premium revenues.Lancashire also said the US tornadoes in April and May had had a minimal effect on its business.Lancashire shares were 0.2 percent lower at 685 pence by 9.25am on Wednesday, valuing the company at about £1 billion.The stock has climbed 24.4 percent so far this year, outpacing a seven percent rise in the FTSE non-life insurance index.Hiscox Ltd said it has no plans to follow Lancashire Holdings back to the UK, despite government efforts to make Britain's tax system more attractive.“The rules have moved a step in the right direction, but not enough steps for us to move back to the UK,” Hiscox chief financial officer Stuart Bridges said in an interview.“We're very glad we redomiciled here; the regulatory regime in Bermuda is very good. We're very happy to be part of that, rather than the UK one.”David Gauke, Exchequer Secretary to the UK Treasury, on Wednesday hailed Lancashire's move as evidence that “Britain is open for business”.Rival Hardy Underwriting Bermuda Ltd declined to comment on whether it was considering a move back to the UK, and Catlin could not be reached, according to a report by Reuters.Hiscox's Mr Bridges said the advantages of being based in Bermuda outweighed the disadvantages, which include a relatively high cost of living and the inconvenience and expense of flying directors to the Island for board meetings.“One of the main advantages to Hiscox is that it makes us think more internationally,” he said.“It's taken the London-centric view of life out of the equation.”