Allied World Assurance Company's redomestication from Bermuda to Switzerland will have minimal impact on the company's Bermuda-based staff — but some executives will relocate.

That was the message from the global re/insurer on Friday, the day after the announcement that its board of directors had voted unanimously to make the European nation the new home for its holding company.

Meanwhile, a note on Friday from leading property and casualty insurance equity analysts Dowling and Partners suggested that Bermuda's role as a major domicile for the industry is set to diminish, although it is likely to remain an important re/insurance market.

Allied World employs approximately 160 people in its Pembroke Road base.

The company has stressed that its insurance and reinsurance operations on the Island will continue after the redomestication, which is subject to approval by shareholders.

"The company estimates the redomestication will primarily affect Bermuda-based executive management, if any, and expects very few staff transfers at this time," an Allied World spokesman told The Royal Gazette.

"The decision to redomesticate is not a 'redundancies' exercise."

Which Bermuda-based executives will move has yet to be determined.

"Some executive management will relocate to Switzerland as well as other geographic locations to support Allied World's business strategy," the spokesman added.

Allied expects to become a Swiss company by the end of the year. Its move highlights the increasing appeal of Europe, relative to Bermuda.

But Allied insists that its move does not reflect any concerns about Bermuda's suitability as a domicile.

"Allied World's decision to redomesticate is due to several strategic business reasons and potential growth opportunities," the spokesman said.

"We believe Bermuda remains an exemplary offshore jurisdiction, and we will continue to support and promote Bermuda as such moving forward."

Nevertheless, the company adds to the list of Bermuda market participants to have become European companies over the past couple of years.

Ace Ltd. and XL Group plc., whose domiciles were both previously in the Cayman Islands, have moved their holding companies to Switzerland and Ireland respectively.

Class of 2005 reinsurer Flagstone Reinsurance Holdings, SA, first moved its capital to Switzerland and then its domicile to Luxembourg.

London-based Amlin redomiciled its Bermuda reinsurance unit to Switzerland this year and Catlin Group also formed a new $1 billion reinsurance entity in the Alpine nation.

In Friday's note to clients, Dowling and Partners said that "while Bermuda will remain an important (re)insurance market (particularly for property cat and excess casualty), its role as a major location of domicile is likely to shrink going forward.

"A number of European jurisdictions are increasingly attractive as a place of domicile and offer more stable and predictable political, economic, regulatory and tax environments."

One tempting factor for Bermuda firms may be that One tempting factor for Bermuda firms may be that Switzerland, unlike Bermuda, has a full tax treaty with the US.

According to William Berkley, chairman of US insurance giant Berkley Corp., speaking to a Congressional committee hearing on reinsurance in July, the one percent US excise tax levied on premiums ceded outside the US can often be waived by treaty.

"In fact, several companies have recently redomesticated to Switzerland or another treaty jurisdiction to avoid imposition of the excise tax," Mr. Berkley added.