Amlin is redomiciling its Bermuda unit to Switzerland as part of a move to create a new European reinsurance operation.

The insurer, whose headquarters is in London, said yesterday that the Island operation, which employs 32 people, would be operationally unchanged by the restructuring.

Amlin Bermuda's reinsurance operation will become a branch of a new unit based in Switzerland, which will be called Amlin AG and will trade as Amlin Re Europe.

In an interview yesterday, Amlin Bermuda's managing director Stuart MacKellar said the restructuring was purely a commercial decision and in no way reflected any negative notions about Bermuda as a jurisdiction.

"The reason for redomiciling the Bermuda operation was a commercial decision to take over what we feel is a space in the continental European reinsurance market," Mr. MacKellar said.

"We are very supportive of the Bermuda marketplace. We established the operation here in 2005 and we have continued to grow and develop it since, and we hope to continue to grow it."

In 2009, Amlin Bermuda, which writes mainly property and catastrophe reinsurance, wrote $628 million of business.

Some two third of that external, third-party business comes from the US. Mr. McKellar said the new unit's business would be purely additional to the group, he said.

The restructuring is similar to the one carried out by Bermuda-based Flagstone Reinsurance Holdings Ltd. last year, when the company merged its Bermuda underwriting unit into its Swiss operation. Since then, Flagstone has announced plans to move its holding company from Bermuda to Luxembourg.

In a statement released yesterday, Amlin said the new Swiss unit would give the European insurance market "a meaningful alternative for high quality reinsurance capacity especially for small and mid-sized companies". It will target European business that does "not typically flow into the London and Bermuda marketplaces".

Amlin AG's capitalisation will be approximately $1.4 billion, the company said, and the capital will be provided exclusively from Amlin's existing group resources.

The unit will be staffed by a team recruited from Swiss Re, headed by Philippe Regazzoni who will become the chief executive officer of Amlin AG.

Rating agency AM Best yesterday said the ratings of Amlin and its operating subsidiaries were unchanged.

"The new platform is expected to benefit from Amlin's excellent business profile and provide the group with enhanced business diversification," Best commented.

"The risk-adjusted capitalisation of Amlin Bermuda on a stand-alone basis and Amlin on a consolidated basis is expected to remain excellent."