LONDON (Bloomberg) — Chaucer Holdings Plc, one of only three Lloyd's of London insurers based in the UK, is considering relocating overseas to reduce its tax bill.

"It's on our list of items to look at this year," chief executive officer Robert Stuchbery said in an interview. "Our peer group has an advantage over us when it comes to tax."

Chaucer, Amlin Plc and Novae Group Plc are the only firms among 19 publicly traded Lloyd's insurers to have their headquarters located in the UK Lloyd's insurers Brit Insurance Holdings NV and Beazley Plc last year announced plans to move to the Netherlands and Ireland, respectively. Hiscox Ltd., Omega Insurance Holdings Ltd. and Hardy Underwriting Bermuda Ltd. moved to Bermuda in 2006 and 2007.

"When you're paying a higher rate of corporation tax relative to your peer group, your shareholders are going to start making demands to move," said Christian Stobbs, a London-based analyst at KBC Peel Hunt Ltd. who has a "buy" rating on the stock. Chaucer's net income could rise by as much as 15 percent if it relocated to Bermuda, where corporation tax is zero, he said.

The UK corporation tax rate, 28 percent of profit, is the eighth highest in the 27-nation European Union and above the trade bloc's average of 23 percent, according to KPMG LLP. Companies in Ireland and the Netherlands pay 12.5 percent and 25.5 percent, respectively.

"People will come and go but London is still a good place to do business," Chancellor of the Exchequer Alistair Darling told the Financial Times in an interview published yesterday. "We have a critical mass here that you can't find in other parts of the world and I'm determined that it remains that way."

Almost half of the publicly traded Lloyd's insurers, or their parent firms, are based in the US, with four in Bermuda.

Stuchbery, 52, who became CEO this month, will put forward a relocation proposal to Chaucer's board by the end of the third quarter, he said, declining to name potential locations.

"I would much prefer to stay in the UK and have a corporation tax environment which put us on a level playing field with our international competition," he said. "If we're not able to have that as an option then you have to look to do something."

Stuchbery's first job as CEO is to "rebuild the confidence" among investors that has been lost over the past two years, he said. Chaucer's share price declined 56 percent in that period. Under former CEO Ewen Gilmour, Chaucer swung to its first net loss in eight years in 2008 after hedge fund investments pushed losses on its holdings to £71 million ($117 million).

"My role now is to steady the ship and that's going to be done by concentrating on the underwriting," Stuchbery said. Chaucer will probably write less catastrophe insurance this year as premium rates for those policies are falling.