Hardy Underwriting Bermuda Ltd. has already seen profit-boosting benefits from redomiciling to London.

And after the official opening of its Bermuda underwriting platform this month, those benefits are set to multiply, according to the company's chief executive officer Barbara Merry.

The Lloyd's specialty insurer and reinsurer moved its holding company to the Island a year ago. Ms Merry estimates the tax advantages of the move put three percentage points on Hardy's post-tax return on equity for 2008, which was an impressive 22.9 percent in one of the most difficult years the industry has ever experienced.

The company dodged the investment troubles of many of its rivals by selling off its entire equity portfolio at a small profit in the first quarter of 2008 to move into safer investments.

Hardy's presence in Bermuda is now tangible, after the opening of its new office in Park Place, at the Front Street end of Par-la-Ville Road.

The new office will primarily write US property catastrophe reinsurance on a treaty basis. Underwriter Chris Wright will lead the Hardy Bermuda team, backed by underwriting assistant Katie Taylor, a Bermudian who previously worked for Validus Holdings Ltd., as well as an office manager to be announced.

"If the treaty book grows, then we hope to hire more people," Ms Merry told The Royal Gazette. "About 30 percent of our book is US business and 70 percent elsewhere. We see the Bermuda office as an opportunity to significantly increase the proportion of US business.

"All of our US property business comes through Bermuda and we see this new platform as an essential part of our operation. We've had a good response already and if we go on to write a quarter of Hardy's total business through Bermuda, then we'll be thrilled."

Improved access to the US market was a major factor in Hardy's decision to redomicile from London in February 2008. Since then, offshore financial centres have come under increased scrutiny from the world's major powers, who are desperately seeking extra tax revenue during a financial crisis that has drained public resources.

"We do have concerns about that, but I think the pressure is off, as far as the UK is concerned," she said. As a former UK company that moved to Bermuda, and which has no US subsidiary, Ms Merry believes Hardy would not be directly impacted by anything the Obama administration does.

"But I think anything the US policymakers think fit to do, then I think it's likely UK policymakers will do the same thing," Ms Merry said. "We can't take our eye off the ball.

"We came to Bermuda because we wanted better access to the US property market. It would be a shame if we lost our tax benefits, but we came here to write business."

Hardy concentrates on four lines of business — property treaty, marine and aviation, non-marine property and specialty lines. Ms Merry has seen evidence of hardening rates, a trend she expects to continue this year.

"We think the amount of capital that has been withdrawn from the industry can't be replaced in the short term," she said. "Therefore we see sustained hard market conditions with property classes moving first."

Hardy made record profits of £23.1 million last year, thanks to a combined ratio of 77.2 percent — quite an achievement when the company suffered estimated losses of $17.6 million from hurricanes Gustav and Ike.

The 30-year-old company, which writes business through Lloyd's syndicate 382, aims to expand selectively, helped by the £40 million of new capital it raised earlier this year. Its priority is the addition of profitable lines of business, rather than expansion of market share.

Already this year, the signs are encouraging for the company, with premium income rising 30 percent in the first quarter, on sales to wealthy individuals and rising rates in catastrophe-exposed business.