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Lloyds 'threatened' by offshore domiciles

Posted: 05 September 2008

Lloyds bank chairman Lord Levene said that Lloyds competitiveness is under threat by lower rates of tax in domiciles such Bermuda.

The tax regime for Lloyd's must be eased if the 320-year old insurance market is to retain its international competitiveness, Lord Levene said in a speech.

"The tax treatment of Lloyd's in the UK must be amended for us to stay on top," Levene said. It is under threat from other markets, notably in offshore centres whose tax regimes are very attractive."

Lloyd's faces mounting competitive threat from emerging insurance industry hubs such as Bermuda and Dublin. Last year, several Lloyd's insurers, including Hardy Underwriting and Kiln, moved to Bermuda to take advantage of the island's lighter tax and regulatory regime.

Hardy announced its move in Dec 2007, and analysts said at the time that moving to Bermuda could halve the company's tax rate.

"(The government) now tell us that they understand the force of our argument and hope to reach a decision soon. I fear though that 'soon' may become a movable feast, and we need a favourable decision now," said Levene.

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