The struggling Irish economy heard some good news last week when XL announced that it is moving its place of incorporation to the Emerald Isle from the Cayman Islands, and will rename the company XL Group plc. Many of its operations, however, will continue to be run from its Bermuda headquarters.
CEO Michael S. McGavick explained that the move was “in the best interests of XL and our shareholders. Among other benefits, we believe the proposed move will reduce certain risks that may impact us and offer us the opportunity to reinforce our reputation, which is one of our key assets, and to better support our global business platforms.”
He added that the new “XL Group” name “is desirable to reflect our exclusive focus on providing property, casualty and specialty insurance and reinsurance products for our customers’ complex risks.”
Insurance continues to be a bright spot for Ireland’s troubled economy. Willis recently completed its “redomestication” there. Lloyd’s insurer Beazley moved its domicile to Ireland in February of 2009.
Ireland profits from being a member of the European Union and the OECD. It also has established an efficient regulatory regime, as well as offering tax breaks and other incentives to companies locating there.
“XL’s recent announcement that it is planning to move its holding company to Ireland is a further example of a growing trend for international re/insurers to look to well-regulated, well-developed and stable locations for their operations,” said Sarah Goddard, CEO of the Dublin International Insurance & Management Association (DIMA).
“XL set up its first European operations in Dublin about 20 years ago, and more recently chose Ireland as the location for its European reinsurance business, so the group has had plenty of experience of the Irish international re/insurance sector in the years preceding its decision to move its holding company,” she continued.
Goddard added that she is looking “forward to welcoming the new holding company to Dublin, and feel that Ireland can represent an efficient choice for international re/insurers looking to streamline and optimize their operational structures in the run-up to Solvency II.”
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