Bermuda based reinsurer Tokio Millennium Re Ltd. (TMR) has today announced its plans to change domicile and move its country of incorporation from Bermuda to Switzerland. As part of the firms ongoing commitment to growth and expansion, as it continues to contribute to parent Tokio Marine Group’s globalisation ambitions, it has been decided that Tokio Millennium Re will move its headquarters to Zurich.
Tokio Millennium Re was formed in 2000 in Bermuda as a risk diversifying operation for the Tokio Marine Group, underwriting property catastrophe reinsurance business outside of its main market of Japan. Since its launch Tokio Millennium Re has established a number of branch operations in other countries, with Zurich being one of those branches established in 2010.
According to a press release, TMR sees Zurich, Switzerland as its preferred domicile to support its corporate structure, grow its access to the European reinsurance market and enable continued growth for itself and contribution to Tokio Marine’s globalisation plans.
Tatsuhiko Hoshina, president and chief executive of TMR commented; “The global reinsurance industry is evolving rapidly, which presents many new opportunities for our organisation. We intend to continue playing a leading role in the marketplace with a view to further growth and expansion while meeting — and exceeding — our clients’ expectations. This restructuring will provide the platform to do precisely that.”
The Bermuda operation will continue to exist and operate as a branch of the TMR operation. It’s assumed that some back-office and operational functions may eventually follow the redomestication to Zurich but overall changes to the Bermuda branch will likely be minimal.
The recently launched collateralized reinsurance and insurance-linked securities (ILS) servicing arm of TMR, Tokio Solution Management Ltd. (TSM), will remain in Bermuda, as will its Shima Reinsurance Ltd. (Shima Re) Bermuda-domiciled segregated accounts reinsurance company. These two firms launched last year to take advantage of the growing activity in the collateralised reinsurance, ILS and catastrophe bond space, offering insurance management and transformer services to facilitate underwriting and investing in catastrophe risk.
Mr Hoshina added; “Even though TMR is redomesticating to Switzerland, we are committed to maintaining our presence in Bermuda where we have operated since inception. We have an exceptional team here supporting our core catastrophe portfolio and expect that to remain.”
Tokio Millennium Re also announced that it intends to open a U.S. branch in the second quarter of 2014, to further help its diversification and globalisation plans.
A number of Bermudian insurance and reinsurance firms have redomesticated their headquarters to Zurich in recent years, with the stable and attractive regulatory environment and skilled workforce always cited as key reasons. At the same time Bermuda has attracted other firms which have moved their headquarter domicile to the island and this country-hopping is part of the ebb and flow of a global market such as reinsurance. Given the changing reinsurance landscape, including the growing influence of third-party capital, relocations such as this will likely be for strategic purposes, perhaps to capitalise on the changes in the market, and we may well see more moves as the market evolves.