Robert Hiscox, chairman, said that the insurer that his father founded in 1946 would swap Britain’s 30 per cent corporation tax rate for Bermuda’s 0 per cent rate by the end of the year.

He used yesterday’s interim results announcement to criticise the heavy regulation meted out to insurers in the UK, which he said further hampered competition. “They’re throwing regulation at us the whole time and then you’ve got Brussels putting its oar in on top of that,” he said.

Mr Hiscox is the latest to criticise the Government for impeding the competitiveness of London insurers and reinsurers. Lord Levene of Portsoken, the Lloyd’s of London chairman, promised last week to use his membership of a high-level Treasury advisory group to lobby the Chancellor for a tax cut. “The question of taxation is already an item of serious discussion between us,” he said.

Lower tax and lighter regulation allow Bermuda-based insurers to quote lower premiums for international reinsurance. Insurance underwritten in Britain and America will still be subject to local tax, but Mr Hiscox said he hoped to see the insurer’s tax rate eventually fall to about 11 per cent.

Hiscox’s board will meet next month to finalise plans for the move and shareholders will be asked to approve the decision. Hiscox plc will delist from the FTSE 250, to be replaced by a company called New Hiscox Bermuda. Shareholders will receive equivalent shares in the new company.

Catlin is the only other Lloyd’s insurer with a Bermudian domicile, from which it has operated since 2002, but Amlin Group set up a business on the island in November 2005, as did Omega Underwriting in February. Wellington Underwriting is looking at setting up a Bermudian operation.

Hiscox reported pre-tax profits of £61.3 million, down from £88.1 million in the first six months of 2005, as a result of currency movements. At steady exchange rates the profit was £64.7 million, against £51.2 million.

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