Update: Dublin Insurance Group Sees Impending Willis Arrival as 'Fairly Major'

The planned shift by Willis Group Holdings Ltd. of its domicile from Bermuda to Dublin would amount to a "fairly major move," in the view of Sarah Goddard, chief executive officer of the association that represents the international insurance and reinsurance sector in Ireland.

"To have a headquarters of this sort of magnitude of course would be very important for us," Goddard said.

In announcing the decision, Joseph J. Plumeri, Willis' chairman and CEO, said the "board of directors has determined that the company's redomestication to Ireland is in the best interests of Willis and our shareholders."

In recent months and years, Goddard said, other financial services organizations have looked either to set up European headquarters in Dublin or create subsidiary operations there.

Goddard heads up the Dublin International Insurance and Management Association Ltd. DIMA's 60 member companies are drawn from the ranks of insurers, reinsurers, and captive managers that do business in Dublin.

Goddard noted that Willis' decision must be approved by both the group's shareholders and the Bermuda Supreme Court.

"We would be very happy to see Willis join us here in Dublin," she said.

High-profile corporate names that have moved their domiciles within and from Europe in recent years have included Beazley, Chubb, Hiscox and Brit.

In announcing in February 2009 that Beazley Group plc would relocate its headquarters from London to Dublin, CEO Andrew Horton cited the attractions of a "stable tax and regulatory environment." Horton suggested to a press conference that the tax advantages available in Bermuda might have been lessened by the island?s distance from London (BestWire, Feb. 18, 2009).

Dublin, Goddard said, can offer "quite a lot" to Willis. This includes more than 20 years of experience in international insurance and reinsurance, a deep knowledge of captives, and a location that encourages cross-border business.

DIMA itself was established in 1990 as a representative association for captive managers, whom the association has described as "the first wave of Ireland's international re/insurance sector."

"It's a solid euro zone country," Goddard said. "We've got common law, which is very useful as far as understanding the legal system of various other countries."

In 2008, Goddard said, DIMA members generated more than 25 billion euros (23 billion pounds) in premiums.

"There's a lot of cross-border activity that happens from here, and it really is an international marketplace," Goddard said.

Dublin, Goddard said, offers strong professional support from lawyers, accountants and other experts. There are also good connections, both electronic and by air, to other financial centers, she said. Goddard said Dublin is not in competition with other locations, such as Bermuda, the United States and Luxembourg.

"It really depends on what the business plan is and what the business wishes to achieve through its location," she said.

Over the years, the Irish government has used tax breaks and outright grants to lure in foreign businesses. Many U.S. companies, particularly in the computer and pharmaceutical industries, set up in Ireland to gain access to the European market. Ireland, which joined what is now the 27-member European Union in 1973, has been enthusiastically pro-European over the years.

"The government in general is highly supportive of financial services," Goddard said. "It's been a major contributor to the Irish economy over the last few years."

Goddard said she knows of no contacts between the Irish government and Willis in connection with the proposed move. Her own first inkling of the news was via a press release, she said.

"I'd assume if there was some sort of connection like that, it was kept at a fairly confidential level," she added.

The Willis press office in New York declined to elaborate on its press release.

Ireland's commitment to Europe will be put to the test on Oct. 2 in a referendum on the Lisbon Treaty, which represents a further stage in the evolution of the EU. The treaty was rejected in a referendum in June 2008 after a fractious campaign.

The Treaty of Nice, which was intended to smooth the expansion of the EU into Eastern Europe, was rejected by Irish voters in a referendum in 2001. That result was reversed in a subsequent referendum (BestWire, July 28, 2008).

The current referendum campaign comes as Ireland is continues to come to terms with the effects of the global economic downturn.

"Everybody's aware that the Celtic Tiger has definitely stopped roaring, and has probably stopped growling as well," Goddard said.

(Clarifies DIMA's full name--Dublin International Insurance and Management Association Ltd.)