Allied World shareholders approved a special dividend as the insurer moved a step closer to its merger with Canadian firm Fairfax Financial Holdings.

Allied Word, one of the Class of 2001 insurers to form in Bermuda after the September 2001 terrorist attacks in the US, is now based in Zug, Switzerland, but has substantial operations on the island.

Yesterday’s vote gave the go-ahead for a $5 special dividend to be paid to shareholders immediately following the completion of the Fairfax deal.

Shareholders also approved the amending of the company’s Articles of Association to remove the limitation on the voting rights of a holder of 10 per cent or more of the company’s ordinary shares.

Scott Carmilani, Allied World’s chief executive officer, said: “We are pleased with the overwhelming support we received today from our shareholders.

“With today’s vote, we move one step closer to completing the transaction with Fairfax, to the benefit of our shareholders, customers, business partners and employees.”

Fairfax has promised Allied World will be allowed to continue to run as it does now after the completion of the merger.