Bermuda-based ACE Ltd. has reduced the role of Lloyd’s in its UK and European business.

ACE announced that it will withdraw business from its Lloyd’s syndicate 2488 and move it to another UK based subsidiary, ACE INA U.K., which has just received regulatory approvals to underwrite all classes of nonlife insurance and reinsurance business.

The company said that ACE INA UK will write ?280 million ($450.6 million) of gross premiums in 2003.

The move highlights a changing dynamic between the London market and the Bermuda market.

XL Capital has also said that it will cut its Lloyds capacity by ten percent.

ACE’s acquisition of Tarquin Ltd., the UK holding company for Charman Underwriting Agencies Ltd, was seen in 1998 as a sign of the increasing international presence at Lloyds.

Post 9/11, several key Lloyd’s figures moved to Bermuda, including the former chairman of ACE UK Limited, John Charman, who became CEO of start-up AXIS Specialty in October 2001.

ACE said that syndicate 2488, a composite syndicate, will continue to write aviation and marine business and “those specialty lines most suited to Lloyd’s”.

But during the next two years ACE INA UK will become ACE’s principal UK and European underwriting operation and will establish branches in 13 European countries.