Allied World Assurance Company moves into its sixth year with an updated logo and a move into a new office block two storeys higher than its adjacent landlord the American International Group.

From the seventh floor AWAC president Scott Carmilani can look down on his Bermuda-based competitors.

Whether it is symbolic or purely coincidental, there is no denying AWAC is assuming an increasingly elevated position in the insurance and reinsurance world, as evident by record full-year operating income of $442.8 million.

Tucked away in Richmond Road behind the AIG office block, the company hosts a grand opening of its new offices this Wednesday.

AWAC today unveils its new corporate identity and colours created in collaboration with Bermuda design firm RBK. The decision to change the branding is to better reflect and strengthen AWAC’s global market presence.

Mr. Carmilani explained: “It is a combination of our coming of age as an independent company and going into the public markets and expansion geographically for the company and the challenges that presents. We thought it would be a great time to focus on what the brand represented and work to use that brand as part of our expansion efforts.”

Since the company was formed by AIG, Chubb and Goldman Sachs, it has grown to the point where it now employs around 165 people in Bermuda. As it expanded, it rented office space in five locations around Hamilton.

“We were fairly scattered around Bermuda and any time we wanted to have a meeting we had to travel a few blocks to do that, which is fine in nice weather but a pain when it is raining,” said Mr. Carmilani.

“As we grew and the staff numbers grew it became harder for staff to get to know one another in all these different locations. So it was a goal to consolidate that.”

The answer came in the form of a new seven-storey office block directly behind AIG’s offices. The two office blocks appear mirror images but the AWAC block has two extra floors. AWAC occupies the top six, while the ground floor is part of the AIG operation.

Planning the logistics of the office move involved many people, one of the keys being assistant vice-president Pegi Croucher who brushed up on facilities management at night classes to add to her knowledge of office relocations.

A crucial part of the move was ensuring the company’s computer system was not disrupted. That was achieved by putting in place two duplicate networks, one in the new office building running as a back-up to the network linking the five separate offices.

It took the best part of six months to complete the switch from the old system to the new. Mr. Carmilani said: “We ran redundant systems for the whole time. We had the system up and running here (in the new building) before we even moved here and we ran it in parallel at the same time.

“So we had two systems running at the same time so we would avoid mistakes or if one of them crashed. Then we moved the people and then we shut down the old network.” Looking to the coming year, AWAC will not be directly affected by the changes to Florida catastrophe insurance fund and Citizens’ Property Insurance Corporation following state legislators doubling the size of the state-sponsored funding.

“The changes will impact homeowners’ insurance and personal lines and the catastrophe-related insurance funds that go along with that and protect those areas. Our business is dominated by commercial business and large commercial business, we don’t usually participate in those sort of coverage or those kinds of pools,” said Mr. Carmilani.

“None of our existing business would be affected by that legislation. Indirectly there is always a possibility that those who provide insurance to those pools or funds will look to deploy their capital elsewhere and thus become competitive to us and that is always a possibility.”

He sees this year as a challenge because of the benign hurricane season in 2006, which means more competitive pressures on risks and rates amongst competing insurers and reinsurers.

As for working in Bermuda, Mr. Carmilani said AWAC has had no bad experiences with obtaining work permits, although a recent change in regulations requiring “proper credentials” for short-term business visitors, those who fly in for a few days, has caused a degree of frustration.

The AWAC president added: “But we are working through it. We have not had a bad experience with obtaining work permits for staff coming onto the Island, whether they be Bermudian or international.

“It is a longer process than most places around the world but it is not an impossible process. We appreciate and understand how this system has been designed. We do employ local staff wherever possible.

[bul] Three legal matters involving AWAC have been reduced to two in the past month after the dropping of a matter between Lexington and AWAC involving a dispute over a $15-million claim.

AWAC expects a Civil Investigative Demand in Texas to be concluded next week and has previously set-aside $2.1 million to cover the anticipated settlement to avoid any impact to its 2007 revenues.

A New Jersey district court matter involving 78 named insurers, including AWAC, is anticipated to have a much smaller settlement requirement than the Texas demand.

AWAC moves into new home