Bermuda needs to listen to the concerns of international business and act on them — or it may continue to lose international companies.

That is the view of Michael Fahy, chairman and finance spokesman for the Bermuda Democratic Alliance, speaking after insurer Allied World Assurance Company Ltd. announced its plans to move its domicile from Bermuda to Switzerland.

As reported in yesterday's Royal Gazette, the company said it intends to maintain its insurance and reinsurance operations in Bermuda, but added that some senior executives would relocate.

"What we all need to appreciate is that even the departure of a few key executives from one company means a detrimental knock on effect to the local economy from rental income, to staff redundancies, to loss of contracts for gardeners and pool cleaners," Mr. Fahy said yesterday.

"It means that other companies may not set up in Bermuda, since these key executives all mix in the same circles. Remember birds of a feather flock together. Inevitably when companies redomesticate more than a few executives disappear over time."

Mr. Fahy added that comments from insurance industry analysts Dowling and Partners were a warning shot across the bow of Government.

Friday's note to clients from Dowling, as revealed in this newspaper yesterday, predicted that Bermuda's "role as a major location of domicile is likely to shrink going forward". And it highlighted the increasing attractiveness of several European jurisdictions.

"We need to expand business opportunities in Bermuda and make comments like those from Dowling and Partners a thing of the past," Mr. Fahy said.

"We need to listen to the concerns of international business and act upon them.

"We need to actually implement recommendation from the Bermuda First Report. We need to once again make Bermuda the envy of the business world."

Yesterday, in a conference call on the proposed switch of domicile, Allied World chief executive officer Scott Carmilani said the move "will situate Allied World in a leading global financial centre, which has a strong reputation for political and economic stability".

He added that Switzerland's competitive corporate tax system would allow the company to maintain a competitive worldwide effective tax rate — something that the insurer's board and management considered critical for the ongoing success of the company.

"We will be retaining our Bermuda operating subsidiary as part of our global portfolio," Mr. Carmilani said.

"We remain committed to the Bermuda market and intend to keep a strong presence on the Island."

Chief financial officer Joan Dillard said she expected the company to benefit from Switzerland's tax treaties and good relations with the US and EU member states. The treaties, she added, would lower the company's risk of being impacted by new tax legislation.