Insurer and reinsurer Hiscox said yesterday it would close a Bermuda-based specialist unit that it opened just three months ago, with the loss of two local jobs.

Robert Childs, chief executive officer of the company's Bermuda operations, said Hiscox would continue to employ 27 people on the Island.

Bob Forness, 43, who joined Hiscox as head of speciality reinsurance on September 1, will depart along with one other Bermuda-based employee and four others elsewhere in the world.

At the same time, Hiscox, which redomiciled to Bermuda from the UK three years ago, announced an expansion of its US business, with five new offices set to open by the end of next year in Boston, Miami, Lexington, Kansas City and Los Angeles. Mr. Childs described the moves announced yesterday as a "refocus" by the company, which is the third-largest underwriter at Lloyd's of London.

"We employed a small team around the world, a specialty reinsurance group, for a short period of time," Mr. Childs told The Royal Gazette. "We have decided not to pursue that, because of opportunities in the US, and so they have left.

"Our property catastrophe reinsurance operations are based in Bermuda and we are actually looking to expand that business."

The decision to close down the unit did not reflect any concern over Bermuda as a place for doing business, Mr. Childs added. "We came here in 2005 and I am as confident in Bermuda now as I was then," he said. The group's chief executive officer Bronek Masojada told Bloomberg: "The insurance world has changed massively since August and we decided to focus on areas we are already active in because it's more familiar to us. Prices are going up. We're more likely to see this in America than in the UK."

Hiscox said yesterday that its US operations would set up new lines in property, construction and inland marine insurance. It also announced ten appointments to strengthen its terrorism, media and technology, small ticket directors and officers, and equine teams.

The struggles of American International Group (AIG), the biggest insurer in the US, has opened up huge potential opportunities for rivals who are sufficiently well capitalised to take advantage.

AIG was brought to its knees by its massive exposure to credit-default swaps and has been bailed out to the tune of more than $120 billion by the US taxpayer. Last week, Hiscox was upgraded to A from A- by Standard & Poor's, based on the company's strong operating performance, diversified business structure and strong capitalisation.

"The tide is continuing to turn in our favour," Mr. Masojada said in a company statement. "The changing insurance market has presented us with a number of excellent opportunities, particularly in the US, and we are enhancing our local expertise to take full advantage."

Hiscox fell three pence (one percent) to 304 pence in London Stock Exchange trading yesterday.