It is understood that Brit Insurance has appointed big four tax and business consultancy firm Ernst & Young to study alternative options for the company's current corporate set up.

Neither Brit Insurance nor E&Y have commented publicly on the reports, but the Lloyds insurer has criticised the current UK corporate tax regime in the past and is expected to announce in its interim results next week that it is reviewing its taxation position.

Several alternative jurisdictions are likely to be under consideration by the company and E&Y, although Bermuda, a specialist offshore insurance jurisdiction, will be sure to figure near the top of any shortlist.

A number of high-profile Lloyds insurers have defected to Bermuda in the recent past, including Hiscox and Omega. Indeed, in December 2006, Brit Insurance announced that it was establishing a specialist reinsurance company, Norton Re Insurance Limited to write catastrophe retrocession business from Bermuda.

With a corporate tax rate of 0%, Bermuda is understandably a strong lure for London-based insurers which have until recently been paying corporate tax at 30%. Bermuda's proximity to the lucrative US market is also a major factor in the jurisdiction's favour.

Ireland and Switzerland are also likely to be in the frame for the company's new tax domicile.