BRIT Insurance Holdings PLC, a leading participant in the Lloyd’s market, announced plans to raise around £204million ($316 million) through a rights offering.
The company plans on using the funds to increase its capitalization and capacity to underwrite more business in what most analysts are now calling a rapidly expanding market. In fact the Lloyd’s market seems to be attracting a lot of interest these days.
Another Lloyd’s insurer, Hiscox plc, announced plans earlier this month to raise £100 million (155 million), and last Friday Warren Buffet’s Berkshire Hathaway agreed to increase the underwriting capacity of Trenwick Group’s Syndicate 839 by an additional $93 million. (See IJ website Sept. 20). Berkshire will also support an additional $119 million increase in capacity via a “qualifying quota share reinsurance facility.”
BRIT may also need the funds to cover the now chronic problem of falling investment values. The company reported an interim 2002 operating loss of £3.7 million ($5.74 million), compared with a £2.1 million ($3.26 million) operating profit a year ago. In a familiar pattern the company at the same time announced that gross written premiums had reached £397 million for the same period, a 94% increase compared to 2001.
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