Lloyd's managing agency Beazley has gone private, after its management completed a buy-out from Aon.

Beazley has also increased its underwriting capacity by £90m to a total of £215m for this year.

Aon bought 49% of the agency in 1997 and provided some of the dedicated capital. But as Beazley's syndicate 623 has been growing, Aon has been reluctant to increase its capital.

Andrew Beazley, director of Beazley, said: “We have been growing at quite a pace and Aon has found it hard to keep up with the risk capital.

“It is a consultancy business, not a risk-taking one, so six months ago we started working on a solution.”

Beazley said trade sales, venture capitals and mergers were considered, but eventually the two firms decided a management buy-out was the best solution.

Aon will remain in partnership with Beazley until 2004 and will then have the option to pull out of the risk-taking element entirely.

The managing agency was founded in 1986. It was originally a partnership of Beazley Furlonge and Hiscox, but in

1993, following the introduction of corporate capital in the market, Hiscox was bought out.

Aon said it believed the new arrangement was “the best platform for the Beazley business to move forward”.