Lloyd's insurer Brit Insurance Holdings is reported to have tabled a £156m bid to takeover PRI Group.
In an announcement to the stock exchange this morning, Brit revealed it has offered 120 pence a share to buy the insurer.
Brit said the combined operations of Brit and PRI would be well placed to take advantage of the continued hard market.
In addition, Brit's directors claimed that the combined operation would benefit from a lower solvency requirement than currently applies to PRI.
A Brit statement said: "The acquisition of PRI, along with Brit Group's growing presence in the UK small to medium commercial insurance sector, should further strengthen Brit's position in the UK insurance market."
