Canopius has confirmed it is looking to grow its business through acquisition, but declined to comment on a possible move for rival Lloyd's insurer Euclidian.

Canopius said it would grow through acquisition with the backing of Englefield Capital, the majority owner of Talisman Holdings, which bought the Lloyd's interests of the Trenwick Group at the end of 2003 and rebranded them Canopius.

Canopius chairman Michael Watson said: "In Englefield we have a business partner looking to find ways to help Canopius grow its business both inside and outside of Lloyd's."

Watson added that the insurer had already looked at possible acquisitions and continued to explore a number of options.

According to sources, Euclidian has held merger talks with Canopius but Capital Insurance Holdings, the owner of Euclidian, declined to comment on a tie-up with Canopius.