Bermuda and London-based insurer `still in the game', says backer

Plans for a new £300m insurance company last week faced a "hiccup" as difficulties were encounterd in raising the cash to back it.

Market sources suggested that negotiations with private equity investors had hit potentially fatal difficulties.

Former QBE general manager Bob Grant admitted his plans for a Bermuda and London-based operation had stumbled, but insisted there was still life in the plan.

Grant set out earlier this year to raise £323.3m to write direct and reinsurance cover including liability lines.

Grant said: "There was a bit of a hiccup last week, but we're still in the game. Nothing's definitely on until it's done... but it's far from being definitely off."

He declined to give further details of the plans and said he hoped to be operating in Bermuda by the end of the year writing insurance and reinsurance.

Plans had got as far as choosing between possible names for the new company.

He insisted that fund raising, which has been ongoing since at least July, was "very advanced".

He denied that the continuing volatility of insurance stocks was making it difficult to persuade investors to sink money into his venture.

"That would only be a problem if people were looking to get a decent valuation. We are not looking for a valuation, we're simply raising money. We're not a trading company. There are some things that will fall into place by the end of the week and we should be in Bermuda by the end of the year."

The year-end reinsurance renewal season would be crucial to the fortunes of the planned business if it intends to take advantage of the strong rate rises expected to be seen across the market.