Cathedral Underwriting is to launch a major new business operation after taking on two top underwriters from Faraday.

Simon King, with his deputy Robert Anglaret, will head a new direct and facultative property reinsurance unit at Cathedral.

The Lloyd's reinsurance specialist currently writes property and aviation catastrophe business.

Chairman Elvin Patrick said: "This will make us a three-legged rather than a two-legged business."

He said he hoped King would be writing business for Cathedral by the end of the year although his departure date from Faraday, where he is currently underwriting director for commercial lines, has yet to be finalised.

King spent more than ten years as a broker, placing North American property business before joining Faraday in 1995.

Patrick said King would eventually be joined by up to four others. Cathedral's premium income could be increased by 35% to 50%, Patrick said.

Its stamp capacity, currently at £160m, comprises £68m of its own capacity and £92m from Names. Patrick said the company had no plans to buy out its Names, but might try to increase its existing capital resources.

"If we were to increase Cathedral's funds at Lloyd's it's more likely to be through equity rather than borrowings," he said.

"We would prefer not to be higher geared."

King's arrival would keep Cathedral focused on short-tail business.

"Our business proposition is supplying intellectual property," Patrick said. "We only go into areas where we have serious expertise."