Chaucer boosted its liability book by 25% after taking on Kiln's syndicate 1204.
The syndicate specialises in US medical malpractice insurance.
It is expected to be merged into Chaucer's Syndicate 1084 along with four of its staff.
Syndicate 1084 will acquire the renewal rights to 1204's business but will not assume liabilities for business written by Syndicate 1204's in the past.
Chaucer chief executive Ewen Gilmour said the group would write about $10m of US medical malpractice business. It would increase Chaucer's interest in liability business by about 25%.
Under Kiln's management, Syndicate 1204 had £28m of capacity for 2003.
Its result for 2001, the most recent figures available, is forecast to be a loss of between 18% and 33% of its capacity which was £23m.
Kiln had already substantially pulled away from backing the syndicate this year. It provided just 10% of the syndicate's 2003 capacity, with the remaining 90% coming from US group SCPIE. Kiln chief executive Edward Creasy said the group was focusing on short tail business.