Iron Trades, the mutually-owned insurance giant, has asked its American financial advisers to review its future – which might include a partial sale or possible conversion to plc status.

Either option would result in an influx of fresh capital – taking Iron Trades closer to its declared aim of becoming one of the top ten general insurers by 2005.

Senior Iron Trades' management refused to reveal the precise instructions to its American bankers Donaldson, Lufkin and Jenrette (DLJ), which is based in London.

One Iron Trades manager dismissed reports of the business review as ‘market rumour', something it would not talk about.

The move came to light after the publication of the insurer's interim results last week.

They showed pre-tax profits increased 44% on the first six months of 1998 to £16.4 million. Gross premiums for the insurance giant climbed by 11.5 % to £128.5m.

This was achieved despite intense competition and generally depressed premium rates. Iron Trades' main business is in employers' liability insurance, but extends into the household, motor and health care sectors.

DLJ was equally unwilling to comment. Its spokesman Andrew Walton of PR firm Smithfield Financial would say only: “DLJ is Iron Trades' appointed adviser and this is part of an on-going relationship as its financial adviser. We are investigating various alternatives for the development of the business.”

However a source close to Iron Trades dismissed suggestions that the insurer was set to ditch its mutual status.

The source claimed that demutualisation was not as attractive to a general insurer like Iron Trades as it is to a life insurer.

She explained that becoming a public limited company would not be as likely to unlock additional capital for Iron Trades as it would for life insurers with substantial cash reserves.

Iron Trades has assets of £220m and wrote £200m of business in 1998.