Collapsed Lloyd's insurer Cotesworth & Co is laying off staff following its decision last month to put its two syndicates into run-off.

The managing agency originally got into difficulties when its parent company, HIH Australia, went into liquidation in March.

The insurer provided the majority of its financial backing and Cotes-worth's syndicates marine 535 and non-marine 1688 began to look for a new capital backer. But in August they were forced to suspend underwriting with immediate effect, following failure to secure funding.

Cotesworth chairman and managing director Norman Britten said the lay-offs were inevitable.

"We currently employ around 80 staff. As we have ceased underwriting, we are obviously going to make staff redundant and we are just going through this process."

The company would not be drawn on numbers, but an employee who attended what he described as an "acrimonious" meeting last Tuesday said half the staff were going to lose their jobs.

Cotesworth is one of the oldest Lloyd's insurers and began trading at Lloyd's in 1855.

When the run-off was announced, Britten said it was a very sad decision for the company's board. But he said given the circumstances, there was no alternative.