Cox plans to increase the capacity of its specialist motor syndicate at Lloyd's by 20% for next year. The move will enable Syndicate 218, which trades as Equity Red Star, to take premiums totalling £433m, up from £361m.

A quota share deal would allow it to write a further 20% of capacity.

The company said it had enough capital to pay for its 57% share of the syndicate's extra underwriting.

Cox retail chief executive Neil Utley said the move was prompted by continuing good conditions in the motor market.

He said: "Our increased capacity will enable us to increase our gross premiums from the £600m we anticipate in 2002 to more than £700m in 2003."

Equitas surplus falls as its solvency margin rises