A former general manager of QBE Europe is setting up a new $500m (£332.3m) insurance company that will operate out of London and Bermuda.

Bob Grant, who left QBE in October 2000 after a well-publicised fall-out with QBE Insurance Group chief executive Frank O'Halloran, said: "We're in the process of raising capital and we hope to be up and running later in the year."

He added that the operation, which has yet to be named, wanted to raise £332.3m of capital from private equity sources and that it would operate in the insurance and reinsurance markets.

"It's difficult to give too much information because of the stage we're at in capital raising," he said. "We'll be better positioned in mid-September to provide more details."

When established, the new company will be the latest in a series of new operations set up to take advantage of the sharp rise in insurance premiums since 11 September.

Recently established operations include Wellington Re, Goshawk Re, Axis Specialty and PRI Group.

One reinsurance broker said the market had suspected for some time that Grant was raising capital to set up a new risk-taking entity.

"Bob is great networker and he's well respected," he said. "If he's going to do it [set up the new company], it should be in the next two or three months, for this year end. It's a great time to do it. All rates are very rosy at the moment."

Meanwhile, ratings agency Standard & Poor's (S&P) has assigned its A counter party credit and insurer financial strength ratings to newly established Wellington Re.

S&P analyst Marcu Rivaldi said: "The ratings reflect the new company's strong and largely established business position, very strong earnings prospects, proven management team and control structure, and extremely strong capital base.

He said factors that weighed against the rating included cyclical nature of the classes of business that Wellington Re focuses on and the nature of its investor base.

The company's launch was marred by contoversy last week when dissident Names tried to block the crucial vote to establish the new company.