Lloyd's managing agent Hardy said it would be offering up to £5m in political risk capacity in 2005.

Hardy entered the political risk market in May of this year with the appointment of experienced political risk underwriter George Doughty, formerly an underwriter at Faraday Syndicate 435.

Hardy chief executive Barbara Merry said this week that the insurer was unlikely to write political risk business in Iraq but would not rule it out. Merry said Hardy would have around £4m-£5m of political risk capacity available next year.

Merry added that Hardy would be selective in the risks it writes.

"George [Doughty] reviews around 200 risks a month, but he will only write around 150 risks a year," Merry said.