Hardy Underwriting Group will launch its new Syndicate 3820 on 1 January, 2007.

The syndicate will focus on more mainstream non-marine classes and will be led by former Chaucer underwriter, Patrick Gage.

The Lloyd's insurer said it expects to commence underwriting with a capacity of up to £75m.

Barbara Merry, chief executive of Hardy, said the recruitment of a team of underwriters was ongoing with two further key underwriting appointments being made.

Meanwhile, the group has seen its profits before tax fall in the first six months of 2006 from £7.7m in 2005.

Merry, said: "The profit before tax is ahead of market expectations at £6.1m.

Each of the underwriting years has continued to progress satisfactorily."

Despite the group's gross written premium also decreasing from £65.5m to £58.3m in the first half of 2006 and its combined ratio declining to 84.4% compared to 82.7% in 2005, Merry remained optimistic.

She said: "We have been busy in 2006 with our corporate activities and are now primed to take the business forward, enhancing income and profits considerably over the next few years and improving the return on equity dramatically if underwriting conditions permit.

"These are very exciting times for Hardy and we are making sure that our enthusiasm is channelled appropriately.

"We want to ensure that we do not lose sight of the need to focus on profitable underwriting and on maintaining a robust risk management environment."