Heath Lambert Capital talking to reinsurers in search for capital

Heath Lambert Capital Partners is currently looking for capacity on behalf of liability start-up Illium Insurance Group.

Heath Lambert Capital Markets managing director Alastair Rodger said: "The aim is to build a diverse capacity base. The management team will have its own capital vehicle and we're also looking at setting up a dedicated corporate member. We're currently looking at ways of capitalising that."

Rodger said talks were ongoing with reinsurers about providing capacity for the start-up.

The news came after Omni Whittington announced it has sold a majority stake in its Lloyd's managing agency to Illium Insurance Group.

The agency will be renamed Illium Managing Agency and will manage specialist Lloyd's liability syndicate, ILM 4040.

Omni Whittington will retain a 9.9% stake in Illium Managing Agency.

Omni Whittington chief executive UK operations Anthony Hobrow refused to rule out a possible IPO of Illium Managing Agency in the future.

He said that, though Omni Whittington viewed Illium as a long-term investment, the company would not stand in the way of a possible flotation.

"We will follow the fortunes of the majority shareholders," said Hobrow.

Subject to Illium receiving authorisation from Lloyd's and the FSA, Syndicate ILM 4040 will have a premium capacity of up to £100m.

Illium Insurance Group's intention to establish Lloyd's Syndicate ILM 4040 was announced last week.

The syndicate will commence underwriting for the 2004 year of account.

It will write third party liability, employers' liability and ancillary insurance.

It is expected that business will come from the UK (80%), the Republic of Ireland (10%) and overseas (10%). The syndicate will not write North American-domiciled exposures.

It is understood that Illium will target mid-market companies with a turnover of £1m to £150m.