Lloyd's broker Holman's is set to expand its £1m underwriting arm Holdfast by 25% in 2004.

Holdfast underwrites marine hull and cargo business as well as some small commercial risks.

The business generates annual premium income of around £1m.

Holman's chief executive Andrew Holman confirmed this week that, following the implementation of a new IT system, the broker was planning to grow the business by around 25%.

Last year, Holdfast launched a new scheme to address the lack of cargo capacity following the outbreak of the war in Iraq.

The scheme was established to underwrite approved cargoes by sea, air, road, rail and post.

The cost of cover for cargo ships doubled overnight following the outbreak of the Iraq war. The cost of insuring an oil tanker in Kuwait increased by 50% to £127,000.

Industry sources said the sudden sharp increase was because cover for cargo ships was sold in seven day blocks to allow moderation of rates as conditions change.