Bermuda insurance group, Lancashire Holdings, could begin trading in the London market as early as 1 October after receiving approval from the FSA.
Lancashire Insurance Co (UK) has obtained authorisation from the FSA to commence underwriting, and has been assigned an A- (excellent) financial strength rating by AM Best.
It will specialise in the same lines as the group's Bermuda subsidiary, which will include worldwide property, energy, marine hull, aviation and terrorism.
Greg Lunn, general counsel and vice president of Lancashire, said: "Although we are three-quarters of the way through 2006, the UK platform gives us opportunities to commence underwriting from London right away.
"In addition, the London platform clearly gives us an entrée into the European market through the Freedom of Service [provisions], which Lancashire does not have in the same way with its Bermuda subsidiary.
"It is an enhancement most definitely," he added.
Lunn said the UK company would continue with its ongoing recruitment drive and said it had not ruled out expanding into other product lines in the future.
The London business will be led by chief executive Paula Porter and head of underwriting Alex Maloney. Richard Brindle will continue as group chief executive.