Heritage takes off

There was good demand for Heritage Underwriting as first-day dealings got underway in the specialist Lloyd's insurer.

Shares in the stock were placed at 75p on Tuesday and rose to as high as 78.5p, in a placing, which raised £15.4m before expenses. The company said it was raising the money "to support current growth in underwriting (increasing managed capacity for the current year from £230m to £265m), to capitalise on the favourable market conditions brought about by the 2005 hurricane season, and to support a new team in underwriting personal accident risks".

Market sources, however, said Heritage had wanted to raise up to £50m by joining Aim, but had to scale it back due to weaker stock markets. Still, at least it got its listing off the ground - specialist investor CBS Insurance Holdings has decided to pull the stock flotation of a £100m investment vehicle called ICP.

Wellington Underwriting has also been a focal point in recent trading sessions.

It is understood to have attempted to buyout the Names on its syndicate 2020, offering its 1,400 to 2,000 third-party investors around 20p for every 100p of capacity they provide.

Members agents are said to have rejected the deal, which would have cost Wellington about £53m to buyout its Names and may well have led to the insurer tapping the stock market for money to fund the deal.

As Insurance Times went to press, Wellington was trading at around 84.5p.

' Yvette Essen is stock market reporter for the Daily Telegraph