Gerling is being stalked by a formidable beast. US private investor Cerberus, named after the mythical gatekeeper of Hades which had three wild dog heads and a serpent"s tail, is understood to be in due diligence with the German insurance giant. Three heads would be very useful in this deal as Cerberus wants to devour the whole group, including the general and life businesses plus a holding company, and use the insurance company as a stepping stone into the German market.

But the highlight on the markets this week was "record" profits from Atrium Underwriting against hurricane gross losses of £23.4m. It declared end of year pre-tax profits of £33m, up by 75% on £18.8m on 2003 figures.

Underwriting profit was £20.9m, "managing agency activities" amounted to £11.7m and investment activities brought in £1.2m.

Gross written premiums were £143m, 11% less than in the previous year, with net combined ratio for the managed syndicate at 82%.