The week's winners
Domestic & General up 4.2%

Jardine Lloyd Thompson up 3.5%

The week's losers
Cox down 27.4%

Wellington Underwriting down 15.3%

Market rumours about Benfie …

The week's winners
Domestic & General up 4.2%

Jardine Lloyd Thompson up 3.5%

The week's losers
Cox down 27.4%

Wellington Underwriting down 15.3%

Market rumours about Benfield Group have been growing over the past week and finally erupted with reports of a New York flotation.

Morgan Stanley is said to be preparing for a float in the first half of this year, which may be worth $1.4bn (£995m).

The cash raised is likely to put Benfield on the lookout for acquisitions as well as providing rewards for star brokers.

The US investment bank will have spotted the chance for the London-based reinsurance broker to follow Willis.

Willis, the world's third largest insurance broker, has seen its shares nearly double to $24.80 (£17.65) since its flotation in June last year.

Insurance analyst Chris Rathbone of Williams de Broë said a US listing would make sense for the London firm.

"In the US you have quite a thriving quoted insurance broking sector - definitely not the case in the UK.

"You just have to look at Marsh, Aon and Willis.

"You would use [the money raised] not only for acquisition but incentivising your brokers."

Rumours of ambitious dealings have been circulating about Benfield since it bought US reinsurance broker EW Blanch last May.

The deal made the company the world's biggest privately-owned reinsurance intermediary, with pro forma revenues of $410m (£291.7m) in 2000.

But Benfield is not alone in its thinking.

Heath Lambert has been drawing up its own plans for a £500m flotation.

In the UK, quoted broker Jardine Lloyd Thompson's (JLT) stock rose 3.5% over last week, bucking the downward trend for insurance shares.

JLT started the week at 606.5p.

Among the insurance companies, worries had been growing about Domestic & General (D&G).

But the stock rose healthily last week on the back of a positive note from HSBC.

The source of optimism was the revelation in December that revenue for D&G's important warranty business was up 25%.

But HSBC analyst John Russell said investors shouldn't hold their breath to see results on the balance sheet.

"We revised our forecast upwards and talked about the potential for revenue growth.

"But this won't show up in results until some time next year because of the nature of the business.

"But this was returning the company to the growth state which it had enjoyed in the mid to late 1990s," he said.

Legal & General's stock reacted badly to the announcement on

24 January of new life business figures that, on the face of it, looked promising.

Despite coming up with a 32% growth in new business on an annual premium equivalent (APE) basis, the stock slid from 171p to about 162p and remained there early this week.

The company will no doubt be hoping the announcement of its non-life results on 28 February does not trigger a similar downturn.

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