Insurer to make a push into UK provincial market
SVB launched a £50m bond issue to fuel a major push on PI and D&O business - and set its sights on the provincial broker market.
The Lloyd's insurer announced the sale of 7% bonds due in 2008 and convertible into shares in the company at 61.2p.
The conversion price is at a 20% premium to SVB's share price.
The issue will help SVB boost its total managed capacity by 15% to £502m for 2004.
SVB plans a 58% increase in professional indemnity and management liability business to £125m gross premium income next year compared to £79m projected for 2003.
The move follows SVB's acquisition of a team of PI brokers from Brit who were formerly with PI insurer PRI.
SVB focuses particularly on UK solicitors and also covers Lloyd's brokers, the healthcare sector and US lawyers.
Its D&O portfolio includes private companies, not for profit organisations and the venture capital industry.
The company said the £50m from the bond issue would better balance its capital base, reducing its reliance on letters of credit which were becoming relatively expensive.
Underwriting review director Alan Nicholls said the company would pursue smaller risks from regional brokers to give it greater breadth in its PI book.
He said: "Where we are seeing scope for expansion is perhaps in some of the smaller risks that wouldn't normally come to Lloyd's.
"There's a fair amount of provincial business that we think we could access."