Beazley approaches Hardy Underwriting - UPDATE

A merger of Lloyd's of London underwriters could be on the cards after Beazley said it is interested in acquiring rival Hardy Underwriting.

While Beazley has reassured that this does not represent a firm intention to make an offer, it did confirm its interest in "entering into exploratory discussions" with Hardy.

Hardy revealed on 1 December that it had seen several "expressions of interest" in the business.

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As a result of this, and after an extremely tough year for the industry which saw some of the worst catastrophe claims in history, the board announced that it should undertake a strategic review

"This review will include consideration of whether shareholder value might best be maximised and business opportunity might be enhanced by finding a buyer or strategic partner" Hardy said.

Hardy had previously said that it is too early to accurately predict the extent of losses related to the severe flooding in Thailand. Its best guess for the net loss after reinsurance could be somewhere between £10m and £25m.

"Hardy has sufficient liquidity and capital to absorb these losses from Thailand and funds have been lodged at Lloyd's to support the 2012 year of account business plan."

JH & BC