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No sign yet of a specialty London or New York IPO

With Talanx's long-awaited IPO finally away and a generally well-received Direct Line float poised for 11 October, the prospects for insurance IPOs look better than they have for years.

However, to date there is no sign that the private equity backers of specialty players in Bermuda and London are looking more favourably on public offerings as a means of realising the billions tied up in their investment companies.

Talanx, Direct Line and prospective float PICC in China are trailblazers for the IPO cycle and it remains to be seen if the broader market is sufficiently impressed by their results to push ahead.

Specialty (re)insurers may also face issues around their prospective IPO valuations, with much of the specialty world trading near or below book value.

Private equity-backed Lloyd's insurers - including the well-regarded Cathedral and Ark, and Barbican and Antares - are not thought to be actively contemplating swelling the considerably diminished ranks of London-listed Lloyd's operators.

Apollo and CVC-owned Brit are thought to be in a similar position, while the expansionist Canopius has made it clear that it thinks that the IPO market will not support an attractive valuation.

Earlier this year, Canopius executive chairman Michael Watson said: "As things currently stand, I'm not saying that you couldn't get one done, but this whole sector is trading at a modest premium to historic book. By the time you take that into account you'd be lucky to list at book."

Similarly, there is little evidence that privately held Bermudians like Torus, Ironshore and newly founded Third Point Re are gearing up to test the market in the near term.

Hyperion looks the most likely of The Insurance Insider's universe of companies to go public as it now plans to list next year.

However, beyond that there is little evidence of a clamour from brokers to get onto the Stock Exchange. Cooper Gay, which has long had ambitions to go public, shelved its plans this year and is instead in the final stages of securing an equity investment from private equity house Lightyear Capital - which it will follow with a vast refinancing exercise. And fast-growing US wholesaler AmWINS has also recently chosen to bring in a new private equity partner in New Mountain rather than make an appeal to a broader investor base.

James Hunt, a financial adviser for Peel Hunt, explained earlier this year that insurers are not likely to be the first companies to take advantage of an improvement in the climate for IPOs.

He explained that at times when there are growth prospects people want a growth stock, like a technology company. It is only later in the cycle when investors have made money from growth in technology-type stocks that they will look for a diversifying play like insurance, he said.

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