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Hardy and Ark shelve 2010 Lloyd's sidecar plans

While Beaufort and Beazley remain on course to launch special purpose syndicates (SPS) for 1.1, fellow Lloyd's insurers Hardy Underwriting and Ark Underwriting have shelved plans to establish new sidecar style vehicles for the 2010 year.

Expansive Hardy - which has separately announced a reinsurance joint venture with Arig (see article 10) - decided last week to postpone plans to launch a special purpose sidecar syndicate (SPS) to sit alongside its existing Syndicate 382 in 2010.

Meanwhile, Ark Underwriting is understood to have been considering setting up a second SPS to go with its existing SPS 6105, the Names-backed vehicle that writes a quota share of its Syndicate 4020.

Hardy is thought to have pulled plans despite having received approval in principle from Lloyd's franchise performance directorate for the vehicle.

According to sources, the SPS was to reinsure 20 percent of the firm's property treaty account writing an estimated £18.7mn in premium income next year.

Underwritten by Hardy underwriter David Carson, the business would have been split 36 percent US and 64 percent international, including 15 percent European, 12 percent Japan, 9 percent Australasia and 9 percent Caribbean.

Hardy chief executive Barbara Merry told The Insurance Insider: "There are any number of different opportunities that we regularly assess and re-assess to ensure they still fit with our long term objectives.

"We do not have endless resources and so we have to prioritise and in that context we have today announced the launch of a joint venture with a partner in the Middle East which we believe will help us to achieve our business goals."

Ark's proposal would have seen it set up a second SPS to support further growth in short-tail lines that could have included additional underwriting hires, but the insurer is thought to have reined in plans as a result of the less optimistic picture that has emerged for rates in 2010.

Ark is already looking to increase stamp capacity on its Syndicate 4020 to £375mn for 2010, up from £250mn at the start of 2009 that was adjusted up to £300mn to take into account the impact of foreign exchange movements at Lloyd's mid-year coming into line.

SPS 6105, which currently has stamp capacity of £28mn, is expected to increase in size marginally to £30mn for the 2010 year.

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