Beazley Says To Raise 150 Mln Stg, Move Tax Base

Horton said Beazley was not interested in bidding for non-life insurer Chaucer Holdings.

Lloyds of London insurer Beazley Group PLC announced plans to raise 150 million pounds ($213 million) to exploit growth opportunities and fund the $35 million acquisition of U.S. underwriting firm First State.

The non-life insurer also said on Friday it would follow other British companies in creating a new parent that will be tax domiciled in Ireland.

Chief executive Andrew Horton said the move will enable Beazley to stay competitive as many rivals already benefit from tax advantages.

"Many of our peer group in the UK and elsewhere can get benefit from lower tax. Its very difficult for us to compete without doing it as well," he said, adding other insurers may follow suit.

The world's second-biggest advertising group, WPP, drugmaker Shire, and media group UBM all announced plans last year to move their tax domicile to Ireland.

Horton said he was targeting a 10 percent reduction in tax bills as well as long-term expansion in the Europe market.

Beazley also reported a 37 percent fall 2008 pretax profit to 87.2 million pounds. Gross written premiums were 12 percent higher at 876 million pounds. The final dividend was set at 4.4 pence. Its shares were up 3.2 percent at 112 pence by 0845 GMT.

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Beazley said the 150 million pounds additional capital, net of expenses, would be raised through a placing and fully underwritten 9-for-19 rights issue at 86 pence, a 21 percent discount to Thursday's close at 108.5 pence.

The rights issue is supported by large shareholders, Horton said, adding 100 million pounds would be used for growth, with major opportunities seen in energy, commercial property and reinsurance lines.

A general rise in insurance prices is anticipated across in 2009 as underwriters react to multi-billion dollar hurricane losses in 2009 and lower investment returns.

"We have had great support from our key shareholders ... certainly the large ones (shareholders) are going to take up the shares," he said.

The support comes despite competition from other insurers calling on shareholders for cash. Lloyds peer Catlin unveiled a 200 million pound rights issue on Thursday aimed at helping it exploit stronger market conditions in 2009. Chaucer is also raising fresh capital.

Beazley said it was buying First State Management Group, a U.S. underwriter specialising in commercial property, from Hartford Financial Services Group for $35.4 million in cash, to boost the group's presence in the U.S. market.

Horton said Beazley was not interested in bidding for non-life insurer Chaucer Holdings.