The consolidation of Lloyd’s insurers has been keenly anticipated among the brokers in the City wine bars but the failure of Brit’s bid for smaller rival Chaucer this week shows how difficult it is to put a deal together in the sector.

Conditions this year have made it increasingly beneficial for dominant participants to emerge. After a difficult 2008, when syndicates suffered heavy losses, they are now expecting a period of rising premium rates, particularly for catastrophe business. Reduced competition from overseas should also help improve returns.