A special purpose acquisition company has launched a new listed business providing investors access to the Lloyd’s of London Insurance market. 

Financials Acquisition revealed it had set up London Innovation Underwriters (LIU), with which it intends to merge in order to raise significant amounts of capital via a listing on the UK capital’s stock exchange.

It believes the combination would create an ‘efficient vehicle’ enabling investors to build exposure to the market without needing to fork out goodwill payments or create additional fee structures.

LIU plans to access the Lloyd’s insurance marketplace through London Bridge 2, a platform that makes it easier for participants to deal with insurance-linked securities investors.

Financials said it expects LIU to have enough capital to support up to £1billion of capacity upon completion of the merger.

SPACs are blank-check firms formed specifically to raise capital through an initial public offering with the intention of buying another company.

They boomed during the height of the Covid-19 pandemic, especially in the US, as businesses sought a way to go public in a faster and cheaper way.

However, their popularity began to plunge in 2022 following a spate of high-profile bankruptcies, as well as rising interest rates and economic uncertainty.

Will Allen, chief executive and co-founder of Financials Acquisition, said: ‘We believe LIU will offer a unique opportunity for investors to gain efficient access and diversified exposure to the Lloyd’s market with liquidity.

‘We are pleased with the initial reaction we have received from both investors and underwriters and look forward to the next stage of the transaction.’

Allen, an ex-managing director of investment bank KBW, set up Financials last year with former Munich Re executive Andy Rear through a partnership vehicle called Finsac.

Financials’ announcement comes a day after Lloyd’s declared a pre-tax profit of £3.9billion for the first six months of 2023, having made a £1.8billion loss in the same period last year.

Earnings were driven by solid investment returns and underwriting profits more than doubling to £2.5billion, thanks to a decline in large loss events.

Gross written premiums jumped by 22 per cent to £29.3billion due to rising prices and growth from both new and existing syndicates.

John O’Neal, chief executive of Lloyd’s, said the results ‘show we are now driving consistent improvement in profitability and an ability to grow sustainably. This performance puts us in a strong position for the second half of the year.’

Britain’s Lotus Cars produced a record number of new sports vehicles in the first half of the year, as the automaker gears up for an initial public offering in New York. 

Under its Chinese owners, Geely, the group is also ramping up production and sales of a new electric SUV this year. 

Lotus produced 2,200 vehicles at its Norfolk factory, which is in a former second world war bomber factory, in the first six months of 2023.

Its order book grew to 17,000 vehicles worldwide for the Eletre, Lotus’ first electric ‘lifestyle hyper-SUV’, and Emira, a mid-engine sports car. 

The bulk of the vehicles built during the period were the Emira sports car. 

Lotus produced over 2,200 Emiras in its UK sportscar manufacturing facility, representing a 381 per cent increase from last year. 

The Emira was the first new car launched by Lotus since Chinese-owned Geely snapped up a 51 per cent stake in the business in 2017.

Customer deliveries for Lotus’ electric SUV began in China at the end of March, and the carmaker expects to deliver to UK and European customers later this summer. 

Feng Qingfeng, the boss of Lotus Group, said: ‘We set an ambitious goal in 2018, with the launch of our Vision80 strategy to transform the business from a traditional automotive brand to become an all-electric, luxury, mobility provider in ten years.

‘We have spent the last few years laying the foundations for success and today’s announcement demonstrates that Lotus is no longer the same business that it has been in previous years. 

‘We are firmly on track to becoming a global performance brand by 2028.’

In an update statement, Lotus added: ‘Lotus plans to further ramp up production and sales for the second half of the year and expects the full year to surpass all previous years.’

Lotus, which marked its 75th anniversary this year, expanded its global retail network to 193 stores in the first half, opening 24 new outlets. 

The group also expanded into into South Korea, one of the biggest luxury car markets in the world, where Lotus has a partnership to sell Lotus motors with regional automotive retailer, Kolon Mobility Group.

Geely has ploughed around £3billion into Lotus ahead of the planned listing of its electric car business on New York Nasdaq’s stock exchange. 

Rather than opt for an initial public offering, it will float via a merger with a special purpose acquisition company, backed by LVMH, the luxury goods group controlled by billionaire Bernard Arnault.