Bermuda-based insurance company Trenwick yesterday said it had reached an agreement in principle with its Lloyd's letter of credit providers which would allow it to carry on underwriting at London insurance market Lloyd's in 2003.

The company had been actively negotiating the extension on its letter of credit since October after it posted large losses in the third quarter and restated results for 2001 and the first and second quarter of this year.

The letter of credit providers have agreed in principle to the renewal of $182 million of letters of credit supporting Trenwick's Lloyd's underwriting operations.

With additional capital provided by Trenwick and its previously announced agreement with National Indemnity Company, an affiliate of the Berkshire Hathaway Group, Trenwick's anticipated Lloyd's underwriting capacity for 2003 was said to be $500 million.

Chief executive officer of Trenwick Managing Agents Limited Michael Watson said in a press statement: "I am delighted that we are able to confirm our plans for 2003. Trenwick's Lloyd's capacity in 2003 will allow it the flexibility to develop its business next year and participate further in market conditions which we believe will continue to be very favorable."

Trenwick also announced that it had retained Greenhill & Co, LLC as its financial advisor.

In addition, Trenwick also said yesterday that Trenwick International Limited, its specialty London market insurance company, had ceased to underwrite new business. Trenwick will continue to administer and pay claims in connection with the insurance policies previously underwritten by Trenwick International Limited.

The company said it would record a charge in the fourth quarter of 2002 for the expenses it expected to incur in connection with the termination of Trenwick International Limited's underwriting business.