Britain's Daily Telegraph newspaper has suggested that Bermuda-based Ariel Re is keen to mount a takeover of a Lloyd's of London insurer.

The paper cites unnamed sources in suggesting that Ariel could be the next Bermuda reinsurer to go shopping in London, following Catlin Group's acquisition of Wellington last year and Validus Re's takeover of Talbot Underwriting last month.

With more consolidation expected in the industry, the Telegraph reported that Bermuda reinsurers "are said to be scouring Lloyd's of London for further targets".

The paper led its story with a claim that Lloyd's insurer Canopius could be sold for an estimated $500 million after receiving several unsolicited takeover approaches.

Canopius, one of the largest privately owned Lloyd's insurers, is understood to have appointed corporate finance boutiques Fox-Pitt Kelton and Benfield Advisory to carry out a strategic review of the business.

The Telegraph added that people familiar with the matter said Canopius may opt against a sale in favour of acquisitions.

Canopius, formerly owned by US insurance group Trenwick, underwrites risks across a wide range of sectors, such as property, casualty, marine, energy, cargo and even some fine art.

The underwriter is majority owned by Englefield Capital, a private equity firm backed by Paul Myners, the chairman of Guardian Media Group, and Sir David Frost, the British broadcaster.