Bermudian insurer Axis Capital Holdings announced tonight it is acquiring Lloyd’s of London insurer Novae for $604 million.

Axis is paying 700p per share for the London-listed insurer — an approximately 20 per cent premium on today’s closing price.

Novae chief executive officer Matthew Fosh will join Axis as executive chairman, Europe, and will report to Axis CEO Albert Benchimol.

“A key component of our growth strategy is to have leadership positions, relevance and scale in each of the specialty risk markets where we choose to compete,” Mr Benchimol said.

“The acquisition of Novae is a great opportunity to accelerate the breadth and depth of talent, lines of business, and leadership positions that we are developing in the London market for specialty risks, advancing our growth and enabling us to better serve our clients.”

Axis said the deal would add scale to its international specialty insurance business, creating “a $2 billion insurer in the London specialty market anchored as a top ten insurer at Lloyd’s”.

Based on 2016 actual results, the combined company will have gross written premiums of more than $6 billion.

Mr Fosh said: “By joining Axis, we are becoming part of a global leader in specialty insurance and reinsurance. Axis is an ideal partner for Novae’s clients and our employees — and I am particularly enthused for our employees who will benefit from having access to the financial strength of a major global carrier and to the enhanced tools, support and resources required to grow our portfolio of underwriting businesses.”

He added: “Our organisations share like-minded corporate cultures grounded in a client-centric, innovative and entrepreneurial mentality. Moreover, our businesses are highly complementary, creating significant potential for our combined platform.”

In his new role, Mr Fosh will help guide the integration of the two businesses.

Axis added that Robert Forster, Novae’s chief underwriting officer, will have a senior underwriting management role on the leadership team of Axis’s international insurance division, which is led by CEO Mark Gregory.

Peter Wilson, CEO of AXIS Insurance, said: “By acquiring Novae, we are strengthening our position in the London market while bringing aboard a complementary business and tremendous talent. Novae is known for its market-leading underwriting talent, who we expect will thrive at Axis and we are so glad to welcome them to our team.”

The deal is expected to close in the fourth quarter of this year, subject to regulatory approvals.