LONDON (Bloomberg) ? Bermuda-based Alea Group Holdings Ltd. will end underwriting in London and may cut jobs after selling the rights to renew business with some customers to Canopius Holdings Ltd.

Alea is in discussions with 125 London employees over potential job losses, the company said yesterday in a statement. The business, sold to Lloyd?s of London insurer Canopius for between $8 million and $12 million, had gross written premiums of $222 million in 2004, Alea said.

?The board of directors has decided to place Alea?s remaining London-based operations into run-off as soon as practical,? the company said in the statement.

The insurer is in discussions to sell other parts of the company after scrapping plans for a share sale to raise funds three months ago. Alea boosted reserves in the first half for US business written in prior years and has lost clients after its credit rating was cut by A.M. Best in September.

Alea in November forecast losses of as much as $80 million from Hurricanes Katrina and Rita and hasn?t provided an estimate for Wilma.

Shares of Alea, which have declined 43 percent this year, fell 3.1 percent to 111.25 pence in London.

The stock first traded in November 2003 at 250 pence a share in an initial public offering managed by Goldman Sachs Group Inc. and Merrill Lynch & Co.

Alea, which has a market value of 192.6 million pounds, is 39 percent owned by the New York-based buyout firm Kohlberg Kravis Roberts & Co., Bloomberg data shows.