XL’s purchase of Catlin could encourage acquisition raids from Bermuda on the Lloyd’s market.

That’s the view of Eamonn Flanagan, an equity analyst at Shore Capital.

Mr Flanagan told Best’s News Service the $4.1 billion deal announced last Friday “might embolden other Bermudian players to take a pop at some of the Lloyd’s vehicles”.

“I think it’s a terrific deal for Catlin shareholders, and full credit to management for eking it out,” Mr Flanagan said.

The analyst Flanagan suspects XL made “tweaks” to its original proposal to make it more attractive to UK shareholders. The changes would have involved the payment of the dividends, he suggested.

Catlin will pay a final dividend of 22 cents per share in the first quarter of this year, the company announced last week.

Mr Flanagan said the deal has reduced the number of barriers to potential mergers and acquisitions activity. M&A thinking had been on the companies worth less than £500 million ($756 million), he said.

XL is paying more than five times that amount for Catlin.

Although Catlin is based in Bermuda, it started out on the Lloyd’s market where it is the largest underwriter.

XL is now based in Ireland, but started up in Bermuda in 1986 and still has substantial underwriting operations on the Island.