ICAT Holdings announced the creation of a new underwritingsyndicate at Lloyd's of London late last week, explaining that thesyndicate will have $200 million of gross capacity for U.S.catastrophe-exposed properties.

The new ICM Syndicate 4242 will commence underwriting businesson Jan. 1, 2007, Boulder, Colo.-based ICAT said.

According to ICAT, its long-term strategy has been to evolve itsbusiness from the underwriting manager model to that of a fullrisk-bearing insurer. In 2005, the company took its first steptoward the achievement of this strategy by establishing ICATSpecialty Insurance Company to underwrite wind-hail only policiesfor small commercial accounts in Florida and named hurricanecoverage for residential properties in Hawaii.

Jack Graham, chief executive officer of ICAT Holdings, saidunder the Lloyd's banner the company is "well positioned to servethe needs of more than 20,000 policyholders and our network of 450independent agents and brokers."

Syndicate 4242 has capital to support approximately $200 millionof gross written premium for its 2007 business plan.

ICAT said that capital has been supplied through a consortiummade up of ICAT and third-party investors, including ChaucerHoldings PLC.

The Chaucer Lloyd's managing agency subsidiary, ChaucerSyndicates, Ltd., will act as the managing agent for Syndicate 4242to provide operations and regulatory support, ICAT said.

ICAT said Chaucer currently has ?1 billion ($1.9 billion) undermanagement.

"Chaucer was attracted to working with ICAT due to itsreputation in the market as a disciplined specialty underwriter,"said Bob Stuchbery, chief underwriting officer of Chaucer.

ICAT's Gregory Butler is the Active Underwriter of Syndicate4242. Mr. Butler has held several underwriting positions at ICATand was previously deputy insurance commissioner in the CaliforniaDepartment of Insurance. He also served as the founding CEO of theCalifornia Earthquake Authority.

ICAT is a specialty insurance underwriter of small and middlemarket commercial properties located in catastrophe-exposed areasof the United States. Founded in 1998, the company reports itinsures more than 60,000 commercial buildings, with in-forcepremium of approximately $200 million.

Most agent and broker business produced for ICAT is transactedover the company's Web site (www.icat.com) where producers submitcoverage requests and secure real-time underwriting decisions andquotes, ICAT said.