THE insurance industry has faced a tough time during the recession,

but there are signs that the worst may be over, which has prompted

Lombard Insurance to seek a listing on the London Stock Exchange.

It is coming to the market in a placing and intermediaries offer

sponsored by Charterhouse Bank. Brokers to the issue are Charterhouse

Tilney Securities.

The issue price of 160p per share values the company at #57m, some #3m

lower than had been hoped for. This reflects the downturn in the London

stock market in recent weeks.

On the basis of the forecast net assets at June 30, 1994, of 146.0p

per share and of pro forma forecast earnings per share for the year of

17.3p, the issue price represents a premium to net assets of 9.6% and a

price earnings multiple of 9.3 times.

The notional dividend yield, based on a notional dividend of 7.7p net

per share, is 6p at the issue price.

The company's principal subsidiary, Lombard General Insurance, is an

authorised general insurance company writing commercial and personal

lines business in the UK provincial market. It has nine UK branches,

including a small but growing office in Glasgow, which has its own

commercial business portfolio.

Lombard is small in national market terms with just 0.5% market share,

but it is more interested in quality rather than quantity of business.

To that end it deals with 1000 brokers and within that, a circle of

under 100 preferred brokers who provide 18% of its motor business and

33% of the commercial portfolio. It concentrates on low to medium risk

with no exposure to the London market and has therefore traded ahead of

many of its rivals during the recession.

Direct insurers such as Direct Line have attracted a lot of attention

in recent months, but Lombard's managing director, Andrew Laing, is

confident of the group's growth potential. This will come through

increased business for niche groups.

It has specialist businesses providing deposit guarantee cover for

house purchasers, motor policies for driving schools, older

motorcyclists, golf clubs, sailboards and companies with the BS5750

quality standard. Niche areas tend to be less price-sensitive and

competitive, enabling the group to at least maintain margins.

Application forms for the intermediaries offer should be submitted by

10am on Friday, May 13. Shares dealings are due to commence on

Wednesday, May 18.