LONDON (Bloomberg) — Omega Insurance Holdings Ltd. increased its underwriting capacity at the Lloyd's of London market by acquiring an 18.3 percent stake in Syndicate 958 with a stock and cash deal.

The Bermuda-based insurer will now underwrite 34.7 percent of capacity on the syndicate. Members accepted an offer of 0.332 new common shares for each pound of capacity in respect of £5.4 million, and 16.1 million pounds in cash for the remaining £40.4 million of capacity, the company said in a statement today.

"The fact that we had such a good take-up on our offer confirms it was the right thing to do," chief executive officer Richard Tolliday said in a telephone interview. "We expect the strengthening of the market to continue through this year and 2010."