David Green, chief executive of think-tank Civitas, baulked at the prospect of the 327-year-old Lloyd’s of London market losing its British identity. 

‘There is a lot to be cautious about with foreign takeovers. Over the long term there is often a loss of value and it is bad for the economy, even if the share price shoots up initially.’

He added: ‘Quite often big takeovers are driven by the interests of executives and not the long term interests of shareholders. These deals are often very bad for the City, and result in job losses.’

Yesterday’s capitulation comes just two weeks after Amlin’s chief executive Charlie Philipps insisted the firm was ‘not for sale’.

Everybody has a price: Only last month Charles Philipps said Amlin was not for sale but today the chief executive revealed he had changed his mind 

If shareholders back the deal it would leave just four quoted Lloyd’s of London insurers left – Beazley, Hiscox, Lancashire and Novae.

Eamonn Flanagan from Shore Capital said these all might be gobbled up as part of the ‘feeding frenzy’ in the market.

London-quoted underwriter Catlin Group – which was domiciled in Bermuda – was bought for £2.8billion by Dublin based XL Group in January. Brit Insurance was snapped up by Canada’s Fairfax Financial for £1.2billion the following month.

Japanese groups have spent almost £11billion so far and account for three of the top five deals – including Tokio Marine’s £4.9billion deal to buy Texas-based HCC Insurance.

The flagging Japanese economy and the frequency of natural catastrophes have prompted the country’s insurers to look for opportunities overseas.

More generally, falling premiums and weak investment returns have fuelled a surge in acquisitions across the sector. 

Mitsui writes property and household insurance in Japan but said buying Amlin would help expand its international business. 

Flanagan said: ‘This is a stunning deal which will bring more premiums in. It is a huge vote of confidence in the UK and Lloyd’s of London in particular.’

David Buik from broker Panmure Gordon said: ‘I’m a free marketeer. If a foreign company is prepared to pay the right price – and it is approved by shareholders and regulators – I’m all in favour.’

Although Mitsui has not disclosed cost-cutting plans, Amlin boss Philipps played down the prospect of significant job losses amongst its 1,900-strong workforce.

RSA yesterday said it is selling off its Latin American arm to Columbia’s GrupoSura for £403million in cash in a deal which could ease its takeover by rival Zurich – which has informally offered £5.6billion for RSA – as well as shore up its finances.

Ben Cohen, insurance analyst at Canaccord Genuity, said the sale may make Zurich more likely to buy RSA because it will have to raise less cash to finance the bid.

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