June 3 (Bloomberg) -- Amlin Plc, the biggest insurer in the Lloyd’s of London market, will buy Fortis Corporate Insurance NV for 350 million euros ($500 million) in its largest acquisition as it seeks to expand in areas not related to catastrophe coverage.

The purchase of the Fortis unit, a provider of corporate property and casualty coverage in the Netherlands and Belgium, will lift Amlin’s earnings in 2009, the London-based company said today in a statement. The insurer said in a separate statement that it raised 76.4 million pounds ($126 million) selling 23.5 million shares at 325 pence apiece to help fund the deal.

“The acquisition represents a step change in the development of our organization,” Chief Executive Officer Charles Philipps said in the statement. “The balance we will achieve both between catastrophe and non-catastrophe exposures, and between insurance and reinsurance risks will add further stability to our book of business and a foundation from which to target further growth.”

The Netherlands bought Fortis Corporate Insurance in October, after the parent company ran out of short-term funding as customers withdrew deposits and credit markets froze. The Dutch state paid 16.8 billion euros for Fortis’s Dutch banking and insurance units and its stake in ABN Amro Holding NV.

Amlin added 0.7 percent to 341.5 pence in London trading, giving the company a market value of 1.69 billion pounds.

“This is a good buyer that was prepared to pay a high price,” Dutch Finance Minister Wouter Bos told reporters in Amsterdam. “The selling price is about equal to the purchasing price.” The Netherlands and Amlin agreed there won’t be any forced layoffs in the next two years, Bos said.

The acquisition comes as premium rates rise following claims from Hurricane Ike last year and the credit crises squeezed the amount of capital available for underwriters. Amlin joined the FTSE 100 Index of leading U.K. companies last year.

To contact the reporter on this story: Jon Menon in London at jmenon1@bloomberg.net

Last Updated: June 3, 2009 11:48 EDT