Kennedys is in early-stage merger talks with top-tier aviation outfit Gates and Partners, in a move which could see the insurance firm branch out into the lucrative aerospace market for the first time.

If the tie-up goes ahead, it will see Kennedys move into a sector currently monopolised by a small number of firms including Clyde & Co, Holman Fenwick Willan and Norton Rose. It is understood talks between the two firms started in recent weeks.