Will more firms now head to market?

The �157m ($262m) offering is thought to have been oversubscribed more than 12 times, as investors rush to grab the first major UK flotation this year.

Just six companies risked a share offering last year, compared to more than 60 in 2000, at the height of the stock market boom.

But analysts believe the Benfield float - which is only open to institutional investors - could tempt a string of other companies to market.

Tempting

David Buick, of Cantor Index, said: "If it goes well, I think it is going to give the economy a sign that maybe we are on the mend again."

He said confidence had been dented by a string of high-profile companies - such as Yell.com and Focus Wickes - dropping plans to float amid market uncertainty.

Benfield shares closed at 280.5p, up 12% from the issue price of 250p.

Grahame Chilton, Benfield chief executive, said he was "very pleased" with the offer price and level of demand from "a wide range of institutions".

Benfield said net proceeds from the sale were �98.8m.