Lloyd's said its half year combined ratio had improved to 87.3 compared with 85 for 2004, which it said compares well with its international peers.

According to the market's figures, the average combined ratio for U.S. property-casualty insurers was 93; for U.S. reinsurers, 105.8, and for European insurers and reinsurers, 92.9.

Lloyd's noted that a reduction in gross written premium to ?8.40 billion ($15.04 billion) compared from ?9.84 billion ($17.46) for the first half of 2004 reflected underwriting discipline, in response to "an increasingly competitive rating environment in the first half of 2005."

It said that resources of the Society and members in the first half of 2005 are up 4.9 percent to ?11.98 billion ($21.44 billion) over the corresponding 2004 period of ?11.42 billion.

Lloyd's Chairman Peter Levene said the results "reflect the market's ability to respond effectively to more competitive conditions, with a clear focus on underwriting profit."

He added that "Hurricanes Katrina and Rita were vivid illustrations of the increasing severity of natural catastrophes and the complex world of risk in which Lloyd's underwriters operate with distinction. Our policyholders in the affected U.S. states can rest assured that Lloyd's will once against meet all of its obligations, and play a full part in the recovery of that region."

According to Lloyd's Chief Executive Nick Prettejohn, first half performance was driven by "a combination of disciplined underwriting and a relatively benign claims environment, and put Lloyd's on a strong footing, even as rates declined from their peak across many areas of business in the first six months."

He said the hurricanes were a reminder that insurers' full year results are influenced significantly by the extent of catastrophic loss, and most notably this year by the severity of the windstorm season.

"Katrina, in particular," said Mr. Prettejohn, "will have a significant bearing on full year profits. With three months left of the year, the North American hurricane season not yet over and the full impact of Katrina and Rita not certain, it is not possible to draw any firm conclusions about the full year result."

In Mr. Prettejohn's estimation, "The hurricanes are also likely to have the effect of stemming the softening of rates in a number of classes of business, and indeed in some rates are now increasing.

"Lloyd's capital position is strong and stable," he added. "The solvency ratio has continued to improve, from 300 percent at the end of 2004, to 375 percent at the end of June."