Lloyd's 2009 opening capacity was estimated at ?17.4 billion ($28.4 billion), and with new players entering the Lloyd's market during 2009, Aon Benfield estimated current capacity at ?17.6 billion ($28.7 billion).

While the investment approach of Lloyd's remains conservative, the corporation has benefited from improved investment market conditions in the second quarter of the year, according to the study.

Equities and alternative investments each accounted for 2 percent of Lloyd's total invested assets at June 30, while cash and letters of credit accounted for the largest proportion of invested assets, at 35 percent of the total.

Corporate and government bonds accounted for 32 percent and 29 percent, respectively; around 72 percent of Lloyd's corporate bond portfolio was rated "AA" or "AAA."

Lloyd's also took advantage of favorable market conditions to repurchase ?102 million ($166.55 million) of subordinated debt during the period, generating a gain of ?36 million ($58.78 million) for the Central Fund, Aon-Benfield said.

Dominic Christian, chief executive officer, international of Aon Benfield, said: "Lloyd's has continued to prosper during 2009, most significantly with the resolution of the Equitas deal in June. Lloyds' capacity structure in 2008 meant that it did not suffer the same level of capacity loss as other global reinsurance and insurance markets."

Equitas was established in September 1996 to reinsure and run off the 1992 and prior years' non-life liabilities, primarily asbestos claims, of Names at Lloyd's. In October 2006, National Indemnity Company, a member of the Berkshire Hathaway group, reinsured and took on the run-off of all Equitas' liabilities. Phase 1 of this transaction was completed in March 2007.

Phase 2 was completed on June 25, when the High Court made an order approving the transfer of the 1992 and prior years' non-life business of members and former members of Lloyd's to Equitas Insurance Limited.

The transfer covers all the business reinsured by Equitas at the time of Reconstruction and Renewal in 1996, and includes the PCW syndicates' business reinsured by Lioncover Insurance Limited and the Warrilow syndicates' business reinsured by Centrewrite Limited.

The transfer took effect on June 30, and means that Names are no longer liable for their 1992 and prior years' underwriting liabilities at Lloyd's as a matter of UK law.

Mr. Christian said that in 2009, "while we estimate an increase in Lloyd's capacity, the Lloyd's market will face increased competition, as capital at other insurers and reinsurers has rebounded materially in the first nine months of the year."

He noted in his remarks that Lloyd's remains an "attractive platform for companies looking to diversify their risk portfolio and, in line with other insurance and reinsurance markets across the world, it has continued to provide capacity to clients through testing conditions in the wider global financial landscape."

Late 2008 and early 2009 saw high levels of interest in the Lloyd's market, the study said, as the subscription market model increased its attractions to ceding companies looking to diversify risk--aside from a number of mergers and acquisitions, nine new syndicates were established at Lloyd's for, or during 2009.

To date, one new syndicate has been announced to begin writing business in 2010. On Sept. 23 Flagstone Re announced its intention to create a worldwide property division, which would initially write on behalf of Marlborough Underwriting Agency's (Flagstone's Lloyd's arm) existing syndicate 1861.

In 2010 the property division will be supported by a new mixed capital syndicate 1969, which will provide the majority of the capacity and utilize managing agency services and systems provided by Marlborough and Flagstone, the report said.