"We are quietly satisfied with the result; we turned in a profit," Lloyd's Chief Executive Richard Ward told NU Online News Service. "It's been challenging, with big claims going out--Chile ?1.4B net, that's close to $2 billion net...which is a pretty significant number."

To still generate a profit, he said, "it's satisfying."

Ward added that Lloyd's will be "really focused until the end of the year on underwriting--getting the pricing right, and where the pricing's not right, willing to walk away from business."

He said Lloyd's careful underwriting is also the focus of performance management working with the syndicates "in monitoring their performance against the plan that they have agreed to with us."

At this point, he noted, "2010 doesn't have the hallmarks of a very profitable year, certainly not of a record year, though we've got to wait and see what happens by the end of the year. We still have another three months to go."

Ward concluded that the results are also "a reminder of why we're in business, which is to pay claims. It's a reminder that some years we have record profits when we have very benign catastrophe seasons, and then when the catastrophes come, our profits fall--which is not surprising, because we're out there paying the claims that we should be paying."

He observed that the market is soft and that the claims are not sufficient to cause market conditions to change globally. The market is being driven "in part by the economic climates, in part by the surplus of capital in insurance, and probably in part by the previous year's results. And so we need to see capital exit the business before market rates improve," Mr. Ward said.

Lloyd's Chairman Lord Peter Levene said in a statement, "The first six months of 2010 were the costliest on record since we began interim reporting, testing not only Lloyd's but insurers around the globe. While events such as the Chilean earthquake and the Deepwater Horizon loss have proved challenging, paying these claims and supporting our policyholders is what we are here to do."

He added, "It is a true indication of the strength of the Lloyd's market that despite challenging investment conditions, softening rates and exceptional catastrophic events, we have returned a first-half profit of $942 million."

The Lloyd's market recorded an accident-year combined ratio for the six months to June 2010 of 103.3, compared to 95.5 the year before. This was reduced by a prior-year reserve release of 4.6 percent to give an overall combined ratio of 98.7.