Lloyd’s profit has fallen 2.2% to £1.35 billion ($3.39 billion) for the first six months of the year after investment income fell £86 million ($215.9 million).

Gross written premiums rose to £9.97 billion ($25 billion) from £8.39 billion ($21 billion) during the same period last year, and underwriting profit increased 20% to £852 million ($2.14 billion).

The combined market ratio also improved on last year – currently at 86%, which was better than for insurers in the US and Europe at more than 90%.

Lloyd’s Chairman Lord Levene says the market outperformed its main international peer groups due to a combination of good market conditions and strong underwriting discipline.

“Our full-year result will be strongly influenced by the claims activity over the remaining three months of the year across the many catastrophe lines we insure, with the current US hurricane season being the obvious – but by no means the only – focus of attention,” he said.

Underwriting is expected to increase in the coming year and its insurance levels are also tipped to rise. Lloyd’s has insured £14.8 billion ($37.1 billion) of business this year, up 7% on last year.

“The outlook for 2006 stays positive, but we must remain disciplined and focused on performance management,” Lord Levene said.

“We recognise that the overall annual result will reflect loss activity that occurs during the remainder of the year, but we are confident that as events happen and market conditions change, the market will adapt appropriately.”