Lloyd’s has £14.9 billion ($35.7 billion) capacity for 2004, the highest figure it has ever achieved. It’s also $1.2 billion higher than last year, a result that has CEO Nick Prettejohn talking up the market’s “continued strength and underwriting discipline”.

The first year of the new franchise arrangements – introduced to deter syndicates from competing too agressively for market share by cutting rates – “has helped to ensure that the market’s plans for 2004 are grounded in the reality of external market conditions”, he said. “The market’s priority is to continue to improve the quality of its business, rather than chasing market share.”

Lloyd’s is the world’s second-largest commercial insurer and sixth-largest reinsurance group, with about 5% of world reinsurance being placed there.

Quota-share agreements – short-term capital that once played a major role in helping the market over claims “peaks” – has also fallen dramatically, from $2.6 billion last year to less than $480 million this year.

“The Lloyd’s market is healthy with a firm capital base,” Mr Prettejohn said. “Indications for 2003 performance continue to be strong and the current outlook for 2004 is good. We have unrivalled underwriting expertise, stable security ratings, and a diverse base of capital providers who believe in this market’s ability to deliver strong performance.”