Lloyd’s profit before tax grew 16% to £3.21 billion ($5.77 billion) last year as a benign period for natural catastrophes and reserve releases offset low interest rates and price pressures from capital inflows.

“These conditions look set to persist,” Chairman John Nelson said. “I therefore expect increased competitive pressure on the market to remain [this year].

“This underlines the need for continued underwriting discipline as we seek to maintain and reinforce our position as the global centre for specialist insurance and reinsurance.”

Gross written premium income increased to a new high of £26.11 billion ($46.9 billion) from £25.49 billion ($45.9 billion), while the combined operating ratio improved to 86.8% from 91.1% in 2012.

Investment returns fell to £839 million ($1.51 billion) from £1.31 billion ($2.36 billion).

Total net incurred claims were £9.58 billion ($17.3 billion), down from £10.1 billion ($18.2 billion) in 2012.

Flooding in Alberta, Canada, was the most costly natural catastrophe for the Lloyd’s market last year, with estimated net claims of £120 million ($216 million).

Lloyd’s does not expect a material claims exposure from recent UK flooding.

The most costly man-made events included the sinking of the container ship MOL Comfort off the coast of Yemen in June last year, the Asiana Airlines crash in San Francisco in July and the loss of two satellites.

CEO Inga Beale, who took over the role in January, says the market has established a strong base to expand in underinsured, high-growth economies around the world.