Meanwhile, Munich Reinsurance has returned to form, recording a profit of €1.2 billion for the first half of this year, compared with a loss of €229 million for the corresponding period last year.

The world’s second-largest insurance broker, Aon Corporation, said its second-quarter profit rose, helped by expense controls. The company reported earnings of $US173 million, compared with $US146 million a year earlier.

St Paul Travelers expects a second-quarter loss after it decided to account for $US1.63 billion of reserves on its income statement.

The insurer requested advice from the US Securities and Exchange Commission a month ago on whether to reflect a $US1.63 billion reserve addition in its second-quarter income statement, on its balance sheet or a combination of both.