Hiscox has reported a half-year profit of £129.38 million ($177.39 million), rising 8% in a market Chairman Robert Childs says is “defying gravity”.

The Bermuda-based specialist’s gross written premium increased 12% to £1.1 billion ($1.5 billion) in the six months to June 30 and its combined operating ratio deteriorated half a percentage point to 82.5%.

Mr Childs says the result is driven by opportunities in the London market and the US, and fewer catastrophes.

“Strong results across the industry mask what we regard as a market that is defying gravity, as pension funds and others pour capital in, fuelling further competition in big-ticket insurance and reinsurance,” he said. “Rating levels are being gnawed away, yet attritional losses remain constant, and thus underlying loss ratios are creeping up.”

The market’s profitability is propped up by a lack of meaningful catastrophe losses.

Mr Childs says rates in property, marine and energy business are in a downward trend.

“Trading conditions in reinsurance remain tough, though there are signs that rates are now finding their floor.”

US property catastrophe business fell 10% at the June and July renewals.