Lloyd's of London is made up of 75 syndicates
Profits at the world's biggest insurance market, Lloyd's of London, have been hit by falling investment income and the rising cost of claims.
Pre-tax profits for the six months to the end of June fell to £949m ($1.76bn), down from £1.8bn in 2007.
Lloyd's chairman Lord Levene said: "We have reported a strong performance in extremely challenging circumstances."
Lloyd's said the costs of Hurricanes Gustav and Ike in the US was likely to have an impact on earnings.
Lloyd's said figures for the second half of the year would "remain subject to the incidences of natural catastrophes".
"Hurricane Gustav and Hurricane Ike made landfalls in the US as strong hurricanes causing significant, widespread damage," it said.
"Whilst it is too early to assess the final economic cost of these storms, undoubtedly it will add pressure to underwriting earnings."
Its 2007 figures had been helped by the absence, at the time, of any major natural disasters since US hurricanes Katrina and Rita in 2005.
Lloyd's is made up of 75 underwriting syndicates, which insure a wide range of items and businesses.
The firm is the world's leading specialist insurance market and expects to have the capacity to write approximately £15.95bn of business in 2008.