Claims dip boosts insurer Lloyd's

The world's biggest insurance market, Lloyd's of London, has posted a rise in 2007 profits, helped by fewer catastrophe claims.

Lloyd's said pre-tax profits rose to £3.85bn ($7.6bn) for the year, up from £3.66bn in 2006.

Strong investment returns and a release of surplus reserves also contributed to the profit, Lloyd's said.

However, the market warned that the low level of disaster claims had led to pressure to cut premiums.

The absence of any major natural disasters since US hurricanes Katrina and Rita in 2005 is making it difficult for Lloyd's to increase rates at the same level.

It also said that it could not rely on low levels of catastrophes to lift its earnings in 2008.

"Last year's softening market conditions reinforced, once again, the need for a clear strategy to enable the market to maintain discipline and strength in the face of increasing competition," said Lloyd's chief executive Richard Ward.

Lloyd's is made up of 75 underwriting syndicates, which insure a wide range of items and businesses.

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