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Lloyd's of London has reported a 34 per cent rise in first-half pre-tax profits.

Interim results released today show that the world's oldest and biggest insurance market made a pre-tax profit of £1.81 billion in the six months to June 30th. That compared to a profit of £1.35 billion reported for the corresponding period last year.

Lloyd's said that its performance over the period was partially the result of a low level of catastrophe claims, with no hurricanes having made US landfall so far this year.

Its combined ratio, a key measure of an insurer's underwriting profitability, also fell to 82.9 per cent. The ratio, an expression of costs and claims expenses as a proportion of premium income, had stood at 86 per cent for the first six months of 2006.

Lloyd's said that its combined ratio continued to "outperform major international peer groups", with the ratio for US property and casualty insurers estimated to stand at an average of 93 per cent. For US reinsurers the ratio is around 90 per cent, while it is estimated to be 97 per cent for European insurers and reinsurers and 86 per cent for Bermuda.

Commenting on the results Lloyd's chief executive Richard Ward said: "These profits reflect the recent favourable rating environment and a relatively low level of catastrophe claims.

"Nonetheless he warned that the market is seeing a fall in insurance prices across the board.

"We are now seeing a downward pressure on rates and a softening of conditions across all classes," Mr Ward stressed.

"This reinforces the continued need to focus on underwriting for profit," he added.