Profit before tax fell to £61.3m in the six months ended 30 June 2006 from £88.1m the year before. Excluding foreign exchange fluctuations, pre-tax profit was £64.7m verus £51.2m a year earlier.

The Lloyd's underwriter said gross written premium income increased 43% to £625.1m, following new ventures in Bermuda and the US. The group combined ratio was 93.2% compared with 83.5% the year before.

"The rates for business in obvious catastrophe zones have strengthened throughout the period, but this has been offset by increasing competition for non-catastrophe exposed business," said chairman Robert Hiscox said in a company statement. "Overall, however, conditions are good," he added.

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