LONDON (AFX) - Lloyd's insurer Atrium Underwriting PLC posted first-half pretax profits of 7.9 mln stg, down from 13.7 mln in the first half of 2005 on a weak dollar.

Gross premiums written also fell to 93.6 mln stg from 94.5 mln -- below Numis' expectations of 127 mln stg -- in stark contrast to a lot of Atrium's competitors, who have seen massive rises in gross written premium over the course of year.

Atrium, which not only operates its own syndicates but also owns an underwriting portfolio on seven Lloyd's syndicates, said the reduction in gross premiums was a result of keeping the same levels of underwriting capacity in its portfolio since 2005, as other companies were increasing theirs.

The combined ratio -- costs and claims expenses as a proportion of premium income, and a key indicator of profitability -- deteriorated to 90 pct from 85 pct, mainly due the foreign exchange impact in its non-marine syndicate 570.

Like its aviation insurance competitor Hardy Underwriting PLC, Atrium said that insurance rates for the aviation book were 'falling dramatically', although the recent security alert at Heathrow airport is causing insurers to re-examine their exposures on some risks.

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