Specialist insurer Hiscox yesterday told shareholders it was making good progress despite weakening prices for some of its products and a tough market.
Chief executive Bronek Masojada said the group, which sells insurance for fine art and major risk cover in the Lloyd's of London market, had benefited from low claims and from targeting insurance areas this year which are still experiencing price rises.
"Business in the global markets area is down but that is not a surprise as some prices fall. Our retail businesses in the UK and Europe have both done very well.
" There has been an absence of large losses. All of that has made a very positive trading environment in the first six months."
Premium prices for some risks in the Lloyd's market, where Hiscox made nearly three quarters of its profits last year, are softening amid increased supply from new Bermuda-based operators and several years of steep rises.
But Lloyd's insurers such as Wellington and Beazley have said underwriting conditions remain generally favourable with good profits expected to flow through from business written in 2004.
Hiscox said it had reduced its exposure to non-US catastrophe cover and major property risks, where rates have fallen by about 20 per cent, and expanded marine cover and insurance for offshore rigs, where prices are rising.
The group expects to reduce its underwriting capacity in the Lloyd's market for 2006 to £ 650 million from £775 million pounds this year. Hiscox is expanding with 11 regional offices targeting smaller risks.