Jardine Lloyd Thompson --Britain's largest listed insurance broker - reported a 25 per cent fall in first-half profit and warned weak market conditions could persist, sending its shares down.
JLT, which brokers insurance for some of the world's largest firms, said pretax profit was £48 million in the six months to June 30, down from £63.9 million a year ago.
A poll of three analysts predicted on average pretax profit of £49 million.
JLT's earnings have been hit by falling insurance prices, a weaker US dollar, high costs and increased scrutiny from buyers of insurance after an industry scandal over alleged kickbacks and price-fixing in the US last year.
Chairman Ken Carter said weaker insurance prices, which eat into broker commissions, were likely to persist into next year and said the recent rise in the US dollar would not benefit JLT's results this year.
"We are in a soft insurance market. It is difficult to see the end of that market."
The gloomy outlook depressed JLT's shares, which were down 1.5 per cent at 3661/2 pence following the announcement.
JLT's stock has fallen around nine per cent over the past 12 months, but climbed back 12 per cent from a year low of 333p in April after the US dollar regained strength.
On a more positive note, Mr Carter said JLT had won 100 new clients who had defected from larger rivals such as Marsh and Mclennan, Aon and Willis following the US fee scandal.
These client wins, along with the recruitment of around 80 people as a result of the industry turmoil, should benefit JLT in 2006, he said.
JLT recommended an unchanged interim dividend of 8.5 pence a share. Shares closed up 263/4p at 399p.