LONDON (Reuters) ? The Lloyd?s of London insurance market said first-half pretax profits dipped to ?1.35 billion ($2.6 billion), but it was positive on the full year.

Earnings eased from ?1.38 billion a year earlier as a 20 percent rise in underwriting profit was offset by a smaller contribution from investment income, Lloyd?s said yesterday.

High insurance prices, especially for cover against natural disasters, and low claims drove strong profits at the market, in which 64 individual insurers, known as syndicates, do business.

The market, which suffered a bill of ?3.3 billion from a string of major hurricanes last year, has emerged virtually unscathed by major storm claims so far this year.

The outlook for full-year profit is positive barring any major claims in the next few months, Lloyd?s Finance Director Luke Savage said.

?(The result) will be good, providing we don?t have any major catastrophes before the year-end,? Savage told Reuters in a telephone interview.

Lloyd?s results have not been marred by the weakness of the dollar against sterling during the first six months, which hurt the interim profits of market participants such as Amlin and Wellington Underwriting.

This is because Lloyd?s reports its results under UK GAAP accounting rules, rather than the IFRS rules by which its insurers report.

The market?s first-half combined ratio, a key benchmark that measures costs and claims as a percentage of premium income, improved to 86 percent from 87.3 percent during the same period last year.

Lloyd?s said its combined ratio performance was better than its US, Bermuda and European insurance and reinsurance rivals.

A figure below 100 means the market is making a profit out of underwriting risks.

Lloyd?s, which has been under growing pressure from rival insurance centre Bermuda in recent years, said it had wooed ?2 billion of fresh capital to the market in the past year, with the creation of five new syndicates.

The market?s authorities are in discussions with a number of new capital providers, Savage said, which could result in a further handful of new syndicates being established before the end of the year.

?This is by far the most active period (for new syndicates) we?ve had in a number of years,? he said.

Lloyd?s overall underwriting capacity is likely to rise modestly next year from its 2006 level of ?14.8 billion, Savage said, unless market conditions change radically due to a major loss before the year-end.

Savage said market players had shown a lot of interest in Thunderbird Re, the structure recently set up by Lloyd?s to allow its participants to get risk cover from the capital markets for US natural catastrophe exposures.

Thunderbird Re allows smaller syndicates, for whom issuing a catastrophe bond on their own would be too costly, to transfer risks to the capital markets as conventional cover from other reinsurers becomes increasingly scarce following the costly hurricanes last year.