LONDON (Reuters) - The Lloyd's of London insurance market's pretax profit for the first six months of the year jumped 34 percent thanks to high premiums and low catastrophe claims, it said. The world's oldest and biggest insurance market made £1.81 billion ($3.7bn), up from £1.35bn in the same period last year.

Its combined ratio, a key performance benchmark, improved to 82.9 percent from 86 percent in the first half of last year. The ratio measures costs and claims as a percentage of premiums, so the further the figure is below 100, the bigger the profit the market has made from underwriting.

Its performance in this regard was better than the US, Bermuda and European insurers and reinsurers against which it compares itself, Lloyd's said.

But Lloyd's chief executive Richard Ward sounded a note of caution, saying several of the ingredients that contributed to the market's record interim results may not be repeated.

High premiums, especially for US catastrophe-exposed risks, low levels of disaster claims and the release of cash from reserves no longer needed to pay claims combined to boost the market's earnings.

"There's no guarantee at all that these conditions will continue. Far from it. I would urge caution," Ward told Reuters.

Lloyd's emerged relatively unscathed from the major wind storm which ripped through northern Europe in January, widespread flooding across Britain this summer and two powerful hurricanes that churned through the Gulf of Mexico.

"We've had some near misses and that makes me a little reserved and cautious about what might be out there for us in the rest of the year and in 2008," Ward said.

Lloyd's gave no outlook on full year results but said there was potential to release further claims reserves, which would bolster full year profits, while the market's investment income was likely to remain robust and would be little affected by the market turmoil caused by the sub-prime mortgage crisis.

But the market, in which 66 insurers currently operate, was now seeing downward pressure on rates, which saw gross written premiums fall slightly to £9.86bn.

The weakening market environment reinforced the need to focus on underwriting for a profit. "Underwriting for the remainder of this year is absolutely key," Ward said.

Ward said he was confident Lloyd's could withstand a huge storm in the Gulf of Mexico costing insurers up to $108bn.

The market's central assets, which underpin its financial strength ratings and would be used to pay claims in the event that syndicates go bust, rose to £2.2bn, strengthened by a 500 million subordinated debt issue in June.

Lloyd's was making good progress in its plan to overhaul the market's archaic business processes, Ward said, though he added "progress could be faster".

It had exceeded its targets for ensuring that contract wordings are agreed and issued before the policy begins, while its initiative to speed up the payment of claims had seen more than 10,000 claims processed electronically.