Lloyd's of London, the specialist insurance market, said its profit halved in 2008 because of hefty hurricane losses and weaker investment returns.
Lloyd's reported a 2008 pretax profit of 1.90 billion pounds ($2.8 billion), saying on Tuesday turmoil in global financial markets slashed its investment returns by 52 percent to 957 million pounds.
Also, last year ranks as the insurance industry's second most costly on record after hurricanes Ike and Gustav contributed to total catastrophe-related losses of about $50 billion.
Lloyd's said its 2008 combined ratio -- claims expenses and operating costs expressed as a proportion of premium income, a key measure of underwriting profitability -- deteriorated to 91 percent from 84 percent in 2007 as a result of higher claims.
A combined ratio below the 100 percent break-even point denotes an underwriting profit.
Amidst the unprecedented slump in the world economy, Lloyd's remains in good shape, chairman Peter Levene said in a statement.
Lloyd's said it had assets of 2.072 billion pounds at the end of 2008, compared with 1.951 billion pounds a year earlier.
(Reporting by Myles Neligan; Editing by Dan Lalor)
($1 = 0.6857 pound)