Large hurricane claims pushed the Lloyd's of London insurance market to its first loss since 2001 last year.

The world's largest insurance market reported a pretax loss of £103 million (€147.6 million), down from £1.4 billion profit in 2004, also a year marred by windstorm losses, and said that claims from Hurricanes Katrina, Wilma and Rita had totalled £3.3 billion.

The group warned that the industry must not treat 2005, which saw record claims from natural catastrophes, as a "freak year".

The industry saw its costliest year for claims in 2005, with catastrophe claims of $83 billion (€67.86 billion), of which $65 billion came from hurricanes Katrina, Rita and Wilma, which buffeted the US and the Caribbean.

The market had overall claims from the storms of £8.8 billion, but the balance of £5.5 billion will be paid by reinsurers from whom Lloyd's businesses had bought policies to help protect themselves in the event of a major disaster.

"We've actually come out of 2005 with our central assets and our solvency ratio having increased. That's a real demonstration of the strength of the Lloyd's market currently," Luke Savage, Lloyd's acting chief executive and finance director, said.

He added that the market was well placed to take advantage of current opportunities and is optimistic about its 2006 prospects.

However, Lloyds chairman Lord Levene commented in his statement: "We must not fall into the trap of thinking that 2005 was a freak year which could never happen again. We must continue to improve the way we model potential risk and spread our exposure." The January renewals, when many of the annual risk contracts are renegotiated, had not reaped the price rises that Lloyd's had been expecting, but Mr Savage said "we're hearing some good news about the April and July renewals" when Asian and US firms renew their insurance.

Sixty two insurance businesses operate within the 318 year-old Lloyd's market, with underwriting capacity of 14.8 billion pounds.

Lloyd's has already toughened the scenarios used to stress-test the insurance market in response to last year's events.

The insurance industry globally has been hit by two years of record windstorms in the US, and is questioning whether this is a cyclical surge in catastrophe occurrence or an enduring change.