Lloyd's insurance market cuts 2005 capacity

Lloyd's of London said today it expected to have £13.7 billion sterling (€19

Lloyd's of London said today it expected to have £13.7 billion sterling (€19.9 billion) to underwrite risk in 2005 in what is

a 9 per cent reduction from the previous year.

The reduced capacity highlights the determination of the world's oldest insurance market to ensure its syndicates - mini-insurers that operate in the market - do not expose the market to unnecessary risk by taking on more business to make up for falling insurance prices.

"Given current market conditions and the focus on delivering underwriting profit, it is a positive sign that there has been a decrease, not an increase in capacity at this point in the insurance cycle," Chief Executive Mr Nick Prettejohn said.