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Profits halved at Lloyd's of London in the first six months of the year, and chief executive Richard Ward today warned that the financial storm is only going to get more choppy.
Unveiling a slump in profits of 47% to £949 million, Ward admitted that Lloyd's faces a stern test.
"The market remains in a good position to face the challenges ahead even though the external conditions in which we operate are about to test our structure and resolve," he said.
Returns from investments are falling just as insurers are facing ever-higher levels of claims, especially for flooding and other "natural" disasters.
Ward has warned before that global warming is a massive risk to the insurance industry.
Finance director Luke Savage said Lloyd's, the world's biggest insurance market, has benefited from a cautious approach that has often come under fire.
"Our conservative asset mix has been criticised in the past for not being racy enough. We are now doing much better than our peers," he said.
Lloyd's holds just 6% of its balance sheet in equities. Savage said the insurance industry is unlikely to get into the same mess as the banking industry because it doesn't have the same leverage or debts.
"Banks rely on liquidity to keep working. As a sector, we are much more highly capitalised," he added.
Lloyd's predicts lower profits for all insurers. Ward said the fall in profits was "no surprise".
How profits hold up in the second half will depend strongly on how many natural catastrophes strike.
Lloyd's has 75 syndicates that insure everything from art and jewellery to satellites and planes.
These member insurers, such as Amlin and Catlin, have reported lower profits in recent months.
