london (Bloomberg) — Two Bermuda-based companies, Hiscox Ltd. and Catlin Group Ltd., and a third which writes much of its reinsurance business on the Island, Amlin, are among the ten best-performing large British companies this year.

The three Lloyd's of London insurers have boosted by forecasts of higher premiums in 2009 and gains at the expense of American International Group Inc.

The insurers have risen more than 14 percent this year, while banks have plummeted and the FTSE 100 index of leading British businesses has fallen about 34 percent. Jardine Lloyd Thompson, a UK broker that trades at Lloyd's, is up 35 percent.

Amlin and Hiscox are increasing their underwriting capacity to benefit from rising insurance premiums at a time when many rivals are taking on less business as falling stocks make them more cautious. The structure of the Lloyd's market allows insurers to share a common capital pool that spreads risk among several smaller companies rather than use one big one like AIG. Amlin, Hiscox and Catlin write much of their business in dollars and their earnings will gain from the currency's surge against the pound this year.

"There will be, over the next few months, quite an opportunity for Lloyd's," Amlin chief executive officer Charles Philipps said in an interview. "For certain risks, clients will be asking themselves 'do we want all our eggs in the AIG basket'?"

Amlin, up 20 percent in London trading this year, became the first independent Lloyd's insurer to break into the FTSE 100 index on Monday this week, and the company raised £50 million ($74 million) of private capital to help it write more reinsurance next year.

Reinsurance, which made up about one-third of premiums written at Lloyd's last year, "is well positioned to benefit from an increase in demand as primary companies come to terms with weakened balance sheets and as access to capital markets is effectively closed", Neil Manser, an analyst at Merrill Lynch & Co., wrote in a note to clients dated November 26. Insurers take out reinsurance with other insurance companies to protect themselves against risks.

Hiscox, which has gained 18 percent this year, will increase 2009 underwriting capacity at its global markets syndicate by seven percent to £750 million. Catlin is up 14 percent in 2008, while the FTSE ASX Nonlife Insurance Index has risen three percent. The companies are poised to be three of the top 10 best-performers among the UK's 250 biggest businesses in 2008.

"In the past, big has been good because having a huge balance sheet has attracted clients to put huge exposures in there," Mark Gregory, CEO of insurance broker Bowring Marsh, said in a telephone interview. "Clients are beginning to consider that spreading their risk is a better thing to do. Lloyd's does that."

Lloyd's central pool of capital, which pays out policy claims if a provider goes bankrupt, has risen from a year ago to a record £2.5 billion, said Luke Savage, finance director at the insurance market.

"Groups can access cash quickly in the event of a major loss," Manser at Merrill said. "Liquidity, loss reserves and capital are not major issues" for insurers at the 300-year-old market, he said.

Amlin, which wrote 40 percent of its premiums in the US last year, and Hiscox and Catlin will benefit from the pound's 25 percent drop against the dollar this year. The gain from writing risk premiums in dollars and stating earnings in pounds will be "quite large" next year, Jonathan Lawlor, a London-based analyst at Fox-Pitt Kelton Ltd., said in a telephone interview.

"Lloyd's is in great shape," finance director Savage said. "When I joined in 2004 nobody was queuing up to get into Lloyd's. Nowadays, there's hardly a major player out there who hasn't approached us."