LONDON (Bloomberg) ? Goshawk Insurance Holdings Plc, a UK reinsurance company, returned to profit in the first half after the company stopped writing unprofitable business at the Lloyd's of London insurance market.

Net income was $10 million, compared with a loss of $50.9 million in the year-earlier period, the London-based company said in a Regulatory News Service statement.

Goshawk has focused on marine and property reinsurance at its Bermuda-based Rosemont Re unit after Lloyd's of London last September rejected a proposal to allow the company to write business without injecting new funds.

"Our strategy, team and technology position us well to take advantage of the improving rating environment in 2005," chief executive Russell Brooke said in the statement.

Shares in Goshawk rose to 2.3 percent to 44 pence at 8:13 a.m. in London, giving the company a market value of 77.4 million pounds.

The company last September said it would need to boost reserves at its Lloyd's business because of costs, legal expenses and cargo-insurance business for "prior years." Goshawk was a lead insurer on a $10 million policy for the space shuttle Columbia, which disintegrated last year.

The combined ratio, or claims and expenses as a percentage of premiums, at Rosemont Re rose to 90 percent from 87 percent, indicating less profitable underwriting. The company said it won't pay an interim dividend.

The hurricanes that have hit the US in the past six weeks may produce losses of $13 million to $22 million, Goshawk said.

"We expect that 2005 premium rates will be positively impacted by the catastrophe activity," said Brooke.