(Bloomberg) -- Lloyd's of London, the world's biggest insurance market, expects to limit next year's sales to about 13.7 billion ($26.4 billion), nine percent less than in 2004, to reduce the risk of losses, said analysts who attended a Lloyd's presentation.

The estimate is the first reduction in so-called capacity since 1999 and compares with 15 billion in 2004, said Prudential Equity Group Inc. analyst Jay Gelb in an e-mailed note to investors. Lloyd's wasn't immediately able to comment.

"Lloyd's is seeing commercial insurance and reinsurance rates soften in most lines of business," Gelb said in the note, after the presentation in New York today.

Lloyd's has urged underwriters to trim the amount of business they write to prevent a return of the boom and bust cycle of the 1990s as rates begin to drop.

Three years of profitable pricing of insurance rates followed 20 years of underwriting losses in the industry, Lloyd's Chairman Peter Levene said in July.

Levene last year warned companies may be prevented from operating at the market after it tightened rules to help maintain profit.

Lloyd's hired Rolf Tolle from a unit of Warren Buffett's Berkshire Hathaway Inc. as franchise performance director in December 2002 to increase oversight of companies in the market.

The ship insurer Dex Serv Ltd., a venture between Swiss Reinsurance Co. and UK insurer Thomas Miller & Co. Ltd., quit Lloyd's in November 2003 after the market refused to approve a business plan.

A month earlier, Lloyd's ordered Goshawk Insurance Holdings Plc. to stop selling policies after the company's underwriting losses surged.