LONDON (Bloomberg) — Lloyd's of London, the 300-year-old insurance market, said insurers should focus on profitable business at the expense of market share to overcome "weak" premium rates.Prices rose 2.9 percent on average in the first half and they are declining in areas that weren't affected by last year's record US hurricane season, Julian James, director of worldwide markets, said today in an e-mail. The global insurance market is suffering from stagnant demand and oversupply, he said.

"Our thinking and behaviour must change if the industry is to be a stable, secure industry for policyholders and shareholders of the future," James said. A slowdown in the US economy will lead to "sluggish demand" for home, car, commercial property and workers' compensation coverage, he added.

Lloyd's insurers including Hiscox Plc are planning to increase the amount of business they can underwrite next year following a rise in premiums in catastrophe-prone areas. The insurance market also anticipates sales in 2007 that will surpass this year's "capacity" of 14.8 billion pounds ($28 billion).