LONDON (Bloomberg) ? Lloyd's of London, the world's biggest insurance market, plans to open an office in India in the third quarter as part of its efforts to expand in faster-growing markets.

The operation in the country will cost about 400,000 pounds ($706,000), Lloyd's said in an e-mailed statement yesterday.

Financial services companies including Allianz AG are seeking to expand in India, the world's second-most populous nation. The country's insurance market is forecast to reach $80 billion in annual premiums in 2010, compared with $8 billion in 2000, according to India's government.

Lloyd's is implementing a three-year strategic plan to cut costs for insurers and prevent rival regions such as Bermuda from gaining market share. Insurers including Hiscox Plc and Amlin Plc, which also trade at Lloyd's, have raised billions of dollars for reinsurance units in Bermuda to take advantage of rising premium rates, zero corporate tax and looser regulations than the UK.

"Lloyd's has made significant progress in recent years," said Chairman Peter Levene in the statement. "But we operate in a fiercely competitive market environment and cannot afford to stand still."

Businesses operating at Lloyd's will be charged different fees relating to their level of risk under plans outlined today, Lloyd's said. Insurers in the market are currently charged a fixed percentage related to the amount of business they underwrite.

The market said 85 percent of insurance contracts written will have a standard format with a clear record of what has been insured by the end of this year. The UK's Financial Services Authority has said insurers must deliver so-called "contract certainty" by December 2006.

Lloyd's also plans to start writing reinsurance business from an office in China, after gaining access a license to operate in the country in November, the market said yesterday.