Lloyd's of London will stand the downturn in the insurance cycle better than the Bermuda market, according to a leading analyst.

Chris Hitchings, insurance analyst at the London arm of US investment bank Keefe, Bruyette & Woods, also does not rule out more acquisitions of London insurers by Bermuda companies.

According to a report by Business Insurance, Mr. Hitchings said that share prices of the major Lloyd's insurers have fallen by about 10 percent since the end of April while shares in the main Bermuda insurers are up eight percent.

This now leaves investors with only a "modest premium" to pay for the power potential risk faced by Lloyd's companies to the coming Gulf of Mexico hurricane season.

The analyst also said that there is a "good economic case" for a Bermuda monoline company to buy a Lloyd's insurer but points out that the capital efficiency of the Lloyd's system does make them "look expensive."

This does not mean that potential acquisitions can be ruled out though, said Mr. Hitchings.

"Their alternative of building their own may be slow so we do not rule out renewed interest in future," he said.