(Bloomberg) ? Hiscox Plc, a Lloyd?s of London insurer, reported a second-half loss on damages from Hurricanes Katrina and Rita in the US.

The insurer said it made a ?12.5 million loss ($21.6 million) compared with a profit of ?20.6 million in the year-earlier period, based on full-year results the insurer published yesterday. Full-year pre-tax profit fell 22 percent to ?70.2 million.

The pre-tax profit ?is very impressive given the hurricane losses,? said Nick Johnson, equity analyst at London-based Numis Securities Ltd., in a telephone interview yesterday. ?It?s down to good underwriting, strong investment returns and a diverse book of business.?

The company has been increasing its professional indemnity and high value household-insurance businesses in Europe and opened a dedicated US office this month to balance risk in catastrophe underwriting.

Hiscox?s total net loss from the hurricane season was ?165 million. Full-year revenue rose 5.5 percent to ?861.2 million. Total insurance-industry claims from the storms, which damaged oil rigs, flooded New Orleans and left hundreds dead in September, may reach $79 billion, according to Risk Management Solutions Inc.

The shares rose 2 pence, or 0.8 percent, to 249.25 pence in London, valuing the company at ?975 million. They have climbed 49 percent in the past 12 months, compared with the 40 percent achieved by the 18-member FTSE All-Share Nonlife Insurance Index.

?We thought that 2004 was a turbulent year, but 2005 well surpassed it with 400 catastrophic natural and man-made events,? said chairman Robert Hiscox in the statement. ?The UK and European business has been the saviour this year.?

Hiscox said the insurer was reducing underwriting business vulnerable to hurricanes this year while maintaining revenue through higher prices and would be promoting the UK professional and household business though a television advertising campaign in May.

The company said UK and European pre-tax profit more than doubled to ?43.4 million. Pre-tax profit in Global Markets, which includes catastrophe underwriting on US property, fell 69 percent to ?20.7 million. Hiscox International, which covers the company?s Guernsey and Bermuda operations, more than doubled pre-tax profit to ?6.2 million.

In December Hiscox announced the opening of its new Bermuda-based unit with $500 million of capital and said it was capable of writing $325 million of business in 2006. Reinsurers have been raising capital for Bermuda units to take advantage of a market that charges no corporate tax and is more loosely regulated than the US. Hiscox said the operation had taken $46 million at the end of February.

?Bermuda is the focus of much attention at the moment as it has now outgrown the London Market in reinsurance. It resembles the Lloyd?s of old in its entrepreneurial spirit, speed of reaction and swift and sensible regulation,? said Hiscox in the company?s statement. Hiscox said electronic underwriting in Bermuda was also more attractive compared with the London?s Market?s centuries-old paper-based system.

Net reinsurance premiums in Bermuda rose 16 percent in 2004 to $14.2 billion from the year-earlier period, Standard & Poor?s said in a report. That outpaced 3.3 percent growth in global reinsurance premiums to $166.9 billion last year, S&P said.

Lloyd?s of London chairman Peter Levene and chief executive officer Richard Ward, appointed this month, needed to ?face inwards? and ?simplify market processes or the capital structure or Lloyd?s will wither away,? said Hiscox in the statement.

Full-year net income at Hiscox dropped to ?48.6 million in 2005, or 15.1 pence a share, from ?63.9 million, or 21 pence a share, a year earlier. The full-year dividend increased 40 percent to 7 pence from 5 pence.