(Bloomberg) Lloyd?s of London, the world?s biggest insurance market, would face lower damages from hurricanes even in a storm season as harsh as last year?s after insurers improved forecasting models, according to Factory Mutual Insurance Co.

The worst storm season on record left the Lloyd?s market with ?3.3 billion ($6.23 billion) of losses in 2005. Hurricanes Katrina, Rita and Wilma battered oil rigs, ships and towns and flooded New Orleans, causing damages of $66 billion along the Gulf Coast, according to Lloyd?s.

?If the same thing happened this year it would certainly have a different impact,? said Martin Fessey, vice president of international operations at Factory Mutual, which insures property for a fifth of companies on the UK?s FTSE 100 index. ?The damage would be significantly less because the modelling has improved. There is a much better understanding of what the exposures are.?

Factory Mutual, based in Johnston, Rhode Island, suffered $509 million in storm losses in 2005. Lloyd?s of London is modelling for as much as $100 billion of insured hurricane damages this year, compared with assumptions for up to $60 billion of losses in 2005, according to a statement on the market?s Web site from March.

?So far it has been a fairly benign year,? Fessey said in an interview. ?There is a suggestion that it is not going to be much more than an average season. But it only takes one big storm to come for it to become a disaster. I don?t think anyone can make a prediction.?

Lloyd?s of London posted a 2005 pretax loss of ?103 million in April, its first since 2001, compared with a profit of ?1.37 billion in 2004.

Claim losses surpassed the ?2 billion pounds related to the Sept. 11, 2001, terror attacks.

Following the storms, some Lloyd?s insurers have sold less property and marine insurance in the Gulf Coast region, while premiums have risen to cover buildings and oil rigs at risk from US hurricanes.

Lloyd?s has said it expects to insure as much as ?14.8 billion of business this year, up seven percent from 2005, to take advantage of rising prices.

Insurers on the Lloyd?s market including Hiscox Plc. and Brit Insurance Holdings Plc. posted profit declines in 2005 because of the US storms. Claims and expenses as a proportion of premiums at Lloyd?s rose to 111.8 percent, compared with 96.6 percent in 2004.

The London market is facing competition from the insurance market in Bermuda where companies including Amlin Plc. and Hiscox have raised capital and opened units.

Insurers are attracted to Bermuda because the island charges no corporate tax and operates an electronic trading platform.

Lloyd?s insurers may report lower profits in the first-half, according to Chris Hitchings, a London-based analyst at Keefe Bruyette & Woods Ltd.

Currency moves, bond losses and higher reinsurance costs may outweigh ?benign? underwriting conditions, said Hutchings in an e-mailed statement August 8.

?The key to full year outcomes will be claims experience in the second-half,? Hitchings said.

Beazley Plc. is the first Lloyd?s of London insurer to report first-half results on August 30. Factory Mutual, which operates under the brand FM Global, is owned by its policyholders, which include General Electric Co., PepsiCo Inc. and GlaxoSmithKline Plc..