LONDON (Bloomberg) ? Wellington Underwriting Plc?s second-half profit declined 44 percent after the Lloyd?s of London insurer of airlines and oilrigs gained less from investments including a stake in Aspen Insurance Holdings Ltd.

Net income fell to ?37.2 million ($71 million) from ?66.2 million a year earlier, based on the company?s full-year earnings statement.

Wellington?s return from its investment in Aspen, a Bermuda-based reinsurer, fell 79 percent in 2004.

Wellington, which first sold shares to the public in 1994, specialises in covering risks ranging from terrorism and accident and health to property and shipbuilding in the three-century old Lloyd?s insurance market.

The company endured the effect of four hurricanes that struck the US last year and caused industry-wide insurance losses of as much as $59 billion.

?These are very good results and the underwriting performance has been better than expected when you consider the catastrophes of last year,? said JPMorgan Chase & Co. analyst Gerald Farr in London, who has an ?overweight? rating on the stock.

Profit for all of 2004 fell 28 percent to ?59.7 million pounds, the company said. Bloomberg calculated second-half earnings by subtracting first-half figures from the full year.

Wellington?s return from its investment in Aspen fell to ?13 million from ?63.1 million in 2003, when Aspen first sold shares to the public. The company will sell its 16 percent stake ?over time,? Wellington chief executive Preben Prebensen said in an interview.

Insurance premium rates fell five percent last year, though some energy and property insurance risks may increase because of the US hurricane damage, Wellington said.

The company?s combined ratio, or claims and expenses as a percentage of premiums, was 86.8 percent in 2004 from 83.6 percent a year earlier, indicating profitable underwriting.

The full-year dividend rose to 3 pence a share from 2 pence, and said Wellington said it?s ?confident? of raising the payout to 4 pence in 2005.