LONDON (Bloomberg) — Lloyd’s of London, the world’s biggest insurance market, has increased the amount of premiums it can accept this year by 8.9 percent to a record $16.1 billion ($31.6 billion), as prices come under pressure.This year’s capacity compares with $14.79 billion last year, said Lloyd’s yesterday in an e-mailed statement.

“I view the increase positively as people are seeing the opportunity to make more profit,” said Charles Coyne, an analyst at KBC Peel Hunt Ltd. in London.

The coverage has been driven by insurers including Kiln Plc and Chaucer Holdings Plc that plan to take advantage of higher prices for risks associated with record US hurricanes of 2005. Prices for other risks including aviation insurance are declining as new entrants to the market add to available supply.

Lloyd’s must seek to avoid a repetition of the market’s boom and bust cycle of the 1990s as rates drop, chairman Peter Levene has said. Chief executive officer Richard Ward said the market must focus on “discipline,” the Financial Times reported earlier yesterday. Lloyd’s in September posted a 2.2 percent decline in first-half pre-tax profit to $1.35 billion.

New insurers including companies run by former American International Group Inc. Chief Executive Officer Maurice Greenberg have entered the market to provide coverage for airlines, cargo ships and oil rigs, potentially adding to pressure on prices.

Coverage offered by individual investors known as “names” with unlimited liability fell 24 percent to $1.1 billion, said Lloyd’s. Coverage by names with limited liability rose 40 percent to $1.4 billion.

Bermuda-based Catlin Group Ltd., which agreed to buy Wellington Underwriting Plc in October for $591 million, is the biggest insurer with 6.8 percent market share, Lloyd’s said.

Separately, Julian James, Lloyd’s director of world-wide markets, is to leave at the end of April to join US insurance brokerage Lockton International, Lloyd’s said today in an e-mail.

James, 43, who was viewed by some analysts as a contender to become CEO before the appointment of Ward last March, has been at Lloyd’s for nine years. The market will seek a replacement for James, said spokeswoman Louise Shield.