Prices for major classes of business at Lloyd's are peaking and beginning to fall, the chief executive of the market's biggest independent underwriter has warned.

Property reinsurance, large commercial property and airline insurance had all hit the top of their pricing cycles, said Amlin chief executive Charles Philipps.

"The fact that it 's peaking and coming off a bit needs to be taken in the context of the [previous ] increases," he said.

He added: "In the classes where it's coming off a little bit there are still good returns to be made."

Amlin's position as a leader on many aviation risks would help maintain returns despite a pricing downturn in the class.

Overall the price reductions would be small and Amlin planned to borrow extra capital to boost its underwriting.

"We would expect to be talking to parties later in the year," he said, "but it's early days to comment on how much."

His comments came as Amlin swung back into the black, posting a £55.4m profit before tax in 2002,up from a loss of £81.5m the year before.

This was despite a £4.5m charge for discontinued operations and a £13.5m hit for increasing US casualty reserves.

But the outlook for earnings was strong, Philipps said, as only 39%of underwriting income written in 2002 had been recognised.

"We will be growing naturally over the next few years," he said.

Amlin's combined ratio, including the World Trade Centre loss, improved to 95% last year from 117%in 2001.

Its net loss from the 11 September tragedy was $157.4m (£100.7m).

Gross premium written increased 22%to £717.1m in 2002 from £587.4m in 2001.

Amlin 's balance sheet was strengthened in the period, with £123m of new equity.