Atrium Underwriting has said its second half results will be affected by Hurricane Katrina, but that it remains confident it has the ability to outperform.

Atrium said its mid-point forecasts for managed Syndicates 570 and 609 improved to 15% and 22.5% respectively for 2003. Both managed syndicates are forecasting 10% returns for 2004 - pre-impact of Hurricane Katrina.

The group also said total managed capacity is being reduced by 19% from £365m in 2005 to £295m for 2006 in line with the stated strategy of strong management of the insurance cycle.

In the underwriting portfolio, improvement has been made in the 2003 account mid-point forecast from 16.1% to 17.5%. The 2004 initial mid-point forecast is 8.9% despite last season's hurricane losses - pre-impact of Hurricane Katrina.

The group said trading conditions across the market remained acceptable with selected individual classes remaining strong. It also said the 2006 portfolio was expected to reduce, consistent with the group's approach to managed capacity.

On Hurricane Katrina, the group said it was too early to make claims estimates but that Katrina would impact, predominantly, on the 2005 year of account of the managed syndicates and underwriting portfolio.

It said at this stage both managed syndicates and underwriting portfolio were expected to remain profitable for the 2005 year of account on a three year basis.

Chief executive Nick Marsh said that whilst Hurricane Katrina was a reminder of the risks, the group remained confident in its ability to outperform.

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