Atrium Underwriting stormed back to profitability with promises of a dividend in its first results based on annual accounting.
Chief executive Nick Marsh said the change in accounting method, from Lloyd's three-year system to the one used by other Lloyd's quoted insurers, accelerated profit recognition.
Figures produced under the old system would have shown a £280,000 loss as a result of losses on the 2001 account.
The company expected to pay a dividend of "at least 7.5p" for the full 2003 year, Marsh said.
He said the market was softening in the areas of energy, motor, airline and US property but hardening in marine, professional liability and many lines of casualty business.
The group would increase capacity on its Syndicate 609 from £160m this year to £180m next year.
Syndicate 609 was one of only two Lloyd's syndicates upgraded last week by ratings agency Standard & Poor's.
The syndicate's underwriter, Christine Dandridge, said the change gave her team "better access to the best business".
She said marine business was still not profitable, despite rate rises, and ocean hull risk business was still "disappointing".