Increased rates and low claims has helped Heritage to more than double its underwriting profit in the first half of 2006.

The Lloyd's insurer reported profit on underwriting activities increased by 136% to £2.6m, up from £1.1m in the first half of 2005. Discounting the effect of the weak dollar, underwriting profit more than quadrupled.

The AIM-listed insurer said underwriting conditions were "the best" since the company was formed.

Gross written premiums increased by 78% to £114m in the first half of the year. Pre-tax profits fell slightly to £3.2m from £3.4m in 2005.

Heritage said rates in its core worldwide property business, underwritten through Syndicate 1200, had increased by 28% on average on its renewal book during the period.

It will increase its participation in the syndicate by 50%, and is looking to grow the book to £260m of premium in 2007.

The company's non-US liability business saw "small" rate reductions within business plan expectation of 7%.

The book, which is mainly professional indemnity, will see small growth in 2007 to £55m in size from its current £50m.