Lloyd's insurer Kiln saw its share price slump dramatically in what its finance director Roy Butler called “a complete overreaction” after it released its results for the six months to June 30.

The company has seen more than half its value evaporate since the US disaster.

The crash, from more than 75p a share before the terrorist attacks in the US to less than 35p earlier today, follows an announcement that Kiln's syndicates 510 and 557 will incur losses of £45m due to the atrocities.

Kiln owns about 51% of the syndicates' capacity, leaving the listed company's exposure at about £16m or 16p a share.

Directors gave a presentation to analysts last week in an effort to bolster the company's stock market performance.

Butler said later the fall in the share value was “a complete overreaction”.

He blamed it on “one or two smallish sellers” whose actions he said could drive the price down.

He said: “Like all these things, the lack of liquidity in the integrated Lloyd's vehicle sector doesn't help.

“We are small and specialist – it's a problem we have to live with.”

Chief executive Edward Creasy said trading conditions would improve and predicted rising rates and reduced competition.

Creasy said: “There's no doubt at all that what happened will change the market.

“If you take the World Trade Centre event out of it, the probability is that some syndicates wouldn't have survived. And what happened last week will accelerate that.”

“Trading conditions were looking pretty good and rates are going to go up even more for 2001.

“It sounds horrible to say, but there are significant opportunities that will come out of this and the effect of the economic loss on Kiln will be substantially offset by what we are able to do in terms of trading for the second half of the year.”

The interim results for the integrated Lloyd's vehicle show a rise of 81.6% in gross written premium to £186.4m from £102.6 last year. Kiln was left with a profit after tax of £900,000.

The firm made a technical profit of £2.2m, against a loss of £2.6m in the comparable period last year and an operating profit of £1.4m against a loss of £3.8m in the comparable period last year.