The 86 syndicates at Lloyd's are likely to be reduced to just 50, according to a new report by Swiss Re's arm Sigma.
The research also predicted that several London-based insurers who deal with international business would also cease activity.
Sigma cited over-capacity and severe World Trade Centre losses as reasons for the likely reduction in syndicates.
The report also highlighted the facts that only half the companies that operated in the Lloyd's market 10 years ago were still writing new business, and that UK insurers had engaged in an exodus from the capital.
Sigma said London now faced the challenge of preserving its leading role in the face of competition from other centres, such as Bermuda.
Sigma said: "While London primarily fulfils the functions of a marketplace, Bermuda has the edge as a capital of capital."
It also said that the London market's future would depend on the extent to which insurance business continued to come to London and was actually traded there - even if the risk-taking capital was located elsewhere.
