Markel's London market operation continued to make an underwriting loss in 2003 despite an improvement in the group's overall performance.

The London operation returned a combined ratio of 104% in 2003 compared to 107% in 2002.

In the last quarter, it deteriorated to 110% from 104% in the same period of the year before.

The company said the underwriting loss in the fourth quarter was primarily due to loss reserve strengthening for 1997 to 2001 US casualty reinsurance programmes.

The improvement over the whole year was due to "more disciplined underwriting, increased pricing and expense control, partially offset by the increases in prior years' loss reserves" in the fourth quarter, the company said.

The London operation produced gross written premiums of $738,000 in 2003 compared to $622,000 the year before.