Markel UK is to withdraw from the SME property package market to concentrate on landlords' insurance, offices and unoccupied premises.

The company is also set to expand its cover for business interruption to protect businesses that are closed by health authorities due to "contagion".

Meanwhile, the insurer saw underwriting profit increase 27% for the second quarter of 2006.

Markel UK reported an underwriting profit of $5.9m (£3.1m) for the quarter, up from $4.7m (£2.5m) in the same period last year.

Gross premium volumes rose to $201m (£105.5m) from $179m (£93.9m) in the second quarter of 2005, while the combined ratio improved to 96% from 103%.

Gerry Albanese, president and chief operating officer of Markel UK's parent, Markel International, said growth was due to "disciplined underwriting".

Markel UK accounts for 30% of Markel International's business, and is its most prominent portfolio.

Markel International reported a 50% increase in net income in the last quarter to $90.4m (£47.4m), compared to $60.2m (£31.6m)) in the previous year.

Gross written premiums improved 12% to $201.3m (£105.6m) from $179m (£93.9m) a year earlier.