Cox returned to profit after reorganising its business to concentrate on motor insurance.

It reported a pre-tax profit of £9.1m for the first six months of the year compared to a loss of £11m for the same period last year.

The company's pre-tax operating profit before amortisation and on continuing operations showed a healthy £34.9m result, up from £22.6m last year.

Its overall combined ratio was an impressive 89% compared to 93% the time before.

The group's retail side produced a six month operating profit based on longer term investment returns of £16.7m and the now-defunct commercial side, put into run-off early this year following a string of disastrous losses, made a loss of £9.6m.

The best performing business sector was the motor book, which produced a first half underwriting result of £12.5m. The worst was the property book, which lost £12.3m.

Retail chief executive Neil Utley played down suggestions that Cox should join many of its peers by seeking more capital to make the most of the current hard market.

"It is not a case of the more [capital] the merrier," he said.

"We would end up trying to get a bit more business by knocking the price down a little bit."

He said existing funds would support underwriting up to the end of 2004 with up to £750m of gross premium.

The company had planned to continue writing nuclear insurance using third party capital for next year, leaving Cox as a managing agent on Syndicate, 1176.

Utley said if the company did not have a source of capital in place by 1 January, it would simply withdraw.

"We're confident the capital will be in place. If for any reason it isn't, we simply won't carry on the business," he said.