Lloyd's of London - the world's largest insurance market - has been hit by the credit crunch and natural disasters.

Profits at the group fell from £1.8bn in 2007 to £949m this year, and Lloyd's warned that recent events would also have an impact on the second half of 2008.

"Hurricane Gustav and Hurricane Ike made landfalls in the US as strong hurricanes causing significant, widespread damage," it said.

"While it is too early to assess the final economic cost of these storms, undoubtedly it will add pressure to underwriting earnings."

By contrast, the figures for 2007 were boosted by the lack of a major natural catastrophe; the most recent ones prior to this year being Hurrican Katrina and Hurricane Rita in 2005.

Lloyd's of London is made up of 75 insurance syndicates covering various sectors.