34% profit increase reported of Lloyd's

As we know, Lloyd's of London is the oldest insurance market. The following is its first half year of 2007 profit report.
Looks good on profit in such a soft market.

Lloyd’s has reported a pre-tax profit of £1.8 billion [approximately Cdn$3.65 billion], for the first six months of 2007, marking a 34% increase over last year.
Lloyd’s saw a profit of £1.35 billion [approximately Cdn$2.74 billion] for the same period of 2006.
The insurer also reported a combined ratio of 82.9% for the first half of 2007, compared to 86.0% for the same period in 2006).
A Lloyd’s release contrasts this ratio with an estimated average of 93% for U.S. property and casualty insurers, 90% for U.S. reinsurers, 86% for Bermuda, and 97% for European insurers and reinsurers.
“This result was driven by the favourable rating environment in 2006, together with the release of prior claims reserves,” a Lloyd’s statement says.
This was balanced by the weaker, but still profitable, underwriting conditions experienced in the first half of the year.
“These profits reflect the recent favourable rating environment and a relatively low level of catastrophe claims,” Richard Ward, Lloyd’s chief executive, said in a statement.
“We are now seeing a downward pressure on rates and a softening of conditions across all classes. This reinforces the continued need to focus on underwriting for profit,” he added.