Catlin, the operator of the biggest syndicate in the Lloyd's of London insurance market, reported a pretax profit of $145 million (93 million pounds), down from $231 million, a year earlier.

Net investment return in the first half fell to $9 million from $83 million a year earlier.

"And that's really the difference between this year and last year in terms of pretax profit, is entirely due to what, I suppose, you could typify as temporary accounting-type losses," chief operating officer Paul Jardine said.

"We hold those securities to maturity and we will get those losses reversed in future periods."

Gross premiums written rose 10 percent in the six months to June 30, with the company reporting a net underwriting contribution of $441 million.

This was in line with a year earlier despite catastrophe losses of $99 million incurred as a result of floods in Calgary, Alberta, floods in Central Europe and tornadoes in Oklahoma.

The company reported no catastrophe losses in the first half last year.

"Underwriting performance was once again solid too, in line with us and with company collected consensus," Barclays analyst Andy Broadfield said in a note.

"However, these solid set of results were impaired by mark to market losses from fixed income instruments, which more than offset the regular investment income," the analyst said.

Shares in the FTSE-250 <.FTMC> company were down 1.4 percent at 482.8 pence at 9.03 British Time on Friday. They have gained 10 percent over the past year.

(Reporting by Abhishek Takle in Bangalore; Editing by Supriya Kurane)

By Abhishek Takle