Bermuda-based insurer and reinsurer AXIS Capital Holdings Limited has reported a 2008 third-quarter net loss of $249 million, or $1.79 per diluted common share, compared to a third-quarter 2007 net income of $270 million, or $1.65 per diluted common share.

The company cited Hurricanes Ike and Gustav as well as investment losses from the "unprecedented financial market volatility and disruption to the financial system" as reasons for the quarter's results.

For its insurance segment, AXIS reported an underwriting loss of $22 million, compared to a third-quarter 2007 underwriting income of $111 million. The combined ratio was 102.8 compared to 63.3 in 2007. AXIS said it saw net losses of $115 million from Hurricanes Ike and Gustav.

The company reported net realized investment losses of $89 million for the quarter, which included other than temporary impairment charges of $50 million, of which $29 million related to fixed maturity holdings in Lehman Brothers. Realized losses on the sale of investments were $41 million, including a $60 million loss on the sale of Fannie Mae and Freddie Mac preferred equity, partially offset by realized gains on the sale of certain fixed maturities, AXIS said. In the third quarter of 2007, net realized losses were $1 million.

Third-quarter 2008 gross premiums written were $403 million, down 16 percent from third-quarter 2007. Reported net premiums of $236 million were down 25 percent from a year ago.

AXIS said, "We reduced gross premiums written in many of our property-casualty lines of business this quarter as a result of continued competitive market conditions. Our political risk premium also decreased this quarter reflecting the reduction in available transactions as private capital flows slowed amidst the ongoing global financial crisis."

AXIS added that it will reserve capacity for expected increases in pricing that "we expect when liquidity returns to the financial markets."

In the reinsurance segment, AXIS reported an underwriting loss of $164 million for the quarter, compared to an underwriting income of $88 million last year. The combined ratio was 141.4 compared to 77.1 in the prior-year quarter.

The reinsurance segment reported gross premiums written of $323 million, up 17 percent from the third quarter of 2007, driven by reinstatement premiums written of $29 million following Hurricanes Ike and Gustav.

AXIS said third-quarter 2008 net investment income decreased $68 million, or 57 percent, from the third quarter of 2007 to $51 million, driven by a reduction in investment income from the company's alternative investment portfolio of $68 million, "the majority of which emanated from unrealized losses on our credit and hedge funds."

For the nine months ended September 30, 2008, AXIS reported a net income of $220 million, or $1.40 per diluted share, compared with $749 million, or $4.53 per diluted share, in 2007.

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AXIS Capital Reports 3Q Net Loss Of $249 Million

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