Arch Capital Group Ltd made a profit of more than $19 million in the first quarter despite booking catastrophe losses of nearly $180 million.The Bermuda-based re/insurer posted net income of $19.3 million, or 41 cents per share, compared to $210 million, or $3.79 per share, in the same period in 2010.The company also reported after-tax operating income of $7.9 million, or 17 cents per share, for the 2011 first quarter versus $98.7 million or $1.78 per share last year.The results far outperformed the expectations of analysts polled by Bloomberg, who had expected an operating loss of 91 cents per share.Arch’s losses from catastrophes totalled $178.7 million, compared to $58.1 million in the first quarter last year.Arch took a $79.3 million hit from the Japanese earthquake and tsunami and made a combined $99.4 million loss from the New Zealand earthquake, Australian floods, Cyclone Yashi and other events.The company’s book value per share was $91.02 at March 31, 2011, a 1.2 percent increase from $89.98 per share at December 31, 2010, while its after-tax operating income available to shareholders represented a 0.8 percent annualised return on average common equity for the first quarter versus 9.8 percent in 2010.It wrote $964.6 million in gross premiums for the three months ended March 31, 2011 compared to $953.7 million the prior year, with the combined ratio up at 110 percent from 96.4 percent over the respective period.Net realised gains were down at $21.6 million in the first quarter from $45.5 million in 2010.For the 2011 first quarter, the combined ratio of the company’s re/insurance subsidiaries consisted of a loss ratio of 77.9 percent and an underwriting expense ratio of 32.1 percent versus a loss ratio of 63.9 percent and an underwriting expense ratio of 32.5 percent for the 2010 first quarter.Including the effects of foreign exchange, total return on the company’s investment portfolio, calculated on a pre-tax basis and before investment expenses, was approximately 1.5 percent for the 2011 first quarter, compared to 1.58 percent for the 2010 first quarter.Net investment income for the 2011 first quarter was $88.3 million or $1.89 per share compared to $93 million or $1.67 per share for the 2010 first quarter. Net investment income for the 2011 first quarter included an initial dividend of $5.5 million received on an investment fund included in other investments.The pre-tax investment income yield, adjusted to normalise the dividend income item, was 3.06 percent for the 2011 first quarter, compared to 3.24 percent for the 2010 fourth quarter and 3.41 percent for the 2010 first quarter. The decline in yields reflects lower reinvestment yields and an increased allocation to equities.Consolidated cash flow provided by operating activities for the 2011 first quarter was $224.6 million versus $184.6 million for the 2010 first quarter. The increase in operating cash flows in the 2011 first quarter was primarily due to the timing of dividend receipts on other investments and the timing of certain expense payments.During 2006, Arch invested $50 million in Aeolus LP, which operates as an unrated reinsurance platform that provides collateralised property catastrophe protection to re/insurers on both an ultimate net loss and industry loss warranty basis. As of March 31, 2011, the carrying value of this investment, after taking into account the $57 million in cash distributions received through March 31, 2011, was approximately $54 million, with no unfunded capital commitments.Based upon information currently available to the company as to the 2011 first quarter catastrophic events, the company estimates that it will record in its second quarter results a loss in the range of $9 million to $12 million in terms of this investment.During the 2011 first quarter, Arch repurchased 2.7 million common shares for an aggregate price of $237.2 million under its share repurchase programme. Since the inception of the programme through March 31, 2011, the company has bought back 34.4 million shares for $2.51 billion. At March 31, 2011, $992.4 million of repurchases were available under the share repurchase programme.