Axis Capital Holdings Limited, a Bermuda-based insurer, said earnings last year fell nearly 82 percent, the result of $1 billion in catastrophe losses diluting earnings.

Earnings for 2005 were $90.1 million, or 57 cents a share, compared with net income of $495 million or $2.98 a share, in the year-ago period, Axis said in a statement last night. Profit excluding a change in the value of investments was $105.2 million, or 67 cents a share, doubling the average estimate of analysts, according to Bloomberg data.

Meanwhile, fourth quarter income grew by nearly 29 percent $233.5 million, or $1.47 a share, compared to $181.1 million, or $1.09 a share. And quarterly profit excluding realised gains was $243.6 million, or $1.54 a share, compared to $177.2 million in the year-ago period.

The result more than doubled analyst estimates of 72 cents a share in operating income, according to Bloomberg data.

Policy sales rose ten percent in 2005 to $2.66 billion, while income from investments jumped 45 percent to $239.8 million.

Hurricanes hitting the US last year cost Axis more than $1 billion, with the company increasing its estimates for its losses from hurricane Katrina and Rita by five percent to $846.9 million. Losses from fourth quarter storm Hurricane Wilma was estimated at $172.2 million. Axis paid $266.3 million in 2004 storm losses.

John Charman, Axis president and chief executive, said: ?It?s always disappointing to report major loss events; however, I am very proud that Axis was able to produce net income for 2005 of $90.1 million. We finished the year with $4 billion in total capital.?

He said throughout his 34-year in the insurance industry, a sector prone to volatile earnings, he has tried to use capital effectively, and to preserve it regardless of market circumstances.

Axis shares gained 1.5 percent in composite trading on the New York Stock Exchange yesterday, moving up to $30. The company?s one-year return is 12 percent.