Allied World Assurance Company Holdings AG made a net loss of $11 million during the third quarter of 2011 after its trading investment portfolio took a hit from declines in the market.The Swiss-based company had previously reported net income of $254.5 million for the same period in 2010 and its profits for the first nine months of the year were well down at $91.4 million from $572.2 million the year prior.The re/insurer’s operating income also dropped to $86.2 million or $2.19 per share for the third quarter, beating Bloomberg analysts’ estimates of $1.52 per share, compared to $143.6 million, or $2.94 per share, a year earlier.Operating income for the nine months ended September 30, 2011 was $89 million or $2.24 per share versus to $300.5 million or $5.79 per share for the opening nine months of 2010.Allied World president and CEO Scott Carmilani said: “Despite the catastrophe activity in the quarter, the company was able to generate operating income of $2.19 per diluted share which equates to 11.5 percent operating return on equity on an annualised basis.“Also noteworthy is the favourable premium growth experienced in each of our operating segments during the quarter. This growth was led by our international reinsurance business written out of our Lloyd’s platform where we are participating in the rate increases experienced in the territories impacted by global catastrophe activity over the last two years. On the insurance side, we continue to gain more traction in the new specialty classes that we are targeting in both our US and international insurance platforms.”He continued: “When including mark-to-market losses on investments, we are reporting a net loss for the quarter driven by market losses taken against our trading investment portfolio. Despite these losses for the quarter, our investment returns have continued to outperform many of our peers and our benchmarks over the last several years and we continue to actively manage our portfolio with a bias towards a shorter duration and diversification into non-fixed income asset classes.“Growing diluted book value per share by 2.1 percent year to date despite the catastrophe activity and the volatility in the equity markets is a strong accomplishment for our company. Given the current valuation of our stock price, we are pleased to announce the resumption of our share repurchase programme which has $201 million of remaining capacity.”Gross premiums written, however, rose 17 percent to $442.7 million for the quarter compared to $378.5 million in 2010. For the nine months ended September 30, 2011, gross premiums written totaled $1.5 billion, a 10.6 percent increase compared to $1.4 billion in the first nine months of 2010.The combined ratio was 83.9 percent versus 70.3 percent in 2010. During the third quarter of 2011, the company recorded net favourable reserve development on prior loss years of $61.5 million, resulting in a benefit of 16.6 percentage points to the its loss and loss expense ratio for the quarter.