Alterra Capital Holdings Ltd last night reported a profit of $37.7 million for the third quarter of 2012, down more than 22 percent from the same period last year.The Bermuda insurer and reinsurer also said its operating income for the last three months was 33 cents per share, falling short of the 37 cents per share estimate of analysts polled by Yahoo Finance.The company’s net income was $32.1 million compared to $50.1 million in the third quarter of 2011. Annualised net operating return on average shareholders’ equity for the quarter was 4.5 percent.Alterra president and CEO Marty Becker said the company’s results reflect a “fundamentally sound” quarter that brought negative impact from crop and storm losses in the US.“We’ve seen continued growth in book value per share contributing to an 11.5 percent growth in diluted book value per share including dividends, since December 31, 2011,” Mr Becker said.“Premium rates continue to firm at a measured pace, but with variation across product lines. We believe our diversified underwriting strategy, by both product line and geography, positions us well to capture favourable underwriting opportunities as they arise, even as we continue to limit our exposure in lines that we think are inadequately priced.“The investment environment remains challenging, given the global market conditions all firms are confronting. We continue to search for higher yielding opportunities without compromising the overall quality of our portfolio, in addition to actively managing our capital positions.”Year over year, Alterra saw no change in the amount of business it wrote. Property and casualty gross premiums written were $385.5 million — the same as the third quarter of last year.Combined ratio, which reflects the proportion of premium dollars spent on claims and expenses, was 99.9 percent for quarter, compared to 87.7 percent in 2011, as the company sustained significant property catastrophe event net losses of $15 million, principally within the US insurance segment, compared to net losses of $42.1 million in a year ago. A smaller proportion of 2012’s property losses fell within the attritional loss ratio, contributing to a higher combined ratio this year.Net favourable development on prior years’ loss reserves was $22.7 million, or 6.8 combined ratio points, compared to $31.7 million, or 9.2 combined ratio points, in 2011.Net investment income was $53.5 million, compared to $60.3 million in the same quarter of 2011, a decrease of 11.3 percent.The company also reported an income of $6.8 million from New Point Re IV Limited, a sidecar in which Alterra has an indirect 34.8 percent equity interest, consisting of fees and equity share earnings.Net investment income for the quarter was $53.5 million, compared to $60.3 million in 2011, a decrease of 11.3 percent.Shareholders’ equity was $2.92 billion as of September 30 — a 4.1 percent increase from the end of last year. Diluted book value per share as of September 30 was $29.57.Alterra repurchased 921,707 common shares during the third quarter of 2012 at an average price of $23.11 per share for a total of $21.3 million.