Everest Re Group Ltd’s profits dropped by almost two-thirds during the third quarter of 2011 after being hit by $119 million in catastrophe losses.The re/insurer posted a net income $63.1 million or $1.16 per share compared to $174.2 million or $3.11 per share for the same period last year.But its operating income held up well at $146.7 million or $2.70 per share versus $149.3 million or $2.67 per share over the same time frame.For first nine months of 2011, the company actually made an operating loss of $42.9 million, or 79 cents per share in contrast to operating income of $260.3 million or $4.50 per share in 2010.Including net realised capital gains and losses, the net loss was $121.5 million or $2.24 per share for the first nine months of 2011 compared to net income of $308.2 million, or $5.33 per share for the same period last year.Everest Re chairman and CEO Joseph Taranto said: “We are pleased to have generated operating income of $147 million for the quarter, driven by both strong underwriting results, with a combined ratio of 95.6 percent, and solid investment earnings, which were up 11 percent over last year. We expect property reinsurance rates to continue to rise into 2012 in response to 2011 catastrophe losses. We will continue to reposition our portfolio to respond to market opportunities.”The company’s gross written premiums also declined three percent to $1.13 billion from 2010 and excluding the impact of foreign exchange and reinstatement premiums, gross written premiums were down six percent for the quarter.Pre-tax catastrophe losses, net of reinstatement premiums, were $119.4 million in the third quarter versus $89.4 million last year. The current quarter losses included $35 million for Hurricane Irene, with the remainder primarily attributable to increased loss estimates on first quarter events, specifically the earthquakes in Japan and New Zealand as cedants and brokers in those regions continued to indicate higher than anticipated loss costs for these events.The re/insurer’s current quarter loss ratio and combined ratio were 69 percent and 95.6 percent respectively compared to 67.7 percent and 95.9 percent, respectively, in 2010.Net investment income rose 11 percent to $156.5 million, while net after-tax realised capital losses totalled $83.6 million for the quarter, due, in large part, to after-tax fair value adjustments on the equity portfolio. This compared to net after-tax realised capital gains of $24.9 million in the same period last year.During the quarter, the company bought back 597,006 of its shares at an average price of $78.08 and a total cost of $46.6 million. Subsequent to the quarter, it had repurchased an additional 105,000 of its shares. The repurchases were made pursuant to a share repurchase authorisation, provided by the board of directors, under which there remains 2.3 million shares available.The company’s shareholders’ equity ended the quarter at $6.1 billion, a decrease of three percent from the $6.3 billion at the end of 2010. Book value per share was $113.26 as of September 30, 2011 compared to $115.45 at December 31, 2010.