Bermuda re/insurer Axis Capital Holdings Ltd. posted a $112 million profit for the first quarter — despite catastrophe losses estimated at $147 million.

In its earnings statement last night, Axis estimated pre-tax net losses of around $100 million for the earthquake that caused widespread destruction in central Chile in February.

For the combination of Australian storms, European Windstorm Xynthia and US winter storms in the first quarter, Axis estimated a loss of $47 million.

Axis chief executive officer John Charman said: "We are pleased to report an increase in diluted book value per common share of nearly three percent during this first quarter of 2010.

"Our prudent risk management efforts have served us well as we have produced strong quarterly profitability despite the accumulated impact of an unprecedented number of worldwide catastrophes affecting underwriting profitability for a first quarter.

"Our underwriting results also reflect the favourable impact of recovery in the global financial markets on certain business lines."

Mr. Charman added that a $500 million senior notes issuance, as well as continued significant share repurchases, were in best interests of shareholders in the current market conditions.

The net income of $112 million, or 79 cents per share for the first quarter, compared with $116 million, or 78 cents per share, for the same period in 2009.

Operating income was $96 million, or 67 cents per share, compared with $156 million, or $1.05 per share, for the first quarter of 2009.

Gross premiums written rose eight percent to $1.4 billion, reflecting higher insurance sales.

Combined ratio — the percentage of premium dollars outlaid on claims and expenses — rose to 98.3 percent.

This was 11.7 percentage points compared to the prior-year period, due to the significant level of catastrophe activity.

Axis said net favourable prior-year reserve development was $81 million, pre-tax, benefiting the combined ratio by 11.7 points, compared with $84 million last year.

Net investment income increased five percent to $105 million and total return on cash and investments was 1.8 percent (pre-tax)

Diluted book value per common share rose three percent during the first quarter to $34.56.

Axis measured total capitalisation at March 31, 2010 at $6.4 billion, including $1 billion of long-term debt and $0.5 billion of preferred equity.

AXIS CAPITAL Q1 REPORT CARD

Net income: $112 million compared to $116 million in 2009.

Gross premiums written $1.43 billion compared to $1.32 billion in 2009.

Combined ratio: 98.3 percent compared to 86.6 percent in 2009.