Bermuda-based Argo Group International Holdings Ltd.'s first-quarter net income fell 23 percent after the re/insurer suffered catastrophe losses of $29.1 million.

Of those estimated losses, which the company said amounted to about 1.8 percent of 2009 year-end shareholders' equity, $21.6 million resulted from February's earthquake in Chile.

Argo's net income for the first three months of the year totalled $20.7 million, or 67 cents per diluted share, compared to $27 million or $88 cents per share in the same period of 2009, when there were no material catastrophe losses.

Argo chief executive officer Mark Watson said: "As is the case for most in the industry, the catastrophic events during the first quarter had a substantial impact on our results. Despite these events and the intensely competitive marketplace, I'm pleased Argo Group produced profitable results and continued its trend of increasing book value per share quarter over quarter."

Book value per share increased to an all-time high of $53.81 at March 31, 2010, increasing 19.2 percent over the preceding 12-month period.

Gross written premiums fell to $404.5 million in the quarter, versus $496.1 million for the first quarter of 2009.

Argo said its group combined ratio — equivalent to the number of cents in each premium dollar spent on claims and expenses — was 105 percent in the first quarter versus 96.3 percent for the same period in 2009. The 2010 first quarter loss ratio was negatively impacted by approximately nine points from catastrophe losses.

Net pre-tax operating income, or pre-tax income before net realised investment gains and losses and foreign currency exchange gains and losses, was $12.2 million versus $43.2 million for the first quarter of 2009.

Argo's net investment income for the three months was $33.8 million, compared to $39.3 million in the prior-year period.

Net realised gains on sales of investments were $14.5 million for the three months ended March 31, 2010, versus losses on sales of investments and other than temporary impairment charges of $11.8 million for the three months ended March 31, 2009.