Bermuda-based re/insurer Alterra Capital Holdings Ltd last night reported net income of $79.7 million for the fourth quarter and beat analysts’ expectations on both earnings and revenue.Alterra, which was formed in May last year through the merger of Max Capital Group and Harbor Point, said operating earnings per share were 66 cents, beating the forecast of analysts polled by Bloomberg of 61 cents.Revenue of $414.5 million handily beat the analysts’ figure of $377.7 million.Full-year net earnings for 2010 totalled $302.3 million. Net operating return on average shareholders’ equity for the fourth quarter of 2010 was 10.2 percent.Marston (Marty) Becker, the president and chief executive officer of Alterra, said: “It has been an exciting and profitable year for Alterra and our shareholders. Our success continues to be tied to our strategy of opportunistically entering complementary market segments with attractive underwriting prospects, while consistently deploying “best in class” underwriting talent to build profitable books of business and better serve our clients.”Property and casualty gross written premiums for the quarter totalled $313.5 million and $1.4 billion for the year.Mr. Becker added: “In 2010, the insurance markets continued to be impacted by competitive pricing that became increasingly more aggressive as the year progressed. In this environment, our foremost objective was, and is, to maintain our underwriting discipline, and we believe we have done this well to date.“As evidence of this, we expect losses from the recent events in Australia and Egypt to be within our normal ranges.“With declining premiums but continuing profitability, excess capital is inevitably generated. We are committed to the flexible and efficient management of capital, and accordingly we are pleased to have returned over $558 million to our shareholders in 2010, in the form of regular dividends, a special dividend, and share repurchases.“We are well positioned to navigate the uncertainty of the present industry environment, and to capture meaningful opportunity at the cycle inflection point.“In the interim, we intend to continue to focus on growth in book value per share, capital management and a competitive dividend, and to protect our clean and strong balance sheet.”Total invested assets, including cash and cash equivalents, were $7.9 billion at December 31, 2010, an increase of $2.6 billion from a year earlier, reflecting additional invested assets from the Harbor Point investment portfolio.Net investment income for the fourth quarter of 2010 was $61.1 million and $222.5 million for the full year.Alterra repurchased approximately 5.2 million of common shares during the fourth quarter of 2010 for $109.3 million. Share repurchases for the full year were 10.3 million shares for $207.8 million.As of the end of 2010, $127.8 million remained under the board-approved share repurchase authorisation.Shareholders’ equity was $2.9 billion at year-end 2010, an increase of 86.5 percent from a year earlier, reflecting the impact of the merger.Diluted book value per share as of December 31, 2010 was $25.99, an increase of 5.7 percent from December 31, 2009 after adding back $2.94 per share in dividends paid to shareholders during the year.www.alterra.com