Bermuda-based re/insurer Axis Capital Ltd saw profits rise by 78 percent last year.The company said in a statement after the close of the stock markets yesterday that its net earnings totalled $820 million, compared to $461 million in 2009.Axis said its profits for the fourth quarter were $262 million, compared to $282 million in the same period last year.The company reported operating earnings per share of $1.41, comfortably beating the $1.21 forecast of analysts polled by Bloomberg.John Charman, chief executive officer and president of Axis, said: “Axis finished the year strongly with an annualised operating return on average common equity for the fourth quarter of 14.3 percent.“Our 2010 operating return on average common equity was 12.4 percent and our diluted book value per share increased 17 percent during the year. Our combined ratio for 2010 was an excellent 88.7 percent. During the year, we also returned $820 million to shareholders through share repurchases and dividends.”Gross premiums written (GPW) for the quarter were $634.8 million, compared to $573.8 million in the same period of 2009, while for the full year GPW totalled $3.75 billion, up from $3.59 billion a year earlier.Combined ratio for the quarter was 85.6 percent, compared to 77.5 percent in 2009, while for the full year combined ratio was 88.7 percent, compared to 2009's 79.3 percent.Mr Charman said that over the last five years, Axis had increased book value per share at a compound annual rate of 16.5 percent.“All of this has been accomplished despite a difficult economic environment, a challenging property and casualty insurance and reinsurance operating environment and a few relatively active and costly catastrophe years,” the CEO added.“During the year, we continued to invest heavily in our global underwriting platform that will allow for substantial and broad scalability of our profitable underwriting portfolio when the market turns.“This scalability will positively impact a far more diversified profile of business than we have seen at Axis in any period to date.“In 2011, we will continue to strive for underwriting margin, manage risk more sharply each day, strongly position our investment portfolio for a rise in interest rates and prudently manage our capital.“Regardless of the timing of the market turn, we believe we are strongly positioned to continue to generate market-leading book value growth for our shareholders.”Share repurchases totalled $277 million in the quarter and $699 million in the year. Diluted book value per common share of $39.37 at December 31, 2010, represented an increase of 17 percent from a year earlier.Axis reported net favourable prior-year reserve development of $81 million in the quarter, pre-tax, benefiting the combined ratio by 10.7 points, compared with $120 million in the prior year quarter.Net investment income for the quarter declined nine percent relative to the prior year quarter to $108 million, while net investment income for the year declined 12 percent to $407 million.