Montpelier Re Holdings Ltd.'s profits dropped by almost $60 million for the third quarter of 2010 as the company reported a $12 million loss from the New Zealand earthquake and a $9 million loss from other large risks.

The reinsurer posted net income of $90 million or $1.27 per share for the quarter down from $147.5 million or $1.68 per share in 2009.

But its book value per share rose 6.9 percent to $23.76 for the quarter and 13.7 percent for the year to date, including dividends.

Operating income also climbed to $61 million or 86 cents per share from $60.2 million or 69 cents per share over the same period, while comprehensive income was $91 million or $1.28 per share versus $147.2 million or $1.68 per share.

The net impact of realised and unrealised gains from investments and foreign exchange, which is included in comprehensive income, was $30 million.

Christopher Harris, president and CEO of Montpelier, said: "We produced another strong quarter in the face of challenging market conditions with solid underwriting results, steady investment performance and active capital management all contributing to the 6.9 percent growth in fully converted book value per share.

"While the September earthquake in New Zealand was a large industry event, our loss was well within our internal expectations and reflects our relative underweighting in this region of the world."

He continued: "We continue to be pleased with the development of Syndicate 5151, both in terms of underwriting results and the strong market support it has attracted. Looking ahead to 2011, our group capital base is at the high end of the range required to support our underwriting plans, and share repurchases remain a compelling option as part of our ongoing cycle management strategy."

Net written premiums grew by 13 percent compared to the third quarter of 2009 with growth in the company's Lloyd's and US operations more than offsetting a decrease in the Bermuda property catastrophe book.

The loss ratio was 33 percent, which includes eight points ($12 million) of loss resulting from the New Zealand earthquake and five points ($9 million) from large risk losses.

Montpelier, meanwhile, benefited from 14 points ($21 million) in favourable releases from prior years' loss reserves.

Its combined ratio rose to 69 percent compared to 66 percent a year ago, while net investment income was down seven percent from a year ago at $19 million.

The total return on the investment portfolio was 1.8 percent for the quarter and 4.9 percent year to date.

Montpelier repurchased 2.63 million shares during the third quarter at an average price of $15.90. The company repurchased a further 1.57 million shares in October and November at an average price of $17.81.