Reinsurance broker Guy Carpenter said shareholders funds of Bermuda companies it tracks grew by 4.5 percent during the first nine months of last year.However, during the same period the Guy Carpenter Bermuda Reinsurance Composite experienced a 24 percent fall in net income compared to 2009. This was largely to $3.2 billion in catastrophe losses in a year that brought significant insured losses from earthquakes in Chile and New Zealand, and the loss of the Deepwater Horizon oil rig.In its report, released yesterday, Guy Carpenter added: “With overall market conditions failing to have improved materially over the past 18 months, companies have decided to return capital to shareholders - in the form of buybacks, primarily, as well as dividends. Capital returns through the first nine months of 2010 amounted to nearly $6.3 billion.”It added that the only significant capital raising during the first nine months of 2010 was the $1.5 billion issued by Alterra Capital following the merger of Max Capital Group and Harbor Point.The significant catastrophe losses contributed 14.3 percentage points to the composite’s combined ratio of 93.8 percent. The 2009 combined ratio of 82.3 percent benefited from a lack of significant catastrophic activity and reserve releases of $2.3 billion, which reduced the ratio by 7.8 percentage points. Reserve releases for the first nine months of 2010 fell to $2 billion, a nine percentage-point benefit to the combined ratio. Much of the redundancy in 2010 stemmed from short-tailed lines of business.Gross premiums written grew by a modest 2.7 percent for the first nine months of 2010 versus the prior-year period. The modest top-line growth stemmed from the continued effects of the financial crisis, which led to decreased exposures and lower demand from cedents.Investment income remained flat in comparison to the prior-year period. Realised capital gains improved in 2010 as asset impairments diminished.The new challenge facing companies appears to be how to reinvest cash and maturing investments in the current low yield environment.