Alterra Capital Holdings Ltd recorded a profit of $65 million for 2011, despite taking a more than quarter-billion-dollar hit from net catastrophe losses.Last night, the Bermuda insurer and reinsurer also said it made net income of $31 million for the fourth quarter. Its operating income for the last three months of the year was 30 cents per share, beating the 28 cents estimate of analysts polled by Bloomberg.After a year in which many of Bermuda’s catastrophe-focused insurers posted losses, CEO Marty Becker said the results showed the value of Alterra’s diversified underwriting portfolio.“We are pleased with Alterra’s relative performance in 2011,” Mr Becker said in a statement. “We have reported positive operating income and a positive return on equity. Importantly, we have grown our book value per share over the year.“Considering the record level of industry property catastrophe losses in 2011, we believe our results highlight the benefits of our diversified underwriting strategy, measured cat risk appetite and sophisticated risk management discipline.“We have worked hard these past few years to build a global organisation with a geographic and product footprint that can meet the needs of our clients and enable us to capture opportunity. As a result, with the industry apparently on the cusp of change, we believe Alterra is particularly well positioned to take advantage of the expected improvement in prices.”For the year, Alterra saw a big increase in the amount of business it wrote. Property and casualty gross premiums written of $1.9 billion, were up $494.9 million, or 35.2 percent, on 2010. Alterra was formed through the amalgamation of Max Capital and Harbor Point Re in May 2010.Combined ratio, which reflects the proportion of premium dollars spent on claims and expenses, was 98.2 percent for the year, compared to 85.7 percent in 2010, as the company sustained property and catastrophe event and significant per-risk net losses of $253.4 million, almost five times more than the previous year.Net favourable development on prior years’ loss reserves was $153.3 million, or 10.8 combined ratio points, compared to $105.5 million, or nine combined ratio points, in 2010.Property catastrophe losses principally affected the reinsurance and Alterra at Lloyd’s segments.Additionally the company lost $25 million of principal invested in a catastrophe bond that was triggered by the Japan earthquake and tsunami in March. This was booked as an investment loss.Net investment income for the year was $234.8 million, compared to $222.5 million in 2010, an increase of 5.6 percent.Shareholders’ equity was $2,809.2 million at the end of last year, a decrease of 3.7 percent from 12 months earlier. Diluted book value per share as of December 31, 2011 was $26.91. Alterra’s share price closed yesterday on $24.98, down 1.8 percent, before the financial results were released.Including dividends declared during 2011, diluted book value per share growth in 2011 was 5.5 percent.