It was a rollercoaster third quarter for Bermuda's insurance companies.

Some took multi-million dollar hits after the European floods and investment returns were not what they might have hoped for.

But the clouds had a silver lining with increased business at the best rates seen in a decade.

There was also the marked contrast between this year's and last year's third quarter results when huge losses were recorded for the three month period as a result of the September 11 terrorist attacks.

Some of the Island's leading insurers - including ACE, XL, Partner Re and IPC Re - were hit by large claims during the quarter as a result of the European floods, but that down side was offset by significant increases in the business coming in.

ACE CEO Brian Duperreault said at the time of the company's third quarter results release: "This quarter and our year to date have been characterised by exceptional premium growth.

"This has helped produce positive cash flow in excess of $1 billion for the quarter," he said.

The company's flood exposure was $90 million after taxes.

Partner Re also saw its third quarter results suffer under the impact of flood claims - a whopping $120 million which wiped out any potential profit.

Although this meant the company posted an operating loss of $28.2 million, CEO Patrick Thiele predicted the rate increases in the current hard market would continue and that there would be greater business opportunities for the reinsurer with "significant turmoil" in some segments of the European market.

IPC Re also reported some exposure to the quarter's catastrophic events, but on the flip side said it had seen a 93.1 percent increase in its total written premiums.

The company said its "careful underwriting approach" meant its flood-related losses were "limited" and the company was still able to post a profit of $45.8 million for the quarter.

XL said it was facing some $50 million in claims as a result of the European floods but the leading insurer still managed to post a $184 million profit during the quarter.

And despite lower than hoped for investment earnings, XL was able to capitalise on the current hard market conditions which gave a boost to the business written during the quarter.

CEO Brian O'Hara said: "Our insurance and reinsurance business have enjoyed a robust third quarter, with significant rate increases and new business contributing to strong underwriting results in the quarter."

And Mr. O'Hara also predicted that rates would continue as a result of hardening market conditions.

Bermuda's new kids on the block - the wave of insurance companies to set up after the September 11 terrorist attacks, to capitalise on better market conditions - also saw healthy business in the third quarter, although there were no comparisons to last year as the companies set up in late 2001.