Catastrophe reinsurance specialist IPC Holdings Ltd. recorded a net loss of $87.5 million for the third quarter, as storm losses and net investment losses each topped $100 million.

In results for the June-through-September period released last night, the Bermuda company estimated that Hurricane Ike alone cost it $106 million, while losses from Gustav would be around $3.7 million.

Additionally, IPC recognised a net loss from investments of $108 million, although this included changes in the fair value of the company's investment portfolio holdings, since the company has used the SFAS 159 fair value accounting rule since the start of 2007.

IPC's net third-quarter loss broke down to $1.93 per common share, compared to a profit of $113.2 million, or $1.63 per share, in the third quarter of 2007.

IPC chief executive officer Jim Bryce said 2008 would go down as a record year for catastrophes of many different types. "In addition to all of the insured losses, we've experienced the costliest catastrophe event in many years — the meltdown of global financial markets — the effect of which will probably be measured in trillions of dollars," Mr. Bryce added. "All of this will inevitably result in impacted balance sheets for many companies."

He added: "On the investment side, our conservative approach helped us avoid any direct losses arising from sub-prime mortgages; in both January and September, 2008 we pared back our investments in equities, although this did not shield us entirely from crashing equity prices, widening credit spreads and major financial institutions requiring rehabilitation or reorganisation, little of which could have been foreseen only a matter of months ago.

"Despite all of these events, we have entered the fourth quarter of 2008 and look forward to 2009 with a feeling of optimism."

Mr. Bryce said IPC's experienced staff had learned the lessons of the busy hurricane seasons in 2004 and 2005 and had adjusted their underwriting approach accordingly. Its low offshore energy exposure had served the company well, particularly with regard to Ike.

Mr. Bryce was confident of retaining clients. "We have an enviable portfolio of clients, many of whom have been with us for over a decade or more, and who will be looking for our continued support in 2009," he said. "We also have strong relationships with the brokers who place business with us, and our long-term, proactive approach should be of benefit in times of consolidation."

Net operating income for the quarter was $21.0 million, or $0.38 per share, compared to $82.5 million, or $1.19 per share for the third quarter of 2007. For the nine months ended September 30, 2008, net operating income was $212.2 million, or $3.53 per common share, compared to $177.1 million, or $2.48 per common share, for the corresponding period in 2007.

The losses from Ike and Gustav were partly offset by a $23.1 million reduction to estimates of losses from prior-year events. This included an $8.5 million reduction for hurricanes Katrina, Rita and Wilma in 2005 and $9.3 million for major events that occurred in 2007.