Reinsurer Endurance Specialty Holdings Ltd. reported a lower first-quarter profit that missed analysts' estimates as net investment income slumped 37 percent.

The Bermuda-based company posted net income of $77.8 million, $1.15 a share, for the first quarter of 2008 compared with $101.8 million, $1.36 a share, a year earlier.

Net investment income fell 37 percent to $46.9 million due to market reductions in the value of the company's alternative investments and high yield funds.

The investment income generated by the company's fixed maturity investments for the first quarter of 2008 was consistent with the same period in 2007.

Operating income, which excludes after-tax realised investment gains and losses and foreign exchange gains and losses, was $89.5 million, $1.33 a share.

Analysts expected the company to earn $1.58 a share, before special items, according to Reuters Estimates.

Chairman and chief executive officer Kenneth LeStrange said: "Endurance reported another quarter of solid operating results and book value growth in a quarter marked by significant capital market volatility and increased industry losses for global property risks.

"Our premiums were up significantly in the quarter, largely from our recently acquired agriculture insurance unit. The premium growth from our agriculture insurance business has the potential to enhance our future earnings and further diversify our underwriting portfolio. As we continue through 2008, we remain focused on identifying new opportunities for profitable growth while maintaining our underwriting discipline."

Gross written premiums were up 51.5 percent, to $868.6 million, as a result of Endurance's acquisition of ARMtech Insurance Services, Inc., which specialise in crop insurance, in October 2007.