Bermuda insurer and reinsurer Argo Group made a net third-quarter loss of $8.8 million on hurricane and investment losses, the company announced last night.

Claims resulting from Gustav and Ike are likely to add up to $60 million, Argo said in its earnings statement, while realised investment losses totalled $18.4 million.

The acquisition of Lloyd's insurer Heritage earlier this year helped to boost business, as Argo's gross premiums written rose to $477.7 million from $332.9 million in the same period in 2007. Revenue also grew by 36 percent, to $351.4 million from $258.7 million.

Argo's net loss broke down to a loss of 29 cents per share, compared to a profit of $74.2 million, or $2.70 per share in the July-through-September period last year. Chief executive officer Mark Watson said: "Although the third quarter proved to be a challenging one for our company and the entire property and casualty insurance industry, Argo Group demonstrated that our risk management practices were effective under the stress of multiple catastrophic events, including a historic downturn in global financial markets.

"The losses produced by two major hurricanes as well as those affecting our investment portfolio were within our risk tolerance and had less of an impact on Argo Group than many of our competitors.

"In the wake of Gustav and Ike, it was imperative we also focus our attention on serving the needs of our insureds affected by the hurricanes.

"I'm pleased to say our claims representatives were on the ground promptly so that they could respond to the needs of claimants, many of whom sustained devastating losses as a result of these storms."

During the quarter, Argo's investments decreased by $35.7 million — less than one percent of the company's portfolio, which was valued at $ billion at September 30, 2008.

The company said net income for the first nine months of the year totalled $51.1 million versus $120.3 million in the same period last year. Argo stressed that the 2007 figure included an extraordinary gain of $67.3 million associated with its merger with PXRE Group Ltd.