Bermuda-based Aspen Insurance Holdings Ltd. yesterday reported a net loss for the third quarter of $116.7 million as it suffered the effects of pay-out claims on Hurricanes Gustav and Ike and exposure to Lehman Brothers investments.

The insurer, which made a profit of $117.2 million for the same period last year, saw the two hurricanes account for $1.91 of the reduction in earnings per share for the third quarter and $1.80 per share for the first nine months of 2008.

But gross premiums written for the quarter were up 18.2 percent at $441.3 million versus $373.5 million for the respective period in 2007, due mainly to the contribution of the new underwriting teams.

However, combined ratio rose from 84.5 percent in the third quarter of last year to 123.3 percent during this year's third quarter, while net investment income lunged 73.3 percent to $19.3 million over the same period.

Book value held up well at $26.21 at the end of the quarter compared to $25.68 by September 30, 2007.

Third quarter performance included a $44.5 million pre-tax charge for holdings in Lehman Brothers Holdings Inc. senior notes and sub-ordinated debt.

Chris O'Kane, chief executive officer of Aspen, said: "Our third quarter earnings were impacted by the September hurricanes and investment losses resulting from the global financial crisis. Our estimated losses from Hurricanes Ike and Gustav are in line with our expectations for storms of this size and nature.

"The impairment charge to our investment portfolio was mainly due to write-downs on our holdings of Lehman Brothers bonds and we also experienced negative performance in our funds of hedge funds investments.

"Our strong balance sheet leaves us well positioned to benefit from the improved pricing environment which we expect to result from the hurricanes and financial markets crisis. Our prudent risk management and disciplined underwriting approach will enable us to deploy our capital effectively against a backdrop of a radically changing economic landscape."

Aspen also announced yesterday that its board of directors declared a quarterly cash dividend of 15 cents per share, which is payable on November 26.