Endurance Specialty Holdings Ltd. yesterday reported a fall in first-quarter profit of more than 28 percent, after it suffered estimated losses of $65 million from catastrophes.

The Bermuda-based re/insurer posted net income of $55.8 million, or 91 cents per share, for the first quarter of 2010, versus $78.3 million, or $1.24 per share, in the same period last year.

February's earthquake in central Chile and the deadly European windstorm Xynthia added 17.6 percentage points to Endurance's combined ratio, a measure of underwriting profitability, which was 97.3 percent.

Endurance chief executive officer David Cash said: "Our first-quarter results are indicative of the strong franchise that we continue to build at Endurance.

"We produced an underwriting profit in the quarter despite significant natural catastrophe losses affecting our industry – a testament to our diversified book of business and strong risk management.

"In addition, we were able to meaningfully expand our portfolio of businesses in the quarter, which is attributable to numerous thoughtful client development and growth initiatives that we have undertaken over the past several years."

Endurance managed to sell more insurance in a testing environment, reflected by its $35.6 million increase in gross premiums written to $818.9 million.

This resulted primarily from growth across all lines of business within the reinsurance segment and increased retentions in the agriculture line of business in the insurance segment, partially offset by the decline in the workers' compensation line after the company's exit from the California workers' compensation market in February 2009.

Endurance's net investment income of $56.5 million declined 12.5 percent, or $8.1 million, for the quarter ended March 31, 2010 as compared to the same period in 2009. This included gains of $17 million on its alternative investments and high yield loan funds, included in other investments, as compared to gains of $10.5 million in the first quarter of 2009.

Endurance's shareholders' equity was $2.8 billion, or $45.89 per common share versus $2.8 billion, or $44.61 per share, at December 31, 2009. The company said it repurchased some 1.33 million of its common shares for an aggregate repurchase price of $48.4 million at an average price of $36.29 per share.