An increase to the loss estimate from Hurricane Ike drove Arch Capital Group Ltd. to a fourth-quarter loss of $143 million.

The Bermuda-based insurer and reinsurer last night said the company's results for the last three months of 2008 had been impacted by $155.6 million increase in net losses from the September storm, on top of the $133 million it declared in the third quarter for Ike and Gustav.

Arch's loss for the quarter broke down to $2.28 per share, and compared to net income of $234.4 million, or $3.31 per share in the same period in 2007.

For the full year, Arch posted net earnings of $265.1 million, or $4.09 per share, compared to $832.1 million, or $11.28 per share in 2007. In its earnings statement, Arch said the Ike loss increase was based on additional information from clients reflecting larger losses than initial estimates, as well as from increased estimates of industry insured losses of $18 billion to $21 billion.

"Approximately two thirds of the increase resulted from the company's expected claims in the onshore and offshore energy lines of business," Arch's statement said. "The updated hurricane loss estimates are derived from modelling techniques, industry assessments of exposure, preliminary claims information obtained from the company's clients and brokers to date as well as a review of the company's in-force contracts."

Conbined ratio was 95 percent for the full year and 101.2 percent for the quarter. Arch's book value per common share, including the net effect of share repurchases, fell to $51.36 at December 31, 2008, compared to $53.04 at September 30 and $55.12 at the end of 2007.

Gross premiums written remained flat at $ 825.5 million, compared to $ 828.2 million in the fourth quarter of last year.

Arch also revealed what its Bermuda-based reinsurance arm had paid in US federal excise tax, for premiums assumed on US risk. For the quarter, it paid $2.9 million and for the year, $13.1 million.

Net investment income declined slightly for the quarter, to $111.7 million from $120.8 million for the same period a year earlier. .

Arch stressed that its investment portfolio primarily comprised high-quality, fixed-income securities. The average credit quality of the portfolio was AA+ at December 31, 2008.