Continuing market turmoil would result in a "sea of red ink" all over insurers' year-end results, according to Lancashire Holdings chief executive officer Richard Brindle.

Payouts resulting from hurricanes Ike and Gustav and investment losses emanating from the financial crisis led Bermuda-based Lancashire to post its first-ever loss in the third quarter.

The net loss for the July-through-September period was $119.4 million, or 69 cents a share, from a profit of $105.2 million, or 51 cents, a year earlier, the company said in a statement yesterday.

Gross premiums written fell 15 percent to $124.6 million. Claims from the hurricanes cost the insurer $150 million.

Lancashire's book value for share declined to $6.33 per share at September 30, 2008, compared to $6.91 at the end of 2007.

Mr. Brindle did found grounds for optimism looking ahead to next year, as he suggested the soft market cycle was coming to an end.

"There is now no question that the market has turned," Mr. Brindle said. "In many areas of our portfolio, conditions could be similar, or even better, than what would have been in place in 2002, due in part to large improvements in terms and conditions since that time.

"Our balance sheet is strong and we look forward with optimism."

Mr. Brindle said the credit crisis was having a "very significant impact on capacity in the industry, as a whole".

"If the current malaise affecting all financial markets continues through the fourth quarter, we can expect a sea of red ink for the industry's full-year results."

Hurricane Ike and the smaller storm, Gustav, cost insurers a combined $10 billion when they struck the Gulf Coast in September, the highest amount since Katrina contributed to a record $58.7 billion of claims in 2005, according to Insurance Services Office.

Lancashire, which was established in 2005, will change its pricing and its products for off-shore energy, adopting a more conservative attitude to energy risks, Jonathan Creagh-Coen, head of investor relations, told Bloomberg in a phone interview yesterday.