Bermuda-based re/insurer Arch Capital Group Ltd said yesterday that fourth-quarter profit fell 20 percent after the company paid out $22.5 million in losses related to December’s Australian floods.Arch said net income for the October through December period was $227.7 million, compared to $284.7 million for the same quarter of 2009. Full-year earnings for 2010 were $816.7 million in 2010 compared to $851.1 million the year before.The company’s earnings per share of $2.58 comfortably beat the forecast of analysts polled by Bloomberg, who expected $2.36.The company added that it expects more catastrophe losses in the first quarter of this year ranging from $30 million to $60 million, relating to further flooding in Australia and Cyclone Yasi, which also occurred Down Under.Arch’s book value was $89.98 at year end 2010, up 23.2 percent from a year earlier and 0.8 percent higher during the quarter.The company’s combined ratio, reflecting the proportion of premium dollars spent on claims and expenses, was 92.7 percent for the quarter compared to 88.8 percent for the same period of 2009. For the year, combined ratio was 92.5 percent compared to 88.1 percent in the previous year.Gross premiums written were down for the quarter, to $664.2 million from $718.7 million, and down for the year, to $3.27 billion from $3.59 billion.Including the effects of foreign exchange, total return on the company’s investment portfolio was approximately -0.07 percent for the fourth quarter, compared to 1.15 percent for the same period in 2009, and seven percent for the year ended December 31, 2010, compared to 11.28 percent for the year ended December 31, 2009.Net investment income for the fourth quarter was $90.6 million, compared to $93.6 million for the 2009 fourth quarter.Arch revealed that it incurred $11.5 million of federal excise taxes for the year ended December 31, 2010, compared to $12.8 million for the previous year.During the fourth quarter, Arch repurchased 2.9 million common shares for an aggregate purchase price of $258.2 million. Since the inception of the share repurchase program through December 31, 2010, ACGL has repurchased 31.7 million common shares for an aggregate purchase price of $2.27 billion. From January 1 to February 11, 2011, the Company repurchased an additional 1.6 million common shares for an aggregate purchase price of $139.6 million.At December 31, 2010, Arch had common shareholders’ equity of $4.19 billion compared to $4 billion a year earlier.