The accident-year combined ratio for the company's core business units was 131.8 for the third quarter, compared to 116.1 in 2004.

Property catastrophe losses contributed 39.2 points to the accident-year combined ratio for the company's core business units, net of recoveries from the property catastrophe cover with Munich Re, compared to 19.8 points in the third quarter of 2004.

The core results exclude non-core business operations and corporate retrocessions but include recoveries under the company's property catastrophe cover with Munich Re. Catastrophe losses included in these results were $412.5 million, compared to $165.9 million in 2004, prior to the application of any corporate retrocessional programs.

For the nine months ended Sept. 30, the net loss was $1.3 billion, compared to net income of $193.7 million in 2004.

American Re said due to "strict adherence to pricing and underwriting discipline" in the first nine months, gross premiums written were $2.9 billion, a 10.7 percent decrease from $3.2 billion for the same period in 2004.

The reinsurer's combined ratio for the first nine months was 234.9, compared to 111.3 in 2004. The accident-year combined ratio for the company's core business units was 106.7 through nine months, compared to 104 in 2004.

Property catastrophe losses contributed 13.5 points to the accident-year combined ratio for the American Re core business units, net of recoveries from the property catastrophe cover with Munich Re, compared to 6.7 points in 2004.

Year-to-date catastrophe losses are at $421.9 million, compared to $174.1 million in 2004, prior to the application of any corporate retrocessional programs.

Also impacting the year-to-date results is the $1.4 billion addition to the company's net loss and loss adjustment expense reserves recorded during the second quarter.

During the third quarter, the company said it successfully executed a comprehensive recapitalization plan with Munich Re that included the expansion of an existing quota share agreement, a $1.1 billion cash capital contribution, conversion to equity capital of $1.6 billion of intercompany loans at the holding company level, and the execution of a loss portfolio transfer covering all accident years prior to 2002.

Commenting on the results, John Phelan, American Re chairman, said: "Successful execution of the recapitalization plan once again demonstrates Munich Re's commitment to American Re and the U.S. market. These actions 'draw a line' under a period of repeated adverse loss development and position American Re to continue to focus on writing profitable business going forward."