Max Capital Group 1Q earnings plummet on investment losses

NEW YORK—Specialty insurer and reinsurer Max Capital Group Ltd. said Tuesday its first-quarter earnings fell 90 percent due to losses on alternative investments.

Net income fell to $7.7 million, or 13 cents per share, from $80 million, or $1.24 per share, during the same period the previous year.

Analysts polled by Thomson Financial, on average, forecast earnings of 18 cents per share for the quarter.

Max Capital lost $25.8 million on alternative investments during the first quarter, compared with $54.1 million in earnings from alternative investments during the first quarter in 2007.

About 19 percent of Max Capital's total invested assets -- worth about $5.2 billion on March 31 -- are placed in alternative investments.

Earnings were also slightly reduced as Max Capital Group took a $4.9 million loss on foreign currency translations, compared with a gain of $384,000 during the year-ago period.

Net premiums written by Max Capital increased 47 percent from the year-ago period to $202 million.

Total claims and expenses for the quarter fell slightly to $154.8 million from $155.2 million during the first quarter last year.