New York-based reinsurer Transatlantic Holdings swung to net losses for Q4 and all of 2011 thanks to record catastrophe losses and "significant costs" associated with merger-related activities that finally resulted in a deal in November to be acquired by Alleghany Corp. That deal is expected to close this quarter. For the year, Transatlantic swung to a net loss of $99.2m from income of $402.2m, as pre-tax cat losses ballooned to $852m from $202m. The cat losses were partially offset by a related tax benefit of $298m compared to the year-earlier benefit of $71m. The group's merger-related costs totalled $138m, including $115m in termination fees and expense reimbursements for the break-up of a merger with Allied World Assurance Co Holdings. Transatlantic's combined ratio for the year jumped to 113.9% from 98.2%, as claims costs leapt 21% to $3.26bn and earned premiums sank 1% to $3.82bn. The book value per share grew 3.4% in 2011, as Transatlantic benefited from the performance of the non-catastrophe book, as well as $261m of share repurchase activity during the year. President and CEO Michael Sapnar said that, looking to 2012, "we are comfortable with our risk profile, given the product and geographic diversity of our exposures". For Q4, Transatlantic swung to a net loss of $57.5m from income of $141.8m, as pre-tax losses jumped to $169m from $23m, reflecting $110m in losses from Thai flooding and an additional $51m in losses from the February earthquake in New Zealand. The group also booked $75m in merger-related costs during the quarter. The Q4 combined ratio rose to 113.5% from 94.8%, as claims costs jumped 30% to $795.9m and earned premiums increased 3% to $961.9m.