New York-based reinsurer Transatlantic Holdings saw net earnings for the  first six months of the year fall 33% to $126.4m, as a deterioration in underwriting results offset improved investment returns. On the underwriting side of the ledger, Transatlantic swung into the red, as reflected in the rise in its combined ratio to 101.8% from 94.3%. Net earned premiums fell 1.9% to $1.97bn, while claims costs increased 6.2% to $1.44bn. The increase in incurred losses was fueled in part by $157m in pre-tax catastrophe losses this year versus "minimal" losses a year ago. Partially offsetting the underwriting results, Transatlantic posted a swing to $6.4m in realized net capital gains from year-earlier losses of $86.1m. Investment income increased 3.3% to $228.4m. Commenting on a Q2 in which net income fell 1.5% to $110.5m, president and chief executive Robert Orlich said that "our operations were strong and the impact of 2010 catastrophe events modest", saying that book value increased 2.5% and annualized return on equity was 11%.