Our annualized Return on Average Common Equity was 10.4% on a reported basis including a slightly negative effect of above-average cat activity and aided by prior year reserve releases.
We continue to believe that in the current market environment, we are earning high single-digit ROEs on an underwriting year basis. This is essentially the same level of ROE performance we estimated for the 2010 underwriting year with slightly less earnings from investment income offsetting by slightly better underwriting results generated by adjustments to our mix of business.
Our investment performance for the quarter including the effects of foreign exchange was a total return of negative 23 basis points as September was a difficult month in the financial markets. As a result, our book value per share for the quarter increased slightly from $31 per share to $31 20 per share, while book value per share from the year ago grew by 5%.
From an underwriting point of view, we record a 94.3 calendar quarter combined ratio, which is an excellent result for the prevailing market conditions. Cash flow from the quarter remained solid at $310 million as claim trends remain favorable. The broad market environment is showing slight improvement across the board.From a rate stand point, most lines of business move into positive territory. The exception were in executive assurance and medical malpractice, where we’re still seeing rate reductions in the rate of 1.5% to 2% for malpractice business and approximately 7% for executive assurance. Even with this slight improvement in the rate environment, significant more rate is needed in many lines in order to achieve adequate returns. For us adequate returns is returns that produced 15% return on equity. In our view based in part on the level of interest rates currently available, the long tail lines need quite a bit more improvement in rate to become attractive. Read the rest of this transcript for free on seekingalpha.com