Net investment income of $104 million for the quarter represented a $54 million increase from the third quarter of 2011 and a $29 million increase from the second quarter of 2012, with the variances primarily driven by the market value of our alternative investments ("other investments"). These investments generated $34 million of income in the third quarter of 2012, compared to losses of $30 million and $2 million, respectively, in the third quarter of 2011 and the second quarter of 2012. Partially offsetting these improvements were reductions in income from our fixed maturity portfolio of $10 million, or 12%, in comparison to the prior year quarter and $4 million, or 6%, in comparison to the second quarter of 2012; these declines were primarily due to lower reinvestment yields, though partially offset by an increase in the average investment balance.
Net realized investment gains were $51 million, compared to $30 million in the prior quarter and $58 million in the prior year quarter.
Capitalization / Shareholders’ EquityOur total capital at September 30, 2012 was $6.9 billion, including $1.0 billion of long-term debt and $503 million of preferred equity. At September 30, 2012, diluted book value per common share on a treasury stock basis was $43.57, up $3.02 in the quarter, with growth driven by operating income, valuation improvements for our available-for-sale investment portfolio and, to a lesser extent, share repurchases. During the quarter we repurchased 5.2 million common shares at an average price of $34.21 per share, for a total cost of $179 million. As of October 31, 2012, we had $236 million of remaining authorization for common share repurchases through December 31, 2012. Conference Call We will host a conference call on Thursday, November 1, 2012 at 10:00 AM (Eastern) to discuss the third quarter financial results and related matters. The teleconference can be accessed by dialing (866) 843-0890 (U.S. callers) or (412) 317-9250 (international callers) approximately ten minutes in advance of the call and entering the code 3-8-0-3-5-1-8. A live, listen-only webcast of the call will also be available via the Investor Information section of the Company’s website at www.axiscapital.com. A replay of the teleconference will be available for three weeks by dialing (877) 344-7529 (U.S. callers) or (412) 317-0088 (international callers) and entering the code 1-0-0-1-8-9-8-4. The webcast will be archived in the Investor Information section of our website. In addition, a financial supplement relating to our financial results for the quarter ended September 30, 2012 is available in the Investor Information section of our website.