And with that I am happy to turn the call over to Marty.Marty Becker Thank you very much Susan and good morning to everyone and welcome to our first earnings call Alterra. As you recall our company was formed in May by the merger of Max Capital and Harbor Point. For the second quarter of 2010 Alterra reported net operating income of $58.8 million or $0.64 per diluted share compared to net operating income of $47.8 million or $0.83 per diluted share in the Max Solar enterprise last year. Fully diluted book value per share was $24.55 after declaration of a $305 million special dividend following the close of the merger transaction and paid in June. Financial results this quarter only partially reflect the future earnings power of combining both operations as Harbor Point's results are for accounting purposes only included post the merger date of May 12. However we have already begun to enjoy the benefits of the merger as evidenced by the increase on the contribution of the reinsurance segment to our business mix. On a reported basis our overall property and casualty gross premiums grew 12% in the second quarter to $398 million. Growth was principally driven by the inclusion of Harbor Point in our reinsurance line. We did have some growth from the continued build out of our Alterra at Lloyd's and Alterra Specialty businesses. Our insurance segment produced lower premium in 2010 than in 2009 reflecting continued competitive market conditions. Our casualty premium was stable for the quarter and declined in the high single digits for the year-to-date. Overall we remain pleased with our high renewal retentions in the mid 80s which demonstrate our strong client relationships and niche focus in some of the tougher underwriting classes of business. Average pricing on that renewed business is down less than 5%. When we do forego existing business it is because the pricing is down significantly, often in excess of 25%. In our other insurance businesses professional lines rates on average are down approximately 7% year-to-date, property lines are down more with pricing reductions closer to 10% to 15% and aviation rates still remain up approximately 6% but if you recall pretty low levels.
We believe we have been very effective in protecting our underwriting margins even as the top line has declined. All four of our property and casualty underwriting segments produce favorable underwriting results with second quarter combined ratios of 83% on a calendar year basis and just under 92% excluding any reserve releases.Market conditions are challenging globally. Our strategy to navigate the soft market or this portion of the cycle has not changed. We intend to maintain our volume in lines of business where we believe we can earn a reasonable return, work hard to search out profitable accounts and scale back in areas with inadequate pricing. Updating you on our combined property cat risks exposure post the amalgamation, following the July 1 renewal, our 1 in 250 PML is approximately 18% of capital with our 1 in 100 year exposure at approximately 12% of capital. We have not written any new Life business this year. Our life and annuity business has exclusively focused on acquiring blocks of policies with significant reserve balances, allowing us to earn a profit by investing at a higher yield than the cost of funds implicit in those reserves. Underwriting volatility on this business has always been quite low. Read the rest of this transcript for free on seekingalpha.com