Alterra undertakes no obligation to update publicly or revise any forward-looking statement whether as a result of new information, future developments or otherwise. With that, I’ll now turn the call over to Marty.Marty Becker Thank you Susan and good morning, and welcome everyone to our third quarter call, which is our first full quarter as Alterra, with global specialty insurance and reinsurance enterprise formed last May by the merger of Max Capital and Harbor Point. Alterra had a very solid quarter and we believe that the integration from the merger of Harbor Point Max is largely complete. On a pro forma basis, our gross premiums written were down from a year ago principally due to our continued underwriting discipline in the face of a softening market and a related trend among primary companies to retain a greater share of business in our reinsurance segment. Our balance sheet is very strong and we expect to be well positioned to respond to market changes as they arrive. Post merger, Alterra has less leveraged in both assets and reserves to equity. Our recent public tenure senior note offering added some financial leverage and flexibility to our balance sheet and our debt-to-equity ratio remains below our peer group average. For the third quarter of 2010, our reported net operating income was 76 million or $0.64 per diluted share compared to net operating income of 53 million or $0.92 per diluted share last year. Fully diluted book value per share was $25.88 up 5.4% for the quarter with booked value growth of 7.4% if you include our held the maturity asset portfolio. On a reported basis, our overall property and cash, the gross premiums grew 21.9% in the third quarter to 324 million. However on a pro forma basis, including Harbor Point premiums in 2009, our overall property and cash the gross premiums written were down 15% for the quarter and 6% year-to-date. Our insurance segment produced lower premium in 2010 and then in 2009 reflecting the continued competitive market conditions. Our excess liability, professional lines and aviation premium have declined both in the quarter and year-to-date.
Property lines premium was modestly higher. Rates remained under pressure with declines of between 3 to 5% in our excess liability class on business we renewed and professional lines D&O rate decreases have accelerated to near 10% while E&O and EPL rates are showing positive momentum and are now modestly up. Property rates on the other hand have effectively reversed the increases of 2009 and in the third quarter were off close to 15%. Aviation rate declines range from 6 to 8% with aerospace on the high end.We believe we have effectively protected our underwriting margins even as the top line has declined. All four of our property and casualty underwriting segments produced favorable underwriting results with a consolidated third quarter combined ratio of 86% and it was even 97% excluding reserve releases. We are somewhat surprised as the seeming complacency in our industry at the moment regarding price, present market pricing combined with historically low investment yields will make earning a true double digit ROE extremely challenging and traditional 15% ROE targets unrealistic, absent an unusually fortuitous last year. Read the rest of this transcript for free on seekingalpha.com