It reported a fall in profits year on year of 79% having posted a profit of $15.1 million in the final quarter of the year, as operating income dropped to $5 million from $58.4 million.

The company had been hard hit by the natural catastrophes and its combined ratio went from 73.3% to 105.7%.

Mr Brown remained positive about the performance and the future "2010 was a positive year for Flagstone. Despite an unprecedented number of large international events, we were able to grow book value by 12.1% for the full year, and by 3.0% in the fourth quarter. Since our founding five years ago, our team has worked diligently to build a platform that today produces quality underwriting opportunities from around the globe, as well as sustainable profitability on an annual basis. It is this diversification, both geographically and by business line that provides us with immense global opportunities to choose from.

"Our written premium for the fourth quarter was $142 million which represents an increase of 15.1% over the same quarter last year and brings our total premium for the year to $1.1 billion which is an 11.1% increase from 2009.,” he added “We have grown by sourcing as much business as possible and then selecting only the risks that meet our stringent pricing targets. The increase in our written premium is a testament to this strict oversight and was implemented with a close eye on cycle management.

“As we have previously announced, increased estimated losses from the earthquake in New Zealand, as well as exposure to Australian aggregate covers and the Queensland flooding, negatively impacted the fourth quarter,” he said. “Furthermore, subsequent flooding in large areas of Australia and Cyclone Yasi in Northern Australia will be first quarter 2011 events and will impact the first quarter financial results. Due to the timing and nature of these events we are assessing our exposure and will provide a loss estimate when our assessment is concluded. It is important to note that the occurrence of this number of sizeable losses over the course of a year in this region is historically unprecedented.”