Flagstone Re has made a loss of $161.2m in the first quarter of 2011, compared with a profit of $31.5m in the same period last year.

The company’s combined ratio for the quarter was 170.3%, compared with 97.6% in Q1 2010.

The losses were caused by the high level of natural catastrophe activity during the quarter, which included Australian flooding and earthquakes in New Zealand and Japan.

“We believe we have reserved conservatively for these events including the most recent reports from major Japanese clients which fall within our previously announced estimates,” Flagstone CEO David Brown said in a statement.

He added that Flagstone’s capital remained strong and more than sufficient to withstand rating agency AM Best’s capital stress test, which considers additional losses from future events.

Flagstone’s shareholders’ equity fell14.6% to $968.8m on 31 March 2011 from $1.13bn on the same date in 2010.

Flagstone’s gross premiums written increased 5.5% to $422.2m in Q1 2011 from $400.2m. Net investment income increased 29.4% to $9.4m from $7.3m.