Flagstone Reinsurance Holdings S.A. and Greenlight Capital Reinsurance Ltd. said stagnant investment markets and historic natural catastrophe losses dampened their financial performance in 2011, the reinsurers announced separately Wednesday.

Luxembourg-based Flagstone Re reported total 2011 revenue of $592.9 million, a 21.2% drop from the $753.0 million recorded in 2010. The company also reported a $326.1 million net loss for the year compared with a $97.1 million profit in 2010.

Flagstone's performance in the fourth quarter of 2011 was similarly challenged. Revenue in the final three months of the year totaled $133.2 million, a 23.5% decline compared with the prior year. For the quarter, Flagstone had a loss of $84.6 million vs. an $18.6 million profit in 2010.

The company's combined ratio ballooned in 2011, to 153.6% from 99.9% in 2010.

“2011 was the worst year on record for industry losses resulting from international catastrophes, and as a global reinsurer with a historical focus on international business, our results reflected this unprecedented number of significant events,” Flagstone CEO David Brown said in the statement.

Flagstone's net incurred losses from natural disasters in 2011 totaled $450.6 million, more than double the $200.7 million recorded in 2010.

“We have now put 2011 behind us and expect that our realigned underwriting focus and our steps to streamline our operating platform will allow us to return to producing quality underwriting results,” Mr. Brown said.

Grand Cayman, Cayman Islands-based Greenlight Capital Re fared slightly better in 2011, posting a net profit and 3.2% gain in revenue for the year. The company recorded $403.1 million in revenue compared with $390.6 million in 2010.

Though net income declined 92.5%, from $90.6 million in the prior year, Greenlight remained profitable at $6.8 million earned in 2011.

For the final three months of the year, Greenlight reported net income of $70.2 million, up from $56.4 million for the prior-year period.

Greenlight's combined loss ratio for 2011 remained nearly flat at 103.8% vs. 102.8% in the prior year.

“We experienced significant competitive head winds on the underwriting side including a difficult pricing environment and a large number of natural catastrophes,” Greenlight Re CEO Bart Hedges said in the statement. “Even so, we found some attractive new opportunities and achieved a rating upgrade from A.M. Best” Co. Inc.