Our net income for the three months ended September 30, 2002, which includes net realized gains and losses from investments, was $45.8 million, or $0.95 per share, compared to a net loss of $(69.0) million, or $(2.75) per share, for the quarter ended September 30, 2001. For the nine months ended September 30, 2002, net income was $137.9 million, compared to a net loss of $(24.2) million for the corresponding period of 2001.
President and Chief Executive Officer Jim Bryce commented: "Typically the third quarter is the peak period for catastrophe losses around the globe, and 2002 was no exception. There was significant flooding in eastern and central Europe, together with some floods in France. In addition, there was flooding in Korea and China as a result of typhoons, one of which also struck Japan. Naturally, all major players in the global reinsurance arena would have suffered some losses as a result, and IPC is no exception. Due to our disciplined underwriting approach, particularly in terms of not writing business which we believe is inadequately priced, we avoided any significant losses from Asia, and have incurred only limited losses from the floods in Europe. As a result, our third quarter 2002 results are in line with the record results achieved in the first two quarters of this year. To round off this successful period in IPC's history, we were gratified by A.M. Best's recent affirmation of our A+ (Superior) rating. The process for negotiating 2003 renewals has just begun, and we optimistically enter this period from a strong foundation, especially in light of the dislocation currently taking place in the European reinsurance marketplace. Because of the opportunities that this dislocation may present us between now and early January, the Board of Directors has decided to defer the decision regarding the declaration of a dividend until we can better assess the extent of those opportunities."
We wrote gross premiums of $35.5 million in the third quarter of 2002, an increase of 7.4% over the $33.1 million we wrote in the third quarter of 2001. It should be noted that the third quarter 2001 figures contained $17 million of reinstatement premiums arising from the World Trade Center losses. Excluding reinstatement premiums from both periods, gross written premiums would have reflected an increase of 115.7%. Premiums were higher because we used our increased capacity from our capital raising in 2001 to satisfy the increased requirements of our existing clients, and we wrote business for new clients, which more than offset business which we did not renew because of unsatisfactory terms and conditions. In addition, we benefitted from rate increases, generally in the range of 10% to 15% for loss free contracts, with greater increases on loss impacted contracts. This brought our total written premiums for the nine months ended September 30, 2002 to $242.7 million, an increase of 93.1% in comparison to the $125.7 million of premiums written in the first nine months of 2001. Excluding reinstatement premiums from both periods, gross written premiums would have increased by 125.5%. We ceded $0.5 million of retrocessional premiums in the quarter ended September 30, 2002, compared to $0.7 million in the third quarter of 2001. This brought the total ceded premiums to $5.6 million for the nine months ended September 30, 2002, compared to $4.1 million for the corresponding period in 2001.
Our net premiums earned in the quarter ended September 30, 2002 were $62.9 million, compared to $45.1 million earned in the quarter ended September 30, 2001, an increase of 39.5%. Once again the third quarter 2001 premium includes the reinstatement premiums arising from the World Trade Center losses. The increase in our earned premiums is primarily due to the increase in written premiums over the past twelve months, and in particular the first nine months of 2002. Earned premiums for the nine months ended September 30, 2002 were $165.8 million, a 75.6% increase over premiums earned in the first nine months of 2001.
Our net investment income was $12.5 million in the quarter ended September 30, 2002, compared to $7.9 million in the third quarter of 2001. This increase is primarily due to the significant increase in our invested assets following the raising of approximately $546 million of additional capital in December of last year. This increase more than offset the decline in the average yield of our investment portfolio. We recorded net realized losses of $(0.8) million on our investments in the quarter ended September 30, 2002, compared with net realized gains of $1.7 million in the third quarter 2001. Net realized losses in the first nine months of 2002 totaled $(8.2) million, compared to a net realized gain of $6.2 million in the corresponding period of 2001. Net realized losses include a second quarter write-down in the cost basis of equity investments in certain S&P 500 stocks where the decline in value was deemed other than temporary, as well as losses realized from the subsequent sale of our entire S&P portfolio in the third quarter of 2002. These losses were offset in part by gains realized from the sales of fixed income securities. The proceeds of the equity sales together with cash from operations were used to invest in the Vanguard Institutional Index fund, a mutual fund which has similar characteristics to the S&P 500 index.
We incurred net loss and loss adjustment expenses of $18.9 million in the quarter ended September 30, 2002, bringing the total for the first nine months of 2002 to $34.2 million. This compares to $116.7 million and $130.9 million, respectively, for the corresponding periods in 2001. Losses in the third quarter of 2002 primarily arise from reserves for the European floods in August, amounting to $18 million. The most significant loss in the third quarter of 2001 was our estimate of claims resulting from the attack on the World Trade Center, which was $112 million. The loss ratio in the third quarter of 2002 was 30.0%, compared to 258.7% for the third quarter of 2001. For the nine months ended September 30, 2002, our loss ratio was 20.7%, compared to 138.6% for the corresponding period of 2001.
Our acquisition costs and general and administrative expenses totaled $9.9 million for the quarter ended September 30, 2002, compared to $6.7 million in the third quarter of 2001. For the nine months ended September 30, 2002 total acquisition costs and general and administrative expenses were $27.7 million, compared to $16.8 million in the first nine months of 2001. For both the third quarter and nine month periods of 2002, these costs and expenses have increased primarily due to the increase in earned premiums, together with some minor increases in certain operating expenses.
Total assets at September 30, 2002 were $1,475.2 million, an increase of 13.3% over total assets at December 31, 2001. At September 30, 2002 total shareholders' equity was $1,222.8 million, compared to $1,105.8 million at December 31, 2001.