April 29 (Reuters) - Arch Capital's ACGL.O first-quarter profit fell 49.2% as catastrophe losses from the California wildfires weighed on its underwriting performance and investment returns, the insurer said on Tuesday.

The results mirror those of peers W R Berkley WRB.N and Chubb CB.N, who also reported a drop in first-quarter profit last week as industry-wide catastrophe losses offset operational gains.

California, whose stringent insurance regulation has long frustrated insurers, experienced a series of wildfires earlier this year, resulting in several fatalities and causing estimated economic damage as high as $250 billion.

The state mandates insurers to seek regulatory approval before raising prices for most policies, thus limiting their ability to adjust prices according to the assessed risk.

The insurer reported pre-tax catastrophe loss of $547 million, primarily due to the California wildfires. This loss is net of reinsurance and reinstatement premiums.

Pembroke, Bermuda-based Arch had said earlier this year it expected an insured market loss between $35 billion and $45 billion due to the California wildfires, with its share of the losses estimated between $450 million and $550 million.

Gross premiums written rose 8.9% to $6.46 billion in the quarter ended March 31. The insurer's net investment income surged 15.6% to $378 million.

The company reported losses and loss adjustment expenses of $2.59 billion for the quarter ended March 31, compared with $1.73 billion a year earlier.

Profit available to common shareholders was $564 million, or $1.48 per share, for the three months ended March 31, compared with $1.11 billion, or $2.92 per share last year.

Arch reported a combined ratio of 90.1%, compared with 78.8% last year. A ratio below 100% indicates the insurer earned more in premiums than it paid out in claims.

(Reporting by Ateev Bhandari in Bengaluru; Editing by Tasim Zahid)

((Ateev.Bhandari@thomsonreuters.com;))