Canada’s fourth-largest insurer, Industrial Alliance said Friday that it had a loss attributable to common shareholders of $81.2 million in its fourth quarter.

That compares with a profit of $74.1 million in the same quarter in 2010.

The Quebec City-based insurer said it changed certain valuation assumptions used in the calculation of its reserves and strengthened its reserves by $152.3 million after taxes ($1.68 per share), which resulted in a loss of $81.2 million in the fourth quarter.

Earnings per diluted share in the quarter were a loss of 90 cents versus a profit of 88 cents per share in the same quarter in 2010.

Industrial Alliance’s (TSX:IAG) revenues for the quarter ended Dec. 31 were $1.35 billion versus $1.33 billion.

For fiscal 2011, net income was $103.3 million versus $253.4 million in 2010. Earnings per share for 2011 were $1.19 versus $3.01 of earnings per share in 2010.

“Our year-end results reflect the extremely challenging environment in 2011, both for equity markets and especially long-term interest rates,” chief executive Yvon Charest said in a news release.

“We strengthened our reserves to recognize the drop in interest rates in 2011 and, as it has been our practice over the last six years, took an additional step to stay ahead of the curve for long-term rates,” he said.

“Despite the impact of these changes on our earnings, we still finished the year with positive results which speaks to the strength of our operations.”

Its shares fell 3.4% or 91 cents to $25.60 in Friday morning trading on the Toronto Stock Exchange.