Arch Capital Group Ltd. reported a profit of $62.4 million for the fourth quarter of 2016, a 17.5% increase compared with the same period a year earlier, as the insurer bounced back from a 2015 quarter hit by rate declines and a strong dollar.

The Bermuda-based insurer and reinsurer reported net premiums written of $872.3 million, a 4.5% increase over the same period last year, while its combined ratio deteriorated to 90.7% from 88.9% in the 2015 quarter.

During the 2016 quarter, Arch completed its purchase of United Guaranty Corp. from American International Group Inc., substantially increasing its mortgage insurance business.

Net premiums written in its insurance business increased 3.2% to $465.9 million, reflecting growth in travel insurance, construction insurance and national account business, Arch said Monday in a statement. The combined ratio for its insurance business worsened to 99.4% from 94.6%, reflecting increased catastrophe losses, primarily related to Hurricane Matthew, Arch said.

Reinsurance net premiums written increased 3% to $206.1 million, while the combined ratio for the sector worsened to 78.6% from 74.3% in the 2015 quarter, as reinsurance results were also affected by storm losses.

In a note to investors, analysts at Credit Suisse Securities (USA) L.L.C. said Arch’s insurance and reinsurance results “were a little softer than expected” but the company continues to manage its expenses well.

Looking forward, the biggest risk to Arch is around tax reform and the reintroduction of the Neal Bill, the analysts said. The Neal Bill, which was reintroduced last September, seeks to close the so-called Bermuda tax loophole, which allows Bermuda-domiciled insurers and reinsurers to lower their tax bill by reinsuring their U.S. business with Bermuda affiliates. In addition, President Donald Trump is to propose sharply lower U.S. corporate taxes, which could lessen the tax advantage that some foreign domiciles have over the U.S.

Tax changes would particularly affect mortgage insurance, “as the business is written out of the U.S. and potential outcomes such as (the) Neal Bill that targets internal reinsurance cessions would likely have a disproportionate earnings impact on that business given the lower combined ratios,” the Credit Suisse analysts said.

For the full year, Arch reported a profit of $664.7 million, up 28.9% compared with 2015; net premiums written of $4.03 billion, up 5.6%; and a combined ratio of 89.9%, compared with 89.5% in 2015.