Arch Capital Group Ltd. reported a net income loss in the second quarter of 2017 as its property/casualty business continues to struggle with weak market conditions. 

The Hamilton, Bermuda-based insurer and reinsurer reported net income of $173.8 million in the second quarter of 2017, down 15.5% compared with the same period in 2016, according to the company’s earnings report, released after market close on Wednesday. 

“Our performance for the second quarter was satisfactory,” Constantine Iordanou, chairman and CEO of Arch Capital, said in an earnings call Thursday. “A strong performance in the mortgage segment was partially offset by higher attritional losses in our property/casualty business.” 

Arch Capital has completed its acquisition of AIG United Guaranty Insurance (Asia) Ltd. from American International Group Inc., an acquisition that will add to its existing global private mortgage insurance businesses, which have operations in the United States, Europe and Australia, according to the company.

The company reported net premiums written of $1.2 billion in the second quarter of 2017, up 22% from the second quarter of 2016, while its overall combined ratio improved to 84.6% from 90.9%, according to the earnings statement. 

Net premiums written in its insurance segment dropped 3.6% to $496,456 in the second quarter vs. the same period last year, which the company attributed to weaker market conditions with reductions in construction, excess and surplus casualty and property lines. The segment’s combined ratio deteriorated to 100.8% in the second quarter of 2017 compared with 99.2% in the previous year’s second quarter. 

Net premiums written in the company’s reinsurance segment rose 15.7% to $337,924 in the second quarter of 2017 compared with $292,102 in the same period last year, reflecting an increase in other specialty business related to certain retroactive reinsurance contracts. However, the segment’s combined ratio worsened to 94% from 82% in the same period last year. 

The company’s reinsurance segment experienced an “unusually high loss activity on a small number of contracts in our property facultative unit in the second quarter,” which contributed to the combined ratio deterioration, Mr. Iordanou said. “The property facultative unit has produced significant underwriting profits over time and we view these losses on this quarter as an aberration.” 

Net income rose 17% to $415.7 million in the first half of 2017, according to the report.