Arch Capital reports a 40.7% drop in third-quarter profits
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Arch Capital Group Ltd.'s net income for the third quarter of 2013 dropped 40.7% from that of the same period a year earlier to $109.3 million, the insurer and reinsurer reported.
Net written premiums for the quarter grew 11.1% over those of the third quarter of 2012 to $839.1 million, the company reported Monday. But net investment income dropped 9.7% to $66.1 million. The combined ratio improved to 86.0% from 90.2% the same period a year earlier.
The company noted that it had sustained foreign exchange losses net of tax of $40.6 million in the quarter compared with $17.0 million during the third quarter of 2012. Hamilton, Bermuda-based Arch added that the “company has not matched a portion of its projected liabilities in foreign currencies with investments in the same currencies and may not match such amounts in future periods, which could increase the company's exposure to foreign currency fluctuations and increase the volatility of the company's shareholders' equity.”
For the first nine months of the year, net income dropped 2.2% over that of a year earlier to $531.8 million, while net written premiums grew 6.7% over the same period a year earlier to $2.60 billion.
Investment income dropped 9.5% to $200.1 million for the first three quarters. The combined ratio improved to 86.0% from 89.2%.
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