Arch profit rises in second quarter
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Arch Capital Group Ltd. on Tuesday reported a 34.2% increase in net income for the 2018 second quarter to $233.2 million.
Net premiums written increased 4.5% over the prior-year period to $1.16 billion. In its insurance segment, net premiums written increased 5.6%, to $524.1 million. Reinsurance premiums increased 4.8% to $354.1 million.
The Hamilton, Bermuda-based insurer and reinsurer reported pretax current accident year catastrophe losses, net of reinsurance and reinstatement premiums, of $14.9 million.
Net investment income increased 16.5%, to $107.8 million.
The insurer’s combined ratio improved to 80.2%, from 82.2%.
“We are pleased with the results across our platform this quarter,” Arch President and Chief Operating Officer Marc Grandisson said during the company’s earnings conference call Wednesday.
“In our (property/casualty) business, market conditions seem to be improving modestly in most of insurance lines. Rate increases appear to be outpacing claims trends,” although margins could ultimately be impacted by several issues, he said.
These include that the calculation of trends is based on past experience; in the case of loss reserves estimates, it “can take several years for the truth to emerge”; and rate changes as reported “do not capture new business written or the effects of changes in terms and conditions.”
“We remain cautious in our underwriting posture,” Mr. Grandisson said.
For the first half of this year, the insurer reported a 10.9% decline in net income compared with the first half of 2017 to $370.5 million. Net premiums written increased 6.7% to $2.39 billion. Insurance premiums increased 5.3% to $1.1 billion, while reinsurance premiums increased 13.3% to $733.8 million.
Net investment income for the first half increased 10.4% to $208 million.
The company reported a 79.2% combined ratio, an improvement from the 80.6% reported for the comparable period a year ago.
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Arch Capital Group Ltd. posted a profit of $137.3 million in the first quarter of 2018 compared with $241.9 million for the same period in 2017, the company said late Tuesday.
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