Arch 2010 profits decline on Australia flood losses

HAMILTON, Bermuda—Arch Capital Group Ltd. said full-year net income for 2010 was $816.7 million, compared with $851.1 million in 2009, as profits for the fourth quarter took a hit from Australian flood losses.

The Hamilton, Bermuda-based insurer and reinsurer said gross written premium for 2010 was $3.27 billion, compared with $3.59 billion in 2009.

Arch's combined ratio for 2010 was 92.5% compared with 88.1% for 2009.

Arch said its fourth-quarter results were dented by losses from flooding in Australia, among other things. Net income for the last three months of 2010 was $227.7 million compared with $284.7 million for the comparable period in 2009.

Arch said Monday that results for the fourth quarter had been affected by net losses of about $22.5 million for flooding in Australia in December.

Arch said its results for the first quarter of 2011 would be affected by further flooding in Australia and Cyclone Yasi, which hit Australia in early February.

Arch said that although it was “early in the estimation process,” it expected loses of between $30 million and $60 million in the first quarter of 2011 from the floods and cyclone in Australia.