28 July 2017Insurance

Arch Capital sees Q2 profit fall

Arch Capital Group has reported that its second quarter 2017 net income came to $173.8 million, a fall of 16 percent on the $205.6 million that it made over the same period of 2016.

Gross premiums written for Q2 2017 came to $1.61 billion, up 21 percent on the $1.33 billion that it recorded over the same period of 2016. Underwriting income was also up, going from $116.6 million in the second quarter of 2016 to $195.4 million in the same period of 2017.

However, the company said that its gross premiums written by the insurance segment in the 2017 second quarter were 2.4 percent lower than in the 2016 second quarter while net premiums written were 3.6 percent lower than in the 2016 second quarter.

According to Arch: “The decrease in net premiums written largely reflected our response to weaker market conditions, with reductions in construction, excess and surplus casualty and property lines, partially offset by growth in programs. The lower level of construction premiums reflected non-renewals as well as lower audit and project premium, while excess and surplus casualty reflected a targeted reduction in certain exposures, increased use of reinsurance and other factors. The reduction in property lines reflected continued weak market conditions while growth in program business primarily reflected the continued impact of two newer programs. Net premiums earned by the insurance segment in the 2017 second quarter were 1.9 percent lower than in the 2016 second quarter, and reflect changes in net premiums written over the previous five quarters.”

Arch added that the 2017 second quarter loss ratio reflected 1.6 points of current year catastrophic activity, compared to 3.9 points in the 2016 second quarter. Estimated net favourable development in prior year loss reserves, before related adjustments, reduced the loss ratio by 0.4 points in the 2017 second quarter, compared to 0.9 points in the 2016 second quarter. The balance of the change in the 2017 second quarter loss ratio resulted, in part, from a softening market environment and changes in the mix of business.

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More on this story

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20 September 2017   Arch Capital has appointed Nicolas Papadopoulo - the current chairman and CEO of Arch Worldwide Reinsurance Group - as the chairman and CEO of Arch Worldwide Insurance Group and chief underwriting officer for property and casualty operations, effective October 1, 2017.
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5 July 2017   Bermuda-based Arch Capital Group has completed the acquisition of AIG United Guaranty Insurance (Asia) from American International Group. The company will now operate as Arch MI Asia.
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19 June 2017   Arch Reinsurance Company has appointed François Dagneau to the position of chief executive officer (CEO) of its Canadian operations.