Reinsurance and mortgage business boost Arch Capital's Q2 2019 results

Growth in reinsurance and mortgage operations drove underwriting profits and improved combined ratio at Bermuda-based Arch Capital Group in the second quarter of 2019.

Arch reported net income of $458.6 million in Q2 2019, compared with $233.2 million it made over the same period of last year.

The company's gross written premiums (GPW) for the quarter increased by 14.2 percent to $1.9 billion, compared with $1.7 billion in the previous year.

The combined ratio, excluding catastrophic activity and prior year development, was 80 percent, an improvement from 82.7 percent in the prior year.

Its insurance segment recorded 19.6 percent GPW growth in the second quarter. Arch said approximately one third of the segment's growth in net premiums written resulted from the company’s recent acquisition of a UK commercial lines book of business. The remainder was due to growth in existing accounts and rate increases across most lines of business.

The company saw 11.3 percent GPW growth in the reinsurance segment and more than 10 percent in the mortgage segment.

"The increase in gross premiums written [in reinsurance business] is primarily a result of growth in property business, with a significant amount being retroceded. The increase in net premiums written in the 2019 second quarter primarily reflected growth from select new business opportunities across most lines of business," Arch explained. "This was partially offset by a decline in other specialty business, primarily reflecting a reduction in U.K motor business with one cedent in the period."

Commenting on its performance in the mortgage business, Arch said: "The growth in net premiums written primarily reflected an increase in monthly premium business due to growth in insurance in force, partially offset by higher ceded premiums related to Bellemeade transactions."

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