Arch is reporting in its Q2 2022 results that it saw net income available to Arch common shareholders of $394.2m, alongside after-tax operating income of $506.5m.
In addition, the firm said it had seen gross written premiums of $3,869m in Q2 2022, up 17.8% from the same point in 2021. However, it also said that its loss ratio had fallen from 54.7% to 47.4% between the same points.
Gross premiums written by the insurance segment in the 2022 second quarter were 24.6% higher than in the 2021 second quarter while net premiums written were 27.5% higher than in the 2021 second quarter. The higher level of net premiums written reflected increases in most lines of business, due in part to rate increases, new business opportunities and growth in existing accounts. Net premiums earned in the 2022 second quarter were 27.4% higher than in the 2021 second quarter, and reflect changes in net premiums written over the previous five quarters.
The 2022 second quarter loss ratio reflected 1.2 points of current year catastrophic activity, compared to 3.2 points of catastrophic activity in the 2021 second quarter. Estimated net favourable development of prior year loss reserves, before related adjustments, reduced the loss ratio by 0.6 points in the 2022 second quarter, compared to 0.5 in the 2021 second quarter. The improvement in the 2022 second quarter loss ratio also reflected the impact of rate increases and changes in mix of business.
The underwriting expense ratio was 34.0% in the 2022 second quarter, compared to 31.2% in the 2021 second quarter. The increase in the 2022 second quarter was primarily due to higher gross commission ratios, growth in lines with higher acquisition costs, such as travel, and targeted personnel expansion to support growth. This increase was partially offset by a higher level of net premiums earned.
Gross premiums written by the reinsurance segment in the 2022 second quarter were 32.1% higher than in the 2021 second quarter, while net premiums written were 25.7% higher than in the 2021 second quarter. The growth in net premiums written reflected increases in other specialty, property catastrophe and property excluding property catastrophe lines, primarily related to rate increases, new business opportunities and growth in existing accounts. Net premiums earned by the reinsurance segment in the 2022 second quarter were 25.9% higher than in the 2021 second quarter, and reflect changes in net premiums written over the previous five quarters.
The 2022 second quarter loss ratio reflected 7.5 points of current year catastrophic activity, primarily due to a series of natural events outside the U.S., compared to 2.6 points of catastrophic activity in the 2021 second quarter. Estimated net favourable development of prior year loss reserves, before related adjustments, reduced the loss ratio by 5.0 points in the 2022 second quarter, compared to 2.8 points in the 2021 second quarter. The improvement in the 2022 second quarter loss ratio also reflected the impact of rate increases and changes in mix of business.
The underwriting expense ratio was 27.5% in the 2022 second quarter, compared to 24.2% in the 2021 second quarter, with the increase primarily resulting from growth in lines with higher acquisition costs and targeted personnel expansion to support growth. This increase was partially offset by a higher level of net premiums earned.
