Bermuda-based re/insurance provider Arch Capital Group has reported $382.1 million of net income for the third quarter – up from $217 million in Q3 2018 – despite underwriting losses in its insurance and reinsurance segments.
Meanwhile, pre-tax current accident year catastrophe losses, net of reinsurance and reinstatement premiums, have been pegged at $68 million for the current quarter, primarily related to Hurricane Dorian and Typhoon Faxai.
Favorable development in prior year loss reserves, net of related adjustments, stands at $51.7 million for the quarter.
In reinsurance, Arch’s combined ratio for the current quarter stands at 100.3%, up 11.8% from the current year quarter.
The current quarter loss ratio of 74.3% includes 12.2 points of current year catastrophe activity, primarily related to Hurricane Dorian and Typhoon Faxai, compared to 9.5 points in the 2018 third quarter.
Underwriting income within the reinsurance segment dropped 108.6% from a $31 million profit in Q3 2018 to a $2.7 million loss in the current quarter.
Gross premiums written by the reinsurance segment in the 2019 third quarter were 52.2% higher than in the 2018 third quarter, while net premiums written were 40.0% higher than in 2018 third quarter.
Arch says this growth in gross premiums primarily reflects new business opportunities in casualty and property lines, partially offset by a decline in other specialty business, driven by reductions in motor and agriculture business.
Arch’s underwriting expense ratio in its insurance segment was 34.2%, compared to 31.8% in the 2018 third quarter, with the increase primarily resulting from acquisitions which increased the operating expense ratio.
Arch says the impact of this increased level of expenses on the expense ratio was partially tempered by the growth in net premiums earned.
Meanwhile, the segment’s CR stands at 104% for the quarter, a 0.8% improvement from Q3 2018.