Arch Capital Group Ltd. ended 2019 with a number of things in its favor.

The Bermuda-based insurer and reinsurer saw its net income climb significantly higher in the fourth quarter and its catastrophe losses decline significantly. Arch also experienced new business, higher premiums and the beginning of financial benefits from acquiring Barbican Group Holdings Ltd., an action expected to deepen its involvement in both Lloyd’s and the London market.

But Arch’s insurance segment combined ratio surpassed 102, showing only a small improvement from the fourth quarter last year.

Arch reported $316 million in net income from the 2019 fourth quarter, or $0.76 per share, versus $126.1 million, or $0.31 per share, in the 2018 fourth quarter.

Results for the quarter also included an 83.8 combined ratio overall based on consolidated results, improved from 87.8 in Q4 2018. Pre-tax net investment income grew to nearly $120 million in Q4 2019 compared to $115.6 million in the 2018 fourth quarter.

Arch closed its purchase of Barbican at the end of November, and the company noted that as a result, its insurance and reinsurance segment results include one month of underwriting activity from Barbican.

Here are further result highlights:

Insurance segment gross premiums written hit the $1 billion mark in Q4 compared to $832.8 million the year before. Net premiums written landed at $688.7 million, up from more than $534.9 million in Q4 2018.

The insurance segment combined ratio hit 102.1 compared to 102.8 in the 2018 fourth quarter.

Reinsurance segment gross premiums written landed at $432.2 million compared to $409.3 million in the 2018 fourth quarter. Net premiums written were close to $338.9 million, improved over $325 million a year ago.

The reinsurance combined ratio for the 2019 fourth quarter was booked at 93.8 compared to nearly 111 in the 2018 fourth quarter.

Pre-tax current year catastrophic losses came in at $30.4 million for the quarter, net of reinsurance and reinstatement premiums. Arch said the number reflected 0.9 points of the total loss ratio for Q4 compared to 6 points in the 2018 fourth quarter, which involved Hurricane Michael and California wildfire losses.

Source: Arch Capital Group

Topics Profit Loss Reinsurance