Travel Business Dip, Catastrophes Leave Arch Capital With Insurance Underwriting Loss

February 10, 2021

Arch Capital Group reported a huge jump in fourth quarter net income, thanks in part to rate hikes and new business. But the Bermuda-based carrier’s insurance business experienced an underwriting loss, thanks, in part to a dip in the travel business and heavy natural catastrophe events.

Arch booked $533.1 million in net income for the 2020 fourth quarter, or $1.30 per share, versus $316 million, or $0.76 per share, in the 2019 fourth quarter.

Pre-tax current accident year catastrophe losses for Arch’s insurance and reinsurance segments, net of reinsurance and reinstatement premiums reached $156.4 million in Q4, of which $400,000 was COVID-19-related losses.

Arch’s net investment income reached nearly $88 million during the quarter, compared to just under $120 million in the 2019 fourth quarter.

Here are insurance and reinsurance Q4 result highlights:

Source: Arch Capital Group