Canadian Underwriter
News

Premiums drop 7.4% at Arch Capital


February 10, 2016   by Canadian Underwriter


Print this page Share

Insurance carrier Arch Capital Group Ltd. reported Tuesday its financial results, reporting an 8.6% drop in underwriting income and a 1.2-point increase – to 88% – in its combined ratio.

Hamilton, Bermuda-based Arch reported net premiums written of $3.35 billion last year, down 7.4% from $3.62 billion in 2014. All figures are in United States dollars.

Net premiums written dropped 7.4% in 2015 for Bermuda insurance carrier Arch Capital Group Ltd.

Underwriting income dropped 8.6%, from $474 million in 2014 to $433.2 million last year.

Arch writes specialty commercial insurance, as well as reinsurance and mortgage insurance. It owns Toronto-based Arch Insurance Canada Ltd., which writes primary insurance and started operations in 2013. Arch Capital also writes treaty and facultative reinsurance in Canada and owns Arch Underwriting at Lloyd’s Ltd., the managing agent of Arch Syndicate 2012.

Arch Capital’s loss ratio increased 0.2 points, from 53% in 2014 to 53.2% last year. The combined ratio was up 1.2 points, from 86.8% in 2014 to 88% in 2015.

Arch’s coverages include casualty insurance for the construction industry, various lines of commercial liability, auto and inland marine, among others. In reinsurance, Arch covers property catastrophe, third-party liability, workers compensation, excess and umbrella liability and marine and aviation.

When it reported its financial results for the fourth quarter of 2015, Arch Capital broke it down by insurance, reinsurance and mortgage.

Company-wide, Arch Capital reported net premiums written of $739 million in the latest quarter, down 8.2% from $808.4 million in the same period of 2014.

In its insurance segment, Arch reported net premiums written of $451.6 million in the most recent quarter, down 6.5% from $483 million in 2014.

In the fourth quarter of 2015, Arch Capital reported net premiums written of $451.6 million in insurance and $200 million in reinsurance

“Changes in foreign currency rates resulted in a decrease in net premiums written in the 2015 fourth quarter of approximately $7 million, or 1.6%, compared to the 2014 fourth quarter,” Arch stated in a release. “The lower level of net premiums written on a constant dollar basis reflected reductions in program business, professional lines, property, energy, marine and aviation business and excess and surplus casualty, partially offset by growth in travel, accident and health business and construction and national accounts. The reduction in program business primarily reflected the non-renewal of a large program.”

In reinsurance, Arch reported net premiums written of $200 million in Q4 2015, down 25.6% from $269 million in the final quarter of 2014.

“The 2014 fourth quarter included an incoming $50.2 million non-recurring unearned premium portfolio transfer in property business from Gulf Reinsurance Limited (which was subsequently acquired in 2015),” Arch noted. “In addition, changes in foreign currency rates resulted in a decrease in net premiums written in the 2015 fourth quarter of approximately $7 million, or 3.5%, compared to the 2014 fourth quarter. The 2015 fourth quarter also reflected increased cessions to Watford Re compared to the 2014 fourth quarter. Net premiums earned in the 2015 fourth quarter were 14.0% lower than in the 2014 fourth quarter, and primarily reflect changes in net premiums written over the previous five quarters, including the mix and type of business written.”

In insurance, Arch Capital’s loss ratio was 63.3% in Q4 2015, down 1.1 points from Q4 2014, while the combined ratio also improved 1.1 point, from 95.7% in Q4 2015 to 94.6% in the latest quarter.

In reinsurance, the loss ratio improved 0.5 points (from 38.8% in Q4 2014 to 38.3% in Q4 2015) while the combined ratio deteriorated 3 points, from 71.3% in Q4 2014 to 74.3% in the most recent quarter.

In the mortgage segment, Arch recorded net premiums written of $87.1 million in the latest quarter. That segment includes Arch Mortgage Insurance Company, which is approved by Fannie Mae and Freddie Mac to insure mortgages in the U.S. It also includes Arch Mortgage Insurance Designated Activity Company, which provides mortgage services in Europe.


Print this page Share

Have your say:

Your email address will not be published. Required fields are marked *

*