Arch net income jumps 27% in third quarter

Arch Capital, which changed chief executive officers this month, recorded a 27% jump in earnings to mark the final set of results under Marc Grandisson. 

Grandisson, who stepped down as CEO after six years at the helm, was replaced by Nicolas Papadopolou, who said the results demonstrated the value of Arch’s diversified platform. 

The company had net income of $978 million for the three months ending on September 30 compared to $713 million in the same period in 2023.

Underwriting income dropped 25.4% to $538 million from $721 million as losses jumped to $2.4 billion from $1.65 billion, in part due to accident year catastrophe losses of $450 million from Hurricane Helene and other global events. Along with prior year developments, this added six percentage points to the company’s combined ratio. 

“Our third quarter results demonstrate the value of our diversified platform with excellent bottom-line contributions from all our units,” Papadopolou said. “Arch’s culture of adapting to evolving market conditions while maintaining undereating discipline remains a key element of our long-term success.” 

Arch said its gross written premiums rose 20.2% to $5.44 billion while net written premiums rose 22.2% to $3.97 billion. 

The company’s combined ratio rose 8.7 points to 86.6%. The combined ratio edged up from 77% to 78.3% after catastrophe results and prior year developments were excluded. 

The company’s investment income jumped 35.7% to $399 million while equity in investments were $171 million compared to $59 million in the same period in 2023. 

By segment, gross written premiums increased by 14.6%, with results boosted from the company’s purchase of US MidCorp and Entertainment from Allianz. 

Underwriting income dropped 7% to $120 million as the combined ratio rose up to 93.1% from 90.9%. 

The reinsurance segment’s underwriting income was cut in half to $149 million from $310 million despite a 29.2% increase in gross written premiums to $2.76 billion.  The company’s combined ratio rose from 80% to 92.3%. 

The third quarter loss ratio reflected 21.3% related to Hurricane Helene and other global losses, compared to 9.7 points in 2023. 

The mortgage segment saw   gross written premiums edge down from $347 million to $339 million while underwriting income fell to $269 million from $282 million. 

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