Arch Capital sees profits surge in Q4 2017

Arch Capital Group has reported fourth quarter 2017 net income of $203.5 million, a substantial rise on the $62.4 million it made in the same period of 2016.

However, for the year ended December 31, 2017, the company reported net income of $566.5 million, a fall from the $664.7 million it made over 2016.

The company also reported after-tax operating income of $187.4 million for the 2017 fourth quarter, up on the $141.5 million it made in fourth quarter of 2016. After-tax operating income for 2017 came to $447.2 million down on the $577.4 million it made in 2016.

Gross premiums written for the fourth quarter of 2017 came to $1.45 billion, a 25.7 increase from the $1.15 it wrote in the same period of 2016. The insurance segment reported gross premiums written in the last quarter of 2017 of $767 million, whilst the reinsurance segment reported gross premiums of $289 million for the same period.

Arch said that it had seen losses of $68.4 million from the California wildfires, $1.5 million from other events and $69.1 million of reductions on the 2017 third quarter hurricane events.

Net investment income for the 2017 fourth quarter was $99.6 million, compared to $70.1 million for the 2016 fourth quarter. The 2017 fourth quarter net investment income reflected income on the acquired UGC portfolio and a higher level of income on fund investments. The annualised pre-tax investment income yield was 2.08 percent for the 2017 fourth quarter, compared to 1.92 percent for the 2016 fourth quarter.

Arch added that its results include a charge of $21.5 million related to the revaluation of the Company’s net deferred tax asset as a result of a lower US corporate income tax rate beginning in 2018.