Reinsurance segment boosts Q4 GWP in Arch Capital

Arch Capital Group enjoyed higher profits in the fourth quarter of 2022 and solid growth boosted by its reinsurance segment in particular.

The re/insurer posted net income of $849.5 million in the fourth quarter of 2022, compared to $613.1 million in the same period a year earlier. Its combined ratio excluding catastrophic activity and prior year development for the period was 82%, compared to 80.1% for the 2021 fourth quarter.

Its gross written premiums increased by 32% to reach $3.8 billion. This was largely driven by growth in its reinsurance book, which enjoyed a 77.4% increase to reach GWP of $1.8 billion.

The company said the comparison of gross and net premiums written in the 2022 fourth quarter were affected by a few non-recurring transactions, primarily impacting the other specialty line of business. Absent these items, gross and net premiums written would have been higher than in the 2021 fourth quarter by 47.9% and 61.0%, respectively.

Its insurance segment enjoyed growth of 10.6% with GWP reaching $1.6 billion. It said increases were seen in most lines of business, due in part to rate increases, new business opportunities and growth in existing accounts. In addition, the insurance segment is retaining more business due to ongoing changes in its reinsurance programs, as well as higher levels of growth in lines with a higher retention rate.