Arch beats expectations with $203.5m profit
Arch Capital Group beat forecasts and finished the year strongly with net income of $203.5 million, or $1.46 per share, for the fourth quarter.
That compares to a profit of $63.4 million for the same period in 2016.
While it suffered pre-tax catastrophe losses of $68.5 million from the California wildfires, and $1.5 million from other events, it benefited from $69.1 million of reductions from the third-quarter hurricane events. This resulted in pre-tax catastrophe losses, net of reinsurance and reinstatement premiums, of $800,000.
Arch Capitalís profit for the fourth quarter, adjusted for non-recurring gains, was $1.34 per share, which beat the expectations of analysts who had forecast $1.13 per share.
Its combined ratio, excluding catastrophic activity and related adjustments was 87 per cent, down from 90.7 per cent, while the underwriting combined ratio for the quarter was 86.3 per cent, and for the year was 82.5 per cent.
There was a $50.9 million favourable development in prior year loss reserves.
During the quarter, Arch took a $21.5 million charge related to the re-evaluation of its net deferred tax assets as a result of the lower US corporate income tax rate that began this year.
After-tax operating income for the period was $187.4 million, or $1.34 per share, compared to $141.5 million, or $1.13 per share a year ago. Gross premiums written for the quarter were up 25.7 per cent to $1.452 billion.
For the full year the Bermudian-based companyís net income was $556.5 million, down from $664.6 million.
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