Mortgage business drives growth at Arch in Q1
Arch Capital Group enjoyed improved profits and strong growth in the first quarter of 2017 mainly driven by the strong performance of its growing mortgage business. Its reinsurance unit shrank slightly.
The company made a net profit of $241.9 million in the first quarter, a rise of 62 percent on the $149.3 million it made over the same period of last year.
Arch also reported after-tax operating income available to Arch common shareholders, a non-GAAP measure, of $198 million, for the 2017 first quarter, compared with $145.7 million for the 2016 first quarter.
Gross written premiums for the company came to $1.6 billion over the period, a rise of 15.3 percent on the $1.4 billion it wrote over the first three months of 2016.
Net premiums written over the first quarter of the year came to $1.27 billion, an increase of 13.8 percent on the $1.12 billion written over the same period of 2016.
However, Arch said that gross premiums written by the reinsurance segment in the 2017 first quarter were 1.2 percent lower than in the 2016 first quarter, while net premiums written were 3.5 percent lower than in the 2016 first quarter.
The company said that the lower level of net premiums written in the 2017 first quarter reflected decreases in casualty, marine and aviation and property catastrophe lines. The reduction in casualty business and marine and aviation business both reflected share decreases and non-renewals.
It added that property-catastrophe net premiums written in both periods reflected the impact of retrocessional portfolio transactions, with a higher level of cessions in the 2017 first quarter. Such amounts were partially offset by growth in other specialty business.
Its mortgage segment performed particularly well, contributing gross written premiums of $348 million, a big 213 percent increase on $111 million a year earlier; and an underwriting profit of $148.9 million, a huge increase on the $27 million it made a year earlier.
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