Prior year reserve releases boost Arch Q2 results
Favourable development in prior year loss reserves have given Bermuda-based Arch Capital Group’s earnings a boost in the second quarter of 2018.
Arch reported net income of $233.2 million for the second quarter of 2018 after $173.8 million in the second quarter of 2017.
The results included favourable development in prior year loss reserves, net of related adjustments, of $60.3 million. The primary insurance segment saw a lower level of large attritional losses and changes in mix of business. The reinsurance segment benefitted from better than expected claims emergence in short-tail business from more recent underwriting years and, in longer-tail business across earlier underwriting years as well as changes in the business mix.
Overall, Arch grew underwriting income by 20.5 percent year on year to $235.5 million in the second quarter of 2018 after $195.4 million in the same period a year ago. The combined ratio improved to 82.7 percent from 84.6 percent over the period.
The group grew gross premiums by 5.4 percent year on year to $1.70 billion in the second quarter of 2018. Net income increased to $233.2 million from $173.8 million over the period.
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