Arch Capital Q3 combined ratio increased 8.7 points to 86.6% the company's first set of results following the departure of ex-CEO Marc Grandisson.
The Bermudian recorded $450mn in cat losses, up from $180mn in Q3 last year fueled by Hurricane Helene and a series of other global events.
Arch’s reinsurance segment booked $364mn of those losses, up from $143mn last year, while cat activity in the primary unit rose to $86mn from $37mn.
In addition, the carrier’s Q3 favorable reserve development of $119mn came in lower than $152mn in the prior year period, mostly on lower releases from the firm’s mortgage portfolio.
Overall, Arch’s underwriting income in Q3 declined over 25% year-on-year to $538mn.
Estimate: The Bermudian’s operating earnings per share at $1.99 were nearly in line with analysts’ estimate average of $2.00 for the quarter.
Top line: Arch’s Q3 GWP went up over 20% to over $5.4bn while NWP rose nearly 21% to over $4bn.
Insurance GWP increased 14.6% to over $2.3bn while NWP went up almost 20% to over $1.8bn.
Arch’s reinsurance unit’s GWP grew over 29% to almost $2.8bn while NWP rose roughly 25% to over $1.9bn.
Segments: The primary business reported a 93.1% CoR, up from 90.9% a year ago, as the LR rose 4.1 points to 61.6%.
The reinsurance division’s CoR deteriorated 12.3 points to 92.3% as the unit’s LR went up 13.2 points to 69.6%.
Investment: Net investment income at the Bermudian carrier increased over 48% to $399mn reflecting the effects of sustained higher interest rates in the market, along with growth in invested assets following strong cash flows and the recent mid-market acquisition from Allianz.
Commentary: Arch’s recently appointed CEO Nicolas Papadopoulo said: “Our third quarter results demonstrate the value of our diversified platform with excellent bottom-line contributions from all of our units.”
“Arch’s culture of adapting to evolving market conditions while maintaining underwriting discipline remains a key element of our long-term success.”