Arch Capital Group Ltd. reported on Monday fourth-quarter net income of $849.5 million, a 38.6% increase compared to the fourth quarter of 2021, attributing the increase to lower-than-average losses and favorable growth in mortgage loan reserves, among other things.
“Each of our three underwriting segments delivered exceptional results,” CEO Marc Grandisson said on a conference call with analysts on Tuesday.
Arch’s total expense ratio improved to 73.5% in the fourth quarter from 77.6% in the prior-year quarter, which included a negative total expense ratio for the mortgage business. The total expense ratio for its insurance business improved to 92.1% from 92.9% and its total expense ratio for reinsurance improved to 78.4% from 83.1%.
The company said the loss ratio for the fourth quarter of 2022 reflected 2.8 points of current year catastrophic activity, spread over various global events during the year, compared to 2.0 points of catastrophic activity in the prior year’s fourth quarter.
Arch reported fourth quarter net written premium of $3 billion, up 17.4% compared to fourth quarter 2021.
Net investment income for the quarter was $181.1 million, more than double that for the same period in 2021.
Mr. Grandisson said the insurance market remains “rational and disciplined.”
He added, “our non-life insurance team continues to lean into tough market conditions and our mortgage team delivered record underwriting income.”
Mr. Grandisson said the company expects to allocate more capital to the property/casualty segment in the coming years.