Arch has trumped analysts’ consensus in the second quarter with a $242.6mn profit that was 43.6 percent higher than this time last year driven by improvement in both its insurance and reinsurance divisions.
The $0.59 per share result was above the $0.53 that had been forecast by 15 Wall Street watchers surveyed by financial news site MarketWatch.
The performance was driven by an improvement in the group’s combined ratio which shed 2 points to hit 80.2 percent during the quarter.
Top line, meanwhile, edged up 3.8 percent to hit $1.59bn during the three-month period.
The bulk of that growth was in the group’s reinsurance division, which swelled by 8.2 percent to write premiums of $490.3mn in the second quarter.
The blue-chip Bermudian touted growth in its non-catastrophe property book as the force behind the premium bump after winning a number of new accounts and enjoying the effect of rate increases.
However, the reinsurance segment only just broke even in the second quarter with a 100 percent combined ratio, albeit lower than the 101.1 percent it reported this time last year.
Meanwhile, the group’s insurance division clocked a 98.5 percent insurance combined ratio that had shed almost 1 point since Q2 2017 after a slight uptick in reserve releases and reduction in catastrophe losses for the quarter.
The segment’s top line edged up 3.4 percent to $769.4mn driven by new business and rate increases in Arch’s travel and programmes books.
The group’s mortgage division, however, shrank marginally by 1.6 percent in the second quarter to $331mn.
“The reduction in gross premiums written primarily reflected lower level of US single premium business and a decrease in Australian mortgage reinsurance business, partially offset by growth in US monthly premium business and government sponsored enterprise (GSE) credit-risk sharing transactions,” Arch said.
The segment’s combined ratio was roughly flat at 30.2 percent.