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Member, Beacon International Group, Ltd.
Arch Capital Group Ltd. on Tuesday reported a steep drop in 2015 fourth-quarter profits and lower revenues amid a continued soft market.
The Hamilton, Bermuda-based insurer and reinsurer reported 2015 fourth-quarter net income of $53.1 million, a 74.7% decrease over the same period in 2014.
Net premiums written fell 8.2% to $73.8 million in the three months ended Dec. 31, while net investment income decreased 7.8% to $67 million. But Arch's combined ratio improved slightly to 86.8% from 87.5% in the same period 2014 on light catastrophe losses.
The fourth quarter results were affected by “headwinds” including plentiful market capacity, lower rates and the strengthening of the U.S. dollar, company chairman and CEO Dinos Iordanou said in a conference call with analysts.
The lower net premiums reflected the nonrenewal of a large program in its program business sector and reductions in business in professional lines, property, energy, marine, aviation, and excess and surplus casualty, the Arch earnings statement said.
For the full-year 2015, net income dropped 36.5% to $515.8 million. Net written premiums were down 7.4% to $3.35 billion, with net investment income decreasing 4.5% to $271.7 million. The combined ratio for 2015 deteriorated to 88% from 86.8% in 2014.
President and Chief Operating Officer Mark Grandisson said in the conference call that Arch sees challenges ahead but also opportunities. However, “the days of low hanging fruit are gone,” he said.