Arch sees Q1 2024 net income hit $1.1bn, CoR improves to 78.8%

Arch Capital Group has reported Q1 2024 net income available to its common shareholders of $1.1 billion, marking an increase of $395 million compared to the same quarter of 2023.

After-tax operating income in Q1 2024 also improved, reaching $933 million, compared to $654 million in the same quarter of the previous year.

Gross premiums written were up 24.1% in Q1 2024 YoY, landing at $5.93 billion. Net premiums written and earned also bettered, increasing 19.3% and 18.7%, respectively.

As for Arch’s combined ratio in Q1 of 2024, the figure refined to 78.8%, down from 80.6% in Q1 of 2023.

Meanwhile, the firm’s underwriting income in this year’s quarter was $736 million, a 29.1% increase from the previous year.

Looking at Arch’s reinsurance segment alone, gross premiums written in Q1 of 2024 were 40.9% higher than in Q1 of 2023, while net premiums written were 31.3% higher.

The firm explained that the growth in net premiums written reflected increases in all lines of business, due in part to rate increases, new business opportunities and growth in existing accounts.

Net premiums earned in Q1 2024 were 25.3% higher than the previous year, reportedly reflecting changes in net premiums written over the previous five quarters.

Underwriting income in the reinsurance segment in Q1 2024 also saw a dramatic increase, spiking 77.9% to $379 million.

As for the firm’s insurance segment, gross premiums written in Q1 of 2024 were 7.4% higher than in 2023, while net premiums written were 7.3% higher, and net premiums earned were 15.4% higher.

However, underwriting income in the insurance segment was down 24.6% to $86 million, while both the combined ratio and loss ratio increased slightly.

Arch said that the Q1 2024 loss ratio reflected 2.1 points of activity related to the Baltimore bridge collapse along with 1.9 points of current-year catastrophic activity, spread across a series of global events, compared to 1.4 points of catastrophic activity in Q1 of 2023.

Estimated net favourable development of prior year loss reserves, before related adjustments, reduced the loss ratio by 0.7 points in Q1 of 2024, compared to 0.9 points in Q1 of 2023.

Marc Grandisson, Chief Executive Officer of Arch Capital Group, commented: “We are extremely pleased with the outstanding financial results across our operations in the first quarter.

“I am especially proud of the ongoing commitment of our Arch colleagues to delivering value-added solutions to our clients and partners in this ever-changing risk environment. This level of hard and smart work bodes well for our future success to the benefit of our shareholders.”

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