Arch Capital’s third-quarter profit jumps on strong underwriting income

(Reuters) — Arch Capital’s third-quarter profit rose 37% as strong underwriting softened the hit from elevated costs, the insurer said on Monday.

The results mirror those of peers W.R. Berkley and Chubb, which reported higher quarterly profits last week on underwriting strength.

Growing confidence in financial stability has spurred clients into seeking more comprehensive policy coverage.

Stronger underwriting reflects an insurer’s ability to price risk effectively, bolstering profits despite higher claims.

Arch Capital posted underwriting income of $871 million in the quarter, compared with $538 billion a year earlier.

Gross premiums written fell 0.6% to $5.41 billion, while pre-tax net investment income grew 0.74% to $408 million in the three months ended September 30.

That helped offset costs from higher expenses on investigating and settling claims. Losses and loss adjustment expenses were $1.16 billion, compared with $1.08 billion a year earlier.

Profit available to common shareholders was $1.34 billion, or $3.56 per share, for the quarter, compared with $978 million, or $2.56 per share, last year.

The company’s shares were up 1.2% in after-hours trading.