Arch Capital’s second-quarter profit falls on higher expenses

(Reuters) — Arch Capital Group’s second-quarter profit fell on Tuesday, as higher expenses weighed on the insurer’s underwriting performance and investment returns.

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

U.S. insurers are benefiting as macroeconomic uncertainty and recession fears promote spending on risk-mitigating offerings by households and businesses.

The insurer reported a pre-tax catastrophe loss of $154 million, net of reinsurance and reinstatement premiums.

Gross premiums written rose 15% to $6.2 billion in the quarter ended June 30. The insurer’s net investment income surged nearly 11.3% to $405 million.

The company reported losses and loss adjustment expenses of $2.3 billion, compared with $1.83 billion a year earlier.

Profit available to common shareholders was $1.2 billion, or $3.23 per share, for the reported quarter, compared with $1.3 billion, or $3.3 per share, last year.

Arch reported a combined ratio of 81.2%, compared with 78.7% last year. A ratio below 100% indicates the insurer earned more in premiums than it paid out in claims.