Arch Capital Posts $227.7 Q4 Net Income; $816.7 Million Full Year

Bermuda-based Arch Capital Group reported net income available to common shareholders for the 2010 fourth quarter of $227.7 million, or $4.54 per share, compared to $284.7 million, or $4.75 per share, for the 2009 fourth quarter.

The Company also reported Q4 after-tax operating income, which excludes capital gains/losses, available to common shareholders of $129.5 million, or $2.58 per share, compared to $159.4 million, or $2.66 per share in Q4, 2009.

Net income for the full year was $$816.744 million, compared to $851.1 million in 2009. After-tax operating income available to common shareholders for 2010 was $491 million, compared to $651.8 million in 2009.

The combined ratio for the fourth quarter was 92.7 percent, a slight increase from the 88.8 percent posted in Q4, 2009. For the full year Arch’s combined ratio was 92.5 percent, compared to 88.1 percent in 2009.

The earnings release noted that the “Company’s book value per common share was $89.98 at December 31, 2010, a 0.8 percent increase from $89.24 per share at September 30, 2010 and a 23.2 percent increase from $73.01 per share at December 31, 2009. The Company’s after-tax operating income available to common shareholders represented a 12.1 percent annualized return on average common equity for the 2010 fourth quarter, compared to 15.7 percent for the 2009 fourth quarter.

“In the 2010 fourth quarter, the Company recorded net losses for the Australian floods that occurred in December 2010 of approximately $22.5 million, or $0.45 per share, net of reinsurance and reinstatement premiums. The Company’s 2011 first quarter results will be impacted by subsequent Australian flooding and Cyclone Yasi that occurred in Australia in 2011.

“Although it is early in the estimation process, the Company’s preliminary estimate of losses for the 2011 first quarter events is in the range of $30 million to $60 million, net of reinsurance and reinstatement premiums. The Company’s estimates for the 2010 and 2011 Australian floods are based, in part, on preliminary estimates of industry insured losses ranging from $3.0 billion to $6.0 billion, and the Company’s estimates for Cyclone Yasi are based, in part, on preliminary estimates of industry insured losses ranging from $0.5 billion to $1.5 billion.

Source: Arch Capital Group

Topics Profit Loss Australia