NU Online News Service, July 26, 2:09 p.m. EDT

Arch Capital Group Ltd.'s 2011 second-quarter net income dropped more than 61 percent compared to the same period a year ago as catastrophes caused $95 million in losses for the Bermuda-based specialty insurer and reinsurer.

Arch says net income attributable to common shareholders was $91.9 million for the quarter, compared to $237 million a year ago.

The $95 million in cat losses compares to $7 million in cat losses for the 2010 second quarter. Of the $95 million, Arch says $81.5 million consists of cat events that occurred during the quarter, including tornado-spawning U.S. storms in April and May, and a June earthquake in Christchurch, New Zealand. The remaining $13.5 million is attributable to increases in loss estimates for 2011 first-quarter events.

Arch's combined ratio was 99.6, up from 90 in the 2010 second quarter. The company's insurance segment posted a combined ratio of 108.1 for the quarter, up from 101.5 a year ago. The segment also posted a $33.4 million underwriting loss, compared to a $6 million underwriting loss in the 2010 second quarter. The reinsurance segment had a combined ratio of 84.7 for the quarter, up from 68.7 a year ago, and reported underwriting income of $35.7 million, down 47.8 percent from a year ago.

Through the first half of the year, Arch's combined ratio is 104.8.

Arch saw net premiums written in the 2011 second quarter climb to $706.5 million, compared to $624.3 million a year ago. Revenues dipped slightly to $775.6 million compared to $776.3 million.

The company says it took net foreign-exchange losses of $18.4 million for the quarter compared to net foreign-exchange gains of $48.6 million.

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Cats Contribute to 61% Net Income Drop for Arch

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