Arch Capital increases net income in 2006 Q1

Arch Capital Group Ltd. (NASDAQ: ACGL) reports that net income available to common shareholders for 2006 Q1 was US$129.6 million, compared to US$115.9 million during 2005 Q1.

Gross and net premiums written for the 2006 first quarter were US$1.17 billion and US$873.7 million, respectively, compared to US$980.7 million and US$799.8 million, respectively, for 2005 Q1.

Of the US$1.17 billion in gross premiums written, US$615.5 million came from Arch’s insurance segment, while Arch’s reinsurance segment accounted for the remaining US$564.7.

Arch’s combined ratio was 88.3% for 2006 Q1, compared to 88.8% for 2005 Q1. Breaking the combined ratio into segments, Arch’s insurance side reported a COR of 90.2% while the reinsurance side accounted for a COR of 85.3%.

The company’s after-tax operating income available to common shareholders represented a 22.8% annualized return on average common equity for 2006 Q1, compared to 19.8% for 2005 Q1.

Net investment income for 2006 Q1 increased to US$80.3 million, compared with US$49.9 million in 2005 Q1. “The higher level of net investment income in the 2006 first quarter resulted from a higher level of average invested assets in the 2006 period, and an increase in the pre-tax investment income yield to 4.3% for the 2006 first quarter, compared to 3.4% for the 2005 first quarter,” the company reported in a press release.