Arch Capital has posted a 57% rise in first-quarter net income to $US277.9 million ($352.1 million), driven by gross written premium (GWP) and currency gains.

The Bermuda-based underwriter’s GWP increased 1.3% to $US1.31 billion ($1.66 billion), while pre-tax net foreign exchange gains totalled $US66.9 million ($84.8 million), compared with a loss of $US6.7 million ($8.5 million) in the March quarter last year.

Net investment income grew to $US70.3 million ($89.1 million) from $US67 million ($84.9 million), as returns from certain fund investments outstripped related expenses.

The insurance division generated GWP of $US766.2 million ($970.7 million), up 4.9%.

But GWP from the reinsurance business fell 6.2% to $US485.1 million ($614.6 million). Arch attributes this to falls in “other specialty”, property catastrophe and casualty lines.

“The decrease in other specialty reflected non-renewals and share decreases in response to current market conditions.

“The lower level of property catastrophe business reflected non-renewals and share decreases in response to current market conditions and a higher usage of retrocessional coverage.”

Arch’s combined operating ratio deteriorated to 87.5% from 84.6%.