Bermuda-based Arch Capital swung back to profitability in the third quarter, but warns this quarter will be “negatively impacted” by Hurricane Michael-related claims.

The hurricane may cost the (re)insurer $US40-$US60 million ($56.4-$84.7 million) on a pre-tax basis, net of reinsurance and reinstatement premiums.

Michael battered the Florida coast last month, becoming the most powerful hurricane to hit mainland US since Andrew in 1992.

Industry analysts say private insured losses may reach $US10 billion ($14.1 billion).

Arch says its “actual losses from this event may vary materially from the estimates due to the inherent uncertainties in making such determinations resulting from several factors.

“In addition, actual losses may increase if the company’s reinsurers fail to meet their obligations to the company or the reinsurance protections purchased by the company are exhausted or are otherwise unavailable.”

In the third quarter Arch recorded a net income of $US217 million ($306 million), compared with a $US52.8 million ($74.5 million) loss in the corresponding period last year, when a string of unprecedented natural catastrophes dragged on earnings.

Gross written premium increased to $US1.73 billion ($2.4 billion) from $US1.65 billion ($2.3 billion). The combined operating ratio improved 29.5 percentage points to 82.3%.