Arch Capital earned net profit of $US74.55 million ($105 million) in the quarter to September 30, down from $US223.19 million ($314.3 million) in the corresponding period last year.

The Bermudan insurer and reinsurer’s profit decline is due to a stronger US dollar, which hit investment returns denominated in currencies such as the British pound and Canadian dollar.

Net foreign exchange gains, on a pre-tax basis, slid to $US16.1 million ($22.7 million) from $US57.6 million ($81.1 million).

Gross written premium (GWP) improved to $US1.16 billion ($1.63 billion) from $US1.14 billion ($1.61 billion), but the combined operating ratio deteriorated to 89.7% from 88.5%.

Net investment income fell to $US67.25 million ($94.7 million) from $US72.24 million ($101.71 million).

Arch’s insurance business booked GWP of $US752.44 million ($1.06 billion), up from $US726.68 million ($1.02 billion).

Reinsurance GWP fell to $US329.33 million ($463.76 million) from $US345.75 million ($487.36 million).

For the nine months to September 30 net profit dropped to $US462.71 million ($651.58 million) from $US602.74 million ($849 million) in the corresponding period last year.