Arch Capital has reported a 17% rise in net profit to $US422.45 million ($455.95 million) for the six months to June 30, with its insurance arm recording increases in rates and new business.

The insurance market “continues on its path of recovery, with rates continuing to rise at roughly the same level as in the first quarter”, Chairman and CEO Constantine Iordanou says.

The second-quarter result fell 15% to $US171.46 million ($184.89 million), with catastrophe losses of $US36.3 million ($39.14 million), mostly from US tornadoes and hailstorms and floods in Europe and Canada.

Half-year gross written premium grew 15% to $US293.77 million ($316.79 million), and the combined ratio was 86%.

Arch reported a second-quarter combined ratio from insurance underwriting of 98.6%, while its reinsurance segment had a combined ratio of 81.2%.

The company says reinsurance gross premiums fell in the second quarter on rate cuts in property catastrophe business, increased retrocession and moves to reduce exposure to some lines.