Bermudian insurer and reinsurer Arch Capital recorded an 18.1% rise in net income to $US812.4 million ($1.05 billion) last year.

The result was partly driven by foreign exchange gains of $US83.2 million ($107.59 million), compared with an exchange loss of $US13.7 million ($17.71 million) in 2013.

Chairman and CEO Constantine Iordanou says rate rises in the insurance segment and the addition last month of US primary mortgage business CMG Mortgage Insurance have helped offset weakness in reinsurance.

Growth in professional lines mainly reflects increases in small and medium-sized international accounts.

Gross written premium (GWP) across the group gained 13.4% to $US4.76 billion ($6.15 billion) last year on growth in professional lines, excess and surplus casualty, and alternative markets.

In the fourth quarter, GWP in the insurance division grew 9.8% to $US699.1 million ($904.32 million), while the reinsurance division gained 4.9% to $US314.6 million ($406.95 million).

Net investment income for last year increased 6.4% to $US284.3 million ($367.74 million).

Annual underwriting income gained 5% to $US474.17 million ($613.34 million) thanks to a strong fourth quarter.

The combined operating ratio deteriorated to 86.8% from 85.9% in 2013.