Arch Capital says net income fell 45% to $US110.3 million ($150.77 million) in the second quarter, driven by lower investment income and premium returns.

The Bermuda-based underwriter’s gross written premium (GWP) was $US1.15 billion ($1.57 billion), down 8% from the corresponding period last year.

Pre-tax net foreign exchange losses were $US22.6 million ($30.89 million), compared with losses of $US2.8 million ($3.82 million) in the second quarter of last year.

Net investment income was $US67.2 million ($91.91 million), down 7.3%.

The insurance division generated GWP of $US744.81 million ($1.01 billion) in the second quarter, down 12.6%, largely due to changes in foreign currency rates.

The drop also reflects lower property, energy and marine business, program business, professional lines and alternative markets business, after rate falls and strategic reductions in certain lines.

GWP from the reinsurance business was $US342.1 million ($467.84 million), down 2.2%.

Property catastrophe business was down in the second quarter.

Arch’s combined operating ratio deteriorated to 87.9% from 86.2%.