Arch Capital says first-quarter net profit fell to $US149.3 million ($194.8 million) from $US277.9 million ($362.6 million) in the corresponding period last year, as earnings took a hit from currency losses and weaker reinsurance results.

The Bermuda-based underwriter’s overall gross written premium (GWP) grew 6.1% to $US1.39 billion ($1.81 billion), but underwriting income declined 2.5% to $US111.89 million ($146 million).

Net foreign exchange losses were $US22 million ($28.7 million), compared with gains of $US66.9 million ($87.3 million) in the first quarter last year.

The combined operating ratio improved to 87.1% from 87.5%.

Net investment income was relatively steady at $US70.4 million ($91.9 million), compared with $US70.3 million ($91.8 million) last year.

The insurance unit’s GWP improved 4.2% to $US798.6 million ($1.04 billion), but reinsurance recorded a 0.8% slide to $US481.4 million ($628.1 million) as underwriting income fell 20.6% to $US58.7 million ($76.6 billion).

Arch says the weaker reinsurance results are due to “increased retrocessions on property and other lines and changes in the mix of business”.