Arch Capital Ltd.’s net income for the fourth quarter of 2006 was more than double that of the previous year, the Bermuda company announced yesterday.

Net income in the last three months of 2006 was $239.3 million, or $3.12 per share, compared to $100.9 million, or $1.34 per share, in the same period the year previous.

Arch also warned that its first-quarter results this year would be hit by estimated net losses of between $5 million and $15 million resulting from claims relating to windstorm Kyrill.

The storm’s hurricane-force winds caused widespread damage across western Europe in mid-Jaunary.

The company also announced it had entered a new line of business from the start of this year, writing excess workers’ compensation and employers’ liability insurance, produced by a managing general agent.

“As part of the transaction, the company’s US insurance operations also entered into an asset purchase agreement to acquire the operations of the managing general agent, including the renewal rights of the subject business, as of January 1, 2008, subject to the satisfaction of customary closing conditions,” a statement released on Business Wire after trading hours stated yesterday.

In 2006, the agent produced around $74 million for the predecessor carrier on the programme.

For the year 2006, Arch’s net earnings were $692.6 million, or $9.08 per share, compared to $256.5 million, or $3.43 per share, in 2005.

Arch reported a fall in gross premiums written, from $1.04 billion in 2005 to $873.19 million in the final quarter of last year. The company put this loss down to non-recurring reinsurance items written in 2005, after that year’s busy hurricane season.

Property and marine business worth around $109.2 million, written in the fourth quarter of 2005, was not expected to be renewed, as Arch pointed out at the time.

The company’s combined ratio was 83.0 percent for the 2006 fourth quarter, compared to 87.3 percent for the same period a year earlier.

Arch’s after-tax operating income represented a 28.9 percent annualised return on average common equity for the 2006 fourth quarter, compared to 23.5 percent for the same period last year. For the year 2006, the return was 25.6 percent, compared to 12.0 percent for 2005.