Arch Capital Ltd., the parent company of insurance start-up Arch Re, tripled its profits during the second quarter of 2003, the company reported this week after it doubled the amount of business it wrote.

The Arch Group, which is based in Bermuda, reported net income for the 2003 second quarter was $61.8 million, or $0.91 per share, compared to $19.2 million, or $0.33 per share, for the 2002 second quarter.

And the amount of business written by the company more than doubled with net premiums written for the 2003 second quarter increased to $560.0 million from $223.0 million for the 2002 second quarter.

The company also reported after-tax operating income for the 2003 second quarter of $59.2 million, or $0.87 per share, compared to $15.5 million, or $0.27 per share, for the 2002 second quarter.

The company's after-tax operating income for the six months ended June 30, 2003 represented a 15.4 percent return on beginning equity, on an annualised basis.

Operating income, a non-GAAP measure, is defined as net income or loss excluding net realised investment gains or losses, net foreign exchange gains or losses, other income and non-cash compensation charges, net of tax.

The Arch group said that its net realised investment gains or losses, net foreign exchange gains or losses, other income and non-cash compensation charges, net of tax, are excluded from operating income because the company does not believe that they are relevant indicators of the performance of, or trends in, the company's core business operations.

It said in a statement that its management believes that operating income provides useful information.

This is because it reflects the underlying fundamentals of the company's operations, follows industry practice and enables investors to compare the company's performance with its industry peer group.

The company's underwriting income, on a GAAP basis, increased to $49.2 million for the 2003 second quarter from $7.0 million for the 2002 second quarter.

For the six months ended June 30, 2003, the company's underwriting income, on a GAAP basis, was $89.3 million, compared to $10.8 million for the six months ended June 30, 2002. The increased underwriting income in the 2003 periods was primarily due to a significantly higher level of net premiums earned.

The company's combined ratio, on a GAAP basis, was 90.7 percent for the 2003 second quarter, compared to 93.9 percent for the 2002 second quarter, and 90.7 percent for the six months ended June 30, 2003, compared to 94.0 percent for the six months ended June 30, 2002. The company's loss ratio was 65.1 percent for the 2003 second quarter, compared to 70.8 percent for the 2002 second quarter, and 65.1 percent for the six months ended June 30, 2003, compared to 72.3 percent for the six months ended June 30, 2002.