Arch to take $38m reinsurance hit
Arch Capital Group Ltd has revealed that its second-quarter profit will take a $38 million hit from reinsurance losses.
The news prompted Arch shares to fall more than 2 per cent in early trading on the Nasdaq Stock Exchange and follows filings that show chairman Dinos Iordanou sold nearly half of his personal stake in the company during the past three weeks.
In a Securities and Exchange Commission filing, the Bermudian insurer and reinsurer said $38 million in losses emanated from its property facultative reinsurance book of business.
“Such activity related to losses incurred on a small number of contracts across multiple underwriting years and represents an unusually high level of activity for the property facultative reinsurance unit,” the filing stated.
“Since its inception in 2007, the property facultative reinsurance unit has consistently produced significant underwriting profits for the company.”
Arch shares had risen more than 12 per cent since the start of the year by Tuesday’s close. Yesterday, Arch closed down $2.10, or 2.2 per cent, at $95.04, in New York trading.
Other recent SEC filings show insider selling by board members.
Chairman Dinos Iordanou sold 100,000 shares — nearly half his stake in the company — since May 18. As of May 31, after those sales he still held 107,151 shares in Arch, worth about $10.15 million at yesterday’s price.
Arch director John Vollaro also sold 10,000 shares on May 31 and June 1, leaving him with a holding of 118,016 shares.