Arch Capital’s shares fell more than 2 per cent yesterday after the insurer and reinsurer reported a more than 40 per cent drop in first-quarter net income.

The Bermudian company made a net profit of $137 million in the first three months of this year, down from $242 million in the same period a year earlier.

Arch reported after-tax operating income, however, a non-GAAP measure, was $235 million, an increase on the $198 million it posted a year earlier. The increase was mainly down to $111 million of net realised gains.

Its combined ratio for the period was 81.3 percent, compared to 81.4 percent a year earlier.

The company said it achieved an average return on net common equity of 6.6 per cent, down from 12.6 per cent a year earlier.

Average shareholders’ equity rose to $8.35 billion, compared to $7.66 billion in the first quarter of 2017.