|Three Months Ended March 31,|
|(U.S. dollars in thousands)||2014||2013||% Change|
|Gross premiums written||$||1,295,136||$||1,163,699||11.3|
|Net premiums written||1,064,990||952,776||11.8|
|Net premiums earned||859,780||752,770||14.2|
|Underwriting Ratios||% Point Change|
|Acquisition expense ratio||18.6||%||16.9||%||1.7|
|Other operating expense ratio||15.4||%||14.6||%||0.8|
Arch Capital Group Ltd. (NASDAQ:ACGL) reports that net income available to Arch common shareholders for the 2014 first quarter was $177.0 million, or $1.30 per share, compared to $251.0 million, or $1.85 per share, for the 2013 first quarter. The Company also reported after-tax operating income available to Arch common shareholders of $164.4 million, or $1.20 per share, for the 2014 first quarter, compared to after-tax operating income available to Arch common shareholders of $158.7 million, or $1.17 per share, for the 2013 first quarter. The Company's after-tax operating income available to Arch common shareholders represented an annualized return on average common equity of 12.1% for the 2014 first quarter, compared to 12.9% for the 2013 first quarter. The Company's net income available to Arch common shareholders represented an anualized return on average common equity of 13.0% for the 2014 first quarter, compared to 20.4% for the 2013 first quarter. The Company's book value per common share was $41.53 at March 31, 2014, a 4.3% increase from $39.82 per share at December 31, 2013 and a 10.3% increase from $37.66 per share at March 31, 2013. After-tax operating income or loss available to Arch common shareholders, a non-GAAP measure, is defined as net income available to Arch common shareholders, excluding net realized gains or losses, net impairment losses recognized in earnings, equity in net income or loss of investment funds accounted for using the equity method and net foreign exchange gains or losses, net of income taxes. See 'Comments on Regulation G' for a further discussion of after-tax operating income or loss available to Arch common shareholders. All earnings per share amounts discussed in this release are on a diluted basis. The following table summarizes the Company's underwriting results. For a discussion of underwriting activities and a review of the Company's results by operating segment, see the “Segment Information” section of this release.
On January 30, 2014, the Company completed the acquisition of CMG Mortgage Insurance Company (renamed Arch Mortgage Insurance Company), the leading provider of mortgage insurance products and services to credit unions in the U.S., and the mortgage insurance operating platform and related assets of PMI Mortgage Insurance Co. (“PMI”). Arch Mortgage Insurance Company (“Arch MI U.S.”) will continue to serve its existing credit union clientele and, at the same time, has made substantial progress in building out its sales force to serve banks and other mortgage originators. The business of Arch MI U.S. has been combined with the Company's other global mortgage insurance, reinsurance and risk-sharing products as a core underwriting segment (Mortgage). The Company has reclassified the presentation of its segment information for the 2013 first quarter to conform to the current presentation.