Oct 30 (Reuters) - Arch Capital's ( ACGL ) third-quarter

profit rose 37% as higher premiums and robust investment returns

softened the hit from elevated costs, the insurer said on

Wednesday.

The results align with trends seen at other major players in

the industry. Growing confidence in their financial stability

has spurred clients into seeking more comprehensive policy

coverage.

In addition, elevated interest rates have boosted returns on

insurers' bond investments while a rally in stocks has increased

gains in their equity portfolios.

Gross premiums written rose 20% to $5.44 billion, while

pre-tax net investment income grew 48% to $399 million in the

quarter.

That helped offset costs from higher expenses on

investigating and settling claims. Losses and loss adjustment

expenses were $2.40 billion, compared with $1.65 billion a year

earlier.

Profit available to common shareholders was $978 million, or

$2.56 per share, for the three months ended Sept. 30, compared

with $713 million, or $1.88 per, share last year.