We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type |
---|---|---|---|
Arch Capital Group Ltd | NASDAQ:ACGL | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.72 | 0.73% | 98.93 | 98.00 | 99.58 | 99.70 | 98.21 | 98.21 | 1,321,136 | 21:30:12 |
Arch Capital Group Ltd. (NASDAQ: ACGL) announces its 2021 first quarter results. The results included:
All earnings per share amounts discussed in this release are on a diluted basis. The following table summarizes the Company’s underwriting results, both (i) on a consolidated basis and (ii) on a consolidated basis excluding the ‘other’ segment (i.e., results of Watford):
(U.S. dollars in thousands)
Consolidated
Consolidated Excluding ‘Other’ Segment (1)
Three Months Ended March 31,
Three Months Ended March 31,
2021
2020
% Change
2021
2020
% Change
Gross premiums written
$
3,397,206
$
2,832,830
19.9
$
3,277,293
$
2,698,537
21.4
Net premiums written
2,508,457
2,137,246
17.4
2,329,146
1,950,546
19.4
Net premiums earned
1,948,422
1,744,444
11.7
1,800,691
1,604,405
12.2
Underwriting income
185,918
154,050
20.7
198,997
160,060
24.3
Underwriting Ratios
% Point Change
% Point Change
Loss ratio
61.7
%
63.9
%
(2.2
)
60.2
%
62.6
%
(2.4
)
Underwriting expense ratio
29.0
%
27.6
%
1.4
29.0
%
27.9
%
1.1
Combined ratio
90.7
%
91.5
%
(0.8
)
89.2
%
90.5
%
(1.3
)
Combined ratio excluding catastrophic activity and prior year development (1)
81.0
%
84.2
%
(3.2
)
(1)
Presentation represents a “non-GAAP” financial measure as defined in Regulation G. Such presentation excludes the results of Watford Holdings Ltd. (“Watford”). Pursuant to GAAP, the Company consolidates the results of Watford in its financial statements, although it only owns approximately 10% of Watford’s outstanding common equity as of March 31, 2021. See ‘Comments on Regulation G’ for further details.
The following table summarizes the Company’s consolidated financial data, including a reconciliation of net income or loss available to Arch common shareholders to after-tax operating income or loss available to Arch common shareholders and related diluted per share results:
(U.S. dollars in thousands, except share data)
Three Months Ended
March 31,
2021
2020
Net income available to Arch common shareholders
$
427,753
$
133,714
Net realized (gains) losses
(105,551
)
109,364
Equity in net (income) loss of investment funds accounted for using the equity method
(71,686
)
4,209
Net foreign exchange (gains) losses
(21,332
)
(64,491
)
Transaction costs and other
1,274
2,595
Income tax expense (benefit) (1)
9,311
4,365
After-tax operating income available to Arch common shareholders
$
239,769
$
189,756
Diluted per common share results:
Net income available to Arch common shareholders
$
1.05
$
0.32
Net realized (gains) losses
(0.25
)
0.27
Equity in net (income) loss of investment funds accounted for using the equity method
(0.18
)
0.01
Net foreign exchange (gains) losses
(0.05
)
(0.16
)
Transaction costs and other
0.00
0.01
Income tax expense (benefit) (1)
0.02
0.01
After-tax operating income available to Arch common shareholders
$
0.59
$
0.46
Weighted average common shares and common share equivalents outstanding — diluted
409,223,253
414,033,570
Beginning common shareholders’ equity
$
12,325,886
$
10,717,371
Ending common shareholders’ equity
12,316,472
10,587,244
Average common shareholders’ equity
$
12,321,179
$
10,652,308
Annualized return on average common equity
13.9
%
5.0
%
Annualized operating return on average common equity
7.8
%
7.1
%
(1)
Income tax expense (benefit) on net realized gains or losses, equity in net income (loss) of investment funds accounted for using the equity method, net foreign exchange gains or losses and transaction costs and other reflects the relative mix reported by jurisdiction and the varying tax rates in each jurisdiction.
Each line item in the table above reflects the impact of the Company’s ownership of Watford’s outstanding common equity. See ‘Comments on Regulation G’ for a discussion of non-GAAP financial measures.
Segment Information
The following section provides analysis on the Company’s 2021 first quarter performance by operating segment. For additional details regarding the Company’s operating segments, please refer to the Company’s Financial Supplement dated March 31, 2021. The Company’s segment information includes the use of underwriting income (loss) and a combined ratio excluding catastrophic activity and prior year development. Such items are non-GAAP financial measures (see ‘Comments on Regulation G’ for further details).
Insurance Segment
Three Months Ended March 31,
(U.S. dollars in thousands)
2021
2020
% Change
Gross premiums written
$
1,415,886
$
1,207,645
17.2
Net premiums written
994,839
828,748
20.0
Net premiums earned
819,474
715,919
14.5
Underwriting income (loss)
$
18,392
$
(28,175
)
165.3
Underwriting Ratios
% Point Change
Loss ratio
65.4
%
70.8
%
(5.4
)
Underwriting expense ratio
32.3
%
33.1
%
(0.8
)
Combined ratio
97.7
%
103.9
%
(6.2
)
Catastrophic activity and prior year development:
Current accident year catastrophic events, net of reinsurance and reinstatement premiums
5.1
%
6.9
%
(1.8
)
Net (favorable) adverse development in prior year loss reserves, net of related adjustments
(0.7
)
%
(0.1
)
%
(0.6
)
Combined ratio excluding catastrophic activity and prior year development (1)
93.3
%
97.1
%
(3.8
)
(1)
See ‘Comments on Regulation G’ for further discussion.
Gross premiums written by the insurance segment in the 2021 first quarter were 17.2% higher than in the 2020 first quarter while net premiums written were 20.0% higher than in the 2020 first quarter. The higher level of net premiums written reflected increases across most lines of business, due in part to rate increases, new business opportunities and growth in existing accounts, partially offset by a decrease in travel business, reflecting the ongoing impact of the COVID-19 global pandemic. Net premiums earned in the 2021 first quarter were 14.5% higher than in the 2020 first quarter, and reflect changes in net premiums written over the previous five quarters.
The 2021 first quarter loss ratio reflected 5.1 points of current year catastrophic activity, primarily from winter storms Uri and Viola, compared to 6.9 points in the 2020 first quarter. Estimated net favorable development of prior year loss reserves, before related adjustments, reduced the loss ratio by 0.5 points in the 2021 first quarter, compared to 0.2 points in the 2020 first quarter. The 2021 first quarter loss ratio also reflected the effect of rate increases, changes in mix of business and a lower level of attritional losses compared to the 2020 first quarter.
The underwriting expense ratio was 32.3% in the 2021 first quarter, compared to 33.1% in the 2020 first quarter, with the decrease primarily due to growth in net premiums earned.
Reinsurance Segment
Three Months Ended March 31,
(U.S. dollars in thousands)
2021
2020
% Change
Gross premiums written
$
1,471,060
$
1,122,519
31.0
Net premiums written
999,112
797,180
25.3
Net premiums earned
644,900
543,460
18.7
Other underwriting income (loss)
(1,198
)
2,120
(156.5
)
Underwriting income (loss)
$
(19,707
)
$
(9,392
)
(109.8
)
Underwriting Ratios
% Point Change
Loss ratio
75.2
%
79.1
%
(3.9
)
Underwriting expense ratio
27.7
%
22.9
%
4.8
Combined ratio
102.9
%
102.0
%
0.9
Catastrophic activity and prior year development:
Current accident year catastrophic events, net of reinsurance and reinstatement premiums
22.7
%
12.7
%
10.0
Net (favorable) adverse development in prior year loss reserves, net of related adjustments
(3.8
)
%
(2.0
)
%
(1.8
)
Combined ratio excluding catastrophic activity and prior year development (1)
84.0
%
91.3
%
(7.3
)
(1)
See ‘Comments on Regulation G’ for further discussion.
For comparability, premiums written for the reinsurance segment in the 2020 first quarter were affected by the presence of an $88 million loss portfolio transfer contract, written and fully earned in the period in the other specialty line of business. Absent this transaction, gross and net premiums written would have been higher than in the 2020 first quarter by 42.2% and 40.8%, respectively. The growth in net premiums written reflected increases in most lines of business, mainly due to rate increases and new business. Excluding the loss portfolio transfer contract, net premiums earned by the reinsurance segment in the 2021 first quarter were 41.5% higher than in the 2020 first quarter, and reflect changes in net premiums written over the previous five quarters.
The 2021 first quarter loss ratio reflected 24.7 points of current year catastrophic activity, including winter storms Uri and Viola as well as other minor global events. The corresponding impact on the 2020 first quarter results was 12.7 points. Estimated net favorable development of prior year loss reserves, before related adjustments, reduced the loss ratio by 4.2 points in the 2021 first quarter, compared to 2.1 points in the 2020 first quarter. The 2021 first quarter loss ratio also reflected the effect of rate increases, changes in the mix of business and a lower level of attritional losses compared to the 2020 first quarter. Absent the loss portfolio transfer contract noted above, the 2020 first quarter loss ratio would have been 3.9 points lower than reported.
The underwriting expense ratio was 27.7% in the 2021 first quarter, compared to 22.9% in the 2020 first quarter. The 2020 first quarter ratio reflected a 4.4 point benefit related to the loss portfolio transfer contract noted above and changes in mix of business.
Mortgage Segment
Three Months Ended March 31,
(U.S. dollars in thousands)
2021
2020
% Change
Gross premiums written
$
391,246
$
368,945
6.0
Net premiums written
335,195
324,618
3.3
Net premiums earned
336,317
345,026
(2.5
)
Other underwriting income
6,897
4,599
50.0
Underwriting income
$
200,312
$
197,627
1.4
Underwriting Ratios
% Point Change
Loss ratio
18.9
%
19.6
%
(0.7
)
Underwriting expense ratio
23.5
%
24.5
%
(1.0
)
Combined ratio
42.4
%
44.1
%
(1.7
)
Prior year development:
Net (favorable) adverse development in prior year loss reserves, net of related adjustments
(3.4
)
%
(1.8
)
%
(1.6
)
Combined ratio excluding prior year development (1)
45.8
%
45.9
%
(0.1
)
(1)
See ‘Comments on Regulation G’ for further discussion.
Gross premiums written by the mortgage segment in the 2021 first quarter were 6.0% higher than in the 2020 first quarter, while net premiums written were 3.3% higher. The growth in net premiums written primarily reflected growth in Australian single premium mortgage insurance, partially offset by a lower level of U.S. primary mortgage insurance in force on monthly premium policies. Net premiums earned in the 2021 first quarter were 2.5% lower than in the 2020 first quarter, reflecting the decrease in U.S. primary mortgage insurance in force, partially offset by an increase in earnings from Australian single premium policy terminations.
U.S. primary mortgage insurance business generated $27.0 billion of new insurance written (“NIW”) in the 2021 first quarter, compared to $16.8 billion in the 2020 first quarter, with the growth primarily the result of the significant increase in mortgage originations in the market. Monthly premium policies contributed 92.5% of NIW in the 2021 first quarter, compared to 93.5% in the 2020 first quarter.
The 2021 first quarter loss ratio reflected continued elevated delinquency rates, primarily due to financial stress related to the COVID-19 pandemic. The percentage of loans in default on U.S. primary mortgage insurance business was 3.86% at March 31, 2021, compared to 4.19% at December 31, 2020, which reflects continued improvement in new delinquencies received. Estimated net favorable development in prior year loss reserves, before related adjustments, reduced the 2021 first quarter loss ratio by 3.2 points, compared to 1.8 points in the 2020 first quarter.
The underwriting expense ratio was 23.5% in the 2021 first quarter, compared to 24.5% in the 2020 first quarter, with the decrease reflecting lower acquisition expenses on U.S. primary mortgage insurance and to a lesser extent international business.
Corporate and Non-Underwriting
Corporate and non-underwriting results include net investment income, other income (loss), corporate expenses, transaction costs and other, amortization of intangible assets, interest expense, items related to the Company’s non-cumulative preferred shares, net realized gains or losses (which includes changes in the allowance for credit losses on financial assets and net impairment losses recognized in earnings), equity in net income or loss of investment funds accounted for using the equity method, net foreign exchange gains or losses, income or loss from operating affiliates and income taxes. Such amounts exclude the results of the ‘other’ segment.
Pre-tax net investment income for the 2021 first quarter was $0.19 per share, or $78.7 million, compared to $0.27 per share, or $113.0 million, for the 2020 first quarter. The annualized pre-tax investment income yield was 1.31% for the 2021 first quarter, compared to 2.20% for the 2020 first quarter, with the decrease primarily due to lower yields available in the financial markets. Total return, a non-GAAP measure, was -0.18% for the 2021 first quarter, compared to -0.86% for the 2020 first quarter. See ‘Comments on Regulation G’ for a discussion of non-GAAP financial measures.
Interest expense for the 2021 first quarter was $34.2 million, compared to $25.2 million for the 2020 first quarter. The higher level of interest expense mainly resulted from the issuance of $1.0 billion of 3.635% senior notes in June 2020.
On a pre-tax basis, net foreign exchange gains for the 2021 first quarter were $21.5 million, compared to net foreign exchange gains for the 2020 first quarter of $63.3 million. For both periods, such amounts were primarily unrealized and resulted from the effects of revaluing the Company’s net insurance liabilities required to be settled in foreign currencies at each balance sheet date. Changes in the value of available-for-sale investments held in foreign currencies due to foreign currency rate movements are reflected as a direct increase or decrease to shareholders’ equity and are not included in the consolidated statements of income. Although the Company generally attempts to match the currency of its projected liabilities with investments in the same currencies, the Company may elect to over or underweight one or more currencies from time to time, which could increase the Company’s exposure to foreign currency fluctuations and increase the volatility of the Company’s shareholders’ equity.
The Company’s effective tax rate on income before income taxes (based on the Company’s estimated annual effective tax rate) was 8.1% for the 2021 first quarter, compared to 16.2% for the 2020 first quarter. The Company’s effective tax rate on pre-tax operating income available to Arch common shareholders was 10.6% for the 2021 first quarter, consistent with 10.5% for the 2020 first quarter. The Company’s effective tax rate may fluctuate from period to period based upon the relative mix of income or loss reported by jurisdiction, the level of catastrophic loss activity incurred, and the varying tax rates in each jurisdiction.
During the 2021 first quarter, the Company changed its presentation of ‘income (loss) from operating affiliates’ on its consolidated statements of income for all periods presented to reclass such item from ‘other income (loss)’. The Company also changed its presentation of ‘investment in operating affiliates’ on its consolidated balance sheet for all periods presented to reclass such item from ‘other assets’. Income from operating affiliates for the 2021 first quarter was $75.5 million, or $0.18 per share, compared to $8.5 million, or $0.02 per share, for the 2020 first quarter. Results for the 2021 first quarter reflected a one-time gain of $74.5 million realized from the Company’s recent acquisition of 29.5% stake in Coface, a global trade credit insurer. As a result of equity method accounting rules, approximately $36 million of additional gain was deferred and will be recognized generally over the next five years.
Conference Call
The Company will hold a conference call for investors and analysts at 11:00 a.m. Eastern Time on April 28, 2021. A live webcast of this call will be available via the Investors section of the Company’s website at http://www.archcapgroup.com. A telephone replay of the conference call also will be available beginning on April 28, 2021 at 2:00 p.m. Eastern Time until May 5, 2021 at midnight Eastern Time. To access the replay, domestic callers should dial 855-859-2056, and international callers should dial 404-537-3406 (passcode 8299092 for all callers).
Please refer to the Company’s Financial Supplement dated March 31, 2021, which is available via the Investors section of the Company’s website at http://www.archcapgroup.com. The Financial Supplement provides additional detail regarding the financial performance of the Company. From time to time, the Company posts additional financial information and presentations to its website, including information with respect to its subsidiaries. Investors and other recipients of this information are encouraged to check the Company’s website regularly for additional information regarding the Company.
Arch Capital Group Ltd., a publicly listed Bermuda exempted company with approximately $15.8 billion in capital at March 31, 2021, provides insurance, reinsurance and mortgage insurance on a worldwide basis through its wholly owned subsidiaries.
Comments on Regulation G
Throughout this release, the Company presents its operations in the way it believes will be the most meaningful and useful to investors, analysts, rating agencies and others who use the Company’s financial information in evaluating the performance of the Company and that investors and such other persons benefit from having a consistent basis for comparison between quarters and for comparison with other companies within the industry. These measures may not, however, be comparable to similarly titled measures used by companies outside of the insurance industry. Investors are cautioned not to place undue reliance on these non-GAAP financial measures in assessing the Company’s overall financial performance.
This presentation includes the use of “after-tax operating income or loss available to Arch common shareholders,” which is defined as net income available to Arch common shareholders, excluding net realized gains or losses (which includes changes in the allowance for credit losses on financial assets and net impairment losses recognized in earnings), equity in net income or loss of investment funds accounted for using the equity method, net foreign exchange gains or losses and transaction costs and other, net of income taxes, and the use of annualized operating return on average common equity. The presentation of after-tax operating income available to Arch common shareholders and annualized operating return on average common equity are non-GAAP financial measures as defined in Regulation G. The reconciliation of such measures to net income available to Arch common shareholders and annualized return on average common equity (the most directly comparable GAAP financial measures) in accordance with Regulation G is included on page 2 of this release.
The Company believes that net realized gains or losses, equity in net income or loss of investment funds accounted for using the equity method, net foreign exchange gains or losses and transaction costs and other in any particular period are not indicative of the performance of, or trends in, the Company’s business performance. Although net realized gains or losses, equity in net income or loss of investment funds accounted for using the equity method and net foreign exchange gains or losses are an integral part of the Company’s operations, the decision to realize investment gains or losses, the recognition of the change in the carrying value of investments accounted for using the fair value option in net realized gains or losses, the recognition of equity in net income or loss of investment funds accounted for using the equity method and the recognition of foreign exchange gains or losses are independent of the insurance underwriting process and result, in large part, from general economic and financial market conditions. Furthermore, certain users of the Company’s financial information believe that, for many companies, the timing of the realization of investment gains or losses is largely opportunistic. In addition, changes in the allowance for credit losses and net impairment losses recognized in earnings on the Company’s investments represent other-than-temporary declines in expected recovery values on securities without actual realization. The use of the equity method on certain of the Company’s investments in certain funds that invest in fixed maturity securities is driven by the ownership structure of such funds (either limited partnerships or limited liability companies). In applying the equity method, these investments are initially recorded at cost and are subsequently adjusted based on the Company’s proportionate share of the net income or loss of the funds (which include changes in the fair value of the underlying securities in the funds). This method of accounting is different from the way the Company accounts for its other fixed maturity securities and the timing of the recognition of equity in net income or loss of investment funds accounted for using the equity method may differ from gains or losses in the future upon sale or maturity of such investments. Transaction costs and other include advisory, financing, legal, severance, incentive compensation and other costs related to acquisitions and Watford’s non-recurring listing expenses. The Company believes that transaction costs and other, due to their non-recurring nature, are not indicative of the performance of, or trends in, the Company’s business performance. Due to these reasons, the Company excludes net realized gains or losses, equity in net income or loss of investment funds accounted for using the equity method, net foreign exchange gains or losses and transaction costs and other from the calculation of after-tax operating income or loss available to Arch common shareholders.
The Company believes that showing net income available to Arch common shareholders exclusive of the items referred to above reflects the underlying fundamentals of the Company’s business since the Company evaluates the performance of and manages its business to produce an underwriting profit. In addition to presenting net income available to Arch common shareholders, the Company believes that this presentation enables investors and other users of the Company’s financial information to analyze the Company’s performance in a manner similar to how the Company’s management analyzes performance. The Company also believes that this measure follows industry practice and, therefore, allows the users of the Company’s financial information to compare the Company’s performance with its industry peer group. The Company believes that the equity analysts and certain rating agencies which follow the Company and the insurance industry as a whole generally exclude these items from their analyses for the same reasons.
The Company’s segment information includes the presentation of consolidated underwriting income or loss and a subtotal of underwriting income or loss before the contribution from the ‘other’ segment. Such measures represent the pre-tax profitability of its underwriting operations and include net premiums earned plus other underwriting income, less losses and loss adjustment expenses, acquisition expenses and other operating expenses. Other operating expenses include those operating expenses that are incremental and/or directly attributable to the Company’s individual underwriting operations. Underwriting income or loss does not incorporate items included in the Company’s corporate (non-underwriting) segment. While these measures are presented in the Segment Information footnote to the Company’s Consolidated Financial Statements, they are considered non-GAAP financial measures when presented elsewhere on a consolidated basis. The reconciliations of underwriting income or loss to income before income taxes (the most directly comparable GAAP financial measure) on a consolidated basis and a subtotal before the contribution from the ‘other’ segment, in accordance with Regulation G, is shown on the following pages.
Management measures segment performance for its three underwriting segments based on underwriting income or loss. The Company does not manage its assets by underwriting segment and, accordingly, investment income and other non-underwriting related items are not allocated to each underwriting segment. As noted earlier, the ‘other’ segment includes the results of Watford. Watford has its own management and board of directors that is responsible for its own results and profitability. For the ‘other’ segment, performance is measured based on net income or loss. The Company does not guarantee or provide credit support for Watford, and the Company’s financial exposure to Watford is limited to its investment in Watford’s senior notes, common and preferred shares and counterparty credit risk (mitigated by collateral) arising from reinsurance transactions.
Along with consolidated underwriting income, the Company provides a subtotal of underwriting income or loss before the contribution from the ‘other’ segment and believes that this presentation enables investors and other users of the Company’s financial information to analyze the Company’s underwriting performance in a manner similar to how the Company’s management analyzes performance.
In addition, the Company’s segment information includes the use of a combined ratio excluding catastrophic activity and prior year development, for the insurance and reinsurance segments, and a combined ratio excluding prior year development, for the mortgage segment. These ratios are non-GAAP financial measures as defined in Regulation G. The reconciliation of such measures to the combined ratio (the most directly comparable GAAP financial measure) in accordance with Regulation G are shown on the individual segment pages. The Company’s management utilizes the adjusted combined ratios excluding current accident year catastrophic events and favorable or adverse development in prior year loss reserves in its analysis of the underwriting performance of each of its underwriting segments.
Total return on investments includes investment income, equity in net income or loss of investment funds accounted for using the equity method, net realized gains and losses (excluding changes in the allowance for credit losses on non-investment related financial assets) and the change in unrealized gains and losses generated by Arch’s investment portfolio. Total return is calculated on a pre-tax basis and before investment expenses, excludes amounts reflected in the ‘other’ segment, and reflects the effect of financial market conditions along with foreign currency fluctuations. Management uses total return on investments as a key measure of the return generated to Arch common shareholders, and compares the return generated by the Company’s investment portfolio against benchmark returns during the periods presented.
The following tables summarize the Company’s results by segment for the 2021 first quarter and 2020 first quarter and a reconciliation of underwriting income or loss to income or loss before income taxes and net income or loss available to Arch common shareholders:
(U.S. Dollars in thousands)
Three Months Ended
March 31, 2021
Insurance
Reinsurance
Mortgage
Sub-total
Other
Total
Gross premiums written (1)
$
1,415,886
$
1,471,060
$
391,246
$
3,277,293
$
216,523
$
3,397,206
Premiums ceded
(421,047
)
(471,948
)
(56,051
)
(948,147
)
(37,212
)
(888,749
)
Net premiums written
994,839
999,112
335,195
2,329,146
179,311
2,508,457
Change in unearned premiums
(175,365
)
(354,212
)
1,122
(528,455
)
(31,580
)
(560,035
)
Net premiums earned
819,474
644,900
336,317
1,800,691
147,731
1,948,422
Other underwriting income (loss)
—
(1,198
)
6,897
5,699
411
6,110
Losses and loss adjustment expenses
(535,747
)
(484,870
)
(63,689
)
(1,084,306
)
(118,794
)
(1,203,100
)
Acquisition expenses
(128,222
)
(118,025
)
(30,082
)
(276,329
)
(28,152
)
(304,481
)
Other operating expenses
(137,113
)
(60,514
)
(49,131
)
(246,758
)
(14,275
)
(261,033
)
Underwriting income (loss)
$
18,392
$
(19,707
)
$
200,312
198,997
(13,079
)
185,918
Net investment income
78,729
20,127
98,856
Net realized gains (losses)
101,336
41,125
142,461
Equity in net income (loss) of investment funds accounted for using the equity method
71,686
—
71,686
Other income (loss)
(1,741
)
—
(1,741
)
Corporate expenses
(23,468
)
—
(23,468
)
Transaction costs and other
(1,201
)
(715
)
(1,916
)
Amortization of intangible assets
(14,402
)
—
(14,402
)
Interest expense
(34,197
)
(4,149
)
(38,346
)
Net foreign exchange gains (losses)
21,505
(1,442
)
20,063
Income (loss) before income taxes and income (loss) from operating affiliates
397,244
41,867
439,111
Income tax expense
(38,852
)
(8
)
(38,860
)
Income (loss) from operating affiliates
75,457
—
75,457
Net income (loss)
433,849
41,859
475,708
Dividends attributable to redeemable noncontrolling interests
117
(972
)
(855
)
Amounts attributable to nonredeemable noncontrolling interests
—
(36,697
)
(36,697
)
Net income (loss) available to Arch
433,966
4,190
438,156
Preferred dividends
(10,403
)
—
(10,403
)
Net income (loss) available to Arch common shareholders
$
423,563
$
4,190
$
427,753
Underwriting Ratios
Loss ratio
65.4
%
75.2
%
18.9
%
60.2
%
80.4
%
61.7
%
Acquisition expense ratio
15.6
%
18.3
%
8.9
%
15.3
%
19.1
%
15.6
%
Other operating expense ratio
16.7
%
9.4
%
14.6
%
13.7
%
9.7
%
13.4
%
Combined ratio
97.7
%
102.9
%
42.4
%
89.2
%
109.2
%
90.7
%
Net premiums written to gross premiums written
70.3
%
67.9
%
85.7
%
71.1
%
82.8
%
73.8
%
(1)
Certain amounts included in the gross premiums written of each segment are related to intersegment transactions and are included in the gross premiums written of each segment. Accordingly, the sum of gross premiums written for each segment does not agree to the total gross premiums written as shown in the table above due to the elimination of intersegment transactions in the total.
(U.S. Dollars in thousands)
Three Months Ended
March 31, 2020
Insurance
Reinsurance
Mortgage
Sub-total
Other
Total
Gross premiums written (1)
$
1,207,645
$
1,122,519
$
368,945
$
2,698,537
$
234,902
$
2,832,830
Premiums ceded
(378,897
)
(325,339
)
(44,327
)
(747,991
)
(48,202
)
(695,584
)
Net premiums written
828,748
797,180
324,618
1,950,546
186,700
2,137,246
Change in unearned premiums
(112,829
)
(253,720
)
20,408
(346,141
)
(46,661
)
(392,802
)
Net premiums earned
715,919
543,460
345,026
1,604,405
140,039
1,744,444
Other underwriting income (loss)
—
2,120
4,599
6,719
133
6,852
Losses and loss adjustment expenses
(507,108
)
(430,069
)
(67,566
)
(1,004,743
)
(110,676
)
(1,115,419
)
Acquisition expenses
(107,337
)
(79,606
)
(38,536
)
(225,479
)
(21,804
)
(247,283
)
Other operating expenses
(129,649
)
(45,297
)
(45,896
)
(220,842
)
(13,702
)
(234,544
)
Underwriting income (loss)
$
(28,175
)
$
(9,392
)
$
197,627
160,060
(6,010
)
154,050
Net investment income
113,028
32,125
145,153
Net realized gains (losses)
(72,109
)
(294,851
)
(366,960
)
Equity in net income (loss) of investment funds accounted for using the equity method
(4,209
)
—
(4,209
)
Other income (loss)
32
—
32
Corporate expenses
(18,201
)
—
(18,201
)
Transaction costs and other
(2,595
)
—
(2,595
)
Amortization of intangible assets
(16,631
)
—
(16,631
)
Interest expense
(25,245
)
(7,310
)
(32,555
)
Net foreign exchange gains (losses)
63,307
9,364
72,671
Income (loss) before income taxes and income (loss) from operating affiliates
197,437
(266,682
)
(69,245
)
Income tax expense
(27,945
)
—
(27,945
)
Income (loss) from operating affiliates
8,516
—
8,516
Net income (loss)
178,008
(266,682
)
(88,674
)
Dividends attributable to redeemable noncontrolling interests
(57
)
(1,096
)
(1,153
)
Amounts attributable to nonredeemable noncontrolling interests
—
233,944
233,944
Net income (loss) available to Arch
177,951
(33,834
)
144,117
Preferred dividends
(10,403
)
—
(10,403
)
Net income (loss) available to Arch common shareholders
$
167,548
$
(33,834
)
$
133,714
Underwriting Ratios
Loss ratio
70.8
%
79.1
%
19.6
%
62.6
%
79.0
%
63.9
%
Acquisition expense ratio
15.0
%
14.6
%
11.2
%
14.1
%
15.6
%
14.2
%
Other operating expense ratio
18.1
%
8.3
%
13.3
%
13.8
%
9.8
%
13.4
%
Combined ratio
103.9
%
102.0
%
44.1
%
90.5
%
104.4
%
91.5
%
Net premiums written to gross premiums written
68.6
%
71.0
%
88.0
%
72.3
%
79.5
%
75.4
%
(1)
Certain amounts included in the gross premiums written of each segment are related to intersegment transactions and are included in the gross premiums written of each segment. Accordingly, the sum of gross premiums written for each segment does not agree to the total gross premiums written as shown in the table above due to the elimination of intersegment transactions in the total.
Cautionary Note Regarding Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 (“PSLRA”) provides a “safe harbor” for forward-looking statements. This release or any other written or oral statements made by or on behalf of the Company may include forward-looking statements, which reflect the Company’s current views with respect to future events and financial performance. All statements other than statements of historical fact included in or incorporated by reference in this release are forward-looking statements. Forward-looking statements, for purposes of the PSLRA or otherwise, can generally be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” and similar statements of a future or forward-looking nature or their negative or variations or similar terminology.
Forward-looking statements involve the Company’s current assessment of risks and uncertainties. Actual events and results may differ materially from those expressed or implied in these statements. Important factors that could cause actual events or results to differ materially from those indicated in such statements are discussed below and elsewhere in this release and in the Company’s periodic reports filed with the Securities and Exchange Commission (the “SEC”), and include:
All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included herein or elsewhere. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Source - Arch Capital Group Ltd. arch-corporate
View source version on businesswire.com: https://www.businesswire.com/news/home/20210427006154/en/
Arch Capital Group Ltd. François Morin: (441) 278-9250 Investor Relations Donald Watson: (914) 872-3616; dwatson@archgroup.com
1 Year Arch Capital Chart |
1 Month Arch Capital Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions