Financial Performance - Total revenues for Q3 2024 reached $4,722 million, a 42% increase from $3,329 million in Q3 2023[19] - Net income available to Arch common shareholders for Q3 2024 was $978 million, compared to $713 million in Q3 2023, representing a 37% increase[19] - Comprehensive income available to Arch for Q3 2024 was $1,598 million, significantly higher than $589 million in Q3 2023[22] - Net income for the nine months ended September 30, 2024, was $3,377 million, an increase of 60.2% compared to $2,109 million for the same period in 2023[28] - Net income available to Arch for the three months ended September 30, 2024, was $988 million, compared to $723 million for the same period in 2023, representing a 36.7% increase[47] - Basic net income per common share for Q3 2024 was $2.62, up from $1.93 in Q3 2023, indicating a 36% increase[19] - After-tax operating income available to Arch common shareholders for Q3 2024 was $762 million, compared to $876 million in Q3 2023, reflecting a decrease of 13.0%[212] Investment Performance - The company reported net investment income of $399 million for Q3 2024, compared to $269 million in Q3 2023, marking a 48% increase[19] - Net investment income for the three months ended September 30, 2024, was $399 million, a 48.3% increase from $269 million in the same period of 2023[99] - Gross investment income for the nine months ended September 30, 2024, reached $1,158 million, up 50.7% from $768 million in the prior year[99] - Net realized gains for the three months ended September 30, 2024, were $169 million, compared to a loss of $248 million in the same period of 2023[102] - The company reported net realized losses for Q3 2024 amounted to $169 million, compared to gains of $248 million in Q3 2023[212] Assets and Liabilities - Total assets increased to $73,656 million as of September 30, 2024, up from $58,906 million at the end of 2023, reflecting a growth of 25%[15] - The company’s total liabilities increased to $51,382 million as of September 30, 2024, compared to $40,551 million at the end of 2023, reflecting a 27% increase[15] - Total shareholders' equity at the end of the period was $22,274 million, up from $15,239 million year-over-year, reflecting a growth of 46.1%[25] - Cash and restricted cash at the end of the period increased to $1,712 million from $1,355 million, marking a growth of 26.4%[28] - The company recognized goodwill of $266 million from the acquisition, primarily due to expanded presence and long-term growth opportunities in the insurance market[40] Underwriting Performance - The combined ratio for the insurance segment was 93.1%, while the reinsurance segment had a combined ratio of 92.3%, indicating strong underwriting performance[57] - The loss ratio for the insurance segment was 61.6%, while the reinsurance segment reported a loss ratio of 69.6%[57] - The property and casualty underwriting teams generated $269 million of underwriting income and over $5 billion of gross premiums written, up 22% from the 2023 third quarter[191] - The reinsurance segment contributed $149 million of underwriting income in the 2024 third quarter, despite increased catastrophic events[192] - The mortgage segment generated $269 million of underwriting income in the 2024 third quarter, with a persistency rate of 82.9% and a low delinquency rate[195] Acquisitions and Growth - The acquisition of Allianz's U.S. Middle Market Property & Casualty Insurance and U.S. Entertainment Property and Casualty Insurance Business was completed for $450 million on August 1, 2024[35] - The total assets acquired in the Allianz transaction were valued at $3,341 million, while total liabilities acquired were $3,157 million, resulting in identifiable net assets of $184 million[39] - The Company completed the acquisition of Watford Insurance Company for a total consideration of $35 million during the third quarter[178] Shareholder Returns - The Company declared a special cash dividend of $1.9 billion, equating to $5.00 per outstanding common share, payable on December 4, 2024[183] - The ending common shareholders' equity increased to $21,444 million in Q3 2024 from $14,409 million in Q3 2023[212] - The average common shareholders' equity for Q3 2024 was $20,640 million, compared to $14,110 million in Q3 2023, showing growth in equity base[212] Tax and Regulatory - The effective tax rate for the nine months ended September 30, 2024, was 8.1%, a decrease from 8.8% for the same period in 2023[172] - The Company paid $221 million in income taxes for the nine months ended September 30, 2024, compared to $127 million for the same period in 2023[173] Risk Management - The Company estimates that Hurricane Milton will negatively impact its 2024 fourth quarter results by $275 million to $375 million, based on industry insured losses of $25 billion to $35 billion[179] - The company utilized various derivative instruments, including foreign currency forward contracts and commodity futures, to manage portfolio duration and replicate investment positions[157]
ARCH CAP GROUP R(ACGLN) - 2024 Q3 - Quarterly Report