Financial Performance - Arch Capital reported net premiums of $15.7 billion for 2024, with a net income of $4.3 billion available to common shareholders[16] - Book value per share increased to $53.11 at December 31, 2024, up from $46.94 at the end of 2023, representing a growth of 4.5%[16] - Total investable assets held by the company were $41.4 billion as of December 31, 2024, emphasizing a focus on capital preservation and market liquidity[87] Acquisitions and Expansions - The company expanded its U.S. insurance middle market presence by acquiring Allianz's U.S. Middle Market Property and Casualty insurance business on August 1, 2024[20] - The acquisition of Watford Insurance Company in 2024 added to Arch Capital's capabilities, as WIC is an admitted insurer in all 50 states[29] - Arch Capital's mortgage operations include participation in GSE credit risk-sharing transactions and direct mortgage insurance, with significant expansion in Australia through the acquisition of Westpac Lenders Mortgage Insurance Limited in August 2021[24] - The company established a managing agency and syndicate at Lloyd's of London in 2009, enhancing its U.K. presence with the acquisition of Barbican Group Holdings Limited in 2019[19] - Arch Insurance (EU) expanded its presence across Europe in 2023 with new branch offices in Spain and France, following the establishment of its Ireland-based carrier[19] Underwriting and Claims Management - Arch Capital's strategy focuses on specialty lines of insurance and reinsurance, targeting areas where it can apply specialized underwriting expertise[25] - The insurance group aims to capitalize on profitable underwriting opportunities by expanding its product portfolio and adding professionals with expertise in specialty lines[36] - Centralized underwriting responsibility is maintained across product lines, enhancing accountability and management of marketing and distribution[36] - The insurance group adheres to disciplined underwriting standards, focusing on risk selection and proper pricing to generate underwriting profit[36] - Claims management is emphasized as a key component of market credibility, with a focus on expeditious and satisfactory claims handling[36] Employee Engagement and Talent Acquisition - As of February 20, 2025, the company had over 7,200 employees globally, an increase from approximately 6,400 the previous year, indicating strong talent retention and growth[77] - The company launched a new talent acquisition model in 2023 to enhance its ability to attract top talent across multiple talent pools[79] - Over 65,000 awards were received by employees in 2024 through the global recognition program, supporting employee engagement and retention[82] Risk Management and Compliance - The company employs an Enterprise Risk Management framework that includes various risk categories, ensuring comprehensive risk assessment and management[96] - The Own Risk and Solvency Assessment (ORSA) process is integral to Arch Capital's risk management framework, linking risk profile, risk appetite, business strategy, and solvency requirements[103] - The ORSA report is produced at least annually, with results reported to the Board, which actively participates in the assessment process[104] - Arch Re Bermuda and AGRL must maintain a minimum liquidity ratio of 75% of relevant liabilities, ensuring compliance with solvency and liquidity standards[110] Regulatory Environment - The Bermuda Monetary Authority (BMA) has established a target capital level for Class 3A and Class 4 insurers equal to 120% of their Enhanced Capital Requirement (ECR)[111] - Arch Capital was designated as an Internationally Active Insurance Group (IAIG) by the BMA in 2024, subjecting it to international oversight[121] - The SEC Cybersecurity Rules require public companies to report material cybersecurity incidents within four days and disclose risk management processes in their annual reports[142] - The California Consumer Privacy Act, effective January 1, 2023, grants consumers rights to access, correct, and delete their data, along with a private right of action for cybersecurity breaches[145] Climate Change and Sustainability - Arch is taking steps to mitigate climate change effects in underwriting segments, adopting a thermal coal policy and providing environmentally sustainable insurance solutions[75] - U.S. state insurance regulators are increasing oversight of climate change risks, requiring insurers with over $100 million in premiums to disclose their climate risk management annually[160] - The U.K. government aims to align its financial system with the 2050 "Net Zero" target, implementing mandatory climate-related financial disclosures for large companies starting from April 6, 2022[188] Technology and Innovation - The company’s generative AI technologies are closely monitored, with approval required for new implementations, highlighting a commitment to data-driven decision-making[76] - The NAIC adopted a model bulletin on the use of AI systems by insurers, with at least 20 states expected to adopt it by February 1, 2025[148] - California passed several AI statutes in 2024 that may impact U.S. underwriting entities, with comprehensive requirements effective from January 1, 2026[151]
ARCH CAP GROUP R(ACGLN) - 2024 Q4 - Annual Report