Arch Capital .(ACGL)2025-04-29 20:09Premiums and Income - Gross premiums written increased by 8.9% to $6,463 million compared to $5,933 million in the same period last year[12] - Net premiums earned rose by 22.4% to $4,188 million from $3,422 million year-over-year[12] - Net income available to Arch common shareholders fell by 49.2% to $564 million, compared to $1,110 million in the same quarter last year[12] - After-tax operating income available to Arch common shareholders decreased by 37.1% to $587 million from $933 million year-over-year[12] - Net premiums earned for the mortgage segment reached $300 million in Q1 2025, compared to $305 million in Q1 2024, showing a slight decrease of 1.6%[35] - Net premiums written decreased to $266 million in Q1 2025, down 4.0% from $277 million in Q4 2024[53] - Net premiums earned were $300 million for Q1 2025, compared to $305 million in Q1 2024, reflecting a decrease of 1.6%[53] Underwriting Performance - Underwriting income decreased by 43.3% to $417 million, down from $736 million in the previous year[12] - The combined ratio worsened to 90.1%, an increase of 11.3 percentage points from 78.8% in the prior year[12] - The combined ratio for the insurance segment was 100.1% in Q1 2025, indicating a deterioration from 94.1% in Q1 2024[35] - The loss ratio for the insurance segment was 66.0% in Q1 2025, compared to 58.9% in Q1 2024, reflecting an increase of 7.1 percentage points[35] - The combined ratio for Q1 2025 was 90.1%, up from 85.0% in Q4 2024, reflecting increased costs associated with claims[74] - The loss ratio for Q1 2025 was 61.8%, compared to 57.5% in Q4 2024, indicating a deterioration in underwriting performance[74] Investment Performance - Pre-tax net investment income increased by 15.6% to $378 million, up from $327 million in the previous year[12] - Total return on investments improved by 122 basis points to 2.02% compared to 0.80% in the same period last year[12] - The annualized net income return on average common equity dropped to 11.1%, down from 24.6% in the previous year[12] - Total investable assets increased to $43,054 million in Q1 2025, up from $35,944 million in Q1 2024, representing a growth of 19.7%[35] - The company reported net investment income of $378 million in Q1 2025, compared to $327 million in Q1 2024, showing an increase of 15.6%[35] - The total return on investments for the three months ended March 31, 2025, was 2.02%, recovering from a negative return of (1.05)% in the previous quarter[84] Cash Flow and Assets - Net cash provided by operating activities decreased by 6.8% to $1,458 million from $1,564 million year-over-year[12] - Total assets increased to $75,176 million as of March 31, 2025, up from $70,906 million at December 31, 2024, representing an increase of 3.6%[20] - Cash and restricted cash at the end of the period was $1,985 million, an increase from $1,760 million at the end of the previous quarter[25] - Shareholders' equity reached $21,545 million, up from $20,820 million, indicating a growth of 3.5%[23] - The company reported a net cash provided by operating activities of $1,458 million for the first quarter of 2025[25] Shareholder Actions - The company repurchased shares worth $196 million during the first quarter of 2025[25] - The average price per share repurchased was $88.89 during the same period[117] - The remaining share repurchase authorization is $800.4 million as of March 31, 2025[117] - Cumulative shares repurchased since the program's inception total 436 million shares[117] Debt and Equity - Total debt as of March 31, 2025, is $2,728 million, consistent with the previous quarter[115] - Common shareholders' equity increased to $20,715 million as of March 31, 2025, compared to $19,990 million in the previous quarter[115] - Total capital available to Arch as of March 31, 2025, is $24,273 million, compared to $23,548 million in the previous quarter[115] - Debt and preferred equity to total capital available to Arch is 14.7% as of March 31, 2025, down from 15.1% in the previous quarter[115] Risk and Compliance - The PMIER sufficiency ratio is reported at 186% as of March 31, 2025, indicating strong compliance with GSE requirements[63] - The risk-to-capital ratio for Arch MI U.S. is 7.8:1 as of March 31, 2025, unchanged from the previous quarter[62] - The percentage of RIF by credit quality shows that 62.6% is from borrowers with a FICO score of 740 and above[61] Miscellaneous - The company plans to focus on expanding its market presence and enhancing its product offerings in the upcoming quarters[46] - The effective tax rate on pre-tax operating income available to Arch was 11.7% in Q1 2025, an increase from 8.5% in Q1 2024[113] - The company emphasizes the importance of after-tax operating income as a non-GAAP financial measure to evaluate performance, excluding net realized gains or losses[100]