Arch Capital .-Arch Capital Q4 Earnings Surpass on Higher Net Investment Income

Core Insights - Arch Capital Group Ltd. (ACGL) reported fourth-quarter 2024 operating income of $2.26 per share, exceeding the Zacks Consensus Estimate by 22%, although it decreased 9.2% year over year [1] - The results were driven by higher premiums written across its Insurance, Reinsurance, and Mortgage segments, along with improved net investment income [1] Premiums and Revenues - Gross premiums written increased by 11.9% year over year to$ 4.7 billion, while net premiums written rose 17.1% year over year to $3.8 billion [2] - Total revenues reached$ 4.5 billion, marking a 14.4% year-over-year increase and surpassing the Zacks Consensus Estimate by 6.1% [3] Investment Income and Losses - Net investment income grew by 29.3% year over year to $405 million, although it fell short of the estimate of$ 416.5 million [2] - Pre-tax current accident year catastrophic losses amounted to $393 million, significantly higher than the previous year's loss of$ 137 million, attributed to Hurricanes Milton and Helene [3] Underwriting Performance - The combined ratio deteriorated by 610 basis points to 85, compared to the estimate of 84.9 [4] - Underwriting income for the Insurance segment decreased by 69.7% year over year to $30 million, with a combined ratio of 98.5 [6] Segment Analysis - In the Insurance segment, gross premiums written surged 28.4% year over year to$ 2.5 billion, while net premiums written climbed 34.9% to $1.9 billion [5] - The Reinsurance segment saw gross premiums written decrease by 1.5% year over year to$ 1.9 billion, with net premiums written rising by 2% to $1.6 billion [6][7] - The Mortgage segment experienced a 5.4% year-over-year drop in gross premiums written to$ 331 million, while net premiums written increased by 8.6% to $277 million [8][9] Financial Position - As of December 31, 2024, Arch Capital had cash of$ 979 million, a 6.8% increase from the end of 2023, and debt of $2.7 billion, which rose by 0.07% year over year [11] - Book value per share was reported at$ 53.11, reflecting a 13.1% increase from the previous year [11] Full-Year Performance - For the full year 2024, Arch Capital reported an operating income of $9.28 per share, exceeding the Zacks Consensus Estimate by 4.7% and increasing 9.8% year over year [12] - Total revenues for 2024 reached$ 17.44 billion, beating the consensus mark by 6.6% and increasing by 28% year over year [12]