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As Of Filer Filing For·On·As Docs:Size 8/05/21 Arch Capital Group Ltd. 10-Q 6/30/21 91:21M |
Document/Exhibit Description Pages Size
1: 10-Q Quarterly Report HTML 2.62M
2: EX-10.1 Material Contract HTML 101K
3: EX-15 Letter re: Unaudited Interim Financial Info HTML 25K
4: EX-31.1 Certification -- §302 - SOA'02 HTML 30K
5: EX-31.2 Certification -- §302 - SOA'02 HTML 30K
6: EX-32.1 Certification -- §906 - SOA'02 HTML 27K
7: EX-32.2 Certification -- §906 - SOA'02 HTML 27K
14: R1 Document and Entity Information HTML 92K
15: R2 Unaudited Consolidated Balance Sheets HTML 166K
16: R3 Unaudited Consolidated Balance Sheets HTML 58K
(Parentheticals)
17: R4 Unaudited Consolidated Statements of Income HTML 142K
18: R5 Unaudited Consolidated Statements of Comprehensive HTML 64K
Income
19: R6 Unaudited Consolidated Statements of Changes in HTML 153K
Shareholders' Equity
20: R7 Unaudited Consolidated Statements of Cash Flows HTML 134K
21: R8 Basis of Presentation and Recent Accounting HTML 36K
Pronouncements
22: R9 Share Transactions HTML 37K
23: R10 Earnings Per Common Share HTML 60K
24: R11 Segment Information HTML 376K
25: R12 Reserve for Losses and Loss Adjustment Expenses HTML 80K
26: R13 Allowance for Expected Credit Losses HTML 101K
27: R14 Investment Information HTML 401K
28: R15 Fair Value HTML 327K
29: R16 Derivative Instruments HTML 66K
30: R17 Commitments and Contingencies HTML 29K
31: R18 Variable Interest Entities and Noncontrolling HTML 174K
Interests
32: R19 Other Comprehensive Income (Loss) HTML 85K
33: R20 Income Taxes HTML 31K
34: R21 Legal Proceedings HTML 27K
35: R22 Transactions With Related Parties HTML 30K
36: R23 Subsequent Events HTML 28K
37: R24 Basis of Presentation and Recent Accounting HTML 38K
Pronouncements (Policies)
38: R25 Earnings Per Common Share (Tables) HTML 60K
39: R26 Segment Information (Tables) HTML 368K
40: R27 Reserve for Losses and Loss Adjustment Expenses HTML 65K
(Tables)
41: R28 Allowance for Expected Credit Losses (Tables) HTML 107K
42: R29 Investment Information (Tables) HTML 416K
43: R30 Fair Value (Tables) HTML 304K
44: R31 Derivative Instruments (Tables) HTML 65K
45: R32 Variable Interest Entities and Noncontrolling HTML 173K
Interests (Tables)
46: R33 Other Comprehensive Income (Loss) (Tables) HTML 86K
47: R34 Share Transactions - Share repurchases (Details) HTML 38K
48: R35 Share Transactions - Issuance of preferred shares HTML 52K
(Details)
49: R36 Earnings Per Common Share (Details) HTML 99K
50: R37 Segment Information - Summary of underwriting HTML 216K
income or loss by segment (Details)
51: R38 Reserve for Losses and Loss Adjustment Expenses - HTML 60K
Reconciliation of beginning and ending balances of
losses and loss adjustment reserves (Details)
52: R39 Reserve for Losses and Loss Adjustment Expenses - HTML 98K
Prior year development (Details)
53: R40 Allowance for Expected Credit Losses - Premiums HTML 63K
receivable (Details)
54: R41 Allowance for Expected Credit Losses - Reinsurance HTML 40K
recoverables (Details)
55: R42 Allowance for Expected Credit Losses - Ceded HTML 44K
credit risk (Details)
56: R43 Allowance for Expected Credit Losses - HTML 38K
Contractholder receivables (Details)
57: R44 Investment Information - Summary of available for HTML 126K
sale securities (Details)
58: R45 Investment Information - Aging of available for HTML 93K
sale securities in an unrealized loss position
(Details)
59: R46 Investment Information - Maturity profile of HTML 82K
available for sale securities) (Details)
60: R47 Investment Information - Securities lending HTML 71K
agreements (Details)
61: R48 Investment Information - Other investments HTML 62K
(Details)
62: R49 Investment Information - Equity method investments HTML 43K
(Details)
63: R50 Investment Information - Limited partnership HTML 36K
interests (Details)
64: R51 Investment Information - Net investment income HTML 45K
(Details)
65: R52 Investment Information - Net realized gains and HTML 66K
losses (Details)
66: R53 Investment Information - Investment in operating HTML 49K
affiliates (Details)
67: R54 Investment Information - Allowance for expected HTML 90K
credit losses (Details)
68: R55 Investment Information - Restricted assets HTML 41K
(Details)
69: R56 Investment Information - Cash and restricted cash HTML 36K
(Details)
70: R57 Investment Information - Narrative (Details) HTML 54K
71: R58 Fair Value - Fair Value Hierarchy (Details) HTML 205K
72: R59 Fair Value - Rollforward of Level 3 assets and HTML 116K
liabilities (Details)
73: R60 Fair Value - Narrative (Details) HTML 38K
74: R61 Derivative Instruments - Fair value and notional HTML 62K
amount of derivatives (Details)
75: R62 Derivative Instruments - Summary of net realized HTML 43K
gains (Losses) Recorded in the Consolidated
Statements of Income (Details)
76: R63 Commitments and Contingencies (Details) HTML 30K
77: R64 Variable Interest Entities and Noncontrolling HTML 67K
Interests - Variable interest entity (Details)
78: R65 Variable Interest Entities and Noncontrolling HTML 115K
Interests - Carrying amount of assets and
liabilities of variable interest entity (Details)
79: R66 Variable Interest Entities and Noncontrolling HTML 52K
Interests - Non-redeemable noncontrolling
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80: R67 Variable Interest Entities and Noncontrolling HTML 47K
Interests - Redeemable noncontrolling interests
(Details)
81: R68 Variable Interest Entities and Noncontrolling HTML 34K
Interests - Income or loss attributable to third
party investors (Details)
82: R69 Variable Interest Entities and Noncontrolling HTML 111K
Interests - Other variable interest entity
disclosures (Details)
83: R70 Other Comprehensive Income (Loss) - Amounts HTML 61K
reclassified from accumulated other comprehensive
income (Details)
84: R71 Other Comprehensive Income (Loss) - Components of HTML 72K
other comprehensive income (Details)
85: R72 Income Taxes (Details) HTML 32K
86: R73 Transactions With Related Parties (Details) HTML 37K
87: R74 Subsequent Events (Details) HTML 31K
89: XML IDEA XML File -- Filing Summary XML 165K
13: XML XBRL Instance -- acgl-20210630_htm XML 7.97M
88: EXCEL IDEA Workbook of Financial Reports XLSX 156K
9: EX-101.CAL XBRL Calculations -- acgl-20210630_cal XML 287K
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90: JSON XBRL Instance as JSON Data -- MetaLinks 527± 806K
91: ZIP XBRL Zipped Folder -- 0000947484-21-000113-xbrl Zip 675K
| acgl-20210630 |
| i ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||||
| For the quarterly period ended | i June 30, 2021 | |||||||||||||
| Or | |||||||||||
| i ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||||
| i Bermuda | i 98-0374481 | ||||||||||||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||||||||
| i Waterloo House, Ground Floor | |||||||||||||||||
| i 100 Pitts Bay Road, | i Pembroke | i HM 08, | i Bermuda | i (441) | i 278-9250 | ||||||||||||
| (Address of principal executive offices) | (Registrant’s telephone number, including area code) | ||||||||||||||||
| Title of each class | Trading Symbol (s) | Name of each exchange on which registered | |||||||||||||||
| i Common shares, $0.0011 par value per share | i ACGL | i NASDAQ | Stock Market | ||||||||||||||
| i Depositary shares, each representing a 1/1000th interest in a 5.25% Series E preferred share | i ACGLP | i NASDAQ | Stock Market | ||||||||||||||
| i Depositary shares, each representing a 1/1000th interest in a 5.45% Series F preferred share | i ACGLO | i NASDAQ | Stock Market | ||||||||||||||
| i Depositary shares, each representing a 1/1000th interest in a 4.55% Series G preferred share | i ACGLN | i NASDAQ | Stock Market | ||||||||||||||
| Page No. | |||||||||||
| PART I | |||||||||||
| Item 1. | |||||||||||
| Item 2. | |||||||||||
| Item 3. | |||||||||||
| Item 4. | |||||||||||
| PART II | |||||||||||
| Item 1. | |||||||||||
| Item 1A. | |||||||||||
| Item 2. | |||||||||||
| Item 3. | |||||||||||
| Item 4. | |||||||||||
| Item 5. | |||||||||||
| Item 6. | |||||||||||
| ARCH CAPITAL | 1 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| ARCH CAPITAL | 2 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| ARCH CAPITAL | 3 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Page No. | ||||||||
| June 30, 2021 (unaudited) and December 31, 2020 | ||||||||
| For the three and six month periods ended June 30, 2021 and 2020 (unaudited) | ||||||||
| For the three and six month periods ended June 30, 2021 and 2020 (unaudited) | ||||||||
| For the three and six month periods ended June 30, 2021 and 2020 (unaudited) | ||||||||
| For the six month periods ended June 30, 2021 and 2020 (unaudited) | ||||||||
| Notes to Consolidated Financial Statements (unaudited) | ||||||||
| ARCH CAPITAL | 4 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| ARCH CAPITAL | 5 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| (Unaudited) | |||||||||||
| June
30, 2021 | December 31, 2020 | ||||||||||
| Assets | |||||||||||
| Investments: | |||||||||||
Fixed maturities available for sale, at fair value (amortized cost: $ i 17,764,783
and $ i 18,143,305; net of allowance for credit losses: $ i 2,124 and $ i 2,397
) | $ | i 18,073,779 | $ | i 18,717,825 | |||||||
Short-term
investments available for sale, at fair value (amortized cost: $ i 2,248,615 and $ i 1,924,292; net of allowance for credit losses: $ i 0
and $ i 0) | i 2,248,613 | i 1,924,922 | |||||||||
Collateral
received under securities lending, at fair value (amortized cost: $ i 172,109 and $ i 301,089) | i 172,116 | i 301,096 | |||||||||
| Equity securities, at fair value | i 1,693,552 | i 1,444,830 | |||||||||
Other
investments (portion measured at fair value: $ i 4,071,497 and $ i 3,824,796) | i 4,571,497 | i 4,324,796 | |||||||||
| Investments accounted for using the equity method | i 2,539,124 | i 2,047,889 | |||||||||
| Total investments | i 29,298,681 | i 28,761,358 | |||||||||
| Cash | i 1,234,059 | i 906,448 | |||||||||
| Accrued investment income | i 96,546 | i 103,299 | |||||||||
Securities
pledged under securities lending, at fair value (amortized cost: $ i 167,871 and $ i 294,493) | i 168,548 | i 294,912 | |||||||||
| Investment in operating affiliates | i 731,810 | i 129,291 | |||||||||
Premiums
receivable (net of allowance for credit losses: $ i 35,979 and $ i 37,781) | i 2,866,578 | i 2,064,586 | |||||||||
Reinsurance
recoverable on unpaid and paid losses and loss adjustment expenses (net of allowance for credit losses: $ i 11,029 and $ i 11,636) | i 4,314,515 | i 4,500,802 | |||||||||
Contractholder
receivables (net of allowance for credit losses: $ i 4,471 and $ i 8,638) | i 1,882,948 | i 1,986,924 | |||||||||
| Ceded unearned premiums | i 1,541,093 | i 1,234,075 | |||||||||
| Deferred acquisition costs | i 1,013,657 | i 790,708 | |||||||||
| Receivable for securities sold | i 309,234 | i 92,743 | |||||||||
| Goodwill and intangible assets | i 667,153 | i 692,863 | |||||||||
| Other assets | i 2,357,064 | i 1,724,288 | |||||||||
| Total assets | $ | i 46,481,886 | $ | i 43,282,297 | |||||||
| Liabilities | |||||||||||
| Reserve for losses and loss adjustment expenses | $ | i 17,196,648 | $ | i 16,513,929 | |||||||
| Unearned premiums | i 6,011,369 | i 4,838,965 | |||||||||
| Reinsurance balances payable | i 1,079,106 | i 683,263 | |||||||||
| Contractholder payables | i 1,887,418 | i 1,995,562 | |||||||||
| Collateral held for insured obligations | i 235,618 | i 215,581 | |||||||||
| Senior notes | i 2,861,728 | i 2,861,113 | |||||||||
| Revolving credit agreement borrowings | i 155,687 | i 155,687 | |||||||||
| Securities lending payable | i 172,109 | i 301,089 | |||||||||
| Payable for securities purchased | i 586,881 | i 218,779 | |||||||||
| Other liabilities | i 1,332,843 | i 1,510,888 | |||||||||
| Total liabilities | i 31,519,407 | i 29,294,856 | |||||||||
| Commitments and Contingencies | i | i | |||||||||
| Redeemable noncontrolling interests | i 57,533 | i 58,548 | |||||||||
| Shareholders' Equity | |||||||||||
| Non-cumulative preferred shares | i 1,280,000 | i 780,000 | |||||||||
Common
shares ($ i i 0.0011 / par, shares issued: i 582,654,893
and i 579,000,841) | i 647 | i 643 | |||||||||
| Additional paid-in capital | i 2,028,919 | i 1,977,794 | |||||||||
| Retained earnings | i 13,454,036 | i 12,362,463 | |||||||||
| Accumulated other comprehensive income (loss), net of deferred income tax | i 230,048 | i 488,895 | |||||||||
Common
shares held in treasury, at cost (shares: i 185,883,642 and i 172,280,199) | ( i 3,007,578) | ( i 2,503,909) | |||||||||
| Total shareholders' equity available to Arch | i 13,986,072 | i 13,105,886 | |||||||||
| Non-redeemable noncontrolling interests | i 918,874 | i 823,007 | |||||||||
| Total shareholders' equity | i 14,904,946 | i 13,928,893 | |||||||||
| Total liabilities, noncontrolling interests and shareholders' equity | $ | i 46,481,886 | $ | i 43,282,297 | |||||||
| ARCH CAPITAL | 6 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| (Unaudited) | (Unaudited) | ||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Net premiums earned | $ | i 2,120,909 | $ | i 1,665,354 | i 4,069,331 | i 3,409,798 | |||||||||||||||||
| Net investment income | i 111,613 | i 131,485 | i 210,469 | i 276,638 | |||||||||||||||||||
| Net realized gains (losses) | i 202,907 | i 556,588 | i 345,368 | i 189,628 | |||||||||||||||||||
| Other underwriting income | i 5,529 | i 6,667 | i 11,639 | i 13,519 | |||||||||||||||||||
| Equity in net income (loss) of investment funds accounted for using the equity method | i 122,186 | ( i 65,119) | i 193,872 | ( i 69,328) | |||||||||||||||||||
| Other income (loss) | i 6,852 | i 33 | i 5,111 | i 65 | |||||||||||||||||||
| Total revenues | i 2,569,996 | i 2,295,008 | i 4,835,790 | i 3,820,320 | |||||||||||||||||||
| Expenses | |||||||||||||||||||||||
| Losses and loss adjustment expenses | i 1,159,831 | i 1,230,522 | i 2,362,931 | i 2,345,941 | |||||||||||||||||||
| Acquisition expenses | i 335,143 | i 254,789 | i 639,624 | i 502,072 | |||||||||||||||||||
| Other operating expenses | i 244,943 | i 209,249 | i 505,976 | i 443,793 | |||||||||||||||||||
| Corporate expenses | i 15,951 | i 17,920 | i 41,335 | i 38,716 | |||||||||||||||||||
| Amortization of intangible assets | i 15,286 | i 16,489 | i 29,688 | i 33,120 | |||||||||||||||||||
| Interest expense | i 35,700 | i 31,139 | i 74,046 | i 63,694 | |||||||||||||||||||
| Net foreign exchange (gains) losses | i 17,775 | i 39,211 | ( i 2,288) | ( i 33,460) | |||||||||||||||||||
| Total expenses | i 1,824,629 | i 1,799,319 | i 3,651,312 | i 3,393,876 | |||||||||||||||||||
| Income (loss) before income taxes and income (loss) from operating affiliates | i 745,367 | i 495,689 | i 1,184,478 | i 426,444 | |||||||||||||||||||
| Income tax expense | ( i 51,179) | ( i 26,127) | ( i 90,039) | ( i 54,072) | |||||||||||||||||||
| Income (loss) from operating affiliates | i 24,476 | ( i 3,173) | i 99,933 | i 5,343 | |||||||||||||||||||
| Net income (loss) | $ | i 718,664 | $ | i 466,389 | $ | i 1,194,372 | $ | i 377,715 | |||||||||||||||
| Net (income) loss attributable to noncontrolling interests | ( i 43,178) | ( i 167,568) | ( i 80,730) | i 65,223 | |||||||||||||||||||
| Net income (loss) available to Arch | i 675,486 | i 298,821 | i 1,113,642 | i 442,938 | |||||||||||||||||||
| Preferred dividends | ( i 11,666) | ( i 10,403) | ( i 22,069) | ( i 20,806) | |||||||||||||||||||
| Net income (loss) available to Arch common shareholders | $ | i 663,820 | $ | i 288,418 | $ | i 1,091,573 | $ | i 422,132 | |||||||||||||||
| Net income per common share and common share equivalent | |||||||||||||||||||||||
| Basic | $ | i 1.67 | $ | i 0.72 | $ | i 2.73 | $ | i 1.05 | |||||||||||||||
| Diluted | $ | i 1.63 | $ | i 0.71 | $ | i 2.68 | $ | i 1.03 | |||||||||||||||
| Weighted average common shares and common share equivalents outstanding | |||||||||||||||||||||||
| Basic | i 397,743,402 | i 402,503,687 | i 399,267,183 | i 403,197,924 | |||||||||||||||||||
| Diluted | i 406,485,994 | i 408,119,681 | i 407,687,680 | i 411,005,591 | |||||||||||||||||||
| ARCH CAPITAL | 7 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| (Unaudited) | (Unaudited) | ||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Comprehensive Income | |||||||||||||||||||||||
| Net income (loss) | $ | i 718,664 | $ | i 466,389 | $ | i 1,194,372 | $ | i 377,715 | |||||||||||||||
| Other comprehensive income (loss), net of deferred income tax | |||||||||||||||||||||||
| Unrealized appreciation (decline) in value of available-for-sale investments: | |||||||||||||||||||||||
| Unrealized holding gains (losses) arising during period | i 78,571 | i 492,796 | ( i 183,179) | i 435,509 | |||||||||||||||||||
| Reclassification of net realized (gains) losses, included in net income (loss) | ( i 60,547) | ( i 167,391) | ( i 57,850) | ( i 288,620) | |||||||||||||||||||
| Foreign currency translation adjustments | i 6,205 | i 22,251 | ( i 22,379) | ( i 22,438) | |||||||||||||||||||
| Comprehensive income (loss) | i 742,893 | i 814,045 | i 930,964 | i 502,166 | |||||||||||||||||||
| Net (income) loss attributable to noncontrolling interests | ( i 43,178) | ( i 167,568) | ( i 80,730) | i 65,223 | |||||||||||||||||||
| Other comprehensive (income) loss attributable to noncontrolling interests | ( i 10) | ( i 20,111) | i 4,560 | i 12,947 | |||||||||||||||||||
| Comprehensive income (loss) available to Arch | $ | i 699,705 | $ | i 626,366 | $ | i 854,794 | $ | i 580,336 | |||||||||||||||
| ARCH CAPITAL | 8 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| (Unaudited) | (Unaudited) | ||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Non-cumulative preferred shares | |||||||||||||||||||||||
| Balance at beginning of period | $ | i 780,000 | $ | i 780,000 | $ | i 780,000 | $ | i 780,000 | |||||||||||||||
| Preferred shares issued | i 500,000 | i — | i 500,000 | i — | |||||||||||||||||||
| Balance at beginning and end of period | $ | i 1,280,000 | $ | i 780,000 | $ | i 1,280,000 | $ | i 780,000 | |||||||||||||||
| Common shares | |||||||||||||||||||||||
| Balance at beginning of period | i 645 | i 642 | i 643 | i 638 | |||||||||||||||||||
| Common shares issued, net | i 2 | i — | i 4 | i 4 | |||||||||||||||||||
| Balance at end of period | i 647 | i 642 | i 647 | i 642 | |||||||||||||||||||
| Additional paid-in capital | |||||||||||||||||||||||
| Balance at beginning of period | i 2,014,741 | i 1,921,487 | i 1,977,794 | i 1,889,683 | |||||||||||||||||||
| Amortization of share-based compensation | i 16,490 | i 13,160 | i 57,063 | i 41,210 | |||||||||||||||||||
| Issue costs on preferred shares | ( i 14,179) | i — | ( i 14,179) | i — | |||||||||||||||||||
| Other changes | i 11,867 | i 867 | i 8,241 | i 4,621 | |||||||||||||||||||
| Balance at end of period | i 2,028,919 | i 1,935,514 | i 2,028,919 | i 1,935,514 | |||||||||||||||||||
| Retained earnings | |||||||||||||||||||||||
| Balance at beginning of period | i 12,790,216 | i 11,132,268 | i 12,362,463 | i 11,021,006 | |||||||||||||||||||
| Cumulative effect of an accounting change (1) | i — | i — | i — | ( i 22,452) | |||||||||||||||||||
| Balance at beginning of period, as adjusted | i 12,790,216 | i 11,132,268 | i 12,362,463 | i 10,998,554 | |||||||||||||||||||
| Net income (loss) | i 718,664 | i 466,389 | i 1,194,372 | i 377,715 | |||||||||||||||||||
| Net (income) loss attributable to noncontrolling interests | ( i 43,178) | ( i 167,568) | ( i 80,730) | i 65,223 | |||||||||||||||||||
| Preferred share dividends | ( i 11,666) | ( i 10,403) | ( i 22,069) | ( i 20,806) | |||||||||||||||||||
| Balance at end of period | i 13,454,036 | i 11,420,686 | i 13,454,036 | i 11,420,686 | |||||||||||||||||||
| Accumulated other comprehensive income (loss), net of deferred income tax | |||||||||||||||||||||||
| Balance at beginning of period | i 205,827 | i 21,944 | i 488,895 | i 212,091 | |||||||||||||||||||
| Unrealized appreciation (decline) in value of available-for-sale investments, net of deferred income tax: | |||||||||||||||||||||||
| Balance at beginning of period | i 246,711 | i 113,149 | i 501,295 | i 258,486 | |||||||||||||||||||
| Unrealized holding gains (losses) during period, net of reclassification adjustment | i 18,024 | i 325,405 | ( i 241,029) | i 146,889 | |||||||||||||||||||
| Unrealized holding gains (losses) during period attributable to noncontrolling interests | ( i 33) | ( i 20,067) | i 4,436 | i 13,112 | |||||||||||||||||||
| Balance at end of period | i 264,702 | i 418,487 | i 264,702 | i 418,487 | |||||||||||||||||||
| Foreign currency translation adjustments, net of deferred income tax: | |||||||||||||||||||||||
| Balance at beginning of period | ( i 40,884) | ( i 91,205) | ( i 12,400) | ( i 46,395) | |||||||||||||||||||
| Foreign currency translation adjustments | i 6,205 | i 22,251 | ( i 22,379) | ( i 22,438) | |||||||||||||||||||
| Foreign currency translation adjustments attributable to noncontrolling interests | i 25 | ( i 45) | i 125 | ( i 166) | |||||||||||||||||||
| Balance at end of period | ( i 34,654) | ( i 68,999) | ( i 34,654) | ( i 68,999) | |||||||||||||||||||
| Balance at end of period | i 230,048 | i 349,488 | i 230,048 | i 349,488 | |||||||||||||||||||
| Common shares held in treasury, at cost | |||||||||||||||||||||||
| Balance at beginning of period | ( i 2,694,957) | ( i 2,489,097) | ( i 2,503,909) | ( i 2,406,047) | |||||||||||||||||||
| Shares repurchased for treasury | ( i 312,621) | ( i 5,408) | ( i 503,669) | ( i 88,458) | |||||||||||||||||||
| Balance at end of period | ( i 3,007,578) | ( i 2,494,505) | ( i 3,007,578) | ( i 2,494,505) | |||||||||||||||||||
| Total shareholders’ equity available to Arch | i 13,986,072 | i 11,991,825 | i 13,986,072 | i 11,991,825 | |||||||||||||||||||
| Non-redeemable noncontrolling interests | i 918,874 | i 679,089 | i 918,874 | i 679,089 | |||||||||||||||||||
| Total shareholders’ equity | $ | i 14,904,946 | $ | i 12,670,914 | $ | i 14,904,946 | $ | i 12,670,914 | |||||||||||||||
| ARCH CAPITAL | 9 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| (Unaudited) | |||||||||||
| Six Months Ended | |||||||||||
| June 30, | |||||||||||
| 2021 | 2020 | ||||||||||
| Operating Activities | |||||||||||
| Net income (loss) | $ | i 1,194,372 | $ | i 377,715 | |||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
| Net realized (gains) losses | ( i 379,049) | ( i 194,776) | |||||||||
| Equity in net (income) or loss of investment funds accounted for using the equity method and other income or loss | ( i 181,028) | i 125,384 | |||||||||
| Amortization of intangible assets | i 29,688 | i 33,120 | |||||||||
| Share-based compensation | i 57,564 | i 41,912 | |||||||||
| Changes in: | |||||||||||
| Reserve for losses and loss adjustment expenses, net of unpaid losses and loss adjustment expenses recoverable | i 948,505 | i 1,158,446 | |||||||||
| Unearned premiums, net of ceded unearned premiums | i 838,650 | i 395,759 | |||||||||
| Premiums receivable | ( i 781,391) | ( i 463,638) | |||||||||
| Deferred acquisition costs | ( i 214,893) | ( i 92,437) | |||||||||
| Reinsurance balances payable | i 331,461 | i 132,161 | |||||||||
| Other items, net | ( i 231,307) | ( i 192,066) | |||||||||
| Net cash provided by (used for) operating activities | i 1,612,572 | i 1,321,580 | |||||||||
| Investing Activities | |||||||||||
| Purchases of fixed maturity investments | ( i 23,554,384) | ( i 25,410,849) | |||||||||
| Purchases of equity securities | ( i 620,774) | ( i 1,025,149) | |||||||||
| Purchases of other investments | ( i 1,033,134) | ( i 501,692) | |||||||||
| Proceeds from sales of fixed maturity investments | i 23,130,388 | i 24,833,030 | |||||||||
| Proceeds from sales of equity securities | i 542,290 | i 580,346 | |||||||||
| Proceeds from sales, redemptions and maturities of other investments | i 772,549 | i 472,188 | |||||||||
| Proceeds from redemptions and maturities of fixed maturity investments | i 805,836 | i 369,240 | |||||||||
| Net settlements of derivative instruments | i 17,286 | i 150,471 | |||||||||
| Net (purchases) sales of short-term investments | ( i 378,086) | ( i 1,323,363) | |||||||||
| Change in cash collateral related to securities lending | ( i 826) | i 54,596 | |||||||||
| Purchase of operating affiliate | ( i 546,349) | i — | |||||||||
| Purchases of fixed assets | ( i 23,585) | ( i 17,687) | |||||||||
| Other | ( i 204,889) | i 8,679 | |||||||||
| Net cash provided by (used for) investing activities | ( i 1,093,678) | ( i 1,810,190) | |||||||||
| Financing Activities | |||||||||||
| Proceeds from issuance of preferred shares, net | i 485,821 | i — | |||||||||
| Purchases of common shares under share repurchase program | ( i 485,315) | ( i 75,486) | |||||||||
| Proceeds from common shares issued, net | i 185 | ( i 9,661) | |||||||||
| Proceeds from borrowings | i — | i 1,004,918 | |||||||||
| Repayments of borrowings | i — | ( i 165,000) | |||||||||
| Change in cash collateral related to securities lending | i 826 | ( i 54,596) | |||||||||
| Third party investment in non-redeemable noncontrolling interests | i 15,971 | ( i 2,867) | |||||||||
| Dividends paid to redeemable noncontrolling interests | ( i 1,907) | ( i 2,540) | |||||||||
| Other | i 27,639 | ( i 2,625) | |||||||||
| Preferred dividends paid | ( i 20,805) | ( i 20,806) | |||||||||
| Net cash provided by (used for) financing activities | i 22,415 | i 671,337 | |||||||||
| Effects of exchange rate changes on foreign currency cash and restricted cash | ( i 13,390) | ( i 21,742) | |||||||||
| Increase (decrease) in cash and restricted cash | i 527,919 | i 160,985 | |||||||||
| Cash and restricted cash, beginning of year | i 1,290,544 | i 903,698 | |||||||||
| Cash and restricted cash, end of period | $ | i 1,818,463 | $ | i 1,064,683 | |||||||
| ARCH CAPITAL | 10 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| ARCH CAPITAL | 11 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income (loss) | $ | i 718,664 | $ | i 466,389 | $ | i 1,194,372 | $ | i 377,715 | |||||||||||||||
| Amounts attributable to noncontrolling interests | ( i 43,178) | ( i 167,568) | ( i 80,730) | i 65,223 | |||||||||||||||||||
| Net income (loss) available to Arch | i 675,486 | i 298,821 | i 1,113,642 | i 442,938 | |||||||||||||||||||
| Preferred dividends | ( i 11,666) | ( i 10,403) | ( i 22,069) | ( i 20,806) | |||||||||||||||||||
| Net income (loss) available to Arch common shareholders | $ | i 663,820 | $ | i 288,418 | $ | i 1,091,573 | $ | i 422,132 | |||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted average common shares and common share equivalents outstanding — basic | i 397,743,402 | i 402,503,687 | i 399,267,183 | i 403,197,924 | |||||||||||||||||||
| Effect of dilutive common share equivalents: | |||||||||||||||||||||||
| Nonvested restricted shares | i 1,990,729 | i 1,597,701 | i 1,932,929 | i 1,829,239 | |||||||||||||||||||
| Stock options (1) | i 6,751,863 | i 4,018,293 | i 6,487,568 | i 5,978,428 | |||||||||||||||||||
| Weighted average common shares and common share equivalents outstanding — diluted | i 406,485,994 | i 408,119,681 | i 407,687,680 | i 411,005,591 | |||||||||||||||||||
| Earnings per common share: | |||||||||||||||||||||||
| Basic | $ | i 1.67 | $ | i 0.72 | $ | i 2.73 | $ | i 1.05 | |||||||||||||||
| Diluted | $ | i 1.63 | $ | i 0.71 | $ | i 2.68 | $ | i 1.03 | |||||||||||||||
| ARCH CAPITAL | 12 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| ARCH CAPITAL | 13 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| June 30, 2021 | |||||||||||||||||||||||||||||||||||
| Insurance | Reinsurance | Mortgage | Sub-Total | Other | Total | ||||||||||||||||||||||||||||||
| Gross premiums written (1) | $ | i 1,368,867 | $ | i 1,358,020 | $ | i 391,511 | $ | i 3,117,505 | $ | i 240,942 | $ | i 3,286,291 | |||||||||||||||||||||||
| Premiums ceded | ( i 405,312) | ( i 433,288) | ( i 55,665) | ( i 893,372) | ( i 65,551) | ( i 886,767) | |||||||||||||||||||||||||||||
| Net premiums written | i 963,555 | i 924,732 | i 335,846 | i 2,224,133 | i 175,391 | i 2,399,524 | |||||||||||||||||||||||||||||
| Change in unearned premiums | ( i 98,128) | ( i 187,708) | ( i 1,625) | ( i 287,461) | i 8,846 | ( i 278,615) | |||||||||||||||||||||||||||||
| Net premiums earned | i 865,427 | i 737,024 | i 334,221 | i 1,936,672 | i 184,237 | i 2,120,909 | |||||||||||||||||||||||||||||
| Other underwriting income (loss) | i — | i 1,053 | i 4,148 | i 5,201 | i 328 | i 5,529 | |||||||||||||||||||||||||||||
| Losses and loss adjustment expenses | ( i 545,880) | ( i 463,823) | ( i 9,880) | ( i 1,019,583) | ( i 140,248) | ( i 1,159,831) | |||||||||||||||||||||||||||||
| Acquisition expenses | ( i 136,852) | ( i 133,585) | ( i 30,117) | ( i 300,554) | ( i 34,589) | ( i 335,143) | |||||||||||||||||||||||||||||
| Other operating expenses | ( i 133,342) | ( i 44,695) | ( i 48,312) | ( i 226,349) | ( i 18,594) | ( i 244,943) | |||||||||||||||||||||||||||||
| Underwriting income (loss) | $ | i 49,353 | $ | i 95,974 | $ | i 250,060 | i 395,387 | ( i 8,866) | i 386,521 | ||||||||||||||||||||||||||
| Net investment income | i 89,430 | i 22,183 | i 111,613 | ||||||||||||||||||||||||||||||||
| Net realized gains (losses) | i 163,394 | i 39,513 | i 202,907 | ||||||||||||||||||||||||||||||||
| Equity in net income (loss) of investment funds accounted for using the equity method | i 122,186 | i — | i 122,186 | ||||||||||||||||||||||||||||||||
| Other income (loss) | i 6,852 | i — | i 6,852 | ||||||||||||||||||||||||||||||||
| Corporate expenses (2) | ( i 17,175) | i — | ( i 17,175) | ||||||||||||||||||||||||||||||||
| Transaction costs and other (2) | i 1,444 | ( i 220) | i 1,224 | ||||||||||||||||||||||||||||||||
| Amortization of intangible assets | ( i 14,388) | ( i 898) | ( i 15,286) | ||||||||||||||||||||||||||||||||
| Interest expense | ( i 31,439) | ( i 4,261) | ( i 35,700) | ||||||||||||||||||||||||||||||||
| Net foreign exchange gains (losses) | ( i 17,892) | i 117 | ( i 17,775) | ||||||||||||||||||||||||||||||||
| Income (loss) before income taxes and income (loss) from operating affiliates | i 697,799 | i 47,568 | i 745,367 | ||||||||||||||||||||||||||||||||
| Income tax (expense) benefit | ( i 50,953) | ( i 226) | ( i 51,179) | ||||||||||||||||||||||||||||||||
| Income (loss) from operating affiliates | i 24,476 | i — | i 24,476 | ||||||||||||||||||||||||||||||||
| Net income (loss) | i 671,322 | i 47,342 | i 718,664 | ||||||||||||||||||||||||||||||||
| Amounts attributable to redeemable noncontrolling interests | ( i 580) | ( i 981) | ( i 1,561) | ||||||||||||||||||||||||||||||||
| Amounts attributable to nonredeemable noncontrolling interests | i — | ( i 41,617) | ( i 41,617) | ||||||||||||||||||||||||||||||||
| Net income (loss) available to Arch | i 670,742 | i 4,744 | i 675,486 | ||||||||||||||||||||||||||||||||
| Preferred dividends | ( i 11,666) | i — | ( i 11,666) | ||||||||||||||||||||||||||||||||
| Net income (loss) available to Arch common shareholders | $ | i 659,076 | $ | i 4,744 | $ | i 663,820 | |||||||||||||||||||||||||||||
| Underwriting Ratios | |||||||||||||||||||||||||||||||||||
| Loss ratio | i 63.1 | % | i 62.9 | % | i 3.0 | % | i 52.6 | % | i 76.1 | % | i 54.7 | % | |||||||||||||||||||||||
| Acquisition expense ratio | i 15.8 | % | i 18.1 | % | i 9.0 | % | i 15.5 | % | i 18.8 | % | i 15.8 | % | |||||||||||||||||||||||
| Other operating expense ratio | i 15.4 | % | i 6.1 | % | i 14.5 | % | i 11.7 | % | i 10.1 | % | i 11.5 | % | |||||||||||||||||||||||
| Combined ratio | i 94.3 | % | i 87.1 | % | i 26.5 | % | i 79.8 | % | i 105.0 | % | i 82.0 | % | |||||||||||||||||||||||
| Goodwill and intangible assets | $ | i 270,262 | $ | i 16,168 | $ | i 370,405 | $ | i 656,835 | $ | i 10,318 | $ | i 667,153 | |||||||||||||||||||||||
| ARCH CAPITAL | 14 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| June 30, 2020 | |||||||||||||||||||||||||||||||||||
| Insurance | Reinsurance | Mortgage | Sub-Total | Other | Total | ||||||||||||||||||||||||||||||
| Gross premiums written (1) | $ | i 1,030,362 | $ | i 807,065 | $ | i 369,144 | $ | i 2,206,410 | $ | i 157,927 | $ | i 2,317,692 | |||||||||||||||||||||||
| Premiums ceded | ( i 358,101) | ( i 241,971) | ( i 44,044) | ( i 643,955) | ( i 52,071) | ( i 649,381) | |||||||||||||||||||||||||||||
| Net premiums written | i 672,261 | i 565,094 | i 325,100 | i 1,562,455 | i 105,856 | i 1,668,311 | |||||||||||||||||||||||||||||
| Change in unearned premiums | i 15,648 | ( i 84,897) | i 40,613 | ( i 28,636) | i 25,679 | ( i 2,957) | |||||||||||||||||||||||||||||
| Net premiums earned | i 687,909 | i 480,197 | i 365,713 | i 1,533,819 | i 131,535 | i 1,665,354 | |||||||||||||||||||||||||||||
| Other underwriting income (loss) | i — | ( i 651) | i 6,450 | i 5,799 | i 868 | i 6,667 | |||||||||||||||||||||||||||||
| Losses and loss adjustment expenses | ( i 518,203) | ( i 383,433) | ( i 224,100) | ( i 1,125,736) | ( i 104,786) | ( i 1,230,522) | |||||||||||||||||||||||||||||
| Acquisition expenses | ( i 107,671) | ( i 90,522) | ( i 34,052) | ( i 232,245) | ( i 22,544) | ( i 254,789) | |||||||||||||||||||||||||||||
| Other operating expenses | ( i 118,757) | ( i 38,716) | ( i 37,574) | ( i 195,047) | ( i 14,202) | ( i 209,249) | |||||||||||||||||||||||||||||
| Underwriting income (loss) | $ | ( i 56,722) | $ | ( i 33,125) | $ | i 76,437 | ( i 13,410) | ( i 9,129) | ( i 22,539) | ||||||||||||||||||||||||||
| Net investment income | i 101,031 | i 30,454 | i 131,485 | ||||||||||||||||||||||||||||||||
| Net realized gains (losses) | i 385,089 | i 171,499 | i 556,588 | ||||||||||||||||||||||||||||||||
| Equity in net income (loss) of investment funds accounted for using the equity method | ( i 65,119) | i — | ( i 65,119) | ||||||||||||||||||||||||||||||||
| Other income (loss) | i 33 | i — | i 33 | ||||||||||||||||||||||||||||||||
| Corporate expenses (2) | ( i 16,943) | i — | ( i 16,943) | ||||||||||||||||||||||||||||||||
| Transaction costs and other (2) | ( i 977) | i — | ( i 977) | ||||||||||||||||||||||||||||||||
| Amortization of intangible assets | ( i 16,489) | i — | ( i 16,489) | ||||||||||||||||||||||||||||||||
| Interest expense | ( i 25,130) | ( i 6,009) | ( i 31,139) | ||||||||||||||||||||||||||||||||
| Net foreign exchange gains (losses) | ( i 42,438) | i 3,227 | ( i 39,211) | ||||||||||||||||||||||||||||||||
| Income (loss) before income taxes and income (loss) from operating affiliates | i 305,647 | i 190,042 | i 495,689 | ||||||||||||||||||||||||||||||||
| Income tax (expense) benefit | ( i 26,529) | i 402 | ( i 26,127) | ||||||||||||||||||||||||||||||||
| Income (loss) from operating affiliates | ( i 3,173) | i — | ( i 3,173) | ||||||||||||||||||||||||||||||||
| Net income (loss) | i 275,945 | i 190,444 | i 466,389 | ||||||||||||||||||||||||||||||||
| Amounts attributable to redeemable noncontrolling interests | ( i 934) | ( i 1,036) | ( i 1,970) | ||||||||||||||||||||||||||||||||
| Amounts attributable to nonredeemable noncontrolling interests | i — | ( i 165,598) | ( i 165,598) | ||||||||||||||||||||||||||||||||
| Net income (loss) available to Arch | i 275,011 | i 23,810 | i 298,821 | ||||||||||||||||||||||||||||||||
| Preferred dividends | ( i 10,403) | i — | ( i 10,403) | ||||||||||||||||||||||||||||||||
| Net income (loss) available to Arch common shareholders | $ | i 264,608 | $ | i 23,810 | $ | i 288,418 | |||||||||||||||||||||||||||||
| Underwriting Ratios | |||||||||||||||||||||||||||||||||||
| Loss ratio | i 75.3 | % | i 79.8 | % | i 61.3 | % | i 73.4 | % | i 79.7 | % | i 73.9 | % | |||||||||||||||||||||||
| Acquisition expense ratio | i 15.7 | % | i 18.9 | % | i 9.3 | % | i 15.1 | % | i 17.1 | % | i 15.3 | % | |||||||||||||||||||||||
| Other operating expense ratio | i 17.3 | % | i 8.1 | % | i 10.3 | % | i 12.7 | % | i 10.8 | % | i 12.6 | % | |||||||||||||||||||||||
| Combined ratio | i 108.3 | % | i 106.8 | % | i 80.9 | % | i 101.2 | % | i 107.6 | % | i 101.8 | % | |||||||||||||||||||||||
| Goodwill and intangible assets | $ | i 263,086 | $ | i 2,516 | $ | i 415,238 | $ | i 680,840 | $ | i 7,650 | $ | i 688,490 | |||||||||||||||||||||||
| ARCH CAPITAL | 15 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Six Months Ended | |||||||||||||||||||||||||||||||||||
| June 30, 2021 | |||||||||||||||||||||||||||||||||||
| Insurance | Reinsurance | Mortgage | Sub-Total | Other | Total | ||||||||||||||||||||||||||||||
| Gross premiums written (1) | $ | i 2,784,753 | $ | i 2,829,080 | $ | i 782,757 | $ | i 6,394,798 | $ | i 457,465 | $ | i 6,683,497 | |||||||||||||||||||||||
| Premiums ceded | ( i 826,359) | ( i 905,236) | ( i 111,716) | ( i 1,841,519) | ( i 102,763) | ( i 1,775,516) | |||||||||||||||||||||||||||||
| Net premiums written | i 1,958,394 | i 1,923,844 | i 671,041 | i 4,553,279 | i 354,702 | i 4,907,981 | |||||||||||||||||||||||||||||
| Change in unearned premiums | ( i 273,493) | ( i 541,920) | ( i 503) | ( i 815,916) | ( i 22,734) | ( i 838,650) | |||||||||||||||||||||||||||||
| Net premiums earned | i 1,684,901 | i 1,381,924 | i 670,538 | i 3,737,363 | i 331,968 | i 4,069,331 | |||||||||||||||||||||||||||||
| Other underwriting income (loss) | i — | ( i 145) | i 11,045 | i 10,900 | i 739 | i 11,639 | |||||||||||||||||||||||||||||
| Losses and loss adjustment expenses | ( i 1,081,627) | ( i 948,693) | ( i 73,569) | ( i 2,103,889) | ( i 259,042) | ( i 2,362,931) | |||||||||||||||||||||||||||||
| Acquisition expenses | ( i 265,074) | ( i 251,610) | ( i 60,199) | ( i 576,883) | ( i 62,741) | ( i 639,624) | |||||||||||||||||||||||||||||
| Other operating expenses | ( i 270,455) | ( i 105,209) | ( i 97,443) | ( i 473,107) | ( i 32,869) | ( i 505,976) | |||||||||||||||||||||||||||||
| Underwriting income (loss) | $ | i 67,745 | $ | i 76,267 | $ | i 450,372 | $ | i 594,384 | $ | ( i 21,945) | $ | i 572,439 | |||||||||||||||||||||||
| Net investment income | i 168,159 | i 42,310 | i 210,469 | ||||||||||||||||||||||||||||||||
| Net realized gains (losses) | i 264,730 | i 80,638 | i 345,368 | ||||||||||||||||||||||||||||||||
| Equity in net income (loss) of investment funds accounted for using the equity method | i 193,872 | i — | i 193,872 | ||||||||||||||||||||||||||||||||
| Other income (loss) | i 5,111 | i — | i 5,111 | ||||||||||||||||||||||||||||||||
| Corporate expenses (2) | ( i 40,643) | i — | ( i 40,643) | ||||||||||||||||||||||||||||||||
| Transaction costs and other (2) | i 243 | ( i 935) | ( i 692) | ||||||||||||||||||||||||||||||||
| Amortization of intangible assets | ( i 28,790) | ( i 898) | ( i 29,688) | ||||||||||||||||||||||||||||||||
| Interest expense | ( i 65,636) | ( i 8,410) | ( i 74,046) | ||||||||||||||||||||||||||||||||
| Net foreign exchange gains (losses) | i 3,613 | ( i 1,325) | i 2,288 | ||||||||||||||||||||||||||||||||
| Income (loss) before income taxes and income (loss) from operating affiliates | i 1,095,043 | i 89,435 | i 1,184,478 | ||||||||||||||||||||||||||||||||
| Income tax (expense) benefit | ( i 89,805) | ( i 234) | ( i 90,039) | ||||||||||||||||||||||||||||||||
| Income (loss) from operating affiliates | i 99,933 | i — | i 99,933 | ||||||||||||||||||||||||||||||||
| Net income (loss) | i 1,105,171 | i 89,201 | i 1,194,372 | ||||||||||||||||||||||||||||||||
| Amounts attributable to redeemable noncontrolling interests | ( i 463) | ( i 1,953) | ( i 2,416) | ||||||||||||||||||||||||||||||||
| Amounts attributable to nonredeemable noncontrolling interests | i — | ( i 78,314) | ( i 78,314) | ||||||||||||||||||||||||||||||||
| Net income (loss) available to Arch | i 1,104,708 | i 8,934 | i 1,113,642 | ||||||||||||||||||||||||||||||||
| Preferred dividends | ( i 22,069) | i — | ( i 22,069) | ||||||||||||||||||||||||||||||||
| Net income (loss) available to Arch common shareholders | $ | i 1,082,639 | $ | i 8,934 | $ | i 1,091,573 | |||||||||||||||||||||||||||||
| Underwriting Ratios | |||||||||||||||||||||||||||||||||||
| Loss ratio | i 64.2 | % | i 68.7 | % | i 11.0 | % | i 56.3 | % | i 78.0 | % | i 58.1 | % | |||||||||||||||||||||||
| Acquisition expense ratio | i 15.7 | % | i 18.2 | % | i 9.0 | % | i 15.4 | % | i 18.9 | % | i 15.7 | % | |||||||||||||||||||||||
| Other operating expense ratio | i 16.1 | % | i 7.6 | % | i 14.5 | % | i 12.7 | % | i 9.9 | % | i 12.4 | % | |||||||||||||||||||||||
| Combined ratio | i 96.0 | % | i 94.5 | % | i 34.5 | % | i 84.4 | % | i 106.8 | % | i 86.2 | % | |||||||||||||||||||||||
| ARCH CAPITAL | 16 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Six Months Ended | |||||||||||||||||||||||||||||||||||
| June 30, 2020 | |||||||||||||||||||||||||||||||||||
| Insurance | Reinsurance | Mortgage | Sub-Total | Other | Total | ||||||||||||||||||||||||||||||
| Gross premiums written (1) | $ | i 2,238,007 | $ | i 1,929,584 | $ | i 738,089 | $ | i 4,904,947 | $ | i 392,829 | $ | i 5,150,522 | |||||||||||||||||||||||
| Premiums ceded | ( i 736,998) | ( i 567,310) | ( i 88,371) | ( i 1,391,946) | ( i 100,273) | ( i 1,344,965) | |||||||||||||||||||||||||||||
| Net premiums written | i 1,501,009 | i 1,362,274 | i 649,718 | i 3,513,001 | i 292,556 | i 3,805,557 | |||||||||||||||||||||||||||||
| Change in unearned premiums | ( i 97,181) | ( i 338,617) | i 61,021 | ( i 374,777) | ( i 20,982) | ( i 395,759) | |||||||||||||||||||||||||||||
| Net premiums earned | i 1,403,828 | i 1,023,657 | i 710,739 | i 3,138,224 | i 271,574 | i 3,409,798 | |||||||||||||||||||||||||||||
| Other underwriting income (loss) | i — | i 1,469 | i 11,049 | i 12,518 | i 1,001 | i 13,519 | |||||||||||||||||||||||||||||
| Losses and loss adjustment expenses | ( i 1,025,311) | ( i 813,502) | ( i 291,666) | ( i 2,130,479) | ( i 215,462) | ( i 2,345,941) | |||||||||||||||||||||||||||||
| Acquisition expenses | ( i 215,008) | ( i 170,128) | ( i 72,588) | ( i 457,724) | ( i 44,348) | ( i 502,072) | |||||||||||||||||||||||||||||
| Other operating expenses | ( i 248,406) | ( i 84,013) | ( i 83,470) | ( i 415,889) | ( i 27,904) | ( i 443,793) | |||||||||||||||||||||||||||||
| Underwriting income (loss) | $ | ( i 84,897) | $ | ( i 42,517) | $ | i 274,064 | $ | i 146,650 | $ | ( i 15,139) | $ | i 131,511 | |||||||||||||||||||||||
| Net investment income | i 214,059 | i 62,579 | i 276,638 | ||||||||||||||||||||||||||||||||
| Net realized gains (losses) | i 312,980 | ( i 123,352) | i 189,628 | ||||||||||||||||||||||||||||||||
| Equity in net income (loss) of investment funds accounted for using the equity method | ( i 69,328) | i — | ( i 69,328) | ||||||||||||||||||||||||||||||||
| Other income (loss) | i 65 | i — | i 65 | ||||||||||||||||||||||||||||||||
| Corporate expenses (2) | ( i 35,144) | i — | ( i 35,144) | ||||||||||||||||||||||||||||||||
| Transaction costs and other (2) | ( i 3,572) | i — | ( i 3,572) | ||||||||||||||||||||||||||||||||
| Amortization of intangible assets | ( i 33,120) | i — | ( i 33,120) | ||||||||||||||||||||||||||||||||
| Interest expense | ( i 50,375) | ( i 13,319) | ( i 63,694) | ||||||||||||||||||||||||||||||||
| Net foreign exchange gains (losses) | i 20,869 | i 12,591 | i 33,460 | ||||||||||||||||||||||||||||||||
| Income (loss) before income taxes and income (loss) from operating affiliates | i 503,084 | ( i 76,640) | i 426,444 | ||||||||||||||||||||||||||||||||
| Income tax (expense) benefit | ( i 54,474) | i 402 | ( i 54,072) | ||||||||||||||||||||||||||||||||
| Income (loss) from operating affiliates | i 5,343 | i — | i 5,343 | ||||||||||||||||||||||||||||||||
| Net income (loss) | i 453,953 | ( i 76,238) | i 377,715 | ||||||||||||||||||||||||||||||||
| Amounts attributable to redeemable noncontrolling interests | ( i 991) | ( i 2,132) | ( i 3,123) | ||||||||||||||||||||||||||||||||
| Amounts attributable to nonredeemable noncontrolling interests | i — | i 68,346 | i 68,346 | ||||||||||||||||||||||||||||||||
| Net income (loss) available to Arch | i 452,962 | ( i 10,024) | i 442,938 | ||||||||||||||||||||||||||||||||
| Preferred dividends | ( i 20,806) | i — | ( i 20,806) | ||||||||||||||||||||||||||||||||
| Net income (loss) available to Arch common shareholders | $ | i 432,156 | $ | ( i 10,024) | $ | i 422,132 | |||||||||||||||||||||||||||||
| Underwriting Ratios | |||||||||||||||||||||||||||||||||||
| Loss ratio | i 73.0 | % | i 79.5 | % | i 41.0 | % | i 67.9 | % | i 79.3 | % | i 68.8 | % | |||||||||||||||||||||||
| Acquisition expense ratio | i 15.3 | % | i 16.6 | % | i 10.2 | % | i 14.6 | % | i 16.3 | % | i 14.7 | % | |||||||||||||||||||||||
| Other operating expense ratio | i 17.7 | % | i 8.2 | % | i 11.7 | % | i 13.3 | % | i 10.3 | % | i 13.0 | % | |||||||||||||||||||||||
| Combined ratio | i 106.0 | % | i 104.3 | % | i 62.9 | % | i 95.8 | % | i 105.9 | % | i 96.5 | % | |||||||||||||||||||||||
| ARCH CAPITAL | 17 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Reserve for losses and loss adjustment expenses at beginning of period | $ | i 16,443,952 | $ | i 14,309,580 | $ | i 16,513,929 | $ | i 13,891,842 | |||||||||||||||
Unpaid
losses and loss adjustment expenses recoverable | i 3,916,650 | i 4,070,114 | i 4,314,855 | i 4,082,650 | |||||||||||||||||||
Net
reserve for losses and loss adjustment expenses at beginning of period | i 12,527,302 | i 10,239,466 | i 12,199,074 | i 9,809,192 | |||||||||||||||||||
Net
incurred losses and loss adjustment expenses relating to losses occurring in: | |||||||||||||||||||||||
Current year | i 1,219,081 | i 1,274,589 | i 2,463,853 | i 2,409,031 | |||||||||||||||||||
Prior
years | ( i 59,250) | ( i 44,067) | ( i 100,922) | ( i 63,090) | |||||||||||||||||||
Total
net incurred losses and loss adjustment expenses | i 1,159,831 | i 1,230,522 | i 2,362,931 | i 2,345,941 | |||||||||||||||||||
Retroactive
reinsurance transactions (1) | i — | i — | ( i 183,893) | i 60,635 | |||||||||||||||||||
Net
foreign exchange (gains) losses | i 135,847 | i 51,157 | i 88,970 | ( i 91,416) | |||||||||||||||||||
Net
paid losses and loss adjustment expenses relating to losses occurring in: | |||||||||||||||||||||||
Current year | ( i 164,441) | ( i 128,174) | ( i 223,425) | ( i 169,434) | |||||||||||||||||||
Prior
years | ( i 607,911) | ( i 504,254) | ( i 1,193,029) | ( i 1,066,201) | |||||||||||||||||||
Total
net paid losses and loss adjustment expenses | ( i 772,352) | ( i 632,428) | ( i 1,416,454) | ( i 1,235,635) | |||||||||||||||||||
Net
reserve for losses and loss adjustment expenses at end of period | i 13,050,628 | i 10,888,717 | i 13,050,628 | i 10,888,717 | |||||||||||||||||||
Unpaid
losses and loss adjustment expenses recoverable | i 4,146,020 | i 4,156,157 | i 4,146,020 | i 4,156,157 | |||||||||||||||||||
Reserve
for losses and loss adjustment expenses at end of period | $ | i 17,196,648 | $ | i 15,044,874 | $ | i 17,196,648 | $ | i 15,044,874 | |||||||||||||||
| ARCH CAPITAL | 18 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| ARCH CAPITAL | 19 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Premium Receivables, Net of Allowance | Allowance for Expected Credit Losses | |||||||||||||
| Three Months Ended June 30, 2021 | ||||||||||||||
| Balance at beginning of period | $ | i 2,618,175 | $ | i 36,111 | ||||||||||
| Change for provision of expected credit losses (1) | ( i 132) | |||||||||||||
| Balance at end of period | $ | i i 2,866,578 / | $ | i 35,979 | ||||||||||
| Three Months Ended June 30, 2020 | ||||||||||||||
| Balance at beginning of period | $ | i 2,155,204 | $ | i 27,990 | ||||||||||
| Change for provision of expected credit losses (1) | i 8,064 | |||||||||||||
| Balance at end of period | $ | i 2,203,753 | $ | i 36,054 | ||||||||||
| Six Months Ended June 30, 2021 | ||||||||||||||
| Balance at beginning of period | $ | i 2,064,586 | $ | i 37,781 | ||||||||||
| Change for provision of expected credit losses (1) | ( i 1,802) | |||||||||||||
| Balance at end of period | $ | i i 2,866,578 / | $ | i 35,979 | ||||||||||
| Six Months Ended June 30, 2020 | ||||||||||||||
| Balance at beginning of period | $ | i 1,778,717 | $ | i 21,003 | ||||||||||
| Cumulative effect of accounting change (2) | i 6,539 | |||||||||||||
| Change for provision of expected credit losses (1) | i 8,512 | |||||||||||||
| Balance at end of period | $ | i 2,203,753 | $ | i 36,054 | ||||||||||
| ARCH CAPITAL | 20 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Reinsurance Recoverables, Net of Allowance | Allowance for Expected Credit Losses | |||||||||||||
| Three Months Ended June 30, 2021 | ||||||||||||||
| Balance at beginning of period | $ | i 4,041,076 | $ | i 10,872 | ||||||||||
| Change for provision of expected credit losses | i 157 | |||||||||||||
| Balance at end of period | $ | i i 4,314,515 / | $ | i 11,029 | ||||||||||
| Three Months Ended June 30, 2020 | ||||||||||||||
| Balance at beginning of period | $ | i 4,303,135 | $ | i 13,700 | ||||||||||
| Change for provision of expected credit losses | ( i 105) | |||||||||||||
| Balance at end of period | $ | i 4,363,507 | $ | i 13,595 | ||||||||||
| Six Months Ended June 30, 2021 | ||||||||||||||
| Balance at beginning of period | $ | i 4,500,802 | $ | i 11,636 | ||||||||||
| Change for provision of expected credit losses | ( i 607) | |||||||||||||
| Balance at end of period | $ | i i 4,314,515 / | $ | i 11,029 | ||||||||||
| Six Months Ended June 30, 2020 | ||||||||||||||
| Balance at beginning of period | $ | i 4,346,816 | $ | i 1,364 | ||||||||||
| Cumulative effect of accounting change (1) | i 12,010 | |||||||||||||
| Change for provision of expected credit losses | i 221 | |||||||||||||
| Balance at end of period | $ | i 4,363,507 | $ | i 13,595 | ||||||||||
June
30, | December 31 | ||||||||||
| 2021 | 2020 | ||||||||||
| Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses | $ | i 4,314,515 | $ | i 4,500,802 | |||||||
| % due from carriers with A.M. Best rating of “A-” or better | i 66.0 | % | i 63.9 | % | |||||||
| % due from all other carriers with no A.M. Best rating (1) | i 34.0 | % | i 36.1 | % | |||||||
| Largest balance due from any one carrier as % of total shareholders’ equity | i 2.4 | % | i 1.8 | % | |||||||
| Contract-holder Receivables, Net of Allowance | Allowance for Expected Credit Losses | |||||||||||||
| Three Months Ended June 30, 2021 | ||||||||||||||
| Balance at beginning of period | $ | i 1,919,655 | $ | i 5,853 | ||||||||||
| Change for provision of expected credit losses | ( i 1,382) | |||||||||||||
| Balance at end of period | $ | i 1,882,948 | $ | i 4,471 | ||||||||||
| Three Months Ended June 30, 2020 | ||||||||||||||
| Balance at beginning of period | $ | i 2,140,724 | $ | i 9,038 | ||||||||||
| Change for provision of expected credit losses | ( i 2,748) | |||||||||||||
| Balance at end of period | i 2,179,124 | $ | i 6,290 | |||||||||||
| Six Months Ended June 30, 2021 | ||||||||||||||
| Balance at beginning of period | $ | i 1,986,924 | $ | i 8,638 | ||||||||||
| Change for provision of expected credit losses | ( i 4,167) | |||||||||||||
| Balance at end of period | $ | i 1,882,948 | $ | i 4,471 | ||||||||||
| Six Months Ended June 30, 2020 | ||||||||||||||
| Balance at beginning of period | $ | i 2,119,460 | $ | i — | ||||||||||
| Cumulative effect of accounting change (1) | i 6,663 | |||||||||||||
| Change for provision of expected credit losses | ( i 373) | |||||||||||||
| Balance at end of period | $ | i 2,179,124 | $ | i 6,290 | ||||||||||
| ARCH CAPITAL | 21 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Estimated Fair Value | Gross Unrealized Gains | Gross Unrealized Losses | Allowance for Expected Credit Losses (2) | Cost or Amortized Cost | |||||||||||||||||||||||||||||||
| June 30, 2021 | |||||||||||||||||||||||||||||||||||
| Fixed maturities (1): | |||||||||||||||||||||||||||||||||||
| Corporate bonds | $ | i 7,129,768 | $ | i 217,061 | $ | ( i 34,751) | $ | ( i 1,232) | $ | i 6,948,690 | |||||||||||||||||||||||||
| Mortgage backed securities | i 389,041 | i 4,480 | ( i 3,479) | ( i 269) | i 388,309 | ||||||||||||||||||||||||||||||
| Municipal bonds | i 415,483 | i 23,153 | ( i 1,660) | ( i 6) | i 393,996 | ||||||||||||||||||||||||||||||
| Commercial mortgage backed securities | i 266,733 | i 4,017 | ( i 611) | ( i 3) | i 263,330 | ||||||||||||||||||||||||||||||
| U.S. government and government agencies | i 5,091,183 | i 14,814 | ( i 14,013) | i — | i 5,090,382 | ||||||||||||||||||||||||||||||
| Non-U.S. government securities | i 2,449,782 | i 108,823 | ( i 18,441) | ( i 128) | i 2,359,528 | ||||||||||||||||||||||||||||||
| Asset backed securities | i 2,487,845 | i 16,460 | ( i 4,056) | ( i 486) | i 2,475,927 | ||||||||||||||||||||||||||||||
| Total | i 18,229,835 | i 388,808 | ( i 77,011) | ( i 2,124) | i 17,920,162 | ||||||||||||||||||||||||||||||
| Short-term investments | i 2,248,613 | i 1,404 | ( i 1,406) | i — | i 2,248,615 | ||||||||||||||||||||||||||||||
| Total | $ | i 20,478,448 | $ | i 390,212 | $ | ( i 78,417) | $ | ( i 2,124) | $ | i 20,168,777 | |||||||||||||||||||||||||
| December 31, 2020 | |||||||||||||||||||||||||||||||||||
| Fixed maturities (1): | |||||||||||||||||||||||||||||||||||
| Corporate bonds | $ | i 7,856,571 | $ | i 414,247 | $ | ( i 34,388) | $ | ( i 896) | $ | i 7,477,608 | |||||||||||||||||||||||||
| Mortgage backed securities | i 630,001 | i 8,939 | ( i 5,028) | ( i 278) | i 626,368 | ||||||||||||||||||||||||||||||
| Municipal bonds | i 494,522 | i 27,291 | ( i 3,835) | ( i 11) | i 471,077 | ||||||||||||||||||||||||||||||
| Commercial mortgage backed securities | i 389,900 | i 8,722 | ( i 2,954) | ( i 122) | i 384,254 | ||||||||||||||||||||||||||||||
| U.S. government and government agencies | i 5,557,077 | i 22,612 | ( i 12,611) | i — | i 5,547,076 | ||||||||||||||||||||||||||||||
| Non-U.S. government securities | i 2,433,733 | i 153,891 | ( i 8,060) | i — | i 2,287,902 | ||||||||||||||||||||||||||||||
| Asset backed securities | i 1,634,804 | i 19,225 | ( i 10,715) | ( i 1,090) | i 1,627,384 | ||||||||||||||||||||||||||||||
| Total | i 18,996,608 | i 654,927 | ( i 77,591) | ( i 2,397) | i 18,421,669 | ||||||||||||||||||||||||||||||
| Short-term investments | i 1,924,922 | i 2,693 | ( i 2,063) | i — | i 1,924,292 | ||||||||||||||||||||||||||||||
| Total | $ | i 20,921,530 | $ | i 657,620 | $ | ( i 79,654) | $ | ( i 2,397) | $ | i 20,345,961 | |||||||||||||||||||||||||
| ARCH CAPITAL | 22 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Less than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||||||
| Estimated Fair Value | Gross Unrealized Losses | Estimated Fair Value | Gross Unrealized Losses | Estimated Fair Value | Gross Unrealized Losses | ||||||||||||||||||||||||||||||
| June 30, 2021 | |||||||||||||||||||||||||||||||||||
| Fixed maturities (1): | |||||||||||||||||||||||||||||||||||
| Corporate bonds | $ | i 2,264,801 | $ | ( i 32,733) | $ | i 22,895 | $ | ( i 2,018) | $ | i 2,287,696 | $ | ( i 34,751) | |||||||||||||||||||||||
| Mortgage backed securities | i 196,765 | ( i 2,893) | i 13,632 | ( i 586) | i 210,397 | ( i 3,479) | |||||||||||||||||||||||||||||
| Municipal bonds | i 24,711 | ( i 1,612) | i 2,859 | ( i 48) | i 27,570 | ( i 1,660) | |||||||||||||||||||||||||||||
| Commercial mortgage backed securities | i 20,039 | ( i 180) | i 7,961 | ( i 431) | i 28,000 | ( i 611) | |||||||||||||||||||||||||||||
| U.S. government and government agencies | i 2,920,944 | ( i 14,013) | i — | i — | i 2,920,944 | ( i 14,013) | |||||||||||||||||||||||||||||
| Non-U.S. government securities | i 1,282,422 | ( i 17,562) | i 16,885 | ( i 879) | i 1,299,307 | ( i 18,441) | |||||||||||||||||||||||||||||
| Asset backed securities | i 781,596 | ( i 2,364) | i 93,923 | ( i 1,692) | i 875,519 | ( i 4,056) | |||||||||||||||||||||||||||||
| Total | i 7,491,278 | ( i 71,357) | i 158,155 | ( i 5,654) | i 7,649,433 | ( i 77,011) | |||||||||||||||||||||||||||||
| Short-term investments | i 531,130 | ( i 1,406) | i — | i — | i 531,130 | ( i 1,406) | |||||||||||||||||||||||||||||
| Total | $ | i 8,022,408 | $ | ( i 72,763) | $ | i 158,155 | $ | ( i 5,654) | $ | i 8,180,563 | $ | ( i 78,417) | |||||||||||||||||||||||
| December 31, 2020 | |||||||||||||||||||||||||||||||||||
| Fixed maturities (1): | |||||||||||||||||||||||||||||||||||
| Corporate bonds | $ | i 747,442 | $ | ( i 33,086) | $ | i 3,934 | $ | ( i 1,302) | $ | i 751,376 | $ | ( i 34,388) | |||||||||||||||||||||||
| Mortgage backed securities | i 284,619 | ( i 4,788) | i 3,637 | ( i 240) | i 288,256 | ( i 5,028) | |||||||||||||||||||||||||||||
| Municipal bonds | i 67,937 | ( i 3,835) | i — | i — | i 67,937 | ( i 3,835) | |||||||||||||||||||||||||||||
| Commercial mortgage backed securities | i 126,624 | ( i 2,916) | i 2,655 | ( i 38) | i 129,279 | ( i 2,954) | |||||||||||||||||||||||||||||
| U.S. government and government agencies | i 1,285,907 | ( i 12,611) | i — | i — | i 1,285,907 | ( i 12,611) | |||||||||||||||||||||||||||||
| Non-U.S. government securities | i 543,844 | ( i 7,658) | i 2,441 | ( i 402) | i 546,285 | ( i 8,060) | |||||||||||||||||||||||||||||
| Asset backed securities | i 634,470 | ( i 9,110) | i 57,737 | ( i 1,605) | i 692,207 | ( i 10,715) | |||||||||||||||||||||||||||||
| Total | i 3,690,843 | ( i 74,004) | i 70,404 | ( i 3,587) | i 3,761,247 | ( i 77,591) | |||||||||||||||||||||||||||||
| Short-term investments | i 97,920 | ( i 2,063) | i — | i — | i 97,920 | ( i 2,063) | |||||||||||||||||||||||||||||
| Total | $ | i 3,788,763 | $ | ( i 76,067) | $ | i 70,404 | $ | ( i 3,587) | $ | i 3,859,167 | $ | ( i 79,654) | |||||||||||||||||||||||
| ARCH CAPITAL | 23 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| June 30, 2021 | December 31, 2020 | |||||||||||||||||||||||||
| Maturity | Estimated Fair Value | Amortized Cost | Estimated Fair Value | Amortized Cost | ||||||||||||||||||||||
| Due in one year or less | $ | i 452,065 | $ | i 439,855 | $ | i 348,200 | $ | i 339,951 | ||||||||||||||||||
| Due after one year through five years | i 10,114,276 | i 9,942,182 | i 10,629,959 | i 10,340,819 | ||||||||||||||||||||||
| Due after five years through 10 years | i 4,148,538 | i 4,055,318 | i 4,881,564 | i 4,654,754 | ||||||||||||||||||||||
| Due after 10 years | i 371,337 | i 355,241 | i 482,180 | i 448,139 | ||||||||||||||||||||||
| i 15,086,216 | i 14,792,596 | i 16,341,903 | i 15,783,663 | |||||||||||||||||||||||
| Mortgage backed securities | i 389,041 | i 388,309 | i 630,001 | i 626,368 | ||||||||||||||||||||||
| Commercial mortgage backed securities | i 266,733 | i 263,330 | i 389,900 | i 384,254 | ||||||||||||||||||||||
| Asset backed securities | i 2,487,845 | i 2,475,927 | i 1,634,804 | i 1,627,384 | ||||||||||||||||||||||
| Total (1) | $ | i 18,229,835 | $ | i 17,920,162 | $ | i 18,996,608 | $ | i 18,421,669 | ||||||||||||||||||
| ARCH CAPITAL | 24 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Remaining Contractual Maturity of the Agreements | ||||||||||||||||||||||||||||||||
| Overnight and Continuous | Less than 30 Days | 30-90 Days | 90 Days or More | Total | ||||||||||||||||||||||||||||
| June 30, 2021 | ||||||||||||||||||||||||||||||||
| U.S. government and government agencies | $ | i 15,745 | $ | i 137,713 | $ | i — | $ | i — | $ | i 153,458 | ||||||||||||||||||||||
| Corporate bonds | i 5,800 | i — | i — | i — | i 5,800 | |||||||||||||||||||||||||||
| Equity securities | i 12,851 | i — | i — | i — | i 12,851 | |||||||||||||||||||||||||||
| Total | $ | i 34,396 | $ | i 137,713 | $ | i — | $ | i — | $ | i 172,109 | ||||||||||||||||||||||
Gross
amount of recognized liabilities for securities lending in offsetting disclosure in note 9 | $ | i — | ||||||||||||||||||||||||||||||
Amounts related to securities lending not included in offsetting disclosure in note
9 | $ | i 172,109 | ||||||||||||||||||||||||||||||
| December 31, 2020 | ||||||||||||||||||||||||||||||||
| U.S. government and government agencies | $ | i 142,317 | $ | i — | $ | i 139,290 | $ | i — | $ | i 281,607 | ||||||||||||||||||||||
| Corporate bonds | i 3,021 | i — | i — | i — | i 3,021 | |||||||||||||||||||||||||||
| Equity securities | i 16,461 | i — | i — | i — | i 16,461 | |||||||||||||||||||||||||||
| Total | $ | i 161,799 | $ | i — | $ | i 139,290 | $ | i — | $ | i 301,089 | ||||||||||||||||||||||
Gross
amount of recognized liabilities for securities lending in offsetting disclosure in note 9 | $ | i — | ||||||||||||||||||||||||||||||
Amounts related to securities lending not included in offsetting disclosure in note
9 | $ | i 301,089 | ||||||||||||||||||||||||||||||
| June
30, 2021 | December 31, 2020 | ||||||||||
| Fixed maturities | $ | i 995,980 | $ | i 843,354 | |||||||
| Other investments | i 2,370,472 | i 2,331,885 | |||||||||
| Short-term investments | i 610,114 | i 557,008 | |||||||||
| Equity securities | i 94,931 | i 92,549 | |||||||||
| Investments accounted for using the fair value option | $ | i 4,071,497 | $ | i 3,824,796 | |||||||
| Other investable assets (1) | i 500,000 | i 500,000 | |||||||||
| Total other investments | $ | i 4,571,497 | $ | i 4,324,796 | |||||||
| June
30, 2021 | December 31, 2020 | ||||||||||
| Term loan investments | $ | i 1,333,014 | $ | i 1,231,731 | |||||||
| Lending | i 638,786 | i 572,636 | |||||||||
| Credit related funds | i 73,171 | i 90,780 | |||||||||
| Energy | i 84,891 | i 65,813 | |||||||||
| Investment grade fixed income | i 110,375 | i 138,646 | |||||||||
| Infrastructure | i 32,109 | i 165,516 | |||||||||
| Private equity | i 70,878 | i 48,750 | |||||||||
| Real estate | i 27,248 | i 18,013 | |||||||||
| Total | $ | i 2,370,472 | $ | i 2,331,885 | |||||||
| June
30, 2021 | December 31, 2020 | ||||||||||
| Credit related funds | $ | i 883,279 | $ | i 740,060 | |||||||
| Equities | i 403,003 | i 343,058 | |||||||||
| Real estate | i 323,566 | i 258,518 | |||||||||
| Lending | i 295,228 | i 179,629 | |||||||||
| Private equity | i 305,662 | i 235,289 | |||||||||
| Infrastructure | i 210,174 | i 175,882 | |||||||||
| Energy | i 118,212 | i 115,453 | |||||||||
| Total | $ | i 2,539,124 | $ | i 2,047,889 | |||||||
| ARCH CAPITAL | 25 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| June 30, 2021 | December 31, 2020 | ||||||||||
| Investments accounted for using the equity method (1) | i 2,539,124 | i 2,047,889 | |||||||||
| Investments accounted for using the fair value option (2) | i 182,260 | i 184,720 | |||||||||
| Total | $ | i 2,721,384 | $ | i 2,232,609 | |||||||
| June 30, | |||||||||||
| 2021 | 2020 | ||||||||||
| Three Months Ended | |||||||||||
| Fixed maturities | $ | i 88,625 | $ | i 105,391 | |||||||
| Term loans | i 16,879 | i 20,512 | |||||||||
| Equity securities | i 8,584 | i 6,219 | |||||||||
| Short-term investments | i 1,138 | i 3,383 | |||||||||
| Other (1) | i 19,950 | i 16,460 | |||||||||
| Gross investment income | i 135,176 | i 151,965 | |||||||||
| Investment expenses | ( i 23,563) | ( i 20,480) | |||||||||
| Net investment income | $ | i 111,613 | $ | i 131,485 | |||||||
| Six Months Ended | |||||||||||
| Fixed maturities | $ | i 179,251 | $ | i 220,238 | |||||||
| Term loans | i 31,607 | i 43,682 | |||||||||
| Equity securities | i 14,234 | i 12,226 | |||||||||
| Short-term investments | i 1,745 | i 8,279 | |||||||||
| Other (1) | i 34,305 | i 35,866 | |||||||||
| Gross investment income | i 261,142 | i 320,291 | |||||||||
| Investment expenses | ( i 50,673) | ( i 43,653) | |||||||||
| Net investment income | $ | i 210,469 | $ | i 276,638 | |||||||
| ARCH CAPITAL | 26 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| June 30, | |||||||||||
| 2021 | 2020 | ||||||||||
| Three Months Ended | |||||||||||
| Available for sale securities: | |||||||||||
| Gross gains on investment sales | $ | i 115,541 | $ | i 232,153 | |||||||
| Gross losses on investment sales | ( i 50,627) | ( i 49,824) | |||||||||
| Change in fair value of assets and liabilities accounted for using the fair value option: | |||||||||||
| Fixed maturities | i 10,912 | i 68,181 | |||||||||
| Other investments | i 60,884 | i 178,570 | |||||||||
| Equity securities | i 5,492 | i 6,664 | |||||||||
| Short-term investments | ( i 104) | i 3,368 | |||||||||
| Equity securities, at fair value: | |||||||||||
| Net realized gains (losses) on sales during the period | i 33,570 | ( i 18,250) | |||||||||
| Net unrealized gains (losses) on equity securities still held at reporting date | i 65,847 | i 145,686 | |||||||||
| Allowance for credit losses: | |||||||||||
| Investments related | i 896 | i 3,225 | |||||||||
| Underwriting related | i 1,381 | ( i 5,834) | |||||||||
| Derivative instruments (1) | ( i 51,109) | ( i 836) | |||||||||
| Other | i 10,224 | ( i 6,515) | |||||||||
| Net realized gains (losses) | $ | i 202,907 | $ | i 556,588 | |||||||
| Six Months Ended | |||||||||||
| Available for sale securities: | |||||||||||
| Gross gains on investment sales | $ | i 180,543 | $ | i 410,353 | |||||||
| Gross losses on investment sales | ( i 113,625) | ( i 81,792) | |||||||||
| Change in fair value of assets and liabilities accounted for using the fair value option: | |||||||||||
| Fixed maturities | i 27,465 | ( i 59,485) | |||||||||
| Other investments | i 107,739 | ( i 129,230) | |||||||||
| Equity securities | i 7,557 | i 1,755 | |||||||||
| Short-term investments | i 632 | ( i 5,313) | |||||||||
| Equity securities, at fair value: | |||||||||||
| Net realized gains (losses) on sales during the period | i 71,419 | ( i 18,789) | |||||||||
| Net unrealized gains (losses) on equity securities still held at reporting date | i 85,555 | ( i 29,880) | |||||||||
| Allowance for credit losses: | |||||||||||
| Investments related | ( i 752) | ( i 6,095) | |||||||||
| Underwriting related | i 6,649 | ( i 9,104) | |||||||||
| Net impairments losses | i — | ( i 533) | |||||||||
| Derivative instruments (1) | ( i 14,993) | i 126,353 | |||||||||
| Other | ( i 12,821) | ( i 8,612) | |||||||||
| Net realized gains (losses) | $ | i 345,368 | $ | i 189,628 | |||||||
| ARCH CAPITAL | 27 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Structured Securities (1) | Municipal Bonds | Corporate Bonds | Short Term Investments | Total | ||||||||||||||||||||||||||||
| Three Months Ended June 30, 2021 | ||||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | i 1,207 | $ | i 2 | $ | i 2,621 | $ | i — | $ | i 3,830 | ||||||||||||||||||||||
| Additions for current-period provision for expected credit losses | i 52 | i — | i 7 | i — | i 59 | |||||||||||||||||||||||||||
| Additions (reductions) for previously recognized expected credit losses | ( i 383) | i 4 | ( i 412) | i — | ( i 791) | |||||||||||||||||||||||||||
| Reductions due to disposals | ( i 117) | i — | ( i 857) | i — | ( i 974) | |||||||||||||||||||||||||||
| Balance at end of period | $ | i 759 | $ | i 6 | $ | i 1,359 | $ | i — | $ | i 2,124 | ||||||||||||||||||||||
| Three Months Ended June 30, 2020 | ||||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | i 2,654 | $ | i 23 | $ | i 7,232 | $ | i 29 | $ | i 9,938 | ||||||||||||||||||||||
| Additions for current-period provision for expected credit losses | i 695 | i 44 | i 290 | ( i 29) | i 1,000 | |||||||||||||||||||||||||||
| Additions (reductions) for previously recognized expected credit losses | ( i 1,304) | ( i 25) | ( i 2,903) | i — | ( i 4,232) | |||||||||||||||||||||||||||
| Reductions due to disposals | ( i 319) | ( i 14) | ( i 504) | i — | ( i 837) | |||||||||||||||||||||||||||
| Balance at end of period | $ | i 1,726 | $ | i 28 | $ | i 4,115 | $ | i — | $ | i 5,869 | ||||||||||||||||||||||
| Six Months Ended June 30, 2021 | ||||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | i 1,490 | $ | i 11 | $ | i 896 | $ | i — | $ | i 2,397 | ||||||||||||||||||||||
| Additions for current-period provision for expected credit losses | i 234 | i — | i 2,428 | i — | i 2,662 | |||||||||||||||||||||||||||
| Additions (reductions) for previously recognized expected credit losses | ( i 765) | ( i 5) | ( i 952) | i — | ( i 1,722) | |||||||||||||||||||||||||||
| Reductions due to disposals | ( i 200) | i — | ( i 1,013) | i — | ( i 1,213) | |||||||||||||||||||||||||||
| Balance at end of period | $ | i 759 | $ | i 6 | $ | i 1,359 | $ | i — | $ | i 2,124 | ||||||||||||||||||||||
| Six Months Ended June 30, 2020 | ||||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | i — | $ | i — | $ | i — | $ | i — | $ | i — | ||||||||||||||||||||||
| Cumulative effect of accounting change (2) | i 517 | i — | i 117 | i — | i 634 | |||||||||||||||||||||||||||
| Additions for current-period provision for expected credit losses | i 2,841 | i 67 | i 7,441 | i — | i 10,349 | |||||||||||||||||||||||||||
| Additions (reductions) for previously recognized expected credit losses | ( i 1,306) | ( i 25) | ( i 2,924) | i — | ( i 4,255) | |||||||||||||||||||||||||||
| Reductions due to disposals | ( i 326) | ( i 14) | ( i 519) | i — | ( i 859) | |||||||||||||||||||||||||||
| Balance at end of period | $ | i 1,726 | $ | i 28 | $ | i 4,115 | $ | i — | $ | i 5,869 | ||||||||||||||||||||||
| ARCH CAPITAL | 28 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| June 30, 2021 | December 31, 2020 | ||||||||||
| Assets used for collateral or guarantees: | |||||||||||
| Affiliated transactions | $ | i 5,041,190 | $ | i 4,643,334 | |||||||
| Third party agreements | i 3,441,929 | i 3,083,324 | |||||||||
| Deposits with U.S. regulatory authorities | i 814,084 | i 827,552 | |||||||||
| Deposits with non-U.S. regulatory authorities | i 428,132 | i 179,099 | |||||||||
| Total restricted assets | $ | i 9,725,335 | $ | i 8,733,309 | |||||||
| June 30, 2021 | December 31, 2020 | ||||||||||
| Cash | $ | i 1,234,059 | $ | i 906,448 | |||||||
| Restricted cash (included in ‘other assets’) | $ | i 584,404 | $ | i 384,096 | |||||||
| Cash and restricted cash | $ | i 1,818,463 | $ | i 1,290,544 | |||||||
| ARCH CAPITAL | 29 | 2021 SECOND QUARTER FORM 10-Q | ||||||
Level 1: | Inputs to the valuation methodology are observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets | |||||||
Level
2: | Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument | |||||||
Level 3: | Inputs to the valuation methodology are unobservable and significant to the fair value measurement | |||||||
| ARCH CAPITAL | 30 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| ARCH CAPITAL | 31 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| ARCH CAPITAL | 32 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Estimated Fair Value Measurements Using: | |||||||||||||||||||||||
| Estimated
Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| Assets measured at fair value (1): | |||||||||||||||||||||||
| Available for sale securities: | |||||||||||||||||||||||
| Fixed maturities: | |||||||||||||||||||||||
| Corporate bonds | $ | i 7,129,768 | $ | i — | $ | i 7,129,755 | $ | i 13 | |||||||||||||||
| Mortgage backed securities | i 389,041 | i — | i 389,041 | i — | |||||||||||||||||||
| Municipal bonds | i 415,483 | i — | i 415,483 | i — | |||||||||||||||||||
| Commercial mortgage backed securities | i 266,733 | i — | i 266,733 | i — | |||||||||||||||||||
| U.S. government and government agencies | i 5,091,183 | i 5,062,571 | i 28,612 | i — | |||||||||||||||||||
| Non-U.S. government securities | i 2,449,782 | i — | i 2,449,782 | i — | |||||||||||||||||||
| Asset backed securities | i 2,487,845 | i — | i 2,484,421 | i 3,424 | |||||||||||||||||||
| Total | i 18,229,835 | i 5,062,571 | i 13,163,827 | i 3,437 | |||||||||||||||||||
| Short-term investments | i 2,248,613 | i 1,996,304 | i 252,309 | i — | |||||||||||||||||||
| Equity securities, at fair value | i 1,706,044 | i 1,631,937 | i 24,971 | i 49,136 | |||||||||||||||||||
| Derivative instruments (4) | i 98,488 | i — | i 98,488 | i — | |||||||||||||||||||
| Residential mortgage loans | i 44,925 | i — | i 44,925 | i — | |||||||||||||||||||
| Fair value option: | |||||||||||||||||||||||
| Corporate bonds | i 790,186 | i — | i 789,188 | i 998 | |||||||||||||||||||
| Non-U.S. government bonds | i 22,552 | i — | i 22,552 | i — | |||||||||||||||||||
| Mortgage backed securities | i 2,707 | i — | i 2,707 | i — | |||||||||||||||||||
| Commercial mortgage backed securities | i 841 | i — | i 841 | i — | |||||||||||||||||||
| Asset backed securities | i 179,423 | i — | i 179,423 | i — | |||||||||||||||||||
| U.S. government and government agencies | i 271 | i 163 | i 108 | i — | |||||||||||||||||||
| Short-term investments | i 610,114 | i 482,815 | i 127,299 | i — | |||||||||||||||||||
| Equity securities | i 94,930 | i 21,252 | i — | i 73,678 | |||||||||||||||||||
| Other investments | i 1,219,294 | i 23,610 | i 1,121,784 | i 73,900 | |||||||||||||||||||
| Other investments measured at net asset value (2) | i 1,151,178 | ||||||||||||||||||||||
| Total | i 4,071,496 | i 527,840 | i 2,243,902 | i 148,576 | |||||||||||||||||||
| Total assets measured at fair value | $ | i 26,399,401 | $ | i 9,218,652 | $ | i 15,828,422 | $ | i 201,149 | |||||||||||||||
| Liabilities measured at fair value: | |||||||||||||||||||||||
| Contingent consideration liabilities | $ | ( i 466) | $ | i — | $ | i — | $ | ( i 466) | |||||||||||||||
| Securities sold but not yet purchased (3) | ( i 28,068) | i — | ( i 28,068) | i — | |||||||||||||||||||
| Derivative instruments (4) | ( i 67,304) | i — | ( i 67,304) | i — | |||||||||||||||||||
| Total liabilities measured at fair value | $ | ( i 95,838) | $ | i — | $ | ( i 95,372) | $ | ( i 466) | |||||||||||||||
| ARCH CAPITAL | 33 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Estimated Fair Value Measurements Using: | |||||||||||||||||||||||
| Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| Assets measured at fair value (1): | |||||||||||||||||||||||
| Available for sale securities: | |||||||||||||||||||||||
| Fixed maturities: | |||||||||||||||||||||||
| Corporate bonds | $ | i 7,856,571 | $ | i — | $ | i 7,856,558 | $ | i 13 | |||||||||||||||
| Mortgage backed securities | i 630,001 | i — | i 630,001 | i — | |||||||||||||||||||
| Municipal bonds | i 494,522 | i — | i 494,522 | i — | |||||||||||||||||||
| Commercial mortgage backed securities | i 389,900 | i — | i 389,900 | i — | |||||||||||||||||||
| U.S. government and government agencies | i 5,557,077 | i 5,463,356 | i 93,721 | i — | |||||||||||||||||||
| Non-U.S. government securities | i 2,433,733 | i — | i 2,433,733 | i — | |||||||||||||||||||
| Asset backed securities | i 1,634,804 | i — | i 1,631,378 | i 3,426 | |||||||||||||||||||
| Total | i 18,996,608 | i 5,463,356 | i 13,529,813 | i 3,439 | |||||||||||||||||||
| Short-term investments | i 1,924,922 | i 1,920,565 | i 4,357 | i — | |||||||||||||||||||
| Equity securities, at fair value | i 1,460,959 | i 1,401,653 | i 17,291 | i 42,015 | |||||||||||||||||||
| Derivative instruments (4) | i 177,383 | i — | i 177,383 | i — | |||||||||||||||||||
| Fair value option: | |||||||||||||||||||||||
| Corporate bonds | i 651,294 | i — | i 650,309 | i 985 | |||||||||||||||||||
| Non-U.S. government bonds | i 35,263 | i — | i 35,263 | i — | |||||||||||||||||||
| Mortgage backed securities | i 3,282 | i — | i 3,282 | i — | |||||||||||||||||||
| Commercial mortgage backed securities | i 1,090 | i — | i 1,090 | i — | |||||||||||||||||||
| Asset backed securities | i 152,151 | i — | i 152,151 | i — | |||||||||||||||||||
| U.S. government and government agencies | i 274 | i 164 | i 110 | i — | |||||||||||||||||||
| Short-term investments | i 557,008 | i 420,131 | i 136,877 | i — | |||||||||||||||||||
| Equity securities | i 92,549 | i 23,373 | i 188 | i 68,988 | |||||||||||||||||||
| Other investments | i 1,134,229 | i 51,149 | i 1,015,977 | i 67,103 | |||||||||||||||||||
| Other investments measured at net asset value (2) | i 1,197,656 | ||||||||||||||||||||||
| Total | i 3,824,796 | i 494,817 | i 1,995,247 | i 137,076 | |||||||||||||||||||
| Total assets measured at fair value | $ | i 26,384,668 | $ | i 9,280,391 | $ | i 15,724,091 | $ | i 182,530 | |||||||||||||||
| Liabilities measured at fair value: | |||||||||||||||||||||||
| Contingent consideration liabilities | $ | ( i 461) | $ | i — | $ | i — | $ | ( i 461) | |||||||||||||||
| Securities sold but not yet purchased (3) | ( i 21,679) | i — | ( i 21,679) | i — | |||||||||||||||||||
| Derivative instruments (4) | ( i 108,705) | i — | ( i 108,705) | i — | |||||||||||||||||||
| Total liabilities measured at fair value | $ | ( i 130,845) | $ | i — | $ | ( i 130,384) | $ | ( i 461) | |||||||||||||||
| ARCH CAPITAL | 34 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Assets | Liabilities | ||||||||||||||||||||||||||||||||||||||||
| s | Available For Sale | Fair Value Option | Fair Value | ||||||||||||||||||||||||||||||||||||||
| Structured Securities (1) | Corporate Bonds | Corporate Bonds | Other Investments | Equity Securities | Equity Securities | Contingent Consideration Liabilities | |||||||||||||||||||||||||||||||||||
| Three Months Ended June 30, 2021 | |||||||||||||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | i 3,472 | $ | i 13 | $ | i 989 | $ | i 67,930 | $ | i 71,176 | $ | i 43,112 | $ | ( i 465) | |||||||||||||||||||||||||||
| Total gains or (losses) (realized/unrealized) | |||||||||||||||||||||||||||||||||||||||||
| Included in earnings (2) | i 12 | i — | i 9 | i 633 | i 2,502 | i 922 | i — | ||||||||||||||||||||||||||||||||||
| Included in other comprehensive income | ( i 57) | i — | i — | i — | i — | i — | i — | ||||||||||||||||||||||||||||||||||
| Purchases, issuances, sales and settlements | |||||||||||||||||||||||||||||||||||||||||
| Purchases | i — | i — | i — | i 5,638 | i — | i 5,102 | i — | ||||||||||||||||||||||||||||||||||
| Issuances | i — | i — | i — | i — | i — | i — | i — | ||||||||||||||||||||||||||||||||||
| Sales | i — | i — | i — | ( i 301) | i — | i — | i — | ||||||||||||||||||||||||||||||||||
| Settlements | ( i 3) | i — | i — | i — | i — | i — | ( i 1) | ||||||||||||||||||||||||||||||||||
| Transfers in and/or out of Level 3 | i — | i — | i — | i — | i — | i — | i — | ||||||||||||||||||||||||||||||||||
| Balance at end of period | $ | i 3,424 | $ | i 13 | $ | i 998 | $ | i 73,900 | $ | i 73,678 | $ | i 49,136 | $ | ( i 466) | |||||||||||||||||||||||||||
| Three Months Ended June 30, 2020 | |||||||||||||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | i 3,846 | $ | i 1,980 | $ | i 965 | $ | i 54,620 | $ | i 60,015 | $ | i 55,632 | $ | ( i 7,967) | |||||||||||||||||||||||||||
| Total gains or (losses) (realized/unrealized) | |||||||||||||||||||||||||||||||||||||||||
| Included in earnings (2) | ( i 64) | i — | i — | ( i 987) | i 1,432 | i 11,799 | ( i 18) | ||||||||||||||||||||||||||||||||||
| Included in other comprehensive income | ( i 287) | ( i 1,123) | i — | i — | i — | i — | i — | ||||||||||||||||||||||||||||||||||
| Purchases, issuances, sales and settlements | |||||||||||||||||||||||||||||||||||||||||
| Purchases | i — | i — | i 33 | i 3 | i — | i — | i — | ||||||||||||||||||||||||||||||||||
| Issuances | i — | i — | i — | i — | i — | i — | i — | ||||||||||||||||||||||||||||||||||
| Sales | i — | i — | i — | ( i 7,183) | i — | ( i 15,450) | i — | ||||||||||||||||||||||||||||||||||
| Settlements | ( i 45) | i — | i — | i — | i — | i — | i 6,735 | ||||||||||||||||||||||||||||||||||
| Transfers in and/or out of Level 3 | i — | i — | i — | i — | i — | i — | i — | ||||||||||||||||||||||||||||||||||
| Balance at end of period | $ | i 3,450 | $ | i 857 | $ | i 998 | $ | i 46,453 | $ | i 61,447 | $ | i 51,981 | $ | ( i 1,250) | |||||||||||||||||||||||||||
| Six Months Ended June 30, 2021 | |||||||||||||||||||||||||||||||||||||||||
| Balance at beginning of year | $ | i 3,426 | $ | i 13 | $ | i 985 | $ | i 67,103 | $ | i 68,988 | $ | i 42,015 | $ | ( i 461) | |||||||||||||||||||||||||||
| Total gains or (losses) (realized/unrealized) | |||||||||||||||||||||||||||||||||||||||||
| Included in earnings (2) | ( i 56) | i — | i 13 | i 881 | i 4,690 | i 1,826 | i — | ||||||||||||||||||||||||||||||||||
| Included in other comprehensive income | i 57 | i — | i — | i — | i — | i — | i — | ||||||||||||||||||||||||||||||||||
| Purchases, issuances, sales and settlements | |||||||||||||||||||||||||||||||||||||||||
| Purchases | i — | i — | i — | i 13,003 | i — | i 5,295 | i — | ||||||||||||||||||||||||||||||||||
| Issuances | i — | i — | i — | i — | i — | i — | i — | ||||||||||||||||||||||||||||||||||
| Sales | i — | i — | i — | ( i 7,087) | i — | i — | i — | ||||||||||||||||||||||||||||||||||
| Settlements | ( i 3) | i — | i — | i — | i — | i — | ( i 5) | ||||||||||||||||||||||||||||||||||
| Transfers in and/or out of Level 3 | i — | i — | i — | i — | i — | i — | i — | ||||||||||||||||||||||||||||||||||
| Balance at end of period | $ | i 3,424 | $ | i 13 | $ | i 998 | $ | i 73,900 | $ | i 73,678 | $ | i 49,136 | $ | ( i 466) | |||||||||||||||||||||||||||
| Six Months Ended June 30, 2020 | |||||||||||||||||||||||||||||||||||||||||
| Balance at beginning of year | $ | i 5,216 | $ | i 8,851 | $ | i 932 | $ | i 68,817 | $ | i 58,094 | $ | i 55,889 | $ | ( i 7,998) | |||||||||||||||||||||||||||
| Total gains or (losses) (realized/unrealized) | |||||||||||||||||||||||||||||||||||||||||
| Included in earnings (2) | ( i 55) | i 7 | i — | ( i 1,014) | i 3,353 | i 8,078 | ( i 72) | ||||||||||||||||||||||||||||||||||
| Included in other comprehensive income | ( i 309) | ( i 6,539) | i — | i — | i — | i — | i — | ||||||||||||||||||||||||||||||||||
| Purchases, issuances, sales and settlements | |||||||||||||||||||||||||||||||||||||||||
| Purchases | i — | i — | i 66 | i 24 | i — | i 3,464 | i — | ||||||||||||||||||||||||||||||||||
| Issuances | i — | i — | i — | i — | i — | i — | i — | ||||||||||||||||||||||||||||||||||
| Sales | i — | i — | i — | ( i 24,358) | i — | ( i 15,450) | i — | ||||||||||||||||||||||||||||||||||
| Settlements | ( i 1,402) | ( i 1,462) | i — | i — | i — | i — | i 6,820 | ||||||||||||||||||||||||||||||||||
| Transfers in and/or out of Level 3 | i — | i — | i — | i 2,984 | i — | i — | i — | ||||||||||||||||||||||||||||||||||
| Balance at end of period | $ | i 3,450 | $ | i 857 | $ | i 998 | $ | i 46,453 | $ | i 61,447 | $ | i 51,981 | $ | ( i 1,250) | |||||||||||||||||||||||||||
| ARCH CAPITAL | 35 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Estimated Fair Value | |||||||||||||||||
| Asset Derivatives | Liability Derivatives | Notional Value (1) | |||||||||||||||
| June 30, 2021 | |||||||||||||||||
| Futures contracts (2) | $ | i 36,277 | $ | ( i 21,515) | $ | i 2,907,342 | |||||||||||
| Foreign currency forward contracts (2) | i 8,242 | ( i 20,729) | i 1,573,973 | ||||||||||||||
| Other (2) | i 53,969 | ( i 25,060) | i 4,838,552 | ||||||||||||||
| Total | $ | i 98,488 | $ | ( i 67,304) | |||||||||||||
| December 31, 2020 | |||||||||||||||||
| Futures contracts (2) | $ | i 11,046 | $ | ( i 4,496) | $ | i 3,099,796 | |||||||||||
| Foreign currency forward contracts (2) | i 52,716 | ( i 6,202) | i 1,656,729 | ||||||||||||||
| Other (2) | i 113,621 | ( i 98,007) | i 5,763,919 | ||||||||||||||
| Total | $ | i 177,383 | $ | ( i 108,705) | |||||||||||||
| ARCH CAPITAL | 36 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Derivatives not designated as | June 30, | |||||||||||||
| hedging instruments: | 2021 | 2020 | ||||||||||||
| Three Months Ended | ||||||||||||||
| Net realized gains (losses): | ||||||||||||||
| Futures contracts | $ | ( i 54,759) | $ | ( i 1,607) | ||||||||||
| Foreign currency forward contracts | i 1,295 | i 3,523 | ||||||||||||
| TBAs | i — | i 264 | ||||||||||||
| Other (1) | i 2,355 | ( i 3,016) | ||||||||||||
| Total | $ | ( i 51,109) | $ | ( i 836) | ||||||||||
| Six Months Ended | ||||||||||||||
| Net realized gains (losses): | ||||||||||||||
| Futures contracts | $ | ( i 7,321) | $ | i 94,337 | ||||||||||
| Foreign currency forward contracts | ( i 20,776) | ( i 7,347) | ||||||||||||
| TBAs | i — | i 1,009 | ||||||||||||
| Other (1) | i 13,104 | i 38,354 | ||||||||||||
| Total | $ | ( i 14,993) | $ | i 126,353 | ||||||||||
| ARCH CAPITAL | 37 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| June 30, | December 31, | ||||||||||
| 2021 | 2020 | ||||||||||
| Assets | |||||||||||
| Investments accounted for using the fair value option (1) | $ | i 1,984,919 | $ | i 1,790,385 | |||||||
| Fixed maturities available for sale, at fair value | i 663,902 | i 655,249 | |||||||||
| Equity securities, at fair value | i 97,623 | i 52,410 | |||||||||
| Cash | i 349,202 | i 211,451 | |||||||||
| Accrued investment income | i 14,549 | i 14,679 | |||||||||
| Premiums receivable | i 305,026 | i 224,377 | |||||||||
| Reinsurance recoverable on unpaid and paid losses and LAE | i 520,531 | i 286,590 | |||||||||
| Ceded unearned premiums | i 123,272 | i 122,339 | |||||||||
| Deferred acquisition costs | i 65,532 | i 53,705 | |||||||||
| Receivable for securities sold | i 102,287 | i 37,423 | |||||||||
| Goodwill and intangible assets | i 10,318 | i 7,650 | |||||||||
| Other assets | i 112,794 | i 75,801 | |||||||||
| Total assets of consolidated VIE | $ | i 4,349,955 | $ | i 3,532,059 | |||||||
| Liabilities | |||||||||||
| Reserve for losses and loss adjustment expenses | $ | i 1,916,742 | $ | i 1,519,583 | |||||||
| Unearned premiums | i 468,948 | i 407,714 | |||||||||
| Reinsurance balances payable | i 132,929 | i 63,269 | |||||||||
| Revolving credit agreement borrowings | i 155,687 | i 155,687 | |||||||||
| Senior notes | i 172,825 | i 172,689 | |||||||||
| Payable for securities purchased | i 199,342 | i 25,881 | |||||||||
| Other liabilities | i 227,396 | i 193,494 | |||||||||
| Total liabilities of consolidated VIE | $ | i 3,273,869 | $ | i 2,538,317 | |||||||
| Redeemable noncontrolling interests | $ | i 52,444 | $ | i 52,398 | |||||||
| June 30, | |||||||||||
| 2021 | 2020 | ||||||||||
| Three Months Ended | |||||||||||
| Balance, beginning of period | $ | i 876,864 | $ | i 492,785 | |||||||
| Additional paid in capital attributable to noncontrolling interests | i 383 | i 595 | |||||||||
| Amounts attributable to noncontrolling interests | i 41,617 | i 165,598 | |||||||||
| Other comprehensive income (loss) attributable to noncontrolling interests | i 10 | i 20,111 | |||||||||
| Balance, end of period | $ | i 918,874 | $ | i 679,089 | |||||||
| Six Months Ended | |||||||||||
| Balance, beginning of year | $ | i 823,007 | $ | i 762,777 | |||||||
| Additional paid in capital attributable to noncontrolling interests | i 22,113 | i 472 | |||||||||
| Repurchases attributable to non-redeemable noncontrolling interests (1) | i — | ( i 2,867) | |||||||||
| Amounts attributable to noncontrolling interests | i 78,314 | ( i 68,346) | |||||||||
| Other comprehensive income (loss) attributable to noncontrolling interests | ( i 4,560) | ( i 12,947) | |||||||||
| Balance, end of period | $ | i 918,874 | $ | i 679,089 | |||||||
| ARCH CAPITAL | 38 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| June 30, | |||||||||||
| 2021 | 2020 | ||||||||||
| Three Months Ended | |||||||||||
| Balance, beginning of period | $ | i 57,670 | $ | i 55,376 | |||||||
| Accretion of preference share issuance costs | i 23 | i i 23 / | |||||||||
| Other | ( i 160) | i 587 | |||||||||
| Balance, end of period | $ | i 57,533 | $ | i 55,986 | |||||||
| Six Months Ended | |||||||||||
| Balance, beginning of year | $ | i 58,548 | $ | i 55,404 | |||||||
| Accretion of preference share issuance costs | i 46 | i 46 | |||||||||
| Other | ( i 1,061) | i 536 | |||||||||
| Balance, end of period | $ | i 57,533 | $ | i 55,986 | |||||||
| June 30, | |||||||||||
| 2021 | 2020 | ||||||||||
| Three Months Ended | |||||||||||
| Amounts attributable to non-redeemable noncontrolling interests | $ | ( i 41,617) | $ | ( i 165,598) | |||||||
| Amounts attributable to redeemable noncontrolling interests | ( i 1,561) | ( i 1,970) | |||||||||
| Net (income) loss attributable to noncontrolling interests | $ | ( i 43,178) | $ | ( i 167,568) | |||||||
| Six Months Ended | |||||||||||
| Amounts attributable to non-redeemable noncontrolling interests | $ | ( i 78,314) | $ | i 68,346 | |||||||
| Amounts attributable to redeemable noncontrolling interests | ( i 2,416) | ( i 3,123) | |||||||||
| Net (income) loss attributable to noncontrolling interests | $ | ( i 80,730) | $ | i 65,223 | |||||||
| ARCH CAPITAL | 39 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Maximum Exposure to Loss | Maximum Exposure to Loss | ||||||||||||||||||||||||||||||||||||||||||||||
| Bellemeade Entities (Issue Date) | Total VIE Assets | On-Balance Sheet (Asset) Liability | Off-Balance Sheet | Total | Total VIE Assets | On-Balance Sheet (Asset) Liability | Off-Balance Sheet | Total | |||||||||||||||||||||||||||||||||||||||
| Bellemeade 2017-1 Ltd. (Oct-17) | $ | i 145,573 | $ | ( i 283) | $ | i 779 | $ | i 496 | $ | i 145,573 | $ | ( i 245) | $ | i 844 | $ | i 599 | |||||||||||||||||||||||||||||||
| Bellemeade 2018-1 Ltd. (Apr-18) | i 250,095 | ( i 909) | i 1,984 | i 1,075 | i 250,095 | ( i 903) | i 2,245 | i 1,342 | |||||||||||||||||||||||||||||||||||||||
| Bellemeade 2018-2 Ltd. (Aug-18) | i — | i — | i — | i — | i 108,395 | ( i 138) | i 280 | i 142 | |||||||||||||||||||||||||||||||||||||||
| Bellemeade 2018-3 Ltd. (Oct-18) | i 302,563 | ( i 1,622) | i 3,706 | i 2,084 | i 302,563 | ( i 1,320) | i 3,262 | i 1,942 | |||||||||||||||||||||||||||||||||||||||
| Bellemeade 2019-1 Ltd. (Mar-19) | i 219,256 | ( i 1,237) | i 8,204 | i 6,967 | i 219,256 | ( i 1,361) | i 8,461 | i 7,100 | |||||||||||||||||||||||||||||||||||||||
| Bellemeade 2019-2 Ltd. (Apr-19) | i 398,316 | ( i 1,042) | i 6,723 | i 5,681 | i 398,316 | ( i 730) | i 5,201 | i 4,471 | |||||||||||||||||||||||||||||||||||||||
| Bellemeade 2019-3 Ltd. (Jul-19) | i 528,084 | ( i 969) | i 4,527 | i 3,558 | i 528,084 | ( i 861) | i 5,079 | i 4,218 | |||||||||||||||||||||||||||||||||||||||
| Bellemeade 2019-4 Ltd. (Oct-19) | i 468,737 | ( i 1,051) | i 7,128 | i 6,077 | i 468,737 | ( i 890) | i 6,676 | i 5,786 | |||||||||||||||||||||||||||||||||||||||
| Bellemeade 2020-1 Ltd. (Jun-20) (1) | i 18,843 | i — | i — | i — | i 275,068 | ( i 178) | i 1,012 | i 834 | |||||||||||||||||||||||||||||||||||||||
| Bellemeade 2020-2 Ltd. (Sep-20) (2) | i 325,712 | ( i 442) | i 4,299 | i 3,857 | i 423,420 | ( i 556) | i 6,839 | i 6,283 | |||||||||||||||||||||||||||||||||||||||
| Bellemeade 2020-3 Ltd. (Nov-20) (3) | i 418,158 | ( i 618) | i 8,250 | i 7,632 | i 418,158 | ( i 631) | i 9,605 | i 8,974 | |||||||||||||||||||||||||||||||||||||||
| Bellemeade 2020-4 Ltd. (Dec-20) (4) | i 268,405 | ( i 150) | i 3,891 | i 3,741 | i 321,393 | ( i 156) | i 6,816 | i 6,660 | |||||||||||||||||||||||||||||||||||||||
| Bellemeade 2021-1 Ltd. (Mar-21) (5) | i 579,717 | ( i 83) | i 4,387 | i 4,304 | i — | i — | i — | i — | |||||||||||||||||||||||||||||||||||||||
| Bellemeade 2021-2 Ltd. (Jun-21) (6) | i 522,807 | i 630 | i 5,207 | i 5,837 | i — | i — | i — | i — | |||||||||||||||||||||||||||||||||||||||
| Total | $ | i 4,446,266 | $ | ( i 7,776) | $ | i 59,085 | $ | i 51,309 | $ | i 3,859,058 | $ | ( i 7,969) | $ | i 56,320 | $ | i 48,351 | |||||||||||||||||||||||||||||||
| ARCH CAPITAL | 40 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Amounts Reclassified from AOCI | ||||||||||||||||||||||||||||||||
| Consolidated Statement of Income | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||
| Details About | Line Item That Includes | June 30, | June 30, | |||||||||||||||||||||||||||||
| AOCI Components | Reclassification | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||||
| Unrealized appreciation on available-for-sale investments | ||||||||||||||||||||||||||||||||
| Net realized gains (losses) | $ | i 64,914 | $ | i 182,329 | $ | i 66,918 | $ | i 328,561 | ||||||||||||||||||||||||
| Provision for credit losses | i 896 | i 3,225 | ( i 751) | ( i 6,095) | ||||||||||||||||||||||||||||
| Other-than-temporary impairment losses | i — | i — | i — | ( i 533) | ||||||||||||||||||||||||||||
| Total before tax | i 65,810 | i 185,554 | i 66,167 | i 321,933 | ||||||||||||||||||||||||||||
| Income tax (expense) benefit | ( i 5,263) | ( i 18,163) | ( i 8,317) | ( i 33,313) | ||||||||||||||||||||||||||||
| Net of tax | $ | i 60,547 | $ | i 167,391 | $ | i 57,850 | $ | i 288,620 | ||||||||||||||||||||||||
| Before Tax Amount | Tax Expense (Benefit) | Net of Tax Amount | |||||||||||||||
| Three Months Ended June 30, 2021 | |||||||||||||||||
| Unrealized appreciation (decline) in value of investments: | |||||||||||||||||
| Unrealized holding gains (losses) arising during period | $ | i 91,057 | $ | i 12,486 | $ | i 78,571 | |||||||||||
| Less reclassification of net realized gains (losses) included in net income | i 65,810 | i 5,263 | i 60,547 | ||||||||||||||
| Foreign currency translation adjustments | i 6,392 | i 187 | i 6,205 | ||||||||||||||
| Other comprehensive income (loss) | $ | i 31,639 | $ | i 7,410 | $ | i 24,229 | |||||||||||
| Three Months Ended June 30, 2020 | |||||||||||||||||
| Unrealized appreciation (decline) in value of investments: | |||||||||||||||||
| Unrealized holding gains (losses) arising during period | $ | i 555,576 | $ | i 62,780 | $ | i 492,796 | |||||||||||
| Less reclassification of net realized gains (losses) included in net income | i 185,554 | i 18,163 | i 167,391 | ||||||||||||||
| Foreign currency translation adjustments | i 22,595 | i 344 | i 22,251 | ||||||||||||||
| Other comprehensive income (loss) | $ | i 392,617 | $ | i 44,961 | $ | i 347,656 | |||||||||||
| Six Months Ended June 30, 2021 | |||||||||||||||||
| Unrealized appreciation (decline) in value of investments: | |||||||||||||||||
| Unrealized holding gains (losses) arising during period | $ | ( i 203,303) | $ | ( i 20,124) | $ | ( i 183,179) | |||||||||||
| Less reclassification of net realized gains (losses) included in net income | i 66,167 | i 8,317 | i 57,850 | ||||||||||||||
| Foreign currency translation adjustments | ( i 22,023) | i 356 | ( i 22,379) | ||||||||||||||
| Other comprehensive income (loss) | $ | ( i 291,493) | $ | ( i 28,085) | $ | ( i 263,408) | |||||||||||
| Six Months Ended June 30, 2020 | |||||||||||||||||
| Unrealized appreciation (decline) in value of investments: | |||||||||||||||||
| Unrealized holding gains (losses) arising during period | $ | i 492,125 | $ | i 56,616 | $ | i 435,509 | |||||||||||
| Less reclassification of net realized gains (losses) included in net income | i 321,933 | i 33,313 | i 288,620 | ||||||||||||||
| Foreign currency translation adjustments | ( i 22,829) | ( i 391) | ( i 22,438) | ||||||||||||||
| Other comprehensive income (loss) | $ | i 147,363 | $ | i 22,912 | $ | i 124,451 | |||||||||||
| ARCH CAPITAL | 41 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| ARCH CAPITAL | 42 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| ARCH CAPITAL | 43 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Arch Portfolio | Benchmark Return | ||||||||||
| Pre-tax total return (before investment expenses): | |||||||||||
| 2021 Second Quarter | 1.58 | % | 1.80 | % | |||||||
| 2020 Second Quarter | 3.72 | % | 6.06 | % | |||||||
| Six Months Ended June 30, 2021 | 1.39 | % | 1.28 | % | |||||||
| Six Months Ended June 30, 2020 | 2.82 | % | 1.23 | % | |||||||
| ARCH CAPITAL | 44 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| % | |||||
ICE BoAML 1-5 Year A - AAA U.S. Corporate Index | 13.00 | % | |||
ICE
BoAML 5-10 Year A - AAA U.S. Corporate Index | 11.00 | ||||
| ICE BoAML 1-5 Year U.S. Treasury Index | 11.00 | ||||
| MSCI ACWI Net Total Return USD Index | 9.30 | ||||
| ICE BoAML 1-10 Year BBB U.S. Corporate Index | 5.00 | ||||
| JPM CLOIE Investment Grade | 5.00 | ||||
| S&P/LSTA Leveraged Loan Total Return Index | 4.965 | ||||
| ICE BoAML U.S. Mortgage Backed Securities Index | 4.00 | ||||
| ICE BoAML AAA US Fixed Rate CMBS | 4.00 | ||||
| ICE BoAML 1-5 Year U.K. Gilt Index | 4.00 | ||||
| ICE BoAML German Government 1-10 Year Index | 3.50 | ||||
| ICE BoAML 0-3 Year U.S. Treasury Index | 3.25 | ||||
| ICE BoAML 5-10 Year U.S. Treasury Index | 3.00 | ||||
| ICE BoAML 1-10 Year U.S. Municipal Securities Index | 3.00 | ||||
| Bloomberg Barclays ABS Aaa Index | 3.00 | ||||
| ICE BoAML 1-5 Year Australia Government Index | 2.75 | ||||
| ICE BoAML U.S. High Yield Constrained Index | 2.50 | ||||
| ICE BoAML 1-5 Year Canada Government Index | 2.00 | ||||
| ICE BofA CCC and Lower US High Yield Constrained Index | 1.38 | ||||
| Bloomberg Barclays Global High Yield Index | 1.38 | ||||
| S&P DJ Global ex-US Select Real Estate Securities Net Index | 0.825 | ||||
| FTSE Nareit All Mortgage Capped Index Total Return USD | 0.825 | ||||
| Bloomberg Barclays CMBS: Erisa Eligible Unhedged USD | 0.825 | ||||
| ICE BoAML 15+ Year Canada Government Index | 0.50 | ||||
Total | 100.00 | % | |||
| ARCH CAPITAL | 45 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| ARCH CAPITAL | 46 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Net income available to Arch common shareholders | $ | 663,820 | $ | 288,418 | $ | 1,091,573 | $ | 422,132 | |||||||||||||||
| Net realized (gains) losses | (167,438) | (406,645) | (272,989) | (297,281) | |||||||||||||||||||
| Equity in net (income) loss of investment funds accounted for using the equity method | (122,186) | 65,119 | (193,872) | 69,328 | |||||||||||||||||||
| Net foreign exchange (gains) losses | 17,888 | 42,032 | (3,444) | (22,459) | |||||||||||||||||||
| Transaction costs and other | (1,421) | 977 | (147) | 3,572 | |||||||||||||||||||
Income
tax expense (1) | 16,553 | 26,713 | 25,864 | 31,078 | |||||||||||||||||||
| After-tax operating income available to Arch common shareholders | $ | 407,216 | $ | 16,614 | $ | 646,985 | $ | 206,370 | |||||||||||||||
| Beginning common shareholders’ equity | $ | 12,316,472 | $ | 10,587,244 | $ | 12,325,886 | $ | 10,717,371 | |||||||||||||||
| Ending common shareholders’ equity | $ | 12,706,072 | $ | 11,211,825 | $ | 12,706,072 | $ | 11,211,825 | |||||||||||||||
| Average common shareholders’ equity | $ | 12,511,272 | $ | 10,899,535 | $ | 12,515,979 | $ | 10,964,598 | |||||||||||||||
| Annualized return on average common equity % | 21.2 | 10.6 | 17.4 | 7.7 | |||||||||||||||||||
| Annualized
operating return on average common equity % | 13.0 | 0.6 | 10.3 | 3.8 | |||||||||||||||||||
| Three Months Ended June 30, | |||||||||||||||||
| 2021 | 2020 | % Change | |||||||||||||||
| Gross premiums written | $ | 1,368,867 | $ | 1,030,362 | 32.9 | ||||||||||||
| Premiums ceded | (405,312) | (358,101) | |||||||||||||||
| Net premiums written | 963,555 | 672,261 | 43.3 | ||||||||||||||
| Change in unearned premiums | (98,128) | 15,648 | |||||||||||||||
| Net premiums earned | 865,427 | 687,909 | 25.8 | ||||||||||||||
| Losses and loss adjustment expenses | (545,880) | (518,203) | |||||||||||||||
| Acquisition expenses | (136,852) | (107,671) | |||||||||||||||
| Other operating expenses | (133,342) | (118,757) | |||||||||||||||
| Underwriting income (loss) | $ | 49,353 | $ | (56,722) | 187.0 | ||||||||||||
| Underwriting Ratios | % Point Change | ||||||||||||||||
| Loss ratio | 63.1 | % | 75.3 | % | (12.2) | ||||||||||||
| Acquisition expense ratio | 15.8 | % | 15.7 | % | 0.1 | ||||||||||||
| Other operating expense ratio | 15.4 | % | 17.3 | % | (1.9) | ||||||||||||
| Combined ratio | 94.3 | % | 108.3 | % | (14.0) | ||||||||||||
| ARCH CAPITAL | 47 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Six Months Ended June 30, | |||||||||||||||||
| 2021 | 2020 | % Change | |||||||||||||||
| Gross premiums written | $ | 2,784,753 | $ | 2,238,007 | 24.4 | ||||||||||||
| Premiums ceded | (826,359) | (736,998) | |||||||||||||||
| Net premiums written | 1,958,394 | 1,501,009 | 30.5 | ||||||||||||||
| Change in unearned premiums | (273,493) | (97,181) | |||||||||||||||
| Net premiums earned | 1,684,901 | 1,403,828 | 20.0 | ||||||||||||||
| Losses and loss adjustment expenses | (1,081,627) | (1,025,311) | |||||||||||||||
| Acquisition expenses | (265,074) | (215,008) | |||||||||||||||
| Other operating expenses | (270,455) | (248,406) | |||||||||||||||
| Underwriting income (loss) | $ | 67,745 | $ | (84,897) | 179.8 | ||||||||||||
| Underwriting Ratios | % Point Change | ||||||||||||||||
| Loss ratio | 64.2 | % | 73.0 | % | (8.8) | ||||||||||||
| Acquisition expense ratio | 15.7 | % | 15.3 | % | 0.4 | ||||||||||||
| Other operating expense ratio | 16.1 | % | 17.7 | % | (1.6) | ||||||||||||
| Combined ratio | 96.0 | % | 106.0 | % | (10.0) | ||||||||||||
| Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
| Amount | % | Amount | % | ||||||||||||||||||||||||||||||||||||||||||||
| Property, energy, marine and aviation | $ | 207,762 | 21.6 | $ | 159,801 | 23.8 | |||||||||||||||||||||||||||||||||||||||||
| Professional lines | 254,961 | 26.5 | 157,899 | 23.5 | |||||||||||||||||||||||||||||||||||||||||||
| Programs | 149,373 | 15.5 | 104,930 | 15.6 | |||||||||||||||||||||||||||||||||||||||||||
| Construction and national accounts | 77,579 | 8.1 | 57,144 | 8.5 | |||||||||||||||||||||||||||||||||||||||||||
| Excess and surplus casualty | 74,346 | 7.7 | 64,703 | 9.6 | |||||||||||||||||||||||||||||||||||||||||||
| Travel, accident and health | 71,071 | 7.4 | 27,997 | 4.2 | |||||||||||||||||||||||||||||||||||||||||||
| Lenders products | 40,386 | 4.2 | 23,690 | 3.5 | |||||||||||||||||||||||||||||||||||||||||||
| Other | 88,077 | 9.1 | 76,097 | 11.3 | |||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 963,555 | 100.0 | $ | 672,261 | 100.0 | |||||||||||||||||||||||||||||||||||||||||
| ARCH CAPITAL | 48 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
| Amount | % | Amount | % | ||||||||||||||||||||||||||||||||||||||||||||
| Property, energy, marine and aviation | $ | 378,260 | 19.3 | $ | 287,386 | 19.1 | |||||||||||||||||||||||||||||||||||||||||
| Professional Lines | 493,207 | 25.2 | 327,017 | 21.8 | |||||||||||||||||||||||||||||||||||||||||||
| Programs | 307,774 | 15.7 | 217,462 | 14.5 | |||||||||||||||||||||||||||||||||||||||||||
| Construction and national accounts | 212,371 | 10.8 | 173,143 | 11.5 | |||||||||||||||||||||||||||||||||||||||||||
| Excess and surplus casualty | 159,939 | 8.2 | 130,122 | 8.7 | |||||||||||||||||||||||||||||||||||||||||||
| Travel, accident and health | 163,377 | 8.3 | 154,043 | 10.3 | |||||||||||||||||||||||||||||||||||||||||||
| Lenders products | 75,246 | 3.8 | 56,982 | 3.8 | |||||||||||||||||||||||||||||||||||||||||||
| Other | 168,220 | 8.6 | 154,854 | 10.3 | |||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 1,958,394 | 100.0 | $ | 1,501,009 | 100.0 | |||||||||||||||||||||||||||||||||||||||||
| Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
| Amount | % | Amount | % | ||||||||||||||||||||||||||||||||||||||||||||
| Property, energy, marine and aviation | $ | 167,716 | 19.4 | $ | 120,781 | 17.6 | |||||||||||||||||||||||||||||||||||||||||
| Professional lines | 214,098 | 24.7 | 154,812 | 22.5 | |||||||||||||||||||||||||||||||||||||||||||
| Programs | 118,974 | 13.7 | 108,464 | 15.8 | |||||||||||||||||||||||||||||||||||||||||||
| Construction and national accounts | 95,849 | 11.1 | 91,605 | 13.3 | |||||||||||||||||||||||||||||||||||||||||||
| Excess and surplus casualty | 72,899 | 8.4 | 60,966 | 8.9 | |||||||||||||||||||||||||||||||||||||||||||
| Travel, accident and health | 62,610 | 7.2 | 52,117 | 7.6 | |||||||||||||||||||||||||||||||||||||||||||
| Lenders products | 46,396 | 5.4 | 23,111 | 3.4 | |||||||||||||||||||||||||||||||||||||||||||
| Other | 86,885 | 10.0 | 76,053 | 11.1 | |||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 865,427 | 100.0 | $ | 687,909 | 100.0 | |||||||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
| Amount | % | Amount | % | ||||||||||||||||||||||||||||||||||||||||||||
| Property, energy, marine and aviation | $ | 324,975 | 19.3 | $ | 231,964 | 16.5 | |||||||||||||||||||||||||||||||||||||||||
| Professional Lines | 413,769 | 24.6 | 306,512 | 21.8 | |||||||||||||||||||||||||||||||||||||||||||
| Programs | 231,814 | 13.8 | 217,342 | 15.5 | |||||||||||||||||||||||||||||||||||||||||||
| Construction and national accounts | 198,520 | 11.8 | 191,305 | 13.6 | |||||||||||||||||||||||||||||||||||||||||||
| Excess and surplus casualty | 148,266 | 8.8 | 126,063 | 9.0 | |||||||||||||||||||||||||||||||||||||||||||
| Travel, accident and health | 112,276 | 6.7 | 129,492 | 9.2 | |||||||||||||||||||||||||||||||||||||||||||
| Lenders products | 86,477 | 5.1 | 48,454 | 3.5 | |||||||||||||||||||||||||||||||||||||||||||
| Other | 168,804 | 10.0 | 152,696 | 10.9 | |||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 1,684,901 | 100.0 | $ | 1,403,828 | 100.0 | |||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Current year | 63.6 | % | 75.7 | % | 64.7 | % | 73.3 | % | |||||||||||||||
| Prior period reserve development | (0.5) | % | (0.4) | % | (0.5) | % | (0.3) | % | |||||||||||||||
| Loss ratio | 63.1 | % | 75.3 | % | 64.2 | % | 73.0 | % | |||||||||||||||
| ARCH CAPITAL | 49 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Three Months Ended June 30, | |||||||||||||||||
| 2021 | 2020 | % Change | |||||||||||||||
| Gross premiums written | $ | 1,358,020 | $ | 807,065 | 68.3 | ||||||||||||
| Premiums ceded | (433,288) | (241,971) | |||||||||||||||
| Net premiums written | 924,732 | 565,094 | 63.6 | ||||||||||||||
| Change in unearned premiums | (187,708) | (84,897) | |||||||||||||||
| Net premiums earned | 737,024 | 480,197 | 53.5 | ||||||||||||||
| Other underwriting income (loss) | 1,053 | (651) | |||||||||||||||
| Losses and loss adjustment expenses | (463,823) | (383,433) | |||||||||||||||
| Acquisition expenses | (133,585) | (90,522) | |||||||||||||||
| Other operating expenses | (44,695) | (38,716) | |||||||||||||||
| Underwriting income (loss) | $ | 95,974 | $ | (33,125) | 389.7 | ||||||||||||
| Underwriting Ratios | % Point Change | ||||||||||||||||
| Loss ratio | 62.9 | % | 79.8 | % | (16.9) | ||||||||||||
| Acquisition expense ratio | 18.1 | % | 18.9 | % | (0.8) | ||||||||||||
| Other operating expense ratio | 6.1 | % | 8.1 | % | (2.0) | ||||||||||||
| Combined ratio | 87.1 | % | 106.8 | % | (19.7) | ||||||||||||
| Six Months Ended June 30, | |||||||||||||||||
| 2021 | 2020 | % Change | |||||||||||||||
| Gross premiums written | $ | 2,829,080 | $ | 1,929,584 | 46.6 | ||||||||||||
| Premiums ceded | (905,236) | (567,310) | |||||||||||||||
| Net premiums written | 1,923,844 | 1,362,274 | 41.2 | ||||||||||||||
| Change in unearned premiums | (541,920) | (338,617) | |||||||||||||||
| Net premiums earned | 1,381,924 | 1,023,657 | 35.0 | ||||||||||||||
| Other underwriting income | (145) | 1,469 | |||||||||||||||
| Losses and loss adjustment expenses | (948,693) | (813,502) | |||||||||||||||
| Acquisition expenses | (251,610) | (170,128) | |||||||||||||||
| Other operating expenses | (105,209) | (84,013) | |||||||||||||||
| Underwriting income (loss) | $ | 76,267 | $ | (42,517) | 279.4 | ||||||||||||
| Underwriting Ratios | % Point Change | ||||||||||||||||
| Loss ratio | 68.7 | % | 79.5 | % | (10.8) | ||||||||||||
| Acquisition expense ratio | 18.2 | % | 16.6 | % | 1.6 | ||||||||||||
| Other operating expense ratio | 7.6 | % | 8.2 | % | (0.6) | ||||||||||||
| Combined ratio | 94.5 | % | 104.3 | % | (9.8) | ||||||||||||
| ARCH CAPITAL | 50 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
| Amount | % | Amount | % | ||||||||||||||||||||||||||||||||||||||||||||
| Property excluding property catastrophe | $ | 249,101 | 26.9 | $ | 163,639 | 29.0 | |||||||||||||||||||||||||||||||||||||||||
| Property catastrophe | 87,642 | 9.5 | 117,676 | 20.8 | |||||||||||||||||||||||||||||||||||||||||||
| Other specialty | 296,325 | 32.0 | 117,375 | 20.8 | |||||||||||||||||||||||||||||||||||||||||||
| Casualty | 225,890 | 24.4 | 105,049 | 18.6 | |||||||||||||||||||||||||||||||||||||||||||
| Marine and aviation | 50,248 | 5.4 | 32,372 | 5.7 | |||||||||||||||||||||||||||||||||||||||||||
| Other | 15,526 | 1.7 | 28,983 | 5.1 | |||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 924,732 | 100.0 | $ | 565,094 | 100.0 | |||||||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
| Amount | % | Amount | % | ||||||||||||||||||||||||||||||||||||||||||||
| Property excluding property catastrophe | $ | 541,934 | 28.2 | $ | 322,563 | 23.7 | |||||||||||||||||||||||||||||||||||||||||
| Property catastrophe | 204,849 | 10.6 | 206,768 | 15.2 | |||||||||||||||||||||||||||||||||||||||||||
| Other Specialty | 580,656 | 30.2 | 402,327 | 29.5 | |||||||||||||||||||||||||||||||||||||||||||
| Casualty | 444,146 | 23.1 | 295,929 | 21.7 | |||||||||||||||||||||||||||||||||||||||||||
| Marine and aviation | 111,886 | 5.8 | 82,157 | 6.0 | |||||||||||||||||||||||||||||||||||||||||||
| Other | 40,373 | 2.1 | 52,530 | 3.9 | |||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 1,923,844 | 100.0 | $ | 1,362,274 | 100.0 | |||||||||||||||||||||||||||||||||||||||||
| Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
| Amount | % | Amount | % | ||||||||||||||||||||||||||||||||||||||||||||
| Property excluding property catastrophe | $ | 202,780 | 27.5 | $ | 124,019 | 25.8 | |||||||||||||||||||||||||||||||||||||||||
| Property catastrophe | 76,167 | 10.3 | 55,226 | 11.5 | |||||||||||||||||||||||||||||||||||||||||||
| Other specialty | 211,817 | 28.7 | 123,006 | 25.6 | |||||||||||||||||||||||||||||||||||||||||||
| Casualty | 183,846 | 24.9 | 132,756 | 27.6 | |||||||||||||||||||||||||||||||||||||||||||
| Marine and aviation | 42,773 | 5.8 | 24,960 | 5.2 | |||||||||||||||||||||||||||||||||||||||||||
| Other | 19,641 | 2.7 | 20,230 | 4.2 | |||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 737,024 | 100.0 | $ | 480,197 | 100.0 | |||||||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
| Amount | % | Amount | % | ||||||||||||||||||||||||||||||||||||||||||||
| Property excluding property catastrophe | $ | 390,562 | 28.3 | $ | 236,671 | 23.1 | |||||||||||||||||||||||||||||||||||||||||
| Property catastrophe | 164,178 | 11.9 | 108,226 | 10.6 | |||||||||||||||||||||||||||||||||||||||||||
| Other Specialty | 375,715 | 27.2 | 326,391 | 31.9 | |||||||||||||||||||||||||||||||||||||||||||
| Casualty | 332,877 | 24.1 | 267,827 | 26.2 | |||||||||||||||||||||||||||||||||||||||||||
| Marine and aviation | 82,881 | 6.0 | 49,818 | 4.9 | |||||||||||||||||||||||||||||||||||||||||||
| Other | 35,711 | 2.6 | 34,724 | 3.4 | |||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 1,381,924 | 100.0 | $ | 1,023,657 | 100.0 | |||||||||||||||||||||||||||||||||||||||||
| ARCH CAPITAL | 51 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Current year | 65.7 | % | 88.2 | % | 72.1 | % | 84.6 | % | |||||||||||||||
| Prior period reserve development | (2.8) | % | (8.4) | % | (3.4) | % | (5.1) | % | |||||||||||||||
| Loss ratio | 62.9 | % | 79.8 | % | 68.7 | % | 79.5 | % | |||||||||||||||
| Three Months Ended June 30, | |||||||||||||||||
| 2021 | 2020 | % Change | |||||||||||||||
| Gross premiums written | $ | 391,511 | $ | 369,144 | 6.1 | ||||||||||||
| Premiums ceded | (55,665) | (44,044) | |||||||||||||||
| Net premiums written | 335,846 | 325,100 | 3.3 | ||||||||||||||
| Change in unearned premiums | (1,625) | 40,613 | |||||||||||||||
| Net premiums earned | 334,221 | 365,713 | (8.6) | ||||||||||||||
| Other underwriting income | 4,148 | 6,450 | |||||||||||||||
| Losses and loss adjustment expenses | (9,880) | (224,100) | |||||||||||||||
| Acquisition expenses | (30,117) | (34,052) | |||||||||||||||
| Other operating expenses | (48,312) | (37,574) | |||||||||||||||
| Underwriting income | $ | 250,060 | $ | 76,437 | 227.1 | ||||||||||||
| Underwriting Ratios | % Point Change | ||||||||||||||||
| Loss ratio | 3.0 | % | 61.3 | % | (58.3) | ||||||||||||
| Acquisition expense ratio | 9.0 | % | 9.3 | % | (0.3) | ||||||||||||
| Other operating expense ratio | 14.5 | % | 10.3 | % | 4.2 | ||||||||||||
| Combined ratio | 26.5 | % | 80.9 | % | (54.4) | ||||||||||||
| ARCH CAPITAL | 52 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Six Months Ended June 30, | |||||||||||||||||
| 2021 | 2020 | % Change | |||||||||||||||
| Gross premiums written | $ | 782,757 | $ | 738,089 | 6.1 | ||||||||||||
| Premiums ceded | (111,716) | (88,371) | |||||||||||||||
| Net premiums written | 671,041 | 649,718 | 3.3 | ||||||||||||||
| Change in unearned premiums | (503) | 61,021 | |||||||||||||||
| Net premiums earned | 670,538 | 710,739 | (5.7) | ||||||||||||||
| Other underwriting income | 11,045 | 11,049 | |||||||||||||||
| Losses and loss adjustment expenses | (73,569) | (291,666) | |||||||||||||||
| Acquisition expenses | (60,199) | (72,588) | |||||||||||||||
| Other operating expenses | (97,443) | (83,470) | |||||||||||||||
| Underwriting income | $ | 450,372 | $ | 274,064 | 64.3 | ||||||||||||
| Underwriting Ratios | % Point Change | ||||||||||||||||
| Loss ratio | 11.0 | % | 41.0 | % | (30.0) | ||||||||||||
| Acquisition expense ratio | 9.0 | % | 10.2 | % | (1.2) | ||||||||||||
| Other operating expense ratio | 14.5 | % | 11.7 | % | 2.8 | ||||||||||||
| Combined ratio | 34.5 | % | 62.9 | % | (28.4) | ||||||||||||
| Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
| Amount | % | Amount | % | ||||||||||||||||||||||||||||||||||||||||||||
| Underwriting location: | |||||||||||||||||||||||||||||||||||||||||||||||
| United States | $ | 234,645 | 69.9 | $ | 261,124 | 80.3 | |||||||||||||||||||||||||||||||||||||||||
| Other | 101,201 | 30.1 | 63,976 | 19.7 | |||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 335,846 | 100.0 | $ | 325,100 | 100.0 | |||||||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
| Amount | % | Amount | % | ||||||||||||||||||||||||||||||||||||||||||||
| Underwriting location: | |||||||||||||||||||||||||||||||||||||||||||||||
| United States | $ | 482,174 | 71.9 | $ | 525,232 | 80.8 | |||||||||||||||||||||||||||||||||||||||||
| Other | 188,867 | 28.1 | 124,486 | 19.2 | |||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 671,041 | 100.0 | $ | 649,718 | 100.0 | |||||||||||||||||||||||||||||||||||||||||
| (U.S. Dollars in millions) | Three Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||||||||||||||
| Amount | % | Amount | % | ||||||||||||||||||||||||||||||||
| Total new insurance written (NIW) (1) | $ | 28,372 | $ | 24,551 | |||||||||||||||||||||||||||||||
| Credit quality (FICO): | |||||||||||||||||||||||||||||||||||
| >=740 | $ | 19,240 | 67.8 | $ | 15,851 | 64.6 | |||||||||||||||||||||||||||||
| 680-739 | 8,113 | 28.6 | 7,781 | 31.7 | |||||||||||||||||||||||||||||||
| 620-679 | 1,019 | 3.6 | 919 | 3.7 | |||||||||||||||||||||||||||||||
| Total | $ | 28,372 | 100.0 | $ | 24,551 | 100.0 | |||||||||||||||||||||||||||||
| Loan-to-value (LTV): | |||||||||||||||||||||||||||||||||||
| 95.01% and above | $ | 1,484 | 5.2 | $ | 1,948 | 7.9 | |||||||||||||||||||||||||||||
| 90.01% to 95.00% | 13,936 | 49.1 | 9,403 | 38.3 | |||||||||||||||||||||||||||||||
| 85.01% to 90.00% | 8,675 | 30.6 | 8,140 | 33.2 | |||||||||||||||||||||||||||||||
| 85.00% and below | 4,277 | 15.1 | 5,060 | 20.6 | |||||||||||||||||||||||||||||||
| Total | $ | 28,372 | 100.0 | $ | 24,551 | 100.0 | |||||||||||||||||||||||||||||
| Monthly vs. single: | |||||||||||||||||||||||||||||||||||
| Monthly | $ | 26,725 | 94.2 | $ | 23,391 | 95.3 | |||||||||||||||||||||||||||||
| Single | 1,647 | 5.8 | 1,160 | 4.7 | |||||||||||||||||||||||||||||||
| Total | $ | 28,372 | 100.0 | $ | 24,551 | 100.0 | |||||||||||||||||||||||||||||
| Purchase vs. refinance: | |||||||||||||||||||||||||||||||||||
| Purchase | $ | 25,010 | 88.2 | $ | 14,956 | 60.9 | |||||||||||||||||||||||||||||
| Refinance | 3,362 | 11.8 | 9,595 | 39.1 | |||||||||||||||||||||||||||||||
| Total | $ | 28,372 | 100.0 | $ | 24,551 | 100.0 | |||||||||||||||||||||||||||||
| ARCH CAPITAL | 53 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| (U.S. Dollars in millions) | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||||||||||||||
| Amount | % | Amount | % | ||||||||||||||||||||||||||||||||
| Total new insurance written (NIW) (1) | $ | 55,391 | $ | 41,329 | |||||||||||||||||||||||||||||||
| Credit quality (FICO): | |||||||||||||||||||||||||||||||||||
| >=740 | $ | 37,058 | 66.9 | $ | 25,920 | 62.7 | |||||||||||||||||||||||||||||
| 680-739 | 16,531 | 29.8 | 13,568 | 32.8 | |||||||||||||||||||||||||||||||
| 620-679 | 1,802 | 3.3 | 1,841 | 4.5 | |||||||||||||||||||||||||||||||
| Total | $ | 55,391 | 100.0 | $ | 41,329 | 100.0 | |||||||||||||||||||||||||||||
| Loan-to-value (LTV): | |||||||||||||||||||||||||||||||||||
| 95.01% and above | $ | 3,092 | 5.6 | $ | 3,616 | 8.7 | |||||||||||||||||||||||||||||
| 90.01% to 95.00% | 26,224 | 47.3 | 16,602 | 40.2 | |||||||||||||||||||||||||||||||
| 85.01% to 90.00% | 16,987 | 30.7 | 13,469 | 32.6 | |||||||||||||||||||||||||||||||
| 85.01% and below | 9,088 | 16.4 | 7,642 | 18.5 | |||||||||||||||||||||||||||||||
| Total | $ | 55,391 | 100.0 | $ | 41,329 | 100.0 | |||||||||||||||||||||||||||||
| Monthly vs. single: | |||||||||||||||||||||||||||||||||||
| Monthly | $ | 51,714 | 93.4 | $ | 39,083 | 94.6 | |||||||||||||||||||||||||||||
| Single | 3,677 | 6.6 | 2,246 | 5.4 | |||||||||||||||||||||||||||||||
| Total | $ | 55,391 | 100.0 | $ | 41,329 | 100.0 | |||||||||||||||||||||||||||||
| Purchase vs. refinance: | |||||||||||||||||||||||||||||||||||
| Purchase | $ | 45,515 | 82.2 | $ | 27,255 | 65.9 | |||||||||||||||||||||||||||||
| Refinance | 9,876 | 17.8 | 14,074 | 34.1 | |||||||||||||||||||||||||||||||
| Total | $ | 55,391 | 100.0 | $ | 41,329 | 100.0 | |||||||||||||||||||||||||||||
| Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
| Amount | % | Amount | % | ||||||||||||||||||||||||||||||||||||||||||||
| Underwriting location: | |||||||||||||||||||||||||||||||||||||||||||||||
| United States | $ | 248,388 | 74.3 | $ | 304,652 | 83.3 | |||||||||||||||||||||||||||||||||||||||||
| Other | 85,833 | 25.7 | 61,061 | 16.7 | |||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 334,221 | 100.0 | $ | 365,713 | 100.0 | |||||||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
| Amount | % | Amount | % | ||||||||||||||||||||||||||||||||||||||||||||
| Underwriting location: | |||||||||||||||||||||||||||||||||||||||||||||||
| United States | $ | 510,938 | 76.2 | $ | 593,814 | 83.5 | |||||||||||||||||||||||||||||||||||||||||
| Other | 159,600 | 23.8 | 116,925 | 16.5 | |||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 670,538 | 100.0 | $ | 710,739 | 100.0 | |||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Current year | 15.9 | % | 61.4 | % | 19.1 | % | 41.9 | % | |||||||||||||||
| Prior period reserve development | (12.9) | % | (0.1) | % | (8.1) | % | (0.9) | % | |||||||||||||||
| Loss ratio | 3.0 | % | 61.3 | % | 11.0 | % | 41.0 | % | |||||||||||||||
| ARCH CAPITAL | 54 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Fixed maturities | $ | 77,709 | $ | 91,491 | $ | 156,726 | $ | 193,254 | |||||||||||||||
| Equity securities | 8,282 | 6,023 | 13,932 | 11,653 | |||||||||||||||||||
| Short-term investments | 972 | 897 | 1,616 | 4,282 | |||||||||||||||||||
| Other (1) | 21,026 | 17,825 | 36,585 | 38,304 | |||||||||||||||||||
| Gross investment income | 107,989 | 116,236 | 208,859 | 247,493 | |||||||||||||||||||
| Investment expenses (2) | (18,559) | (15,205) | (40,700) | (33,434) | |||||||||||||||||||
| Net investment income | $ | 89,430 | $ | 101,031 | $ | 168,159 | 214,059 | ||||||||||||||||
| ARCH CAPITAL | 55 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| ARCH CAPITAL | 56 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Investable assets (1): | Estimated Fair Value | % of Total | |||||||||||||||
| June 30, 2021 | |||||||||||||||||
| Fixed maturities (2) | $ | 18,022,113 | 66.0 | ||||||||||||||
| Short-term investments (2) | 2,380,016 | 8.7 | |||||||||||||||
| Cash | 884,857 | 3.2 | |||||||||||||||
| Equity securities (2) | 1,633,579 | 6.0 | |||||||||||||||
| Other investments (2) | 1,512,317 | 5.5 | |||||||||||||||
| Other investable assets (3) | 500,000 | 1.8 | |||||||||||||||
| Investments accounted for using the equity method | 2,539,124 | 9.3 | |||||||||||||||
| Securities transactions entered into but not settled at the balance sheet date | (180,592) | (0.7) | |||||||||||||||
| Total investable assets held by Arch | $ | 27,291,414 | 100.0 | ||||||||||||||
| Average effective duration (in years) | 2.31 | ||||||||||||||||
| Average S&P/Moody’s credit ratings (4) | AA/Aa2 | ||||||||||||||||
| Embedded book yield (5) | 1.45 | % | |||||||||||||||
| December 31, 2020 | |||||||||||||||||
| Fixed maturities (2) | $ | 18,771,296 | 69.9 | ||||||||||||||
| Short-term investments (2) | 2,063,240 | 7.7 | |||||||||||||||
| Cash | 694,997 | 2.6 | |||||||||||||||
| Equity securities (2) | 1,436,104 | 5.3 | |||||||||||||||
| Other investments (2) | 1,480,347 | 5.5 | |||||||||||||||
| Other investable assets (3) | 500,000 | 1.9 | |||||||||||||||
| Investments accounted for using the equity method | 2,047,889 | 7.6 | |||||||||||||||
| Securities transactions entered into but not settled at the balance sheet date | (137,578) | (0.5) | |||||||||||||||
| Total investable assets held by Arch | $ | 26,856,295 | 100.0 | ||||||||||||||
| Average effective duration (in years) | 3.01 | ||||||||||||||||
| Average S&P/Moody’s credit ratings (4) | AA/Aa2 | ||||||||||||||||
| Embedded book yield (5) | 1.56 | % | |||||||||||||||
| ARCH CAPITAL | 57 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Estimated Fair Value | % of Total | ||||||||||
| June 30, 2021 | |||||||||||
| Corporate bonds | $ | 7,375,350 | 40.9 | ||||||||
| Residential mortgage backed securities | 374,565 | 2.1 | |||||||||
| Municipal bonds | 413,709 | 2.3 | |||||||||
| Commercial mortgage backed securities | 267,574 | 1.5 | |||||||||
| U.S. government and government agencies | 4,855,595 | 26.9 | |||||||||
| Non-U.S. government securities | 2,308,403 | 12.8 | |||||||||
| Asset backed securities | 2,426,917 | 13.5 | |||||||||
| Total | $ | 18,022,113 | 100.0 | ||||||||
| December 31, 2020 | |||||||||||
| Corporate bonds | $ | 8,039,745 | 42.8 | ||||||||
| Residential mortgage backed securities | 616,619 | 3.3 | |||||||||
| Municipal bonds | 492,734 | 2.6 | |||||||||
| Commercial mortgage backed securities | 390,990 | 2.1 | |||||||||
| U.S. government and government agencies | 5,354,863 | 28.5 | |||||||||
| Non-U.S. government securities | 2,310,157 | 12.3 | |||||||||
| Asset backed securities | 1,566,188 | 8.3 | |||||||||
| Total | $ | 18,771,296 | 100.0 | ||||||||
| Estimated Fair Value | % of Total | ||||||||||
| June 30, 2021 | |||||||||||
| U.S. government and gov’t agencies (1) | $ | 5,221,296 | 29.0 | ||||||||
| AAA | 3,432,285 | 19.0 | |||||||||
| AA | 2,004,442 | 11.1 | |||||||||
| A | 3,268,661 | 18.1 | |||||||||
| BBB | 2,896,453 | 16.1 | |||||||||
| BB | 544,730 | 3.0 | |||||||||
| B | 330,639 | 1.8 | |||||||||
| Lower than B | 48,230 | 0.3 | |||||||||
| Not rated | 275,377 | 1.5 | |||||||||
| Total | $ | 18,022,113 | 100.0 | ||||||||
| December 31, 2020 | |||||||||||
| U.S. government and gov’t agencies (1) | $ | 5,963,758 | 31.8 | ||||||||
| AAA | 3,117,046 | 16.6 | |||||||||
| AA | 2,063,738 | 11.0 | |||||||||
| A | 3,760,280 | 20.0 | |||||||||
| BBB | 2,699,201 | 14.4 | |||||||||
| BB | 574,189 | 3.1 | |||||||||
| B | 268,095 | 1.4 | |||||||||
| Lower than B | 54,795 | 0.3 | |||||||||
| Not rated | 270,194 | 1.4 | |||||||||
| Total | $ | 18,771,296 | 100.0 | ||||||||
| Severity of gross unrealized losses: | Estimated Fair Value | Gross Unrealized Losses | % of Total Gross Unrealized Losses | ||||||||||||||
| June 30, 2021 | |||||||||||||||||
| 0-10% | $ | 7,387,667 | $ | (68,781) | 92.0 | ||||||||||||
| 10-20% | 28,039 | (4,166) | 5.6 | ||||||||||||||
| 20-30% | 1,999 | (553) | 0.7 | ||||||||||||||
| Greater than 30% | 1,326 | (1,239) | 1.7 | ||||||||||||||
| Total | $ | 7,419,031 | $ | (74,739) | 100.0 | ||||||||||||
| December 31, 2020 | |||||||||||||||||
| 0-10% | $ | 3,583,981 | $ | (55,542) | 79.4 | ||||||||||||
| 10-20% | 95,495 | (12,183) | 17.4 | ||||||||||||||
| 20-30% | 1,061 | (406) | 0.6 | ||||||||||||||
| Greater than 30% | 1,249 | (1,785) | 2.6 | ||||||||||||||
| Total | $ | 3,681,786 | $ | (69,916) | 100.0 | ||||||||||||
| Estimated Fair Value | Credit Rating (1) | ||||||||||
| Bank of America Corporation | $ | 373,742 | A-/A2 | ||||||||
| JPMorgan Chase & Co. | 372,381 | A-/A2 | |||||||||
| Citigroup Inc. | 288,574 | BBB+/A3 | |||||||||
| Morgan Stanley | 253,549 | BBB+/A1 | |||||||||
| Wells Fargo & Company | 247,222 | BBB+/A2 | |||||||||
| The Goldman Sachs Group, Inc. | 185,647 | BBB+/A2 | |||||||||
| Nestlé S.A. | 129,191 | AA-/Aa3 | |||||||||
| Amazon.com, Inc. | 118,047 | AA/A1 | |||||||||
| Nippon Telegraph and Telephone Corporation | 95,958 | A/A1 | |||||||||
| AT&T Inc. | 92,795 | BBB/Baa2 | |||||||||
| Total | $ | 2,157,106 | |||||||||
| ARCH CAPITAL | 58 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Agencies | Investment Grade | Below Investment Grade | Total | ||||||||||||||||||||
| Jun 30, 2021 | |||||||||||||||||||||||
| RMBS | $ | 336,784 | $ | 14,716 | $ | 23,065 | $ | 374,565 | |||||||||||||||
| CMBS | 28,917 | 213,655 | 25,002 | 267,574 | |||||||||||||||||||
| ABS | — | 2,206,453 | 220,464 | 2,426,917 | |||||||||||||||||||
| Total | $ | 365,701 | $ | 2,434,824 | $ | 268,531 | $ | 3,069,056 | |||||||||||||||
| Dec 31, 2020 | |||||||||||||||||||||||
| RMBS | $ | 584,499 | $ | 4,102 | $ | 28,018 | $ | 616,619 | |||||||||||||||
| CMBS | 24,396 | 342,491 | 24,103 | 390,990 | |||||||||||||||||||
| ABS | — | 1,403,137 | 163,051 | 1,566,188 | |||||||||||||||||||
| Total | $ | 608,895 | $ | 1,749,730 | $ | 215,172 | $ | 2,573,797 | |||||||||||||||
| June 30, 2021 | December 31, 2020 | ||||||||||
| Equities (1) | $ | 864,688 | $ | 676,437 | |||||||
| Exchange traded funds | |||||||||||
| Fixed income (2) | 304,723 | 341,139 | |||||||||
| Equity and other (3) | 464,168 | 418,528 | |||||||||
| Total | $ | 1,633,579 | $ | 1,436,104 | |||||||
| June
30, 2021 | December 31, 2020 | ||||||||||
| Lending | $ | 638,786 | $ | 572,636 | |||||||
| Term loan investments | 474,859 | 380,193 | |||||||||
| Energy | 84,891 | 65,813 | |||||||||
| Credit related funds | 73,171 | 90,780 | |||||||||
| Investment grade fixed income | 110,375 | 138,646 | |||||||||
| Infrastructure | 32,109 | 165,516 | |||||||||
| Private equity | 70,878 | 48,750 | |||||||||
| Real estate | 27,248 | 18,013 | |||||||||
| Total fair value option | $ | 1,512,317 | $ | 1,480,347 | |||||||
| Other investable assets | $ | 500,000 | $ | 500,000 | |||||||
| Total other investments | $ | 2,012,317 | $ | 1,980,347 | |||||||
| June
30, 2021 | December 31, 2020 | ||||||||||
| Investments accounted for using the fair value option: | |||||||||||
| Other investments | $ | 858,155 | $ | 851,538 | |||||||
| Fixed maturities | 578,280 | 455,163 | |||||||||
| Short-term investments | 478,711 | 418,690 | |||||||||
| Equity securities | 69,773 | 64,994 | |||||||||
| Total | 1,984,919 | 1,790,385 | |||||||||
| Fixed maturities available for sale, at fair value | 625,422 | 613,503 | |||||||||
| Equity securities, at fair value | 97,623 | 52,410 | |||||||||
| Cash | 349,202 | 211,451 | |||||||||
| Securities sold but not yet purchased | (28,068) | (21,679) | |||||||||
| Securities transactions entered into but not settled at the balance sheet date | (97,055) | 11,542 | |||||||||
| Total investable assets included in ‘other’ segment | $ | 2,932,043 | $ | 2,657,612 | |||||||
| ARCH CAPITAL | 59 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Premiums written: | |||||||||||||||||||||||
| Direct | $ | 1,909,893 | $ | 1,485,627 | $ | 3,802,138 | $ | 3,174,425 | |||||||||||||||
| Assumed | 1,376,398 | 832,065 | 2,881,359 | 1,976,097 | |||||||||||||||||||
| Ceded | (886,767) | (649,381) | (1,775,516) | (1,344,965) | |||||||||||||||||||
| Net | $ | 2,399,524 | $ | 1,668,311 | $ | 4,907,981 | $ | 3,805,557 | |||||||||||||||
| Premiums earned: | |||||||||||||||||||||||
| Direct | $ | 1,795,899 | $ | 1,559,222 | $ | 3,508,824 | $ | 3,105,047 | |||||||||||||||
| Assumed | 1,091,968 | 746,188 | 2,039,582 | 1,507,262 | |||||||||||||||||||
| Ceded | (766,958) | (640,056) | (1,479,075) | (1,202,511) | |||||||||||||||||||
| Net | $ | 2,120,909 | $ | 1,665,354 | $ | 4,069,331 | $ | 3,409,798 | |||||||||||||||
| Losses and LAE: | |||||||||||||||||||||||
| Direct | $ | 1,046,579 | $ | 1,162,958 | $ | 2,032,512 | $ | 2,148,041 | |||||||||||||||
| Assumed | 554,256 | 508,108 | 1,221,567 | 1,053,977 | |||||||||||||||||||
| Ceded | (441,004) | (440,544) | (891,148) | (856,077) | |||||||||||||||||||
| Net | $ | 1,159,831 | $ | 1,230,522 | $ | 2,362,931 | $ | 2,345,941 | |||||||||||||||
| June 30, 2021 | |||||||||||||||||
| Initial Coverage at Issuance | Current Coverage | Remaining Retention, Net | |||||||||||||||
| Bellemeade 2017-1 Ltd. (1) | $ | 368,114 | $ | 145,573 | $ | 125,297 | |||||||||||
| Bellemeade 2018-1 Ltd. (2) | 374,460 | 250,095 | 123,173 | ||||||||||||||
| Bellemeade 2018-3 Ltd. (3) | 506,110 | 302,563 | 126,127 | ||||||||||||||
| Bellemeade 2019-1 Ltd. (4) | 341,790 | 219,256 | 102,017 | ||||||||||||||
| Bellemeade 2019-2 Ltd. (5) | 621,022 | 398,316 | 156,718 | ||||||||||||||
| Bellemeade 2019-3 Ltd. (6) | 700,920 | 528,084 | 176,565 | ||||||||||||||
| Bellemeade 2019-4 Ltd. (7) | 577,267 | 468,737 | 113,415 | ||||||||||||||
| Bellemeade 2020-1 Ltd. (8) | 528,540 | 18,843 | 747,799 | ||||||||||||||
| Bellemeade 2020-2 Ltd. (9) | 449,167 | 328,375 | 232,481 | ||||||||||||||
| Bellemeade 2020-3 Ltd. (10) | 451,816 | 451,816 | 163,905 | ||||||||||||||
| Bellemeade 2020-4 Ltd. (11) | 337,013 | 281,750 | 138,183 | ||||||||||||||
| Bellemeade 2021-1 Ltd. (12) | 643,577 | 643,577 | 166,199 | ||||||||||||||
| Bellemeade 2021-2 Ltd. (13) | 616,017 | 616,017 | 152,734 | ||||||||||||||
| Total | $ | 6,515,813 | $ | 4,653,002 | $ | 2,524,613 | |||||||||||
| ARCH CAPITAL | 60 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| June 30, 2021 | December 31, 2020 | ||||||||||
| Insurance segment: | |||||||||||
| Case reserves | $ | 2,100,109 | $ | 2,051,640 | |||||||
| IBNR reserves | 4,117,169 | 3,889,823 | |||||||||
| Total net reserves | 6,217,278 | 5,941,463 | |||||||||
| Reinsurance segment: | |||||||||||
| Case reserves | 1,523,486 | 1,560,523 | |||||||||
| Additional case reserves | 432,516 | 280,472 | |||||||||
| IBNR reserves | 2,435,575 | 2,253,953 | |||||||||
| Total net reserves | 4,391,577 | 4,094,948 | |||||||||
| Mortgage segment: | |||||||||||
| Case reserves | 704,314 | 631,921 | |||||||||
| IBNR reserves | 266,690 | 271,702 | |||||||||
| Total net reserves | 971,004 | 903,623 | |||||||||
| Other segment: | |||||||||||
| Case reserves | 682,341 | 566,587 | |||||||||
| Additional case reserves | 47,774 | 32,321 | |||||||||
| IBNR reserves | 740,654 | 660,132 | |||||||||
| Total net reserves | 1,470,769 | 1,259,040 | |||||||||
| Total: | |||||||||||
| Case reserves | 5,010,250 | 4,810,671 | |||||||||
| Additional case reserves | 480,290 | 312,793 | |||||||||
| IBNR reserves | 7,560,088 | 7,075,610 | |||||||||
| Total net reserves | $ | 13,050,628 | $ | 12,199,074 | |||||||
| June 30, 2021 | December 31, 2020 | ||||||||||
| Insurance segment: | |||||||||||
| Professional lines (1) | $ | 1,516,878 | $ | 1,482,820 | |||||||
| Construction and national accounts | 1,470,201 | 1,395,067 | |||||||||
| Excess and surplus casualty (2) | 859,662 | 816,495 | |||||||||
| Programs | 748,015 | 699,354 | |||||||||
| Property, energy, marine and aviation | 500,880 | 517,692 | |||||||||
| Travel, accident and health | 96,345 | 98,910 | |||||||||
| Lenders products | 64,560 | 48,946 | |||||||||
| Other (3) | 960,737 | 882,179 | |||||||||
| Total net reserves | $ | 6,217,278 | $ | 5,941,463 | |||||||
| June 30, 2021 | December 31, 2020 | ||||||||||
| Reinsurance segment: | |||||||||||
| Casualty (1) | $ | 2,024,591 | $ | 1,995,849 | |||||||
| Other specialty (2) | 955,770 | 917,178 | |||||||||
| Property excluding property catastrophe | 668,339 | 594,033 | |||||||||
| Marine and aviation | 215,345 | 204,205 | |||||||||
| Property catastrophe | 410,034 | 268,858 | |||||||||
| Other (3) | 117,498 | 114,825 | |||||||||
| Total net reserves | $ | 4,391,577 | $ | 4,094,948 | |||||||
| June
30, 2021 | December 31, 2020 | ||||||||||
| U.S. primary mortgage insurance (1) | $ | 713,135 | $ | 649,748 | |||||||
| Other | 257,869 | 253,875 | |||||||||
| Total net reserves | $ | 971,004 | $ | 903,623 | |||||||
| ARCH CAPITAL | 61 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| (U.S. Dollars in millions) | June 30, 2021 | December 31, 2020 | |||||||||||||||||||||
| Amount | % | Amount | % | ||||||||||||||||||||
| Insurance In Force (IIF) (1): | |||||||||||||||||||||||
| U.S. primary mortgage insurance | $ | 277,887 | 65.8 | $ | 280,579 | 66.2 | |||||||||||||||||
| Mortgage reinsurance | 32,666 | 7.7 | 31,220 | 7.4 | |||||||||||||||||||
| Other (2) | 111,884 | 26.5 | 111,740 | 26.4 | |||||||||||||||||||
| Total | $ | 422,437 | 100.0 | $ | 423,539 | 100.0 | |||||||||||||||||
| Risk In Force (RIF) (3): | |||||||||||||||||||||||
| U.S. primary mortgage insurance | $ | 69,587 | 90.3 | $ | 70,522 | 90.5 | |||||||||||||||||
| Mortgage reinsurance | 2,245 | 2.9 | 2,226 | 2.9 | |||||||||||||||||||
| Other (2) | 5,188 | 6.7 | 5,146 | 6.6 | |||||||||||||||||||
| Total | $ | 77,020 | 100.0 | $ | 77,894 | 100.0 | |||||||||||||||||
| (U.S. Dollars in millions) | IIF | RIF | Delinquency | ||||||||||||||||||||||||||
| Amount | % | Amount | % | Rate (1) | |||||||||||||||||||||||||
| Policy year: | |||||||||||||||||||||||||||||
| 2011 and prior | $ | 12,591 | 4.5 | $ | 2,839 | 4.1 | 9.75 | % | |||||||||||||||||||||
| 2012 | 2,261 | 0.8 | 587 | 0.8 | 3.00 | % | |||||||||||||||||||||||
| 2013 | 5,635 | 2.0 | 1,563 | 2.2 | 2.95 | % | |||||||||||||||||||||||
| 2014 | 6,288 | 2.3 | 1,729 | 2.5 | 3.52 | % | |||||||||||||||||||||||
| 2015 | 11,208 | 4.0 | 3,017 | 4.3 | 3.19 | % | |||||||||||||||||||||||
| 2016 | 18,500 | 6.7 | 4,958 | 7.1 | 4.11 | % | |||||||||||||||||||||||
| 2017 | 17,577 | 6.3 | 4,574 | 6.6 | 4.87 | % | |||||||||||||||||||||||
| 2018 | 19,044 | 6.9 | 4,827 | 6.9 | 6.25 | % | |||||||||||||||||||||||
| 2019 | 34,944 | 12.6 | 8,727 | 12.5 | 4.02 | % | |||||||||||||||||||||||
| 2020 | 95,419 | 34.3 | 23,316 | 33.5 | 0.88 | % | |||||||||||||||||||||||
| 2021 | 54,420 | 19.6 | 13,450 | 19.3 | 0.10 | % | |||||||||||||||||||||||
| Total | $ | 277,887 | 100.0 | $ | 69,587 | 100.0 | 3.11 | % | |||||||||||||||||||||
| (U.S. Dollars in millions) | IIF | RIF | Delinquency | ||||||||||||||||||||||||||
| Amount | % | Amount | % | Rate (1) | |||||||||||||||||||||||||
| Policy year: | |||||||||||||||||||||||||||||
| 2011 and prior | $ | 14,588 | 5.2 | $ | 3,327 | 4.7 | 11.36 | % | |||||||||||||||||||||
| 2012 | 3,651 | 1.3 | 992 | 1.4 | 2.98 | % | |||||||||||||||||||||||
| 2013 | 7,546 | 2.7 | 2,107 | 3.0 | 3.30 | % | |||||||||||||||||||||||
| 2014 | 8,261 | 2.9 | 2,273 | 3.2 | 4.06 | % | |||||||||||||||||||||||
| 2015 | 15,032 | 5.4 | 4,048 | 5.7 | 3.72 | % | |||||||||||||||||||||||
| 2016 | 24,958 | 8.9 | 6,648 | 9.4 | 4.77 | % | |||||||||||||||||||||||
| 2017 | 24,748 | 8.8 | 6,413 | 9.1 | 5.52 | % | |||||||||||||||||||||||
| 2018 | 27,304 | 9.7 | 6,918 | 9.8 | 6.76 | % | |||||||||||||||||||||||
| 2019 | 48,304 | 17.2 | 12,001 | 17.0 | 4.61 | % | |||||||||||||||||||||||
| 2020 | 106,187 | 37.8 | 25,795 | 36.6 | 0.76 | % | |||||||||||||||||||||||
| Total | $ | 280,579 | 100.0 | $ | 70,522 | 100.0 | 4.19 | % | |||||||||||||||||||||
| (U.S. Dollars in millions) | June 30, 2021 | December 31, 2020 | |||||||||||||||||||||
| Amount | % | Amount | % | ||||||||||||||||||||
| Credit quality (FICO): | |||||||||||||||||||||||
| >=740 | $ | 41,156 | 59.1 | $ | 40,774 | 57.8 | |||||||||||||||||
| 680-739 | 23,663 | 34.0 | 24,498 | 34.7 | |||||||||||||||||||
| 620-679 | 4,401 | 6.3 | 4,837 | 6.9 | |||||||||||||||||||
| <620 | 367 | 0.5 | 413 | 0.6 | |||||||||||||||||||
| Total | $ | 69,587 | 100.0 | $ | 70,522 | 100.0 | |||||||||||||||||
| Weighted average FICO score | 745 | 743 | |||||||||||||||||||||
| Loan-to-value (LTV): | |||||||||||||||||||||||
| 95.01% and above | $ | 7,975 | 11.5 | $ | 8,643 | 12.3 | |||||||||||||||||
| 90.01% to 95.00% | 37,619 | 54.1 | 37,877 | 53.7 | |||||||||||||||||||
| 85.01% to 90.00% | 19,784 | 28.4 | 20,013 | 28.4 | |||||||||||||||||||
| 85.00% and below | 4,209 | 6.0 | 3,989 | 5.7 | |||||||||||||||||||
| Total | $ | 69,587 | 100.0 | $ | 70,522 | 100.0 | |||||||||||||||||
| Weighted average LTV | 92.8 | % | 92.8 | % | |||||||||||||||||||
| Total RIF, net of external reinsurance | $ | 55,557 | $ | 56,658 | |||||||||||||||||||
| ARCH CAPITAL | 62 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| (U.S. Dollars in millions) | June 30, 2021 | December 31, 2020 | |||||||||||||||||||||
| Amount | % | Amount | % | ||||||||||||||||||||
| Total RIF by State: | |||||||||||||||||||||||
| Texas | $ | 5,560 | 8.0 | $ | 5,636 | 8.0 | |||||||||||||||||
| California | 5,324 | 7.7 | 5,261 | 7.5 | |||||||||||||||||||
| Florida | 3,367 | 4.8 | 3,632 | 5.2 | |||||||||||||||||||
| Minnesota | 2,973 | 4.3 | 2,520 | 3.6 | |||||||||||||||||||
| North Carolina | 2,924 | 4.2 | 2,622 | 3.7 | |||||||||||||||||||
| Georgia | 2,886 | 4.1 | 2,959 | 4.2 | |||||||||||||||||||
| Illinois | 2,832 | 4.1 | 2,762 | 3.9 | |||||||||||||||||||
| Massachusetts | 2,459 | 3.5 | 2,464 | 3.5 | |||||||||||||||||||
| Virginia | 2,372 | 3.4 | 2,526 | 3.6 | |||||||||||||||||||
| Ohio | 2,229 | 3.2 | 2,264 | 3.2 | |||||||||||||||||||
| Other | 36,661 | 52.7 | 37,876 | 53.7 | |||||||||||||||||||
| Total | $ | 69,587 | 100.0 | $ | 70,522 | 100.0 | |||||||||||||||||
| (U.S. Dollars in thousands, except policy, loan and claim count) | Six Months Ended | ||||||||||
| June 30, | |||||||||||
| 2021 | 2020 | ||||||||||
| Roll-forward of insured loans in default: | |||||||||||
| Beginning delinquent number of loans | 52,234 | 20,163 | |||||||||
New notices | 18,415 | 67,793 | |||||||||
Cures | (32,924) | (22,205) | |||||||||
Paid
claims | (406) | (1,084) | |||||||||
| Ending delinquent number of loans (1) | 37,319 | 64,667 | |||||||||
| Ending number of policies in force (1) | 1,199,918 | 1,259,328 | |||||||||
| Delinquency rate (1) | 3.11 | % | 5.14 | % | |||||||
| Losses: | |||||||||||
| Number of claims paid | 406 | 1,084 | |||||||||
| Total paid claims | $ | 15,297 | $ | 46,139 | |||||||
| Average per claim | $ | 37.7 | $ | 42.6 | |||||||
| Severity (2) | 81.0 | % | 94.3 | % | |||||||
| Average case reserve per default (in thousands) | $ | 19.5 | $ | 6.9 | |||||||
| (U.S. dollars in thousands, except share data) | June
30, 2021 | December 31, 2020 | |||||||||
| Total shareholders’ equity available to Arch | $ | 13,986,072 | $ | 13,105,886 | |||||||
| Less preferred shareholders’ equity | 1,280,000 | 780,000 | |||||||||
| Common shareholders’ equity available to Arch | $ | 12,706,072 | $ | 12,325,886 | |||||||
| Common shares and common share equivalents outstanding, net of treasury shares (1) | 396,771,251 | 406,720,642 | |||||||||
| Book value per share | $ | 32.02 | $ | 30.31 | |||||||
| ARCH CAPITAL | 63 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Six Months Ended | |||||||||||
| June 30, | |||||||||||
| 2021 | 2020 | ||||||||||
| Total cash provided by (used for): | |||||||||||
| Operating activities | $ | 1,565,718 | $ | 1,234,383 | |||||||
| Investing activities | (1,174,033) | (1,888,221) | |||||||||
| Financing activities | 8,352 | 824,990 | |||||||||
| Effects of exchange rate changes on foreign currency cash | (9,868) | (15,384) | |||||||||
| Increase (decrease) in cash and restricted cash | $ | 390,169 | $ | 155,768 | |||||||
| (U.S. dollars in thousands, except share data) | Jun
30, 2021 | Dec 31, 2020 | |||||||||
| Senior notes | $ | 2,723,903 | $ | 2,723,423 | |||||||
| Shareholders’ equity available to Arch: | |||||||||||
| Series E non-cumulative preferred shares | $ | 450,000 | $ | 450,000 | |||||||
| Series F non-cumulative preferred shares | 330,000 | 330,000 | |||||||||
| Series G non-cumulative preferred shares | 500,000 | — | |||||||||
| Common shareholders’ equity | 12,706,072 | 12,325,886 | |||||||||
| Total | $ | 13,986,072 | $ | 13,105,886 | |||||||
| Total capital available to Arch | $ | 16,709,975 | $ | 15,829,309 | |||||||
| Debt to total capital (%) | 16.3 | 17.2 | |||||||||
| Preferred to total capital (%) | 7.7 | 4.9 | |||||||||
| Debt and preferred to total capital (%) | 24.0 | 22.1 | |||||||||
| ARCH CAPITAL | 64 | 2021 SECOND QUARTER FORM 10-Q | ||||||
Interest | Principal | Carrying | ||||||||||||||||||
Issuer/Due | (Fixed) | Amount | Amount | |||||||||||||||||
| Arch Capital: | ||||||||||||||||||||
| 7.350 | % | $ | 300,000 | $ | 297,426 | |||||||||||||||
June 30, 2050 | 3.635 | % | 1,000,000 | 988,609 | ||||||||||||||||
| Arch-U.S.: | ||||||||||||||||||||
Nov.
1, 2043 (1) | 5.144 | % | 500,000 | 495,003 | ||||||||||||||||
| Arch Finance: | ||||||||||||||||||||
Dec. 15, 2026 (1) | 4.011 | % | 500,000 | 497,420 | ||||||||||||||||
Dec.
15, 2046 (1) | 5.031 | % | 450,000 | 445,445 | ||||||||||||||||
Total | $ | 2,750,000 | $ | 2,723,903 | ||||||||||||||||
| June 30, 2021 | December 31, 2020 | ||||||||||||||||||||||||||||||||||||||||
| Arch Capital | Arch-U.S. | Arch Capital | Arch-U.S. | ||||||||||||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||||||||||||
| Total investments | $ | 508 | $ | 373,784 | $ | 172 | $ | 396,547 | |||||||||||||||||||||||||||||||||
| Cash | 15,239 | 27,434 | 18,932 | 11,368 | |||||||||||||||||||||||||||||||||||||
| Investment in operating affiliates | 7,294 | — | 7,731 | — | |||||||||||||||||||||||||||||||||||||
| Due from subsidiaries and affiliates | — | 225,006 | — | 201,515 | |||||||||||||||||||||||||||||||||||||
| Other assets | 15,244 | 27,568 | 10,659 | 34,405 | |||||||||||||||||||||||||||||||||||||
| Total assets | $ | 38,285 | $ | 653,792 | $ | 37,494 | $ | 643,835 | |||||||||||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||||||||||||||
| Senior notes | 1,286,035 | 495,003 | 1,285,867 | 494,944 | |||||||||||||||||||||||||||||||||||||
| Due to subsidiaries and affiliates | — | 551,760 | — | 586,805 | |||||||||||||||||||||||||||||||||||||
| Other liabilities | 20,172 | 42,582 | 23,270 | 41,876 | |||||||||||||||||||||||||||||||||||||
| Total liabilities | $ | 1,306,207 | $ | 1,089,345 | $ | 1,309,137 | $ | 1,123,625 | |||||||||||||||||||||||||||||||||
| Non-cumulative preferred shares | $ | 1,280,000 | — | $ | 780,000 | — | |||||||||||||||||||||||||||||||||||
| ARCH CAPITAL | 65 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Six Months Ended | Year Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| June 30, 2021 | December 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Arch Capital | Arch-U.S. | Arch Capital | Arch-U.S. | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment income | $ | 796 | $ | 5,007 | $ | 53 | $ | 18,084 | |||||||||||||||||||||||||||||||||||||||||||||
| Net realized gains (losses) | — | 70,522 | (2,110) | 26,096 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Equity in net income (loss) of investments accounted for using the equity method | — | 10,678 | — | 2,507 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total revenues | 796 | 86,207 | (2,057) | 46,687 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate expenses | 37,021 | 3,007 | 65,566 | 7,227 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | 29,369 | 23,567 | 40,445 | 47,566 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net foreign exchange (gains) losses | 6 | — | 3 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total expenses | 66,396 | 26,574 | 106,014 | 54,793 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) before income taxes and income (loss) from operating affiliates | (65,600) | 59,633 | (108,071) | (8,106) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Income tax (expense) benefit | — | (14,731) | — | 2,689 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from operating affiliates | (317) | — | (437) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net income available to Arch | (65,917) | 44,902 | (108,508) | (5,417) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred dividends | (22,069) | — | (41,612) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net income available to Arch common shareholders | $ | (87,986) | $ | 44,902 | $ | (150,120) | $ | (5,417) | |||||||||||||||||||||||||||||||||||||||||||||
| ARCH CAPITAL | 66 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| ARCH CAPITAL | 67 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| (U.S. dollars in billions) | Interest Rate Shift in Basis Points | ||||||||||||||||||||||||||||
| -100 | -50 | — | +50 | +100 | |||||||||||||||||||||||||
| Jun 30, 2021 | |||||||||||||||||||||||||||||
| Total fair value | $ | 25.83 | $ | 25.45 | $ | 25.08 | $ | 24.70 | $ | 24.33 | |||||||||||||||||||
| Change from base | 3.0 | % | 1.5 | % | (1.5) | % | (3.0) | % | |||||||||||||||||||||
| Change in unrealized value | $ | 0.75 | $ | 0.38 | $ | (0.38) | $ | (0.75) | |||||||||||||||||||||
| Dec 31, 2020 | |||||||||||||||||||||||||||||
| Total fair value | $ | 25.82 | $ | 25.44 | $ | 25.07 | $ | 24.69 | $ | 24.31 | |||||||||||||||||||
| Change from base | 3.0 | % | 1.5 | % | (1.5) | % | (3.0) | % | |||||||||||||||||||||
| Change in unrealized value | $ | 0.75 | $ | 0.38 | $ | (0.38) | $ | (0.75) | |||||||||||||||||||||
| (U.S. dollars in billions) | Credit Spread Shift in Percentage Points | ||||||||||||||||||||||||||||
| -100 | -50 | — | +50 | +100 | |||||||||||||||||||||||||
| Jun 30, 2021 | |||||||||||||||||||||||||||||
| Total fair value | $ | 25.55 | $ | 25.33 | $ | 25.08 | $ | 24.83 | $ | 24.60 | |||||||||||||||||||
| Change from base | 1.9 | % | 1.0 | % | (1.0) | % | (1.9) | % | |||||||||||||||||||||
| Change in unrealized value | $ | 0.48 | $ | 0.25 | $ | (0.25) | $ | (0.48) | |||||||||||||||||||||
| Dec 31, 2020 | |||||||||||||||||||||||||||||
| Total fair value | $ | 25.54 | $ | 25.32 | $ | 25.07 | $ | 24.82 | $ | 24.59 | |||||||||||||||||||
| Change from base | 1.9 | % | 1.0 | % | (1.0) | % | (1.9) | % | |||||||||||||||||||||
| Change in unrealized value | $ | 0.48 | $ | 0.25 | $ | (0.25) | $ | (0.48) | |||||||||||||||||||||
| ARCH CAPITAL | 68 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| (U.S. dollars in thousands, except per share data) | June
30, 2021 | December 31, 2020 | |||||||||
| Net assets (liabilities), denominated in foreign currencies, excluding shareholders’ equity and derivatives | $ | (11,717) | $ | (309,968) | |||||||
| Shareholders’ equity denominated in foreign currencies (1) | 808,505 | 695,355 | |||||||||
| Net foreign currency forward contracts outstanding (2) | 456,727 | 1,108,161 | |||||||||
| Net exposures denominated in foreign currencies | $ | 1,253,515 | $ | 1,493,548 | |||||||
| Pre-tax impact of a hypothetical 10% appreciation of the U.S. Dollar against foreign currencies: | |||||||||||
| Shareholders’ equity | $ | (125,352) | $ | (149,355) | |||||||
| Book value per share | $ | (0.32) | $ | (0.37) | |||||||
| Pre-tax impact of a hypothetical 10% decline of the U.S. Dollar against foreign currencies: | |||||||||||
| Shareholders’ equity | $ | 125,352 | $ | 149,355 | |||||||
| Book value per share | $ | 0.32 | $ | 0.37 | |||||||
| ARCH CAPITAL | 69 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| ARCH CAPITAL | 70 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Issuer Purchases of Equity Securities | ||||||||||||||||||||||||||
| Period | Total Number of
Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet be Purchased Under the Plan or Programs (2) | ||||||||||||||||||||||
| 4/1/2021-4/30/2021 | 25,531 | $ | 39.91 | — | $ | 737,262 | ||||||||||||||||||||
| 5/1/2021-5/31/2021 | 2,739,667 | 39.99 | 2,604,338 | $ | 633,077 | |||||||||||||||||||||
| 6/1/2021-6/30/2021 | 5,205,413 | 38.81 | 5,201,117 | $ | 431,213 | |||||||||||||||||||||
| Total | 7,970,611 | $ | 39.22 | 7,805,455 | ||||||||||||||||||||||
| ARCH CAPITAL | 71 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| Incorporated by Reference | ||||||||||||||||||||||||||||||||
| Exhibit Number | Exhibit Description | Form | Original Number | Date Filed | Filed Herewith | |||||||||||||||||||||||||||
| 1.01 | 8-K | 1.01 | 6/3/2021 | |||||||||||||||||||||||||||||
| 4.1 | 8-K | 4.1 | 6/11/2021 | |||||||||||||||||||||||||||||
| 4.2 | 8-K | 4.2 | 6/11/2021 | |||||||||||||||||||||||||||||
| 4.3 | 8-K | 4.3 | 6/11/2021 | |||||||||||||||||||||||||||||
| 4.4 | 8-K | 4.4 | 6/11/2021 | |||||||||||||||||||||||||||||
| 10.1 | X | |||||||||||||||||||||||||||||||
| 15 | X | |||||||||||||||||||||||||||||||
| 31.1 | X | |||||||||||||||||||||||||||||||
| 31.2 | X | |||||||||||||||||||||||||||||||
| 32.1 | X | |||||||||||||||||||||||||||||||
| 32.2 | X | |||||||||||||||||||||||||||||||
| 101.INS | XBRL Instance Document | |||||||||||||||||||||||||||||||
| 101.SCH | XBRL Taxonomy Extension Schema Document | |||||||||||||||||||||||||||||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||||||||||||||||||||||||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||||||||||||||||||||||||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||||||||||||||||||||||||||||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||||||||||||||||||||||||||
| ARCH CAPITAL | 72 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| ARCH CAPITAL GROUP LTD. | ||||||||
| (REGISTRANT) | ||||||||
| /s/ Marc Grandisson | ||||||||
| Date: August 5, 2021 | Marc Grandisson | |||||||
| Chief Executive Officer (Principal Executive Officer) | ||||||||
| /s/ François Morin | ||||||||
| Date: August 5, 2021 | François Morin | |||||||
| Executive Vice President, Chief Financial Officer (Principal Financial and Accounting Officer) and Treasurer | ||||||||
| ARCH CAPITAL | 73 | 2021 SECOND QUARTER FORM 10-Q | ||||||
| This ‘10-Q’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| 5/1/34 | ||||
| 7/2/29 | ||||
| 12/15/26 | ||||
| 6/11/26 | ||||
| 12/31/21 | 10-K, 13F-HR, 5 | |||
| Filed on: | 8/5/21 | 13F-HR | ||
| 7/30/21 | ||||
| 7/1/21 | 4 | |||
| For Period end: | 6/30/21 | 13F-HR | ||
| 3/31/21 | 10-Q, 13F-HR | |||
| 2/26/21 | 10-K, 4, 8-K | |||
| 1/1/21 | ||||
| 12/31/20 | 10-K, 13F-HR, 5 | |||
| 12/1/20 | ||||
| 11/30/20 | ||||
| 9/1/20 | ||||
| 8/31/20 | ||||
| 6/30/20 | 10-Q, 8-K | |||
| 6/1/20 | ||||
| 5/31/20 | ||||
| 1/1/20 | 3, 4 | |||
| 12/31/19 | 10-K | |||
| 7/1/19 | ||||
| 6/30/19 | 10-Q | |||
| 1/1/19 | ||||
| 12/31/18 | 10-K, 5 | |||
| 7/1/18 | ||||
| 6/30/18 | 10-Q | |||
| 1/1/18 | ||||
| 12/31/17 | 10-K, 5 | |||
| 7/1/17 | 8-K | |||
| 6/30/17 | 10-Q | |||
| 1/1/17 | ||||
| List all Filings | ||||
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 2/23/24 Arch Capital Group Ltd. 10-K 12/31/23 166:34M 2/24/23 Arch Capital Group Ltd. 10-K 12/31/22 164:39M 2/25/22 Arch Capital Group Ltd. 10-K 12/31/21 170:41M |
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 6/11/21 Arch Capital Group Ltd. 8-K:5,8,9 6/11/21 17:927K 6/03/21 Arch Capital Group Ltd. 8-K:1,8,9 6/02/21 13:570K |