10-K/APeriod: FY2005

ARCH CAPITAL GROUP LTD. Annual Report (Amendment), Year Ended Dec 31, 2005

Filed June 23, 2006For Securities:ACGLACGLNACGLO

Summary

Arch Capital Group Ltd. (ACGL) filed this amendment to its 2005 Form 10-K to correct dates in the auditor's report. The company, a Bermuda-based provider of property and casualty insurance and reinsurance, reported strong operational performance in 2005. ACGL generated $3.14 billion in net premiums and achieved a net income of $256.5 million, resulting in a 10.9% return on average equity. The company's book value per share increased by 9.0% to $33.82 by year-end 2005. ACGL's business is structured into two main segments: reinsurance and insurance. In 2005, the reinsurance segment wrote $1.66 billion in net premiums, while the insurance segment wrote $1.48 billion. Both segments focus on specialty lines, emphasizing disciplined underwriting and risk selection. The company has a robust capital base, with approximately $2.8 billion in capital at the end of 2005, and has been actively raising capital through various equity and debt offerings to support its underwriting activities. Despite a challenging market, ACGL demonstrated resilience, though the company noted increased exposure to catastrophic events in 2005, impacting its loss ratios.

Key Highlights

  • 1Arch Capital Group Ltd. (ACGL) reported net income of $256.5 million and a return on average equity of 10.9% for the fiscal year ended December 31, 2005.
  • 2Net premiums written reached $3.14 billion for 2005, with the reinsurance segment accounting for $1.66 billion and the insurance segment for $1.48 billion.
  • 3Diluted book value per share increased by 9.0% to $33.82 by the end of 2005.
  • 4The company's capital base stood at approximately $2.8 billion as of December 31, 2005.
  • 5ACGL's investment portfolio consisted of $7.12 billion in cash and invested assets at year-end 2005, with a significant portion (86.3%) in investment-grade fixed maturities.
  • 6The company maintains strong financial ratings, with its key subsidiaries holding 'A-' ratings from A.M. Best and 'A2' from Moody's.
  • 7This filing is an amendment (10-K/A) to correct dates in the original 10-K filing for the year ended December 31, 2005.

Frequently Asked Questions

This filing (10-K/A, Amendment No. 1) is an amendment to the original Form 10-K for the year ended December 31, 2005. Its primary purpose is to correct specific dates within Exhibit 23 and the Report of the Independent Registered Public Accounting Firm.

For the year ended December 31, 2005, ACGL reported net income of $256.5 million on net premiums written of $3.14 billion. The company achieved a return on average equity of 10.9% and saw its diluted book value per share increase by 9.0% to $33.82.

ACGL's operations are classified into two underwriting segments: reinsurance and insurance. Both segments focus on writing specialty lines of insurance and reinsurance on a worldwide basis.

As of December 31, 2005, Arch Capital Group Ltd. had approximately $2.8 billion in capital.

ACGL's investment strategy emphasizes capital preservation, market liquidity, and diversification of risk. The portfolio is primarily composed of high-quality fixed maturities, with approximately 96% rated investment grade by Standard & Poor's at December 31, 2005. The company also engages in a securities lending program.