10-KPeriod: FY2009

ARCH CAPITAL GROUP LTD. Annual Report, Year Ended Dec 31, 2009

Filed February 26, 2010For Securities:ACGLACGLNACGLO

Summary

Arch Capital Group Ltd. (ACGL) reported a strong financial performance for the fiscal year ending December 31, 2009. The company demonstrated significant growth in book value per common share, which increased by 42.2% to $73.01, reflecting robust underwriting results and positive investment performance. ACGL's net income available to common shareholders was $851.1 million, with an after-tax operating income available to common shareholders of $651.8 million. The company's operating return on average common equity (Operating ROAE) stood at a healthy 18.3%. The insurance segment contributed positively to underwriting income in 2009, while the reinsurance segment also reported strong underwriting income, benefiting from favorable prior period reserve development and a reduction in current year catastrophe losses compared to 2008. The company's investment portfolio delivered an 11.28% pre-tax total return in 2009, outperforming its benchmark. ACGL maintained a solid capital position, with total shareholders' equity of $4.32 billion at year-end.

Financial Highlights

28 data points
Beta

Revenue

$3.50B

Net Income

$876.95M

25.0% Net Margin

EPS (Diluted)

$1.53

Total Assets

$15.38B

Cash & Equivalents

$334.57M

Free Cash Flow

$992.65M

Financial Statements
Beta
Revenue$3.50B
Interest Expense$24.44M
Net Income$876.95M
EPS (Basic)$1.59
EPS (Diluted)$1.53
Shares Outstanding (Basic)536.04M
Shares Outstanding (Diluted)557.34M

Key Highlights

  • 1Book Value per Common Share increased by 42.2% to $73.01 at December 31, 2009.
  • 2Net income available to common shareholders was $851.1 million for the year ended December 31, 2009.
  • 3Operating Return on Average Common Equity (Operating ROAE) was 18.3% for 2009.
  • 4Total investable assets grew to $11.38 billion at December 31, 2009.
  • 5The company maintained strong financial strength ratings across its key subsidiaries.
  • 6ACGL reported a combined ratio of 98.1% for its insurance segment and 73.7% for its reinsurance segment in 2009.
  • 7The company repurchased $458.4 million of its common shares in 2009 under its share repurchase program.

Frequently Asked Questions

Arch Capital Group Ltd. (ACGL) reported a strong financial performance in 2009, with net income available to common shareholders of $851.1 million and an after-tax operating income of $651.8 million. The company's book value per common share grew by 42.2% to $73.01, driven by solid underwriting results and positive investment returns. The operating return on average common equity (Operating ROAE) was 18.3%.

Both segments showed improvement. The insurance segment reported underwriting income of $32.9 million and a combined ratio of 98.1%, benefiting from a lack of significant catastrophic events in 2009 compared to the prior year. The reinsurance segment posted a robust underwriting income of $303.2 million and a combined ratio of 73.7%, aided by favorable prior period reserve development and reduced catastrophe losses.

ACGL maintained a strong capital position with total shareholders' equity of $4.32 billion at December 31, 2009. The company's investment portfolio totaled $11.38 billion and maintained a high average credit quality rating of 'AA+'. The investment strategy emphasizes capital preservation, market liquidity, and diversification, and delivered an 11.28% pre-tax total return in 2009, outperforming its benchmark.