10-KPeriod: FY2022

ARCH CAPITAL GROUP LTD. Annual Report, Year Ended Dec 31, 2022

Filed February 24, 2023For Securities:ACGLACGLNACGLO

Summary

Arch Capital Group Ltd. (ACGL) reported strong financial performance for the fiscal year ending December 31, 2022, demonstrating resilience and strategic execution in a dynamic market. The company generated net income available to common shareholders of $1.4 billion, with net premiums written reaching $11.1 billion across its insurance, reinsurance, and mortgage segments. This performance highlights the company's ability to navigate challenging economic conditions, including inflation and rising interest rates, while capitalizing on market dislocations and growth opportunities. ACGL maintained a disciplined underwriting philosophy focused on specialty lines, emphasizing risk-adjusted returns. The company's capital base remains strong, with book value per share at $32.62 as of December 31, 2022. The company also actively managed its capital through a share repurchase program, with $1.0 billion remaining authorization at year-end. The outlook for 2023 is positive, with management anticipating continued premium and revenue growth, supported by improved underwriting margins and favorable market conditions in key segments.

Financial Highlights

33 data points
Beta

Revenue

$9.61B

Net Income

$1.48B

15.4% Net Margin

EPS (Diluted)

$3.80

Total Assets

$47.99B

Cash & Equivalents

$855.00M

Free Cash Flow

$3.82B

Financial Statements
Beta
Revenue$9.61B
Interest Expense$131.00M
Net Income$1.48B
EPS (Basic)$3.90
EPS (Diluted)$3.80
Shares Outstanding (Basic)368.60M
Shares Outstanding (Diluted)377.60M

Key Highlights

  • 1Net income available to Arch common shareholders was $1.4 billion for the year ended December 31, 2022.
  • 2Net premiums written across all segments totaled $11.1 billion.
  • 3Book value per share was $32.62 as of December 31, 2022, a slight decrease from the prior year.
  • 4The company reported an annualized operating return on average common equity of 14.8% for 2022.
  • 5Total return on investments for 2022 was -6.45%, reflecting challenging market conditions, but outperformed the benchmark return of -9.60%.
  • 6The reinsurance segment showed significant growth, with net premiums written increasing by 51.3% year-over-year.
  • 7The company had $1.0 billion of share repurchase authorization remaining at December 31, 2022.

Frequently Asked Questions

Arch Capital reported a net income available to common shareholders of $1.4 billion for the fiscal year ended December 31, 2022. The company achieved net premiums written of $11.1 billion across its insurance, reinsurance, and mortgage segments, demonstrating strong operational performance despite challenging market conditions.

In 2022, Arch Capital's investment portfolio experienced a total return of -6.45%. This performance was impacted by rising interest rates on fixed maturities and weak equity markets. However, the company's return outperformed its benchmark return of -9.60%, and management noted that the portfolio remains cautious regarding duration, credit, and equity risk.

Growth was driven by strong underwriting performance across its specialty lines and favorable market conditions. The reinsurance segment, in particular, saw significant growth with net premiums written increasing by 51.3% due to market dislocations and rate improvements. The insurance segment also grew by 21.0%, benefiting from rate increases and new business opportunities.

Yes, Arch Capital repurchased shares under its share repurchase program in 2022. The company repurchased approximately 12.9 million shares for an aggregate amount of $585.8 million during the fiscal year. At December 31, 2022, there was $1.0 billion of remaining authorization for future share repurchases.