10-QPeriod: Q2 FY2009

ARCH CAPITAL GROUP LTD. Quarterly Report for Q2 Ended Jun 30, 2009

Filed August 7, 2009For Securities:ACGLACGLNACGLO

Summary

Arch Capital Group Ltd. (ACGL) reported a solid financial performance for the quarter ended June 30, 2009. The company demonstrated resilience in a challenging economic environment, with net income available to common shareholders of $152.1 million, translating to a diluted earnings per share of $2.43. This performance reflects a robust underwriting income from its reinsurance segment, which significantly offset a weaker performance in the insurance segment. Investment income, while lower than the prior year's period, remained a substantial contributor to overall profitability. Key financial highlights include a strong growth in the reinsurance segment's underwriting income, driven by a favorable loss ratio, and a healthy combined ratio across both segments. The company's investment portfolio showed a positive total return, despite a challenging market. ACGL's capital base remained strong, with total shareholders' equity increasing to $4.03 billion, supported by net income and an increase in the market value of its investment portfolio. The company also continued its share repurchase program, indicating confidence in its financial position and commitment to shareholder value.

Financial Highlights

19 data points
Beta

Revenue

$848.74M

Net Income

$158.59M

18.7% Net Margin

EPS (Diluted)

$0.27

Cash & Equivalents

$336.69M

Free Cash Flow

$518.54M

Financial Statements
Beta
Revenue$848.74M
Interest Expense$5.71M
Net Income$158.59M
EPS (Basic)$0.28
EPS (Diluted)$0.27
Shares Outstanding (Basic)543.76M
Shares Outstanding (Diluted)563.64M

Key Highlights

  • 1Net income available to common shareholders was $152.1 million, or $2.43 per diluted share for the second quarter of 2009.
  • 2Total shareholders' equity increased to $4.03 billion as of June 30, 2009.
  • 3The reinsurance segment generated underwriting income of $88.3 million, with a combined ratio of 68.7%, showing improved profitability.
  • 4The insurance segment's underwriting income was $1.3 million, with a combined ratio of 99.7%, indicating a challenging quarter for this segment.
  • 5Net investment income was $100.5 million for the quarter, though lower than the prior year due to declining yields and reduced portfolio duration.
  • 6The company repurchased $1.6 million of its common shares during the quarter as part of its ongoing share repurchase program.
  • 7The company's investment portfolio generated a total return of 3.89% for the quarter, indicating positive performance despite market conditions.

Frequently Asked Questions

For the quarter ended June 30, 2009, Arch Capital Group Ltd. reported net income available to common shareholders of $152.1 million, which translated to a diluted earnings per common share of $2.43.

The reinsurance segment showed strong performance with an underwriting income of $88.3 million and a combined ratio of 68.7%. The insurance segment faced challenges, reporting an underwriting income of $1.3 million and a combined ratio of 99.7%.

Arch Capital maintained a strong financial position, with total shareholders' equity reaching $4.03 billion as of June 30, 2009. The company's capital base grew from $3.43 billion at the end of 2008, reflecting net income and positive investment performance.

The company's investment portfolio yielded positive results despite market volatility. Net investment income was $100.5 million, and the total portfolio return was 3.89% for the quarter. However, net investment income was lower than the prior year due to declining yields and portfolio adjustments.