XML 44 R26.htm IDEA: XBRL DOCUMENT v3.19.3
Segment Information (Tables)
 9 Months Ended
Sep. 30, 2019
Segment Reporting [Abstract]  
Analysis of underwriting income or loss by segment and reconciliation to net income available to common shareholders
The following tables summarize the Company’s underwriting income or loss by segment, together with a reconciliation of underwriting income or loss to net income available to Arch common shareholders:
 
Three Months Ended
 
September 30, 2019
 
Insurance
 
Reinsurance
 
Mortgage
 
Sub-Total
 
Other
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Gross premiums written (1)
$
1,005,874

 
$
662,572

 
$
375,092

 
$
2,043,292

 
$
249,960

 
$
2,181,121

Premiums ceded
(302,034
)
 
(226,096
)
 
(57,703
)
 
(585,587
)
 
(94,208
)
 
(567,664
)
Net premiums written
703,840

 
436,476

 
317,389

 
1,457,705

 
155,752

 
1,613,457

Change in unearned premiums
(98,504
)
 
(72,621
)
 
25,611

 
(145,514
)
 
(29,920
)
 
(175,434
)
Net premiums earned
605,336

 
363,855

 
343,000

 
1,312,191

 
125,832

 
1,438,023

Other underwriting income (loss)
—

 
(1,208
)
 
3,955

 
2,747

 
579

 
3,326

Losses and loss adjustment expenses
(422,782
)
 
(270,379
)
 
(13,080
)
 
(706,241
)
 
(96,214
)
 
(802,455
)
Acquisition expenses
(91,259
)
 
(62,393
)
 
(34,396
)
 
(188,048
)
 
(23,072
)
 
(211,120
)
Other operating expenses
(115,408
)
 
(32,533
)
 
(37,003
)
 
(184,944
)
 
(11,568
)
 
(196,512
)
Underwriting income (loss)
$
(24,113
)
 
$
(2,658
)
 
$
262,476

 
235,705

 
(4,443
)
 
231,262

 
 
 
 
 
 
 
 
 
 
 
 
Net investment income
 
 
 
 
 
 
126,874

 
34,614

 
161,488

Net realized gains (losses)
 
 
 
 
 
 
81,177

 
(18,659
)
 
62,518

Net impairment losses recognized in earnings
 
 
 
 
 
 
(1,163
)
 
—

 
(1,163
)
Equity in net income (loss) of investment funds accounted for using the equity method
 
 
 
 
 
 
17,130

 
—

 
17,130

Other income (loss)
 
 
 
 
 
 
1,338

 
—

 
1,338

Corporate expenses (2)
 
 
 
 
 
 
(15,066
)
 
—

 
(15,066
)
Transaction costs and other (2)
 
 
 
 
 
 
(1,995
)
 
—

 
(1,995
)
Amortization of intangible assets
 
 
 
 
 
 
(20,003
)
 
—

 
(20,003
)
Interest expense
 
 
 
 
 
 
(23,237
)
 
(8,091
)
 
(31,328
)
Net foreign exchange gains (losses)
 
 
 
 
 
 
29,794

 
3,330

 
33,124

Income before income taxes
 
 
 
 
 
 
430,554

 
6,751

 
437,305

Income tax expense
 
 
 
 
 
 
(38,116
)
 
—

 
(38,116
)
Net income
 
 
 
 
 
 
392,438

 
6,751

 
399,189

Dividends attributable to redeemable noncontrolling interests
 
 
 
 
 
 
—

 
(6,600
)
 
(6,600
)
Amounts attributable to nonredeemable noncontrolling interests
 
 
 
 
 
 
—

 
(136
)
 
(136
)
Net income available to Arch
 
 
 
 
 
 
392,438

 
15

 
392,453

Preferred dividends
 
 
 
 
 
 
(10,403
)
 
—

 
(10,403
)
Net income available to Arch common shareholders
 
 
 
 
 
 
$
382,035

 
$
15

 
$
382,050

 
 
 
 
 
 
 
 
 
 
 
 
Underwriting Ratios
 

 
 

 
 

 
 
 
 

 
 

Loss ratio
69.8
%
 
74.3
%
 
3.8
%
 
53.8
%
 
76.5
%
 
55.8
%
Acquisition expense ratio
15.1
%
 
17.1
%
 
10.0
%
 
14.3
%
 
18.3
%
 
14.7
%
Other operating expense ratio
19.1
%
 
8.9
%
 
10.8
%
 
14.1
%
 
9.2
%
 
13.7
%
Combined ratio
104.0
%
 
100.3
%
 
24.6
%
 
82.2
%
 
104.0
%
 
84.2
%
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill and intangible assets
$
158,990

 
$
—

 
$
457,860

 
$
616,850

 
$
7,650

 
$
624,500


(1)
Certain amounts included in the gross premiums written of each segment are related to intersegment transactions. Accordingly, the sum of gross premiums written for each segment does not agree to the total gross premiums written as shown in the table above due to the elimination of intersegment transactions in the total.
(2)
Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘transaction costs and other.’

 
Three Months Ended
 
September 30, 2018
 
Insurance
 
Reinsurance
 
Mortgage
 
Sub-Total
 
Other
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Gross premiums written (1)
$
836,820

 
$
435,396

 
$
350,559

 
$
1,622,532

 
$
185,033

 
$
1,731,328

Premiums ceded
(259,968
)
 
(123,705
)
 
(57,226
)
 
(440,656
)
 
(33,356
)
 
(397,775
)
Net premiums written
576,852

 
311,691

 
293,333

 
1,181,876

 
151,677

 
1,333,553

Change in unearned premiums
(15,794
)
 
(18,418
)
 
7,591

 
(26,621
)
 
(16,054
)
 
(42,675
)
Net premiums earned
561,058

 
293,273

 
300,924

 
1,155,255

 
135,623

 
1,290,878

Other underwriting income (loss)
—

 
1,387

 
3,733

 
5,120

 
703

 
5,823

Losses and loss adjustment expenses
(409,435
)
 
(183,413
)
 
(9,615
)
 
(602,463
)
 
(96,957
)
 
(699,420
)
Acquisition expenses
(88,255
)
 
(50,367
)
 
(33,361
)
 
(171,983
)
 
(29,619
)
 
(201,602
)
Other operating expenses
(90,081
)
 
(29,936
)
 
(31,122
)
 
(151,139
)
 
(9,959
)
 
(161,098
)
Underwriting income (loss)
$
(26,713
)
 
$
30,944

 
$
230,559

 
234,790

 
(209
)
 
234,581

 
 
 
 
 
 
 
 
 
 
 
 
Net investment income
 
 
 
 
 
 
114,328

 
29,696

 
144,024

Net realized gains (losses)
 
 
 
 
 
 
(47,010
)
 
(4,695
)
 
(51,705
)
Net impairment losses recognized in earnings
 
 
 
 
 
 
(492
)
 
—

 
(492
)
Equity in net income (loss) of investment funds accounted for using the equity method
 
 
 
 
 
 
15,982

 
—

 
15,982

Other income (loss)
 
 
 
 
 
 
(726
)
 
—

 
(726
)
Corporate expenses (2)
 
 
 
 
 
 
(13,244
)
 
—

 
(13,244
)
Transaction costs and other (2)
 
 
 
 
 
 
(1,091
)
 
—

 
(1,091
)
Amortization of intangible assets
 
 
 
 
 
 
(26,315
)
 
—

 
(26,315
)
Interest expense
 
 
 
 
 
 
(24,666
)
 
(5,064
)
 
(29,730
)
Net foreign exchange gains (losses)
 
 
 
 
 
 
7,130

 
3,708

 
10,838

Income before income taxes
 
 
 
 
 
 
258,686

 
23,436

 
282,122

Income tax expense
 
 
 
 
 
 
(33,356
)
 
—

 
(33,356
)
Net income
 
 
 
 
 
 
225,330

 
23,436

 
248,766

Dividends attributable to redeemable noncontrolling interests
 
 
 
 
 
 
—

 
(4,599
)
 
(4,599
)
Amounts attributable to nonredeemable noncontrolling interests
 
 
 
 
 
 
—

 
(16,759
)
 
(16,759
)
Net income available to Arch
 
 
 
 
 
 
225,330

 
2,078

 
227,408

Preferred dividends
 
 
 
 
 
 
(10,402
)
 
—

 
(10,402
)
Net income available to Arch common shareholders
 
 
 
 
 
 
$
214,928

 
$
2,078

 
$
217,006

 
 
 
 
 
 
 
 
 
 
 
 
Underwriting Ratios
 

 
 

 
 

 
 
 
 

 
 

Loss ratio
73.0
%
 
62.5
%
 
3.2
%
 
52.1
%
 
71.5
%
 
54.2
%
Acquisition expense ratio
15.7
%
 
17.2
%
 
11.1
%
 
14.9
%
 
21.8
%
 
15.6
%
Other operating expense ratio
16.1
%
 
10.2
%
 
10.3
%
 
13.1
%
 
7.3
%
 
12.5
%
Combined ratio
104.8
%
 
89.9
%
 
24.6
%
 
80.1
%
 
100.6
%
 
82.3
%
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill and intangible assets
$
20,141

 
$
—

 
$
538,871

 
$
559,012

 
$
7,650

 
$
566,662


(1)
Certain amounts included in the gross premiums written of each segment are related to intersegment transactions. Accordingly, the sum of gross premiums written for each segment does not agree to the total gross premiums written as shown in the table above due to the elimination of intersegment transactions in the total.
(2)
Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘transaction costs and other.’



 
Nine Months Ended
 
September 30, 2019
 
Insurance
 
Reinsurance
 
Mortgage
 
Sub-Total
 
Other
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Gross premiums written (1)
$
2,867,753

 
$
1,890,974

 
$
1,095,607

 
$
5,853,574

 
$
598,627

 
$
6,196,809

Premiums ceded
(914,751
)
 
(627,120
)
 
(149,358
)
 
(1,690,469
)
 
(178,118
)
 
(1,613,195
)
Net premiums written
1,953,002

 
1,263,854

 
946,249

 
4,163,105

 
420,509

 
4,583,614

Change in unearned premiums
(201,719
)
 
(186,450
)
 
72,436

 
(315,733
)
 
2,735

 
(312,998
)
Net premiums earned
1,751,283

 
1,077,404

 
1,018,685

 
3,847,372

 
423,244

 
4,270,616

Other underwriting income (loss)
—

 
4,393

 
11,867

 
16,260

 
1,844

 
18,104

Losses and loss adjustment expenses
(1,168,677
)
 
(751,147
)
 
(50,226
)
 
(1,970,050
)
 
(318,480
)
 
(2,288,530
)
Acquisition expenses
(265,177
)
 
(173,504
)
 
(98,722
)
 
(537,403
)
 
(81,654
)
 
(619,057
)
Other operating expenses
(338,327
)
 
(102,197
)
 
(116,697
)
 
(557,221
)
 
(39,368
)
 
(596,589
)
Underwriting income (loss)
$
(20,898
)
 
$
54,949

 
$
764,907

 
798,958

 
(14,414
)
 
784,544

 
 
 
 
 
 
 
 
 
 
 
 
Net investment income
 
 
 
 
 
 
371,161

 
102,314

 
473,475

Net realized gains (losses)
 
 
 
 
 
 
318,722

 
6,167

 
324,889

Net impairment losses recognized in earnings
 
 
 
 
 
 
(2,521
)
 
—

 
(2,521
)
Equity in net income (loss) of investment funds accounted for using the equity method
 
 
 
 
 
 
96,533

 
—

 
96,533

Other income (loss)
 
 
 
 
 
 
3,550

 
—

 
3,550

Corporate expenses (2)
 
 
 
 
 
 
(47,911
)
 
—

 
(47,911
)
Transaction costs and other (2)
 
 
 
 
 
 
(5,363
)
 
—

 
(5,363
)
Amortization of intangible assets
 
 
 
 
 
 
(60,214
)
 
—

 
(60,214
)
Interest expense
 
 
 
 
 
 
(70,094
)
 
(19,579
)
 
(89,673
)
Net foreign exchange gains (losses)
 
 
 
 
 
 
28,779

 
2,918

 
31,697

Income before income taxes
 
 
 
 
 
 
1,431,600

 
77,406

 
1,509,006

Income tax expense
 
 
 
 
 
 
(128,454
)
 
(20
)
 
(128,474
)
Net income
 
 
 
 
 
 
1,303,146

 
77,386

 
1,380,532

Dividends attributable to redeemable noncontrolling interests
 
 
 
 
 
 
—

 
(15,778
)
 
(15,778
)
Amounts attributable to nonredeemable noncontrolling interests
 
 
 
 
 
 
—

 
(54,819
)
 
(54,819
)
Net income available to Arch
 
 
 
 
 
 
1,303,146

 
6,789

 
1,309,935

Preferred dividends
 
 
 
 
 
 
(31,209
)
 
—

 
(31,209
)
Net income available to Arch common shareholders
 
 
 
 
 
 
$
1,271,937

 
$
6,789

 
$
1,278,726

 
 
 
 
 
 
 
 
 
 
 
 
Underwriting Ratios
 

 
 

 
 

 
 
 
 

 
 

Loss ratio
66.7
%
 
69.7
%
 
4.9
%
 
51.2
%
 
75.2
%
 
53.6
%
Acquisition expense ratio
15.1
%
 
16.1
%
 
9.7
%
 
14.0
%
 
19.3
%
 
14.5
%
Other operating expense ratio
19.3
%
 
9.5
%
 
11.5
%
 
14.5
%
 
9.3
%
 
14.0
%
Combined ratio
101.1
%
 
95.3
%
 
26.1
%
 
79.7
%
 
103.8
%
 
82.1
%
(1)
Certain amounts included in the gross premiums written of each segment are related to intersegment transactions. Accordingly, the sum of gross premiums written for each segment does not agree to the total gross premiums written as shown in the table above due to the elimination of intersegment transactions in the total.
(2)
Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘transaction costs and other.’

 
Nine Months Ended
 
September 30, 2018
 
Insurance
 
Reinsurance
 
Mortgage
 
Sub-Total
 
Other
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Gross premiums written (1)
$
2,429,570

 
$
1,503,206

 
$
1,002,727

 
$
4,935,339

 
$
574,078

 
$
5,266,086

Premiums ceded
(752,413
)
 
(455,682
)
 
(154,230
)
 
(1,362,161
)
 
(102,263
)
 
(1,221,093
)
Net premiums written
1,677,157

 
1,047,524

 
848,497

 
3,573,178

 
471,815

 
4,044,993

Change in unearned premiums
(30,913
)
 
(134,761
)
 
23,147

 
(142,527
)
 
(39,926
)
 
(182,453
)
Net premiums earned
1,646,244

 
912,763

 
871,644

 
3,430,651

 
431,889

 
3,862,540

Other underwriting income (loss)
—

 
2,490

 
10,464

 
12,954

 
2,092

 
15,046

Losses and loss adjustment expenses
(1,120,630
)
 
(555,044
)
 
(74,672
)
 
(1,750,346
)
 
(312,087
)
 
(2,062,433
)
Acquisition expenses
(264,094
)
 
(148,828
)
 
(87,665
)
 
(500,587
)
 
(95,229
)
 
(595,816
)
Other operating expenses
(274,735
)
 
(101,185
)
 
(108,622
)
 
(484,542
)
 
(27,752
)
 
(512,294
)
Underwriting income (loss)
$
(13,215
)
 
$
110,196

 
$
611,149

 
708,130

 
(1,087
)
 
707,043

 
 
 
 
 
 
 
 
 
 
 
 
Net investment income
 
 
 
 
 
 
322,332

 
84,084

 
406,416

Net realized gains (losses)
 
 
 
 
 
 
(218,414
)
 
(20,900
)
 
(239,314
)
Net impairment losses recognized in earnings
 
 
 
 
 
 
(1,124
)
 
—

 
(1,124
)
Equity in net income (loss) of investment funds accounted for using the equity method
 
 
 
 
 
 
52,523

 
—

 
52,523

Other income (loss)
 
 
 
 
 
 
2,461

 
—

 
2,461

Corporate expenses (2)
 
 
 
 
 
 
(43,330
)
 
—

 
(43,330
)
Transaction costs and other (2)
 
 
 
 
 
 
(8,829
)
 
—

 
(8,829
)
Amortization of intangible assets
 
 
 
 
 
 
(79,523
)
 
—

 
(79,523
)
Interest expense
 
 
 
 
 
 
(76,631
)
 
(14,079
)
 
(90,710
)
Net foreign exchange gains (losses)
 
 
 
 
 
 
38,302

 
6,521

 
44,823

Income before income taxes
 
 
 
 
 
 
695,897

 
54,539

 
750,436

Income tax expense
 
 
 
 
 
 
(78,912
)
 
(27
)
 
(78,939
)
Net income
 
 
 
 
 
 
616,985

 
54,512

 
671,497

Dividends attributable to redeemable noncontrolling interests
 
 
 
 
 
 
—

 
(13,769
)
 
(13,769
)
Amounts attributable to nonredeemable noncontrolling interests
 
 
 
 
 
 
—

 
(36,251
)
 
(36,251
)
Net income available to Arch
 
 
 
 
 
 
616,985

 
4,492

 
621,477

Preferred dividends
 
 
 
 
 
 
(31,242
)
 
—

 
(31,242
)
Loss on redemption of preferred shares
 
 
 
 
 
 
(2,710
)
 
—

 
(2,710
)
Net income available to Arch common shareholders
 
 
 
 
 
 
$
583,033

 
$
4,492

 
$
587,525

 
 
 
 
 
 
 
 
 
 
 
 
Underwriting Ratios
 

 
 

 
 

 
 
 
 

 
 

Loss ratio
68.1
%
 
60.8
%
 
8.6
%
 
51.0
%
 
72.3
%
 
53.4
%
Acquisition expense ratio
16.0
%
 
16.3
%
 
10.1
%
 
14.6
%
 
22.0
%
 
15.4
%
Other operating expense ratio
16.7
%
 
11.1
%
 
12.5
%
 
14.1
%
 
6.4
%
 
13.3
%
Combined ratio
100.8
%
 
88.2
%
 
31.2
%
 
79.7
%
 
100.7
%
 
82.1
%

(1)
Certain amounts included in the gross premiums written of each segment are related to intersegment transactions. Accordingly, the sum of gross premiums written for each segment does not agree to the total gross premiums written as shown in the table above due to the elimination of intersegment transactions in the total.
(2)
Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘transaction costs and other.’