XML 39 R26.htm IDEA: XBRL DOCUMENT v3.20.2
Segment Information (Tables)
 6 Months Ended
Jun. 30, 2020
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
 
June 30, 2020
 
Insurance
 
Reinsurance
 
Mortgage
 
Sub-Total
 
Other
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Gross premiums written (1)
$
1,030,362

 
$
807,065

 
$
369,144

 
$
2,206,410

 
$
157,927

 
$
2,317,692

Premiums ceded
(358,101
)
 
(241,971
)
 
(44,044
)
 
(643,955
)
 
(52,071
)
 
(649,381
)
Net premiums written
672,261

 
565,094

 
325,100

 
1,562,455

 
105,856

 
1,668,311

Change in unearned premiums
15,648

 
(84,897
)
 
40,613

 
(28,636
)
 
25,679

 
(2,957
)
Net premiums earned
687,909

 
480,197

 
365,713

 
1,533,819

 
131,535

 
1,665,354

Other underwriting income (loss)
—

 
(651
)
 
6,450

 
5,799

 
868

 
6,667

Losses and loss adjustment expenses
(518,203
)
 
(383,433
)
 
(224,100
)
 
(1,125,736
)
 
(104,786
)
 
(1,230,522
)
Acquisition expenses
(107,671
)
 
(90,522
)
 
(34,052
)
 
(232,245
)
 
(22,544
)
 
(254,789
)
Other operating expenses
(118,757
)
 
(38,716
)
 
(37,574
)
 
(195,047
)
 
(14,202
)
 
(209,249
)
Underwriting income (loss)
$
(56,722
)
 
$
(33,125
)
 
$
76,437

 
(13,410
)
 
(9,129
)
 
(22,539
)
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income
 
 
 
 
 
 
101,031

 
30,454

 
131,485

Net realized gains (losses)
 
 
 
 
 
 
385,089

 
171,499

 
556,588

Equity in net income (loss) of investment funds accounted for using the equity method
 
 
 
 
 
 
(65,119
)
 
—

 
(65,119
)
Other income (loss)
 
 
 
 
 
 
(3,140
)
 
—

 
(3,140
)
Corporate expenses (2)
 
 
 
 
 
 
(16,943
)
 
—

 
(16,943
)
Transaction costs and other (2)
 
 
 
 
 
 
(977
)
 
—

 
(977
)
Amortization of intangible assets
 
 
 
 
 
 
(16,489
)
 
—

 
(16,489
)
Interest expense
 
 
 
 
 
 
(25,130
)
 
(6,009
)
 
(31,139
)
Net foreign exchange gains (losses)
 
 
 
 
 
 
(42,438
)
 
3,227

 
(39,211
)
Income (loss) before income taxes
 
 
 
 
 
 
302,474

 
190,042

 
492,516

Income tax (expense) benefit
 
 
 
 
 
 
(26,529
)
 
402

 
(26,127
)
Net income (loss)
 
 
 
 
 
 
275,945

 
190,444

 
466,389

Amounts attributable to redeemable noncontrolling interests
 
 
 
 
 
 
(934
)
 
(1,036
)
 
(1,970
)
Amounts attributable to nonredeemable noncontrolling interests
 
 
 
 
 
 
—

 
(165,598
)
 
(165,598
)
Net income (loss) available to Arch
 
 
 
 
 
 
275,011

 
23,810

 
298,821

Preferred dividends
 
 
 
 
 
 
(10,403
)
 
—

 
(10,403
)
Net income (loss) available to Arch common shareholders
 
 
 
 
 
 
$
264,608

 
$
23,810

 
$
288,418

 
 
 
 
 
 
 
 
 
 
 
 
Underwriting Ratios
 
 
 
 
 
 
 
 
 
 
 
Loss ratio
75.3
%
 
79.8
%
 
61.3
%
 
73.4
%
 
79.7
%
 
73.9
%
Acquisition expense ratio
15.7
%
 
18.9
%
 
9.3
%
 
15.1
%
 
17.1
%
 
15.3
%
Other operating expense ratio
17.3
%
 
8.1
%
 
10.3
%
 
12.7
%
 
10.8
%
 
12.6
%
Combined ratio
108.3
%
 
106.8
%
 
80.9
%
 
101.2
%
 
107.6
%
 
101.8
%
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill and intangible assets
$
263,086

 
$
2,516

 
$
415,238

 
$
680,840

 
$
7,650

 
$
688,490

(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
 
June 30, 2019
 
Insurance
 
Reinsurance
 
Mortgage
 
Sub-Total
 
Other
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Gross premiums written (1)
$
919,925

 
$
545,547

 
$
364,465

 
$
1,829,829

 
$
161,978

 
$
1,937,809

Premiums ceded
(292,095
)
 
(169,457
)
 
(42,857
)
 
(504,301
)
 
(42,608
)
 
(492,911
)
Net premiums written
627,830

 
376,090

 
321,608

 
1,325,528

 
119,370

 
1,444,898

Change in unearned premiums
(35,388
)
 
(8,906
)
 
31,175

 
(13,119
)
 
31,948

 
18,829

Net premiums earned
592,442

 
367,184

 
352,783

 
1,312,409

 
151,318

 
1,463,727

Other underwriting income (loss)
—

 
1,224

 
4,056

 
5,280

 
673

 
5,953

Losses and loss adjustment expenses
(389,172
)
 
(240,958
)
 
(25,997
)
 
(656,127
)
 
(111,416
)
 
(767,543
)
Acquisition expenses
(91,094
)
 
(56,785
)
 
(32,654
)
 
(180,533
)
 
(29,556
)
 
(210,089
)
Other operating expenses
(109,523
)
 
(33,960
)
 
(39,819
)
 
(183,302
)
 
(15,612
)
 
(198,914
)
Underwriting income (loss)
$
2,653

 
$
36,705

 
$
258,369

 
297,727

 
(4,593
)
 
293,134

 
 
 
 
 
 
 
 
 
 
 
 
Net investment income
 
 
 
 
 
 
123,038

 
32,000

 
155,038

Net realized gains (losses)
 
 
 
 
 
 
125,063

 
(4,306
)
 
120,757

Equity in net income (loss) of investment funds accounted for using the equity method
 
 
 
 
 
 
32,536

 
—

 
32,536

Other income (loss)
 
 
 
 
 
 
1,129

 
—

 
1,129

Corporate expenses (2)
 
 
 
 
 
 
(16,073
)
 
—

 
(16,073
)
Transaction costs and other (2)
 
 
 
 
 
 
(2,178
)
 
—

 
(2,178
)
Amortization of intangible assets
 
 
 
 
 
 
(19,794
)
 
—

 
(19,794
)
Interest expense
 
 
 
 
 
 
(23,375
)
 
(5,905
)
 
(29,280
)
Net foreign exchange gains (losses)
 
 
 
 
 
 
(6,190
)
 
1,238

 
(4,952
)
Income (loss) before income taxes
 
 
 
 
 
 
511,883

 
18,434

 
530,317

Income tax (expense) benefit
 
 
 
 
 
 
(44,452
)
 
(20
)
 
(44,472
)
Net income (loss)
 
 
 
 
 
 
467,431

 
18,414

 
485,845

Amounts attributable to redeemable noncontrolling interests
 
 
 
 
 
 
—

 
(4,590
)
 
(4,590
)
Amounts attributable to nonredeemable noncontrolling interests
 
 
 
 
 
 
—

 
(12,301
)
 
(12,301
)
Net income (loss) available to Arch
 
 
 
 
 
 
467,431

 
1,523

 
468,954

Preferred dividends
 
 
 
 
 
 
(10,403
)
 
—

 
(10,403
)
Net income (loss) available to Arch common shareholders
 
 
 
 
 
 
$
457,028

 
$
1,523

 
$
458,551

 
 
 
 
 
 
 
 
 
 
 
 
Underwriting Ratios
 

 
 

 
 

 
 
 
 

 
 

Loss ratio
65.7
%
 
65.6
%
 
7.4
%
 
50.0
%
 
73.6
%
 
52.4
%
Acquisition expense ratio
15.4
%
 
15.5
%
 
9.3
%
 
13.8
%
 
19.5
%
 
14.4
%
Other operating expense ratio
18.5
%
 
9.2
%
 
11.3
%
 
14.0
%
 
10.3
%
 
13.6
%
Combined ratio
99.6
%
 
90.3
%
 
28.0
%
 
77.8
%
 
103.4
%
 
80.4
%
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill and intangible assets
$
157,440

 
$
—

 
$
475,920

 
$
633,360

 
$
7,650

 
$
641,010


(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.’
 
Six Months Ended
 
June 30, 2020
 
Insurance
 
Reinsurance
 
Mortgage
 
Sub-Total
 
Other
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Gross premiums written (1)
$
2,238,007

 
$
1,929,584

 
$
738,089

 
$
4,904,947

 
$
392,829

 
$
5,150,522

Premiums ceded
(736,998
)
 
(567,310
)
 
(88,371
)
 
(1,391,946
)
 
(100,273
)
 
(1,344,965
)
Net premiums written
1,501,009

 
1,362,274

 
649,718

 
3,513,001

 
292,556

 
3,805,557

Change in unearned premiums
(97,181
)
 
(338,617
)
 
61,021

 
(374,777
)
 
(20,982
)
 
(395,759
)
Net premiums earned
1,403,828

 
1,023,657

 
710,739

 
3,138,224

 
271,574

 
3,409,798

Other underwriting income (loss)
—

 
1,469

 
11,049

 
12,518

 
1,001

 
13,519

Losses and loss adjustment expenses
(1,025,311
)
 
(813,502
)
 
(291,666
)
 
(2,130,479
)
 
(215,462
)
 
(2,345,941
)
Acquisition expenses
(215,008
)
 
(170,128
)
 
(72,588
)
 
(457,724
)
 
(44,348
)
 
(502,072
)
Other operating expenses
(248,406
)
 
(84,013
)
 
(83,470
)
 
(415,889
)
 
(27,904
)
 
(443,793
)
Underwriting income (loss)
$
(84,897
)
 
$
(42,517
)
 
$
274,064

 
146,650

 
(15,139
)
 
131,511

 
 
 
 
 
 
 
 
 
 
 
 
Net investment income
 
 
 
 
 
 
214,059

 
62,579

 
276,638

Net realized gains (losses)
 
 
 
 
 
 
312,980

 
(123,352
)
 
189,628

Equity in net income (loss) of investment funds accounted for using the equity method
 
 
 
 
 
 
(69,328
)
 
—

 
(69,328
)
Other income (loss)
 
 
 
 
 
 
5,408

 
—

 
5,408

Corporate expenses (2)
 
 
 
 
 
 
(35,144
)
 
—

 
(35,144
)
Transaction costs and other (2)
 
 
 
 
 
 
(3,572
)
 
—

 
(3,572
)
Amortization of intangible assets
 
 
 
 
 
 
(33,120
)
 
—

 
(33,120
)
Interest expense
 
 
 
 
 
 
(50,375
)
 
(13,319
)
 
(63,694
)
Net foreign exchange gains (losses)
 
 
 
 
 
 
20,869

 
12,591

 
33,460

Income (loss) before income taxes
 
 
 
 
 
 
508,427

 
(76,640
)
 
431,787

Income tax (expense) benefit
 
 
 
 
 
 
(54,474
)
 
402

 
(54,072
)
Net income (loss)
 
 
 
 
 
 
453,953

 
(76,238
)
 
377,715

Dividends attributable to redeemable noncontrolling interests
 
 
 
 
 
 
(991
)
 
(2,132
)
 
(3,123
)
Amounts attributable to nonredeemable noncontrolling interests
 
 
 
 
 
 
—

 
68,346

 
68,346

Net income (loss) available to Arch
 
 
 
 
 
 
452,962

 
(10,024
)
 
442,938

Preferred dividends
 
 
 
 
 
 
(20,806
)
 
—

 
(20,806
)
Net income (loss) available to Arch common shareholders
 
 
 
 
 
 
$
432,156

 
$
(10,024
)
 
$
422,132

 
 
 
 
 
 
 
 
 
 
 
 
Underwriting Ratios
 

 
 

 
 

 
 
 
 

 
 

Loss ratio
73.0
%
 
79.5
%
 
41.0
%
 
67.9
%
 
79.3
%
 
68.8
%
Acquisition expense ratio
15.3
%
 
16.6
%
 
10.2
%
 
14.6
%
 
16.3
%
 
14.7
%
Other operating expense ratio
17.7
%
 
8.2
%
 
11.7
%
 
13.3
%
 
10.3
%
 
13.0
%
Combined ratio
106.0
%
 
104.3
%
 
62.9
%
 
95.8
%
 
105.9
%
 
96.5
%
(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.’

 
Six Months Ended
 
June 30, 2019
 
Insurance
 
Reinsurance
 
Mortgage
 
Sub-Total
 
Other
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Gross premiums written (1)
$
1,861,879

 
$
1,228,402

 
$
720,515

 
$
3,810,282

 
$
348,667

 
$
4,015,688

Premiums ceded
(612,717
)
 
(401,024
)
 
(91,655
)
 
(1,104,882
)
 
(83,910
)
 
(1,045,531
)
Net premiums written
1,249,162

 
827,378

 
628,860

 
2,705,400

 
264,757

 
2,970,157

Change in unearned premiums
(103,215
)
 
(113,829
)
 
46,825

 
(170,219
)
 
32,655

 
(137,564
)
Net premiums earned
1,145,947

 
713,549

 
675,685

 
2,535,181

 
297,412

 
2,832,593

Other underwriting income (loss)
—

 
5,601

 
7,912

 
13,513

 
1,265

 
14,778

Losses and loss adjustment expenses
(745,895
)
 
(480,768
)
 
(37,146
)
 
(1,263,809
)
 
(222,266
)
 
(1,486,075
)
Acquisition expenses
(173,918
)
 
(111,111
)
 
(64,326
)
 
(349,355
)
 
(58,582
)
 
(407,937
)
Other operating expenses
(222,919
)
 
(69,664
)
 
(79,694
)
 
(372,277
)
 
(27,800
)
 
(400,077
)
Underwriting income (loss)
$
3,215

 
$
57,607

 
$
502,431

 
563,253

 
(9,971
)
 
553,282

 
 
 
 
 
 
 
 
 
 
 
 
Net investment income
 
 
 
 
 
 
244,287

 
67,700

 
311,987

Net realized gains (losses)
 
 
 
 
 
 
236,187

 
24,826

 
261,013

Equity in net income (loss) of investment funds accounted for using the equity method
 
 
 
 
 
 
79,403

 
—

 
79,403

Other income (loss)
 
 
 
 
 
 
2,212

 
—

 
2,212

Corporate expenses (2)
 
 
 
 
 
 
(32,845
)
 
—

 
(32,845
)
Transaction costs and other (2)
 
 
 
 
 
 
(3,368
)
 
—

 
(3,368
)
Amortization of intangible assets
 
 
 
 
 
 
(40,211
)
 
—

 
(40,211
)
Interest expense
 
 
 
 
 
 
(46,857
)
 
(11,488
)
 
(58,345
)
Net foreign exchange gains (losses)
 
 
 
 
 
 
(1,015
)
 
(412
)
 
(1,427
)
Income (loss) before income taxes
 
 
 
 
 
 
1,001,046

 
70,655

 
1,071,701

Income tax (expense) benefit
 
 
 
 
 
 
(90,338
)
 
(20
)
 
(90,358
)
Net income (loss)
 
 
 
 
 
 
910,708

 
70,635

 
981,343

Dividends attributable to redeemable noncontrolling interests
 
 
 
 
 
 
—

 
(9,178
)
 
(9,178
)
Amounts attributable to nonredeemable noncontrolling interests
 
 
 
 
 
 
—

 
(54,683
)
 
(54,683
)
Net income (loss) available to Arch
 
 
 
 
 
 
910,708

 
6,774

 
917,482

Preferred dividends
 
 
 
 
 
 
(20,806
)
 
—

 
(20,806
)
Net income (loss) available to Arch common shareholders
 
 
 
 
 
 
$
889,902

 
$
6,774

 
$
896,676

 
 
 
 
 
 
 
 
 
 
 
 
Underwriting Ratios
 

 
 

 
 

 
 
 
 

 
 

Loss ratio
65.1
%
 
67.4
%
 
5.5
%
 
49.9
%
 
74.7
%
 
52.5
%
Acquisition expense ratio
15.2
%
 
15.6
%
 
9.5
%
 
13.8
%
 
19.7
%
 
14.4
%
Other operating expense ratio
19.5
%
 
9.8
%
 
11.8
%
 
14.7
%
 
9.3
%
 
14.1
%
Combined ratio
99.8
%
 
92.8
%
 
26.8
%
 
78.4
%
 
103.7
%
 
81.0
%

(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.’