Segment Information (Tables)

3 Months Ended

Mar. 31, 2022

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
	March 31, 2022
	Insurance			Reinsurance			Mortgage			Sub-Total			Other			Total

Gross premiums written (1)	$	1,719,605		$	1,718,942		$	364,839		$	3,800,775		$	—		$	3,800,775
Premiums ceded	(512,709)			(579,818)			(76,719)			(1,166,635)			—			(1,166,635)
Net premiums written	1,206,896			1,139,124			288,120			2,634,140			—			2,634,140
Change in unearned premiums	(180,200)			(334,724)			1,417			(513,507)			—			(513,507)
Net premiums earned	1,026,696			804,400			289,537			2,120,633			—			2,120,633
Other underwriting income (loss)	—			836			5,061			5,897			—			5,897
Losses and loss adjustment expenses	(600,739)			(454,700)			54,604			(1,000,835)			—			(1,000,835)
Acquisition expenses	(195,650)			(171,996)			(10,513)			(378,159)			—			(378,159)
Other operating expenses	(166,825)			(69,776)			(53,342)			(289,943)			—			(289,943)
Underwriting income (loss)	$	63,482		$	108,764		$	285,347		457,593			—			457,593

Net investment income										80,436			—			80,436
Net realized gains (losses)										(292,414)			—			(292,414)

Equity in net income (loss) of investment funds accounted for using the equity method										36,305			—			36,305
Other income (loss)										(9,025)			—			(9,025)
Corporate expenses (2)										(31,935)			—			(31,935)
Transaction costs and other (2)										(397)			—			(397)
Amortization of intangible assets										(27,167)			—			(27,167)
Interest expense										(32,708)			—			(32,708)
Net foreign exchange gains (losses)										3,845			—			3,845
Income (loss) before income taxes and income (loss) from operating affiliates										184,533			—			184,533
Income tax (expense) benefit										(11,619)			—			(11,619)
Income (loss) from operating affiliates										24,518			—			24,518
Net income (loss)										197,432			—			197,432
Amounts attributable to redeemable noncontrolling interests										(1,632)			—			(1,632)

Net income (loss) available to Arch										195,800			—			195,800
Preferred dividends										(10,184)			—			(10,184)

Net income (loss) available to Arch common shareholders										$	185,616		$	—		$	185,616

Underwriting Ratios
Loss ratio	58.5		%	56.5		%	(18.9)		%	47.2		%	—		%	47.2		%
Acquisition expense ratio	19.1		%	21.4		%	3.6		%	17.8		%	—		%	17.8		%
Other operating expense ratio	16.2		%	8.7		%	18.4		%	13.7		%	—		%	13.7		%
Combined ratio	93.8		%	86.6		%	3.1		%	78.7		%	—		%	78.7		%

Goodwill and intangible assets	$	249,423		$	183,675		$	493,329		$	926,427		$	—		$	926,427

(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
	March 31, 2021
	Insurance			Reinsurance			Mortgage			Sub-Total			Other			Total

Gross premiums written (1)	$	1,415,886		$	1,471,060		$	391,246		$	3,277,293		$	216,523		$	3,397,206
Premiums ceded	(421,047)			(471,948)			(56,051)			(948,147)			(37,212)			(888,749)
Net premiums written	994,839			999,112			335,195			2,329,146			179,311			2,508,457
Change in unearned premiums	(175,365)			(354,212)			1,122			(528,455)			(31,580)			(560,035)
Net premiums earned	819,474			644,900			336,317			1,800,691			147,731			1,948,422
Other underwriting income (loss)	—			(1,198)			6,897			5,699			411			6,110
Losses and loss adjustment expenses	(535,747)			(484,870)			(63,689)			(1,084,306)			(118,794)			(1,203,100)
Acquisition expenses	(128,222)			(118,025)			(30,082)			(276,329)			(28,152)			(304,481)
Other operating expenses	(137,113)			(60,514)			(49,131)			(246,758)			(14,275)			(261,033)
Underwriting income (loss)	$	18,392		$	(19,707)		$	200,312		198,997			(13,079)			185,918

Net investment income										78,729			20,127			98,856
Net realized gains (losses)										101,336			41,125			142,461

Equity in net income (loss) of investment funds accounted for using the equity method										71,686			—			71,686
Other income (loss)										(1,741)			—			(1,741)
Corporate expenses (2)										(23,468)			—			(23,468)
Transaction costs and other (2)										(1,201)			(715)			(1,916)
Amortization of intangible assets										(14,402)			—			(14,402)
Interest expense										(34,197)			(4,149)			(38,346)
Net foreign exchange gains (losses)										21,505			(1,442)			20,063
Income (loss) before income taxes and income (loss) from operating affiliates										397,244			41,867			439,111
Income tax (expense) benefit										(38,852)			(8)			(38,860)
Income (loss) from operating affiliates										75,457			—			75,457
Net income (loss)										433,849			41,859			475,708
Amounts attributable to redeemable noncontrolling interests										117			(972)			(855)
Amounts attributable to nonredeemable noncontrolling interests										—			(36,697)			(36,697)
Net income (loss) available to Arch										433,966			4,190			438,156
Preferred dividends										(10,403)			—			(10,403)

Net income (loss) available to Arch common shareholders										$	423,563		$	4,190		$	427,753

Underwriting Ratios
Loss ratio	65.4		%	75.2		%	18.9		%	60.2		%	80.4		%	61.7		%
Acquisition expense ratio	15.6		%	18.3		%	8.9		%	15.3		%	19.1		%	15.6		%
Other operating expense ratio	16.7		%	9.4		%	14.6		%	13.7		%	9.7		%	13.4		%
Combined ratio	97.7		%	102.9		%	42.4		%	89.2		%	109.2		%	90.7		%

Goodwill and intangible assets	$	276,211		$	17,807		$	377,841		$	671,859		$	7,650		$	679,509

(2) Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘transaction costs and other.’