Transactions with Related Parties

12 Months Ended

Dec. 31, 2024

Related Party Transactions [Abstract]

Transactions with Related Parties

In 2017, the Company acquired approximately 25% of Premia. Premia is the parent of Premia Reinsurance Ltd., a multi-line Bermuda reinsurance company. Premia’s strategy is to reinsure or acquire companies or reserve portfolios in the non-life property and casualty insurance and reinsurance run-off market. Arch Re Bermuda and certain Arch co-investors invested $100 million and acquired approximately 25% of Premia as well as warrants to purchase additional common equity. Arch has appointed two directors to serve on the seven person board of directors of Premia. Arch Re Bermuda is providing a quota share reinsurance treaty on certain business written by Premia, and subsidiaries of Arch Capital are providing certain administrative and support services to Premia, in each case pursuant to separate multi-year agreements. During the 2024 period, the Company did not enter into any new reinsurance transactions with Premia, compared to $80 million and $81 million of net premiums

written and earned, respectively in 2023. At December 31, 2024, the Company recorded a funds held asset from Premia of $137 million, compared to $158 million at December 31, 2023.

In 2021, the Company completed the acquisition of Somers. Somers is wholly owned by Greysbridge, and Greysbridge is owned 40% by the Company and by certain funds managed by Kelso and Warburg. The Company entered into certain reinsurance transactions with Somers. During 2024 and 2023 periods, the Company’s net premiums written was reduced by $738 million and $574 million, respectively. In addition, Somers paid certain acquisition costs and administrative fees to the Company. At December 31, 2024, the Company recorded a reinsurance recoverable on unpaid and paid losses from Somers of $1.6 billion and a reinsurance balance payable to Somers of $489 million. At December 31, 2023, reinsurance recoverable on unpaid and paid losses from Somers was $1.3 billion, with a reinsurance balance payable to Somers of $475 million.

Under the terms of the Greysbridge equity financing, beginning January 1, 2024, the Company has a call right (but not the obligation) and Warburg and Kelso each have a put right (but not the obligation) to buy/sell a certain amount of their initial shares annually at the current year-end tangible book value per share of Greysbridge. In 2024, Warburg and Kelso both delivered a put option notice to sell a certain amount of their initial shares. The transaction, which will involve third-party purchasers of such shares, is expected to close in the 2025 calendar year, subject to any required regulatory approvals and other closing conditions. In association with the put option notice at December 31, 2024, the Company’s balance sheet reflected $261 million in both other assets and other liabilities.

During 2024 period, the Company completed the acquisition of Watford Insurance Company from Somers for a total consideration paid of $35 million.

As of December 31, 2024, the Company owns $35 million in aggregate principal amount of Somers 6.5% senior notes, due July 2, 2029