Arch Capital Group (ACGL) Q4 2023 earnings summary

Executive summary

• Q4 net income available to common shareholders was $2.324B, or $6.12 diluted EPS; results included a $1.18B deferred tax benefit, or $3.10 per share.

• Adjusted after-tax operating income was $945M, or $2.49 diluted EPS; annualized operating return on average common equity was 23.7%.

• FY 2023 operating return on equity was 21.6%, and book value per share increased 43.9% for the year; Q4 book value per share reached $46.94.

Financial highlights

• Net premiums earned were $3.344B, up from $2.761B YoY; underwriting income was $715M versus $734M.

• Gross premiums written were $4.251B, up 12.0% YoY; net premiums written were $3.261B, up 7.4%.

• Pre-tax net investment income was $313M versus $181M YoY, reflecting higher market interest rates and growth in invested assets.

• Net realized investment gains were $189M versus $80M YoY; income from operating affiliates was $69M versus $36M.

Outlook and guidance

• Management was bullish on 2024 prospects, citing underwriters leaning into favorable conditions in most operating markets.