Arch Capital Group (ACGL) Q4 2024 earnings summary

Executive summary

• Net premium for Q4 2024 was $3.8 billion, up 17% year-over-year, with underwriting income of $625 million, down 13% due to catastrophe losses, notably California wildfires estimated at $450–$550 million net loss.

• Full-year after-tax operating income reached $3.5 billion, with an 18.9% operating ROE and book value per share up 13% to $53.11, or nearly 24% after adjusting for a $5/share special dividend.

• Net income available to common shareholders grew 168% from $1,594M in 2019 to $4,272M in 2024.

• Special dividend of $1.9 billion and $24 million in share repurchases reflect strong capital management.

• Underwriting income for FY 2024 totaled $1,094M, with 62% from mortgage and 38% from other sources.

Financial highlights

• Gross premiums written rose 11.9% year-over-year to $4.76 billion; net premiums written up 17.1% to $3.82 billion.

• Net investment income and equity method investments reached $570M in Q4 2024, up from $426M in Q4 2022.

• Net premiums earned increased 23.9% to $4.14 billion; underwriting income fell 12.6% to $625 million.

• Ex-cat/accident year combined ratio was 79% for Q4 and 78.6% for the year.

• Total investable assets stood at $41.4B as of December 31, 2024.

Outlook and guidance

• Expectation for 2025 is to maintain attractive margins amid heightened competition.

• Catastrophe load guidance for 2025 is 7%-8% of net earned premium, reflecting both recent cat events and the MidCorp acquisition.

• Effective tax rate expected to rise to 16%-18% in 2025 due to Bermuda's new corporate tax.

• Focus remains on generating superior risk-adjusted returns through disciplined underwriting and dynamic capital allocation.

• Favorable growth outlook for both North America and international insurance in 2025.