Arch Capital Group Ltd. · NASDAQ:ACGL
Arch Capital — Q3 2023 Earnings Presentation
19 slides from Arch Capital's earnings presentation, Oct 31, 2023
Slide 1: Investor Presentation 2023 Third Quarter
Investor Presentation 2023 Third Quarter © 2023 Arch Capital Group Ltd. All rights reserved.
Slide 2: Informational Statements
Informational Click Statements to edit Master title style The Private Securities Litigation Reform Act of 1995 (“PSLRA”) provides a “safe harbor” for forward-looking statements. This release or any other written or oral statements made by or on behalf of Arch Capital Group Ltd. and its subsidiaries
Slide 3: Specialty Insurance Businesses
Specialty Click to edit Insurance Master title Businesses style Arch operates leading specialty insurance lines across a wide range of geographies and products Total Net Premiums Written $13.2B Line of Business 12 Months Ending 9/30/23 12 Months Ending 9/30/23 Other1, 7% Travel, accident 8% Property
Slide 4: Creating Shareholder Value Throughout The Cycle
Click to editShareholder Creating Master title style Value Throughout The Cycle Generate Superior Focus on Conservative Risk Adjusted Underwriting Balance Sheet Returns Thorough risk Talent intensive, assessment of Minimize not people underlying investment risk intensive exposures Align executive co
Slide 5: Consistently Superior Risk-Adjusted Returns
Click to edit Master Consistently Superiortitle style Risk-Adjusted Returns Strong track record of generating higher, more consistent risk-adjusted returns Total Value Creation vs. Coefficient of Variation – Total Composite 12/31/2003 – 9/30/2023 Lower Volatility, Higher Returns Higher Volatility, H
Slide 6: Property Casualty Segments
Property Casualty Segments Diversification reduces earnings volatility Insurance Net Premiums Written $5.6B1 Reinsurance Net Premiums Written $6.5B2 12 Months Ending 9/30/23 12 Months Ending 9/30/23 Warranty and Other, 9% Professional Lines, 26% Other, 2% lenders Marine, Aviation solutions, 4% and S
Slide 7: Insurance Segment
Insurance Click Segment to edit Master title style Building on growth opportunities Calendar Year Net Premiums Written by Line ($M) 6,000 $5,630 5,000 4,000 Other Warranty and lenders solutions Travel, accident and health 3,000 Excess and surplus casualty Construction and national accounts $2,212 Pr
Slide 8: Reinsurance Segment
Reinsurance Click Segment to edit Master title style Growing into a hard market Calendar Year Net Premiums Written by Line ($M) 7,000 $6,540 6,000 5,000 Other 4,000 Marine, aviation and space Specialty Property catastrophe 3,000 Property excl. property catastrophe Casualty 2,000 $1,373 1,000 - 2018
Slide 9: Managed Catastrophe Risk
Click to edit Master Managed title style Catastrophe Risk ACGL Peak Zone 1:250 PML 1,500 30% $1,457 $1,468 1:250 as a % of Tangible shareholders' equity available to Arch* 25% 1,250 19.4% 20% 17.0% $1,069 1:250 PML $M 1,000 14.4% $970 15% $881 $867 $860 750 $801 10.5% 10.1% 9.1% $748 8.1% 8.0% 8.1%
Slide 10: Mortgage Segment: Differentiated business model
Mortgage Segment Differentiated business model © 2023 Arch Capital Group Ltd. All rights reserved. 10
Slide 11: Mortgage Segment: Stable growth
Mortgage Segment Stable growth Insurance In Force ($B) © 2023 Arch Capital Group Ltd. All rights reserved. 11
Slide 12: Mortgage Segment: Credit quality remains high
Mortgage Segment Credit quality remains high Arch MI U.S. Delinquency Rate 5.5% March 18, 2020 GSEs announce COVID related 5.14% 5.0% “Eviction Moratorium” 4.69% 4.5% 4.19% 3.86% 4.0% 3.5% 3.11% 3.0% 2.67% 2.36% 2.5% 2.09% 1.70% 1.77% 2.0% 1.60% 1.77% 1.60% 1.54% 1.73% 1.65% 1.65% 1.54% 1.48% 1.42%
Slide 13: Mortgage Segment: Strong earnings not correlated to P&C cycle
Mortgage Segment Strong earnings not correlated to Property & Casualty insurance cycle Underwriting Income ($M) $1,400 $1,200 $1,256 $1,151 $1,000 $1,041 $953 $800 $858 $600 $594 $400 $200 $0 2018 2019 2020 2021 2022 12 Months Ending 9/30/23 © 2023 Arch Capital Group Ltd. All rights reserved. 13
Slide 14: Our Investment Strategy
Our Investment Strategy Conservative portfolio focused on total return Invested Assets - $31.9B Fixed Maturity by Rating - $23.1B 9/30/23 9/30/23 Lower than B, 0.1% Not Rated, U.S. B, 1.5% 2.1% U.S. Equity method funds & other, 16.6% government, government BB, 3.3% 17.8% and Equity government securi
Slide 15: Investment Income
Investment Income Net Investment Income + Equity Method Investments ($M) $350 $328 $311 $300 $59 $69 $247 $250 $221 $48 $193 $200 $40 $158 $164 $150 $105 $110 $116 $58 $269 $67 $242 $100 $36 $199 $181 $129 $50 $106 $88 $91 $80 $0 $(19) 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 -$50 Total Investab
Slide 16: Strong Net Income Growth
Net to Click Income edit Master title style Strong Net Income Growth Net Income Available to Arch Common Shareholder ($M) $4,000 $2,928 $3,000 $891 Other 2 $2,000 $1,151 Net investment income $714 Mortgage underwriting income 1 Reinsurance underrwriting income $438 $1,000 $1,031 Insurance underwriti
Slide 17: Our ESG Focus Areas and Sustainability Highlights
Click OurtoESG editFocus Master Areas titleand style Sustainability Highlights 1. Our Business 2. Our Operations 3. Our Investing 4. Our People 5. Our Communities ■ Strategic approach to ■ Maintaining data privacy and ■ Implementing a Responsible ■ Advancing our D&I strategy ■ Corporate giving of $5
Slide 18: Value Creation
Click Valueto edit Master title style Creation Book value per common share1 $45.00 $40.00 $35.00 $30.00 $25.00 $20.00 $38.62 $33.56 $32.62 $15.00 $30.31 $26.42 $10.00 $20.30 $21.52 $18.40 $15.09 $15.88 $5.00 $9.91 $10.51 $11.98 $13.18 $6.12 $5.71 $8.04 $4.89 $2.36 $2.84 $3.45 $3.76 $2.03 $0.00 Dec-0
Slide 19: Contact
Click to edit Master title style Contact Investor Inquiries: Donald Watson Vinay Misquith Executive Vice President, Senior Vice President, Financial Services Financial Services (914) 872 3616 (914) 872 3666 DWatson@archgroup.com VMisquith@archgroup.com ©©2017 Arch Capital Group Ltd. All rights reser