Arch Capital Group Ltd (ACGL) Reports Q3 2023 Earnings: Net Income Soars to $713 Million
Net income available to Arch common shareholders reached $713 million, a significant increase from $7 million in Q3 2022.
After-tax operating income available to Arch common shareholders stood at $876 million, compared to $106 million in Q3 2022.
Pre-tax current accident year catastrophic losses for the Companys insurance and reinsurance segments were $180 million.
Book value per common share increased by 4.3% from June 30, 2023, to $38.62 at September 30, 2023.
Arch Capital Group Ltd (NASDAQ:ACGL) announced its Q3 2023 earnings on October 30, 2023, revealing a significant increase in net income available to Arch common shareholders. The net income reached $713 million, or $1.88 per share, a stark contrast to the $7 million, or $0.02 per share, reported for the same period in 2022. This represents a 20.2% annualized net income return on average common equity.
Financial Highlights
The company's after-tax operating income available to Arch common shareholders also saw a substantial increase, reaching $876 million, or $2.31 per share. This is a 24.8% annualized operating return on average common equity, compared to $106 million, or $0.28 per share, for the 2022 third quarter.
Arch Capital Group Ltd (NASDAQ:ACGL) reported pre-tax current accident year catastrophic losses for the Companys insurance and reinsurance segments, net of reinsurance and reinstatement premiums, of $180 million. The company also reported favorable development in prior year loss reserves, net of related adjustments, of $152 million.
The company's book value per common share stood at $38.62 at the end of September 2023, marking a 4.3% increase from June 30, 2023.
CEO Commentary
Marc Grandisson, Chief Executive Officer of ACGL, commented: Excellent underwriting performance from all three of our segments, along with improved investment returns, helped us achieve an impressive 24.8% operating return on equity in the third quarter. Growth in net premiums written across our insurance and reinsurance segments was especially strong as hard market rates and rising inflation drove client demand for many of our property and casualty products, resulting in an overall 26.0% year-over-year increase across both segments.
Underwriting Results
The company's underwriting income for Q3 2023 was $721 million, a significant increase from $68 million in Q3 2022. The combined ratio excluding catastrophic activity and prior year development was 77.0%, compared to 82.2% for the 2022 third quarter.
Segment Performance
Both the insurance and reinsurance segments of the company showed strong performance. The insurance segment reported gross premiums written of $2,043 million, a 9.7% increase from Q3 2022. The reinsurance segment reported gross premiums written of $2,138 million, a 30.4% increase from the same period in 2022.
Arch Capital Group Ltd (NASDAQ:ACGL) is a Bermuda exempted company listed on the NASDAQ, providing insurance, reinsurance, and mortgage insurance on a worldwide basis through its wholly-owned subsidiaries.
Explore the complete 8-K earnings release (here) from Arch Capital Group Ltd for further details.
This article first appeared on GuruFocus.
