On this page of StockholderLetter.com we present the 3/28/2024 shareholder letter from ARCH CAPITAL GROUP LTD. — ticker symbol ACGL. Reading current and past ACGL letters to shareholders can bring important insights into the investment thesis.

 •  3/28/2024 Letter Continued (Full PDF)
 •  3/23/2023 ACGL Stockholder Letter
 •  3/25/2025 ACGL Stockholder Letter
 •  3/24/2026 ACGL Stockholder Letter
 •  More "Insurance Brokers" Category Stockholder Letters
 •  ACGL Benford's Law Stock Score = 88

ACGL 3/28/2024 Shareholder/Stockholder Letter Transcript:

Arch Capital Group Ltd.
2023 ANNUAL REPORT
ARCH CAPITAL GROUP LTD.
  2024 Arch Capital Group Ltd. All rights reserved. 00365.
2023 ANNUAL REPORT
archgroup.com

FINANCIAL HIGHLIGHTS
ARCH CAPITAL GROUP LTD.
GROSS PREMIUMS WRITTEN
DIRECTORS
NET LOSS RESERVES
$18.4B
$16.1B
TOTAL ASSETS
$58.9B
$21.1B
2023
(Amounts in U.S. $ million, except percentages and per share data)
Book value per common share at year end
Net income available to common shareholders
Per share
Net income return on average common equity
Gross premiums written
Underwriting income*
$4,403
$1,436
206.6%
29.7%
11.6%
$32.62
Per share
Eileen Mallesch 1,6
Former SVP & CFO of Nationwide Property and Casualty Segment,
Nationwide Mutual Insurance Company
205.8%
$18,403
$15,327
20.1%
Louis J. Paglia
Founder of Oakstone Capital LLC and Former Executive Vice
President of UIL Holdings Corporation
$3,201
$1,840
74.0%
Brian S. Posner 2,4
President of Point Rider Group LLC
$1,796
$8.45
Operating return on average common equity*
Moira Kilcoyne 1,2,5
Former Managing Director, Co-Chief Information Officer
of Morgan Stanley
43.9%
$3.80
$2,612
After-tax operating income*
Jennifer Centrone
Chief Human Resources Officer
Laurie S. Goodman 1,5,6
Institute Fellow at the Urban Institute and Founder of its Housing
Finance Policy Center
Change
$11.62
John L. Bunce, Jr. 3,4,5
Managing Director and Founder of Greyhawk Capital Management,
LLC and Managing Director and Founder of Steel Box, LLC
Francis Ebong 1,2,5
Managing Director of Turtle Capital, LLC
2022
$46.94
Marc Grandisson 3
Chief Executive Officer
Director
Eric W. Doppstadt 2,4,5
Vice President and Chief Investment Officer
of the Ford Foundation
TOTAL CAPITALIZATION
$4.87
21.6%
2,6
45.4%
73.5%
14.8%
Eugene S. Sunshine 1,2,5
Former Senior Vice President for Business and Finance at
Northwestern University
John D. Vollaro 4,6
Senior Advisor and former Executive Vice President, Chief Financial
Officer and Treasurer, Arch Capital Group Ltd.
Growth in Book Value per Common Share   
$50.00
OFFICERS
John M. Pasquesi
Chair of the Board
Managing Member of Otter Capital LLC
3,4,6
David E. Gansberg
Chief Executive Officer, Mortgage Group
Chris Hovey
Chief Operations Officer
Fran  ois Morin
Chief Financial Officer and Treasurer
Nicolas Papadopoulo
President and Chief Underwriting Officer
Chief Executive Officer, Insurance Group
Louis T. Petrillo
General Counsel
Maamoun Rajeh
Chief Executive Officer, Reinsurance Group
Jay Rajendra
Chief Strategy and Innovation Officer
Christine Todd
Chief Investment Officer
1 Audit Committee
2 Compensation and Human Capital Committee
3 Executive Committee
4 Finance, Investment and Risk Committee
5 Nominating and Governance Committee
6 Underwriting Oversight Committee
$45.00
$40.00
15.3%
$35.00
$30.00
SHAREHOLDER INFORMATION
BVPS Growth
Rate
$25.00
$20.00
CORPORATE ADDRESS
$15.00
$10.00
$5.00
$0.00
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
* We use non-GAAP financial measures in this report. The first mention of each non-GAAP financial measure is referenced by an asterisk (*). See Additional Information for a reconciliation to the most
comparable GAAP financial measures.
    Annualized growth rate from December 31, 2001 to December 31, 2023. Excludes the effects of stock options, restricted and performance stock units outstanding.
  2024 Arch Capital Group Ltd. All rights reserved.
Waterloo House, Ground Floor
100 Pitts Bay Road
Pembroke HM 08, Bermuda
T: 441 278 9250
MARKET INFORMATION
The common shares of Arch Capital Group Ltd. are listed on the
NASDAQ Global Select Market under the symbol ACGL.
TRANSFER AGENT
American Stock Transfer & Trust Company, LLC
6201 15th Avenue
Brooklyn, New York 11219
SHAREHOLDER INQUIRIES
Fran  ois Morin
Chief Financial Officer and Treasurer
T: 441 278 9250
  2024 Arch Capital Group Ltd. All rights reserved.

TO OUR SHAREHOLDERS
2023 was an exceptional year of growth and
success at Arch. For the second consecutive
year, we surpassed previous milestones in
premium growth and underwriting income
while further establishing our leadership
position in the specialty insurance sector. Our
shareholders were rewarded with an 18.3%
share price increase and a net income return on
average common equity of 29.7%.
MARC GRANDISSON
ARCH
GROUP
LTD.| 1
ArchCEO,
Capital
GroupCAPITAL
Ltd. 2023 Annual
Report

UNDERWRITING
INCOME ($M)
$1,400
$1,200
$1,000
$800
$600
CHANGE
CHANGE
101%
CHANGE
249%
-15%
$400
$200
$0
2022
2023
2022
Insurance
2023
2022
Reinsurance
Arch   s 2023 results underscore a consistent vision and reflect the
continuous investments we have made in our platform and our
people. Our Insurance and Reinsurance teams leveraged their global
underwriting reach to lean into improved property and casualty (P&C)
market conditions     writing over $17.0 billion of gross premiums
and $12.4 billion of net premiums, both significant increases from
records set in 2022. Outside of the P&C businesses, our consistently
profitable Mortgage segment delivered over $1.0 billion of
underwriting income for the second consecutive year. Finally, our
investment portfolio, fueled by premium growth and strong cash
flows, grew to over $34.6 billion.
2023
Mortgage
We believe there   s a direct line between our recent success and our
unique business strategy. We operate in a consistent and intentional
way. We underwrite specialty lines, adhere to a cycle management
philosophy to navigate market cycles and dynamically allocate capital
to the opportunities with the greatest risk-adjusted returns. That,
combined with a focus on hiring intelligent, inquisitive people, equals
a recipe for long-term success.
Having the people, platform and discipline to adhere to our
principles helps fuel our growth, limit volatility and position us
to continue our current trajectory     resulting in an attractive
shareholder value proposition.
A GLOBAL
PRESENCE
Denmark
6,400+
Employees Worldwide
United
Kingdom
Ireland
Canada
Spain
United States
Bermuda
Gibraltar
Switzerland
United Arab Emirates
Corporate
France
Philippines
Insurance
Mortgage
Reinsurance
Global Services
2 | Arch Capital Group Ltd. 2023 Annual Report
Australia

NET PREMIUMS
WRITTEN ($M)
$7,000
$6,000
$5,000
$4,000
CHANGE
CHANGE
17%
$3,000
33%
CHANGE
-7%
$2,000
$1,000
$0
2022
2023
Insurance
Underwriting Results
At Arch, underwriting compensation is aligned with shareholder
results, meaning the profitability of the business is what ultimately
drives underwriting decisions. This is key to our success. Therefore,
whether we are operating in a hard or soft market, we maintain a
principled underwriting approach focused on pricing adequacy
and risk-adjusted returns. Our focus on underwriting profitability is
reflected in the $2.6 billion* of underwriting income generated across
our segments, a 45% increase from 2022.
Along with our focus on underwriting returns, we take a long-term view
of risk that dictates a prudent approach to reserving. At Arch, we protect
shareholder capital by conservatively setting our reserves based on
a comprehensive view of historical losses and actuarial models and
then let the reserves age until there is enough data to more precisely
determine the ultimate loss. For us, the adage holds true: Recognize
bad news quickly and good news over time. Fortunately, for Arch and
our shareholders, we have good news to report.
Segment Performance
Arch is a diversified enterprise. That enables us to manage the
insurance cycle by dynamically allocating capital     across and
within our business segments     to the opportunities with the
greatest expected returns. Since the emergence of the current hard
market cycle, we have increasingly deployed capital into our P&C
segments, which offer tremendous growth opportunities combined
with solid risk-adjusted returns.
INSURANCE
The Insurance group wrote $5.9 billion of net premium in 2023, a 17%
increase from 2022, while delivering $450 million of underwriting
income     more than double the $224 million produced in 2022.
* We use non-GAAP financial measures in this report. The first mention of each non-GAAP
financial measure is referenced by an asterisk (*). See Additional Information for a
reconciliation to the most comparable GAAP financial measures.
2022
2023
Reinsurance
2022
2023
Mortgage
Premium growth in 2023 came from a diverse mix of products including
Property, Energy, Marine and Aviation, Construction and National
Accounts, and Programs. I   m also pleased to note the increasing
market leadership and influence of the Insurance team, which received
a significant number of accolades last year including, importantly,
several awards recognizing our commitment to broker partners.
REINSURANCE
For the second consecutive year, our Reinsurance segment grew
the most of our three underwriting segments. Net premiums written
(NPW) were $6.6 billion in 2023, a 33% increase from 2022.
Underwriting income increased to $1.1 billion, an impressive 249%
jump from 2022 and evidence of our ability to rapidly increase our
capacity to meet client demands around the world. Growth in our
Reinsurance book was broad-based, reflecting improved market
conditions, the expertise and leadership of our talented team and a
reduction in capacity from our competition.
MORTGAGE
The Mortgage segment remained a global leader in acquiring,
managing and syndicating mortgage credit risk and has become a
reliable    earnings engine    for our shareholders. In 2023, the segment
generated $1.1 billion of underwriting income while writing
$1.1 billion of NPW, an excellent performance despite a housing market
with lower new originations amid tight supply. Persistency of coverage
remained strong as higher mortgage rates reduced the incentive for
most homeowners to sell their homes or refinance their mortgages.
The credit quality of homebuyers with loans we insure remains
very strong, and the discipline of the overall mortgage market is
reassuring. Our focus on credit quality and profitability over volume
helps ensure a well-constructed portfolio that can deliver profitable
results under different economic scenarios.
Arch Capital Group Ltd. 2023 Annual Report | 3

3/28/2024 Letter Continued (Full PDF)

 

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