Fourth Quarter 2024 Financial Supplement

(U.S. Dollars and shares in millions, except per share data)

Three Months Ended

Year Ended

December 31,

December 31,

2024

2023

Change

2024

2023

Change

Underwriting results:

Gross premiums written

$

4,756

$

4,251

11.9 %

$

21,511

$

18,403

16.9 %

Net premiums written

3,819

3,261

17.1 %

15,732

13,468

16.8 %

Net premiums earned

4,143

3,344

23.9 %

15,100

12,440

21.4 %

Underwriting income (loss) (1)

625

715

(12.6)%

2,661

2,612

1.9 %

Loss ratio

57.5 %

49.0 %

8.5

55.2 %

50.2 %

5.0

Acquisition expense ratio

17.6 %

19.2 %

(1.6)

17.6 %

18.6 %

(1.0)

Other operating expense ratio

9.9 %

10.7 %

(0.8)

9.7 %

10.5 %

(0.8)

Combined ratio

85.0 %

78.9 %

6.1

82.5 %

79.3 %

3.2

Net investment income

$

405

$

313

29.4 %

$

1,495

$

1,023

46.1 %

Per diluted share

$

1.06

$

0.82

29.3 %

$

3.92

$

2.70

45.2 %

Net income available to Arch common shareholders

$

925

$

2,324

(60.2)%

$

4,272

$

4,403

(3.0)%

Per diluted share

$

2.42

$

6.12

(60.5)%

$

11.19

$

11.62

(3.7)%

After-tax operating income available to Arch common shareholders (1)

$

866

$

945

(8.4)%

$

3,542

$

3,201

10.7 %

Per diluted share

$

2.26

$

2.49

(9.2)%

$

9.28

$

8.45

9.8 %

Comprehensive income (loss) available to Arch

$

415

$

3,111

(86.7)%

$

4,268

$

5,413

(21.2)%

Net cash provided by operating activities

$

1,573

$

1,665

(5.5)%

$

6,673

$

5,749

16.1 %

Weighted average common shares and common share equivalents outstanding - diluted

382.8

379.8

0.8 %

381.8

378.8

0.8 %

Financial measures:

Change in book value per common share during period

(6.8)%

21.5 %

(28.3)

13.1 %

43.9 %

(30.8)

Change in book value per common share during period, including dividends paid to Arch common shareholders

1.9 %

21.5 %

(19.6)

23.8 %

43.9 %

(20.1)

Annualized net income retuon average common equity

17.9 %

58.2 %

(40.3)

22.8 %

29.7 %

(6.9)

Annualized operating retuon average common equity (1)

16.7 %

23.7 %

(7.0)

18.9 %

21.6 %

(2.7)

Total retuon investments (2)

(1.05)%

4.76 %

-581 bps

5.08 %

7.57 %

-249 bps

(U.S. Dollars and shares in millions, except per share data)

Three Months Ended

Year Ended

December 31,

September 30,

June 30,

March 31,

December 31,

December 31,

December 31,

2024

2024

2024

2024

2023

2024

2023

Revenues

Net premiums earned

$

4,143

$

3,970

$

3,565

$

3,422

$

3,344

$

15,100

$

12,440

Net investment income

405

399

364

327

313

1,495

1,023

Net realized gains (losses)

(161)

169

122

67

189

197

(165)

Other underwriting income

6

5

3

12

10

26

31

Equity in net income (loss) of investment funds accounted for using the equity method

143

171

167

99

102

580

278

Other income (loss)

12

8

8

14

17

42

27

Total revenues

4,548

4,722

4,229

3,941

3,975

17,440

13,634

Expenses

Losses and loss adjustment expenses

(2,384)

(2,403)

(1,827)

(1,728)

(1,637)

(8,342)

(6,246)

Acquisition expenses

(730)

(681)

(633)

(607)

(643)

(2,651)

(2,312)

Other operating expenses

(410)

(353)

(346)

(363)

(359)

(1,472)

(1,301)

Corporate expenses

(57)

(49)

(41)

(53)

(31)

(200)

(102)

Amortization of intangible assets

(99)

(88)

(27)

(21)

(24)

(235)

(95)

Interest expense

(37)

(35)

(35)

(34)

(34)

(141)

(133)

Net foreign exchange gains (losses)

106

(63)

1

31

(59)

75

(60)

Total expenses

(3,611)

(3,672)

(2,908)

(2,775)

(2,787)

(12,966)

(10,249)

Income (loss) before income taxes and income (loss) from operating affiliates

937

1,050

1,321

1,166

1,188

4,474

3,385

Income tax (expense) benefit

(66)

(98)

(97)

(101)

1,076

(362)

873

Income (loss) from operating affiliates

64

36

45

55

69

200

184

Net income (loss)

935

988

1,269

1,120

2,333

4,312

4,442

Net (income) loss attributable to noncontrolling interests

-

-

-

-

1

-

1

Net income (loss) attributable to Arch

935

988

1,269

1,120

2,334

4,312

4,443

Preferred dividends

(10)

(10)

(10)

(10)

(10)

(40)

(40)

Net income (loss) available to Arch common shareholders

$

925

$

978

$

1,259

$

1,110

$

2,324

$

4,272

$

4,403

Comprehensive income (loss) available to Arch

$

415

$

1,598

$

1,280

$

975

$

3,111

$

4,268

$

5,413

Net income (loss) per common share and common share equivalent

Basic

$

2.48

$

2.62

$

3.38

$

2.99

$

6.29

$

11.47

$

11.94

Diluted

$

2.42

$

2.56

$

3.30

$

2.92

$

6.12

$

11.19

$

11.62

Weighted average common shares and common share equivalents outstanding

Basic

373.3

373.2

372.7

370.9

369.6

372.5

368.7

Diluted

382.8

382.3

381.6

380.5

379.8

381.8

378.8

(U.S. Dollars and shares in millions, except per share data)

December 31,

September 30,

June 30,

March 31,

December 31,

2024

2024

2024

2024

2023

Assets

Investments:

Fixed maturities available for sale, at fair value

$

27,035

$

28,434

$

25,202

$

23,628

$

23,553

Short-term investments available for sale, at fair value

2,784

3,341

2,297

2,142

2,063

Equity securities, at fair value

1,675

1,623

1,397

1,720

1,186

Other investments

3,066

3,261

3,206

2,886

2,488

Investments accounted for using the equity method

5,980

5,244

4,983

4,842

4,566

Total investments

40,540

41,903

37,085

35,218

33,856

Cash

979

1,025

1,020

993

917

Accrued investment income

298

292

287

236

236

Investment in operating affiliates

1,240

1,236

1,143

1,174

1,119

Premiums receivable

5,634

6,364

6,268

5,765

4,644

Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses

8,260

7,948

7,473

7,509

7,064

Contractholder receivables

2,161

2,078

2,016

1,907

1,814

Ceded unearned premiums

2,428

2,935

2,981

2,717

2,170

Deferred acquisition costs

1,734

1,744

1,635

1,625

1,531

Receivable for securities sold

50

790

116

166

63

Goodwill and intangible assets

1,351

1,486

725

778

731

Other assets

6,231

5,855

4,716

4,680

4,761

Total assets

$

70,906

$

73,656

$

65,465

$

62,768

$

58,906

Liabilities

Reserve for losses and loss adjustment expenses

$

29,369

$

28,679

$

24,466

$

23,705

$

22,752

Unearned premiums

10,218

11,238

10,452

9,971

8,808

Reinsurance balances payable

2,137

2,586

2,591

2,497

2,000

Contractholder payables

2,165

2,082

2,020

1,910

1,817

Collateral held for insured obligations

249

268

263

263

259

Senior notes

2,728

2,727

2,727

2,727

2,726

Payable for securities purchased

181

967

410

433

247

Other liabilities

3,039

2,835

1,871

1,905

1,942

Total liabilities

50,086

51,382

44,800

43,411

40,551

Redeemable noncontrolling interests

-

-

-

2

2

Shareholders' equity

Non-cumulative preferred shares

830

830

830

830

830

Common shares

1

1

1

1

1

Additional paid-in capital

2,510

2,465

2,443

2,401

2,327

Retained earnings

22,686

23,642

22,664

21,405

20,295

Accumulated other comprehensive income (loss), net of deferred income tax

(720)

(200)

(810)

(821)

(676)

Common shares held in treasury, at cost

(4,487)

(4,464)

(4,463)

(4,461)

(4,424)

Total shareholders' equity

20,820

22,274

20,665

19,355

18,353

Total liabilities, noncontrolling interests and shareholders' equity

$

70,906

$

73,656

$

65,465

$

62,768

$

58,906

Common shares and common share equivalents outstanding, net of treasury shares

376.4

376.2

376.0

375.3

373.3

Book value per common share (1)

$

53.11

$

57.00

$

52.75

$

49.36

$

46.94

(U.S. Dollars in millions)

Three Months Ended

Year Ended

December 31,

September 30,

June 30,

March 31,

December 31,

December 31,

December 31,

2024

2024

2024

2024

2023

2024

2023

Non-cumulative preferred shares

Balance at beginning and end of period

$

830

$

830

$

830

$

830

$

830

$

830

$

830

Common shares

Balance at beginning and end of period

1

1

1

1

1

1

1

Additional paid-in capital

Balance at beginning of period

2,465

2,443

2,401

2,327

2,297

2,327

2,211

Amortization of share-based compensation

33

16

16

68

20

133

93

All other

12

6

26

6

10

50

23

Balance at end of period

2,510

2,465

2,443

2,401

2,327

2,510

2,327

Retained earnings

Balance at beginning of period

23,642

22,664

21,405

20,295

17,971

20,295

15,892

Net income

935

988

1,269

1,120

2,333

4,312

4,442

Amounts attributable to noncontrolling interests

-

-

-

-

1

-

1

Common share dividends

(1,881)

-

-

-

-

(1,881)

-

Preferred share dividends

(10)

(10)

(10)

(10)

(10)

(40)

(40)

Balance at end of period

22,686

23,642

22,664

21,405

20,295

22,686

20,295

Accumulated other comprehensive income (loss), net of deferred income tax

Balance at beginning of period

(200)

(810)

(821)

(676)

(1,453)

(676)

(1,646)

Change in unrealized appreciation (decline) in value of available-for-sale investments

(442)

585

27

(112)

721

58

947

Change in foreign currency translation adjustments

(78)

25

(16)

(33)

56

(102)

23

Balance at end of period

(720)

(200)

(810)

(821)

(676)

(720)

(676)

Common shares held in treasury, at cost

Balance at beginning of period

(4,464)

(4,463)

(4,461)

(4,424)

(4,407)

(4,424)

(4,378)

Shares repurchased for treasury

(23)

(1)

(2)

(37)

(17)

(63)

(46)

Balance at end of period

(4,487)

(4,464)

(4,463)

(4,461)

(4,424)

(4,487)

(4,424)

Total shareholders' equity

$

20,820

$

22,274

$

20,665

$

19,355

$

18,353

$

20,820

$

18,353

(U.S. Dollars in millions)

Three Months Ended

Year Ended

December 31,

September 30,

June 30,

March 31,

December 31,

December 31,

December 31,

2024

2024

2024

2024

2023

2024

2023

Operating Activities

Net income (loss)

$

935

$

988

$

1,269

$

1,120

$

2,333

$

4,312

$

4,442

Adjustments to reconcile net income to net cash provided by operating activities:

Net realized (gains) losses

176

(165)

(144)

(52)

(185)

(185)

182

Equity in net (income) or loss of investment funds accounted for using the equity method and

other income or loss

(152)

(162)

(62)

(112)

(111)

(488)

(215)

Amortization of intangible assets

99

88

27

21

24

235

95

Share-based compensation

33

16

16

68

20

133

93

Changes in:

Reserve for losses and loss adjustment expenses, net

832

1,078

709

660

534

3,279

2,138

Unearned premiums, net

(324)

77

216

663

(83)

632

1,028

Premiums receivable

686

178

(523)

(1,159)

352

(818)

(981)

Deferred acquisition costs

(46)

(86)

2

(82)

(45)

(212)

(235)

Reinsurance balances payable

(410)

(27)

95

521

(237)

179

455

Deferred income tax assets, net

(96)

16

21

24

(1,201)

(35)

(1,161)

Other items, net

(160)

17

(108)

(108)

264

(359)

(92)

Net cash provided by operating activities

1,573

2,018

1,518

1,564

1,665

6,673

5,749

Investing Activities

Purchases of fixed maturity investments

(9,731)

(7,436)

(5,798)

(8,325)

(5,038)

(31,290)

(18,062)

Purchases of equity securities

(491)

(278)

(145)

(509)

(280)

(1,423)

(456)

Purchases of other investments

(1,587)

(529)

(875)

(494)

(1,059)

(3,485)

(2,171)

Proceeds from sales of fixed maturity investments

9,798

5,227

3,691

7,529

4,450

26,245

14,105

Proceeds from sales of equity securities

428

126

482

65

72

1,101

288

Proceeds from sales, redemptions and maturities of other investments

834

405

503

116

423

1,858

768

Proceeds from redemptions and maturities of fixed maturity investments

766

392

515

363

192

2,036

781

Net settlements of derivative instruments

(132)

115

7

5

119

(5)

50

Net (purchases) sales of short-term investments

549

(793)

65

(90)

(373)

(269)

(696)

Acquisitions, net of cash

-

852

-

-

-

852

-

Purchases of fixed assets

(13)

(12)

(11)

(15)

(15)

(51)

(52)

Other

(1)

(32)

57

(54)

(23)

(30)

(23)

Net cash provided by (used for) investing activities

420

(1,963)

(1,509)

(1,409)

(1,532)

(4,461)

(5,468)

Financing Activities

Purchases of common shares under share repurchase program

(24)

-

-

-

-

(24)

-

Proceeds from common shares issued, net

9

6

24

(32)

(7)

7

(2)

Change in third party investment in redeemable noncontrolling interests

-

-

-

-

-

-

(22)

Common dividends paid

(1,866)

-

-

-

-

(1,866)

-

Preferred dividends paid

(10)

(10)

(10)

(10)

(10)

(40)

(40)

Other

1

(3)

-

-

-

(2)

(5)

Net cash provided by (used for) financing activities

(1,890)

(7)

14

(42)

(17)

(1,925)

(69)

Effects of exchange rate changes on foreign currency cash and restricted cash

(55)

37

4

(11)

27

(25)

13

Increase (decrease) in cash and restricted cash

48

85

27

102

143

262

225

Cash and restricted cash, beginning of period

1,712

1,627

1,600

1,498

1,355

1,498

1,273

Cash and restricted cash, end of period

$

1,760

$

1,712

$

1,627

$

1,600

$

1,498

$

1,760

$

1,498

Income taxes paid (received)

$

157

$

76

$

151

$

(6)

$

140

$

378

$

267

Interest paid

$

64

$

-

$

63

$

-

$

64

$

127

$

127

(U.S. Dollars in millions)

Three Months Ended

December 31, 2024

Insurance

Reinsurance

Mortgage

Total

Gross premiums written (1)

$

2,484

$

1,941

$

331

$

4,756

Premiums ceded (1)

(530)

(353)

(54)

(937)

Net premiums written

1,954

1,588

277

3,819

Change in unearned premiums

(21)

316

29

324

Net premiums earned

1,933

1,904

306

4,143

Other underwriting income (loss)

-

4

2

6

Losses and loss adjustment expenses

(1,281)

(1,121)

18

(2,384)

Acquisition expenses

(345)

(382)

(3)

(730)

Other operating expenses

(277)

(77)

(56)

(410)

Underwriting income (loss)

$

30

$

328

$

267

625

Net investment income

405

Net realized gains (losses)

(161)

Equity in net income (loss) of investment funds accounted for using the equity method

143

Other income (loss)

12

Corporate expenses (2)

(31)

Transaction costs and other (2)

(26)

Amortization of intangible assets

(99)

Interest expense

(37)

Net foreign exchange gains (losses)

106

Income (loss) before income taxes and income (loss) from operating affiliates

937

Income tax (expense) benefit

(66)

Income (loss) from operating affiliates

64

Net income (loss) available to Arch

935

Preferred dividends

(10)

Net income (loss) available to Arch common shareholders

$

925

Underwriting Ratios

Loss ratio

66.3 %

58.9 %

(5.9)%

57.5 %

Acquisition expense ratio

17.9 %

20.0 %

1.0 %

17.6 %

Other operating expense ratio

14.3 %

4.1 %

18.3 %

9.9 %

Combined ratio

98.5 %

83.0 %

13.4 %

85.0 %

Net premiums written to gross premiums written

78.7 %

81.8 %

83.7 %

80.3 %

Total investable assets

$

41,388

Total assets

70,906

Total liabilities

50,086