Arch reports Q4’24 net income of $925m despite elevated cat environment

Arch Capital Group’s Q4 2024 net income available to common shareholders was $925 million, down from the $2.3 billion recorded in Q4 2023.

According to Arch, pre-tax current accident year catastrophic losses for insurance and reinsurance segments, net of reinsurance and reinstatement premiums, were $393 million, partly due to Hurricanes Milton and Helene.

Given this, the firm’s underwriting income was also down in Q4 2024, at $625 million, compared to $715 million in Q4 2023. Arch’s combined ratio in Q4 2024 was 85%, up 6.1% from the 78.9% reported in Q4 2023.

However, gross premiums written in Q4 2024 were up 11.9% from the previous year, reaching $4.76 billion.

Gross premiums written by the insurance segment in Q4 2024 were 28.4% higher than in Q4 2023, while net premiums written were 34.9% higher than in Q4 2023.

Meanwhile, gross premiums written by the reinsurance segment in Q4 2024 were 1.5% lower than in Q4 2023, while net premiums written were 2% higher.

Arch explained that the growth in net premiums written primarily reflected increases in casualty, property excluding property catastrophe and property catastrophe lines due partly to rate increases, new business opportunities and growth in existing accounts.

Underwriting income in the insurance segment in Q4 2024 was $30 million, down 69.7% from Q4 2023, with a combined ratio of 98.5%.

Underwriting income in the reinsurance segment in Q4 2024 was $328 million, down only slightly from the $330 million recorded in Q4 2023, with a combined ratio in this segment of 83%.

Nicolas Papadopoulo, Arch CEO, commented on the results, “We closed the year with a very strong fourth quarter including contributions from all our earnings sources.

“These are excellent results when you consider the elevated catastrophe environment and the increased risk levels across many lines of business.”

Shedding some light on the California wildfires, Papadopoulo added, “Additionally, on behalf of everyone at Arch, I would like to offer our thoughts and sympathies to everyone affected by the California wildfires.

“This devastating event will require the coordinated efforts of many, particularly the insurance industry, to help rebuild.

“While still too early to fully assess the magnitude of this disaster, our current view of the insured market loss will be between $35 billion and $45 billion, making Arch’s expected share of the event somewhere between $450 million and $550 million.”

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