Arch Capital Group (ACGL) Q4 2024 earnings summary

Executive summary

• Q4 2024 net premium rose 17% year-over-year to $3.8 billion, with full-year after-tax operating income of $3.5 billion and an 18.9% operating ROE, despite elevated catastrophe losses from California wildfires and hurricanes.

• Gross premiums written reached $21.5B in FY 2024, with 52% from reinsurance, 42% insurance, and 6% mortgage segments.

• Net income available to common shareholders was $925 million in Q4 2024, with a 17.9% annualized net income return on average common equity.

• Book value per share was $53.11 at year-end, up 13% year-over-year or nearly 24% after adjusting for a $5 per share special dividend paid in December.

• Special dividend of $1.9 billion and $24 million in share repurchases reflect strong capital position and active capital management.

Financial highlights

• Q4 underwriting income was $625 million, down 13% year-over-year due to catastrophe losses.

• Net investment income for the year was nearly $1.5 billion, with a $40 billion asset base; Q4 pre-tax investment income was $548 million.

• Cash flow from operations was $6.7 billion, up 16% from 2023.

• Gross premiums written rose 11.9% year-over-year to $4.76 billion in Q4; net premiums written up 17.1% to $3.82 billion.

• Tangible shareholders' equity available was $19.5B at year-end 2024.

Outlook and guidance

• Catastrophe load for 2025 expected at 7%-8% of net earned premium, reflecting recent losses and the MidCorp acquisition.

• Annualized effective tax rate projected at 16%-18% for 2025 due to Bermuda's new corporate tax.

• Management expects the insured market loss from California wildfires to be $35–$45 billion, with the company's expected share between $450–$550 million.

• Focus remains on disciplined underwriting, dynamic capital allocation, and conservative balance sheet management.

• Favorable growth outlook in North America and international insurance, with competitive market conditions and selective capital deployment.