Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
56K characters. Original on sec.gov · Markdown
Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
| (a) Financial Statements, Financial Statement Schedules and Exhibits. | ||||||||
| 1. Financial Statements | ||||||||
| Included in Part II – see Item 8 of this report. | ||||||||
| 2. Financial Statement Schedules | ||||||||
| Page No. | ||||||||
| II. Condensed Financial Information of Registrant | ||||||||
| As of December 31, 2023 and 2022, and for the years ended December 31, 2023, 2022 and 2021 | 180 | |||||||
| III. Supplementary Insurance Information | ||||||||
| For the years ended December 31, 2023, 2022 and 2021 | 183 | |||||||
| IV. Reinsurance | ||||||||
| For the years ended December 31, 2023, 2022 and 2021 | 184 | |||||||
| VI. Supplementary Information for Property and Casualty Insurance Underwriters | ||||||||
| For the years ended December 31, 2023, 2022 and 2021 | 185 |
Schedules other than those listed above are omitted for the reason that they are not applicable or the information is provided in Item 8 of this report.
| ARCH CAPITAL | 174 | 2023 FORM 10-K |
3. Exhibits
| ARCH CAPITAL | 175 | 2023 FORM 10-K |
| ARCH CAPITAL | 176 | 2023 FORM 10-K |
(1) Certain schedules and exhibits have been omitted pursuant to Item 601(b)(10) of Regulation S-K. The Company hereby undertakes to furnish supplemental copies of any of the omitted schedules and exhibits to the SEC upon request.
† Management contract or compensatory plan or arrangement.
| ARCH CAPITAL | 177 | 2023 FORM 10-K |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ARCH CAPITAL GROUP LTD. (Registrant) | |||||||||||
| By: | /s/ Marc Grandisson | ||||||||||
| Name: | Marc Grandisson | ||||||||||
| Title: | Chief Executive Officer (Principal Executive Officer) |
February 23, 2024
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| Name | Title | Date | ||||||
| /s/ Marc Grandisson | ||||||||
| Marc Grandisson | Chief Executive Officer (Principal Executive Officer) | February 23, 2024 | ||||||
| /s/ François Morin | ||||||||
| François Morin | Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) and Treasurer | February 23, 2024 | ||||||
| * | ||||||||
| John M. Pasquesi | Chairman of the Board | February 23, 2024 | ||||||
| * | ||||||||
| John L. Bunce, Jr. | Director | February 23, 2024 | ||||||
| * | ||||||||
| Eric W. Doppstadt | Director | February 23, 2024 | ||||||
| * | ||||||||
| Francis Ebong | Director | February 23, 2024 | ||||||
| * | ||||||||
| Laurie S. Goodman | Director | February 23, 2024 |
| ARCH CAPITAL | 178 | 2023 FORM 10-K |
| Name | Title | Date | ||||||
| * | ||||||||
| Moira Kilcoyne | Director | February 23, 2024 | ||||||
| * | ||||||||
| Eileen Mallesch | Director | February 23, 2024 | ||||||
| * | ||||||||
| Louis J. Paglia | Director | February 23, 2024 | ||||||
| * | ||||||||
| Brian S. Posner | Director | February 23, 2024 | ||||||
| * | ||||||||
| Eugene S. Sunshine | Director | February 23, 2024 | ||||||
| * | ||||||||
| John D. Vollaro | Director | February 23, 2024 | ||||||
- By François Morin, as attorney-in-fact and agent, pursuant to a power of attorney, a copy of which has been filed with the Securities and Exchange Commission as Exhibit 24 to this report.
| /s/ François Morin | |||||
| Name: | François Morin Attorney-in-Fact |
| ARCH CAPITAL | 179 | 2023 FORM 10-K |
SCHEDULE II
ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(U.S. dollars in millions)
Balance Sheet
(Parent Company Only)
| December 31, | |||||||||||||||||||||||||||||
| 2023 | 2022 | ||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Total investments | $ | 17 | $ | 7 | |||||||||||||||||||||||||
| Cash | 9 | 11 | |||||||||||||||||||||||||||
| Investments in subsidiaries | 19,590 | 14,191 | |||||||||||||||||||||||||||
| Investment in operating affiliates | 4 | 5 | |||||||||||||||||||||||||||
| Due from subsidiaries and affiliates | — | 2 | |||||||||||||||||||||||||||
| Other assets | 58 | 18 | |||||||||||||||||||||||||||
| Total assets | $ | 19,678 | $ | 14,234 | |||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||
| Senior notes | $ | 1,287 | $ | 1,287 | |||||||||||||||||||||||||
| Other liabilities | 38 | 37 | |||||||||||||||||||||||||||
| Total liabilities | 1,325 | 1,324 | |||||||||||||||||||||||||||
| Shareholders' Equity | |||||||||||||||||||||||||||||
| Non-cumulative preferred shares | 830 | 830 | |||||||||||||||||||||||||||
| Common shares ($0.0011 par, shares issued: 591.9 and 588.3) | 1 | 1 | |||||||||||||||||||||||||||
| Additional paid-in capital | 2,327 | 2,211 | |||||||||||||||||||||||||||
| Retained earnings | 20,295 | 15,892 | |||||||||||||||||||||||||||
| Accumulated other comprehensive income (loss), net of deferred income tax | (676) | (1,646) | |||||||||||||||||||||||||||
| Common shares held in treasury, at cost (shares: 218.5 and 217.9) | (4,424) | (4,378) | |||||||||||||||||||||||||||
| Total shareholders' equity | $ | 18,353 | $ | 12,910 | |||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 19,678 | $ | 14,234 |
The financial information for the parent company (Arch Capital Group Ltd.) should be read in conjunction with the Consolidated Financial Statements and Notes thereto.
| ARCH CAPITAL | 180 | 2023 FORM 10-K |
SCHEDULE II
(continued)
ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(U.S. dollars in millions)
Statement of Income
(Parent Company Only)
| Year Ended | |||||||||||||||||
| December 31, | |||||||||||||||||
| 2023 | 2022 | 2021 | |||||||||||||||
| Revenues | |||||||||||||||||
| Net investment income | $ | 2 | $ | 2 | $ | 2 | |||||||||||
| Total revenues | 2 | 2 | 2 | ||||||||||||||
| Expenses | |||||||||||||||||
| Corporate expenses | 93 | 86 | 72 | ||||||||||||||
| Interest expense | 59 | 59 | 59 | ||||||||||||||
| Total expenses | 152 | 145 | 131 | ||||||||||||||
| Income (loss) before income taxes and income (loss) from operating affiliates | (150) | (143) | (129) | ||||||||||||||
| Income tax (expense) benefit | 41 | — | — | ||||||||||||||
| Income (loss) from operating affiliates | (1) | (1) | (1) | ||||||||||||||
| Income (loss) before equity in net income of subsidiaries | (110) | (144) | (130) | ||||||||||||||
| Equity in net income of subsidiaries | 4,553 | 1,593 | 2,287 | ||||||||||||||
| Net income available to Arch | 4,443 | 1,449 | 2,157 | ||||||||||||||
| Preferred dividends | (40) | (40) | (48) | ||||||||||||||
| Loss on redemption of preferred shares | — | — | (15) | ||||||||||||||
| Net income available to Arch common shareholders | $ | 4,403 | $ | 1,409 | $ | 2,094 |
The financial information for the parent company (Arch Capital Group Ltd.) should be read in conjunction with the Consolidated Financial Statements and Notes thereto.
| ARCH CAPITAL | 181 | 2023 FORM 10-K |
SCHEDULE II
(continued)
ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(U.S. dollars in millions)
Statement of Cash Flows
(Parent Company Only)
| Year Ended | |||||||||||||||||
| December 31, | |||||||||||||||||
| 2023 | 2022 | 2021 | |||||||||||||||
| Operating Activities: | |||||||||||||||||
| Net Cash Provided By Operating Activities | $ | 46 | $ | 621 | $ | 1,728 | |||||||||||
| Investing Activities: | |||||||||||||||||
| Net (purchases) sales of short-term investments | (8) | (5) | (2) | ||||||||||||||
| Capital contributed to subsidiaries | — | — | (487) | ||||||||||||||
| Purchase of fixed assets | — | — | (1) | ||||||||||||||
| Other | 1 | (1) | — | ||||||||||||||
| Net Cash Used For Investing Activities | (7) | (6) | (490) | ||||||||||||||
| Financing Activities: | |||||||||||||||||
| Purchases of common shares under share repurchase program | — | (586) | (1,234) | ||||||||||||||
| Proceeds from common shares issued, net | (2) | 6 | 6 | ||||||||||||||
| Proceeds from issuance of preferred shares, net | — | — | 486 | ||||||||||||||
| Redemption of preferred shares | — | — | (450) | ||||||||||||||
| Preferred dividends paid | (40) | (40) | (48) | ||||||||||||||
| Net Cash Used For Financing Activities | (42) | (620) | (1,240) | ||||||||||||||
| Increase (decrease) in cash and restricted cash | (3) | (5) | (2) | ||||||||||||||
| Cash and restricted cash, beginning of year | 12 | 17 | 19 | ||||||||||||||
| Cash and restricted cash, end of period | $ | 9 | $ | 12 | $ | 17 |
The financial information for the parent company (Arch Capital Group Ltd.) should be read in conjunction with the Consolidated Financial Statements and Notes thereto.
| ARCH CAPITAL | 182 | 2023 FORM 10-K |
SCHEDULE III
ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES
SUPPLEMENTARY INSURANCE INFORMATION
(U.S. dollars in millions)
| Deferred Acquisition Costs | Reserves for Losses and Loss Adjustment Expenses | Unearned Premiums | Net Premiums Earned | Net Investment Income (1) | Net Losses and Loss Adjustment Expenses Incurred | Amortization of Deferred Acquisition Costs | Other Operating Expenses (2) | Net Premiums Written | |||||||||||||||||||||
| December 31, 2023 | |||||||||||||||||||||||||||||
| Insurance | $566 | $12,250 | $3,917 | $5,446 | NM | $3,122 | $1,055 | $819 | $5,862 | ||||||||||||||||||||
| Reinsurance | 901 | 9,924 | 4,254 | 5,836 | NM | 3,227 | 1,240 | 288 | 6,554 | ||||||||||||||||||||
| Mortgage | 64 | 578 | 637 | 1,158 | NM | (103) | 17 | 194 | 1,052 | ||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||
| Total | $1,531 | $22,752 | $8,808 | $12,440 | NM | $6,246 | $2,312 | $1,301 | $13,468 | ||||||||||||||||||||
| December 31, 2022 | |||||||||||||||||||||||||||||
| Insurance | $301 | $11,017 | $3,382 | $4,560 | NM | $2,784 | $887 | $665 | $5,021 | ||||||||||||||||||||
| Reinsurance | 992 | 8,306 | 3,206 | 3,959 | NM | 2,568 | 813 | 268 | 4,924 | ||||||||||||||||||||
| Mortgage | (30) | 709 | 749 | 1,160 | NM | (324) | 40 | 195 | 1,133 | ||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||
| Total | $1,263 | $20,032 | $7,337 | $9,679 | NM | $5,028 | $1,740 | $1,128 | $11,078 | ||||||||||||||||||||
| December 31, 2021 | |||||||||||||||||||||||||||||
| Insurance | $378 | $9,811 | $2,938 | $3,625 | NM | $2,345 | $606 | $559 | $4,149 | ||||||||||||||||||||
| Reinsurance | 424 | 6,879 | 2,263 | 2,841 | NM | 1,925 | 537 | 214 | 3,254 | ||||||||||||||||||||
| Mortgage | 99 | 1,068 | 811 | 1,283 | NM | 57 | 97 | 193 | 1,261 | ||||||||||||||||||||
| Other | 333 | NM | 258 | 63 | 33 | 353 | |||||||||||||||||||||||
| Total | $901 | $17,758 | $6,012 | $8,082 | NM | $4,585 | $1,303 | $999 | $9,017 |
(1) The Company does not manage its assets by segment and, accordingly, net investment income is not allocated to each underwriting segment. See note 4, “Segment Information,” to our consolidated financial statements in Item 8 for information related to the ‘other’ segment.
(2) Certain other operating expenses relate to the Company’s corporate segment. Such amounts are not reflected in the table above. See note 4, “Segment Information,” to our consolidated financial statements in Item 8 for information related to the corporate segment.
| ARCH CAPITAL | 183 | 2023 FORM 10-K |
SCHEDULE IV
ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES
REINSURANCE
(U.S. dollars in millions)
| Gross Amount | Ceded to Other Companies (1) | Assumed From Other Companies (1) | Net Amount | Percentage of Amount Assumed to Net | |||||||||||||||||||||||||
| Year Ended December 31, 2023 | |||||||||||||||||||||||||||||
| Premiums Written: | |||||||||||||||||||||||||||||
| Insurance | $ | 7,865 | $ | (2,049) | $ | 46 | $ | 5,862 | 0.8 | % | |||||||||||||||||||
| Reinsurance | 626 | (2,559) | 8,487 | 6,554 | 129.5 | % | |||||||||||||||||||||||
| Mortgage | 1,161 | (335) | 226 | 1,052 | 21.5 | % | |||||||||||||||||||||||
| Total | $ | 9,652 | $ | (4,935) | $ | 8,751 | $ | 13,468 | 65.0 | % | |||||||||||||||||||
| Year Ended December 31, 2022 | |||||||||||||||||||||||||||||
| Premiums Written: | |||||||||||||||||||||||||||||
| Insurance | $ | 6,889 | $ | (1,910) | $ | 42 | $ | 5,021 | 0.8 | % | |||||||||||||||||||
| Reinsurance | 397 | (2,024) | 6,553 | 4,924 | 133.1 | % | |||||||||||||||||||||||
| Mortgage | 1,256 | (322) | 199 | 1,133 | 17.6 | % | |||||||||||||||||||||||
| Total | $ | 8,542 | $ | (4,249) | $ | 6,785 | $ | 11,078 | 61.2 | % | |||||||||||||||||||
| Year Ended December 31, 2021 | |||||||||||||||||||||||||||||
| Premiums Written: | |||||||||||||||||||||||||||||
| Insurance | $ | 5,834 | $ | (1,719) | $ | 34 | $ | 4,149 | 0.8 | % | |||||||||||||||||||
| Reinsurance | 409 | (1,840) | 4,685 | 3,254 | 144.0 | % | |||||||||||||||||||||||
| Mortgage | 1,213 | (247) | 294 | 1,261 | 23.3 | % | |||||||||||||||||||||||
| Other | 251 | (105) | 206 | 353 | 58.4 | % | |||||||||||||||||||||||
| Total | $ | 7,707 | $ | (3,735) | $ | 5,045 | $ | 9,017 | 55.9 | % |
(1) Certain amounts included in the gross premiums written of each segment are related to intersegment transactions and are included in the gross premiums written of each segment. Accordingly, the sum of gross premiums written for each segment does not agree to the total gross premiums written as shown in the table above due to the elimination of intersegment transactions in the total.
| ARCH CAPITAL | 184 | 2023 FORM 10-K |
SCHEDULE VI
ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES
SUPPLEMENTARY INFORMATION FOR PROPERTY AND CASUALTY INSURANCE UNDERWRITERS
(U.S. dollars in millions)
| Column A | Column B | Column C | Column D | Column E | Column F | Column G | Column H | Column I | Column J | Column K | |||||||||||||||||||||||||
| Affiliation with Registrant | Deferred Acquisition Costs | Reserves for Losses and Loss Adjustment Expenses | Discount, if any, deducted in Column C | Unearned Premiums | Net Premiums Earned | Net Investment Income | Net Losses and Loss Adjustment Expenses Incurred Related to | Amortization of Deferred Acquisition Costs | Net Paid Losses and Loss Adjustment Expenses | Net Premiums Written | |||||||||||||||||||||||||
| (a) Current Year | (b) Prior Years | ||||||||||||||||||||||||||||||||||
| Consolidated Subsidiaries | |||||||||||||||||||||||||||||||||||
| 2023 | $ | 1,531 | $ | 22,752 | $ | 66 | $ | 8,808 | $ | 12,440 | $ | 1,023 | $ | 6,784 | $ | (538) | $ | 2,312 | $ | 4,093 | $ | 13,468 | |||||||||||||
| 2022 | 1,263 | 20,032 | 61 | 7,337 | 9,679 | 496 | 5,797 | (769) | 1,740 | 3,141 | 11,078 | ||||||||||||||||||||||||
| 2021 | 901 | 17,758 | 56 | 6,012 | 8,082 | 389 | 4,940 | (355) | 1,303 | 2,827 | 9,017 |
Previous: Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES · Next: Item 16. FORM 10-K SUMMARY