Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Billions, except Share data, unless otherwise specified | Dec. 31, 2014 | Feb. 20, 2015 | Jun. 30, 2014 |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | ARCH CAPITAL GROUP LTD. | ||
Entity Central Index Key | 947484 | ||
Current Fiscal Year End Date | -19 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | FALSE | ||
Entity Common Stock, Shares Outstanding | 126,226,689 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $7.05 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Investments: | ||||
Fixed maturities available for sale, at fair value (amortized cost: $10,701,557 and $9,564,634) | $10,750,770 | $9,571,776 | ||
Short-term investments available for sale, at fair value (amortized cost: $801,758 and $1,477,584) | 797,226 | 1,478,367 | ||
Investment of funds received under securities lending, at fair value (amortized cost: $40,473 and $97,943) | 44,301 | 100,584 | ||
Equity securities available for sale, at fair value (cost: $562,534 and $433,275) | 658,182 | 496,824 | ||
Other investments available for sale, at fair value (cost: $264,747 and $488,687) | 296,224 | 498,310 | ||
Investments accounted for using the fair value option | 2,435,532 | 1,221,534 | ||
Investments accounted for using the equity method | 349,014 | 244,339 | ||
Total investments | 15,331,249 | 13,611,734 | ||
Cash | 485,702 | 434,057 | ||
Accrued investment income | 74,316 | 66,848 | ||
Investment in joint venture (cost: $100,000) | 90,426 | 104,856 | ||
Fixed maturities and short-term investments pledged under securities lending, at fair value | 50,802 | 105,081 | ||
Premiums receivable | 948,695 | 753,924 | ||
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses | 1,812,845 | 1,804,330 | ||
Contractholder receivables | 1,309,192 | 1,064,246 | ||
Prepaid reinsurance premiums | 377,078 | 328,343 | ||
Deferred acquisition costs, net | 414,525 | 342,314 | ||
Receivable for securities sold | 78,170 | 50,555 | ||
Goodwill and intangible assets | 109,539 | 27,319 | ||
Other assets | 927,004 | 872,487 | ||
Total assets | 22,009,543 | 19,566,094 | ||
Liabilities | ||||
Reserve for losses and loss adjustment expenses | 9,036,448 | 8,824,696 | ||
Unearned premiums | 2,231,578 | 1,896,365 | ||
Reinsurance balances payable | 219,312 | 196,167 | ||
Contractholder payables | 1,309,192 | 1,064,246 | ||
Deposit accounting liabilities | 327,384 | 421,297 | ||
Senior notes | 800,000 | 800,000 | ||
Revolving credit agreement borrowings | 100,000 | 100,000 | ||
Securities lending payable | 50,529 | 107,999 | ||
Payable for securities purchased | 128,413 | 51,318 | ||
Other liabilities | 688,041 | 456,510 | ||
Total liabilities | 14,890,897 | 13,918,598 | ||
Commitments and Contingencies | ||||
Redeemable noncontrolling interests | 219,512 | [1] | 0 | [1] |
Shareholders’ Equity | ||||
Non-cumulative preferred shares | 325,000 | 325,000 | ||
Common shares ($0.0033 par, shares issued: 171,672,408 and 169,560,591) | 572 | 565 | ||
Additional paid-in capital | 383,073 | 299,517 | ||
Retained earnings | 6,854,571 | 6,042,154 | ||
Accumulated other comprehensive income, net of deferred income tax | 128,856 | 74,964 | ||
Common shares held in treasury, at cost (shares: 44,304,474 and 35,885,707) | -1,562,019 | -1,094,704 | ||
Total shareholders' equity available to Arch | 6,130,053 | 5,647,496 | ||
Non-redeemable noncontrolling interests | 769,081 | [1] | 0 | [1] |
Total shareholders' equity | 6,899,134 | 5,647,496 | ||
Total liabilities, noncontrolling interests and shareholders' equity | $22,009,543 | $19,566,094 | ||
[1] | See Note 4. |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parentheticals) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Fixed maturities available for sale, at amortized cost | $10,701,557 | $9,564,634 |
Short-term investments available for sale, at amortized cost | 801,758 | 1,477,584 |
Investment of funds received under securities lending agreements, at cost | 40,473 | 97,943 |
Equity securities, at cost | 562,534 | 433,275 |
Other investments, at cost | 264,747 | 488,687 |
Investment in joint venture, at cost | $100,000 | $100,000 |
Common shares, par value per share | $0.00 | $0.00 |
Common shares issued (shares) | 171,672,408 | 169,560,591 |
Common shares held in treasury (shares) | 44,304,474 | 35,885,707 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 12 Months Ended | |||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Revenues | ||||||
Net premiums written | $3,891,938 | $3,351,367 | $3,052,235 | |||
Change in unearned premiums | -298,190 | -205,415 | -117,095 | |||
Net premiums earned | 3,593,748 | 3,145,952 | 2,935,140 | |||
Net investment income | 302,585 | 267,219 | 294,895 | |||
Net realized gains | 102,917 | 74,018 | 194,228 | |||
Other-than-temporary impairment losses | -30,470 | -3,961 | -12,175 | |||
Less investment impairments recognized in other comprehensive income, before taxes | 320 | 175 | 787 | |||
Net impairment losses recognized in earnings | -30,150 | -3,786 | -11,388 | |||
Other underwriting income | 10,142 | 7,639 | 8,090 | |||
Equity in net income of investment funds accounted for using the equity method | 19,883 | 35,701 | 73,510 | |||
Other income (loss) | -10,252 | -586 | -12,094 | |||
Total revenues | 3,988,873 | 3,526,157 | 3,482,381 | |||
Expenses | ||||||
Losses and loss adjustment expenses | 1,919,250 | 1,679,424 | 1,861,277 | |||
Acquisition expenses | 657,262 | 564,103 | 508,884 | |||
Other operating expenses | 606,224 | 500,730 | 465,353 | |||
Interest expense | 45,634 | 27,060 | 28,525 | |||
Net foreign exchange (gains) losses | -83,744 | 12,335 | 28,955 | |||
Total expenses | 3,144,626 | 2,783,652 | 2,892,994 | |||
Income before income taxes | 844,247 | 742,505 | 589,387 | |||
Current tax expense | 30,550 | 32,696 | 9,004 | |||
Deferred tax (benefit) expense | -7,563 | 78 | -13,014 | |||
Income tax expense (benefit) | 22,987 | 32,774 | -4,010 | |||
Net income | 821,260 | 709,731 | 593,397 | |||
Amounts attributable to noncontrolling interests | 13,095 | [1] | 0 | [1] | 0 | [1] |
Net income available to Arch | 834,355 | 709,731 | 593,397 | |||
Preferred dividends | -21,938 | -21,938 | -25,079 | |||
Loss on repurchase of preferred shares | 0 | 0 | -10,612 | |||
Net income available to Arch common shareholders | $812,417 | $687,793 | $557,706 | |||
Net income per common share | ||||||
Basic (per share) | $6.21 | $5.24 | $4.15 | |||
Diluted (per share) | $6.02 | $5.07 | $4.03 | |||
Weighted average common shares and common share equivalents outstanding | ||||||
Basic (shares) | 130,817,610 | 131,355,392 | 134,446,158 | |||
Diluted (shares) | 134,922,322 | 135,777,183 | 138,258,847 | |||
[1] | See Note 4. |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Comprehensive Income | ||||||
Net income | $821,260 | $709,731 | $593,397 | |||
Unrealized appreciation (decline) in value of available-for-sale investments: | ||||||
Unrealized holding gains (losses) arising during period | 146,330 | -176,403 | 273,931 | |||
Portion of other-than-temporary impairment losses recognized in other comprehensive income, net of deferred income tax | -320 | -175 | -787 | |||
Reclassification of net realized gains, net of income taxes, included in net income | -65,104 | -32,686 | -157,824 | |||
Foreign currency translation adjustments | -27,014 | -2,789 | 17,774 | |||
Comprehensive income | 875,152 | 497,678 | 726,491 | |||
Amounts attributable to noncontrolling interests | 13,095 | [1] | 0 | [1] | 0 | [1] |
Comprehensive income available to Arch | $888,247 | $497,678 | $726,491 | |||
[1] | See Note 4. |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Shareholders' Equity (USD $) | Total | Non-cumulative preferred shares | Common shares | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income | Unrealized Appreciation on Available-For-Sale Investments | Foreign Currency Translation Adjustments | Common shares held in treasury, at cost | |
In Thousands | ||||||||||
Balance at beginning of year at Dec. 31, 2011 | $325,000 | $549 | $161,419 | $4,796,655 | $153,923 | $174,636 | ($20,713) | ($845,472) | ||
Shares issued - Series C | 325,000 | |||||||||
Shares repurchased | -325,000 | 10,612 | -10,612 | |||||||
Common shares issued, net | 12 | 6,823 | ||||||||
Issue costs on Series C preferred shares | -9,398 | |||||||||
Exercise of stock options | 14,218 | |||||||||
Amortization of share-based compensation | 42,303 | |||||||||
Other | 1,801 | |||||||||
Net income | 593,397 | 593,397 | ||||||||
Amounts attributable to noncontrolling interests | [1] | 0 | ||||||||
Dividends declared on preferred shares | -25,079 | -25,079 | ||||||||
Unrealized holding gains (losses) arising during period, net of reclassification adjustment | 116,107 | |||||||||
Portion of other-than-temporary impairment losses recognized in other comprehensive income, net of deferred income tax | -787 | |||||||||
Foreign currency translation adjustments | 17,774 | 17,774 | ||||||||
Shares repurchased for treasury | -180,367 | |||||||||
Non-redeemable noncontrolling interests | [1] | 0 | ||||||||
Total shareholders' equity | 5,168,878 | |||||||||
Balance at end of year at Dec. 31, 2012 | 5,168,878 | 325,000 | 561 | 227,778 | 5,354,361 | 287,017 | 289,956 | -2,939 | -1,025,839 | |
Shares issued - Series C | 0 | |||||||||
Shares repurchased | 0 | 0 | 0 | |||||||
Common shares issued, net | 4 | 8,237 | ||||||||
Issue costs on Series C preferred shares | 0 | |||||||||
Exercise of stock options | 10,561 | |||||||||
Amortization of share-based compensation | 49,237 | |||||||||
Other | 3,704 | |||||||||
Net income | 709,731 | 709,731 | ||||||||
Amounts attributable to noncontrolling interests | [1] | 0 | ||||||||
Dividends declared on preferred shares | -21,938 | -21,938 | ||||||||
Unrealized holding gains (losses) arising during period, net of reclassification adjustment | -209,089 | |||||||||
Portion of other-than-temporary impairment losses recognized in other comprehensive income, net of deferred income tax | -175 | |||||||||
Foreign currency translation adjustments | -2,789 | -2,789 | ||||||||
Shares repurchased for treasury | -68,865 | |||||||||
Non-redeemable noncontrolling interests | [1] | 0 | ||||||||
Total shareholders' equity | 5,647,496 | |||||||||
Balance at end of year at Dec. 31, 2013 | 5,647,496 | 325,000 | 565 | 299,517 | 6,042,154 | 74,964 | 80,692 | -5,728 | -1,094,704 | |
Shares issued - Series C | 0 | |||||||||
Shares repurchased | 0 | 0 | 0 | |||||||
Common shares issued, net | 7 | 9,590 | ||||||||
Issue costs on Series C preferred shares | 0 | |||||||||
Exercise of stock options | 18,662 | |||||||||
Amortization of share-based compensation | 54,789 | |||||||||
Other | 515 | |||||||||
Net income | 821,260 | 821,260 | ||||||||
Amounts attributable to noncontrolling interests | [1] | 13,095 | ||||||||
Dividends declared on preferred shares | -21,938 | -21,938 | ||||||||
Unrealized holding gains (losses) arising during period, net of reclassification adjustment | 81,226 | |||||||||
Portion of other-than-temporary impairment losses recognized in other comprehensive income, net of deferred income tax | -320 | |||||||||
Foreign currency translation adjustments | -27,014 | -27,014 | ||||||||
Shares repurchased for treasury | -467,315 | |||||||||
Non-redeemable noncontrolling interests | [1] | 769,081 | ||||||||
Total shareholders' equity | 6,899,134 | |||||||||
Balance at end of year at Dec. 31, 2014 | $6,130,053 | $325,000 | $572 | $383,073 | $6,854,571 | $128,856 | $161,598 | ($32,742) | ($1,562,019) | |
[1] | See Note 4. |
Unaudited_Consolidated_Stateme
Unaudited Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating Activities | |||
Net income | $821,260 | $709,731 | $593,397 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Net realized losses | -127,511 | -78,084 | -199,547 |
Net impairment losses recognized in earnings | 30,150 | 3,786 | 11,388 |
Equity in net income or loss of investment funds accounted for using the equity method and other income or loss | 13,340 | 52,824 | -43,633 |
Share-based compensation | 54,789 | 49,237 | 42,303 |
Changes in: | |||
Reserve for losses and loss adjustment expenses, net of unpaid losses and loss adjustment expenses recoverable | 156,211 | -29,393 | 395,901 |
Unearned premiums, net of prepaid reinsurance premiums | 298,190 | 205,415 | 117,095 |
Premiums receivable | -217,035 | -60,224 | -120,380 |
Deferred acquisition costs, net | -81,584 | -75,948 | -34,371 |
Reinsurance balances payable | 26,699 | 6,830 | 42,740 |
Other liabilities | 101,757 | -29,989 | 41,049 |
Other items, net | -39,136 | 96,683 | 75,661 |
Net Cash Provided By Operating Activities | 1,037,130 | 850,868 | 921,603 |
Investing Activities | |||
Purchases of fixed maturity investments | -28,745,279 | -18,174,988 | -17,568,592 |
Purchases of equity securities | -520,817 | -535,857 | -268,999 |
Purchases of other investments | -2,257,481 | -1,326,729 | -1,000,049 |
Proceeds from the sale of fixed maturity investments | 26,823,192 | 17,196,614 | 16,366,306 |
Proceeds from the sale of equity securities | 411,362 | 462,787 | 313,617 |
Proceeds from sales, redemptions and maturities of other investments | 1,643,000 | 1,162,707 | 443,630 |
Proceeds from redemptions and maturities of fixed maturity investments | 762,995 | 731,708 | 1,115,594 |
Net sales (purchases) of short-term investments | 577,126 | -750,613 | 185,919 |
Change in investment of securities lending collateral | 57,470 | -55,643 | 6,190 |
Purchase of business, net of cash acquired | -237,106 | 0 | 28,948 |
Purchases of furniture, equipment and other assets | -19,883 | -17,499 | -18,532 |
Net Cash Used For Investing Activities | -1,505,421 | -1,307,513 | -395,968 |
Financing Activities | |||
Proceeds from issuance of Series C preferred shares, net | 0 | 0 | 315,763 |
Repurchase of Series A and B preferred shares | 0 | 0 | -325,000 |
Purchases of common shares under share repurchase program | -454,137 | -57,796 | -172,056 |
Proceeds from common shares issued, net | 6,827 | 3,051 | 7,033 |
Proceeds from borrowings | 0 | 494,228 | 0 |
Repayments of borrowings | 0 | 0 | -310,868 |
Change in securities lending collateral | -57,470 | 55,643 | -6,190 |
Third party investment in non-redeemable noncontrolling interests | 796,903 | 0 | 0 |
Third party investment in redeemable noncontrolling interests | 219,233 | 0 | 0 |
Dividends paid to redeemable noncontrolling interests | -14,448 | 0 | 0 |
Other | 64,973 | 50,830 | 6,664 |
Preferred dividends paid | -21,938 | -21,938 | -28,381 |
Net Cash Used For Financing Activities | 539,943 | 524,018 | -513,035 |
Effects of exchange rate changes on foreign currency cash | -20,007 | -4,357 | 6,742 |
Increase in cash | 51,645 | 63,016 | 19,342 |
Cash beginning of year | 434,057 | 371,041 | 351,699 |
Cash end of period | 485,702 | 434,057 | 371,041 |
Income taxes paid (recovered) | 20,923 | 15,288 | -1,801 |
Interest paid | $46,429 | $23,733 | $29,133 |
General
General | 12 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | General |
Arch Capital Group Ltd. (“ACGL”) is a Bermuda public limited liability company which provides insurance and reinsurance on a worldwide basis through its wholly owned subsidiaries. ACGL was formed in September 2000 and became the sole shareholder of Arch Capital Group (U.S.) Inc. (“Arch-U.S.”) pursuant to an internal reorganization transaction completed in November 2000. In October 2001, the Company launched an underwriting initiative to meet current and future demand in the global insurance and reinsurance markets that included the recruitment of new management teams and an equity capital infusion of $763.2 million. | |
On January 30, 2014, the Company acquired CMG Mortgage Insurance Company and its affiliated mortgage insurance companies (together, “CMG Entities”) and the mortgage insurance platform and related assets from PMI Mortgage Insurance Co., in Rehabilitation (“PMI”) (see Note 2). | |
On March 20, 2014, the Company acquired approximately 11% of Watford Holdings Ltd.’s common equity and a warrant to purchase additional common equity for $100 million. Watford Holdings Ltd. is the parent of Watford Re Ltd., a newly-formed multi-line Bermuda reinsurance company (together with Watford Holdings Ltd., “Watford Re”). Watford Re is considered a variable interest entity (“VIE”) and the Company concluded that it is the primary beneficiary of Watford Re. As such, the results of Watford Re are included in the Company’s consolidated financial statements (see Note 4). | |
As used herein, the “Company” means ACGL and its subsidiaries. Similarly, “Common Shares” means the common shares, par value $0.0033, of ACGL. The Company has reclassified the presentation of certain prior year information to conform to the current presentation. Such reclassifications had no effect on the Company’s net income, shareholders’ equity or cash flows. Tabular amounts are in U.S. Dollars in thousands, except share amounts, unless otherwise noted. |
Business_Acquired
Business Acquired | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Business Combinations [Abstract] | |||||||
Business Acquired | Business Acquired | ||||||
On January 30, 2014, the Company’s U.S.-based subsidiaries completed the acquisition of the CMG Entities through a stock purchase agreement (“SPA”) from its previous owners, PMI, which has been in rehabilitation under the receivership of the Arizona Department of Insurance since 2011, and CMFG Life Insurance Company (“CUNA Mutual”). In addition, the Company entered into a distribution agreement with CUNA Mutual and a reinsurance agreement with an affiliate of CUNA Mutual. CMG Mortgage Insurance Company has been renamed “Arch Mortgage Insurance Company” (“Arch MI U.S.”). As part of the transaction, Arch MI U.S. obtained approval as an eligible mortgage insurer from Federal National Mortgage Association and Federal Home Loan Mortgage Corporation (each a government sponsored enterprise or “GSE”), subject to maintaining certain ongoing requirements. | |||||||
In addition, through an asset purchase agreement (“APA”) with PMI, the Company acquired the mortgage insurance operating platform of PMI, 100% of the capital stock of PMI Mortgage Assurance Co., a mortgage insurance company licensed in all 50 states (renamed Arch Mortgage Guaranty Company), and entered into a quota share reinsurance agreement pursuant to which Arch Reinsurance Ltd. (“Arch Re Bermuda”) agreed to provide 100% quota share indemnity reinsurance to PMI for all certificates of insurance that were issued by PMI between and including January 1, 2009 and December 31, 2011 that were not in default as of an agreed upon effective date. Other than this quota share, no PMI legacy exposures were assumed in the transaction. As part of the transaction, the Company entered into a services agreement with PMI to provide certain necessary operational services to administer the run-off of PMI’s legacy business at the direction of PMI. Arch MI U.S. also entered into a quota share reinsurance agreement whereby it will cede to PMI 20% of all new primary flow mortgage insurance business post-closing (both credit union and non-credit union business) on the first $25 billion in original loan amounts, on a funds-withheld basis. | |||||||
The completion of the SPA and APA transactions enabled the Company to enter the U.S. mortgage insurance marketplace and serve all lenders nationwide. The arrangements with CUNA Mutual also provided a seamless transition and enabled the Company to provide uninterrupted access and services to the credit union marketplace. | |||||||
At closing, the Company paid aggregate consideration of $160.6 million (80% of the actual closing date book value of the CMG Entities) under the SPA and $84.6 million under the APA. Additionally, the SPA contains provisions for contingent consideration payments, subject to an overall maximum payment of 150% of closing book value of the pre-closing portfolio of the CMG Entities as re-calculated over an earn-out period and payable at the third, fifth and sixth anniversaries after closing (subject to a one time extension period of one to three years at the sellers’ discretion). The maximum amount of contingent consideration payments is $136.9 million. To the extent that the adjusted book value of the CMG Entities drops below the cumulative amount paid by the Company, no additional payments would be due. To determine the fair value of the contingent consideration liability, the Company estimated future payments using a weighted average cost of capital approach at a rate of return of 15% which reflects the industry-weighted average rate of return on debt and equity as required by market participants. The fair value of the contingent consideration liability was $41.8 million at closing. The contingent consideration liability, which is included in ‘other liabilities’ in the consolidated balance sheets, is remeasured at fair value at each balance sheet date ($61.8 million at December 31, 2014) until the contingency is resolved with changes in fair value recognized in ‘net realized gains (losses).’ | |||||||
The following table summarizes the fair value of net assets acquired and allocation of purchase price, measured as of the acquisition date: | |||||||
Total | Useful Life | ||||||
Purchase price | |||||||
Cash paid | $ | 245,157 | |||||
Contingent consideration liability | 41,762 | ||||||
Total purchase price (a) | $ | 286,919 | |||||
Assets acquired | |||||||
Cash | $ | 9,579 | |||||
Investments, at fair value | 312,093 | ||||||
Intangible asset -- acquired insurance contracts | 46,473 | 5 years | |||||
Intangible asset -- operating platform | 29,900 | 5 years | |||||
Intangible asset -- favorable lease contract | 1,056 | 5 years | |||||
Intangible asset -- insurance licenses | 16,858 | Indefinite | |||||
Other assets acquired | 21,691 | ||||||
Total assets acquired | 437,650 | ||||||
Liabilities acquired | |||||||
Reserves for losses and loss adjustment expenses | $ | 121,572 | |||||
Unearned premiums | 26,261 | ||||||
Intangible liability -- unfavorable service contract | 9,533 | 9 years | |||||
Other liabilities acquired | 7,217 | ||||||
Total liabilities acquired | 164,583 | ||||||
Net assets acquired (b) | $ | 273,067 | |||||
Goodwill (a)-(b) | $ | 13,852 | |||||
From the acquisition date to December 31, 2014, the Company recorded amortization expense of $20.1 million related to net intangible assets acquired. The Company recognized goodwill of $13.9 million that is primarily attributed to PMI’s assembled workforce, access to the mortgage insurance market and additional synergies to be realized in the future. Under U.S. tax principles, which differentiate between taxable and non-taxable business combinations, the Company estimates that $48.0 million of goodwill is expected to be deductible for tax purposes. | |||||||
The Company includes the operations of Arch MI U.S. in its mortgage segment (see Note 5). |
Significant_Accounting_Policie
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Significant accounting policies | Significant Accounting Policies |
(a) Basis of Presentation | |
The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of ACGL and its subsidiaries, including Arch Re Bermuda, Arch Reinsurance Company (“Arch Re U.S.”), Arch-U.S., Arch Insurance Company, Arch Specialty Insurance Company, Arch Excess & Surplus Insurance Company, Arch Indemnity Insurance Company, Arch Insurance Canada Ltd. (“Arch Insurance Canada”), Arch Risk Transfer Services Ltd., Arch Reinsurance Europe Underwriting Limited (“Arch Re Europe”), Arch MI U.S., Arch Mortgage Guaranty Company, Arch Mortgage Insurance Limited (“Arch MI Europe”), Arch Insurance Company (Europe) Limited (“Arch Insurance Company Europe”), Lloyd’s of London syndicate 2012 and related companies (“Arch Syndicate 2012”) and Watford Re. All significant intercompany transactions and balances have been eliminated in consolidation. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions. | |
(b) Premium Revenues and Related Expenses | |
Insurance. Insurance premiums written are generally recorded at the policy inception and are primarily earned on a pro rata basis over the terms of the policies for all products, usually 12 months. Premiums written include estimates in the Company’s programs, specialty lines, lenders products business and for participation in involuntary pools. Such premium estimates are derived from multiple sources which include the historical experience of the underlying business, similar business and available industry information. Unearned premium reserves represent the portion of premiums written that relates to the unexpired terms of in-force insurance policies. | |
Reinsurance. Reinsurance premiums written include amounts reported by brokers and ceding companies, supplemented by the Company’s own estimates of premiums where reports have not been received. The determination of premium estimates requires a review of the Company’s experience with the ceding companies, familiarity with each market, the timing of the reported information, an analysis and understanding of the characteristics of each line of business, and management’s judgment of the impact of various factors, including premium or loss trends, on the volume of business written and ceded to the Company. On an ongoing basis, the Company’s underwriters review the amounts reported by these third parties for reasonableness based on their experience and knowledge of the subject class of business, taking into account the Company’s historical experience with the brokers or ceding companies. In addition, reinsurance contracts under which the Company assumes business generally contain specific provisions which allow the Company to perform audits of the ceding company to ensure compliance with the terms and conditions of the contract, including accurate and timely reporting of information. Based on a review of all available information, management establishes premium estimates where reports have not been received. Premium estimates are updated when new information is received and differences between such estimates and actual amounts are recorded in the period in which estimates are changed or the actual amounts are determined. | |
Reinsurance premiums written are recorded based on the type of contracts the Company writes. Premiums on the Company’s excess of loss and pro rata reinsurance contracts are estimated when the business is underwritten. For excess of loss contracts, premiums are recorded as written based on the terms of the contract. Estimates of premiums written under pro rata contracts are recorded in the period in which the underlying risks are expected to incept and are based on information provided by the brokers and the ceding companies. For multi-year reinsurance treaties which are payable in annual installments, generally, only the initial annual installment is included as premiums written at policy inception due to the ability of the reinsured to commute or cancel coverage during the term of the policy. The remaining annual installments are included as premiums written at each successive anniversary date within the multi-year term. | |
Reinstatement premiums for the Company’s insurance and reinsurance operations are recognized at the time a loss event occurs, where coverage limits for the remaining life of the contract are reinstated under pre-defined contract terms. Reinstatement premiums, if obligatory, are fully earned when recognized. The accrual of reinstatement premiums is based on an estimate of losses and loss adjustment expenses, which reflects management’s judgment. | |
Premium estimates are reviewed by management at least quarterly. Such review includes a comparison of actual reported premiums to expected ultimate premiums along with a review of the aging and collection of premium estimates. Based on management’s review, the appropriateness of the premium estimates is evaluated, and any adjustment to these estimates is recorded in the period in which it becomes known. Adjustments to premium estimates could be material and such adjustments could directly and significantly impact earnings favorably or unfavorably in the period they are determined because the estimated premium may be fully or substantially earned. A significant portion of amounts included as premiums receivable, which represent estimated premiums written, net of commissions, are not currently due based on the terms of the underlying contracts. | |
Reinsurance premiums written, irrespective of the class of business, are generally earned on a pro rata basis over the terms of the underlying policies or reinsurance contracts. Contracts and policies written on a “losses occurring” basis cover claims that may occur during the term of the contract or policy, which is typically 12 months. Accordingly, the premium is earned evenly over the term. Contracts which are written on a “risks attaching” basis cover claims which attach to the underlying insurance policies written during the terms of such contracts. Premiums earned on such contracts usually extend beyond the original term of the reinsurance contract, typically resulting in recognition of premiums earned over a 24-month period. Certain of the Company’s reinsurance contracts include provisions that adjust premiums or acquisition expenses based upon the experience under the contracts. Premiums written and earned, as well as related acquisition expenses, are recorded based upon the projected experience under such contracts. | |
The Company also writes certain reinsurance business that is intended to provide insurers with risk management solutions that complement traditional reinsurance. Under these contracts, the Company assumes a measured amount of insurance risk in exchange for an anticipated margin, which is typically lower than on traditional reinsurance contracts. The terms and conditions of these contracts may include additional or return premiums based on loss experience, loss corridors, sublimits and caps. Examples of such business include aggregate stop-loss coverages, financial quota share coverages and multi-year retrospectively rated excess of loss coverages. If these contracts are deemed to transfer risk, they are accounted for as reinsurance. | |
Mortgage. Mortgage guaranty insurance policies are contracts that are generally non-cancelable by the insurer, are renewable at a fixed price, and provide for payment of premiums on a monthly, annual or single basis. Upon renewal, the Company is not able to re-underwrite or re-price its policies. Consistent with industry accounting practices, premiums written on a monthly basis are earned as coverage is provided. Premiums written on an annual basis are amortized on a monthly pro rata basis over the year of coverage. Primary mortgage insurance premiums written on policies covering more than one year are referred to as single premiums. A portion of the revenue from single premiums is recognized in premiums earned in the current period, and the remaining portion is deferred as unearned premiums and earned over the estimated expiration of risk of the policy. If single premium policies related to insured loans are canceled due to repayment by the borrower and the policy is a non-refundable product, the remaining unearned premium related to each canceled policy is recognized as earned premium upon notification of the cancellation. | |
Unearned premiums represent the portion of premiums written that is applicable to the estimated unexpired risk of insured loans. A portion of premium payments may be refundable if the insured cancels coverage, which generally occurs when the loan is repaid, the loan amortizes to a sufficiently low amount to trigger a lender permitted or legally required cancellation, or the value of the property has increased sufficiently in accordance with the terms of the contract. Premium refunds reduce premiums earned in the consolidated statements of income. Generally, only unearned premiums are refundable. However, when the Company pays a claim on a delinquent loan, all servicer paid premiums received on the delinquent loan covering any period after the default date will be refunded, in accordance with the terms of the contract. | |
Acquisition Costs. Acquisition expenses and other expenses related to the Company’s underwriting operations that vary with, and are directly related to, the successful acquisition or renewal of business are deferred and amortized based on the type of contract. For property and casualty insurance and reinsurance contracts, deferred acquisition costs are amortized over the period in which the related premiums are earned. Consistent with mortgage insurance industry accounting practice, amortization of acquisition costs related to the mortgage insurance contracts for each underwriting year’s book of business is recorded in proportion to estimated gross profits. Estimated gross profits are comprised of earned premiums and losses and loss adjustment expenses. For each underwriting year, the Company estimates the rate of amortization to reflect actual experience and any changes to persistency or loss development. | |
Acquisition expenses, net of ceding commissions received from reinsurers, consist principally of commissions and premium taxes paid to obtain the Company’s business. Other operating expenses also include expenses that vary with, and are directly related to, the successful acquisition of business. Deferred acquisition costs are carried at their estimated realizable value and take into account anticipated losses and loss adjustment expenses, based on historical and current experience, and anticipated investment income. | |
A premium deficiency occurs if the sum of anticipated losses and loss adjustment expenses, unamortized acquisition costs and maintenance costs exceed unearned premiums (including expected future premiums) and anticipated investment income. A premium deficiency reserve (“PDR”) is recorded by charging any unamortized acquisition costs to expense to the extent required in order to eliminate the deficiency. If the premium deficiency exceeds unamortized acquisition costs then a liability is accrued for the excess deficiency. | |
To assess the need for a PDR on mortgage exposures, the Company develops loss projections based on modeled loan defaults related to its current policies in force. This projection is based on recent trends in default experience, severity and rates of defaulted loans moving to claim, as well as recent trends in the rate at which loans are prepaid. Evaluating the expected profitability of the Company’s existing mortgage insurance business and the need for a PDR for its mortgage business involves significant reliance upon assumptions and estimates with regard to the likelihood, magnitude and timing of potential losses and premium revenues. | |
No premium deficiency charges were recorded by the Company during 2014, 2013 or 2012. | |
(c) Deposit Accounting | |
Certain assumed reinsurance contracts, which pursuant to Financial Accounting Standards Board (“FASB”) guidance regarding the accounting and reporting for reinsurance and short-duration and long-duration contracts, that are deemed not to transfer insurance risk, are accounted for using the deposit method of accounting as prescribed in the FASB guidance. However, it is possible that the Company could incur financial losses on such contracts. Management exercises significant judgment in the assumptions used in determining whether assumed contracts should be accounted for as reinsurance contracts or deposit contracts. Under the FASB guidance, for those contracts that contain only significant underwriting risk, the estimated profit margin is deferred and amortized over the contract period and such amount is included in the Company’s underwriting results. When the estimated profit margin is explicit, the margin is reflected as other underwriting income and any adverse financial results on such contracts are reflected as incurred losses. When the estimated profit margin is implicit, the margin is reflected as an offset to paid losses and any adverse financial results on such contracts are reflected as incurred losses. Additional judgments are required when applying the accounting guidance with respect to the revenue recognition criteria for contracts deemed to transfer only significant underwriting risk. For those contracts that contain only significant timing risk, an accretion rate is established at inception of the contract based on actuarial estimates whereby the deposit accounting liability is increased to the estimated amount payable over the contract term. The accretion on the deposit is based on the expected rate of return required to fund the expected future payment obligations. Periodically the Company reassesses the estimated ultimate liability and the related expected rate of return. The accretion of the deposit accounting liability as well as changes to the estimated ultimate liability and the accretion rate are reflected as part of interest expense in the Company’s results of operations. | |
Deposit accounting liabilities totaled $327.4 million and $421.3 million, respectively, at December 31, 2014 and 2013. Under some of these contracts, the ceding company retains the related assets on a funds-held basis. In those instances, the Company records the asset as a deposit accounting asset. Deposit accounting assets of $284.4 million and $370.5 million, respectively, at December 31, 2014 and 2013 are included in “Other assets” on the Company’s balance sheet. Interest income produced by those assets are recorded as part of net investment income in the Company's results of operations. | |
(d) Retroactive Accounting | |
Retroactive reinsurance reimburses a ceding company for liabilities incurred as a result of past insurable events covered by the underlying policies reinsured. In certain instances, reinsurance contracts cover losses both on a prospective basis and on a retroactive basis and, accordingly, the Company bifurcates the prospective and retrospective elements of these reinsurance contracts and accounts for each element separately. Underwriting income generated in connection with retroactive reinsurance contracts is deferred and amortized into income over the settlement period while losses are charged to income immediately. Subsequent changes in estimated or actual cash flows under such retroactive reinsurance contracts are accounted for by adjusting the previously deferred amount to the balance that would have existed had the revised estimate been available at the inception of the reinsurance transaction, with a corresponding charge or credit to income. | |
(e) Reinsurance Ceded | |
In the normal course of business, the Company purchases reinsurance to increase capacity and to limit the impact of individual losses and events on its underwriting results by reinsuring certain levels of risk with other insurance enterprises or reinsurers. The Company uses pro rata, excess of loss and facultative reinsurance contracts. Reinsurance ceding commissions are recognized as a reduction to acquisition costs on a pro rata basis over the period of risk while the portion of such commissions that will be earned in the future is deferred. The accompanying consolidated statement of income reflects premiums and losses and loss adjustment expenses and acquisition costs, net of reinsurance ceded. See Note 7 for information on the Company's reinsurance usage. Ceded unearned premiums are reported as prepaid reinsurance premiums and estimated amounts of reinsurance recoverable on unpaid losses are reported as unpaid losses and loss adjustment expenses recoverable. Reinsurance premiums ceded and unpaid losses and loss adjustment expenses recoverable are estimated in a manner consistent with that of the original policies issued and the terms of the reinsurance contracts. If the reinsurers are unable to satisfy their obligations under the agreements, the Company’s insurance or reinsurance subsidiaries would be liable for such defaulted amounts. | |
(f) Cash | |
Cash includes cash equivalents, which are investments with original maturities of three months or less that are not managed by external or internal investment advisors. | |
(g) Investments | |
The Company currently classifies substantially all of its fixed maturity investments, equity securities and short-term investments as “available for sale” and, accordingly, they are carried at estimated fair value (also known as fair value) with the changes in fair value recorded as an unrealized gain or loss component of accumulated other comprehensive income in shareholders’ equity. The fair value of fixed maturity securities and equity securities is generally determined from quotations received from nationally recognized pricing services, or when such prices are not available, by reference to broker or underwriter bid indications. Short-term investments comprise securities due to mature within one year of the date of issue. Short-term investments include certain cash equivalents which are part of investment portfolios under the management of external and internal investment managers. | |
The Company participates in a securities lending program as a mechanism for generating additional interest income on its fixed income portfolio. Under the security lending agreements, certain of its fixed income portfolio securities are loaned to third parties, primarily major brokerage firms, for short periods of time through a lending agent. Such securities have been reclassified as “Fixed maturities and short-term investments pledged under securities lending agreements, at fair value.” The Company maintains legal control over the securities it lends, retains the earnings and cash flows associated with the loaned securities and receives a fee from the borrower for the temporary use of the securities. Collateral received, primarily in the form of cash, is required at a rate of 102% of the fair value of the loaned securities including accrued investment income and is monitored and maintained by the lending agent. Such collateral is reinvested and is reflected as “Investment of funds received under securities lending agreements, at fair value.” | |
The Company’s investment portfolio includes certain funds that, due to their ownership structure, are accounted for by the Company using the equity method. In applying the equity method, these investments are initially recorded at cost and are subsequently adjusted based on the Company’s proportionate share of the net income or loss of the funds (which include changes in the fair value of the underlying securities in the funds). Such investments are generally recorded on a one to three month lag based on the availability of reports from the investment funds. Changes in the carrying value of such investments are recorded in net income as “Equity in net income (loss) of investment funds accounted for using the equity method.” As such, fluctuations in the carrying value of the investment funds accounted for using the equity method may increase the volatility of the Company’s reported results of operations. | |
Other investments include funds and separately managed accounts with holdings in Asian and emerging markets, fixed maturities, term loans and other investment strategies. The fair value for certain of the Company’s other investments are determined using net asset values (“NAVs”) as advised by external fund managers. The NAV is based on the fund manager’s valuation of the underlying holdings in accordance with the fund’s governing documents. Certain of the funds are accounted for as available for sale equity securities, regardless of the nature of the investments held within the fund. | |
The Company elected to carry certain fixed maturity securities, equity securities and other investments at fair value under the fair value option afforded by accounting guidance regarding the fair value option for financial assets and liabilities. Changes in fair value of investments accounted for using the fair value option are included in “Net realized gains (losses).” The primary reasons for electing the fair value option were to address simplification and cost-benefit considerations. | |
The Company invests in limited partner equity interests issued by third party variable interest entities (“VIE”). Such amounts are included in investments accounted for using the equity method, other investments available for sale and investments accounted for using the fair value option. A VIE refers to entities that have characteristics such as (i) insufficient equity at risk to allow the entity to finance its activities without additional financial support or (ii) instances where the equity investors, as a group, do not have the characteristic of a controlling financial interest. If the Company is determined to be the primary beneficiary, it is required to consolidate the VIE. The primary beneficiary is defined as the variable interest holder that is determined to have the controlling financial interest as a result of having both (i) the power to direct the activities of a VIE that most significantly impact the economic performance of the VIE and (ii) the obligation to absorb losses or right to receive benefits from the VIE that could potentially be significant to the VIE. At inception of the VIE as well as on an ongoing basis, the Company determines whether it is the primary beneficiary based on an analysis of the Company’s level of involvement in the VIE, the contractual terms, and the overall structure of the VIE. The Company's maximum exposure to loss with respect to these investments is limited to the investment carrying amounts reported in the Company's consolidated balance sheet and any unfunded commitment. | |
The Company performs quarterly reviews of its investments to determine whether declines in fair value below the cost basis are considered other-than-temporary in accordance with applicable accounting guidance regarding the recognition and presentation of other-than-temporary impairments (“OTTI”). The process of determining whether a security is other-than-temporarily impaired requires judgment and involves analyzing many factors. These factors include (i) an analysis of the liquidity, business prospects and overall financial condition of the issuer, (ii) the time period in which there was a significant decline in value, (iii) the significance of the decline and (iv) the analysis of specific credit events. The Company evaluates the unrealized losses of its equity securities by issuer and forecasts a reasonable period of time by which the fair value of the securities would increase and the Company would recover its cost. If the Company is unable to forecast a reasonable period of time in which to recover the cost of its equity securities, a net impairment loss in earnings equivalent to the entire unrealized loss is recognized. | |
When there are credit-related losses associated with debt securities for which the Company does not have an intent to sell and it is more likely than not that it will not be required to sell the security before recovery of its cost basis, the amount of the OTTI related to a credit loss is recognized in earnings and the amount of the OTTI related to other factors (e.g., interest rates, market conditions, etc.) is recorded as a component of other comprehensive income (loss). The amount of the credit loss of an impaired debt security is the difference between the amortized cost and the greater of (i) the present value of expected future cash flows and (ii) the fair value of the security. In instances where no credit loss exists but it is more likely than not that the Company will have to sell the debt security prior to the anticipated recovery, the decline in fair value below amortized cost is recognized as an OTTI in earnings. In periods after the recognition of an OTTI on debt securities, the Company accounts for such securities as if they had been purchased on the measurement date of the OTTI at an amortized cost basis equal to the previous amortized cost basis less the OTTI recognized in earnings. For debt securities for which OTTI were recognized in earnings, the difference between the new amortized cost basis and the cash flows expected to be collected will be accreted or amortized into net investment income. See Note 8, “Investment Information—Other-Than-Temporary Impairments” for additional information. | |
Net investment income includes interest and dividend income together with amortization of market premiums and discounts and is net of investment management and custody fees. Anticipated prepayments and expected maturities are used in applying the interest method for certain investments such as mortgage and other asset-backed securities. When actual prepayments differ significantly from anticipated prepayments, the effective yield is recalculated to reflect actual payments to date and anticipated future payments. The net investment in such securities is adjusted to the amount that would have existed had the new effective yield been applied since the acquisition of the security. Such adjustments, if any, are included in net investment income when determined. Equity in net income (loss) of investment funds accounted for using the equity method includes changes in the fair value of certain alternative investments accounted for under the equity method. | |
Investment gains or losses realized on the sale of investments, except for certain fund investments, are determined on a first-in, first-out basis and are reflected in net income. Investments gains or losses realized on the sale of certain fund investments are determined on an average cost basis. Unrealized appreciation or decline in the value of securities, which are carried at fair value, is excluded from net income and recorded as a separate component of accumulated other comprehensive income, net of applicable deferred income tax. | |
(h) Derivative Instruments | |
The Company recognizes all derivative instruments, including embedded derivative instruments, at fair value in the Consolidated Balance Sheets. The Company employs the use of derivative instruments within its operations to mitigate risks arising from assets and liabilities held in foreign currencies as well as part of its overall investment strategy. For such instruments, changes in assets and liabilities measured at fair value are recorded as “Net realized gains” in the consolidated statements of income. In addition, the Company’s derivative instruments include amounts related to underwriting activities where an insurance or reinsurance contract meets the accounting definition of a derivative instrument. For such contracts, changes in fair value are reflected in “Other underwriting income” in the consolidated statements of income as the underlying contract originates from the Company’s underwriting operations. For the periods ended 2014, 2013, and 2012, the Company did not designate any derivative instruments as hedges under the relevant accounting guidance. See Note 11 for information on the Company’s derivative instruments. | |
(i) Reserves for Losses and Loss Adjustment Expenses | |
Insurance and Reinsurance. The reserve for losses and loss adjustment expenses consists of estimates of unpaid reported losses and loss adjustment expenses and estimates for losses incurred but not reported. The reserve for unpaid reported losses and loss adjustment expenses, established by management based on reports from ceding companies and claims from insureds, excludes estimates of amounts related to losses under high deductible policies, and represents the estimated ultimate cost of events or conditions that have been reported to or specifically identified by the Company. Such reserves are supplemented by management’s estimates of reserves for losses incurred for which reports or claims have not been received. The Company’s reserves are based on a combination of reserving methods, incorporating both Company and industry loss development patterns. The Company selects the initial expected loss and loss adjustment expense ratios based on information derived by its underwriters and actuaries during the initial pricing of the business, supplemented by industry data where appropriate. Such ratios consider, among other things, rate changes and changes in terms and conditions that have been observed in the market. These estimates are reviewed regularly and, as experience develops and new information becomes known, the reserves are adjusted as necessary. Such adjustments, if any, are reflected in income in the period in which they are determined. As actual loss information has been reported, the Company has developed its own loss experience and its reserving methods include other actuarial techniques. Over time, such techniques have been given further weight in its reserving process based on the continuing maturation of the Company’s reserves. Inherent in the estimates of ultimate losses and loss adjustment expenses are expected trends in claims severity and frequency and other factors which may vary significantly as claims are settled. Accordingly, ultimate losses and loss adjustment expenses may differ materially from the amounts recorded in the accompanying consolidated financial statements. Losses and loss adjustment expenses are recorded on an undiscounted basis, except for excess workers’ compensation and employers’ liability business written by the Company’s insurance operations. | |
Mortgage. The reserves for mortgage guaranty insurance losses and loss adjustment expenses are the estimated claim settlement costs on notices of default that have been received by the Company, as well as loan defaults that have been incurred but have not been reported by the lenders. Consistent with industry accounting practice, the Company does not establish loss reserves for future claims on insured loans that are not currently in default (defined as two consecutive missed payments). The Company establishes loss reserves on a case-by-case basis when insured loans are identified as currently in default using estimated claim rates and average claim sizes for each report year, net of any salvage recoverable. The Company also reserves for defaults that have occurred but have not yet been reported to the Company prior to the close of an accounting period. To determine this reserve, the Company estimates the number of defaults not yet reported using historical information regarding late reported delinquencies and applies estimated claim rates and claim sizes for the estimated defaults not yet reported. | |
The establishment of reserves across the Company’s segments is an inherently uncertain process, are necessarily based on estimates, and the ultimate net cost may vary from such estimates. The methods for making such estimates and for establishing the resulting liability are reviewed and updated using the most current information available. Any resulting adjustments, which may be material, are reflected in current operations. | |
(j) Contractholder Receivables and Payables | |
Certain insurance policies written by the Company’s insurance operations feature large deductibles, primarily in its construction and national accounts lines of business. Under such contracts, the Company is obligated to pay the claimant for the full amount of the claim. The Company is subsequently reimbursed by the policyholder for the deductible amount. These amounts are included on a gross basis in the consolidated balance sheet in contractholder payables and contractholder receivables, respectively. In the event that the Company is unable to collect from the policyholder, the Company would record an increase to losses and loss adjustment expenses related to such policy. | |
(k) Foreign Exchange | |
Assets and liabilities of foreign operations whose functional currency is not the U.S. Dollar are translated at the prevailing exchange rates at each balance sheet date. Revenues and expenses of such foreign operations are translated at average exchange rates during the year. The net effect of the translation adjustments for foreign operations is included in accumulated other comprehensive income, net of applicable deferred income tax. Monetary assets and liabilities, such as premiums receivable and the reserve for losses and loss adjustment expenses, denominated in foreign currencies are revalued at the exchange rate in effect at the balance sheet date with the resulting foreign exchange gains and losses included in net income. Accounts that are classified as non-monetary, such as deferred acquisition costs and the unearned premium reserves, are not revalued. In the case of foreign currency denominated fixed maturity securities which are classified as “available for sale,” the change in exchange rates between the local currency in which the investments are denominated and the Company’s functional currency at each balance sheet date is included in unrealized appreciation or decline in value of securities, a component of accumulated other comprehensive income, net of applicable deferred income tax. | |
(l) Income Taxes | |
Deferred income taxes reflect the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. A valuation allowance is recorded if it is more likely than not that some or all of a deferred tax asset may not be realized. The Company considers future taxable income and feasible tax planning strategies in assessing the need for a valuation allowance. In the event the Company determines that it will not be able to realize all or part of its deferred income tax assets in the future, an adjustment to the deferred income tax assets would be charged to income in the period in which such determination is made. In addition, if the Company subsequently assesses that the valuation allowance is no longer needed, a benefit would be recorded to income in the period in which such determination is made. See Note 14 for more information. | |
The Company recognizes a tax benefit where it concludes that it is more likely than not that the tax benefit will be sustained on audit by the taxing authority based solely on the technical merits of the associated tax position. If the recognition threshold is met, the Company recognizes a tax benefit measured at the largest amount of the tax benefit that, in the Company’s judgment, is greater than 50% likely to be realized. The Company records interest and penalties related to unrecognized tax benefits in the provision for income taxes. | |
(m) Share-Based Payment Arrangements | |
The Company applies a fair value based measurement method in accounting for its share-based payment arrangements with eligible employees and directors. Compensation expense is estimated based on the fair value of the award at the grant date and is recognized in net income over the requisite service period with a corresponding increase in shareholders’ equity. No value is attributed to awards that employees forfeit because they fail to satisfy vesting conditions. As such, the number of shares granted is reduced by assumed forfeitures and adjusted based on actual forfeitures until vesting. The Company’s share-based payment arrangements generally vest over a three year period with one-third vesting on the first, second and third anniversaries of the grant date. The share-based compensation expense associated with such awards that have graded vesting features and vest based on service conditions only is calculated on a straight-line basis over the requisite service period for the entire award. For awards granted to retirement-eligible employees where no service is required for the employee to retain the award, the grant date fair value is immediately recognized as compensation expense at the grant date because the employee is able to retain the award without continuing to provide service. For employees near retirement eligibility, attribution of compensation cost is over the period from the grant date to the retirement eligibility date. In November 2012, the Company issued off-cycle share-based awards, which will cliff vest on the fifth anniversary of the grant date. The expense for such grant is being amortized on a straight-line basis over the five-year requisite service period. The off-cycle awards have similar terms as the annual award agreements, however with respect to retirement eligible employees service is required for the employee to retain the award. Retirement-eligible employees retiring prior to the fifth anniversary of the grant date will vest in a pro-rated portion of the award commensurate with the service performed. Such employees will receive the vested portion at the end of the five-year cliff period. These charges had no impact on the Company’s cash flows or total shareholders’ equity. See Note 20 for information relating to the Company’s share-based payment awards. | |
(n) Guaranty Fund and Other Related Assessments | |
Liabilities for guaranty fund and other related assessments in the Company’s insurance and reinsurance operations are accrued when the Company receives notice that an amount is payable, or earlier if a reasonable estimate of the assessment can be made. | |
(o) Treasury Shares | |
Treasury shares are common shares purchased by the Company and not subsequently canceled. These shares are recorded at cost and result in a reduction of the Company’s shareholders’ equity in its Consolidated Balance Sheets. | |
(p) Goodwill and Intangible Assets | |
Goodwill represents the excess of the purchase price of an acquisition over the fair value of the net assets acquired and is assigned to the applicable reporting unit at acquisition. Goodwill is not amortized and is evaluated for impairment on an annual basis. Impairment tests may be performed more frequently if the facts and circumstances indicate a possible impairment. In performing impairment tests, the Company may first assess qualitative factors to determine whether it is more likely than not (that is, more than a 50% probability) that the fair value of a reporting unit exceeds its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in the accounting guidance. | |
Indefinite-lived intangible assets, such as insurance licenses, are not amortized and are evaluated for impairment similar to goodwill. Finite-lived intangible assets and liabilities include the value of acquired insurance and reinsurance contracts, which are estimated based on the present value of future expected cash flows and amortized in ‘acquisition expenses’ in proportion to the estimated profits expected to be realized. Other finite-lived intangible assets or liabilities, including favorable or unfavorable contracts, are amortized in ‘other operating expenses’ over their useful lives. Finite-lived intangible assets and liabilities are periodically reviewed for indicators of impairment. An impairment is recognized when the carrying amount is not recoverable from its undiscounted cash flows and is measured as the difference between the carrying amount and fair value. | |
If goodwill or intangible assets are impaired, such assets are written down to their fair values with the related expense recorded in the Company’s results of operations. See Note 18 for information relating to the Company’s goodwill and intangible assets. | |
(q) Recent Accounting Pronouncements | |
A new accounting standard issued in the 2014 second quarter will change the manner in which most companies recognize revenue. The standard requires that revenue reflect the transfer of goods or services to customers based on the consideration or payment the company expects to be entitled to in exchange for those goods or services; however, the standard does not change the accounting for insurance contracts or financial instruments. The new standard also requires enhanced disclosures about revenue. This accounting guidance is effective in the 2017 first quarter and may be applied on a full retrospective or modified retrospective approach. The Company is currently assessing the impact the implementation of this standard will have on its consolidated financial statements. | |
A new accounting standard was issued in the 2015 first quarter providing targeted improvements to consolidation guidance for limited partnerships and other similarly structured entities. The new standard addresses instances where a reporting entity consolidates another entity when the reporting entity is simply acting on the behalf of others, amongst other related issues. While the standard is targeted, the application is relevant for all companies that are required to assess whether or not to consolidate certain entities. The standard is effective in the 2016 first quarter and early adoption is permitted. The Company is currently assessing the impact the implementation of this standard will have on its consolidated financial statements. |
Variable_Interest_Entity_and_N
Variable Interest Entity and Noncontrolling Interests | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Variable Interest Entity and Noncontrolling Interest Disclosure [Abstract] | ||||
Variable Interest Entity and Noncontrolling Interests | Variable Interest Entity and Noncontrolling Interests | |||
Variable interest entity | ||||
A VIE refers to an entity that has characteristics such as (i) insufficient equity at risk to allow the entity to finance its activities without additional financial support or (ii) instances where the equity investors, as a group, do not have characteristics of a controlling financial interest. The primary beneficiary of a VIE is defined as the variable interest holder that is determined to have the controlling financial interest as a result of having both (i) the power to direct the activities of a VIE that most significantly impact the economic performance of the VIE and (ii) the obligation to absorb losses or right to receive benefits from the VIE that could potentially be significant to the VIE. If a company is determined to be the primary beneficiary, it is required to consolidate the VIE in its financial statements. | ||||
In March 2014, Watford Re raised approximately $1.1 billion of capital consisting of $907.3 million in common equity ($895.6 million net of issuance costs) and $226.6 million in preference equity ($219.2 million net of issuance costs and discount). The Company invested $100.0 million and acquired approximately 11% of Watford Holdings Ltd.’s common equity and a warrant to purchase additional common equity. Arch Underwriters Ltd. (“AUL”), a subsidiary of the Company, acts as Watford Re’s reinsurance underwriting manager, and Highbridge Principal Strategies, LLC (“Highbridge”), a subsidiary of JPMorgan Chase & Co., manages Watford Re’s investment assets, each under separate long term services agreements. In connection with the capital raise at Watford Re, warrants to purchase a total of 1.7 million common shares were issued to the Company and Highbridge. The warrants are only exercisable if Watford Re has consummated an initial public offering of its common shares or otherwise effected a listing of its common shares on a U.S. national securities exchange and certain targeted returns are achieved for existing common shareholders. The warrants expire on March 25, 2020. John Rathgeber, previously Vice Chairman of Arch Worldwide Reinsurance Group, was named CEO of Watford Re. In addition, Marc Grandisson, Chairman and CEO of Arch Worldwide Reinsurance and Mortgage Groups, and Nicolas Papadopoulo, CEO Reinsurance Group, were appointed to the board of directors of Watford Re. | ||||
The Company concluded that Watford Re is a VIE due to both the reinsurance management services agreement with AUL and the investment management agreement with Highbridge. Both of these agreements provide for services for an extended period of time with limited termination rights by Watford Re. In addition, these agreements allow for both AUL and Highbridge to participate in the favorable results of Watford Re in the form of performance fees. To determine if the Company is the primary beneficiary of Watford Re, the Company concluded that the most significant activity of Watford Re pertains to the insurance activities arising from the reinsurance management services agreement, as these activities will ultimately generate the investable assets required by Highbridge to execute the investment strategy. In addition, the Company factored into its analysis qualitative aspects of its relationship with Watford Re that are indicative of power to direct the insurance activities. These aspects coupled with the Company’s board seats and a former executive of the Company serving as Watford Re’s CEO resulted in the Company concluding that it is the primary beneficiary of Watford Re. As such, the results of Watford Re are included in the Company’s consolidated financial statements. | ||||
The Company concluded that Watford Re represents a separate operating segment and provides the income statement and total investable assets, total assets and total liabilities of Watford Re within Note 5. At December 31, 2014, Watford Re’s liabilities included unearned premiums of $180.0 million and reserves for losses and loss adjustment expenses of $66.3 million, some of which is related to transactions with the Company. During 2014, Watford Re generated $39.3 million of cash provided by operating activities and $1.16 billion of cash provided by financing activities, partially offset by $1.18 billion of cash used for investing activities. | ||||
Because Watford Re is an independent company, the assets of Watford Re can be used only to settle obligations of Watford Re and Watford Re is solely responsible for its own liabilities and commitments. The Company’s financial exposure to Watford Re is limited to its investment in Watford Re’s common shares and counterparty credit risk (mitigated by collateral) arising from the reinsurance transactions. | ||||
Non-redeemable noncontrolling interests | ||||
The Company accounts for the portion of Watford Re’s common equity attributable to third party investors in the shareholders’ equity section of its consolidated balance sheets. The noncontrolling ownership in Watford Re’s common shares was approximately 89% at December 31, 2014. The following table sets forth activity in the non-redeemable noncontrolling interests: | ||||
Year Ended December 31, 2014 | ||||
Balance, beginning of year | $ | — | ||
Sale of shares to noncontrolling interests | 796,904 | |||
Amounts attributable to noncontrolling interests | (27,823 | ) | ||
Balance, end of year | $ | 769,081 | ||
Redeemable noncontrolling interests | ||||
The Company accounts for redeemable noncontrolling interests in the mezzanine section of its consolidated balance sheets in accordance with applicable accounting guidance. Such redeemable noncontrolling interests represent the 9,065,200 cumulative redeemable preference shares (“Watford Preference Shares”) issued in late March 2014 with a par value of $0.01 per share and a liquidation preference of $25.00 per share. The Watford Preference Shares were issued at a discounted amount of $24.50 per share. Holders of the Watford Preference Shares will be entitled to receive, if declared by Watford Re’s board, quarterly cash dividends on the last day of March, June, September, and December. Dividends will accrue from the closing date to June 30, 2019 at a fixed rate of 8.5% per annum. From June 30, 2019 and subsequent, dividends will accrue based on a floating rate equal to the 3 month U.S. dollar LIBOR (with a 1% floor) plus a margin based on the difference between the fixed rate and the 5 year mid swap rate to the floating rate as set out on the Bloomberg Screen IRSB 18. The Watford Preference Shares may be redeemed by Watford Re on or after June 30, 2019 or at the option of the preferred shareholders at any time on or after June 30, 2034. Because the redemption features are not solely within the control of Watford Re, the Company accounts for the redeemable noncontrolling interests in the Watford Preference Shares in the mezzanine section of its consolidated balance sheets. Third party investors own 100% of the Watford Preference Shares at December 31, 2014. Preferred dividends on the Watford Preference Shares, including the accretion of the discount and issuance costs, totaled $14.7 million for 2014. | ||||
The portion of Watford Re’s income or loss attributable to third party investors is recorded in the consolidated statements of income in ‘amounts attributable to noncontrolling interests.’ For 2014, amounts attributable to noncontrolling interests of $13.1 million reflected the net impact of amounts attributable to non-redeemable noncontrolling interests of $27.8 million and amounts attributable to redeemable noncontrolling interests of $14.7 million, as described above. |
Segment_Information
Segment Information | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||
Segment Information | Segment Information | |||||||||||||||||||||||
During the 2014 first quarter, to reflect activity during the period as described below, the Company changed its segment structure and added two new segments (mortgage and ‘other’). The Company now classifies its businesses into three underwriting segments — insurance, reinsurance and mortgage — and two other operating segments — ‘other’ and corporate (non-underwriting). The Company determined its reportable segments using the management approach described in accounting guidance regarding disclosures about segments of an enterprise and related information. The accounting policies of the segments are the same as those used for the preparation of the Company’s consolidated financial statements. Intersegment business is allocated to the segment accountable for the underwriting results. | ||||||||||||||||||||||||
The Company’s insurance, reinsurance and mortgage segments each have managers who are responsible for the overall profitability of their respective segments and who are directly accountable to the Company’s chief operating decision makers, the Chairman, President and Chief Executive Officer of ACGL and the Chief Financial Officer of ACGL. The chief operating decision makers do not assess performance, measure return on equity or make resource allocation decisions on a line of business basis. Management measures segment performance for its three underwriting segments based on underwriting income or loss. The Company does not manage its assets by underwriting segment, with the exception of goodwill and intangible assets, and, accordingly, investment income is not allocated to each underwriting segment. | ||||||||||||||||||||||||
The insurance segment consists of the Company’s insurance underwriting units which offer specialty product lines on a worldwide basis. Product lines include: construction and national accounts; excess and surplus casualty; lenders products; professional lines; programs; property, energy, marine and aviation; travel, accident and health; and other (consisting of alternative markets, excess workers' compensation and surety business). | ||||||||||||||||||||||||
The reinsurance segment consists of the Company’s reinsurance underwriting units which offer specialty product lines on a worldwide basis. Product lines include: casualty; marine and aviation; other specialty; property catastrophe; property excluding property catastrophe (losses on a single risk, both excess of loss and pro rata); and other (consisting of life reinsurance, casualty clash and other). | ||||||||||||||||||||||||
The mortgage segment consists of the Company’s mortgage insurance and reinsurance business and includes the results of Arch MI U.S. Arch MI U.S. was approved as an eligible mortgage insurer by the GSEs (see Note 2) and provides mortgage insurance to banks and other lenders nationwide, including existing credit union customers. The mortgage segment also provides reinsurance on a global basis, direct mortgage insurance in Europe and various risk-sharing products to government agencies and mortgage lenders. | ||||||||||||||||||||||||
The ‘other’ segment includes the results of Watford Re (see Note 4). Watford Re has its own management and board of directors that is responsible for the overall profitability of the ‘other’ segment. For the ‘other’ segment, performance is measured based on net income or loss. | ||||||||||||||||||||||||
The corporate (non-underwriting) segment results include net investment income, other income (loss), other expenses incurred by the Company, interest expense, net realized gains or losses, net impairment losses included in earnings, equity in net income (loss) of investment funds accounted for using the equity method, net foreign exchange gains or losses, income taxes and items related to the Company’s non-cumulative preferred shares. Such amounts exclude the results of the ‘other’ segment. | ||||||||||||||||||||||||
The following tables summarize the Company’s underwriting income or loss by segment, together with a reconciliation of underwriting income to net income available to Arch common shareholders, summary information regarding net premiums written and earned by major line of business and net premiums written by location: | ||||||||||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||||||||||
Insurance | Reinsurance | Mortgage | Sub-Total | Other | Total | |||||||||||||||||||
Gross premiums written (1) | $ | 3,008,669 | $ | 1,527,245 | $ | 227,356 | $ | 4,760,394 | $ | 288,627 | $ | 4,840,616 | ||||||||||||
Premiums ceded | (862,015 | ) | (261,254 | ) | (22,519 | ) | (1,142,912 | ) | (14,171 | ) | (948,678 | ) | ||||||||||||
Net premiums written | 2,146,654 | 1,265,991 | 204,837 | 3,617,482 | 274,456 | 3,891,938 | ||||||||||||||||||
Change in unearned premiums | (129,284 | ) | 13,337 | (11,264 | ) | (127,211 | ) | (170,979 | ) | (298,190 | ) | |||||||||||||
Net premiums earned | 2,017,370 | 1,279,328 | 193,573 | 3,490,271 | 103,477 | 3,593,748 | ||||||||||||||||||
Other underwriting income | 2,135 | 3,167 | 4,840 | 10,142 | — | 10,142 | ||||||||||||||||||
Losses and loss adjustment expenses | (1,260,953 | ) | (532,450 | ) | (55,674 | ) | (1,849,077 | ) | (70,173 | ) | (1,919,250 | ) | ||||||||||||
Acquisition expenses, net | (316,308 | ) | (261,438 | ) | (49,400 | ) | (627,146 | ) | (30,116 | ) | (657,262 | ) | ||||||||||||
Other operating expenses | (335,157 | ) | (147,964 | ) | (66,891 | ) | (550,012 | ) | (6,268 | ) | (556,280 | ) | ||||||||||||
Underwriting income (loss) | $ | 107,087 | $ | 340,643 | $ | 26,448 | 474,178 | (3,080 | ) | 471,098 | ||||||||||||||
Net investment income | 284,336 | 18,249 | 302,585 | |||||||||||||||||||||
Net realized gains (losses) | 133,384 | (30,467 | ) | 102,917 | ||||||||||||||||||||
Net impairment losses recognized in earnings | (30,150 | ) | — | (30,150 | ) | |||||||||||||||||||
Equity in net income of investment funds accounted for using the equity method | 19,883 | — | 19,883 | |||||||||||||||||||||
Other income (loss) | (10,252 | ) | — | (10,252 | ) | |||||||||||||||||||
Other expenses | (47,615 | ) | (2,329 | ) | (49,944 | ) | ||||||||||||||||||
Interest expense | (45,634 | ) | — | (45,634 | ) | |||||||||||||||||||
Net foreign exchange gains (losses) | 82,658 | 1,086 | 83,744 | |||||||||||||||||||||
Income before income taxes | 860,788 | (16,541 | ) | 844,247 | ||||||||||||||||||||
Income tax expense | (22,987 | ) | — | (22,987 | ) | |||||||||||||||||||
Net income | 837,801 | (16,541 | ) | 821,260 | ||||||||||||||||||||
Dividends attributable to redeemable noncontrolling interests | — | (14,728 | ) | (14,728 | ) | |||||||||||||||||||
Amounts attributable to noncontrolling interests | — | 27,823 | 27,823 | |||||||||||||||||||||
Net income available to Arch | 837,801 | (3,446 | ) | 834,355 | ||||||||||||||||||||
Preferred dividends | (21,938 | ) | — | (21,938 | ) | |||||||||||||||||||
Net income available to Arch common shareholders | $ | 815,863 | $ | (3,446 | ) | $ | 812,417 | |||||||||||||||||
Underwriting Ratios | ||||||||||||||||||||||||
Loss ratio | 62.5 | % | 41.6 | % | 28.8 | % | 53 | % | 67.8 | % | 53.4 | % | ||||||||||||
Acquisition expense ratio | 15.7 | % | 20.4 | % | 25.5 | % | 18 | % | 29.1 | % | 18.3 | % | ||||||||||||
Other operating expense ratio | 16.6 | % | 11.6 | % | 34.6 | % | 15.8 | % | 6.1 | % | 15.5 | % | ||||||||||||
Combined ratio | 94.8 | % | 73.6 | % | 88.9 | % | 86.8 | % | 103 | % | 87.2 | % | ||||||||||||
Goodwill and intangible assets | $ | 28,331 | $ | 3,333 | $ | 77,875 | $ | 109,539 | $ | — | $ | 109,539 | ||||||||||||
Total investable assets | $ | 14,609,969 | $ | 1,163,240 | $ | 15,773,209 | ||||||||||||||||||
Total assets | 20,527,027 | 1,482,516 | 22,009,543 | |||||||||||||||||||||
Total liabilities | 14,492,237 | 398,660 | 14,890,897 | |||||||||||||||||||||
-1 | Certain amounts included in the gross premiums written of each segment are related to intersegment transactions. 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. | |||||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||||||
Insurance | Reinsurance | Mortgage | Sub-Total | Other | Total | |||||||||||||||||||
Gross premiums written (1) | $ | 2,712,509 | $ | 1,399,621 | $ | 89,570 | $ | 4,196,623 | $ | — | $ | 4,196,623 | ||||||||||||
Premiums ceded | (763,713 | ) | (86,620 | ) | — | (845,256 | ) | — | (845,256 | ) | ||||||||||||||
Net premiums written | 1,948,796 | 1,313,001 | 89,570 | 3,351,367 | — | 3,351,367 | ||||||||||||||||||
Change in unearned premiums | (72,782 | ) | (94,329 | ) | (38,304 | ) | (205,415 | ) | — | (205,415 | ) | |||||||||||||
Net premiums earned | 1,876,014 | 1,218,672 | 51,266 | 3,145,952 | — | 3,145,952 | ||||||||||||||||||
Other underwriting income | 2,122 | 5,258 | 259 | 7,639 | — | 7,639 | ||||||||||||||||||
Losses and loss adjustment expenses | (1,188,445 | ) | (486,236 | ) | (4,743 | ) | (1,679,424 | ) | — | (1,679,424 | ) | |||||||||||||
Acquisition expenses, net | (311,904 | ) | (234,373 | ) | (17,826 | ) | (564,103 | ) | — | (564,103 | ) | |||||||||||||
Other operating expenses | (315,387 | ) | (134,563 | ) | (8,377 | ) | (458,327 | ) | — | (458,327 | ) | |||||||||||||
Underwriting income (loss) | $ | 62,400 | $ | 368,758 | $ | 20,579 | 451,737 | — | 451,737 | |||||||||||||||
Net investment income | 267,219 | — | 267,219 | |||||||||||||||||||||
Net realized gains | 74,018 | — | 74,018 | |||||||||||||||||||||
Net impairment losses recognized in earnings | (3,786 | ) | — | (3,786 | ) | |||||||||||||||||||
Equity in net income (loss) of investment funds accounted for using the equity method | 35,701 | — | 35,701 | |||||||||||||||||||||
Other income (loss) | (586 | ) | — | (586 | ) | |||||||||||||||||||
Other expenses | (42,403 | ) | — | (42,403 | ) | |||||||||||||||||||
Interest expense | (27,060 | ) | — | (27,060 | ) | |||||||||||||||||||
Net foreign exchange gains (losses) | (12,335 | ) | — | (12,335 | ) | |||||||||||||||||||
Income before income taxes | 742,505 | — | 742,505 | |||||||||||||||||||||
Income tax expense | (32,774 | ) | — | (32,774 | ) | |||||||||||||||||||
Net income | 709,731 | — | 709,731 | |||||||||||||||||||||
Dividends attributable to redeemable noncontrolling interests | — | — | — | |||||||||||||||||||||
Amounts attributable to noncontrolling interests | — | — | — | |||||||||||||||||||||
Net income available to Arch | 709,731 | — | 709,731 | |||||||||||||||||||||
Preferred dividends | (21,938 | ) | — | (21,938 | ) | |||||||||||||||||||
Net income available to Arch common shareholders | $ | 687,793 | $ | — | $ | 687,793 | ||||||||||||||||||
Underwriting Ratios | ||||||||||||||||||||||||
Loss ratio | 63.3 | % | 39.9 | % | 9.3 | % | 53.4 | % | — | 53.4 | % | |||||||||||||
Acquisition expense ratio | 16.6 | % | 19.2 | % | 34.8 | % | 17.9 | % | — | 17.9 | % | |||||||||||||
Other operating expense ratio | 16.8 | % | 11 | % | 16.3 | % | 14.6 | % | — | 14.6 | % | |||||||||||||
Combined ratio | 96.7 | % | 70.1 | % | 60.4 | % | 85.9 | % | — | 85.9 | % | |||||||||||||
Goodwill and intangible assets | $ | 20,419 | $ | 6,900 | $ | — | $ | 27,319 | $ | — | $ | 27,319 | ||||||||||||
Total investable assets | $ | 14,049,525 | $ | — | $ | 14,049,525 | ||||||||||||||||||
Total assets | 19,566,094 | — | 19,566,094 | |||||||||||||||||||||
Total liabilities | 13,918,598 | — | 13,918,598 | |||||||||||||||||||||
-1 | Certain amounts included in the gross premiums written of each segment are related to intersegment transactions. 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. | |||||||||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||||||
Insurance | Reinsurance | Mortgage | Sub-Total | Other | Total | |||||||||||||||||||
Gross premiums written (1) | $ | 2,593,959 | $ | 1,213,889 | $ | 68,111 | $ | 3,869,161 | $ | — | $ | 3,869,161 | ||||||||||||
Premiums ceded | (768,625 | ) | (55,099 | ) | — | (816,926 | ) | — | (816,926 | ) | ||||||||||||||
Net premiums written | 1,825,334 | 1,158,790 | 68,111 | 3,052,235 | — | 3,052,235 | ||||||||||||||||||
Change in unearned premiums | (24,991 | ) | (40,663 | ) | (51,441 | ) | (117,095 | ) | — | (117,095 | ) | |||||||||||||
Net premiums earned | 1,800,343 | 1,118,127 | 16,670 | 2,935,140 | — | 2,935,140 | ||||||||||||||||||
Other underwriting income | 2,335 | 5,755 | — | 8,090 | — | 8,090 | ||||||||||||||||||
Losses and loss adjustment expenses | (1,283,841 | ) | (574,821 | ) | (2,615 | ) | (1,861,277 | ) | — | (1,861,277 | ) | |||||||||||||
Acquisition expenses, net | (298,983 | ) | (204,903 | ) | (4,998 | ) | (508,884 | ) | — | (508,884 | ) | |||||||||||||
Other operating expenses | (307,489 | ) | (118,245 | ) | (4,301 | ) | (430,035 | ) | — | (430,035 | ) | |||||||||||||
Underwriting income (loss) | $ | (87,635 | ) | $ | 225,913 | $ | 4,756 | 143,034 | — | 143,034 | ||||||||||||||
Net investment income | 294,895 | — | 294,895 | |||||||||||||||||||||
Net realized gains | 194,228 | — | 194,228 | |||||||||||||||||||||
Net impairment losses recognized in earnings | (11,388 | ) | — | (11,388 | ) | |||||||||||||||||||
Equity in net income (loss) of investment funds accounted for using the equity method | 73,510 | — | 73,510 | |||||||||||||||||||||
Other income (loss) | (12,094 | ) | — | (12,094 | ) | |||||||||||||||||||
Other expenses | (35,318 | ) | — | (35,318 | ) | |||||||||||||||||||
Interest expense | (28,525 | ) | — | (28,525 | ) | |||||||||||||||||||
Net foreign exchange gains (losses) | (28,955 | ) | — | (28,955 | ) | |||||||||||||||||||
Income before income taxes | 589,387 | — | 589,387 | |||||||||||||||||||||
Income tax benefit | 4,010 | — | 4,010 | |||||||||||||||||||||
Net income | 593,397 | — | 593,397 | |||||||||||||||||||||
Dividends attributable to redeemable noncontrolling interests | — | — | — | |||||||||||||||||||||
Amounts attributable to noncontrolling interests | — | — | — | |||||||||||||||||||||
Net income available to Arch | 593,397 | — | 593,397 | |||||||||||||||||||||
Preferred dividends | (25,079 | ) | — | (25,079 | ) | |||||||||||||||||||
Loss on repurchase of preferred shares | (10,612 | ) | — | (10,612 | ) | |||||||||||||||||||
Net income available to Arch common shareholders | $ | 557,706 | $ | — | $ | 557,706 | ||||||||||||||||||
Underwriting Ratios | ||||||||||||||||||||||||
Loss ratio | 71.3 | % | 51.4 | % | 15.7 | % | 63.4 | % | — | % | 63.4 | % | ||||||||||||
Acquisition expense ratio | 16.6 | % | 18.3 | % | 30 | % | 17.3 | % | — | % | 17.3 | % | ||||||||||||
Other operating expense ratio | 17.1 | % | 10.6 | % | 25.8 | % | 14.7 | % | — | % | 14.7 | % | ||||||||||||
Combined ratio | 105 | % | 80.3 | % | 71.5 | % | 95.4 | % | — | % | 95.4 | % | ||||||||||||
Goodwill and intangible assets | $ | 21,357 | $ | 16,902 | $ | — | $ | 38,259 | $ | — | $ | 38,259 | ||||||||||||
Total investable assets | $ | 13,045,134 | $ | — | $ | 13,045,134 | ||||||||||||||||||
Total assets | 17,816,762 | — | 17,816,762 | |||||||||||||||||||||
Total liabilities | 12,647,884 | — | 12,647,884 | |||||||||||||||||||||
-1 | Certain amounts included in the gross premiums written of each segment are related to intersegment transactions. 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. | |||||||||||||||||||||||
The following tables provide summary information regarding net premiums written and earned by major line of business and net premiums written by location: | ||||||||||||||||||||||||
INSURANCE SEGMENT | Year Ended December 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
Net premiums written (1) | ||||||||||||||||||||||||
Programs | $ | 480,580 | $ | 419,673 | $ | 340,130 | ||||||||||||||||||
Professional lines (2) | 476,604 | 476,193 | 548,423 | |||||||||||||||||||||
Construction and national accounts | 286,994 | 271,110 | 211,130 | |||||||||||||||||||||
Property, energy, marine and aviation | 244,640 | 280,551 | 294,690 | |||||||||||||||||||||
Excess and surplus casualty (3) | 212,519 | 149,286 | 112,307 | |||||||||||||||||||||
Travel, accident and health | 145,732 | 104,903 | 106,871 | |||||||||||||||||||||
Lenders products | 100,407 | 101,576 | 99,724 | |||||||||||||||||||||
Other (4) | 199,178 | 145,504 | 112,059 | |||||||||||||||||||||
Total | $ | 2,146,654 | $ | 1,948,796 | $ | 1,825,334 | ||||||||||||||||||
Net premiums earned (1) | ||||||||||||||||||||||||
Programs | $ | 460,392 | $ | 386,840 | $ | 318,740 | ||||||||||||||||||
Professional lines (2) | 456,508 | 491,791 | 536,971 | |||||||||||||||||||||
Construction and national accounts | 277,811 | 250,729 | 209,217 | |||||||||||||||||||||
Property, energy, marine and aviation | 244,974 | 304,294 | 313,081 | |||||||||||||||||||||
Excess and surplus casualty (3) | 182,024 | 118,395 | 113,597 | |||||||||||||||||||||
Travel, accident and health | 127,691 | 97,135 | 98,686 | |||||||||||||||||||||
Lenders products | 94,438 | 99,847 | 103,478 | |||||||||||||||||||||
Other (4) | 173,532 | 126,983 | 106,573 | |||||||||||||||||||||
Total | $ | 2,017,370 | $ | 1,876,014 | $ | 1,800,343 | ||||||||||||||||||
Net premiums written by client location (1) | ||||||||||||||||||||||||
United States | $ | 1,726,181 | $ | 1,526,156 | $ | 1,314,577 | ||||||||||||||||||
Europe | 240,136 | 226,254 | 271,278 | |||||||||||||||||||||
Asia and Pacific | 79,564 | 95,970 | 120,492 | |||||||||||||||||||||
Other | 100,773 | 100,416 | 118,987 | |||||||||||||||||||||
Total | $ | 2,146,654 | $ | 1,948,796 | $ | 1,825,334 | ||||||||||||||||||
Net premiums written by underwriting location (1) | ||||||||||||||||||||||||
United States | $ | 1,688,887 | $ | 1,478,930 | $ | 1,254,623 | ||||||||||||||||||
Europe | 394,430 | 389,763 | 472,132 | |||||||||||||||||||||
Other | 63,337 | 80,103 | 98,579 | |||||||||||||||||||||
Total | $ | 2,146,654 | $ | 1,948,796 | $ | 1,825,334 | ||||||||||||||||||
-1 | Insurance segment results include premiums written and earned assumed through intersegment transactions and exclude premiums written and earned ceded through intersegment transactions. | |||||||||||||||||||||||
-2 | Includes professional liability, executive assurance and healthcare business. | |||||||||||||||||||||||
-3 | Includes casualty and contract binding business. | |||||||||||||||||||||||
-4 | Includes alternative markets, excess workers' compensation and surety business. | |||||||||||||||||||||||
REINSURANCE SEGMENT | Year Ended December 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
Net premiums written (1) | ||||||||||||||||||||||||
Other specialty (2) | $ | 405,126 | $ | 417,865 | $ | 308,104 | ||||||||||||||||||
Property excluding property catastrophe (3) | 343,043 | 292,536 | 265,783 | |||||||||||||||||||||
Casualty (4) | 317,996 | 306,304 | 205,925 | |||||||||||||||||||||
Property catastrophe | 137,471 | 220,749 | 283,677 | |||||||||||||||||||||
Marine and aviation | 50,444 | 64,380 | 84,649 | |||||||||||||||||||||
Other (5) | 11,911 | 11,167 | 10,652 | |||||||||||||||||||||
Total | $ | 1,265,991 | $ | 1,313,001 | $ | 1,158,790 | ||||||||||||||||||
Net premiums earned (1) | ||||||||||||||||||||||||
Other specialty (2) | $ | 424,725 | $ | 387,630 | $ | 309,101 | ||||||||||||||||||
Property excluding property catastrophe (3) | 303,496 | 274,719 | 254,338 | |||||||||||||||||||||
Casualty (4) | 327,518 | 241,774 | 188,963 | |||||||||||||||||||||
Property catastrophe | 150,761 | 232,423 | 280,185 | |||||||||||||||||||||
Marine and aviation | 61,118 | 70,105 | 76,145 | |||||||||||||||||||||
Other (5) | 11,710 | 12,021 | 9,395 | |||||||||||||||||||||
Total | $ | 1,279,328 | $ | 1,218,672 | $ | 1,118,127 | ||||||||||||||||||
Net premiums written (1) | ||||||||||||||||||||||||
Pro rata | $ | 663,135 | $ | 692,024 | $ | 530,763 | ||||||||||||||||||
Excess of loss | 602,856 | 620,977 | 628,027 | |||||||||||||||||||||
Total | $ | 1,265,991 | $ | 1,313,001 | $ | 1,158,790 | ||||||||||||||||||
Net premiums earned (1) | ||||||||||||||||||||||||
Pro rata | $ | 686,201 | $ | 608,586 | $ | 499,094 | ||||||||||||||||||
Excess of loss | 593,127 | 610,086 | 619,033 | |||||||||||||||||||||
Total | $ | 1,279,328 | $ | 1,218,672 | $ | 1,118,127 | ||||||||||||||||||
Net premiums written by client location (1) | ||||||||||||||||||||||||
United States | $ | 589,255 | $ | 706,388 | $ | 568,043 | ||||||||||||||||||
Europe | 355,735 | 327,059 | 341,653 | |||||||||||||||||||||
Asia and Pacific | 142,626 | 94,252 | 97,879 | |||||||||||||||||||||
Bermuda | 77,620 | 87,047 | 72,864 | |||||||||||||||||||||
Other | 100,755 | 98,255 | 78,351 | |||||||||||||||||||||
Total | $ | 1,265,991 | $ | 1,313,001 | $ | 1,158,790 | ||||||||||||||||||
Net premiums written by underwriting location (1) | ||||||||||||||||||||||||
United States | $ | 492,891 | $ | 507,183 | $ | 379,239 | ||||||||||||||||||
Bermuda | 394,351 | 459,467 | 527,909 | |||||||||||||||||||||
Europe | 343,823 | 309,129 | 225,470 | |||||||||||||||||||||
Other | 34,926 | 37,222 | 26,172 | |||||||||||||||||||||
Total | $ | 1,265,991 | $ | 1,313,001 | $ | 1,158,790 | ||||||||||||||||||
-1 | Reinsurance segment results include premiums written and earned assumed through intersegment transactions and exclude premiums written and earned ceded through intersegment transactions. | |||||||||||||||||||||||
-2 | Includes non-excess motor, surety, accident and health, workers’ compensation catastrophe, agriculture, trade credit and other. | |||||||||||||||||||||||
-3 | Includes facultative business. | |||||||||||||||||||||||
-4 | Includes executive assurance, professional liability, workers’ compensation, excess motor, healthcare and other. | |||||||||||||||||||||||
-5 | Includes life, casualty clash and other. | |||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||
MORTGAGE SEGMENT | 2014 | 2013 | 2012 | |||||||||||||||||||||
Net premiums written by client location | ||||||||||||||||||||||||
United States | $ | 184,333 | $ | 63,692 | $ | 61,571 | ||||||||||||||||||
Other | 20,504 | 25,878 | 6,540 | |||||||||||||||||||||
Total | $ | 204,837 | $ | 89,570 | $ | 68,111 | ||||||||||||||||||
Net premiums written by underwriting location | ||||||||||||||||||||||||
United States | $ | 98,809 | $ | — | $ | — | ||||||||||||||||||
Other | 106,028 | 89,570 | 68,111 | |||||||||||||||||||||
Total | $ | 204,837 | $ | 89,570 | $ | 68,111 | ||||||||||||||||||
OTHER SEGMENT | Year Ended December 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
Net premiums written (1) | ||||||||||||||||||||||||
Casualty (2) | $ | 179,054 | $ | — | $ | — | ||||||||||||||||||
Other specialty (3) | 66,524 | — | — | |||||||||||||||||||||
Property catastrophe | 9,280 | — | — | |||||||||||||||||||||
Marine and aviation | 1,251 | — | — | |||||||||||||||||||||
Property excluding property catastrophe | 564 | — | — | |||||||||||||||||||||
Other (4) | 17,783 | — | — | |||||||||||||||||||||
Total | $ | 274,456 | $ | — | $ | — | ||||||||||||||||||
Net premiums earned (1) | ||||||||||||||||||||||||
Casualty (2) | $ | 72,395 | $ | — | $ | — | ||||||||||||||||||
Other specialty (3) | 24,157 | — | — | |||||||||||||||||||||
Property catastrophe | 5,115 | — | — | |||||||||||||||||||||
Marine and aviation | 789 | — | — | |||||||||||||||||||||
Property excluding property catastrophe | 182 | — | — | |||||||||||||||||||||
Other (4) | 839 | — | — | |||||||||||||||||||||
Total | $ | 103,477 | $ | — | $ | — | ||||||||||||||||||
Net premiums written by client location (1) | ||||||||||||||||||||||||
United States | $ | 186,795 | $ | — | $ | — | ||||||||||||||||||
Europe | 54,131 | — | — | |||||||||||||||||||||
Bermuda | 27,977 | — | — | |||||||||||||||||||||
Other | 5,553 | — | — | |||||||||||||||||||||
Total | $ | 274,456 | $ | — | $ | — | ||||||||||||||||||
-1 | Other segment results include premiums written and earned assumed through intersegment transactions and exclude premiums written and earned ceded through intersegment transactions. | |||||||||||||||||||||||
-2 | Includes professional liability, excess motor, programs and other. | |||||||||||||||||||||||
-3 | Includes non-excess motor and other. | |||||||||||||||||||||||
-4 | Includes mortgage and other. |
Reserve_for_Losses_and_Loss_Ad
Reserve for Losses and Loss Adjustment Expenses | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract] | ||||||||||||
Reserve for losses and loss adjustment expenses | Reserve for Losses and Loss Adjustment Expenses | |||||||||||
The following table represents an analysis of losses and loss adjustment expenses and a reconciliation of the beginning and ending reserve for losses and loss adjustment expenses: | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Reserve for losses and loss adjustment expenses at beginning of year | $ | 8,824,696 | $ | 8,933,292 | $ | 8,456,210 | ||||||
Unpaid losses and loss adjustment expenses recoverable | 1,748,250 | 1,829,070 | 1,818,047 | |||||||||
Net reserve for losses and loss adjustment expenses at beginning of year | 7,076,446 | 7,104,222 | 6,638,163 | |||||||||
Net incurred losses and loss adjustment expenses relating to losses occurring in: | ||||||||||||
Current year | 2,246,152 | 1,943,466 | 2,082,805 | |||||||||
Prior years | (326,902 | ) | (264,042 | ) | (221,528 | ) | ||||||
Total net incurred losses and loss adjustment expenses | 1,919,250 | 1,679,424 | 1,861,277 | |||||||||
Net losses and loss adjustment expense reserves of acquired business (1) | 120,671 | — | 31,977 | |||||||||
Foreign exchange (gains) losses | (160,486 | ) | 1,617 | 38,184 | ||||||||
Net paid losses and loss adjustment expenses relating to losses occurring in: | ||||||||||||
Current year | (347,270 | ) | (288,114 | ) | (295,984 | ) | ||||||
Prior years | (1,350,466 | ) | (1,420,703 | ) | (1,169,395 | ) | ||||||
Total net paid losses and loss adjustment expenses | (1,697,736 | ) | (1,708,817 | ) | (1,465,379 | ) | ||||||
Net reserve for losses and loss adjustment expenses at end of year | 7,258,145 | 7,076,446 | 7,104,222 | |||||||||
Unpaid losses and loss adjustment expenses recoverable | 1,778,303 | 1,748,250 | 1,829,070 | |||||||||
Reserve for losses and loss adjustment expenses at end of year | $ | 9,036,448 | $ | 8,824,696 | $ | 8,933,292 | ||||||
-1 | 2014 amount relates to the Company’s acquisition of Arch MI U.S. while the 2012 amount relates to the Company’s acquisition of the trade credit and surety operations of Ariel Reinsurance Company. | |||||||||||
2014 Prior Year Reserve Development | ||||||||||||
During 2014, the Company recorded estimated net favorable development on prior year loss reserves of $326.9 million, which consisted of $267.3 million from the reinsurance segment, $58.7 million from the insurance segment and $0.9 million from the mortgage segment. | ||||||||||||
The reinsurance segment’s net favorable development of $267.3 million, or 20.9 points of net earned premium, consisted of $146.7 million from short-tailed lines and $120.6 million of net favorable development from medium-tailed and long-tailed lines. Favorable development in short-tailed lines included $107.6 million from property catastrophe and property other than property catastrophe reserves, primarily from the 2011 to 2013 underwriting years (i.e., losses attributable to contracts having an inception or renewal date within the given twelve-month period). Contained within this release was favorable development of $23.3 million from the 2005 to 2013 named catastrophic events. The net reduction of loss estimates for the reinsurance segment’s short-tailed lines primarily resulted from varying levels of reported and paid claims activity than previously anticipated which led to decreases in certain loss ratio selections during 2014. Net favorable development of $120.6 million in medium-tailed and long-tailed lines included reductions in casualty reserves of $101.6 million, primarily from the 2003 to 2006 underwriting years and the 2009 and 2010 underwriting years, and marine and aviation reserves of $14.7 million, primarily from the 2008 to 2012 underwriting years. The balance of net favorable development was spread across various lines and underwriting years. | ||||||||||||
The insurance segment’s net favorable development of $58.7 million, or 2.9 points of net earned premium, consisted of $73.5 million of net favorable development from short-tailed lines, partially offset by $14.8 million of net adverse development from medium-tailed and long-tailed lines. Favorable development in short-tailed lines predominantly consisted of $60.5 million of net favorable development in property lines, primarily from the 2008 to 2013 accident years (i.e., the year in which a loss occurred), with the balance emanating from lenders products, primarily from the 2012 accident year, and travel and accident, primarily from the 2012 and 2013 accident years. Contained within this short tail release was favorable development of $7.9 million from 2005 to 2013 named catastrophic events. Net adverse development in medium-tailed and long-tailed lines of $14.8 million included a net increase of $41.3 million in construction reserves, primarily from the 2009 to 2013 accident years. The adverse development in construction was largely driven by general liability claims involving New York labor law matters. In addition, the insurance segment experienced $26.2 million of net adverse development in program business, primarily from the 2011 and 2012 accident years. Such amounts were partially offset by $39.0 million of net favorable development on professional lines, primarily from the 2003 to 2011 accident years, and $7.8 million of net favorable development on surety business, primarily from the 2011 to 2013 accident years. | ||||||||||||
2013 Prior Year Reserve Development | ||||||||||||
During 2013, the Company recorded estimated net favorable development on prior year loss reserves of $264.0 million, which consisted of $217.9 million from the reinsurance segment, $45.1 million from the insurance segment and $1.0 million from the mortgage segment. | ||||||||||||
The reinsurance segment’s net favorable development of $217.9 million, or 17.9 points of net earned premium, consisted of $111.1 million from short-tailed lines and $106.8 million of net favorable development from medium-tailed and long-tailed lines. Favorable development in short-tailed lines included $110.1 million from property catastrophe and property other than property catastrophe reserves, primarily from the 2009 to 2012 underwriting years. Contained within this release was favorable development of $28.6 million from the 2005 to 2012 named catastrophic events. The net reduction of loss estimates for the reinsurance segment’s short-tailed lines primarily resulted from varying levels of reported and paid claims activity than previously anticipated which led to decreases in certain loss ratio selections during 2013. Net favorable development of $106.8 million in medium-tailed and long-tailed lines included reductions in casualty reserves of $98.8 million, primarily from the 2003 to 2009 underwriting years, and marine and aviation reserves of $8.1 million, primarily from the 2007 and 2009 underwriting years. The balance of net favorable development was spread across various lines and underwriting years. | ||||||||||||
The insurance segment’s net favorable development of $45.1 million, or 2.4 points of net earned premium, consisted of $67.0 million of net favorable development from short-tailed lines, partially offset by $21.9 million of net adverse development from medium-tailed and long-tailed lines. Favorable development in short-tailed lines predominantly consisted of $62.4 million of net favorable development in property lines from the 2008 to 2011 accident years, with the balance emanating from lenders products, primarily from the 2011 and 2012 accident years, and travel and accident, primarily from the 2009 and 2010 accident years. Contained within this short tail release was favorable development of $15.9 million from 2005 to 2012 named catastrophic events. Net adverse development in medium-tailed and long-tailed lines of $21.9 million included a net increase of $28.0 million in specialty casualty reserves. Such development primarily stemmed from losses in two captive programs written by the insurance segment's Canadian operation, which was partially offset by favorable development in non-captive business, and from three large excess casualty claims in the insurance segment's U.S. operation, all of the above in the more recent accident years. In addition, the insurance segment experienced $26.2 million of net adverse development in program business, with nearly 90% of this development emanating from a single canceled program whose last inception year was 2011. Such amounts were partially offset by net favorable development spread across various lines and accident years. | ||||||||||||
2012 Prior Year Reserve Development | ||||||||||||
During 2012, the Company recorded estimated net favorable development on prior year loss reserves of $221.5 million, which consisted of $190.3 million from the reinsurance segment and $31.2 million from the insurance segment. | ||||||||||||
The reinsurance segment’s net favorable development of $190.3 million, or 17.0 points of net earned premium, consisted of $117.6 million from short-tailed lines and $72.7 million of net favorable development from medium-tailed and long-tailed lines. Favorable development in short-tailed lines included $92.1 million from property catastrophe and property other than property catastrophe reserves, primarily from the 2008 to 2011 underwriting years. Contained within this release was favorable development of $16.8 million from the 2005 to 2011 named catastrophic events. The net reduction of loss estimates for the reinsurance segment’s short-tailed lines primarily resulted from varying levels of reported and paid claims activity than previously anticipated which led to decreases in certain loss ratio selections during 2012. Net favorable development of $72.7 million in medium-tailed and long-tailed lines included reductions in casualty reserves of $55.9 million, primarily from the 2003 to 2009 underwriting years, and marine and aviation reserves of $16.8 million, primarily from the 2008 to 2010 underwriting years. The balance of net favorable development was spread across various lines and underwriting years. | ||||||||||||
The insurance segment’s net favorable development of $31.2 million, or 1.7 points of net earned premium, consisted of $79.3 million of net favorable development from short-tailed lines, partially offset by $48.1 million of net adverse development from medium-tailed and long-tailed lines. Favorable development in short-tailed lines predominantly consisted of $69.0 million of net favorable development in property lines from the 2007 to 2011 accident years, with the balance emanating from travel and accident and lender’s products, both primarily from the 2009 to 2011 accident years. Contained within this short tail release was favorable development of $19.1 million from 2005 to 2011 named catastrophic events. Net adverse development in medium-tailed and long-tailed lines of $48.1 million included a net increase of $38.9 million from the insurance segment’s U.K. underwriting operations for the 2007 to 2010 accident years, primarily due to an increase in Australian executive assurance reserves. In addition, U.S. primary specialty casualty reserves reflected a net increase of $23.0 million, primarily from the 2003 to 2005 accident years, and $19.8 million from U.S. professional liability in the two most recent accident years. Such amounts were partially offset by net favorable development spread across various lines and accident years. |
Reinsurance
Reinsurance | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Reinsurance Disclosures [Abstract] | ||||||||||||
Reinsurance | Reinsurance | |||||||||||
In the normal course of business, the Company’s insurance subsidiaries cede a portion of their premium through pro rata and excess of loss reinsurance agreements on a treaty or facultative basis. The Company’s reinsurance subsidiaries participate in “common account” retrocessional arrangements for certain pro rata treaties. Such arrangements reduce the effect of individual or aggregate losses to all companies participating on such treaties, including the reinsurers, such as the Company’s reinsurance subsidiaries, and the ceding company. In addition, the Company’s reinsurance subsidiaries may purchase retrocessional coverage as part of their risk management program. Reinsurance recoverables are recorded as assets, predicated on the reinsurers’ ability to meet their obligations under the reinsurance agreements. If the reinsurers are unable to satisfy their obligations under the agreements, the Company’s insurance or reinsurance subsidiaries would be liable for such defaulted amounts. | ||||||||||||
The effects of reinsurance on the Company’s written and earned premiums and losses and loss adjustment expenses with unaffiliated reinsurers were as follows: | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Premiums Written | ||||||||||||
Direct | $ | 3,100,946 | $ | 2,754,582 | $ | 2,673,864 | ||||||
Assumed | 1,739,670 | 1,442,041 | 1,195,297 | |||||||||
Ceded | (948,678 | ) | (845,256 | ) | (816,926 | ) | ||||||
Net | $ | 3,891,938 | $ | 3,351,367 | $ | 3,052,235 | ||||||
Premiums Earned | ||||||||||||
Direct | $ | 2,914,755 | $ | 2,666,104 | $ | 2,572,078 | ||||||
Assumed | 1,574,049 | 1,296,048 | 1,165,371 | |||||||||
Ceded | (895,056 | ) | (816,200 | ) | (802,309 | ) | ||||||
Net | $ | 3,593,748 | $ | 3,145,952 | $ | 2,935,140 | ||||||
Losses and Loss Adjustment Expenses | ||||||||||||
Direct | $ | 1,763,492 | $ | 1,603,369 | $ | 1,725,707 | ||||||
Assumed | 621,346 | 450,618 | 578,081 | |||||||||
Ceded | (465,588 | ) | (374,563 | ) | (442,511 | ) | ||||||
Net | $ | 1,919,250 | $ | 1,679,424 | $ | 1,861,277 | ||||||
The Company monitors the financial condition of its reinsurers and attempts to place coverages only with substantial, financially sound carriers. At December 31, 2014, approximately 83.0% of the Company’s reinsurance recoverables on paid and unpaid losses (not including prepaid reinsurance premiums) of $1.81 billion were due from carriers which had an A.M. Best rating of “A-” or better and the largest reinsurance recoverables from any one carrier was approximately 3.7% of the Company’s total shareholders’ equity. At December 31, 2013, approximately 86.5% of the Company’s reinsurance recoverables on paid and unpaid losses (not including prepaid reinsurance premiums) of $1.80 billion were due from carriers which had an A.M. Best rating of “A-” or better and the largest reinsurance recoverables from any one carrier was approximately 4.2% of the Company’s total shareholders’ equity. Although the Company has not experienced any material credit losses to date, an inability of its reinsurers or retrocessionaires to meet their obligations to it over the relevant exposure periods for any reason could have a material adverse effect on its financial condition and results of operations. |
Investment_Information
Investment Information | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Disclosure Investment Information [Abstract] | ||||||||||||||||||||||||
Investment Information | Investment Information | |||||||||||||||||||||||
At December 31, 2014, total investable assets of $15.77 billion included $14.61 billion managed by the Company and $1.16 billion attributable to Watford Re. | ||||||||||||||||||||||||
Available For Sale Securities | ||||||||||||||||||||||||
The following table summarizes the fair value and cost or amortized cost of the Company’s securities classified as available for sale: | ||||||||||||||||||||||||
Estimated | Gross | Gross | Cost or | OTTI | ||||||||||||||||||||
Fair | Unrealized | Unrealized | Amortized | Unrealized | ||||||||||||||||||||
Value | Gains | Losses | Cost | Losses (2) | ||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||
Fixed maturities and fixed maturities pledged | ||||||||||||||||||||||||
under securities lending agreements (1): | ||||||||||||||||||||||||
Corporate bonds | $ | 3,108,513 | $ | 37,928 | $ | (38,974 | ) | $ | 3,109,559 | $ | (317 | ) | ||||||||||||
Mortgage backed securities | 943,343 | 18,843 | (3,842 | ) | 928,342 | (3,307 | ) | |||||||||||||||||
Municipal bonds | 1,494,122 | 31,227 | (1,044 | ) | 1,463,939 | — | ||||||||||||||||||
Commercial mortgage backed securities | 1,114,528 | 14,594 | (3,822 | ) | 1,103,756 | — | ||||||||||||||||||
U.S. government and government agencies | 1,447,972 | 8,345 | (1,760 | ) | 1,441,387 | — | ||||||||||||||||||
Non-U.S. government securities | 1,015,153 | 21,311 | (37,203 | ) | 1,031,045 | — | ||||||||||||||||||
Asset backed securities | 1,677,941 | 8,425 | (6,089 | ) | 1,675,605 | (22 | ) | |||||||||||||||||
Total | 10,801,572 | 140,673 | (92,734 | ) | 10,753,633 | (3,646 | ) | |||||||||||||||||
Equity securities | 658,182 | 109,012 | (13,364 | ) | 562,534 | — | ||||||||||||||||||
Other investments | 296,224 | 31,839 | (362 | ) | 264,747 | — | ||||||||||||||||||
Short-term investments | 797,226 | 738 | (5,270 | ) | 801,758 | — | ||||||||||||||||||
Total | $ | 12,553,204 | $ | 282,262 | $ | (111,730 | ) | $ | 12,382,672 | $ | (3,646 | ) | ||||||||||||
31-Dec-13 | ||||||||||||||||||||||||
Fixed maturities and fixed maturities pledged | ||||||||||||||||||||||||
under securities lending agreements (1): | ||||||||||||||||||||||||
Corporate bonds | $ | 2,267,263 | $ | 35,289 | $ | (35,537 | ) | $ | 2,267,511 | $ | (16 | ) | ||||||||||||
Mortgage backed securities | 1,133,095 | 16,270 | (22,209 | ) | 1,139,034 | (9,269 | ) | |||||||||||||||||
Municipal bonds | 1,481,738 | 29,378 | (9,730 | ) | 1,462,090 | (17 | ) | |||||||||||||||||
Commercial mortgage backed securities | 1,074,497 | 13,972 | (15,224 | ) | 1,075,749 | (199 | ) | |||||||||||||||||
U.S. government and government agencies | 1,301,809 | 3,779 | (11,242 | ) | 1,309,272 | (19 | ) | |||||||||||||||||
Non-U.S. government securities | 1,085,861 | 14,729 | (19,363 | ) | 1,090,495 | — | ||||||||||||||||||
Asset backed securities | 1,332,594 | 20,033 | (13,795 | ) | 1,326,356 | (3,422 | ) | |||||||||||||||||
Total | 9,676,857 | 133,450 | (127,100 | ) | 9,670,507 | (12,942 | ) | |||||||||||||||||
Equity securities | 496,824 | 69,487 | (5,938 | ) | 433,275 | — | ||||||||||||||||||
Other investments | 498,310 | 28,082 | (18,459 | ) | 488,687 | — | ||||||||||||||||||
Short-term investments | 1,478,367 | 1,654 | (871 | ) | 1,477,584 | — | ||||||||||||||||||
Total | $ | 12,150,358 | $ | 232,673 | $ | (152,368 | ) | $ | 12,070,053 | $ | (12,942 | ) | ||||||||||||
-1 | In securities lending transactions, the Company receives collateral in excess of the fair value of the fixed maturities and short-term investments pledged. For purposes of this table, the Company has excluded the collateral received and reinvested and included the fixed maturities and short-term investments pledged. See “—Securities Lending Agreements.” | |||||||||||||||||||||||
-2 | Represents the total other-than-temporary impairments (“OTTI”) recognized in accumulated other comprehensive income (“AOCI”). It does not include the change in fair value subsequent to the impairment measurement date. At December 31, 2014, the net unrealized gain related to securities for which a non-credit OTTI was recognized in AOCI was $0.9 million, compared to a net unrealized gain of $6.0 million at December 31, 2013. | |||||||||||||||||||||||
The following table summarizes, for all available for sale securities in an unrealized loss position, the fair value and gross unrealized loss by length of time the security has been in a continual unrealized loss position: | ||||||||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
Estimated | Gross | Estimated | Gross | Estimated | Gross | |||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||
Value | Losses | Value | Losses | Value | Losses | |||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||
Fixed maturities and fixed maturities pledged under securities lending agreements (1): | ||||||||||||||||||||||||
Corporate bonds | $ | 1,309,637 | $ | (32,903 | ) | $ | 148,963 | $ | (6,071 | ) | $ | 1,458,600 | $ | (38,974 | ) | |||||||||
Mortgage backed securities | 293,624 | (1,476 | ) | 59,107 | (2,366 | ) | 352,731 | (3,842 | ) | |||||||||||||||
Municipal bonds | 210,614 | (588 | ) | 13,643 | (456 | ) | 224,257 | (1,044 | ) | |||||||||||||||
Commercial mortgage backed securities | 232,147 | (770 | ) | 125,894 | (3,052 | ) | 358,041 | (3,822 | ) | |||||||||||||||
U.S. government and government agencies | 618,381 | (1,626 | ) | 3,438 | (134 | ) | 621,819 | (1,760 | ) | |||||||||||||||
Non-U.S. government securities | 510,766 | (31,172 | ) | 46,910 | (6,031 | ) | 557,676 | (37,203 | ) | |||||||||||||||
Asset backed securities | 612,950 | (2,486 | ) | 243,452 | (3,603 | ) | 856,402 | (6,089 | ) | |||||||||||||||
Total | 3,788,119 | (71,021 | ) | 641,407 | (21,713 | ) | 4,429,526 | (92,734 | ) | |||||||||||||||
Equity securities | 181,002 | (13,364 | ) | — | — | 181,002 | (13,364 | ) | ||||||||||||||||
Other investments | 59,638 | (362 | ) | — | — | 59,638 | (362 | ) | ||||||||||||||||
Short-term investments | 79,271 | (5,270 | ) | — | — | 79,271 | (5,270 | ) | ||||||||||||||||
Total | $ | 4,108,030 | $ | (90,017 | ) | $ | 641,407 | $ | (21,713 | ) | $ | 4,749,437 | $ | (111,730 | ) | |||||||||
31-Dec-13 | ||||||||||||||||||||||||
Fixed maturities and fixed maturities pledged under securities lending agreements (1): | ||||||||||||||||||||||||
Corporate bonds | $ | 1,183,625 | $ | (32,837 | ) | $ | 46,673 | $ | (2,700 | ) | $ | 1,230,298 | $ | (35,537 | ) | |||||||||
Mortgage backed securities | 778,693 | (20,253 | ) | 43,634 | (1,956 | ) | 822,327 | (22,209 | ) | |||||||||||||||
Municipal bonds | 589,009 | (9,422 | ) | 6,092 | (308 | ) | 595,101 | (9,730 | ) | |||||||||||||||
Commercial mortgage backed securities | 677,617 | (15,110 | ) | 1,612 | (114 | ) | 679,229 | (15,224 | ) | |||||||||||||||
U.S. government and government agencies | 1,144,809 | (11,242 | ) | — | — | 1,144,809 | (11,242 | ) | ||||||||||||||||
Non-U.S. government securities | 821,506 | (15,776 | ) | 24,334 | (3,587 | ) | 845,840 | (19,363 | ) | |||||||||||||||
Asset backed securities | 692,362 | (10,431 | ) | 88,629 | (3,364 | ) | 780,991 | (13,795 | ) | |||||||||||||||
Total | 5,887,621 | (115,071 | ) | 210,974 | (12,029 | ) | 6,098,595 | (127,100 | ) | |||||||||||||||
Equity securities | 76,563 | (5,938 | ) | — | — | 76,563 | (5,938 | ) | ||||||||||||||||
Other investments | 165,891 | (15,775 | ) | 47,316 | (2,684 | ) | 213,207 | (18,459 | ) | |||||||||||||||
Short-term investments | 28,170 | (871 | ) | — | — | 28,170 | (871 | ) | ||||||||||||||||
Total | $ | 6,158,245 | $ | (137,655 | ) | $ | 258,290 | $ | (14,713 | ) | $ | 6,416,535 | $ | (152,368 | ) | |||||||||
-1 | In securities lending transactions, the Company receives collateral in excess of the fair value of the fixed maturities and short-term investments pledged. For purposes of this table, the Company has excluded the collateral received and reinvested and included the fixed maturities and short-term investments pledged. See “—Securities Lending Agreements.” | |||||||||||||||||||||||
At December 31, 2014, on a lot level basis, approximately 1,900 security lots out of a total of approximately 4,790 security lots were in an unrealized loss position and the largest single unrealized loss from a single lot in the Company’s fixed maturity portfolio was $2.9 million. At December 31, 2013, on a lot level basis, approximately 2,080 security lots out of a total of approximately 4,400 security lots were in an unrealized loss position and the largest single unrealized loss from a single lot in the Company’s fixed maturity portfolio was $3.5 million. | ||||||||||||||||||||||||
The contractual maturities of the Company’s fixed maturities and fixed maturities pledged under securities lending agreements are shown in the following table. Expected maturities, which are management’s best estimates, will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. | ||||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||||||
Maturity | Estimated Fair Value | Amortized Cost | Estimated Fair Value | Amortized Cost | ||||||||||||||||||||
Due in one year or less | $ | 235,930 | $ | 233,794 | $ | 235,330 | $ | 232,652 | ||||||||||||||||
Due after one year through five years | 4,074,562 | 4,077,408 | 3,738,500 | 3,718,920 | ||||||||||||||||||||
Due after five years through 10 years | 2,475,726 | 2,461,356 | 1,966,536 | 1,979,510 | ||||||||||||||||||||
Due after 10 years | 279,542 | 273,372 | 196,305 | 198,286 | ||||||||||||||||||||
7,065,760 | 7,045,930 | 6,136,671 | 6,129,368 | |||||||||||||||||||||
Mortgage backed securities | 943,343 | 928,342 | 1,133,095 | 1,139,034 | ||||||||||||||||||||
Commercial mortgage backed securities | 1,114,528 | 1,103,756 | 1,074,497 | 1,075,749 | ||||||||||||||||||||
Asset backed securities | 1,677,941 | 1,675,605 | 1,332,594 | 1,326,356 | ||||||||||||||||||||
Total | $ | 10,801,572 | $ | 10,753,633 | $ | 9,676,857 | $ | 9,670,507 | ||||||||||||||||
Securities Lending Agreements | ||||||||||||||||||||||||
At December 31, 2014, the fair value and amortized cost of fixed maturities and short-term investments pledged under securities lending agreements were $50.8 million and $52.1 million, respectively, compared to $105.1 million and $105.9 million at December 31, 2013, respectively. At December 31, 2014, the portfolio of collateral backing the Company’s securities lending program included approximately $5.8 million of sub-prime securities, compared to $6.3 million at December 31, 2013. | ||||||||||||||||||||||||
Other Investments | ||||||||||||||||||||||||
The following table summarizes the Company’s other investments, including available for sale and fair value option components: | ||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Available for sale securities: | ||||||||||||||||||||||||
Asian and emerging markets | $ | 236,586 | $ | 331,984 | ||||||||||||||||||||
Investment grade fixed income | 59,638 | 159,115 | ||||||||||||||||||||||
Other | — | 7,211 | ||||||||||||||||||||||
Total available for sale | 296,224 | 498,310 | ||||||||||||||||||||||
Fair value option: | ||||||||||||||||||||||||
Term loan investments (par value: $1,076,011 and $360,204) | 1,073,649 | 399,591 | ||||||||||||||||||||||
Mezzanine debt funds | 121,341 | 102,172 | ||||||||||||||||||||||
Credit related funds | 114,436 | 63,271 | ||||||||||||||||||||||
Investment grade fixed income | 69,108 | 75,062 | ||||||||||||||||||||||
Asian and emerging markets | 25,800 | 14,054 | ||||||||||||||||||||||
Other (1) | 147,573 | 119,130 | ||||||||||||||||||||||
Total fair value option | 1,551,907 | 773,280 | ||||||||||||||||||||||
Total | $ | 1,848,131 | $ | 1,271,590 | ||||||||||||||||||||
-1 | Includes fund investments with strategies in mortgage servicing rights, transportation and infrastructure assets and other. | |||||||||||||||||||||||
Certain of the Company’s other investments are in investment funds for which the Company has the option to redeem at agreed upon values as described in each investment fund’s subscription agreement. Depending on the terms of the various subscription agreements, investments in investment funds may be redeemed daily, monthly, quarterly or on other terms. Two common redemption restrictions which may impact the Company’s ability to redeem these investment funds are gates and lockups. A gate is a suspension of redemptions which may be implemented by the general partner or investment manager of the fund in order to defer, in whole or in part, the redemption request in the event the aggregate amount of redemption requests exceeds a predetermined percentage of the investment fund's net assets which may otherwise hinder the general partner or investment manager's ability to liquidate holdings in an orderly fashion in order to generate the cash necessary to fund extraordinarily large redemption payouts. A lockup period is the initial amount of time an investor is contractually required to hold the security before having the ability to redeem. If the investment funds are eligible to be redeemed, the time to redeem such fund can take weeks or months following the notification. | ||||||||||||||||||||||||
Fair Value Option | ||||||||||||||||||||||||
The following table summarizes the Company’s assets and liabilities which are accounted for using the fair value option: | ||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Fixed maturities | $ | 632,024 | $ | 448,254 | ||||||||||||||||||||
Other investments | 1,551,907 | 773,280 | ||||||||||||||||||||||
Short term investments | 251,601 | — | ||||||||||||||||||||||
Investments accounted for using the fair value option | $ | 2,435,532 | $ | 1,221,534 | ||||||||||||||||||||
Net Investment Income | ||||||||||||||||||||||||
The components of net investment income were derived from the following sources: | ||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
Fixed maturities | $ | 265,219 | $ | 249,833 | $ | 281,140 | ||||||||||||||||||
Term loan investments | 39,940 | 20,608 | 15,283 | |||||||||||||||||||||
Equity securities (dividends) | 13,005 | 8,919 | 7,963 | |||||||||||||||||||||
Short-term investments | 1,888 | 1,259 | 1,980 | |||||||||||||||||||||
Other (1) | 28,869 | 19,710 | 14,196 | |||||||||||||||||||||
Gross investment income | 348,921 | 300,329 | 320,562 | |||||||||||||||||||||
Investment expenses | (46,336 | ) | (33,110 | ) | (25,667 | ) | ||||||||||||||||||
Net investment income | $ | 302,585 | $ | 267,219 | $ | 294,895 | ||||||||||||||||||
-1 | Includes dividends on investment funds and other items. | |||||||||||||||||||||||
Net Realized Gains (Losses) | ||||||||||||||||||||||||
Net realized gains (losses) were as follows, excluding the other-than-temporary impairment provisions: | ||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
Available for sale securities: | ||||||||||||||||||||||||
Gross gains on investment sales | $ | 248,031 | $ | 239,421 | $ | 247,291 | ||||||||||||||||||
Gross losses on investment sales | (145,808 | ) | (203,077 | ) | (71,722 | ) | ||||||||||||||||||
Change in fair value of assets and liabilities accounted for using the fair value option: | ||||||||||||||||||||||||
Fixed maturities | (20,743 | ) | 54 | 13,195 | ||||||||||||||||||||
Other investments | 2,672 | 17,503 | 7,383 | |||||||||||||||||||||
Equity securities | — | 704 | (73 | ) | ||||||||||||||||||||
Short term investments | (395 | ) | — | — | ||||||||||||||||||||
Derivative instruments (1) | 43,934 | 20,912 | (1,326 | ) | ||||||||||||||||||||
Other (2) | (24,774 | ) | (1,499 | ) | (520 | ) | ||||||||||||||||||
Net realized gains | $ | 102,917 | $ | 74,018 | $ | 194,228 | ||||||||||||||||||
-1 | See Note 11 for information on the Company’s derivative instruments. | |||||||||||||||||||||||
-2 | Includes accretion of contingent consideration liability amounts related to the acquisition of the CMG Entities (see Note 2 for further details). | |||||||||||||||||||||||
Other-Than-Temporary Impairments | ||||||||||||||||||||||||
The Company performs quarterly reviews of its available for sale investments in order to determine whether declines in fair value below the amortized cost basis were considered other-than-temporary in accordance with applicable guidance. The following table details the net impairment losses recognized in earnings by asset class: | ||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
Fixed maturities: | ||||||||||||||||||||||||
Corporate bonds | $ | (2,062 | ) | $ | (88 | ) | $ | (1,512 | ) | |||||||||||||||
Mortgage backed securities | (1,525 | ) | (295 | ) | (2,491 | ) | ||||||||||||||||||
Asset backed securities | (40 | ) | (128 | ) | (127 | ) | ||||||||||||||||||
Non-U.S. government securities | — | — | (261 | ) | ||||||||||||||||||||
Commercial mortgage backed securities | (7 | ) | — | (211 | ) | |||||||||||||||||||
U.S. government and government agencies | — | — | (10 | ) | ||||||||||||||||||||
Total | (3,634 | ) | (511 | ) | (4,612 | ) | ||||||||||||||||||
Other investments | (25,410 | ) | — | — | ||||||||||||||||||||
Equity securities | (1,106 | ) | (3,275 | ) | (6,689 | ) | ||||||||||||||||||
Investment of funds received under securities lending agreements | — | — | (87 | ) | ||||||||||||||||||||
Net impairment losses recognized in earnings | $ | (30,150 | ) | $ | (3,786 | ) | $ | (11,388 | ) | |||||||||||||||
A description of the methodology and significant inputs used to measure the amount of net impairment losses recognized in earnings in 2014 is as follows: | ||||||||||||||||||||||||
• | Other investments — the Company utilized information received from fund managers and positive and negative evidence, including the business prospects, recent events, industry and market data and other factors. Net impairment losses for 2014 primarily related to a reduction in the carrying value of a fund investment which was in an unrealized loss position and where the Company determined that it did not intend to hold such investment for a reasonable period of time by which the fair value of the fund would increase and the Company would recover its cost. The Company redeemed its holding in such fund in early October 2014; | |||||||||||||||||||||||
• | Corporate bonds – the Company reviewed the business prospects, credit ratings, estimated loss given default factors, foreign currency impacts and information received from asset managers and rating agencies for certain corporate bonds. The amortized cost basis of the corporate bonds were adjusted down, if required, to the expected recovery value calculated in the OTTI review process; | |||||||||||||||||||||||
• | Mortgage backed securities – the Company utilized underlying data provided by asset managers, cash flow projections and additional information from credit agencies in order to determine an expected recovery value for each security. The analysis includes expected cash flow projections under base case and stress case scenarios which modify the expected default expectations and loss severities and slow down prepayment assumptions. The significant inputs in the models include the expected default rates, delinquency rates and foreclosure costs. Net impairment losses for 2014 primarily resulted from a revised analysis of prepayment assumptions on one interest only mortgage backed security and small adjustments in other holdings. The amortized cost basis of the mortgage backed securities were adjusted down, if required, to the expected recovery value calculated in the OTTI review process; | |||||||||||||||||||||||
• | Equity securities – the Company utilized information received from asset managers on common stocks, including the business prospects, recent events, industry and market data and other factors. For certain equities which were in an unrealized loss position and where the Company determined that it did not have the intent or ability to hold such securities for a reasonable period of time by which the fair value of the securities would increase and the Company would recover its cost, the cost basis of such securities was adjusted down accordingly. | |||||||||||||||||||||||
The Company believes that the $3.6 million of OTTI included in accumulated other comprehensive income at December 31, 2014 on the securities which were considered by the Company to be impaired was due to market and sector-related factors (i.e., not credit losses). At December 31, 2014, the Company did not intend to sell these securities, or any other securities which were in an unrealized loss position, and determined that it is more likely than not that the Company will not be required to sell such securities before recovery of their cost basis. | ||||||||||||||||||||||||
The following table provides a roll forward of the amount related to credit losses recognized in earnings for which a portion of an OTTI was recognized in accumulated other comprehensive income: | ||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
Balance at start of year | $ | 60,062 | $ | 62,001 | $ | 66,545 | ||||||||||||||||||
Credit loss impairments recognized on securities not previously impaired | 691 | 423 | 1,962 | |||||||||||||||||||||
Credit loss impairments recognized on securities previously impaired | 162 | 88 | 2,735 | |||||||||||||||||||||
Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security | — | — | — | |||||||||||||||||||||
Reductions for securities sold during the period | (40,719 | ) | (2,450 | ) | (9,241 | ) | ||||||||||||||||||
Balance at end of year | $ | 20,196 | $ | 60,062 | $ | 62,001 | ||||||||||||||||||
Restricted Assets | ||||||||||||||||||||||||
The Company is required to maintain assets on deposit, which primarily consist of fixed maturities, with various regulatory authorities to support its insurance and reinsurance operations. The Company’s insurance and reinsurance subsidiaries maintain assets in trust accounts as collateral for insurance and reinsurance transactions with affiliated companies and also have investments in segregated portfolios primarily to provide collateral or guarantees for letters of credit to third parties. See Note 16, “Commitments and Contingencies—Letter of Credit and Revolving Credit Facilities,” for further details. The following table details the value of the Company’s restricted assets: | ||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Assets used for collateral or guarantees: | ||||||||||||||||||||||||
Affiliated transactions | $ | 4,138,527 | $ | 4,060,533 | ||||||||||||||||||||
Third party agreements | 970,120 | 856,890 | ||||||||||||||||||||||
Deposits with U.S. regulatory authorities | 337,981 | 302,809 | ||||||||||||||||||||||
Trust funds | 72,461 | 75,264 | ||||||||||||||||||||||
Deposits with non-U.S. regulatory authorities | — | 6,546 | ||||||||||||||||||||||
Total restricted assets | $ | 5,519,089 | $ | 5,302,042 | ||||||||||||||||||||
In addition, because Watford Re is an independent company, the assets of Watford Re can be used only to settle obligations of Watford Re and Watford Re is solely responsible for its own liabilities and commitments. See Note 5, “Segment Information,” for information on Watford Re’s assets and liabilities. | ||||||||||||||||||||||||
Investment Funds Accounted For Using the Equity Method | ||||||||||||||||||||||||
The Company recorded equity in net income related to investment funds accounted for using the equity method of $19.9 million for 2014, compared to $35.7 million for 2013 and $73.5 million for 2012. Due to the ownership structure of these investment funds (e.g., limited partnership), the Company uses the equity method where it does not have a controlling interest and is not the primary beneficiary. In applying the equity method, these investments are initially recorded at cost and are subsequently adjusted based on the Company’s proportionate share of the net income or loss of the funds (which include changes in the fair value of the underlying securities in the funds). Such investments are generally recorded on a one month lag with some investments reported on a three month lag based on the availability of reports from the investment funds. Changes in the carrying value of such investments are recorded in net income as “Equity in net income (loss) of investment funds accounted for using the equity method.” As such, fluctuations in the carrying value of the investment funds accounted for using the equity method may increase the volatility of the Company’s reported results of operations. Investment funds accounted for using the equity method totaled $349.0 million at December 31, 2014, compared to $244.3 million at December 31, 2013. |
Fair_Value
Fair Value | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||
Fair Value | Fair Value | |||||||||||||||||||||||
Accounting guidance regarding fair value measurements addresses how companies should measure fair value when they are required to use a fair value measure for recognition or disclosure purposes under GAAP and provides a common definition of fair value to be used throughout GAAP. It defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly fashion between market participants at the measurement date. In addition, it establishes a three-level valuation hierarchy for the disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The level in the hierarchy within which a given fair value measurement falls is determined based on the lowest level input that is significant to the measurement (Level 1 being the highest priority and Level 3 being the lowest priority). | ||||||||||||||||||||||||
The levels in the hierarchy are defined as follows: | ||||||||||||||||||||||||
Level 1: | Inputs to the valuation methodology are observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets | |||||||||||||||||||||||
Level 2: | Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument | |||||||||||||||||||||||
Level 3: | Inputs to the valuation methodology are unobservable and significant to the fair value measurement | |||||||||||||||||||||||
Fair Value Measurements on a Recurring Basis | ||||||||||||||||||||||||
Following is a description of the valuation methodologies used for securities measured at fair value, as well as the general classification of such securities pursuant to the valuation hierarchy. | ||||||||||||||||||||||||
The Company determines the existence of an active market based on its judgment as to whether transactions for the financial instrument occur in such market with sufficient frequency and volume to provide reliable pricing information. The independent pricing sources obtain market quotations and actual transaction prices for securities that have quoted prices in active markets. The Company uses quoted values and other data provided by nationally recognized independent pricing sources as inputs into its process for determining fair values of its fixed maturity investments. To validate the techniques or models used by pricing sources, the Company's review process includes, but is not limited to: (i) quantitative analysis (e.g., comparing the quarterly return for each managed portfolio to its target benchmark, with significant differences identified and investigated); (ii) a review of the average number of prices obtained in the pricing process and the range of resulting fair values; (iii) initial and ongoing evaluation of methodologies used by outside parties to calculate fair value; (iv) comparing the fair value estimates to its knowledge of the current market; (v) a comparison of the pricing services' fair values to other pricing services' fair values for the same investments; and (vi) periodic back-testing, which includes randomly selecting purchased or sold securities and comparing the executed prices to the fair value estimates from the pricing service. For a majority of investments, the Company obtained multiple quotes. A price source hierarchy was maintained in order to determine which price source would be used (i.e., a price obtained from a pricing service with more seniority in the hierarchy will be used over a less senior one in all cases). The hierarchy prioritizes pricing services based on availability and reliability and assigns the highest priority to index providers. Based on the above review, the Company will challenge any prices for a security or portfolio which are considered not to be representative of fair value. At December 31, 2014, the Company adjusted certain prices (primarily on structured securities) obtained from the pricing services and substituted alternate prices (primarily broker-dealer quotes) for such securities. Such adjustments did not have a material impact on the overall fair value of the Company’s investment portfolio at December 31, 2014. | ||||||||||||||||||||||||
The independent pricing sources obtain market quotations and actual transaction prices for securities that have quoted prices in active markets. Each source has its own proprietary method for determining the fair value of securities that are not actively traded. In general, these methods involve the use of “matrix pricing” in which the independent pricing source uses observable market inputs including, but not limited to, investment yields, credit risks and spreads, benchmarking of like securities, broker-dealer quotes, reported trades and sector groupings to determine a reasonable fair value. In addition, pricing vendors use model processes, such as an Option Adjusted Spread model, to develop prepayment and interest rate scenarios. The Option Adjusted Spread model is commonly used to estimate fair value for securities such as mortgage backed and asset backed securities. In certain circumstances, when fair values are unavailable from these independent pricing sources, quotes are obtained directly from broker-dealers who are active in the corresponding markets. Such quotes are subject to the validation procedures noted above. Of the $15.1 billion of financial assets and liabilities measured at fair value at December 31, 2014, approximately $260.8 million, or 1.7%, were priced using non-binding broker-dealer quotes. Of the $13.4 billion of financial assets and liabilities measured at fair value at December 31, 2013, approximately $601.9 million, or 4.5%, were priced using non-binding broker-dealer quotes. | ||||||||||||||||||||||||
The Company reviews its securities measured at fair value and discusses the proper classification of such investments with investment advisors and others. A discussion of the general classification of the Company’s financial instruments follows: | ||||||||||||||||||||||||
Fixed maturities. The Company determined that all U.S. Treasuries would be classified as Level 1 securities due to observed levels of trading activity, the high number of strongly correlated pricing quotes received on U.S. Treasuries and other factors. Where the Company believes that quoted market prices are not available or that the market is not active, fair values are estimated by using quoted prices of securities with similar characteristics, pricing models or matrix pricing and are generally classified as Level 2 securities. The Company determined that Level 2 securities included corporate bonds, mortgage backed securities, municipal bonds, asset backed securities and non-U.S. government securities. The Company determined that certain corporate bonds and asset backed securities for which there is a low level of transparency around inputs to the valuation process should be classified within Level 3 of the valuation hierarchy. | ||||||||||||||||||||||||
Equity securities. The Company determined that exchange-traded equity securities would be included in Level 1 as their fair values are based on quoted market prices in active markets. Other equity securities are included in Level 2 of the valuation hierarchy. | ||||||||||||||||||||||||
Other investments. The fair values for certain of the Company's other investments are determined using net asset values (“NAV”) as advised by external fund managers. The NAV is based on the fund manager's valuation of the underlying holdings in accordance with the fund's governing documents. Periodically, the Company performs a number of monitoring procedures in order to assess the quality of the NAVs, including regular review and discussion of each fund's performance, regular evaluation of fund performance against applicable benchmarks and the backtesting of the NAVs against audited and interim financial statements. Other investments with liquidity terms allowing the Company to substantially redeem its holdings in a short time frame at the applicable NAV are reflected in Level 2. Other investments with redemption restrictions that prevent the Company from redeeming in the near term are classified in Level 3 of the valuation hierarchy. | ||||||||||||||||||||||||
Short-term investments. The Company determined that certain of its short-term investments held in highly liquid money market-type funds would be included in Level 1 as their fair values are based on quoted market prices in active markets. Other short-term investments are classified in Level 2 of the valuation hierarchy. | ||||||||||||||||||||||||
In securities lending transactions, the Company receives collateral in excess of the fair value of the fixed maturities and short-term investments pledged under securities lending agreements. For purposes of the following tables, the Company has excluded the collateral received and reinvested and included the fixed maturities and short-term investments pledged under securities lending agreements, at fair value. | ||||||||||||||||||||||||
Contingent consideration liability. The contingent consideration liability (included in ‘other liabilities’ in the consolidated balance sheets) resulted from the acquisition of the CMG Entities and is remeasured at fair value at each balance sheet date. Changes in fair value are recognized in ‘net realized gains (losses).’ To determine the fair value of the contingent consideration liability, the Company estimates future payments using an income approach based on modeled inputs which include a weighted average cost of capital. The Company determined that the contingent consideration liability would be included in Level 3 of the valuation hierarchy. | ||||||||||||||||||||||||
The Company reviews the classification of its investments each quarter. No transfers were made between Level 1 and Level 2 in 2012, 2013 or 2014. In the 2014 fourth quarter, the Company determined that certain asset backed securities would be included in Level 3 due to a review of the pricing inputs used on such securities. This resulted in a transfer of $57.5 million from Level 2 into Level 3 in the 2014 fourth quarter. | ||||||||||||||||||||||||
The following table presents the Company’s financial assets and liabilities measured at fair value by level at December 31, 2014: | ||||||||||||||||||||||||
Fair Value Measurement Using: | ||||||||||||||||||||||||
Estimated | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||||||||||
Fair Value | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||||
Assets measured at fair value: | ||||||||||||||||||||||||
Available for sale securities: | ||||||||||||||||||||||||
Fixed maturities and fixed maturities pledged under securities lending agreements (1): | ||||||||||||||||||||||||
Corporate bonds | $ | 3,108,513 | $ | — | $ | 3,108,513 | $ | — | ||||||||||||||||
Mortgage backed securities | 943,343 | — | 943,343 | — | ||||||||||||||||||||
Municipal bonds | 1,494,122 | — | 1,494,122 | — | ||||||||||||||||||||
Commercial mortgage backed securities | 1,114,528 | — | 1,114,528 | — | ||||||||||||||||||||
U.S. government and government agencies | 1,447,972 | 1,447,972 | — | — | ||||||||||||||||||||
Non-U.S. government securities | 1,015,153 | — | 1,015,153 | — | ||||||||||||||||||||
Asset backed securities | 1,677,941 | — | 1,620,441 | 57,500 | ||||||||||||||||||||
Total | 10,801,572 | 1,447,972 | 9,296,100 | 57,500 | ||||||||||||||||||||
Equity securities | 658,182 | 658,182 | — | — | ||||||||||||||||||||
Other investments | 296,224 | — | 192,687 | 103,537 | ||||||||||||||||||||
Short-term investments | 797,226 | 759,621 | 37,605 | — | ||||||||||||||||||||
Fair value option: | ||||||||||||||||||||||||
Investments accounted for using the fair value option: | ||||||||||||||||||||||||
Corporate bonds | 497,101 | — | 497,101 | — | ||||||||||||||||||||
Non-U.S. government bonds | 88,411 | — | 88,411 | — | ||||||||||||||||||||
Mortgage backed securities | 22,190 | — | 22,190 | — | ||||||||||||||||||||
Asset backed securities | 24,322 | — | 24,322 | — | ||||||||||||||||||||
Other investments | 1,551,907 | — | 1,085,557 | 466,350 | ||||||||||||||||||||
Short-term investments | 251,601 | 250,580 | 1,021 | — | ||||||||||||||||||||
Total | 2,435,532 | 250,580 | 1,718,602 | 466,350 | ||||||||||||||||||||
Total assets measured at fair value | $ | 14,988,736 | $ | 3,116,355 | $ | 11,244,994 | $ | 627,387 | ||||||||||||||||
Liabilities measured at fair value: | ||||||||||||||||||||||||
Contingent consideration liability | $ | (61,845 | ) | $ | — | $ | — | $ | (61,845 | ) | ||||||||||||||
Total liabilities measured at fair value | $ | (61,845 | ) | $ | — | $ | — | $ | (61,845 | ) | ||||||||||||||
-1 | In securities lending transactions, the Company receives collateral in excess of the fair value of the fixed maturities and short-term investments pledged. For purposes of this table, the Company has excluded the collateral received and reinvested and included the fixed maturities and short-term investments pledged. | |||||||||||||||||||||||
The following table presents the Company’s financial assets and liabilities measured at fair value by level at December 31, 2013: | ||||||||||||||||||||||||
Fair Value Measurement Using: | ||||||||||||||||||||||||
Estimated | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||||||||||
Fair Value | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||||
Assets measured at fair value: | ||||||||||||||||||||||||
Available for sale securities: | ||||||||||||||||||||||||
Fixed maturities and fixed maturities pledged under securities lending agreements (1): | ||||||||||||||||||||||||
Corporate bonds | $ | 2,267,263 | $ | — | $ | 2,265,218 | $ | 2,045 | ||||||||||||||||
Mortgage backed securities | 1,133,095 | — | 1,133,095 | — | ||||||||||||||||||||
Municipal bonds | 1,481,738 | — | 1,481,738 | — | ||||||||||||||||||||
Commercial mortgage backed securities | 1,074,497 | — | 1,074,497 | — | ||||||||||||||||||||
U.S. government and government agencies | 1,301,809 | 1,301,809 | — | — | ||||||||||||||||||||
Non-U.S. government securities | 1,085,861 | — | 1,085,861 | — | ||||||||||||||||||||
Asset backed securities | 1,332,594 | — | 1,332,594 | — | ||||||||||||||||||||
Total | 9,676,857 | 1,301,809 | 8,373,003 | 2,045 | ||||||||||||||||||||
Equity securities | 496,824 | 496,738 | 86 | — | ||||||||||||||||||||
Other investments | 498,310 | — | 327,890 | 170,420 | ||||||||||||||||||||
Short-term investments | 1,478,367 | 1,427,744 | 50,623 | — | ||||||||||||||||||||
Fair value option: | ||||||||||||||||||||||||
Investments accounted for using the fair value option: | ||||||||||||||||||||||||
Corporate bonds | 334,065 | — | 334,065 | — | ||||||||||||||||||||
Non-U.S. government bonds | 73,156 | — | 73,156 | — | ||||||||||||||||||||
Mortgage backed securities | 41,033 | — | 41,033 | — | ||||||||||||||||||||
Other investments | 773,280 | — | 395,755 | 377,525 | ||||||||||||||||||||
Total | 1,221,534 | — | 844,009 | 377,525 | ||||||||||||||||||||
Total assets measured at fair value | $ | 13,371,892 | $ | 3,226,291 | $ | 9,595,611 | $ | 549,990 | ||||||||||||||||
-1 | In securities lending transactions, the Company receives collateral in excess of the fair value of the fixed maturities and short-term investments pledged. For purposes of this table, the Company has excluded the collateral received and reinvested and included the fixed maturities and short-term investments pledged. | |||||||||||||||||||||||
The following table presents a reconciliation of the beginning and ending balances for all investments measured at fair value on a recurring basis using Level 3 inputs for 2014, 2013 and 2012: | ||||||||||||||||||||||||
Fair Value Measurements Using: | ||||||||||||||||||||||||
Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||
Assets | Liabilities | |||||||||||||||||||||||
Available for sale | Fair value option | |||||||||||||||||||||||
Asset Backed Securities | Corporate Bonds | Other Investments | Other Investments | Total | Contingent | |||||||||||||||||||
Consideration | ||||||||||||||||||||||||
Liability | ||||||||||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||||||||||
Balance at beginning of year | $ | — | $ | 2,045 | $ | 170,420 | $ | 377,525 | $ | 549,990 | $ | — | ||||||||||||
Total gains or (losses) (realized/unrealized) | ||||||||||||||||||||||||
Included in earnings (1) | — | — | (39 | ) | 16,818 | 16,779 | (20,083 | ) | ||||||||||||||||
Included in other comprehensive income | — | — | (680 | ) | 932 | 252 | — | |||||||||||||||||
Purchases, issuances and settlements | ||||||||||||||||||||||||
Purchases | — | — | — | 185,224 | 185,224 | — | ||||||||||||||||||
Issuances | — | — | — | — | — | (41,762 | ) | |||||||||||||||||
Sales | — | (2,045 | ) | (66,164 | ) | — | (68,209 | ) | — | |||||||||||||||
Settlements | — | — | — | (114,149 | ) | (114,149 | ) | — | ||||||||||||||||
Transfers in and/or out of Level 3 | 57,500 | — | — | — | 57,500 | — | ||||||||||||||||||
Balance at end of year | $ | 57,500 | $ | — | $ | 103,537 | $ | 466,350 | $ | 627,387 | $ | (61,845 | ) | |||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||||||
Balance at beginning of year | $ | — | $ | 98,404 | $ | 184,202 | $ | 195,350 | $ | 477,956 | $ | — | ||||||||||||
Total gains or (losses) (realized/unrealized) | ||||||||||||||||||||||||
Included in earnings (1) | — | 4,679 | 8,915 | 11,743 | 25,337 | — | ||||||||||||||||||
Included in other comprehensive income | — | (3,051 | ) | 473 | — | (2,578 | ) | — | ||||||||||||||||
Purchases, issuances and settlements | ||||||||||||||||||||||||
Purchases | — | — | 25,000 | 275,067 | 300,067 | — | ||||||||||||||||||
Issuances | — | — | — | — | — | — | ||||||||||||||||||
Sales | — | (96,655 | ) | — | (20,156 | ) | (116,811 | ) | — | |||||||||||||||
Settlements | — | (1,332 | ) | (48,170 | ) | (84,479 | ) | (133,981 | ) | — | ||||||||||||||
Transfers in and/or out of Level 3 | — | — | — | — | — | — | ||||||||||||||||||
Balance at end of year | $ | — | $ | 2,045 | $ | 170,420 | $ | 377,525 | $ | 549,990 | $ | — | ||||||||||||
-1 | Gains or losses on corporate bonds were included in net realized gains (losses) while gains or losses on other investments were included in net realized gains (losses) or net investment income. Amounts related to the contingent consideration liability were included in net realized gains (losses). | |||||||||||||||||||||||
The amount of total gains for 2014 included in earnings attributable to the change in unrealized gains or losses relating to assets still held at December 31, 2014 was $11.5 million. The amount of total gains for 2013 included in earnings attributable to the change in unrealized gains or losses relating to assets still held at December 31, 2013 was $22.0 million. | ||||||||||||||||||||||||
Fair Value Measurements on a Non-Recurring Basis | ||||||||||||||||||||||||
The Company measures the fair value of certain assets on a non-recurring basis, generally quarterly, annually, or when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. These assets include investment funds accounted for using the equity method, investment in joint venture, certain other investments, goodwill and intangible assets, and long-lived assets. The Company uses a variety of techniques to measure the fair value of these assets when appropriate, as described below: | ||||||||||||||||||||||||
Investments accounted for using the equity method and Investment in joint venture. When the Company determines that the carrying value of these assets may not be recoverable, the Company records the assets at fair value with the loss recognized in income. In such cases, the Company measures the fair value of these assets using the techniques discussed above in “—Fair Value Measurements on a Recurring Basis.” | ||||||||||||||||||||||||
Goodwill and Intangible Assets. The Company tests goodwill and intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable, but at least annually for goodwill. When the Company determines goodwill and intangible assets may be impaired, the Company uses techniques including discounted expected future cash flows, to measure fair value. | ||||||||||||||||||||||||
Long-Lived Assets. The Company tests its long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of a long-lived asset may not be recoverable. |
Investment_in_Joint_Venture
Investment in Joint Venture | 12 Months Ended |
Dec. 31, 2014 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Joint Venture | Investment in Joint Venture |
In May 2008, the Company provided $100.0 million of funding to Gulf Reinsurance Limited (“Gulf Re”), a newly formed reinsurer based in the Dubai International Financial Centre, pursuant to the joint venture agreement with Gulf Investment Corporation GSC (“GIC”). Under the agreement, Arch Re Bermuda and GIC each own 50% of Gulf Re, which commenced underwriting activities in June 2008. Gulf Re provides property and casualty reinsurance primarily in the member states of the Gulf Cooperation Council, which include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. The initial capital of the joint venture consisted of $200.0 million. The Company accounts for its investment in Gulf Re, shown as “Investment in joint venture,” using the equity method and records its equity in the operating results of Gulf Re in “Other income (loss).” | |
For 2014, the Company recorded $14.1 million of losses from Gulf Re, compared to $0.4 million of losses for 2013 and $1.1 million of losses for 2012. Gulf Re’s losses for 2014 primarily reflected the impact of a number of large technical risk claims. The Company entered into a number of strategic initiatives related to Gulf Re in the 2014 fourth quarter, including an agreement to acquire complete ownership of Gulf Re, which is pending approval by the Dubai Financial Services Authority. To further support Gulf Re’s business in advance of the January 1 renewal season, the Company entered into a 90% whole account quota share retrocession arrangement of Gulf Re’s net liabilities and a portfolio transfer of all of Gulf Re’s existing business on a funds withheld basis, effective as of October 1, 2014. The portfolio transfer included approximately $50 million of net unearned premium reserves and $65 million of net reserves for losses and loss adjustment expenses. |
Derivative_Instruments
Derivative Instruments | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||
Derivative Instruments | Derivative Instruments | |||||||||||||||
The Company’s investment strategy allows for the use of derivative securities. The Company’s derivative instruments are recorded on its consolidated balance sheets at fair value. The fair values of those derivatives are based on quoted market prices. All realized and unrealized contract gains and losses are reflected in the Company’s results of operations. The Company utilizes exchange traded U.S. Treasury note, Eurodollar and other futures contracts and commodity futures to manage portfolio duration or replicate investment positions in its portfolios. Certain of the Company’s corporate bonds are managed in a global bond portfolio which incorporates the use of foreign currency forward contracts which are intended to provide an economic hedge against foreign currency movements on the portfolio’s non-U.S. Dollar denominated holdings. The Company routinely utilizes other foreign currency forward contracts, currency options, index futures contracts and other derivatives as part of its total return objective. | ||||||||||||||||
In addition, the Company purchases to-be-announced mortgage backed securities (“TBAs”) as part of its investment strategy. TBAs represent commitments to purchase a future issuance of agency mortgage backed securities. For the period between purchase of a TBA and issuance of the underlying security, the Company’s position is accounted for as a derivative. The Company purchases TBAs in both long and short positions to enhance investment performance and as part of its overall investment strategy. The Company did not hold any derivatives which were designated as hedging instruments at December 31, 2014 or 2013. | ||||||||||||||||
The following table summarizes information on the fair values and notional values of the Company’s derivative instruments. The fair value of TBAs is included in “fixed maturities available for sale, at fair value.” | ||||||||||||||||
Asset | Liability Derivatives | Net | ||||||||||||||
Derivatives | Derivatives | |||||||||||||||
Fair Value | Fair Value | Fair Value | Notional | |||||||||||||
Value (1) | ||||||||||||||||
31-Dec-14 | ||||||||||||||||
Futures contracts | $ | 2,156 | $ | (1,907 | ) | $ | 249 | $ | 2,549,027 | |||||||
Foreign currency forward contracts | 10,511 | (1,145 | ) | 9,366 | 397,106 | |||||||||||
TBAs | 10,592 | — | 10,592 | 10,056 | ||||||||||||
Other | 3,209 | (2,345 | ) | 864 | 735,684 | |||||||||||
Total | $ | 26,468 | $ | (5,397 | ) | $ | 21,071 | |||||||||
31-Dec-13 | ||||||||||||||||
Futures contracts | $ | 461 | $ | (110 | ) | $ | 351 | $ | 475,967 | |||||||
Foreign currency forward contracts | 5,023 | (3,090 | ) | 1,933 | 330,746 | |||||||||||
TBAs | 33,455 | (21,731 | ) | 11,724 | 56,160 | |||||||||||
Other | 920 | (1,541 | ) | (621 | ) | 347,916 | ||||||||||
Total | $ | 39,859 | $ | (26,472 | ) | $ | 13,387 | |||||||||
-1 | Represents the absolute notional value of all outstanding contracts, consisting of long and short positions. | |||||||||||||||
The Company’s derivative instruments are generally traded under master netting agreements, which establish terms that apply to all derivative transactions with a counterparty. In the event of a bankruptcy or other stipulated event of default, such agreements provide that the non-defaulting party may elect to terminate all outstanding derivative transactions, in which case all individual derivative positions (loss or gain) with a counterparty are closed out and netted and replaced with a single amount, usually referred to as the termination amount, which is expressed in a single currency. The resulting single net amount, where positive, is payable to the party “in-the-money” regardless of whether or not it is the defaulting party, unless the parties have agreed that only the non-defaulting party is entitled to receive a termination payment where the net amount is positive and is in its favor. Effectively, contractual close-out netting reduces derivatives credit exposure from gross to net exposure. At December 31, 2014, $25.3 million and $5.4 million, respectively, of asset derivatives and liability derivatives were subject to a master netting agreement or similar arrangement, compared to $28.0 million and $14.6 million, respectively, at December 31, 2013. The remaining derivatives included in the table above were not subject to a master netting agreement. | ||||||||||||||||
The following table summarizes net realized gains (losses) recorded on the Company’s derivative instruments in the consolidated statements of income: | ||||||||||||||||
Derivatives not designated | Year Ended December 31, | |||||||||||||||
as hedging instruments | 2014 | 2013 | 2012 | |||||||||||||
Futures contracts | $ | 30,444 | $ | 10,742 | $ | (3,307 | ) | |||||||||
Foreign currency forward contracts | 13,430 | 9,762 | (214 | ) | ||||||||||||
TBAs | (342 | ) | (1,623 | ) | 4,413 | |||||||||||
Other | 402 | 2,031 | (2,218 | ) | ||||||||||||
Total | $ | 43,934 | $ | 20,912 | $ | (1,326 | ) | |||||||||
Other_Comprehensive_Income
Other Comprehensive Income | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
Comprehensive Income Note Disclosure [Abstract] | |||||||||||||||
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) | ||||||||||||||
The following table presents the changes in each component of accumulated other comprehensive income (“AOCI”), net of tax: | |||||||||||||||
Unrealized Appreciation on Available-For-Sale Investments | Foreign Currency Translation Adjustments | Total | |||||||||||||
Year Ended December 31, 2014 | |||||||||||||||
Beginning balance | $ | 80,692 | $ | (5,728 | ) | $ | 74,964 | ||||||||
Other comprehensive income (loss) before reclassifications | 146,010 | (27,014 | ) | 118,996 | |||||||||||
Amounts reclassified from accumulated other comprehensive income | (65,104 | ) | — | (65,104 | ) | ||||||||||
Net current period other comprehensive income (loss) | 80,906 | (27,014 | ) | 53,892 | |||||||||||
Ending balance | $ | 161,598 | $ | (32,742 | ) | $ | 128,856 | ||||||||
Year Ended December 31, 2013 | |||||||||||||||
Beginning balance | $ | 289,956 | $ | (2,939 | ) | $ | 287,017 | ||||||||
Other comprehensive income (loss) before reclassifications | (176,578 | ) | (2,789 | ) | (179,367 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive income | (32,686 | ) | — | (32,686 | ) | ||||||||||
Net current period other comprehensive income (loss) | (209,264 | ) | (2,789 | ) | (212,053 | ) | |||||||||
Ending balance | $ | 80,692 | $ | (5,728 | ) | $ | 74,964 | ||||||||
Year Ended December 31, 2012 | |||||||||||||||
Beginning balance | $ | 174,636 | $ | (20,713 | ) | $ | 153,923 | ||||||||
Other comprehensive income (loss) before reclassifications | 273,144 | 17,774 | 290,918 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income | (157,824 | ) | — | (157,824 | ) | ||||||||||
Net current period other comprehensive income (loss) | 115,320 | 17,774 | 133,094 | ||||||||||||
Ending balance | $ | 289,956 | $ | (2,939 | ) | $ | 287,017 | ||||||||
The following table presents details about amounts reclassified from accumulated other comprehensive income: | |||||||||||||||
Consolidated Statement of Income | Amounts Reclassed from AOCI | ||||||||||||||
Line Item That Includes | Year Ended December 31, | ||||||||||||||
Details About AOCI Components | Reclassification | 2014 | 2013 | 2012 | |||||||||||
Unrealized appreciation on available-for-sale investments | |||||||||||||||
Net realized gains | $ | 102,223 | $ | 39,308 | $ | 180,144 | |||||||||
Other-than-temporary impairment losses | (30,470 | ) | (3,961 | ) | (12,175 | ) | |||||||||
Total before tax | 71,753 | 35,347 | 167,969 | ||||||||||||
Income tax expense | (6,649 | ) | (2,661 | ) | (10,145 | ) | |||||||||
Net of tax | $ | 65,104 | $ | 32,686 | $ | 157,824 | |||||||||
Following are the related tax effects allocated to each component of other comprehensive income (loss): | |||||||||||||||
Before | Tax | Net | |||||||||||||
Tax | Expense | of Tax | |||||||||||||
Amount | (Benefit) | Amount | |||||||||||||
Year Ended December 31, 2014 | |||||||||||||||
Unrealized appreciation (decline) in value of available-for-sale investments: | |||||||||||||||
Unrealized holding losses arising during period | $ | 161,685 | $ | 15,355 | $ | 146,330 | |||||||||
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss) | (320 | ) | — | (320 | ) | ||||||||||
Less reclassification of net realized gains included in net income | 71,753 | 6,649 | 65,104 | ||||||||||||
Foreign currency translation adjustments | (27,014 | ) | — | (27,014 | ) | ||||||||||
Other comprehensive income (loss) | $ | 62,598 | $ | 8,706 | $ | 53,892 | |||||||||
Year Ended December 31, 2013 | |||||||||||||||
Unrealized appreciation (decline) in value of available-for-sale investments: | |||||||||||||||
Unrealized holding gains arising during period | $ | (201,386 | ) | $ | (24,983 | ) | $ | (176,403 | ) | ||||||
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss) | (175 | ) | — | (175 | ) | ||||||||||
Less reclassification of net realized gains included in net income | 35,347 | 2,661 | 32,686 | ||||||||||||
Foreign currency translation adjustments | (2,789 | ) | — | (2,789 | ) | ||||||||||
Other comprehensive income (loss) | $ | (239,697 | ) | $ | (27,644 | ) | $ | (212,053 | ) | ||||||
Year Ended December 31, 2012 | |||||||||||||||
Unrealized appreciation (decline) in value of available-for-sale investments: | |||||||||||||||
Unrealized holding gains arising during period | $ | 278,917 | $ | 4,986 | $ | 273,931 | |||||||||
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss) | (787 | ) | — | (787 | ) | ||||||||||
Less reclassification of net realized gains included in net income | 167,969 | 10,145 | 157,824 | ||||||||||||
Foreign currency translation adjustments | 18,748 | 974 | 17,774 | ||||||||||||
Other comprehensive income (loss) | $ | 128,909 | $ | (4,185 | ) | $ | 133,094 | ||||||||
Earnings_Per_Common_Share
Earnings Per Common Share | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Earnings Per Share [Abstract] | ||||||||||||
Earnings Per Common Share | Earnings Per Common Share | |||||||||||
The calculation of basic earnings per common share excludes dilutive securities and is computed by dividing income available to Arch common shareholders by the weighted average number of Common Shares, including vested restricted shares, outstanding for the periods. The following table sets forth the computation of basic and diluted earnings per common share: | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Numerator: | ||||||||||||
Net income | $ | 821,260 | $ | 709,731 | $ | 593,397 | ||||||
Amounts attributable to noncontrolling interests | 13,095 | — | — | |||||||||
Net income available to Arch | 834,355 | 709,731 | 593,397 | |||||||||
Preferred dividends | (21,938 | ) | (21,938 | ) | (25,079 | ) | ||||||
Loss on repurchase of preferred shares | — | — | (10,612 | ) | ||||||||
Net income available to Arch common shareholders | $ | 812,417 | $ | 687,793 | $ | 557,706 | ||||||
Denominator: | ||||||||||||
Weighted average common shares outstanding – basic | 130,817,610 | 131,355,392 | 134,446,158 | |||||||||
Effect of dilutive common share equivalents: | ||||||||||||
Nonvested restricted shares | 1,128,540 | 1,090,100 | 857,174 | |||||||||
Stock options (1) | 2,976,172 | 3,331,691 | 2,955,515 | |||||||||
Weighted average common shares and common share | 134,922,322 | 135,777,183 | 138,258,847 | |||||||||
equivalents outstanding – diluted | ||||||||||||
Earnings per common share: | ||||||||||||
Basic | $ | 6.21 | $ | 5.24 | $ | 4.15 | ||||||
Diluted | $ | 6.02 | $ | 5.07 | $ | 4.03 | ||||||
-1 | Certain stock options were not included in the computation of diluted earnings per share where the exercise price of the stock options exceeded the average market price and would have been anti-dilutive or where, when applying the treasury stock method to in-the-money options, the sum of the proceeds, including unrecognized compensation, exceeded the average market price and would have been anti-dilutive. For 2014, 2013 and 2012, the number of stock options excluded were 1,435,955, 892,439 and 839,414, respectively. |
Income_Taxes
Income Taxes | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Income Taxes | Income Taxes | |||||||||||
ACGL is incorporated under the laws of Bermuda and, under current Bermuda law, is not obligated to pay any taxes in Bermuda based upon income or capital gains. The Company has received a written undertaking from the Minister of Finance in Bermuda under the Exempted Undertakings Tax Protection Act 1966 that, in the event that any legislation is enacted in Bermuda imposing any tax computed on profits, income, gain or appreciation on any capital asset, or any tax in the nature of estate duty or inheritance tax, such tax will not be applicable to ACGL or any of its operations until March 31, 2035. This undertaking does not, however, prevent the imposition of taxes on any person ordinarily resident in Bermuda or any company in respect of its ownership of real property or leasehold interests in Bermuda. | ||||||||||||
ACGL and its non-U.S. subsidiaries will be subject to U.S. federal income tax only to the extent that they derive U.S. source income that is subject to U.S. withholding tax or income that is effectively connected with the conduct of a trade or business within the U.S. and is not exempt from U.S. tax under an applicable income tax treaty with the U.S. ACGL and its non-U.S. subsidiaries will be subject to a withholding tax on dividends from U.S. investments and interest from certain U.S. payors (subject to reduction by any applicable income tax treaty). ACGL and its non-U.S. subsidiaries intend to conduct their operations in a manner that will not cause them to be treated as engaged in a trade or business in the United States and, therefore, will not be required to pay U.S. federal income taxes (other than U.S. excise taxes on insurance and reinsurance premium and withholding taxes on dividends and certain other U.S. source investment income). However, because there is uncertainty as to the activities which constitute being engaged in a trade or business within the United States, there can be no assurances that the U.S. Internal Revenue Service will not contend successfully that ACGL or its non-U.S. subsidiaries are engaged in a trade or business in the United States. If ACGL or any of its non-U.S. subsidiaries were subject to U.S. income tax, ACGL’s shareholders’ equity and earnings could be materially adversely affected. ACGL has subsidiaries and branches that operate in various jurisdictions around the world that are subject to tax in the jurisdictions in which they operate. The significant jurisdictions in which ACGL’s subsidiaries and branches are subject to tax include the United States, United Kingdom, Ireland, Canada, Switzerland and Denmark. | ||||||||||||
The components of income taxes attributable to operations were as follows: | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Current expense (benefit): | ||||||||||||
United States | $ | 29,749 | $ | 27,537 | $ | 8,267 | ||||||
Non-U.S. | 801 | 5,159 | 737 | |||||||||
30,550 | 32,696 | 9,004 | ||||||||||
Deferred expense (benefit): | ||||||||||||
United States | (8,168 | ) | 1,937 | (9,779 | ) | |||||||
Non-U.S. | 605 | (1,859 | ) | (3,235 | ) | |||||||
(7,563 | ) | 78 | (13,014 | ) | ||||||||
Income tax expense (benefit) | $ | 22,987 | $ | 32,774 | $ | (4,010 | ) | |||||
The Company’s income or loss before income taxes was earned in the following jurisdictions: | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Income (Loss) Before Income Taxes: | ||||||||||||
Bermuda | $ | 794,926 | $ | 717,661 | $ | 609,710 | ||||||
United States | 53,055 | 87,032 | 9,600 | |||||||||
Other | (3,734 | ) | (62,188 | ) | (29,923 | ) | ||||||
Total | $ | 844,247 | $ | 742,505 | $ | 589,387 | ||||||
The expected tax provision computed on pre-tax income or loss at the weighted average tax rate has been calculated as the sum of the pre-tax income in each jurisdiction multiplied by that jurisdiction’s applicable statutory tax rate. The statutory tax rates by jurisdiction were as follows: Bermuda (0.0%), United States (35.0%), United Kingdom (21.5%), Ireland (12.5%), Denmark (24.5%), Canada (24.0%), Gibraltar (10.0%) and the Netherlands (23.9%). | ||||||||||||
A reconciliation of the difference between the provision for income taxes and the expected tax provision at the weighted average tax rate follows: | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Expected income tax expense (benefit) computed on pre-tax income | $ | 18,178 | $ | 17,506 | $ | (3,426 | ) | |||||
at weighted average income tax rate | ||||||||||||
Addition (reduction) in income tax expense (benefit) resulting from: | ||||||||||||
Tax-exempt investment income | (8,048 | ) | (8,255 | ) | (9,257 | ) | ||||||
Meals and entertainment | 711 | 599 | 688 | |||||||||
State taxes, net of U.S. federal tax benefit | 1,281 | 431 | 270 | |||||||||
Foreign branch taxes | 464 | 703 | 544 | |||||||||
Prior year adjustment | 320 | 2,810 | (1,581 | ) | ||||||||
Foreign exchange gains & losses | 746 | (1,254 | ) | (436 | ) | |||||||
Changes in applicable tax rate | (51 | ) | 2,007 | 1,193 | ||||||||
Dividend withholding taxes | 3,276 | 4,619 | 2,511 | |||||||||
Change in valuation allowance | (736 | ) | 11,795 | 4,281 | ||||||||
Contingent consideration | 6,763 | — | — | |||||||||
Other | 83 | 1,813 | 1,203 | |||||||||
Income tax expense (benefit) | $ | 22,987 | $ | 32,774 | $ | (4,010 | ) | |||||
Deferred income tax assets and liabilities reflect temporary differences based on enacted tax rates between the carrying amounts of assets and liabilities for financial reporting and income tax purposes. Significant components of the Company’s deferred income tax assets and liabilities were as follows: | ||||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Deferred income tax assets: | ||||||||||||
Net operating loss | $ | 12,017 | $ | 15,294 | ||||||||
AMT credit carryforward | 5,309 | 14,456 | ||||||||||
Discounting of net loss reserves | 63,880 | 53,293 | ||||||||||
Net unearned premium reserve | 34,087 | 30,698 | ||||||||||
Compensation liabilities | 27,765 | 26,481 | ||||||||||
Foreign tax credit carryforward | 4,628 | 4,343 | ||||||||||
Interest expense | 5,208 | 6,049 | ||||||||||
Goodwill | 885 | — | ||||||||||
Tax and loss bonds | 21,247 | — | ||||||||||
Other, net | 13,408 | 13,347 | ||||||||||
Deferred tax assets before valuation allowance | 188,434 | 163,961 | ||||||||||
Valuation allowance | (12,624 | ) | (15,548 | ) | ||||||||
Deferred tax assets net of valuation allowance | 175,810 | 148,413 | ||||||||||
Deferred income tax liabilities: | ||||||||||||
Depreciation and amortization | (7,579 | ) | (3,810 | ) | ||||||||
Deferred acquisition costs, net | (2,744 | ) | (3,369 | ) | ||||||||
Deposit accounting liability | (4,170 | ) | (4,581 | ) | ||||||||
Contingency reserve | (18,480 | ) | — | |||||||||
Net unrealized appreciation of investments | (11,695 | ) | (6,354 | ) | ||||||||
Other, net | (150 | ) | (1,738 | ) | ||||||||
Total deferred tax liabilities | (44,818 | ) | (19,852 | ) | ||||||||
Net deferred income tax assets | $ | 130,992 | $ | 128,561 | ||||||||
The Company provides a valuation allowance to reduce certain deferred tax assets to an amount which management expects to more likely than not be realized. As of December 31, 2014, the Company’s valuation allowance was $12.6 million, compared to $15.5 million at December 31, 2013. The valuation allowance in both periods was primarily attributable to (1) a full valuation allowance on the Company’s Canadian operations; (2) unutilized foreign tax credits; and (3) certain other deferred tax assets relating to carryforwards that have a limited use. | ||||||||||||
At December 31, 2014, the Company has net operating loss carryforwards in its U.K. operating subsidiaries of approximately $20.7 million. Additionally, the Company’s U.K. operations have a foreign tax credit carryforward of $4.6 million at December 31, 2014. These operating losses and foreign tax credits can be carried forward without expiration. Due to uncertainty surrounding their future utilization, valuation allowances of $0.2 million and $4.6 million have been established in respect of $1.2 million U.K. operating losses and $4.6 million foreign tax credits respectively. | ||||||||||||
At December 31, 2014, net operating loss carryforwards in Ireland were approximately $10.0 million. Although these losses may be carried forward indefinitely, a valuation allowance of $0.3 million has been established in respect of $2.5 million of these losses given management’s expectation that losses in a specific Irish entity will not be utilized in the future. | ||||||||||||
At December 31, 2014, net operating loss carryforwards in the U.S. were approximately $18.9 million. Such net operating loss carryforwards are currently available to offset future taxable income of the Company’s U.S. subsidiaries. Under applicable law, the U.S. net operating loss carryforwards expire between 2029 and 2034. On January 30, 2014, the Company’s U.S. mortgage operations underwent an ownership change for U.S. federal income tax purposes as a result of the Company’s acquisition of the CMG Entities. As a result of this ownership change, a limitation has been imposed upon the utilization of approximately $12.1 million of the Company’s existing U.S. net operating loss carryforwards. Utilization is limited to approximately $0.6 million per year in accordance with Section 382 of the Internal Revenue Code of 1986 as amended (“the Code”). Additionally, the Company has an alternative minimum tax (“AMT”) credit carryforward in the amount of $5.3 million which can be carried forward indefinitely. | ||||||||||||
Given the Company’s U.S. mortgage operations, the Company is eligible for a tax deduction, subject to certain limitations, under Section 832(e) of the Code for amounts required by state law or regulation to be set aside in statutory contingency reserves. The deduction is allowed only to the extent that the Company purchases non-interest bearing U.S. Mortgage Guaranty Tax and Loss Bonds (“T&L Bonds”) issued by the Treasury Department in an amount equal to the tax benefit derived from deducting any portion of the statutory contingency reserves. | ||||||||||||
Cumulative T&L bonds purchased and subsequent redemptions are reflected in the Company’s deferred tax asset and total approximately $21.2 million at December 31, 2014. | ||||||||||||
Deferred income tax liabilities have not been accrued with respect to all of the undistributed earnings of the Company's U.S. and Canadian subsidiaries. If the earnings were to be distributed, as dividends or otherwise, such amounts may be subject to withholding tax in the jurisdiction of the paying entity. No withholding taxes have been accrued with respect to the earnings of the Company's U.S. and Canadian subsidiaries, as it is the intention that all such earnings will be permanently reinvested. Additionally, determining the amount of the related deferred income tax liability is not practicable. | ||||||||||||
The Company recognizes interest and penalties relating to unrecognized tax benefits in the provision for income taxes. As of December 31, 2014, the Company’s total unrecognized tax benefits, including interest and penalties, were nil. | ||||||||||||
The Company or its subsidiaries or branches files income tax returns in the U.S. federal jurisdiction and various state, local and foreign jurisdictions. The Company has an open examination by the tax authorities in the U.S. for the 2009 and 2011 tax years. The Company believes that this examination will be concluded within the next 12 months. While the Company cannot estimate with certainty the outcome of this examination, the Company does not believe that adjustments from this examination will result in a significant change to the Company’s results of operation. The following table details open tax years that are potentially subject to examination by local tax authorities, in the following major jurisdictions: | ||||||||||||
Jurisdiction | Tax Years | |||||||||||
United States | 2009-2014 | |||||||||||
United Kingdom | 2009-2014 | |||||||||||
Ireland | 2010-2014 | |||||||||||
Canada | 2010-2014 | |||||||||||
Switzerland | 2011-2014 | |||||||||||
Denmark | 2011-2014 | |||||||||||
As of December 31, 2014, the Company’s current income tax payable (included in “Other liabilities”) was $3.6 million. |
Transactions_with_Related_Part
Transactions with Related Parties | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
Transactions with Related Parties | Transactions with Related Parties |
The Company made an investment of $50.0 million in Aeolus LP (“Aeolus”) in 2006. Aeolus operates as an unrated reinsurance platform that provides property catastrophe protection to insurers and reinsurers on both an ultimate net loss and industry loss warranty basis. The Company’s investment in Aeolus, included in “Investments accounted for using the equity method” on the balance sheet, represents an approximate 4% share in Aeolus and is accounted for using the equity method. The Company made its investment in Aeolus on the same economic terms as a fund affiliated with Warburg Pincus LLC. During 2010, all remaining shares of the Company owned by funds affiliated with Warburg Pincus LLC were distributed. In addition, one of the founders of Aeolus is Peter Appel, former President and CEO and a former director of the Company. During 2014, 2013 and 2012, the Company received distributions of $0.6 million, $2.1 million and $19.8 million, respectively, from Aeolus. | |
As part of its investment philosophy, the Company invests a portion of its investment portfolio in alternative investment funds. As of December 31, 2014, the Company had aggregate commitments of $395.9 million to funds managed by The Carlyle Group (“Carlyle”). Of such amount, $260.2 million was unfunded as of December 31, 2014. The Company may make additional commitments to funds managed by Carlyle from time to time. During 2014, 2013 and 2012, the Company made aggregate capital contributions to funds managed by Carlyle of $51.7 million, $60.8 million and $43.0 million, respectively, and received aggregate cash distributions from funds managed by Carlyle of $33.6 million, $15.0 million and $4.5 million, respectively. Kewsong Lee, a director of ACGL, joined Carlyle as Managing Director and Deputy Chief Investment Officer for Corporate Private Equity on December 31, 2013. | |
See note 4, “Variable Interest Entity and Noncontrolling Interests,” for information about Watford Re. Certain directors and executive officers of the Company own common and preference shares of Watford Re. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Commitments and Contingencies | Commitments and Contingencies | |||
Concentrations of Credit Risk | ||||
The creditworthiness of a counterparty is evaluated by the Company, taking into account credit ratings assigned by independent agencies. The credit approval process involves an assessment of factors, including, among others, the counterparty, country and industry credit exposure limits. Collateral may be required, at the discretion of the Company, on certain transactions based on the creditworthiness of the counterparty. | ||||
The areas where significant concentrations of credit risk may exist include unpaid losses and loss adjustment expenses recoverable, prepaid reinsurance premiums and paid losses and loss adjustment expenses recoverable net of reinsurance balances payable (collectively, “reinsurance balances recoverable”), investments and cash and cash equivalent balances. The Company’s reinsurance balances recoverable at December 31, 2014 and 2013 amounted to $1.97 billion and $1.94 billion, respectively, and primarily resulted from reinsurance arrangements entered into in the course of its operations. A credit exposure exists with respect to reinsurance recoverables as they may become uncollectible. The Company manages its credit risk in its reinsurance relationships by transacting with reinsurers that it considers financially sound and, if necessary, the Company may hold collateral in the form of funds, trust accounts and/or irrevocable letters of credit. This collateral can be drawn on for amounts that remain unpaid beyond specified time periods on an individual reinsurer basis. | ||||
In addition, the Company underwrites a significant amount of its business through brokers and a credit risk exists should any of these brokers be unable to fulfill their contractual obligations with respect to the payments of insurance and reinsurance balances owed to the Company. During 2014, approximately 13.4% and 15.0% of the Company’s consolidated gross written premiums were generated from or placed by Aon Corporation and its subsidiaries and Marsh & McLennan Companies and its subsidiaries, respectively, compared to approximately 16.0% and 17.0% for 2013, respectively, and 20.3% and 14.1% for 2012, respectively. No other broker and no one insured or reinsured accounted for more than 10% of gross premiums written for 2014, 2013 and 2012. | ||||
The Company’s available for sale investment portfolio is managed in accordance with guidelines that have been tailored to meet specific investment strategies, including standards of diversification, which limit the allowable holdings of any single issue. There were no investments in any entity in excess of 10% of the Company’s shareholders’ equity at December 31, 2014 other than investments issued or guaranteed by the United States government or its agencies. | ||||
Investment Commitments | ||||
The Company’s investment commitments, which are primarily related to agreements entered into by the Company to invest in funds and separately managed accounts when called upon, were approximately $968.9 million at December 31, 2014. | ||||
Letter of Credit and Revolving Credit Facilities | ||||
As of December 31, 2014, the Company had a $300.0 million unsecured revolving loan and letter of credit facility and a $500.0 million secured letter of credit facility (the “Credit Agreement”). Under the terms of the Credit Agreement, Arch Re U.S. and Arch Re Bermuda are limited to issuing an aggregate of $100.0 million of unsecured letters of credit as part of the $300.0 million unsecured revolving loan. Borrowings of revolving loans may be made by ACGL at a variable rate based on LIBOR or an alternative base rate at the option of the Company. Secured letters of credit are available for issuance on behalf of the Company’s insurance and reinsurance subsidiaries. The Credit Agreement and related documents are structured such that each party that requests a letter of credit or borrowing does so only for itself and for only its own obligations. Issuance of letters of credit and borrowings under the Credit Agreement are subject to the Company’s compliance with certain covenants and conditions, including absence of a material adverse change. These covenants require, among other things, that the Company maintain a debt to total capital ratio of not greater than 0.35 to 1 and consolidated tangible net worth in excess of $3.95 billion plus 25% of future aggregate net income for each quarterly period (not including any future net losses) beginning after March 31, 2014 and 25% of future aggregate proceeds from the issuance of common or preferred equity and that the Company’s principal insurance and reinsurance subsidiaries maintain at least a “B++” rating from A.M. Best. In addition, certain of the Company’s subsidiaries which are party to the Credit Agreement are required to maintain minimum shareholders’ equity levels. The Company was in compliance with all covenants contained in the Credit Agreement at December 31, 2014. The Credit Agreement expires on June 30, 2019. | ||||
In addition, the Company has access to secured letter of credit facilities for up to a total of $190.9 million, which are available on a limited basis and for limited purposes (together with the secured portion of the Credit Agreement and these letter of credit facilities, the “LOC Facilities”). The principal purpose of the LOC Facilities is to issue, as required, evergreen standby letters of credit in favor of primary insurance or reinsurance counterparties with which the Company has entered into reinsurance arrangements to ensure that such counterparties are permitted to take credit for reinsurance obtained from the Company’s reinsurance subsidiaries in United States jurisdictions where such subsidiaries are not licensed or otherwise admitted as an insurer, as required under insurance regulations in the United States, and to comply with requirements of Lloyd’s of London in connection with qualifying quota share and other arrangements. The amount of letters of credit issued is driven by, among other things, the timing and payment of catastrophe losses, loss development of existing reserves, the payment pattern of such reserves, the further expansion of the Company’s business and the loss experience of such business. When issued, certain letters of credit are secured by a portion of the Company’s investment portfolio. In addition, the LOC Facilities also require the maintenance of certain covenants, which the Company was in compliance with at December 31, 2014. At such date, the Company had approximately $423.2 million in outstanding letters of credit under the LOC Facilities, which were secured by investments with a fair value of $483.5 million, and had $100.0 million of borrowings outstanding under the Credit Agreement. | ||||
As of December 31, 2014, Watford Re had a $200 million line of credit facility that expires on May 19, 2015. At December 31, 2014, Watford Re had $26.0 million in outstanding letters of credit under that credit facility. Watford Re was in compliance with all covenants contained in its credit facility at December 31, 2014. | ||||
Leases and Purchase Obligations | ||||
At December 31, 2014, the future minimum rental commitments, exclusive of escalation clauses and maintenance costs and net of rental income, for all of the Company’s operating leases are as follows: | ||||
2015 | $ | 23,343 | ||
2016 | 23,670 | |||
2017 | 22,539 | |||
2018 | 20,803 | |||
2019 | 17,705 | |||
Thereafter | 46,672 | |||
Total | $ | 154,732 | ||
All of these leases are for the rental of office space, with expiration terms that range from 2015 to 2024. Rental expense, net of income from subleases, was approximately $23.1 million, $18.7 million and $17.1 million for 2014, 2013 and 2012, respectively. | ||||
The Company has also entered into certain agreements which commit the Company to purchase goods or services, primarily related to software and computerized systems. Such purchase obligations were approximately $22.2 million and $35.9 million at December 31, 2014 and 2013, respectively. | ||||
Employment and Other Arrangements | ||||
At December 31, 2014, the Company has entered into employment agreements with certain of its executive officers for periods extending up to March 2018. Such employment arrangements provide for compensation in the form of base salary, annual bonus, share-based awards, participation in the Company’s employee benefit programs and the reimbursements of expenses. |
Senior_Notes
Senior Notes | 12 Months Ended |
Dec. 31, 2014 | |
Debt Disclosure [Abstract] | |
Senior Notes | Senior Notes |
On May 4, 2004, ACGL completed a public offering of $300.0 million principal amount of 7.35% senior notes due May 1, 2034 (“ACGL Senior Notes”). The ACGL Senior Notes are ACGL’s senior unsecured obligations and rank equally with all of its existing and future senior unsecured indebtedness. Interest payments on the ACGL Senior Notes are due on May 1st and November 1st of each year. ACGL may redeem the ACGL Senior Notes at any time and from time to time, in whole or in part, at a “make-whole” redemption price. The fair value of the ACGL Senior Notes at December 31, 2014 and 2013 was $462.4 million and $381.0 million, respectively. | |
On December 13, 2013, Arch-U.S., a wholly-owned subsidiary of ACGL, completed a public offering of $500.0 million principal amount of 5.144% senior notes due November 1, 2043 (“Arch-U.S. Senior Notes”), fully and unconditionally guaranteed by ACGL (the “Guarantee”). The Arch-U.S. Senior Notes are unsecured and unsubordinated obligations of Arch-U.S. and ACGL, respectively, and rank equally and ratably with the other unsecured and unsubordinated indebtedness of Arch-U.S. and ACGL, respectively. Interest payments on the Arch-U.S. Senior Notes are due on May 1st and November 1st of each year. Arch-U.S. may redeem the Arch-U.S. Senior Notes at any time and from time to time, in whole or in part, at a “make-whole” redemption price. The fair value of the Arch-U.S. Senior Notes at December 31, 2014 and 2013 was $609.9 million and $514.1 million, respectively. |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets | |||||||||||||||
The following table shows an analysis of goodwill and intangible assets: | ||||||||||||||||
Goodwill | Intangible assets with an indefinite life | Intangible assets with finite life | Total | |||||||||||||
Net balance at December 31, 2012 | $ | — | $ | 16,666 | $ | 21,593 | $ | 38,259 | ||||||||
Acquisitions | — | — | — | — | ||||||||||||
Amortization | — | — | (11,170 | ) | (11,170 | ) | ||||||||||
Foreign currency translation adjustment | — | — | 230 | 230 | ||||||||||||
Net balance at December 31, 2013 | — | 16,666 | 10,653 | 27,319 | ||||||||||||
Acquisitions | 14,965 | 16,858 | 76,435 | 108,258 | ||||||||||||
Amortization | — | — | (25,520 | ) | (25,520 | ) | ||||||||||
Foreign currency translation adjustment | (19 | ) | — | (499 | ) | (518 | ) | |||||||||
Net balance at December 31, 2014 | $ | 14,946 | $ | 33,524 | $ | 61,069 | $ | 109,539 | ||||||||
Gross balance at December 31, 2014 | $ | 14,965 | $ | 33,524 | $ | 124,908 | $ | 173,397 | ||||||||
Accumulated amortization | — | — | (63,439 | ) | (63,439 | ) | ||||||||||
Foreign currency translation adjustment | (19 | ) | — | (400 | ) | (419 | ) | |||||||||
Net balance at December 31, 2014 | $ | 14,946 | $ | 33,524 | $ | 61,069 | $ | 109,539 | ||||||||
The following table presents the components of intangible assets: | ||||||||||||||||
Gross Balance | Accumulated | Foreign Currency Translation Adjustment | Net | |||||||||||||
Amortization | Balance | |||||||||||||||
31-Dec-14 | ||||||||||||||||
Acquired insurance contracts | $ | 77,574 | $ | (47,710 | ) | $ | (107 | ) | $ | 29,757 | ||||||
Operating platform | 29,900 | (5,482 | ) | 24,418 | ||||||||||||
Customer relationships | 25,910 | (12,283 | ) | (293 | ) | 13,334 | ||||||||||
Goodwill | 14,965 | — | (19 | ) | 14,946 | |||||||||||
Insurance licenses | 33,524 | — | — | 33,524 | ||||||||||||
Unfavorable service contract | (9,533 | ) | 2,229 | — | (7,304 | ) | ||||||||||
Other | 1,057 | (193 | ) | — | 864 | |||||||||||
Total | $ | 173,397 | $ | (63,439 | ) | $ | (419 | ) | $ | 109,539 | ||||||
31-Dec-13 | ||||||||||||||||
Acquired insurance contracts | $ | 31,102 | $ | (28,208 | ) | $ | — | $ | 2,894 | |||||||
Customer relationships | 17,371 | (9,711 | ) | 99 | 7,759 | |||||||||||
Insurance licenses | 16,666 | — | — | 16,666 | ||||||||||||
Total | $ | 65,139 | $ | (37,919 | ) | $ | 99 | $ | 27,319 | |||||||
The expected remaining amortization expense for intangible assets with a finite life is $21.8 million for 2015, $17.0 million for 2016, $13.3 million for 2017, $9.4 million for 2018 and $0.8 million for 2019. The estimated remaining useful lives of these assets range from two to eight years at December 31, 2014. | ||||||||||||||||
The Company’s impairment reviews for goodwill and intangible assets did not result in the recognition of impairment losses for 2014, 2013 and 2012. |
Shareholders_Equity
Shareholders' Equity | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Stockholders' Equity Note [Abstract] | |||||||||
Shareholders' Equity | Shareholders’ Equity | ||||||||
Authorized and Issued | |||||||||
The authorized share capital of the Company consists of 600 million Common Shares, par value of $0.0033 per share, and 50 million Preferred Shares, par value of $0.01 per share. | |||||||||
Common Shares | |||||||||
The following table presents a roll-forward of changes in the Company’s issued and outstanding Common Shares: | |||||||||
Year Ended December 31, | |||||||||
2014 | 2013 | 2012 | |||||||
Common Shares: | |||||||||
Shares issued and outstanding, beginning of year | 169,560,591 | 168,255,572 | 164,636,338 | ||||||
Shares issued (1) | 1,493,524 | 811,732 | 2,066,065 | ||||||
Restricted shares issued, net of cancellations | 618,293 | 493,287 | 1,553,169 | ||||||
Shares issued, end of year | 171,672,408 | 169,560,591 | 168,255,572 | ||||||
Common shares in treasury, end of year | (44,304,474 | ) | (35,885,707 | ) | (34,412,959 | ) | |||
Shares issued and outstanding, end of year | 127,367,934 | 133,674,884 | 133,842,613 | ||||||
-1 | Includes shares issued from the exercise of stock options and stock appreciation rights, and shares issued from the employee share purchase plan. | ||||||||
Share Repurchases | |||||||||
The board of directors of ACGL has authorized the investment in ACGL’s common shares through a share repurchase program. Authorizations have consisted of a $1.0 billion authorization in February 2007, a $500.0 million authorization in May 2008, a $1.0 billion authorization in November 2009, a $1.0 billion authorization in February 2011 and a $629.2 million authorization in November 2014. Since the inception of the share repurchase program through December 31, 2014, ACGL has repurchased approximately 118.1 million common shares for an aggregate purchase price of $3.24 billion. During 2014, ACGL repurchased 8.2 million common shares for an aggregate purchase price of $454.1 million, compared to 1.3 million common shares for an aggregate purchase price of $57.8 million during 2013 and 3.9 million common shares for an aggregate purchase price of $172.1 million during 2012. Weighted average shares outstanding for 2014 were reduced by 111.9 million shares, compared to 109.6 million shares for 2013 and 105.0 million shares for 2012. At December 31, 2014, approximately $887.1 million of share repurchases were available under the program. Repurchases under the program may be effected from time to time in open market or privately negotiated transactions. The timing and amount of the repurchase transactions under this program will depend on a variety of factors, including market conditions and corporate and regulatory considerations. | |||||||||
Treasury Shares | |||||||||
In May 2010, ACGL’s shareholders approved amendments to the bye-laws to permit ACGL to hold its own acquired shares as treasury shares in lieu of cancellation, as determined by ACGL’s board of directors. From May 5, 2010 to December 31, 2014, all repurchases of ACGL’s common shares in connection with the share repurchase plan noted above and other share-based transactions were held in the treasury under the cost method, and the cost of the common shares acquired is included in ‘Common shares held in treasury, at cost.’ At December 31, 2014, the Company held 44.3 million shares for an aggregate cost of $1.56 billion in treasury, at cost. | |||||||||
Preferred Shares | |||||||||
On April 2, 2012, the Company completed the underwritten public offering of $325.0 million of its 6.75% Series C non-cumulative preferred shares (“Preferred Shares”). Except in specified circumstances relating to certain tax or corporate events, the Preferred Shares are not redeemable prior to April 2, 2017. The net proceeds from the offering of $315.8 million and other available funds were used to redeem all of the Company’s $200.0 million of 8.0% Series A preferred shares and $125.0 million of 7.875% Series B preferred shares on May 2, 2012. The Series A preferred shares and Series B preferred shares were redeemed at a redemption price equal to $25.00 per share, plus all declared and unpaid dividends to (but excluding) the redemption date. | |||||||||
Dividends on the Preferred Shares are non-cumulative. Consequently, in the event dividends are not declared on the Preferred Shares for any dividend period, holders of Preferred Shares will not be entitled to receive a dividend for such period, and such undeclared dividend will not accrue and will not be payable. Holders of Preferred Shares will be entitled to receive dividend payments only when, as and if declared by ACGL’s board of directors or a duly authorized committee of the board of directors. Any such dividends will be payable from the date of original issue on a non-cumulative basis, quarterly in arrears. To the extent declared, these dividends will accumulate, with respect to each dividend period, in an amount per share equal to 6.75% of the $25.00 liquidation preference per annum. The Company paid dividends of $21.9 million in 2014, compared to $21.9 million in 2013 and $28.4 million in 2012 to holders of the Company’s preferred shares. |
ShareBased_Compensation
Share-Based Compensation | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||
Share-Based Compensation | Share-Based Compensation | ||||||||
Long Term Incentive and Share Award Plans | |||||||||
The 2012 Long Term Incentive and Share Award Plan (the “2012 Plan”) became effective as of May 9, 2012 (the “Effective Date”) following approval by shareholders of the Company. The 2012 Plan is intended to provide for competitive compensation opportunities, to encourage long-term service, to recognize individual contributions and reward achievement of performance goals and to promote the creation of long-term value for shareholders by aligning the interests of such persons with those of shareholders. The 2012 Plan provides for the grant to eligible employees and directors stock options, stock appreciation rights (“SARs”), restricted shares, restricted share units payable in common shares or cash, share awards in lieu of cash awards, dividend equivalents and other share-based awards. The 2012 Plan also provides the Company’s non-employee directors with the opportunity to receive the annual retainer fee for Board service in common shares. The 2012 Plan will terminate as to future awards on February 28, 2022. | |||||||||
The 2007 Long Term Incentive and Share Award Plan (the “2007 Plan”) was merged with and into the 2012 Plan as of the Effective Date. As of the Effective Date, the 3,153,924 remaining shares available for issuance under the 2007 Plan were transferred into the 2012 Plan and as of such date no additional grants may be made under the 2007 Plan. Grants which were outstanding under the 2007 Plan as of the Effective Date will continue in accordance with their original terms (subject to such amendments as the compensation committee determines appropriate, consistent with the terms of the 2007 Plan) and will be issued or transferred under the 2012 Plan. | |||||||||
The number of common shares reserved for grants of awards under the 2012 Plan, subject to anti-dilution adjustments in the event of certain changes in the Company’s capital structure is 7,433,924 which is the sum of (i) 4,280,000 and (ii) 3,153,924 shares remaining available for grants under the 2007 Plan. In addition, no more than 50% of such common shares may be issued in connection with full value awards (i.e., awards other than stock options or SARs) and no more than 2,000,000 common shares may be issued as incentive stock options under Section 422 of the Code. At December 31, 2014, 980,571 shares are available for grant under the 2012 Plan. | |||||||||
On May 11, 2007, following shareholder approval, the Company adopted the 2007 Employee Share Purchase Plan (the “ESPP”). The purpose of the ESPP is to give employees of ACGL and its subsidiaries an opportunity to purchase common shares through payroll deductions, thereby encouraging employees to share in the economic growth and success of ACGL and its subsidiaries. The ESPP is designed to qualify as an “employee share purchase plan” under Section 423 of the Code. A total of 2,250,000 common shares are reserved for issuance under the ESPP. At December 31, 2014, approximately 762,293 shares remain available for issuance. The ESPP provides for consecutive six-month offering periods (or other periods of not more than 27 months as determined by the compensation committee) under which participating employees can elect to have up to 20% of their total compensation withheld and applied to the purchase of common shares of the Company at the end of the period. Unless otherwise determined by the compensation committee before an offering period commences, (1) the purchase price will be 85% of the fair market value of the common shares at the beginning of the offering period; and (2) the maximum number of common shares that may be purchased by an employee in any offering period is 3,000 shares. In addition, applicable Code limitations specify, in general, that a participant’s right to purchase stock under the ESPP cannot accumulate at a rate in excess of $25,000 (based on the value at the beginning of the applicable offering periods) per calendar year. The Company recorded $1.6 million of share-based compensation expense, net of a tax benefit of $0.1 million, related to the ESPP for 2014, compared to $1.4 million, net of a tax benefit of $0.1 million, for 2013 and $1.1 million, net of a tax benefit of $0.1 million, for 2012. | |||||||||
In June 2002, following shareholder approval, the Company adopted the 2002 Long Term Incentive and Share Award Plan (the “2002 Plan”). An aggregate of 9,497,490 Common Shares has been reserved for issuance under the 2002 Plan. The 2002 Plan expired in January 2012. | |||||||||
With respect to certain subsidiaries, the Company may withhold, or require a participant to remit to the Company, an amount sufficient to satisfy any federal, state or local withholding tax requirements associated with awards under the Company’s share award plans. This includes the authority to withhold or receive shares or other property and to make cash payments in respect thereof. | |||||||||
Stock Options and Stock Appreciation Rights | |||||||||
The Company generally issues stock options and SARs to eligible employees, with exercise prices equal to the fair market values of the Company’s Common Shares on the grant dates. Such grants generally vest over a three year period with one-third vesting on the first, second and third anniversaries of the grant date. In addition, in November 2012 the Company issued off-cycle stock options and SARs to certain employees, which will cliff vest on the fifth anniversary of the grant date. Option awards and SARs have a 10 year contractual life. Refer to Note 3(m) for details related to the Company’s accounting for stock options and SARs. | |||||||||
The Company recorded after-tax share-based compensation expense of $12.5 million related to stock options and SARs for 2014, net of a tax benefit of $2.1 million, compared to $10.6 million for 2013, net of a tax benefit of $2.0 million, and $8.5 million for 2012, net of a tax benefit of $1.8 million. As of December 31, 2014, there was approximately $14.8 million of unrecognized compensation cost related to nonvested stock options and SARs. Such cost is expected to be recognized over a weighted average period of 1.8 years. | |||||||||
For purposes of determining estimated market value, the Company has computed the estimated market values of share-based compensation related to stock options and SARs using the Black-Scholes option valuation model and has applied the assumptions set forth in the following table. As described above, stock options and SARs generally vest over a three year period with one-third vesting on the first, second and third anniversaries of the grant date. The expected life assumption (i.e., the estimated period of time between the date an option or SAR is granted and the date the option or SAR is exercised) was based on an expected term analysis which incorporated the Company’s historical exercise experience. The Company based its estimate of expected volatility for stock options and SARs granted during 2014 on daily historical trading data of its common shares from September 20, 2002, the date marking the completion of the Company’s transition as a worldwide insurance and reinsurance company. For stock options and SARs granted during 2013 and 2012, the Company based its volatility estimate under the same method used for 2014, using the period from September 20, 2002 through the last day of the applicable period. | |||||||||
Year Ended December 31, | |||||||||
2014 | 2013 | 2012 | |||||||
Dividend yield | 0 | % | 0 | % | 0 | % | |||
Expected volatility | 22.8 | % | 23.6 | % | 24.3 | % | |||
Risk free interest rate | 1.9 | % | 1 | % | 1 | % | |||
Expected option life | 6.0 years | 6.0 years | 6.25 years | ||||||
The Black-Scholes option pricing model requires the input of highly subjective assumptions. Because the Company’s employee stock options and SARs have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models may not provide a reliable single measure of the fair value of its employee stock options and SARs. In addition, management will continue to assess the assumptions and methodologies used to calculate estimated fair value of share-based compensation. Circumstances may change and additional data may become available over time, which could result in changes to these assumptions and methodologies, and which could materially impact the Company’s fair value determination. | |||||||||
A summary of stock option and SAR activity under the Company’s Long Term Incentive and Share Award Plans during 2014 is presented below: | |||||||||
Year Ended December 31, 2014 | |||||||||
Number of | Weighted Average Exercise Price | ||||||||
Options / SARs | |||||||||
Outstanding, beginning of year | 8,338,480 | $ | 28.82 | ||||||
Granted | 1,078,036 | $ | 56.71 | ||||||
Exercised | (1,542,828 | ) | $ | 18.62 | |||||
Forfeited or expired | (69,655 | ) | $ | 46.91 | |||||
Outstanding, end of year | 7,804,033 | $ | 34.52 | ||||||
Exercisable, end of year | 5,558,439 | $ | 28.91 | ||||||
The weighted average grant-date fair value of stock options and SARs granted during 2014, 2013 and 2012 was $14.77, $12.96 and $10.61, respectively. The aggregate intrinsic value of stock options and SARs exercised during 2014, 2013 and 2012 was approximately $58.4 million, $21.7 million, and $64.0 million, respectively and represents the difference between the exercise price of the stock options and SARs and the closing market price of the Company’s common shares on the exercise dates. Shares issued upon exercise of stock options and SARs were from the Company’s authorized but unissued share capital pool. | |||||||||
The aggregate intrinsic value of the Company’s outstanding and exercisable stock options and SARs at December 31, 2014 was $191.8 million and $167.8 million, respectively. The weighted average remaining contractual life of the Company’s outstanding and exercisable stock options and SARs at December 31, 2014 was 5.7 years and 4.6 years, respectively. During 2014, the Company received proceeds of $11.0 million from the exercise of stock options and recognized a tax benefit of $8.9 million from the exercise of stock options and SARs. | |||||||||
Restricted Common Shares and Restricted Units | |||||||||
The Company also issues restricted share and unit awards to eligible employees and directors, for which the fair value is equal to the fair market values of the Company’s Common Shares on the grant dates. Restricted share and unit awards generally vest over a three year period with one-third vesting on the first, second and third anniversaries of the grant date. In addition, in November 2012 the Company issued off-cycle restricted share and unit awards to certain employees, which will cliff vest on the fifth anniversary of the grant date. Refer to Note 3(m) for details related to the Company’s accounting for restricted share and unit awards. | |||||||||
The Company recorded $30.0 million of share-based compensation expense, net of a tax benefit of $8.4 million, related to restricted share and unit awards for 2014, compared to $27.4 million, net of a tax benefit of $7.8 million, for 2013 and $24.6 million, net of a tax benefit of $6.3 million, for 2012. As of December 31, 2014 , there were $48.5 million and $8.1 million, respectively, of unrecognized compensation costs related to unvested restricted share and unit awards which are expected to be recognized over a weighted average period of 1.7 years and 1.8 years, respectively. | |||||||||
A summary of unvested restricted share and unit activity under the Company’s Long Term Incentive and Share Award Plans for 2014 is presented below: | |||||||||
Year Ended December 31, 2014 | |||||||||
Restricted | Restricted | ||||||||
Common | Unit | ||||||||
Shares | Awards | ||||||||
Unvested Shares: | |||||||||
Unvested balance, beginning of year | 1,943,125 | 308,322 | |||||||
Granted | 660,043 | 107,426 | |||||||
Vested | (591,576 | ) | (88,210 | ) | |||||
Forfeited | (41,750 | ) | (22,405 | ) | |||||
Unvested balance, end of year | 1,969,842 | 305,133 | |||||||
Weighted Average Grant Date Fair Value: | |||||||||
Unvested balance, beginning of year | $ | 43.55 | $ | 43.32 | |||||
Granted | $ | 56.94 | $ | 57.18 | |||||
Vested | $ | 41.89 | $ | 41.86 | |||||
Forfeited | $ | 46.54 | $ | 45.07 | |||||
Unvested balance, end of year | $ | 48.47 | $ | 48.49 | |||||
During 2014, 2013 and 2012, the Company granted an aggregate of 767,469, 590,118 and 1,819,657 restricted share and restricted unit awards, respectively, with weighted average grant date fair values of $56.97, $53.21 and $40.75, respectively. During 2014, 2013 and 2012, the aggregate fair value of restricted shares and units that vested was $38.6 million, $41.0 million and $33.2 million, respectively. The aggregate intrinsic value of restricted units outstanding at December 31, 2014 was $26.4 million, and the aggregate intrinsic value of restricted units vested and deferred was $8.4 million. | |||||||||
The issuance of share-based awards and amortization thereon has no effect on the Company’s consolidated shareholders’ equity. |
Retirement_Plans
Retirement Plans | 12 Months Ended |
Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |
Retirement Plans | Retirement Plans |
For purposes of providing employees with retirement benefits, the Company maintains defined contribution retirement plans. Contributions are based on the participants’ eligible compensation. For 2014, 2013 and 2012, the Company expensed $26.8 million, $21.5 million and $19.3 million, respectively, related to these retirement plans. |
Legal_Proceedings
Legal Proceedings | 12 Months Ended |
Dec. 31, 2014 | |
Disclosure Legal Proceedings [Abstract] | |
Legal Proceedings | Legal Proceedings |
The Company, in common with the insurance industry in general, is subject to litigation and arbitration in the normal course of its business. As of December 31, 2014, the Company was not a party to any litigation or arbitration which is expected by management to have a material adverse effect on the Company’s results of operations and financial condition and liquidity. |
Statutory_Information
Statutory Information | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Disclosure Statutory Information [Abstract] | ||||||||||||||||
Statutory Information | Statutory Information | |||||||||||||||
The Company’s insurance and reinsurance subsidiaries are subject to insurance and/or reinsurance laws and regulations in the jurisdictions in which they operate. These regulations include certain restrictions on the amount of dividends or other distributions available to shareholders without prior approval of the insurance regulatory authorities. | ||||||||||||||||
The actual and required statutory capital and surplus for the Company’s principal operating subsidiaries at December 31, 2014 and 2013 was as follows: | ||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||
Actual (1) | Required (1) | Actual (1) | Required (1) | |||||||||||||
Statutory capital and surplus (1): | ||||||||||||||||
Bermuda | $ | 6,447,803 | $ | 2,209,757 | $ | 5,416,948 | $ | 2,077,442 | ||||||||
Ireland | 553,561 | 463,877 | 533,283 | 458,666 | ||||||||||||
United States | 1,454,282 | 467,797 | 1,013,228 | 335,442 | ||||||||||||
United Kingdom | 384,525 | 307,596 | 392,734 | 353,330 | ||||||||||||
Canada | 79,123 | 58,837 | 77,877 | 74,951 | ||||||||||||
-1 | Such amounts include ownership interests in affiliated insurance and reinsurance subsidiaries. | |||||||||||||||
The statutory net income (loss) for the Company’s principal operating subsidiaries for 2014, 2013 and 2012 was as follows: | ||||||||||||||||
Year Ended December 31, | ||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Statutory net income (loss): | ||||||||||||||||
Bermuda | $ | 692,676 | $ | 719,267 | $ | 631,483 | ||||||||||
Ireland | 43,197 | (24,410 | ) | (1,940 | ) | |||||||||||
United States | 46,110 | 62,605 | (21,517 | ) | ||||||||||||
United Kingdom | 13,016 | (11,353 | ) | (4,449 | ) | |||||||||||
Canada | 1,517 | (36,203 | ) | — | ||||||||||||
Statutory accounting differs from U.S. GAAP in the reporting of certain items such as acquisition costs, deferred income taxes and investments. | ||||||||||||||||
Bermuda | ||||||||||||||||
Under The Insurance Act 1978, as amended, and related regulations of Bermuda (the “Insurance Act”), Arch Re Bermuda, the Company’s Bermuda reinsurance and insurance subsidiary, is registered as a Class 4 insurer and long-term insurer and is required to annually prepare and file statutory financial statements and a statutory financial return with the Bermuda Monetary Authority (“BMA”). The Insurance Act also requires Arch Re Bermuda to maintain minimum share capital and must ensure that the value of its general business assets exceeds the amount of its general business liabilities by an amount greater than the prescribed minimum solvency margins and enhanced capital requirement pertaining to its general business. At December 31, 2014, all such requirements were met. | ||||||||||||||||
Arch Re Bermuda is also required to file a regulatory risk based capital model that measures risks and determines enhanced capital requirements and a target capital level. In addition, all Class 4 Bermuda insurers must prepare and file with the BMA audited GAAP basis annual financial statements, which must be made publicly available. Declarations of dividends from retained earnings and distributions from additional paid-in-capital are subject to these requirements being met. For all applicable periods presented herein, Arch Re Bermuda satisfied these requirements. | ||||||||||||||||
The Bermuda Companies Act 1981 (the “Companies Act”) limits Arch Re Bermuda’s ability to pay dividends and distributions to shareholders if there are reasonable grounds for believing that: (a) Arch Re Bermuda is, or would after the payment be, unable to pay its liabilities as they become due; or (b) the realizable value of Arch Re Bermuda’s assets would thereby be less than the aggregate of its liabilities and its issued share capital and share premium accounts. Under the Insurance Act, Arch Re Bermuda is restricted with respect to the payment of dividends. Arch Re Bermuda is prohibited from declaring or paying in any financial year dividends of more than 25% of its total statutory capital and surplus (as shown on its previous financial year’s statutory balance sheet) unless it files, at least seven days before payment of such dividends, with the Bermuda Monetary Authority an affidavit stating that it will continue to meet the required margins. In addition, Arch Re Bermuda is prohibited, without prior approval of the Bermuda Monetary Authority, from reducing by 15% or more its total statutory capital, as set out in its previous year’s statutory financial statements. Accordingly, Arch Re Bermuda can pay approximately $1.36 billion to ACGL during 2015 without providing an affidavit to the BMA. | ||||||||||||||||
Watford Re is registered as a Class 4 insurer and is required to annually prepare and file statutory financial statements and a statutory financial return with the BMA. The Insurance Act also requires Watford Re to maintain minimum share capital and must ensure that the value of its general business assets exceeds the amount of its general business liabilities by an amount greater than the prescribed minimum solvency margins and enhanced capital requirement pertaining to its general business. At December 31, 2014, all such requirements were met. | ||||||||||||||||
Ireland | ||||||||||||||||
Arch Re Europe was licensed and authorized by the Central Bank of Ireland (“CBOI”) as a non-life reinsurer in October 2008 and as a life reinsurer in November 2009 while Arch MI Europe was authorized as a non-life insurer in Ireland in December 2011. Irish authorized reinsurers and insurers, such as Arch Re Europe and Arch MI Europe, are also subject to the general body of Irish laws and regulations including the provisions of the Companies Acts 1963-2013. Arch Re Europe and Arch MI Europe must file and submit their annual audited financial statements in accordance with Irish generally accepted accounting principles and related reports to the Registrar of Companies (“Registrar”) under the Companies Acts 1963-2013 together with an annual return of certain core corporate information. Changes to core corporate information during the year must also be notified to the Registrar. These requirements are in addition to the regulatory returns required to be filed annually with the CBOI. Arch Re Europe and Arch MI Europe are required to maintain reserves, particularly in respect of underwriting liabilities and a solvency margin as provided for in the European Communities (Reinsurance) Regulations, 2006, related guidance and the European Communities Insurance Accounts Regulations, 1996. Assets constituting statutory reserves must comply with certain principles including obligations to secure sufficiency, liquidity, security, quality, profitability and currency matching of investments. Statutory reserves must be actuarially certified annually. | ||||||||||||||||
Under Irish company law, Arch Re Europe and Arch MI Europe are permitted to make distributions only out of profits available for distribution. A company’s profits available for distribution are its accumulated, realized profits, so far as not previously utilized by distribution or capitalization, less its accumulated, realized losses, so far as not previously written off in a reduction or reorganization of capital duly made. Further, the CBOI has powers to intervene if a dividend payment were to lead to a breach of regulatory capital requirements. Dividends or distributions, if any, made by Arch Re Europe would result in an increase in available capital at Arch Re Bermuda. | ||||||||||||||||
United States | ||||||||||||||||
The Company’s U.S. insurance and reinsurance subsidiaries file financial statements prepared in accordance with statutory accounting practices prescribed or permitted by insurance regulators. Statutory net income and statutory surplus, as reported to the insurance regulatory authorities, differ in certain respects from the amounts prepared in accordance with GAAP. The main differences between statutory net income and GAAP net income relate to deferred acquisition costs and deferred income taxes. In addition to deferred acquisition costs and deferred income tax assets, other differences between statutory surplus and GAAP shareholder’s equity are unrealized appreciation or decline in value of investments and non-admitted assets. | ||||||||||||||||
The Company’s U.S. insurance and reinsurance subsidiaries are subject to insurance laws and regulations in the jurisdictions in which they operate. The ability of the Company’s regulated insurance subsidiaries to pay dividends or make distributions is dependent on their ability to meet applicable regulatory standards. These regulations include restrictions that limit the amount of dividends or other distributions, such as loans or cash advances, available to shareholders without prior approval of the insurance regulatory authorities. Dividends or distributions, if any, made by Arch Re U.S. would result in an increase in available capital at Arch-U.S., the Company’s U.S. holding company. Arch Re U.S. can declare a maximum of approximately $110 million of dividends during 2015 subject to the approval of the Commissioner of the Delaware Department of Insurance (“Commissioner”). In addition, with respect to dividends in excess of the $110 million (extraordinary dividend), no payment can be made until (1) 30 days after the Commissioner has received notice of the declaration thereof and has not within such period disapproved such payments; or (2) the Commissioner shall have approved the payment within the 30-day period. Delaware insurance laws also require that the statutory surplus of Arch Re U.S. following any dividend or distribution be reasonable in relation to its outstanding liabilities and adequate to its financial needs. | ||||||||||||||||
Arch MI U.S. is subject to detailed regulation both by its domiciliary and primary regulator, the Wisconsin Office of the Commissioner of Insurance, and by state insurance departments in each state in which it is licensed. In addition, Arch MI U.S. is currently approved by the GSEs as an eligible mortgage insurer. In addition to existing eligibility requirements applicable to all eligible mortgage insurers, the GSEs imposed conditions in connection with their approvals of Arch MI U.S. as a qualified mortgage insurer. These conditions require, among other things, that Arch MI U.S.: (i) maintain, through December 31, 2016, minimum capital funding of $400 million which may consist of statutory capital (policyholders’ surplus plus contingency reserves), dedicated reinsurance trust assets for any primary business reinsured and a value for purchased technology assets; (ii) maintain minimum statutory capital (defined as policyholders’ surplus plus contingency reserves) of no less than $260 million; (ii) maintain a risk-to-capital ratio of no greater than 18 to 1; and (iv) refrain from paying dividends to affiliates for three years commencing February 2014. | ||||||||||||||||
United Kingdom | ||||||||||||||||
The Company’s European insurance operations are conducted on two platforms: Arch Insurance Company Europe and Arch Syndicate 2012 (collectively, the insurance operations are referred to as “Arch Insurance Europe”). The Financial Services Authority (the “FSA”), which on April 1, 2013 was replaced by the Prudential Regulatory Authority (“PRA”) and the Financial Conduct Authority (“FCA”), regulated insurance and reinsurance companies and firms carrying on insurance mediation activities operating in the U.K. Arch Insurance Company Europe was licensed and authorized by the FSA to underwrite all classes of general insurance in the U.K. in May 2004. In 2009, AUAL was licensed and authorized by the FSA and the Lloyd’s Franchise Board. AUAL holds the relevant permissions for the classes of insurance business which are underwritten in the U.K. by Arch Syndicate 2012. Arch Syndicate 2012 has one member, Arch Syndicate Investments Ltd. Arch Risk Partners was licensed and authorized by the FSA in February 2012 to conduct insurance mediation activities. All U.K. companies are also subject to a range of statutory provisions, including the laws and regulations of the Companies Acts 2006 (as amended) (the “U.K. Companies Acts”). | ||||||||||||||||
Like all U.K. companies, Arch Insurance Europe must file and submit their annual audited financial statements in accordance with International Financial Reporting Standards and related reports to the Registrar of Companies under the U.K. Companies Acts together with an annual return of certain core corporate information and changes from the prior year. This requirement is in addition to the regulatory returns required to be filed annually with the FSA (now the PRA or the FCA, as applicable) for Arch Insurance Company Europe, AUAL and Arch Risk Partners and, in the case of AUAL and ASIL, Lloyd’s. | ||||||||||||||||
Arch Insurance Company Europe, AUAL (on behalf of itself, Arch Syndicate 2012 and ASIL) and Arch Risk Partners were each required to demonstrate to the FSA that each had adequate financial assets to meet the financial resources requirement for its category. However, since the FSA split into the PRA and FCA, Arch Insurance Company Europe and AUAL (on behalf of itself, Arch Syndicate 2012 and ASIL) are now each required to demonstrate the adequacy of its financial assets to the PRA, while Arch Risk Partners is required to demonstrate the adequacy of its financial assets to the FCA. On a periodic basis, Arch Insurance Europe was required to provide the FSA and Lloyd’s with its own risk-based assessment of its capital needs, taking into account comprehensive risk factors, including market, credit, operational, liquidity and group risks to generate a revised calculation of its expected liabilities which, in turn, enabled the FSA and Lloyd’s to provide individual capital guidance and requirements to Arch Insurance Europe. Following the split of the FSA into the PRA and FCA, similar requirements from the PRA have taken effect. Arch Insurance Europe’s surplus is above the risk-based capital threshold allowed by the FSA’s (now PRA's) individual capital assessment of Arch Insurance Europe. The FSA required, and now the PRA requires, that Arch Insurance Europe maintain a margin of solvency calculation based on the classes of business for which it is authorized and within its premium income projections applied to its worldwide general business. | ||||||||||||||||
Under U.K. law, all U.K. companies are restricted from declaring a dividend to their shareholders unless they have “profits available for distribution.” The calculation as to whether a company has sufficient profits is based on its accumulated realized profits minus its accumulated realized losses. U.K. insurance regulatory laws do not prohibit the payment of dividends, but the FSA required, and now the PRA or FCA, as applicable, requires that insurance companies and insurance intermediaries maintain certain solvency margins and may restrict the payment of a dividend by Arch Insurance Company Europe, AUAL, ASIL or Arch Risk Partners. Dividends or distributions, if any, made by Arch Insurance Europe would result in an increase in available capital at Arch Re Europe, a subsidiary of Arch Re Bermuda. | ||||||||||||||||
Canada | ||||||||||||||||
Arch Insurance Canada, which commenced underwriting on January 1, 2013, and the Canadian branch of Arch Re U.S. (“Arch Re Canada”), which commenced underwriting on January 1, 2015, are subject to federal, as well as provincial and territorial, regulation in Canada. The Office of the Superintendent of Financial Institutions (“OSFI”) is the federal regulatory body that, under the Insurance Companies Act (Canada), regulates federal Canadian and non-Canadian insurance companies operating in Canada. The primary goal of OSFI is to supervise the safety and soundness of insurance companies with the aim of securing the appropriate level of protection of insureds by imposing risk management, solvency and capital requirements on such companies. Arch Insurance Canada and Arch Re Canada are subject to regulation in the provinces and territories in which they underwrite insurance/reinsurance, and the primary goal of insurance/reinsurance regulation at the provincial and territorial levels is to govern the market conduct of insurance/reinsurance companies. Arch Insurance Canada is licensed to carry on insurance business by OSFI and in each province and territory. Arch Re Canada is licensed to carry-on reinsurance business by OSFI and in the province of Ontario. | ||||||||||||||||
Under the Insurance Companies Act (Canada), Arch Insurance Canada is required to maintain an adequate amount of capital in Canada, calculated in accordance with a test promulgated by OSFI called the Minimum Capital Test (“MCT”), and Arch Re Canada is required to maintain an adequate margin of assets over liabilities in Canada, calculated in accordance with a test promulgated by OSFI called the Branch Adequacy of Assets Test. Arch Insurance Canada and Arch Re Canada are required to file financial information with OSFI on an ongoing basis, including annual audited financial statements in accordance with IFRS. Dividends or distributions, if any, made by Arch Insurance Canada would result in an increase in available capital at Arch Insurance Company (see “—United States” section). |
Unaudited_Condensed_Quarterly_
Unaudited Condensed Quarterly Financial Information | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
Unaudited Condensed Quarterly Financial Information | Unaudited Condensed Quarterly Financial Information | |||||||||||||||
The following table summarizes the Company’s 2014 and 2013 unaudited condensed quarterly financial information (including the results of the ‘other’ segment): | ||||||||||||||||
Fourth | Third | Second | First | |||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||
Net premiums written | $ | 895,481 | $ | 959,539 | $ | 971,928 | $ | 1,064,990 | ||||||||
Net premiums earned | 923,165 | 903,651 | 907,152 | 859,780 | ||||||||||||
Net investment income | 82,496 | 80,105 | 72,990 | 66,994 | ||||||||||||
Net realized gains | 10,561 | 18,515 | 54,144 | 19,697 | ||||||||||||
Net impairment losses recognized in earnings | (3,837 | ) | (8,593 | ) | (14,749 | ) | (2,971 | ) | ||||||||
Underwriting income | 113,464 | 101,087 | 124,091 | 132,456 | ||||||||||||
Net income | 207,134 | 223,264 | 211,717 | 179,145 | ||||||||||||
Preferred dividends | (5,485 | ) | (5,484 | ) | (5,485 | ) | (5,484 | ) | ||||||||
Net income available to Arch common shareholders | 209,679 | 223,191 | 202,531 | 177,016 | ||||||||||||
Net income per common share -- basic | $ | 1.65 | $ | 1.69 | $ | 1.53 | $ | 1.34 | ||||||||
Net income per common share -- diluted | $ | 1.6 | $ | 1.64 | $ | 1.48 | $ | 1.3 | ||||||||
Year Ended December 31, 2013 | ||||||||||||||||
Net premiums written | $ | 748,921 | $ | 839,135 | $ | 810,535 | $ | 952,776 | ||||||||
Net premiums earned | 839,366 | 795,000 | 758,816 | 752,770 | ||||||||||||
Net investment income | 67,095 | 66,083 | 68,369 | 65,672 | ||||||||||||
Net realized gains (losses) | 9,048 | (6,022 | ) | 12,652 | 58,340 | |||||||||||
Net impairment losses recognized in earnings | (88 | ) | (728 | ) | (724 | ) | (2,246 | ) | ||||||||
Underwriting income | 128,318 | 110,992 | 96,029 | 116,398 | ||||||||||||
Net income | 161,490 | 114,825 | 176,940 | 256,476 | ||||||||||||
Preferred dividends | (5,485 | ) | (5,484 | ) | (5,485 | ) | (5,484 | ) | ||||||||
Net income available to Arch common shareholders | 156,005 | 109,341 | 171,455 | 250,992 | ||||||||||||
Net income per common share -- basic | $ | 1.19 | $ | 0.83 | $ | 1.31 | $ | 1.92 | ||||||||
Net income per common share -- diluted | $ | 1.14 | $ | 0.8 | $ | 1.26 | $ | 1.85 | ||||||||
Guarantor_Financial_Informatio
Guarantor Financial Information | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ||||||||||||||||||||
Guarantor Financial Information | Guarantor Financial Information | |||||||||||||||||||
The following tables present condensed consolidating balance sheets at December 31, 2014 and 2013 and condensed consolidating statements of income, comprehensive income and cash flows for 2014, 2013 and 2012 for ACGL, Arch-U.S., a 100% owned subsidiary of ACGL, and ACGL's other subsidiaries. | ||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||
Condensed Consolidating Balance Sheet | ACGL (Parent Guarantor) | Arch-U.S. (Subsidiary Issuer) | Other ACGL Subsidiaries | Consolidating Adjustments and Eliminations | ACGL Consolidated | |||||||||||||||
Assets | ||||||||||||||||||||
Total investments | $ | 107 | $ | 62,867 | $ | 15,268,275 | $ | — | $ | 15,331,249 | ||||||||||
Cash | 3,218 | 2,787 | 479,697 | — | 485,702 | |||||||||||||||
Investments in subsidiaries | 6,536,644 | 1,685,185 | — | (8,221,829 | ) | — | ||||||||||||||
Due from subsidiaries and affiliates | 48 | 7,517 | 370,429 | (377,994 | ) | — | ||||||||||||||
Premiums receivable | — | — | 1,331,511 | (382,816 | ) | 948,695 | ||||||||||||||
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses | — | — | 5,584,973 | (3,772,128 | ) | 1,812,845 | ||||||||||||||
Contractholder receivables | — | — | 1,309,192 | — | 1,309,192 | |||||||||||||||
Prepaid reinsurance premiums | — | — | 1,373,008 | (995,930 | ) | 377,078 | ||||||||||||||
Deferred acquisition costs, net | — | — | 414,525 | — | 414,525 | |||||||||||||||
Other assets | 7,590 | 49,576 | 1,689,670 | (416,579 | ) | 1,330,257 | ||||||||||||||
Total assets | $ | 6,547,607 | $ | 1,807,932 | $ | 27,821,280 | $ | (14,167,276 | ) | $ | 22,009,543 | |||||||||
Liabilities | ||||||||||||||||||||
Reserve for losses and loss adjustment expenses | $ | — | $ | — | $ | 12,784,030 | $ | (3,747,582 | ) | $ | 9,036,448 | |||||||||
Unearned premiums | — | — | 3,227,508 | (995,930 | ) | 2,231,578 | ||||||||||||||
Reinsurance balances payable | — | — | 589,289 | (369,977 | ) | 219,312 | ||||||||||||||
Contractholder payables | — | — | 1,309,192 | — | 1,309,192 | |||||||||||||||
Deposit accounting liabilities | — | — | 587,050 | (259,666 | ) | 327,384 | ||||||||||||||
Senior notes | 300,000 | 500,000 | — | — | 800,000 | |||||||||||||||
Revolving credit agreement borrowings | 100,000 | — | — | — | 100,000 | |||||||||||||||
Due to subsidiaries and affiliates | 417 | 7,505 | 370,072 | (377,994 | ) | — | ||||||||||||||
Other liabilities | 17,137 | 49,403 | 994,741 | (194,298 | ) | 866,983 | ||||||||||||||
Total liabilities | 417,554 | 556,908 | 19,861,882 | (5,945,447 | ) | 14,890,897 | ||||||||||||||
Redeemable noncontrolling interests (1) | — | — | 219,512 | — | 219,512 | |||||||||||||||
Shareholders' Equity | ||||||||||||||||||||
Total shareholders' equity available to Arch | 6,130,053 | 1,251,024 | 6,970,805 | (8,221,829 | ) | 6,130,053 | ||||||||||||||
Non-redeemable noncontrolling interests (1) | — | — | 769,081 | — | 769,081 | |||||||||||||||
Total shareholders' equity | 6,130,053 | 1,251,024 | 7,739,886 | (8,221,829 | ) | 6,899,134 | ||||||||||||||
Total liabilities, noncontrolling interests and shareholders' equity | $ | 6,547,607 | $ | 1,807,932 | $ | 27,821,280 | $ | (14,167,276 | ) | $ | 22,009,543 | |||||||||
(1) See Note 4. | ||||||||||||||||||||
31-Dec-13 | ||||||||||||||||||||
Condensed Consolidating Balance Sheet | ACGL (Parent Guarantor) | Arch-U.S. (Subsidiary Issuer) | Other ACGL Subsidiaries | Consolidating Adjustments and Eliminations | ACGL Consolidated | |||||||||||||||
Assets | ||||||||||||||||||||
Total investments | $ | 2,530 | $ | 408,957 | $ | 13,200,247 | $ | — | $ | 13,611,734 | ||||||||||
Cash | 3,223 | 509 | 430,325 | — | 434,057 | |||||||||||||||
Investments in subsidiaries | 6,046,060 | 1,258,889 | — | (7,304,949 | ) | — | ||||||||||||||
Due from subsidiaries and affiliates | 2,251 | — | 405,110 | (407,361 | ) | — | ||||||||||||||
Premiums receivable | — | — | 1,085,369 | (331,445 | ) | 753,924 | ||||||||||||||
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses | — | — | 5,645,156 | (3,840,826 | ) | 1,804,330 | ||||||||||||||
Contractholder receivables | — | — | 1,064,246 | — | 1,064,246 | |||||||||||||||
Prepaid reinsurance premiums | — | — | 1,109,312 | (780,969 | ) | 328,343 | ||||||||||||||
Deferred acquisition costs, net | — | — | 342,314 | — | 342,314 | |||||||||||||||
Other assets | 6,598 | 60,342 | 1,714,651 | (554,445 | ) | 1,227,146 | ||||||||||||||
Total assets | $ | 6,060,662 | $ | 1,728,697 | $ | 24,996,730 | $ | (13,219,995 | ) | $ | 19,566,094 | |||||||||
Liabilities | ||||||||||||||||||||
Reserve for losses and loss adjustment expenses | $ | — | $ | — | $ | 12,625,766 | $ | (3,801,070 | ) | $ | 8,824,696 | |||||||||
Unearned premiums | — | — | 2,677,334 | (780,969 | ) | 1,896,365 | ||||||||||||||
Reinsurance balances payable | — | — | 662,394 | (466,227 | ) | 196,167 | ||||||||||||||
Contractholder payables | — | — | 1,064,246 | — | 1,064,246 | |||||||||||||||
Deposit accounting liabilities | — | — | 758,490 | (337,193 | ) | 421,297 | ||||||||||||||
Senior notes | 300,000 | 500,000 | — | — | 800,000 | |||||||||||||||
Revolving credit agreement borrowings | 100,000 | — | — | — | 100,000 | |||||||||||||||
Due to subsidiaries and affiliates | 18 | 10,250 | 397,093 | (407,361 | ) | — | ||||||||||||||
Other liabilities | 13,148 | 33,206 | 691,699 | (122,226 | ) | 615,827 | ||||||||||||||
Total liabilities | 413,166 | 543,456 | 18,877,022 | (5,915,046 | ) | 13,918,598 | ||||||||||||||
Redeemable noncontrolling interests | — | — | — | — | — | |||||||||||||||
Shareholders' Equity | ||||||||||||||||||||
Total shareholders' equity available to Arch | 5,647,496 | 1,185,241 | 6,119,708 | (7,304,949 | ) | 5,647,496 | ||||||||||||||
Non-redeemable noncontrolling interests | — | — | — | — | — | |||||||||||||||
Total shareholders' equity | 5,647,496 | 1,185,241 | 6,119,708 | (7,304,949 | ) | 5,647,496 | ||||||||||||||
Total liabilities, noncontrolling interests and shareholders' equity | $ | 6,060,662 | $ | 1,728,697 | $ | 24,996,730 | $ | (13,219,995 | ) | $ | 19,566,094 | |||||||||
Year Ended December 31, 2014 | ||||||||||||||||||||
Condensed Consolidating Statement of Income and Comprehensive Income | ACGL (Parent Guarantor) | Arch-U.S. (Subsidiary Issuer) | Other ACGL Subsidiaries | Consolidating Adjustments and Eliminations | ACGL Consolidated | |||||||||||||||
Revenues | ||||||||||||||||||||
Net premiums earned | $ | — | $ | — | $ | 3,593,748 | $ | — | $ | 3,593,748 | ||||||||||
Net investment income | — | — | 326,831 | (24,246 | ) | 302,585 | ||||||||||||||
Net realized gains | — | 5 | 102,912 | — | 102,917 | |||||||||||||||
Net impairment losses recognized in earnings | — | — | (30,150 | ) | — | (30,150 | ) | |||||||||||||
Other underwriting income | — | — | 10,142 | — | 10,142 | |||||||||||||||
Equity in net income of investment funds accounted for using the equity method | — | — | 19,883 | — | 19,883 | |||||||||||||||
Other income (loss) | — | — | (10,252 | ) | — | (10,252 | ) | |||||||||||||
Total revenues | — | 5 | 4,013,114 | (24,246 | ) | 3,988,873 | ||||||||||||||
Expenses | ||||||||||||||||||||
Losses and loss adjustment expenses | — | — | 1,919,250 | — | 1,919,250 | |||||||||||||||
Acquisition expenses | — | — | 657,262 | — | 657,262 | |||||||||||||||
Other operating expenses | 46,074 | 3,387 | 556,763 | — | 606,224 | |||||||||||||||
Interest expense | 23,423 | 25,817 | 20,640 | (24,246 | ) | 45,634 | ||||||||||||||
Net foreign exchange gains | — | — | (53,222 | ) | (30,522 | ) | (83,744 | ) | ||||||||||||
Total expenses | 69,497 | 29,204 | 3,100,693 | (54,768 | ) | 3,144,626 | ||||||||||||||
Income (loss) before income taxes | (69,497 | ) | (29,199 | ) | 912,421 | 30,522 | 844,247 | |||||||||||||
Income tax benefit (expense) | — | 10,125 | (33,112 | ) | — | (22,987 | ) | |||||||||||||
Income (loss) before equity in net income of subsidiaries | (69,497 | ) | (19,074 | ) | 879,309 | 30,522 | 821,260 | |||||||||||||
Equity in net income of subsidiaries | 903,852 | 53,584 | — | (957,436 | ) | — | ||||||||||||||
Net income | 834,355 | 34,510 | 879,309 | (926,914 | ) | 821,260 | ||||||||||||||
Amounts attributable to noncontrolling interests (1) | — | — | 13,095 | — | 13,095 | |||||||||||||||
Net income available to Arch | 834,355 | 34,510 | 892,404 | (926,914 | ) | 834,355 | ||||||||||||||
Preferred dividends | (21,938 | ) | — | — | — | (21,938 | ) | |||||||||||||
Net income available to Arch common shareholders | $ | 812,417 | $ | 34,510 | $ | 892,404 | $ | (926,914 | ) | $ | 812,417 | |||||||||
Comprehensive income available to Arch | $ | 888,247 | $ | 33,671 | $ | 976,821 | $ | (1,010,492 | ) | $ | 888,247 | |||||||||
(1) See Note 4. | ||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||
Condensed Consolidating Statement of Income and Comprehensive Income | ACGL (Parent Guarantor) | Arch-U.S. (Subsidiary Issuer) | Other ACGL Subsidiaries | Consolidating Adjustments and Eliminations | ACGL Consolidated | |||||||||||||||
Revenues | ||||||||||||||||||||
Net premiums earned | $ | — | $ | — | $ | 3,145,952 | $ | — | $ | 3,145,952 | ||||||||||
Net investment income | — | 31 | 307,449 | (40,261 | ) | 267,219 | ||||||||||||||
Net realized gains | — | — | 74,018 | — | 74,018 | |||||||||||||||
Net impairment losses recognized in earnings | — | — | (3,786 | ) | — | (3,786 | ) | |||||||||||||
Other underwriting income | — | — | 7,639 | — | 7,639 | |||||||||||||||
Equity in net income of investment funds accounted for using the equity method | — | — | 35,701 | — | 35,701 | |||||||||||||||
Other income (loss) | — | — | (586 | ) | — | (586 | ) | |||||||||||||
Total revenues | — | 31 | 3,566,387 | (40,261 | ) | 3,526,157 | ||||||||||||||
Expenses | ||||||||||||||||||||
Losses and loss adjustment expenses | — | — | 1,679,424 | — | 1,679,424 | |||||||||||||||
Acquisition expenses | — | — | 564,103 | — | 564,103 | |||||||||||||||
Other operating expenses | 38,702 | 2,691 | 459,337 | — | 500,730 | |||||||||||||||
Interest expense | 23,272 | 1,316 | 42,733 | (40,261 | ) | 27,060 | ||||||||||||||
Net foreign exchange losses | — | — | 2,145 | 10,190 | 12,335 | |||||||||||||||
Total expenses | 61,974 | 4,007 | 2,747,742 | (30,071 | ) | 2,783,652 | ||||||||||||||
Income (loss) before income taxes | (61,974 | ) | (3,976 | ) | 818,645 | (10,190 | ) | 742,505 | ||||||||||||
Income tax benefit (expense) | — | 1,383 | (34,157 | ) | — | (32,774 | ) | |||||||||||||
Income (loss) before equity in net income of subsidiaries | (61,974 | ) | (2,593 | ) | 784,488 | (10,190 | ) | 709,731 | ||||||||||||
Equity in net income of subsidiaries | 771,705 | 25,644 | — | (797,349 | ) | — | ||||||||||||||
Net income | 709,731 | 23,051 | 784,488 | (807,539 | ) | 709,731 | ||||||||||||||
Amounts attributable to noncontrolling interests | — | — | — | — | — | |||||||||||||||
Net income available to Arch | 709,731 | 23,051 | 784,488 | (807,539 | ) | 709,731 | ||||||||||||||
Preferred dividends | (21,938 | ) | — | — | — | (21,938 | ) | |||||||||||||
Net income available to Arch common shareholders | $ | 687,793 | $ | 23,051 | $ | 784,488 | $ | (807,539 | ) | $ | 687,793 | |||||||||
Comprehensive income (loss) available to Arch | $ | 497,678 | $ | (28,330 | ) | $ | 562,245 | $ | (533,915 | ) | $ | 497,678 | ||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||
Condensed Consolidating Statement of Income and Comprehensive Income | ACGL (Parent Guarantor) | Arch-U.S. (Subsidiary Issuer) | Other ACGL Subsidiaries | Consolidating Adjustments and Eliminations | ACGL Consolidated | |||||||||||||||
Revenues | ||||||||||||||||||||
Net premiums earned | $ | — | $ | — | $ | 2,935,140 | $ | — | $ | 2,935,140 | ||||||||||
Net investment income | 4 | 8 | 321,805 | (26,922 | ) | 294,895 | ||||||||||||||
Net realized gains | — | — | 194,228 | — | 194,228 | |||||||||||||||
Net impairment losses recognized in earnings | — | — | (11,388 | ) | — | (11,388 | ) | |||||||||||||
Other underwriting income | — | — | 8,090 | — | 8,090 | |||||||||||||||
Equity in net income of investment funds accounted for using the equity method | — | — | 73,510 | — | 73,510 | |||||||||||||||
Other income (loss) | — | — | (12,094 | ) | — | (12,094 | ) | |||||||||||||
Total revenues | 4 | 8 | 3,509,291 | (26,922 | ) | 3,482,381 | ||||||||||||||
Expenses | ||||||||||||||||||||
Losses and loss adjustment expenses | — | — | 1,861,277 | — | 1,861,277 | |||||||||||||||
Acquisition expenses | — | — | 508,884 | — | 508,884 | |||||||||||||||
Other operating expenses | 35,570 | 1,218 | 428,565 | — | 465,353 | |||||||||||||||
Interest expense | 23,496 | — | 31,951 | (26,922 | ) | 28,525 | ||||||||||||||
Net foreign exchange losses | — | — | 21,787 | 7,168 | 28,955 | |||||||||||||||
Total expenses | 59,066 | 1,218 | 2,852,464 | (19,754 | ) | 2,892,994 | ||||||||||||||
Income (loss) before income taxes | (59,062 | ) | (1,210 | ) | 656,827 | (7,168 | ) | 589,387 | ||||||||||||
Income tax benefit | — | 424 | 3,586 | — | 4,010 | |||||||||||||||
Income (loss) before equity in net income of subsidiaries | (59,062 | ) | (786 | ) | 660,413 | (7,168 | ) | 593,397 | ||||||||||||
Equity in net income of subsidiaries | 652,459 | 9,738 | — | (662,197 | ) | — | ||||||||||||||
Net income | 593,397 | 8,952 | 660,413 | (669,365 | ) | 593,397 | ||||||||||||||
Amounts attributable to noncontrolling interests | — | — | — | — | — | |||||||||||||||
Net income available to Arch | 593,397 | 8,952 | 660,413 | (669,365 | ) | 593,397 | ||||||||||||||
Preferred dividends | (25,079 | ) | — | — | — | (25,079 | ) | |||||||||||||
Loss on repurchase of preferred shares | (10,612 | ) | — | — | — | (10,612 | ) | |||||||||||||
Net income available to Arch common shareholders | $ | 557,706 | $ | 8,952 | $ | 660,413 | $ | (669,365 | ) | $ | 557,706 | |||||||||
Comprehensive income available to Arch | $ | 726,491 | $ | 2,796 | $ | 786,338 | $ | (789,134 | ) | $ | 726,491 | |||||||||
Year Ended December 31, 2014 | ||||||||||||||||||||
Condensed Consolidating Statement | ACGL (Parent Guarantor) | Arch-U.S. (Subsidiary Issuer) | Other ACGL Subsidiaries | Consolidating Adjustments and Eliminations | ACGL Consolidated | |||||||||||||||
of Cash Flows | ||||||||||||||||||||
Operating Activities | ||||||||||||||||||||
Net Cash Provided By (Used For) | $ | 467,091 | $ | 8,142 | $ | 1,077,597 | $ | (515,700 | ) | $ | 1,037,130 | |||||||||
Operating Activities | ||||||||||||||||||||
Investing Activities | ||||||||||||||||||||
Purchases of fixed maturity investments | — | (78,509 | ) | (28,666,770 | ) | — | (28,745,279 | ) | ||||||||||||
Purchases of equity securities | — | — | (520,817 | ) | — | (520,817 | ) | |||||||||||||
Purchases of other investments | — | — | (2,257,481 | ) | — | (2,257,481 | ) | |||||||||||||
Proceeds from the sales of fixed maturity investments | — | 16,011 | 26,807,181 | — | 26,823,192 | |||||||||||||||
Proceeds from the sales of equity securities | — | — | 411,362 | — | 411,362 | |||||||||||||||
Proceeds from the sales of other investments | — | — | 1,643,000 | — | 1,643,000 | |||||||||||||||
Proceeds from redemptions and maturities of fixed maturity investments | — | — | 762,995 | — | 762,995 | |||||||||||||||
Net (purchases) sales of short-term investments | 2,423 | 408,591 | 166,112 | — | 577,126 | |||||||||||||||
Change in investment of securities lending collateral | — | — | 57,470 | — | 57,470 | |||||||||||||||
Contributions to subsidiaries | — | (341,707 | ) | (128,825 | ) | 470,532 | — | |||||||||||||
Issuance of intercompany loans | — | (7,500 | ) | (7,500 | ) | 15,000 | — | |||||||||||||
Repayments of intercompany loans | — | — | 38,964 | (38,964 | ) | — | ||||||||||||||
Purchase of business, net of cash acquired | — | — | (237,106 | ) | — | (237,106 | ) | |||||||||||||
Purchases of furniture, equipment and other assets | (271 | ) | — | (19,612 | ) | — | (19,883 | ) | ||||||||||||
Net Cash Provided By (Used For) | 2,152 | (3,114 | ) | (1,951,027 | ) | 446,568 | (1,505,421 | ) | ||||||||||||
Investing Activities | ||||||||||||||||||||
Financing Activities | ||||||||||||||||||||
Purchases of common shares under share repurchase program | (454,137 | ) | — | — | — | (454,137 | ) | |||||||||||||
Proceeds from common shares issued, net | 6,827 | — | 470,532 | (470,532 | ) | 6,827 | ||||||||||||||
Proceeds from intercompany loans | — | 7,500 | 7,500 | (15,000 | ) | — | ||||||||||||||
Repayments of intercompany loans | — | (10,250 | ) | (28,714 | ) | 38,964 | — | |||||||||||||
Change in securities lending collateral | — | — | (57,470 | ) | — | (57,470 | ) | |||||||||||||
Third party investment in non-redeemable noncontrolling interests (1) | — | — | 796,903 | — | 796,903 | |||||||||||||||
Third party investment in redeemable noncontrolling interests (1) | — | — | 219,233 | — | 219,233 | |||||||||||||||
Dividends paid to redeemable noncontrolling interests (1) | — | — | (14,448 | ) | — | (14,448 | ) | |||||||||||||
Dividends paid to parent (2) | — | — | (515,700 | ) | 515,700 | — | ||||||||||||||
Other | — | — | 64,973 | — | 64,973 | |||||||||||||||
Preferred dividends paid | (21,938 | ) | — | — | — | (21,938 | ) | |||||||||||||
Net Cash Provided By (Used For) | (469,248 | ) | (2,750 | ) | 942,809 | 69,132 | 539,943 | |||||||||||||
Financing Activities | ||||||||||||||||||||
Effects of exchange rates changes on foreign currency cash | — | — | (20,007 | ) | — | (20,007 | ) | |||||||||||||
Increase (decrease) in cash | (5 | ) | 2,278 | 49,372 | — | 51,645 | ||||||||||||||
Cash beginning of year | 3,223 | 509 | 430,325 | — | 434,057 | |||||||||||||||
Cash end of year | $ | 3,218 | $ | 2,787 | $ | 479,697 | $ | — | $ | 485,702 | ||||||||||
(1) See Note 4. | ||||||||||||||||||||
(2) Included in net cash provided by (used for) operating activities in the ACGL (Parent Guarantor) column. | ||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||
Condensed Consolidating Statement | ACGL (Parent Guarantor) | Arch-U.S. (Subsidiary Issuer) | Other ACGL Subsidiaries | Consolidating Adjustments and Eliminations | ACGL Consolidated | |||||||||||||||
of Cash Flows | ||||||||||||||||||||
Operating Activities | ||||||||||||||||||||
Net Cash Provided By (Used For) | $ | 68,562 | $ | (6,569 | ) | $ | 908,375 | $ | (119,500 | ) | $ | 850,868 | ||||||||
Operating Activities | ||||||||||||||||||||
Investing Activities | ||||||||||||||||||||
Purchases of fixed maturity investments | — | — | (18,174,988 | ) | — | (18,174,988 | ) | |||||||||||||
Purchases of equity securities | — | — | (535,857 | ) | — | (535,857 | ) | |||||||||||||
Purchases of other investments | — | — | (1,326,729 | ) | — | (1,326,729 | ) | |||||||||||||
Proceeds from the sales of fixed maturity investments | — | — | 17,196,614 | — | 17,196,614 | |||||||||||||||
Proceeds from the sales of equity securities | — | — | 462,787 | — | 462,787 | |||||||||||||||
Proceeds from the sales of other investments | — | — | 1,162,707 | — | 1,162,707 | |||||||||||||||
Proceeds from redemptions and maturities of fixed maturity investments | — | — | 731,708 | — | 731,708 | |||||||||||||||
Net (purchases) sales of short-term investments | 5,799 | (400,162 | ) | (356,250 | ) | — | (750,613 | ) | ||||||||||||
Change in investment of securities lending collateral | — | — | (55,643 | ) | — | (55,643 | ) | |||||||||||||
Contributions to subsidiaries | (160 | ) | (97,850 | ) | (20,250 | ) | 118,260 | — | ||||||||||||
Issuance of intercompany loans | — | — | (10,250 | ) | 10,250 | — | ||||||||||||||
Purchases of furniture, equipment and other assets | (712 | ) | — | (16,787 | ) | — | (17,499 | ) | ||||||||||||
Net Cash Provided By (Used For) | 4,927 | (498,012 | ) | (942,938 | ) | 128,510 | (1,307,513 | ) | ||||||||||||
Investing Activities | ||||||||||||||||||||
Financing Activities | ||||||||||||||||||||
Purchases of common shares under share repurchase program | (57,796 | ) | — | — | — | (57,796 | ) | |||||||||||||
Proceeds from common shares issued, net | 3,051 | — | 118,260 | (118,260 | ) | 3,051 | ||||||||||||||
Proceeds from intercompany loans | — | 10,250 | — | (10,250 | ) | — | ||||||||||||||
Proceeds from borrowings | — | 494,228 | — | — | 494,228 | |||||||||||||||
Change in securities lending collateral | — | — | 55,643 | — | 55,643 | |||||||||||||||
Dividends paid to parent (1) | — | — | (119,500 | ) | 119,500 | — | ||||||||||||||
Other | — | — | 50,830 | — | 50,830 | |||||||||||||||
Preferred dividends paid | (21,938 | ) | — | — | — | (21,938 | ) | |||||||||||||
Net Cash Provided By (Used For) | (76,683 | ) | 504,478 | 105,233 | (9,010 | ) | 524,018 | |||||||||||||
Financing Activities | ||||||||||||||||||||
Effects of exchange rates changes on foreign currency cash | — | — | (4,357 | ) | — | (4,357 | ) | |||||||||||||
Increase (decrease) in cash | (3,194 | ) | (103 | ) | 66,313 | — | 63,016 | |||||||||||||
Cash beginning of year | 6,417 | 612 | 364,012 | — | 371,041 | |||||||||||||||
Cash end of year | $ | 3,223 | $ | 509 | $ | 430,325 | $ | — | $ | 434,057 | ||||||||||
(1) Included in net cash provided by (used for) operating activities in the ACGL (Parent Guarantor) column. | ||||||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||
Condensed Consolidating Statement | ACGL (Parent Guarantor) | Arch-U.S. (Subsidiary Issuer) | Other ACGL Subsidiaries | Consolidating Adjustments and Eliminations | ACGL Consolidated | |||||||||||||||
of Cash Flows | ||||||||||||||||||||
Operating Activities | ||||||||||||||||||||
Net Cash Provided By (Used For) | $ | 209,500 | $ | (8,086 | ) | $ | 978,679 | $ | (258,490 | ) | $ | 921,603 | ||||||||
Operating Activities | ||||||||||||||||||||
Investing Activities | ||||||||||||||||||||
Purchases of fixed maturity investments | — | — | (17,568,592 | ) | — | (17,568,592 | ) | |||||||||||||
Purchases of equity securities | — | — | (268,999 | ) | — | (268,999 | ) | |||||||||||||
Purchases of other investments | — | — | (1,000,049 | ) | — | (1,000,049 | ) | |||||||||||||
Proceeds from the sales of fixed maturity investments | — | — | 16,366,306 | — | 16,366,306 | |||||||||||||||
Proceeds from the sales of equity securities | — | — | 313,617 | — | 313,617 | |||||||||||||||
Proceeds from the sales of other investments | — | — | 443,630 | — | 443,630 | |||||||||||||||
Proceeds from redemptions and maturities of fixed maturity investments | — | — | 1,115,594 | — | 1,115,594 | |||||||||||||||
Net (purchases) sales of short-term investments | (5,094 | ) | 1,986 | 189,027 | — | 185,919 | ||||||||||||||
Change in investment of securities lending collateral | — | — | 6,190 | — | 6,190 | |||||||||||||||
Contributions to subsidiaries | — | — | (38,576 | ) | 38,576 | — | ||||||||||||||
Purchase of business, net of cash acquired | — | — | 28,948 | — | 28,948 | |||||||||||||||
Purchases of furniture, equipment and other assets | (65 | ) | — | (18,467 | ) | — | (18,532 | ) | ||||||||||||
Net Cash Provided By (Used For) | (5,159 | ) | 1,986 | (431,371 | ) | 38,576 | (395,968 | ) | ||||||||||||
Investing Activities | ||||||||||||||||||||
Financing Activities | ||||||||||||||||||||
Proceeds from issuance of Series C preferred shares issued, net | 315,763 | — | — | — | 315,763 | |||||||||||||||
Repurchase of Series A and B preferred shares | (325,000 | ) | — | — | — | (325,000 | ) | |||||||||||||
Purchases of common shares under share repurchase program | (172,056 | ) | — | — | — | (172,056 | ) | |||||||||||||
Proceeds from common shares issued, net | 7,033 | — | 38,576 | (38,576 | ) | 7,033 | ||||||||||||||
Repayments of borrowings | — | — | (310,868 | ) | — | (310,868 | ) | |||||||||||||
Change in securities lending collateral | — | — | (6,190 | ) | — | (6,190 | ) | |||||||||||||
Dividends paid to parent (1) | — | — | (258,490 | ) | 258,490 | — | ||||||||||||||
Other | — | — | 6,664 | — | 6,664 | |||||||||||||||
Preferred dividends paid | (28,381 | ) | — | — | — | (28,381 | ) | |||||||||||||
Net Cash Provided By (Used For) | (202,641 | ) | — | (530,308 | ) | 219,914 | (513,035 | ) | ||||||||||||
Financing Activities | ||||||||||||||||||||
Effects of exchange rates changes on foreign currency cash | — | — | 6,742 | — | 6,742 | |||||||||||||||
Increase (decrease) in cash | 1,700 | (6,100 | ) | 23,742 | — | 19,342 | ||||||||||||||
Cash beginning of year | 4,717 | 6,712 | 340,270 | — | 351,699 | |||||||||||||||
Cash end of year | $ | 6,417 | $ | 612 | $ | 364,012 | $ | — | $ | 371,041 | ||||||||||
(1) Included in net cash provided by (used for) operating activities in the ACGL (Parent Guarantor) column. |
Schedule_III_Supplementary_Ins
Schedule III - Supplementary Insurance Information | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||
Supplementary Insurance Information [Abstract] | ||||||||||||||||||||||||||
Supplementary Insurance Information | SCHEDULE III | |||||||||||||||||||||||||
ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES | ||||||||||||||||||||||||||
SUPPLEMENTARY INSURANCE INFORMATION | ||||||||||||||||||||||||||
(U.S. dollars in thousands) | ||||||||||||||||||||||||||
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 | ||||||||||||||||||
Net | ||||||||||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||||||||
Insurance | $178,545 | $6,161,500 | $1,237,099 | $2,017,370 | NM | $1,260,953 | $316,308 | $335,157 | $2,146,654 | |||||||||||||||||
Reinsurance | 148,130 | 2,690,070 | 666,233 | 1,279,328 | NM | 532,450 | 261,438 | 147,964 | 1,265,991 | |||||||||||||||||
Mortgage | 38,321 | 118,550 | 148,232 | 193,573 | NM | 55,674 | 49,400 | 66,891 | 204,837 | |||||||||||||||||
Other | 49,529 | 66,328 | 180,014 | 103,477 | NM | 70,173 | 30,116 | 6,268 | 274,456 | |||||||||||||||||
Total | $414,525 | $9,036,448 | $2,231,578 | $3,593,748 | NM | $1,919,250 | $657,262 | $556,280 | $3,891,938 | |||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||||
Insurance | 158,121 | 6,137,121 | 1,192,188 | 1,876,014 | NM | 1,188,445 | 311,904 | 315,387 | 1,948,796 | |||||||||||||||||
Reinsurance | 167,642 | 2,680,288 | 612,725 | 1,218,672 | NM | 486,236 | 234,373 | 134,563 | 1,313,001 | |||||||||||||||||
Mortgage | 16,551 | 7,287 | 91,452 | 51,266 | NM | 4,743 | 17,826 | 8,377 | 89,570 | |||||||||||||||||
Total | $342,314 | $8,824,696 | $1,896,365 | $3,145,952 | NM | $1,679,424 | $564,103 | $458,327 | $3,351,367 | |||||||||||||||||
31-Dec-12 | ||||||||||||||||||||||||||
Insurance | $141,962 | $6,149,247 | $1,077,211 | $1,800,343 | NM | $1,283,841 | $298,983 | $307,489 | $1,825,334 | |||||||||||||||||
Reinsurance | 106,677 | 2,781,424 | 517,619 | 1,118,127 | NM | 574,821 | 204,903 | 118,245 | 1,158,790 | |||||||||||||||||
Mortgage | 14,183 | 2,621 | 53,148 | 16,670 | NM | 2,615 | 4,998 | 4,301 | 68,111 | |||||||||||||||||
Total | $262,822 | $8,933,292 | $1,647,978 | $2,935,140 | NM | $1,861,277 | $508,884 | $430,035 | $3,052,235 | |||||||||||||||||
-1 | The Company does not manage its assets by segment and, accordingly, net investment income is not allocated to each underwriting segment. See Note 5 for information related to the ‘other’ segment. | |||||||||||||||||||||||||
-2 | Certain other operating expenses relate to the Company’s corporate segment (non-underwriting). Such amounts are not reflected in the table above. See Note 5. |
Schedule_IV_Reinsurance
Schedule IV - Reinsurance | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Abstract] | |||||||||||||||||||
Reinsurance | SCHEDULE IV | ||||||||||||||||||
ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES | |||||||||||||||||||
REINSURANCE | |||||||||||||||||||
(U.S. dollars in thousands) | |||||||||||||||||||
Gross Amount | Ceded to Other Companies (1) | Assumed From Other Companies (1) | Net | Percentage of Amount Assumed to Net | |||||||||||||||
Amount | |||||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||||
Premiums Written: | |||||||||||||||||||
Insurance | $ | 2,974,996 | $ | (862,015 | ) | $ | 33,673 | $ | 2,146,654 | 1.6 | % | ||||||||
Reinsurance | 22,405 | (261,255 | ) | 1,504,841 | 1,265,991 | 118.9 | % | ||||||||||||
Mortgage | 103,545 | (22,519 | ) | 123,811 | 204,837 | 60.4 | % | ||||||||||||
Other | — | (14,171 | ) | 288,627 | 274,456 | 105.2 | % | ||||||||||||
Total | $ | 3,100,946 | $ | (948,678 | ) | $ | 1,739,670 | $ | 3,891,938 | 44.7 | % | ||||||||
Year Ended December 31, 2013 | |||||||||||||||||||
Premiums Written: | |||||||||||||||||||
Insurance | $ | 2,682,446 | $ | (763,713 | ) | $ | 30,063 | $ | 1,948,796 | 1.5 | % | ||||||||
Reinsurance | 72,136 | (86,620 | ) | 1,327,485 | 1,313,001 | 101.1 | % | ||||||||||||
Mortgage | — | — | 89,570 | 89,570 | 100 | % | |||||||||||||
Total | $ | 2,754,582 | $ | (845,256 | ) | $ | 1,442,041 | $ | 3,351,367 | 43 | % | ||||||||
Year Ended December 31, 2012 | |||||||||||||||||||
Premiums Written: | |||||||||||||||||||
Insurance | $ | 2,562,788 | $ | (768,625 | ) | $ | 31,171 | $ | 1,825,334 | 1.7 | % | ||||||||
Reinsurance | 111,076 | (55,099 | ) | 1,102,813 | 1,158,790 | 95.2 | % | ||||||||||||
Mortgage | — | — | 68,111 | 68,111 | 100 | % | |||||||||||||
Total | $ | 2,673,864 | $ | (816,926 | ) | $ | 1,195,297 | $ | 3,052,235 | 39.2 | % | ||||||||
-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. |
Schedule_VI_Supplementary_Info
Schedule VI - Supplementary Information For Property and Casualty Insurance Underwriters | 12 Months Ended | |||||||||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||||||||
Supplemental Information for Property, Casualty Insurance Underwriters [Abstract] | ||||||||||||||||||||||||||||||||||
Supplementary Information for Property and Casualty Insurance Underwriters | SCHEDULE VI | |||||||||||||||||||||||||||||||||
ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES | ||||||||||||||||||||||||||||||||||
SUPPLEMENTARY INFORMATION FOR PROPERTY AND CASUALTY INSURANCE UNDERWRITERS | ||||||||||||||||||||||||||||||||||
(U.S. dollars in thousands) | ||||||||||||||||||||||||||||||||||
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 | Net Investment Income | Net Losses and Loss Adjustment Expenses Incurred Related to | Amortization | Net Paid Losses and Loss Adjustment Expenses | Net | ||||||||||||||||||||||||
Net | Premiums Earned | (a) Current Year | (b) | of Deferred Acquisition Costs | Premiums Written | |||||||||||||||||||||||||||||
Prior Years | ||||||||||||||||||||||||||||||||||
Consolidated Subsidiaries | ||||||||||||||||||||||||||||||||||
2014 | $ | 414,525 | $ | 9,036,448 | $ | 14,732 | $ | 2,231,578 | $ | 3,593,748 | $ | 302,585 | $ | 2,246,152 | $ | (326,902 | ) | $ | 657,262 | $ | 1,697,736 | $ | 3,891,938 | |||||||||||
2013 | 342,314 | 8,824,696 | 12,539 | 1,896,365 | 3,145,952 | 267,219 | 1,943,466 | (264,042 | ) | 564,103 | 1,708,817 | 3,351,367 | ||||||||||||||||||||||
2012 | 262,822 | 8,933,292 | 10,485 | 1,647,978 | 2,935,140 | 294,895 | 2,082,805 | (221,528 | ) | 508,884 | 1,465,379 | 3,052,235 | ||||||||||||||||||||||
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Basis of presentation | The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of ACGL and its subsidiaries, including Arch Re Bermuda, Arch Reinsurance Company (“Arch Re U.S.”), Arch-U.S., Arch Insurance Company, Arch Specialty Insurance Company, Arch Excess & Surplus Insurance Company, Arch Indemnity Insurance Company, Arch Insurance Canada Ltd. (“Arch Insurance Canada”), Arch Risk Transfer Services Ltd., Arch Reinsurance Europe Underwriting Limited (“Arch Re Europe”), Arch MI U.S., Arch Mortgage Guaranty Company, Arch Mortgage Insurance Limited (“Arch MI Europe”), Arch Insurance Company (Europe) Limited (“Arch Insurance Company Europe”), Lloyd’s of London syndicate 2012 and related companies (“Arch Syndicate 2012”) and Watford Re. All significant intercompany transactions and balances have been eliminated in consolidation. |
Use of estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions. |
Premium revenues | Insurance. Insurance premiums written are generally recorded at the policy inception and are primarily earned on a pro rata basis over the terms of the policies for all products, usually 12 months. Premiums written include estimates in the Company’s programs, specialty lines, lenders products business and for participation in involuntary pools. Such premium estimates are derived from multiple sources which include the historical experience of the underlying business, similar business and available industry information. Unearned premium reserves represent the portion of premiums written that relates to the unexpired terms of in-force insurance policies. |
Reinsurance. Reinsurance premiums written include amounts reported by brokers and ceding companies, supplemented by the Company’s own estimates of premiums where reports have not been received. The determination of premium estimates requires a review of the Company’s experience with the ceding companies, familiarity with each market, the timing of the reported information, an analysis and understanding of the characteristics of each line of business, and management’s judgment of the impact of various factors, including premium or loss trends, on the volume of business written and ceded to the Company. On an ongoing basis, the Company’s underwriters review the amounts reported by these third parties for reasonableness based on their experience and knowledge of the subject class of business, taking into account the Company’s historical experience with the brokers or ceding companies. In addition, reinsurance contracts under which the Company assumes business generally contain specific provisions which allow the Company to perform audits of the ceding company to ensure compliance with the terms and conditions of the contract, including accurate and timely reporting of information. Based on a review of all available information, management establishes premium estimates where reports have not been received. Premium estimates are updated when new information is received and differences between such estimates and actual amounts are recorded in the period in which estimates are changed or the actual amounts are determined. | |
Reinsurance premiums written are recorded based on the type of contracts the Company writes. Premiums on the Company’s excess of loss and pro rata reinsurance contracts are estimated when the business is underwritten. For excess of loss contracts, premiums are recorded as written based on the terms of the contract. Estimates of premiums written under pro rata contracts are recorded in the period in which the underlying risks are expected to incept and are based on information provided by the brokers and the ceding companies. For multi-year reinsurance treaties which are payable in annual installments, generally, only the initial annual installment is included as premiums written at policy inception due to the ability of the reinsured to commute or cancel coverage during the term of the policy. The remaining annual installments are included as premiums written at each successive anniversary date within the multi-year term. | |
Reinstatement premiums for the Company’s insurance and reinsurance operations are recognized at the time a loss event occurs, where coverage limits for the remaining life of the contract are reinstated under pre-defined contract terms. Reinstatement premiums, if obligatory, are fully earned when recognized. The accrual of reinstatement premiums is based on an estimate of losses and loss adjustment expenses, which reflects management’s judgment. | |
Premium estimates are reviewed by management at least quarterly. Such review includes a comparison of actual reported premiums to expected ultimate premiums along with a review of the aging and collection of premium estimates. Based on management’s review, the appropriateness of the premium estimates is evaluated, and any adjustment to these estimates is recorded in the period in which it becomes known. Adjustments to premium estimates could be material and such adjustments could directly and significantly impact earnings favorably or unfavorably in the period they are determined because the estimated premium may be fully or substantially earned. A significant portion of amounts included as premiums receivable, which represent estimated premiums written, net of commissions, are not currently due based on the terms of the underlying contracts. | |
Reinsurance premiums written, irrespective of the class of business, are generally earned on a pro rata basis over the terms of the underlying policies or reinsurance contracts. Contracts and policies written on a “losses occurring” basis cover claims that may occur during the term of the contract or policy, which is typically 12 months. Accordingly, the premium is earned evenly over the term. Contracts which are written on a “risks attaching” basis cover claims which attach to the underlying insurance policies written during the terms of such contracts. Premiums earned on such contracts usually extend beyond the original term of the reinsurance contract, typically resulting in recognition of premiums earned over a 24-month period. Certain of the Company’s reinsurance contracts include provisions that adjust premiums or acquisition expenses based upon the experience under the contracts. Premiums written and earned, as well as related acquisition expenses, are recorded based upon the projected experience under such contracts. | |
The Company also writes certain reinsurance business that is intended to provide insurers with risk management solutions that complement traditional reinsurance. Under these contracts, the Company assumes a measured amount of insurance risk in exchange for an anticipated margin, which is typically lower than on traditional reinsurance contracts. The terms and conditions of these contracts may include additional or return premiums based on loss experience, loss corridors, sublimits and caps. Examples of such business include aggregate stop-loss coverages, financial quota share coverages and multi-year retrospectively rated excess of loss coverages. If these contracts are deemed to transfer risk, they are accounted for as reinsurance. | |
Mortgage. Mortgage guaranty insurance policies are contracts that are generally non-cancelable by the insurer, are renewable at a fixed price, and provide for payment of premiums on a monthly, annual or single basis. Upon renewal, the Company is not able to re-underwrite or re-price its policies. Consistent with industry accounting practices, premiums written on a monthly basis are earned as coverage is provided. Premiums written on an annual basis are amortized on a monthly pro rata basis over the year of coverage. Primary mortgage insurance premiums written on policies covering more than one year are referred to as single premiums. A portion of the revenue from single premiums is recognized in premiums earned in the current period, and the remaining portion is deferred as unearned premiums and earned over the estimated expiration of risk of the policy. If single premium policies related to insured loans are canceled due to repayment by the borrower and the policy is a non-refundable product, the remaining unearned premium related to each canceled policy is recognized as earned premium upon notification of the cancellation. | |
Unearned premiums represent the portion of premiums written that is applicable to the estimated unexpired risk of insured loans. A portion of premium payments may be refundable if the insured cancels coverage, which generally occurs when the loan is repaid, the loan amortizes to a sufficiently low amount to trigger a lender permitted or legally required cancellation, or the value of the property has increased sufficiently in accordance with the terms of the contract. Premium refunds reduce premiums earned in the consolidated statements of income. Generally, only unearned premiums are refundable. However, when the Company pays a claim on a delinquent loan, all servicer paid premiums received on the delinquent loan covering any period after the default date will be refunded, in accordance with the terms of the contract. | |
Deferred acquisition costs | Acquisition Costs. Acquisition expenses and other expenses related to the Company’s underwriting operations that vary with, and are directly related to, the successful acquisition or renewal of business are deferred and amortized based on the type of contract. For property and casualty insurance and reinsurance contracts, deferred acquisition costs are amortized over the period in which the related premiums are earned. Consistent with mortgage insurance industry accounting practice, amortization of acquisition costs related to the mortgage insurance contracts for each underwriting year’s book of business is recorded in proportion to estimated gross profits. Estimated gross profits are comprised of earned premiums and losses and loss adjustment expenses. For each underwriting year, the Company estimates the rate of amortization to reflect actual experience and any changes to persistency or loss development. |
Acquisition expenses, net of ceding commissions received from reinsurers, consist principally of commissions and premium taxes paid to obtain the Company’s business. Other operating expenses also include expenses that vary with, and are directly related to, the successful acquisition of business. Deferred acquisition costs are carried at their estimated realizable value and take into account anticipated losses and loss adjustment expenses, based on historical and current experience, and anticipated investment income. | |
A premium deficiency occurs if the sum of anticipated losses and loss adjustment expenses, unamortized acquisition costs and maintenance costs exceed unearned premiums (including expected future premiums) and anticipated investment income. A premium deficiency reserve (“PDR”) is recorded by charging any unamortized acquisition costs to expense to the extent required in order to eliminate the deficiency. If the premium deficiency exceeds unamortized acquisition costs then a liability is accrued for the excess deficiency. | |
To assess the need for a PDR on mortgage exposures, the Company develops loss projections based on modeled loan defaults related to its current policies in force. This projection is based on recent trends in default experience, severity and rates of defaulted loans moving to claim, as well as recent trends in the rate at which loans are prepaid. Evaluating the expected profitability of the Company’s existing mortgage insurance business and the need for a PDR for its mortgage business involves significant reliance upon assumptions and estimates with regard to the likelihood, magnitude and timing of potential losses and premium revenues. | |
No premium deficiency charges were recorded by the Company during 2014, 2013 or 2012. | |
Deposit accounting | Certain assumed reinsurance contracts, which pursuant to Financial Accounting Standards Board (“FASB”) guidance regarding the accounting and reporting for reinsurance and short-duration and long-duration contracts, that are deemed not to transfer insurance risk, are accounted for using the deposit method of accounting as prescribed in the FASB guidance. However, it is possible that the Company could incur financial losses on such contracts. Management exercises significant judgment in the assumptions used in determining whether assumed contracts should be accounted for as reinsurance contracts or deposit contracts. Under the FASB guidance, for those contracts that contain only significant underwriting risk, the estimated profit margin is deferred and amortized over the contract period and such amount is included in the Company’s underwriting results. When the estimated profit margin is explicit, the margin is reflected as other underwriting income and any adverse financial results on such contracts are reflected as incurred losses. When the estimated profit margin is implicit, the margin is reflected as an offset to paid losses and any adverse financial results on such contracts are reflected as incurred losses. Additional judgments are required when applying the accounting guidance with respect to the revenue recognition criteria for contracts deemed to transfer only significant underwriting risk. For those contracts that contain only significant timing risk, an accretion rate is established at inception of the contract based on actuarial estimates whereby the deposit accounting liability is increased to the estimated amount payable over the contract term. The accretion on the deposit is based on the expected rate of return required to fund the expected future payment obligations. Periodically the Company reassesses the estimated ultimate liability and the related expected rate of return. The accretion of the deposit accounting liability as well as changes to the estimated ultimate liability and the accretion rate are reflected as part of interest expense in the Company’s results of operations. |
Deposit accounting liabilities totaled $327.4 million and $421.3 million, respectively, at December 31, 2014 and 2013. Under some of these contracts, the ceding company retains the related assets on a funds-held basis. In those instances, the Company records the asset as a deposit accounting asset. Deposit accounting assets of $284.4 million and $370.5 million, respectively, at December 31, 2014 and 2013 are included in “Other assets” on the Company’s balance sheet. Interest income produced by those assets are recorded as part of net investment income in the Company's results of operations. | |
Retroactive accounting | Retroactive reinsurance reimburses a ceding company for liabilities incurred as a result of past insurable events covered by the underlying policies reinsured. In certain instances, reinsurance contracts cover losses both on a prospective basis and on a retroactive basis and, accordingly, the Company bifurcates the prospective and retrospective elements of these reinsurance contracts and accounts for each element separately. Underwriting income generated in connection with retroactive reinsurance contracts is deferred and amortized into income over the settlement period while losses are charged to income immediately. Subsequent changes in estimated or actual cash flows under such retroactive reinsurance contracts are accounted for by adjusting the previously deferred amount to the balance that would have existed had the revised estimate been available at the inception of the reinsurance transaction, with a corresponding charge or credit to income. |
Reinsurance ceded | In the normal course of business, the Company purchases reinsurance to increase capacity and to limit the impact of individual losses and events on its underwriting results by reinsuring certain levels of risk with other insurance enterprises or reinsurers. The Company uses pro rata, excess of loss and facultative reinsurance contracts. Reinsurance ceding commissions are recognized as a reduction to acquisition costs on a pro rata basis over the period of risk while the portion of such commissions that will be earned in the future is deferred. The accompanying consolidated statement of income reflects premiums and losses and loss adjustment expenses and acquisition costs, net of reinsurance ceded. See Note 7 for information on the Company's reinsurance usage. Ceded unearned premiums are reported as prepaid reinsurance premiums and estimated amounts of reinsurance recoverable on unpaid losses are reported as unpaid losses and loss adjustment expenses recoverable. Reinsurance premiums ceded and unpaid losses and loss adjustment expenses recoverable are estimated in a manner consistent with that of the original policies issued and the terms of the reinsurance contracts. If the reinsurers are unable to satisfy their obligations under the agreements, the Company’s insurance or reinsurance subsidiaries would be liable for such defaulted amounts. |
Cash | Cash includes cash equivalents, which are investments with original maturities of three months or less that are not managed by external or internal investment advisors. |
Investments | The Company currently classifies substantially all of its fixed maturity investments, equity securities and short-term investments as “available for sale” and, accordingly, they are carried at estimated fair value (also known as fair value) with the changes in fair value recorded as an unrealized gain or loss component of accumulated other comprehensive income in shareholders’ equity. The fair value of fixed maturity securities and equity securities is generally determined from quotations received from nationally recognized pricing services, or when such prices are not available, by reference to broker or underwriter bid indications. Short-term investments comprise securities due to mature within one year of the date of issue. Short-term investments include certain cash equivalents which are part of investment portfolios under the management of external and internal investment managers. |
The Company participates in a securities lending program as a mechanism for generating additional interest income on its fixed income portfolio. Under the security lending agreements, certain of its fixed income portfolio securities are loaned to third parties, primarily major brokerage firms, for short periods of time through a lending agent. Such securities have been reclassified as “Fixed maturities and short-term investments pledged under securities lending agreements, at fair value.” The Company maintains legal control over the securities it lends, retains the earnings and cash flows associated with the loaned securities and receives a fee from the borrower for the temporary use of the securities. Collateral received, primarily in the form of cash, is required at a rate of 102% of the fair value of the loaned securities including accrued investment income and is monitored and maintained by the lending agent. Such collateral is reinvested and is reflected as “Investment of funds received under securities lending agreements, at fair value.” | |
The Company’s investment portfolio includes certain funds that, due to their ownership structure, are accounted for by the Company using the equity method. In applying the equity method, these investments are initially recorded at cost and are subsequently adjusted based on the Company’s proportionate share of the net income or loss of the funds (which include changes in the fair value of the underlying securities in the funds). Such investments are generally recorded on a one to three month lag based on the availability of reports from the investment funds. Changes in the carrying value of such investments are recorded in net income as “Equity in net income (loss) of investment funds accounted for using the equity method.” As such, fluctuations in the carrying value of the investment funds accounted for using the equity method may increase the volatility of the Company’s reported results of operations. | |
Other investments include funds and separately managed accounts with holdings in Asian and emerging markets, fixed maturities, term loans and other investment strategies. The fair value for certain of the Company’s other investments are determined using net asset values (“NAVs”) as advised by external fund managers. The NAV is based on the fund manager’s valuation of the underlying holdings in accordance with the fund’s governing documents. Certain of the funds are accounted for as available for sale equity securities, regardless of the nature of the investments held within the fund. | |
The Company elected to carry certain fixed maturity securities, equity securities and other investments at fair value under the fair value option afforded by accounting guidance regarding the fair value option for financial assets and liabilities. Changes in fair value of investments accounted for using the fair value option are included in “Net realized gains (losses).” The primary reasons for electing the fair value option were to address simplification and cost-benefit considerations. | |
The Company invests in limited partner equity interests issued by third party variable interest entities (“VIE”). Such amounts are included in investments accounted for using the equity method, other investments available for sale and investments accounted for using the fair value option. A VIE refers to entities that have characteristics such as (i) insufficient equity at risk to allow the entity to finance its activities without additional financial support or (ii) instances where the equity investors, as a group, do not have the characteristic of a controlling financial interest. If the Company is determined to be the primary beneficiary, it is required to consolidate the VIE. The primary beneficiary is defined as the variable interest holder that is determined to have the controlling financial interest as a result of having both (i) the power to direct the activities of a VIE that most significantly impact the economic performance of the VIE and (ii) the obligation to absorb losses or right to receive benefits from the VIE that could potentially be significant to the VIE. At inception of the VIE as well as on an ongoing basis, the Company determines whether it is the primary beneficiary based on an analysis of the Company’s level of involvement in the VIE, the contractual terms, and the overall structure of the VIE. The Company's maximum exposure to loss with respect to these investments is limited to the investment carrying amounts reported in the Company's consolidated balance sheet and any unfunded commitment. | |
The Company performs quarterly reviews of its investments to determine whether declines in fair value below the cost basis are considered other-than-temporary in accordance with applicable accounting guidance regarding the recognition and presentation of other-than-temporary impairments (“OTTI”). The process of determining whether a security is other-than-temporarily impaired requires judgment and involves analyzing many factors. These factors include (i) an analysis of the liquidity, business prospects and overall financial condition of the issuer, (ii) the time period in which there was a significant decline in value, (iii) the significance of the decline and (iv) the analysis of specific credit events. The Company evaluates the unrealized losses of its equity securities by issuer and forecasts a reasonable period of time by which the fair value of the securities would increase and the Company would recover its cost. If the Company is unable to forecast a reasonable period of time in which to recover the cost of its equity securities, a net impairment loss in earnings equivalent to the entire unrealized loss is recognized. | |
When there are credit-related losses associated with debt securities for which the Company does not have an intent to sell and it is more likely than not that it will not be required to sell the security before recovery of its cost basis, the amount of the OTTI related to a credit loss is recognized in earnings and the amount of the OTTI related to other factors (e.g., interest rates, market conditions, etc.) is recorded as a component of other comprehensive income (loss). The amount of the credit loss of an impaired debt security is the difference between the amortized cost and the greater of (i) the present value of expected future cash flows and (ii) the fair value of the security. In instances where no credit loss exists but it is more likely than not that the Company will have to sell the debt security prior to the anticipated recovery, the decline in fair value below amortized cost is recognized as an OTTI in earnings. In periods after the recognition of an OTTI on debt securities, the Company accounts for such securities as if they had been purchased on the measurement date of the OTTI at an amortized cost basis equal to the previous amortized cost basis less the OTTI recognized in earnings. For debt securities for which OTTI were recognized in earnings, the difference between the new amortized cost basis and the cash flows expected to be collected will be accreted or amortized into net investment income. See Note 8, “Investment Information—Other-Than-Temporary Impairments” for additional information. | |
Net investment income includes interest and dividend income together with amortization of market premiums and discounts and is net of investment management and custody fees. Anticipated prepayments and expected maturities are used in applying the interest method for certain investments such as mortgage and other asset-backed securities. When actual prepayments differ significantly from anticipated prepayments, the effective yield is recalculated to reflect actual payments to date and anticipated future payments. The net investment in such securities is adjusted to the amount that would have existed had the new effective yield been applied since the acquisition of the security. Such adjustments, if any, are included in net investment income when determined. Equity in net income (loss) of investment funds accounted for using the equity method includes changes in the fair value of certain alternative investments accounted for under the equity method. | |
Investment gains or losses realized on the sale of investments, except for certain fund investments, are determined on a first-in, first-out basis and are reflected in net income. Investments gains or losses realized on the sale of certain fund investments are determined on an average cost basis. Unrealized appreciation or decline in the value of securities, which are carried at fair value, is excluded from net income and recorded as a separate component of accumulated other comprehensive income, net of applicable deferred income tax. | |
Derivative instruments | The Company recognizes all derivative instruments, including embedded derivative instruments, at fair value in the Consolidated Balance Sheets. The Company employs the use of derivative instruments within its operations to mitigate risks arising from assets and liabilities held in foreign currencies as well as part of its overall investment strategy. For such instruments, changes in assets and liabilities measured at fair value are recorded as “Net realized gains” in the consolidated statements of income. In addition, the Company’s derivative instruments include amounts related to underwriting activities where an insurance or reinsurance contract meets the accounting definition of a derivative instrument. For such contracts, changes in fair value are reflected in “Other underwriting income” in the consolidated statements of income as the underlying contract originates from the Company’s underwriting operations. For the periods ended 2014, 2013, and 2012, the Company did not designate any derivative instruments as hedges under the relevant accounting guidance. See Note 11 for information on the Company’s derivative instruments. |
Reserve for losses and loss adjustment expenses | Insurance and Reinsurance. The reserve for losses and loss adjustment expenses consists of estimates of unpaid reported losses and loss adjustment expenses and estimates for losses incurred but not reported. The reserve for unpaid reported losses and loss adjustment expenses, established by management based on reports from ceding companies and claims from insureds, excludes estimates of amounts related to losses under high deductible policies, and represents the estimated ultimate cost of events or conditions that have been reported to or specifically identified by the Company. Such reserves are supplemented by management’s estimates of reserves for losses incurred for which reports or claims have not been received. The Company’s reserves are based on a combination of reserving methods, incorporating both Company and industry loss development patterns. The Company selects the initial expected loss and loss adjustment expense ratios based on information derived by its underwriters and actuaries during the initial pricing of the business, supplemented by industry data where appropriate. Such ratios consider, among other things, rate changes and changes in terms and conditions that have been observed in the market. These estimates are reviewed regularly and, as experience develops and new information becomes known, the reserves are adjusted as necessary. Such adjustments, if any, are reflected in income in the period in which they are determined. As actual loss information has been reported, the Company has developed its own loss experience and its reserving methods include other actuarial techniques. Over time, such techniques have been given further weight in its reserving process based on the continuing maturation of the Company’s reserves. Inherent in the estimates of ultimate losses and loss adjustment expenses are expected trends in claims severity and frequency and other factors which may vary significantly as claims are settled. Accordingly, ultimate losses and loss adjustment expenses may differ materially from the amounts recorded in the accompanying consolidated financial statements. Losses and loss adjustment expenses are recorded on an undiscounted basis, except for excess workers’ compensation and employers’ liability business written by the Company’s insurance operations. |
Mortgage. The reserves for mortgage guaranty insurance losses and loss adjustment expenses are the estimated claim settlement costs on notices of default that have been received by the Company, as well as loan defaults that have been incurred but have not been reported by the lenders. Consistent with industry accounting practice, the Company does not establish loss reserves for future claims on insured loans that are not currently in default (defined as two consecutive missed payments). The Company establishes loss reserves on a case-by-case basis when insured loans are identified as currently in default using estimated claim rates and average claim sizes for each report year, net of any salvage recoverable. The Company also reserves for defaults that have occurred but have not yet been reported to the Company prior to the close of an accounting period. To determine this reserve, the Company estimates the number of defaults not yet reported using historical information regarding late reported delinquencies and applies estimated claim rates and claim sizes for the estimated defaults not yet reported. | |
The establishment of reserves across the Company’s segments is an inherently uncertain process, are necessarily based on estimates, and the ultimate net cost may vary from such estimates. The methods for making such estimates and for establishing the resulting liability are reviewed and updated using the most current information available. Any resulting adjustments, which may be material, are reflected in current operations. | |
Contractholder receivables and payables | Certain insurance policies written by the Company’s insurance operations feature large deductibles, primarily in its construction and national accounts lines of business. Under such contracts, the Company is obligated to pay the claimant for the full amount of the claim. The Company is subsequently reimbursed by the policyholder for the deductible amount. These amounts are included on a gross basis in the consolidated balance sheet in contractholder payables and contractholder receivables, respectively. In the event that the Company is unable to collect from the policyholder, the Company would record an increase to losses and loss adjustment expenses related to such policy. |
Foreign exchange | Assets and liabilities of foreign operations whose functional currency is not the U.S. Dollar are translated at the prevailing exchange rates at each balance sheet date. Revenues and expenses of such foreign operations are translated at average exchange rates during the year. The net effect of the translation adjustments for foreign operations is included in accumulated other comprehensive income, net of applicable deferred income tax. Monetary assets and liabilities, such as premiums receivable and the reserve for losses and loss adjustment expenses, denominated in foreign currencies are revalued at the exchange rate in effect at the balance sheet date with the resulting foreign exchange gains and losses included in net income. Accounts that are classified as non-monetary, such as deferred acquisition costs and the unearned premium reserves, are not revalued. In the case of foreign currency denominated fixed maturity securities which are classified as “available for sale,” the change in exchange rates between the local currency in which the investments are denominated and the Company’s functional currency at each balance sheet date is included in unrealized appreciation or decline in value of securities, a component of accumulated other comprehensive income, net of applicable deferred income tax. |
Income taxes | Deferred income taxes reflect the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. A valuation allowance is recorded if it is more likely than not that some or all of a deferred tax asset may not be realized. The Company considers future taxable income and feasible tax planning strategies in assessing the need for a valuation allowance. In the event the Company determines that it will not be able to realize all or part of its deferred income tax assets in the future, an adjustment to the deferred income tax assets would be charged to income in the period in which such determination is made. In addition, if the Company subsequently assesses that the valuation allowance is no longer needed, a benefit would be recorded to income in the period in which such determination is made. See Note 14 for more information. |
The Company recognizes a tax benefit where it concludes that it is more likely than not that the tax benefit will be sustained on audit by the taxing authority based solely on the technical merits of the associated tax position. If the recognition threshold is met, the Company recognizes a tax benefit measured at the largest amount of the tax benefit that, in the Company’s judgment, is greater than 50% likely to be realized. The Company records interest and penalties related to unrecognized tax benefits in the provision for income taxes. | |
Share-based payment arrangements | The Company applies a fair value based measurement method in accounting for its share-based payment arrangements with eligible employees and directors. Compensation expense is estimated based on the fair value of the award at the grant date and is recognized in net income over the requisite service period with a corresponding increase in shareholders’ equity. No value is attributed to awards that employees forfeit because they fail to satisfy vesting conditions. As such, the number of shares granted is reduced by assumed forfeitures and adjusted based on actual forfeitures until vesting. The Company’s share-based payment arrangements generally vest over a three year period with one-third vesting on the first, second and third anniversaries of the grant date. The share-based compensation expense associated with such awards that have graded vesting features and vest based on service conditions only is calculated on a straight-line basis over the requisite service period for the entire award. For awards granted to retirement-eligible employees where no service is required for the employee to retain the award, the grant date fair value is immediately recognized as compensation expense at the grant date because the employee is able to retain the award without continuing to provide service. For employees near retirement eligibility, attribution of compensation cost is over the period from the grant date to the retirement eligibility date. In November 2012, the Company issued off-cycle share-based awards, which will cliff vest on the fifth anniversary of the grant date. The expense for such grant is being amortized on a straight-line basis over the five-year requisite service period. The off-cycle awards have similar terms as the annual award agreements, however with respect to retirement eligible employees service is required for the employee to retain the award. Retirement-eligible employees retiring prior to the fifth anniversary of the grant date will vest in a pro-rated portion of the award commensurate with the service performed. Such employees will receive the vested portion at the end of the five-year cliff period. These charges had no impact on the Company’s cash flows or total shareholders’ equity. See Note 20 for information relating to the Company’s share-based payment awards. |
Guaranty fund and other related assessments | Liabilities for guaranty fund and other related assessments in the Company’s insurance and reinsurance operations are accrued when the Company receives notice that an amount is payable, or earlier if a reasonable estimate of the assessment can be made. |
Treasury shares | Treasury shares are common shares purchased by the Company and not subsequently canceled. These shares are recorded at cost and result in a reduction of the Company’s shareholders’ equity in its Consolidated Balance Sheets. |
Goodwill and intangible assets | Goodwill represents the excess of the purchase price of an acquisition over the fair value of the net assets acquired and is assigned to the applicable reporting unit at acquisition. Goodwill is not amortized and is evaluated for impairment on an annual basis. Impairment tests may be performed more frequently if the facts and circumstances indicate a possible impairment. In performing impairment tests, the Company may first assess qualitative factors to determine whether it is more likely than not (that is, more than a 50% probability) that the fair value of a reporting unit exceeds its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in the accounting guidance. |
Indefinite-lived intangible assets, such as insurance licenses, are not amortized and are evaluated for impairment similar to goodwill. Finite-lived intangible assets and liabilities include the value of acquired insurance and reinsurance contracts, which are estimated based on the present value of future expected cash flows and amortized in ‘acquisition expenses’ in proportion to the estimated profits expected to be realized. Other finite-lived intangible assets or liabilities, including favorable or unfavorable contracts, are amortized in ‘other operating expenses’ over their useful lives. Finite-lived intangible assets and liabilities are periodically reviewed for indicators of impairment. An impairment is recognized when the carrying amount is not recoverable from its undiscounted cash flows and is measured as the difference between the carrying amount and fair value. | |
If goodwill or intangible assets are impaired, such assets are written down to their fair values with the related expense recorded in the Company’s results of operations. See Note 18 for information relating to the Company’s goodwill and intangible assets. | |
Recent accounting pronouncements | A new accounting standard issued in the 2014 second quarter will change the manner in which most companies recognize revenue. The standard requires that revenue reflect the transfer of goods or services to customers based on the consideration or payment the company expects to be entitled to in exchange for those goods or services; however, the standard does not change the accounting for insurance contracts or financial instruments. The new standard also requires enhanced disclosures about revenue. This accounting guidance is effective in the 2017 first quarter and may be applied on a full retrospective or modified retrospective approach. The Company is currently assessing the impact the implementation of this standard will have on its consolidated financial statements. |
A new accounting standard was issued in the 2015 first quarter providing targeted improvements to consolidation guidance for limited partnerships and other similarly structured entities. The new standard addresses instances where a reporting entity consolidates another entity when the reporting entity is simply acting on the behalf of others, amongst other related issues. While the standard is targeted, the application is relevant for all companies that are required to assess whether or not to consolidate certain entities. The standard is effective in the 2016 first quarter and early adoption is permitted. The Company is currently assessing the impact the implementation of this standard will have on its consolidated financial statements. |
Business_Acquired_Tables
Business Acquired (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Business Combinations [Abstract] | |||||||
Summary of fair value of net assets acquired and allocation of purchase price | The following table summarizes the fair value of net assets acquired and allocation of purchase price, measured as of the acquisition date: | ||||||
Total | Useful Life | ||||||
Purchase price | |||||||
Cash paid | $ | 245,157 | |||||
Contingent consideration liability | 41,762 | ||||||
Total purchase price (a) | $ | 286,919 | |||||
Assets acquired | |||||||
Cash | $ | 9,579 | |||||
Investments, at fair value | 312,093 | ||||||
Intangible asset -- acquired insurance contracts | 46,473 | 5 years | |||||
Intangible asset -- operating platform | 29,900 | 5 years | |||||
Intangible asset -- favorable lease contract | 1,056 | 5 years | |||||
Intangible asset -- insurance licenses | 16,858 | Indefinite | |||||
Other assets acquired | 21,691 | ||||||
Total assets acquired | 437,650 | ||||||
Liabilities acquired | |||||||
Reserves for losses and loss adjustment expenses | $ | 121,572 | |||||
Unearned premiums | 26,261 | ||||||
Intangible liability -- unfavorable service contract | 9,533 | 9 years | |||||
Other liabilities acquired | 7,217 | ||||||
Total liabilities acquired | 164,583 | ||||||
Net assets acquired (b) | $ | 273,067 | |||||
Goodwill (a)-(b) | $ | 13,852 | |||||
Variable_Interest_Entity_and_N1
Variable Interest Entity and Noncontrolling Interests (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Variable Interest Entity and Noncontrolling Interest Disclosure [Abstract] | ||||
Activity in non-redeemable noncontrolling interests | The following table sets forth activity in the non-redeemable noncontrolling interests: | |||
Year Ended December 31, 2014 | ||||
Balance, beginning of year | $ | — | ||
Sale of shares to noncontrolling interests | 796,904 | |||
Amounts attributable to noncontrolling interests | (27,823 | ) | ||
Balance, end of year | $ | 769,081 | ||
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||
Analysis of underwriting income by segment and reconciliation to net income available to common shareholders | The following tables summarize the Company’s underwriting income or loss by segment, together with a reconciliation of underwriting income to net income available to Arch common shareholders, summary information regarding net premiums written and earned by major line of business and net premiums written by location: | |||||||||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||||||||||
Insurance | Reinsurance | Mortgage | Sub-Total | Other | Total | |||||||||||||||||||
Gross premiums written (1) | $ | 3,008,669 | $ | 1,527,245 | $ | 227,356 | $ | 4,760,394 | $ | 288,627 | $ | 4,840,616 | ||||||||||||
Premiums ceded | (862,015 | ) | (261,254 | ) | (22,519 | ) | (1,142,912 | ) | (14,171 | ) | (948,678 | ) | ||||||||||||
Net premiums written | 2,146,654 | 1,265,991 | 204,837 | 3,617,482 | 274,456 | 3,891,938 | ||||||||||||||||||
Change in unearned premiums | (129,284 | ) | 13,337 | (11,264 | ) | (127,211 | ) | (170,979 | ) | (298,190 | ) | |||||||||||||
Net premiums earned | 2,017,370 | 1,279,328 | 193,573 | 3,490,271 | 103,477 | 3,593,748 | ||||||||||||||||||
Other underwriting income | 2,135 | 3,167 | 4,840 | 10,142 | — | 10,142 | ||||||||||||||||||
Losses and loss adjustment expenses | (1,260,953 | ) | (532,450 | ) | (55,674 | ) | (1,849,077 | ) | (70,173 | ) | (1,919,250 | ) | ||||||||||||
Acquisition expenses, net | (316,308 | ) | (261,438 | ) | (49,400 | ) | (627,146 | ) | (30,116 | ) | (657,262 | ) | ||||||||||||
Other operating expenses | (335,157 | ) | (147,964 | ) | (66,891 | ) | (550,012 | ) | (6,268 | ) | (556,280 | ) | ||||||||||||
Underwriting income (loss) | $ | 107,087 | $ | 340,643 | $ | 26,448 | 474,178 | (3,080 | ) | 471,098 | ||||||||||||||
Net investment income | 284,336 | 18,249 | 302,585 | |||||||||||||||||||||
Net realized gains (losses) | 133,384 | (30,467 | ) | 102,917 | ||||||||||||||||||||
Net impairment losses recognized in earnings | (30,150 | ) | — | (30,150 | ) | |||||||||||||||||||
Equity in net income of investment funds accounted for using the equity method | 19,883 | — | 19,883 | |||||||||||||||||||||
Other income (loss) | (10,252 | ) | — | (10,252 | ) | |||||||||||||||||||
Other expenses | (47,615 | ) | (2,329 | ) | (49,944 | ) | ||||||||||||||||||
Interest expense | (45,634 | ) | — | (45,634 | ) | |||||||||||||||||||
Net foreign exchange gains (losses) | 82,658 | 1,086 | 83,744 | |||||||||||||||||||||
Income before income taxes | 860,788 | (16,541 | ) | 844,247 | ||||||||||||||||||||
Income tax expense | (22,987 | ) | — | (22,987 | ) | |||||||||||||||||||
Net income | 837,801 | (16,541 | ) | 821,260 | ||||||||||||||||||||
Dividends attributable to redeemable noncontrolling interests | — | (14,728 | ) | (14,728 | ) | |||||||||||||||||||
Amounts attributable to noncontrolling interests | — | 27,823 | 27,823 | |||||||||||||||||||||
Net income available to Arch | 837,801 | (3,446 | ) | 834,355 | ||||||||||||||||||||
Preferred dividends | (21,938 | ) | — | (21,938 | ) | |||||||||||||||||||
Net income available to Arch common shareholders | $ | 815,863 | $ | (3,446 | ) | $ | 812,417 | |||||||||||||||||
Underwriting Ratios | ||||||||||||||||||||||||
Loss ratio | 62.5 | % | 41.6 | % | 28.8 | % | 53 | % | 67.8 | % | 53.4 | % | ||||||||||||
Acquisition expense ratio | 15.7 | % | 20.4 | % | 25.5 | % | 18 | % | 29.1 | % | 18.3 | % | ||||||||||||
Other operating expense ratio | 16.6 | % | 11.6 | % | 34.6 | % | 15.8 | % | 6.1 | % | 15.5 | % | ||||||||||||
Combined ratio | 94.8 | % | 73.6 | % | 88.9 | % | 86.8 | % | 103 | % | 87.2 | % | ||||||||||||
Goodwill and intangible assets | $ | 28,331 | $ | 3,333 | $ | 77,875 | $ | 109,539 | $ | — | $ | 109,539 | ||||||||||||
Total investable assets | $ | 14,609,969 | $ | 1,163,240 | $ | 15,773,209 | ||||||||||||||||||
Total assets | 20,527,027 | 1,482,516 | 22,009,543 | |||||||||||||||||||||
Total liabilities | 14,492,237 | 398,660 | 14,890,897 | |||||||||||||||||||||
-1 | Certain amounts included in the gross premiums written of each segment are related to intersegment transactions. 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. | |||||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||||||
Insurance | Reinsurance | Mortgage | Sub-Total | Other | Total | |||||||||||||||||||
Gross premiums written (1) | $ | 2,712,509 | $ | 1,399,621 | $ | 89,570 | $ | 4,196,623 | $ | — | $ | 4,196,623 | ||||||||||||
Premiums ceded | (763,713 | ) | (86,620 | ) | — | (845,256 | ) | — | (845,256 | ) | ||||||||||||||
Net premiums written | 1,948,796 | 1,313,001 | 89,570 | 3,351,367 | — | 3,351,367 | ||||||||||||||||||
Change in unearned premiums | (72,782 | ) | (94,329 | ) | (38,304 | ) | (205,415 | ) | — | (205,415 | ) | |||||||||||||
Net premiums earned | 1,876,014 | 1,218,672 | 51,266 | 3,145,952 | — | 3,145,952 | ||||||||||||||||||
Other underwriting income | 2,122 | 5,258 | 259 | 7,639 | — | 7,639 | ||||||||||||||||||
Losses and loss adjustment expenses | (1,188,445 | ) | (486,236 | ) | (4,743 | ) | (1,679,424 | ) | — | (1,679,424 | ) | |||||||||||||
Acquisition expenses, net | (311,904 | ) | (234,373 | ) | (17,826 | ) | (564,103 | ) | — | (564,103 | ) | |||||||||||||
Other operating expenses | (315,387 | ) | (134,563 | ) | (8,377 | ) | (458,327 | ) | — | (458,327 | ) | |||||||||||||
Underwriting income (loss) | $ | 62,400 | $ | 368,758 | $ | 20,579 | 451,737 | — | 451,737 | |||||||||||||||
Net investment income | 267,219 | — | 267,219 | |||||||||||||||||||||
Net realized gains | 74,018 | — | 74,018 | |||||||||||||||||||||
Net impairment losses recognized in earnings | (3,786 | ) | — | (3,786 | ) | |||||||||||||||||||
Equity in net income (loss) of investment funds accounted for using the equity method | 35,701 | — | 35,701 | |||||||||||||||||||||
Other income (loss) | (586 | ) | — | (586 | ) | |||||||||||||||||||
Other expenses | (42,403 | ) | — | (42,403 | ) | |||||||||||||||||||
Interest expense | (27,060 | ) | — | (27,060 | ) | |||||||||||||||||||
Net foreign exchange gains (losses) | (12,335 | ) | — | (12,335 | ) | |||||||||||||||||||
Income before income taxes | 742,505 | — | 742,505 | |||||||||||||||||||||
Income tax expense | (32,774 | ) | — | (32,774 | ) | |||||||||||||||||||
Net income | 709,731 | — | 709,731 | |||||||||||||||||||||
Dividends attributable to redeemable noncontrolling interests | — | — | — | |||||||||||||||||||||
Amounts attributable to noncontrolling interests | — | — | — | |||||||||||||||||||||
Net income available to Arch | 709,731 | — | 709,731 | |||||||||||||||||||||
Preferred dividends | (21,938 | ) | — | (21,938 | ) | |||||||||||||||||||
Net income available to Arch common shareholders | $ | 687,793 | $ | — | $ | 687,793 | ||||||||||||||||||
Underwriting Ratios | ||||||||||||||||||||||||
Loss ratio | 63.3 | % | 39.9 | % | 9.3 | % | 53.4 | % | — | 53.4 | % | |||||||||||||
Acquisition expense ratio | 16.6 | % | 19.2 | % | 34.8 | % | 17.9 | % | — | 17.9 | % | |||||||||||||
Other operating expense ratio | 16.8 | % | 11 | % | 16.3 | % | 14.6 | % | — | 14.6 | % | |||||||||||||
Combined ratio | 96.7 | % | 70.1 | % | 60.4 | % | 85.9 | % | — | 85.9 | % | |||||||||||||
Goodwill and intangible assets | $ | 20,419 | $ | 6,900 | $ | — | $ | 27,319 | $ | — | $ | 27,319 | ||||||||||||
Total investable assets | $ | 14,049,525 | $ | — | $ | 14,049,525 | ||||||||||||||||||
Total assets | 19,566,094 | — | 19,566,094 | |||||||||||||||||||||
Total liabilities | 13,918,598 | — | 13,918,598 | |||||||||||||||||||||
-1 | Certain amounts included in the gross premiums written of each segment are related to intersegment transactions. 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. | |||||||||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||||||
Insurance | Reinsurance | Mortgage | Sub-Total | Other | Total | |||||||||||||||||||
Gross premiums written (1) | $ | 2,593,959 | $ | 1,213,889 | $ | 68,111 | $ | 3,869,161 | $ | — | $ | 3,869,161 | ||||||||||||
Premiums ceded | (768,625 | ) | (55,099 | ) | — | (816,926 | ) | — | (816,926 | ) | ||||||||||||||
Net premiums written | 1,825,334 | 1,158,790 | 68,111 | 3,052,235 | — | 3,052,235 | ||||||||||||||||||
Change in unearned premiums | (24,991 | ) | (40,663 | ) | (51,441 | ) | (117,095 | ) | — | (117,095 | ) | |||||||||||||
Net premiums earned | 1,800,343 | 1,118,127 | 16,670 | 2,935,140 | — | 2,935,140 | ||||||||||||||||||
Other underwriting income | 2,335 | 5,755 | — | 8,090 | — | 8,090 | ||||||||||||||||||
Losses and loss adjustment expenses | (1,283,841 | ) | (574,821 | ) | (2,615 | ) | (1,861,277 | ) | — | (1,861,277 | ) | |||||||||||||
Acquisition expenses, net | (298,983 | ) | (204,903 | ) | (4,998 | ) | (508,884 | ) | — | (508,884 | ) | |||||||||||||
Other operating expenses | (307,489 | ) | (118,245 | ) | (4,301 | ) | (430,035 | ) | — | (430,035 | ) | |||||||||||||
Underwriting income (loss) | $ | (87,635 | ) | $ | 225,913 | $ | 4,756 | 143,034 | — | 143,034 | ||||||||||||||
Net investment income | 294,895 | — | 294,895 | |||||||||||||||||||||
Net realized gains | 194,228 | — | 194,228 | |||||||||||||||||||||
Net impairment losses recognized in earnings | (11,388 | ) | — | (11,388 | ) | |||||||||||||||||||
Equity in net income (loss) of investment funds accounted for using the equity method | 73,510 | — | 73,510 | |||||||||||||||||||||
Other income (loss) | (12,094 | ) | — | (12,094 | ) | |||||||||||||||||||
Other expenses | (35,318 | ) | — | (35,318 | ) | |||||||||||||||||||
Interest expense | (28,525 | ) | — | (28,525 | ) | |||||||||||||||||||
Net foreign exchange gains (losses) | (28,955 | ) | — | (28,955 | ) | |||||||||||||||||||
Income before income taxes | 589,387 | — | 589,387 | |||||||||||||||||||||
Income tax benefit | 4,010 | — | 4,010 | |||||||||||||||||||||
Net income | 593,397 | — | 593,397 | |||||||||||||||||||||
Dividends attributable to redeemable noncontrolling interests | — | — | — | |||||||||||||||||||||
Amounts attributable to noncontrolling interests | — | — | — | |||||||||||||||||||||
Net income available to Arch | 593,397 | — | 593,397 | |||||||||||||||||||||
Preferred dividends | (25,079 | ) | — | (25,079 | ) | |||||||||||||||||||
Loss on repurchase of preferred shares | (10,612 | ) | — | (10,612 | ) | |||||||||||||||||||
Net income available to Arch common shareholders | $ | 557,706 | $ | — | $ | 557,706 | ||||||||||||||||||
Underwriting Ratios | ||||||||||||||||||||||||
Loss ratio | 71.3 | % | 51.4 | % | 15.7 | % | 63.4 | % | — | % | 63.4 | % | ||||||||||||
Acquisition expense ratio | 16.6 | % | 18.3 | % | 30 | % | 17.3 | % | — | % | 17.3 | % | ||||||||||||
Other operating expense ratio | 17.1 | % | 10.6 | % | 25.8 | % | 14.7 | % | — | % | 14.7 | % | ||||||||||||
Combined ratio | 105 | % | 80.3 | % | 71.5 | % | 95.4 | % | — | % | 95.4 | % | ||||||||||||
Goodwill and intangible assets | $ | 21,357 | $ | 16,902 | $ | — | $ | 38,259 | $ | — | $ | 38,259 | ||||||||||||
Total investable assets | $ | 13,045,134 | $ | — | $ | 13,045,134 | ||||||||||||||||||
Total assets | 17,816,762 | — | 17,816,762 | |||||||||||||||||||||
Total liabilities | 12,647,884 | — | 12,647,884 | |||||||||||||||||||||
-1 | Certain amounts included in the gross premiums written of each segment are related to intersegment transactions. 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. | |||||||||||||||||||||||
Summary of information regarding net premiums written and earned by major line of business and net premiums written by location | The following tables provide summary information regarding net premiums written and earned by major line of business and net premiums written by location: | |||||||||||||||||||||||
INSURANCE SEGMENT | Year Ended December 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
Net premiums written (1) | ||||||||||||||||||||||||
Programs | $ | 480,580 | $ | 419,673 | $ | 340,130 | ||||||||||||||||||
Professional lines (2) | 476,604 | 476,193 | 548,423 | |||||||||||||||||||||
Construction and national accounts | 286,994 | 271,110 | 211,130 | |||||||||||||||||||||
Property, energy, marine and aviation | 244,640 | 280,551 | 294,690 | |||||||||||||||||||||
Excess and surplus casualty (3) | 212,519 | 149,286 | 112,307 | |||||||||||||||||||||
Travel, accident and health | 145,732 | 104,903 | 106,871 | |||||||||||||||||||||
Lenders products | 100,407 | 101,576 | 99,724 | |||||||||||||||||||||
Other (4) | 199,178 | 145,504 | 112,059 | |||||||||||||||||||||
Total | $ | 2,146,654 | $ | 1,948,796 | $ | 1,825,334 | ||||||||||||||||||
Net premiums earned (1) | ||||||||||||||||||||||||
Programs | $ | 460,392 | $ | 386,840 | $ | 318,740 | ||||||||||||||||||
Professional lines (2) | 456,508 | 491,791 | 536,971 | |||||||||||||||||||||
Construction and national accounts | 277,811 | 250,729 | 209,217 | |||||||||||||||||||||
Property, energy, marine and aviation | 244,974 | 304,294 | 313,081 | |||||||||||||||||||||
Excess and surplus casualty (3) | 182,024 | 118,395 | 113,597 | |||||||||||||||||||||
Travel, accident and health | 127,691 | 97,135 | 98,686 | |||||||||||||||||||||
Lenders products | 94,438 | 99,847 | 103,478 | |||||||||||||||||||||
Other (4) | 173,532 | 126,983 | 106,573 | |||||||||||||||||||||
Total | $ | 2,017,370 | $ | 1,876,014 | $ | 1,800,343 | ||||||||||||||||||
Net premiums written by client location (1) | ||||||||||||||||||||||||
United States | $ | 1,726,181 | $ | 1,526,156 | $ | 1,314,577 | ||||||||||||||||||
Europe | 240,136 | 226,254 | 271,278 | |||||||||||||||||||||
Asia and Pacific | 79,564 | 95,970 | 120,492 | |||||||||||||||||||||
Other | 100,773 | 100,416 | 118,987 | |||||||||||||||||||||
Total | $ | 2,146,654 | $ | 1,948,796 | $ | 1,825,334 | ||||||||||||||||||
Net premiums written by underwriting location (1) | ||||||||||||||||||||||||
United States | $ | 1,688,887 | $ | 1,478,930 | $ | 1,254,623 | ||||||||||||||||||
Europe | 394,430 | 389,763 | 472,132 | |||||||||||||||||||||
Other | 63,337 | 80,103 | 98,579 | |||||||||||||||||||||
Total | $ | 2,146,654 | $ | 1,948,796 | $ | 1,825,334 | ||||||||||||||||||
-1 | Insurance segment results include premiums written and earned assumed through intersegment transactions and exclude premiums written and earned ceded through intersegment transactions. | |||||||||||||||||||||||
-2 | Includes professional liability, executive assurance and healthcare business. | |||||||||||||||||||||||
-3 | Includes casualty and contract binding business. | |||||||||||||||||||||||
-4 | Includes alternative markets, excess workers' compensation and surety business. | |||||||||||||||||||||||
REINSURANCE SEGMENT | Year Ended December 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
Net premiums written (1) | ||||||||||||||||||||||||
Other specialty (2) | $ | 405,126 | $ | 417,865 | $ | 308,104 | ||||||||||||||||||
Property excluding property catastrophe (3) | 343,043 | 292,536 | 265,783 | |||||||||||||||||||||
Casualty (4) | 317,996 | 306,304 | 205,925 | |||||||||||||||||||||
Property catastrophe | 137,471 | 220,749 | 283,677 | |||||||||||||||||||||
Marine and aviation | 50,444 | 64,380 | 84,649 | |||||||||||||||||||||
Other (5) | 11,911 | 11,167 | 10,652 | |||||||||||||||||||||
Total | $ | 1,265,991 | $ | 1,313,001 | $ | 1,158,790 | ||||||||||||||||||
Net premiums earned (1) | ||||||||||||||||||||||||
Other specialty (2) | $ | 424,725 | $ | 387,630 | $ | 309,101 | ||||||||||||||||||
Property excluding property catastrophe (3) | 303,496 | 274,719 | 254,338 | |||||||||||||||||||||
Casualty (4) | 327,518 | 241,774 | 188,963 | |||||||||||||||||||||
Property catastrophe | 150,761 | 232,423 | 280,185 | |||||||||||||||||||||
Marine and aviation | 61,118 | 70,105 | 76,145 | |||||||||||||||||||||
Other (5) | 11,710 | 12,021 | 9,395 | |||||||||||||||||||||
Total | $ | 1,279,328 | $ | 1,218,672 | $ | 1,118,127 | ||||||||||||||||||
Net premiums written (1) | ||||||||||||||||||||||||
Pro rata | $ | 663,135 | $ | 692,024 | $ | 530,763 | ||||||||||||||||||
Excess of loss | 602,856 | 620,977 | 628,027 | |||||||||||||||||||||
Total | $ | 1,265,991 | $ | 1,313,001 | $ | 1,158,790 | ||||||||||||||||||
Net premiums earned (1) | ||||||||||||||||||||||||
Pro rata | $ | 686,201 | $ | 608,586 | $ | 499,094 | ||||||||||||||||||
Excess of loss | 593,127 | 610,086 | 619,033 | |||||||||||||||||||||
Total | $ | 1,279,328 | $ | 1,218,672 | $ | 1,118,127 | ||||||||||||||||||
Net premiums written by client location (1) | ||||||||||||||||||||||||
United States | $ | 589,255 | $ | 706,388 | $ | 568,043 | ||||||||||||||||||
Europe | 355,735 | 327,059 | 341,653 | |||||||||||||||||||||
Asia and Pacific | 142,626 | 94,252 | 97,879 | |||||||||||||||||||||
Bermuda | 77,620 | 87,047 | 72,864 | |||||||||||||||||||||
Other | 100,755 | 98,255 | 78,351 | |||||||||||||||||||||
Total | $ | 1,265,991 | $ | 1,313,001 | $ | 1,158,790 | ||||||||||||||||||
Net premiums written by underwriting location (1) | ||||||||||||||||||||||||
United States | $ | 492,891 | $ | 507,183 | $ | 379,239 | ||||||||||||||||||
Bermuda | 394,351 | 459,467 | 527,909 | |||||||||||||||||||||
Europe | 343,823 | 309,129 | 225,470 | |||||||||||||||||||||
Other | 34,926 | 37,222 | 26,172 | |||||||||||||||||||||
Total | $ | 1,265,991 | $ | 1,313,001 | $ | 1,158,790 | ||||||||||||||||||
-1 | Reinsurance segment results include premiums written and earned assumed through intersegment transactions and exclude premiums written and earned ceded through intersegment transactions. | |||||||||||||||||||||||
-2 | Includes non-excess motor, surety, accident and health, workers’ compensation catastrophe, agriculture, trade credit and other. | |||||||||||||||||||||||
-3 | Includes facultative business. | |||||||||||||||||||||||
-4 | Includes executive assurance, professional liability, workers’ compensation, excess motor, healthcare and other. | |||||||||||||||||||||||
-5 | Includes life, casualty clash and other. | |||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||
MORTGAGE SEGMENT | 2014 | 2013 | 2012 | |||||||||||||||||||||
Net premiums written by client location | ||||||||||||||||||||||||
United States | $ | 184,333 | $ | 63,692 | $ | 61,571 | ||||||||||||||||||
Other | 20,504 | 25,878 | 6,540 | |||||||||||||||||||||
Total | $ | 204,837 | $ | 89,570 | $ | 68,111 | ||||||||||||||||||
Net premiums written by underwriting location | ||||||||||||||||||||||||
United States | $ | 98,809 | $ | — | $ | — | ||||||||||||||||||
Other | 106,028 | 89,570 | 68,111 | |||||||||||||||||||||
Total | $ | 204,837 | $ | 89,570 | $ | 68,111 | ||||||||||||||||||
OTHER SEGMENT | Year Ended December 31, | |||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
Net premiums written (1) | ||||||||||||||||||||||||
Casualty (2) | $ | 179,054 | $ | — | $ | — | ||||||||||||||||||
Other specialty (3) | 66,524 | — | — | |||||||||||||||||||||
Property catastrophe | 9,280 | — | — | |||||||||||||||||||||
Marine and aviation | 1,251 | — | — | |||||||||||||||||||||
Property excluding property catastrophe | 564 | — | — | |||||||||||||||||||||
Other (4) | 17,783 | — | — | |||||||||||||||||||||
Total | $ | 274,456 | $ | — | $ | — | ||||||||||||||||||
Net premiums earned (1) | ||||||||||||||||||||||||
Casualty (2) | $ | 72,395 | $ | — | $ | — | ||||||||||||||||||
Other specialty (3) | 24,157 | — | — | |||||||||||||||||||||
Property catastrophe | 5,115 | — | — | |||||||||||||||||||||
Marine and aviation | 789 | — | — | |||||||||||||||||||||
Property excluding property catastrophe | 182 | — | — | |||||||||||||||||||||
Other (4) | 839 | — | — | |||||||||||||||||||||
Total | $ | 103,477 | $ | — | $ | — | ||||||||||||||||||
Net premiums written by client location (1) | ||||||||||||||||||||||||
United States | $ | 186,795 | $ | — | $ | — | ||||||||||||||||||
Europe | 54,131 | — | — | |||||||||||||||||||||
Bermuda | 27,977 | — | — | |||||||||||||||||||||
Other | 5,553 | — | — | |||||||||||||||||||||
Total | $ | 274,456 | $ | — | $ | — | ||||||||||||||||||
-1 | Other segment results include premiums written and earned assumed through intersegment transactions and exclude premiums written and earned ceded through intersegment transactions. | |||||||||||||||||||||||
-2 | Includes professional liability, excess motor, programs and other. | |||||||||||||||||||||||
-3 | Includes non-excess motor and other. | |||||||||||||||||||||||
-4 | Includes mortgage and other. |
Reserve_for_Losses_and_Loss_Ad1
Reserve for Losses and Loss Adjustment Expenses (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract] | ||||||||||||
Analysis of losses and loss adjustment expenses and reconciliation of beginning and ending reserve balances | The following table represents an analysis of losses and loss adjustment expenses and a reconciliation of the beginning and ending reserve for losses and loss adjustment expenses: | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Reserve for losses and loss adjustment expenses at beginning of year | $ | 8,824,696 | $ | 8,933,292 | $ | 8,456,210 | ||||||
Unpaid losses and loss adjustment expenses recoverable | 1,748,250 | 1,829,070 | 1,818,047 | |||||||||
Net reserve for losses and loss adjustment expenses at beginning of year | 7,076,446 | 7,104,222 | 6,638,163 | |||||||||
Net incurred losses and loss adjustment expenses relating to losses occurring in: | ||||||||||||
Current year | 2,246,152 | 1,943,466 | 2,082,805 | |||||||||
Prior years | (326,902 | ) | (264,042 | ) | (221,528 | ) | ||||||
Total net incurred losses and loss adjustment expenses | 1,919,250 | 1,679,424 | 1,861,277 | |||||||||
Net losses and loss adjustment expense reserves of acquired business (1) | 120,671 | — | 31,977 | |||||||||
Foreign exchange (gains) losses | (160,486 | ) | 1,617 | 38,184 | ||||||||
Net paid losses and loss adjustment expenses relating to losses occurring in: | ||||||||||||
Current year | (347,270 | ) | (288,114 | ) | (295,984 | ) | ||||||
Prior years | (1,350,466 | ) | (1,420,703 | ) | (1,169,395 | ) | ||||||
Total net paid losses and loss adjustment expenses | (1,697,736 | ) | (1,708,817 | ) | (1,465,379 | ) | ||||||
Net reserve for losses and loss adjustment expenses at end of year | 7,258,145 | 7,076,446 | 7,104,222 | |||||||||
Unpaid losses and loss adjustment expenses recoverable | 1,778,303 | 1,748,250 | 1,829,070 | |||||||||
Reserve for losses and loss adjustment expenses at end of year | $ | 9,036,448 | $ | 8,824,696 | $ | 8,933,292 | ||||||
-1 | 2014 amount relates to the Company’s acquisition of Arch MI U.S. while the 2012 amount relates to the Company’s acquisition of the trade credit and surety operations of Ariel Reinsurance Company. |
Reinsurance_Tables
Reinsurance (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Reinsurance Disclosures [Abstract] | ||||||||||||
Effects of reinsurance | The effects of reinsurance on the Company’s written and earned premiums and losses and loss adjustment expenses with unaffiliated reinsurers were as follows: | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Premiums Written | ||||||||||||
Direct | $ | 3,100,946 | $ | 2,754,582 | $ | 2,673,864 | ||||||
Assumed | 1,739,670 | 1,442,041 | 1,195,297 | |||||||||
Ceded | (948,678 | ) | (845,256 | ) | (816,926 | ) | ||||||
Net | $ | 3,891,938 | $ | 3,351,367 | $ | 3,052,235 | ||||||
Premiums Earned | ||||||||||||
Direct | $ | 2,914,755 | $ | 2,666,104 | $ | 2,572,078 | ||||||
Assumed | 1,574,049 | 1,296,048 | 1,165,371 | |||||||||
Ceded | (895,056 | ) | (816,200 | ) | (802,309 | ) | ||||||
Net | $ | 3,593,748 | $ | 3,145,952 | $ | 2,935,140 | ||||||
Losses and Loss Adjustment Expenses | ||||||||||||
Direct | $ | 1,763,492 | $ | 1,603,369 | $ | 1,725,707 | ||||||
Assumed | 621,346 | 450,618 | 578,081 | |||||||||
Ceded | (465,588 | ) | (374,563 | ) | (442,511 | ) | ||||||
Net | $ | 1,919,250 | $ | 1,679,424 | $ | 1,861,277 | ||||||
Investment_Information_Tables
Investment Information (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Disclosure Investment Information [Abstract] | ||||||||||||||||||||||||
Summary of fair value and cost or amortized cost of available for sale securities | The following table summarizes the fair value and cost or amortized cost of the Company’s securities classified as available for sale: | |||||||||||||||||||||||
Estimated | Gross | Gross | Cost or | OTTI | ||||||||||||||||||||
Fair | Unrealized | Unrealized | Amortized | Unrealized | ||||||||||||||||||||
Value | Gains | Losses | Cost | Losses (2) | ||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||
Fixed maturities and fixed maturities pledged | ||||||||||||||||||||||||
under securities lending agreements (1): | ||||||||||||||||||||||||
Corporate bonds | $ | 3,108,513 | $ | 37,928 | $ | (38,974 | ) | $ | 3,109,559 | $ | (317 | ) | ||||||||||||
Mortgage backed securities | 943,343 | 18,843 | (3,842 | ) | 928,342 | (3,307 | ) | |||||||||||||||||
Municipal bonds | 1,494,122 | 31,227 | (1,044 | ) | 1,463,939 | — | ||||||||||||||||||
Commercial mortgage backed securities | 1,114,528 | 14,594 | (3,822 | ) | 1,103,756 | — | ||||||||||||||||||
U.S. government and government agencies | 1,447,972 | 8,345 | (1,760 | ) | 1,441,387 | — | ||||||||||||||||||
Non-U.S. government securities | 1,015,153 | 21,311 | (37,203 | ) | 1,031,045 | — | ||||||||||||||||||
Asset backed securities | 1,677,941 | 8,425 | (6,089 | ) | 1,675,605 | (22 | ) | |||||||||||||||||
Total | 10,801,572 | 140,673 | (92,734 | ) | 10,753,633 | (3,646 | ) | |||||||||||||||||
Equity securities | 658,182 | 109,012 | (13,364 | ) | 562,534 | — | ||||||||||||||||||
Other investments | 296,224 | 31,839 | (362 | ) | 264,747 | — | ||||||||||||||||||
Short-term investments | 797,226 | 738 | (5,270 | ) | 801,758 | — | ||||||||||||||||||
Total | $ | 12,553,204 | $ | 282,262 | $ | (111,730 | ) | $ | 12,382,672 | $ | (3,646 | ) | ||||||||||||
31-Dec-13 | ||||||||||||||||||||||||
Fixed maturities and fixed maturities pledged | ||||||||||||||||||||||||
under securities lending agreements (1): | ||||||||||||||||||||||||
Corporate bonds | $ | 2,267,263 | $ | 35,289 | $ | (35,537 | ) | $ | 2,267,511 | $ | (16 | ) | ||||||||||||
Mortgage backed securities | 1,133,095 | 16,270 | (22,209 | ) | 1,139,034 | (9,269 | ) | |||||||||||||||||
Municipal bonds | 1,481,738 | 29,378 | (9,730 | ) | 1,462,090 | (17 | ) | |||||||||||||||||
Commercial mortgage backed securities | 1,074,497 | 13,972 | (15,224 | ) | 1,075,749 | (199 | ) | |||||||||||||||||
U.S. government and government agencies | 1,301,809 | 3,779 | (11,242 | ) | 1,309,272 | (19 | ) | |||||||||||||||||
Non-U.S. government securities | 1,085,861 | 14,729 | (19,363 | ) | 1,090,495 | — | ||||||||||||||||||
Asset backed securities | 1,332,594 | 20,033 | (13,795 | ) | 1,326,356 | (3,422 | ) | |||||||||||||||||
Total | 9,676,857 | 133,450 | (127,100 | ) | 9,670,507 | (12,942 | ) | |||||||||||||||||
Equity securities | 496,824 | 69,487 | (5,938 | ) | 433,275 | — | ||||||||||||||||||
Other investments | 498,310 | 28,082 | (18,459 | ) | 488,687 | — | ||||||||||||||||||
Short-term investments | 1,478,367 | 1,654 | (871 | ) | 1,477,584 | — | ||||||||||||||||||
Total | $ | 12,150,358 | $ | 232,673 | $ | (152,368 | ) | $ | 12,070,053 | $ | (12,942 | ) | ||||||||||||
-1 | In securities lending transactions, the Company receives collateral in excess of the fair value of the fixed maturities and short-term investments pledged. For purposes of this table, the Company has excluded the collateral received and reinvested and included the fixed maturities and short-term investments pledged. See “—Securities Lending Agreements.” | |||||||||||||||||||||||
-2 | Represents the total other-than-temporary impairments (“OTTI”) recognized in accumulated other comprehensive income (“AOCI”). It does not include the change in fair value subsequent to the impairment measurement date. At December 31, 2014, the net unrealized gain related to securities for which a non-credit OTTI was recognized in AOCI was $0.9 million, compared to a net unrealized gain of $6.0 million at December 31, 2013. | |||||||||||||||||||||||
Summary of available for sale securities in a continual unrealized loss position | The following table summarizes, for all available for sale securities in an unrealized loss position, the fair value and gross unrealized loss by length of time the security has been in a continual unrealized loss position: | |||||||||||||||||||||||
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
Estimated | Gross | Estimated | Gross | Estimated | Gross | |||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||
Value | Losses | Value | Losses | Value | Losses | |||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||
Fixed maturities and fixed maturities pledged under securities lending agreements (1): | ||||||||||||||||||||||||
Corporate bonds | $ | 1,309,637 | $ | (32,903 | ) | $ | 148,963 | $ | (6,071 | ) | $ | 1,458,600 | $ | (38,974 | ) | |||||||||
Mortgage backed securities | 293,624 | (1,476 | ) | 59,107 | (2,366 | ) | 352,731 | (3,842 | ) | |||||||||||||||
Municipal bonds | 210,614 | (588 | ) | 13,643 | (456 | ) | 224,257 | (1,044 | ) | |||||||||||||||
Commercial mortgage backed securities | 232,147 | (770 | ) | 125,894 | (3,052 | ) | 358,041 | (3,822 | ) | |||||||||||||||
U.S. government and government agencies | 618,381 | (1,626 | ) | 3,438 | (134 | ) | 621,819 | (1,760 | ) | |||||||||||||||
Non-U.S. government securities | 510,766 | (31,172 | ) | 46,910 | (6,031 | ) | 557,676 | (37,203 | ) | |||||||||||||||
Asset backed securities | 612,950 | (2,486 | ) | 243,452 | (3,603 | ) | 856,402 | (6,089 | ) | |||||||||||||||
Total | 3,788,119 | (71,021 | ) | 641,407 | (21,713 | ) | 4,429,526 | (92,734 | ) | |||||||||||||||
Equity securities | 181,002 | (13,364 | ) | — | — | 181,002 | (13,364 | ) | ||||||||||||||||
Other investments | 59,638 | (362 | ) | — | — | 59,638 | (362 | ) | ||||||||||||||||
Short-term investments | 79,271 | (5,270 | ) | — | — | 79,271 | (5,270 | ) | ||||||||||||||||
Total | $ | 4,108,030 | $ | (90,017 | ) | $ | 641,407 | $ | (21,713 | ) | $ | 4,749,437 | $ | (111,730 | ) | |||||||||
31-Dec-13 | ||||||||||||||||||||||||
Fixed maturities and fixed maturities pledged under securities lending agreements (1): | ||||||||||||||||||||||||
Corporate bonds | $ | 1,183,625 | $ | (32,837 | ) | $ | 46,673 | $ | (2,700 | ) | $ | 1,230,298 | $ | (35,537 | ) | |||||||||
Mortgage backed securities | 778,693 | (20,253 | ) | 43,634 | (1,956 | ) | 822,327 | (22,209 | ) | |||||||||||||||
Municipal bonds | 589,009 | (9,422 | ) | 6,092 | (308 | ) | 595,101 | (9,730 | ) | |||||||||||||||
Commercial mortgage backed securities | 677,617 | (15,110 | ) | 1,612 | (114 | ) | 679,229 | (15,224 | ) | |||||||||||||||
U.S. government and government agencies | 1,144,809 | (11,242 | ) | — | — | 1,144,809 | (11,242 | ) | ||||||||||||||||
Non-U.S. government securities | 821,506 | (15,776 | ) | 24,334 | (3,587 | ) | 845,840 | (19,363 | ) | |||||||||||||||
Asset backed securities | 692,362 | (10,431 | ) | 88,629 | (3,364 | ) | 780,991 | (13,795 | ) | |||||||||||||||
Total | 5,887,621 | (115,071 | ) | 210,974 | (12,029 | ) | 6,098,595 | (127,100 | ) | |||||||||||||||
Equity securities | 76,563 | (5,938 | ) | — | — | 76,563 | (5,938 | ) | ||||||||||||||||
Other investments | 165,891 | (15,775 | ) | 47,316 | (2,684 | ) | 213,207 | (18,459 | ) | |||||||||||||||
Short-term investments | 28,170 | (871 | ) | — | — | 28,170 | (871 | ) | ||||||||||||||||
Total | $ | 6,158,245 | $ | (137,655 | ) | $ | 258,290 | $ | (14,713 | ) | $ | 6,416,535 | $ | (152,368 | ) | |||||||||
-1 | In securities lending transactions, the Company receives collateral in excess of the fair value of the fixed maturities and short-term investments pledged. For purposes of this table, the Company has excluded the collateral received and reinvested and included the fixed maturities and short-term investments pledged. See “—Securities Lending Agreements.” | |||||||||||||||||||||||
Contractual maturities of the Company's fixed maturities and fixed maturities pledged under securities lending arrangements | ||||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||||||
Maturity | Estimated Fair Value | Amortized Cost | Estimated Fair Value | Amortized Cost | ||||||||||||||||||||
Due in one year or less | $ | 235,930 | $ | 233,794 | $ | 235,330 | $ | 232,652 | ||||||||||||||||
Due after one year through five years | 4,074,562 | 4,077,408 | 3,738,500 | 3,718,920 | ||||||||||||||||||||
Due after five years through 10 years | 2,475,726 | 2,461,356 | 1,966,536 | 1,979,510 | ||||||||||||||||||||
Due after 10 years | 279,542 | 273,372 | 196,305 | 198,286 | ||||||||||||||||||||
7,065,760 | 7,045,930 | 6,136,671 | 6,129,368 | |||||||||||||||||||||
Mortgage backed securities | 943,343 | 928,342 | 1,133,095 | 1,139,034 | ||||||||||||||||||||
Commercial mortgage backed securities | 1,114,528 | 1,103,756 | 1,074,497 | 1,075,749 | ||||||||||||||||||||
Asset backed securities | 1,677,941 | 1,675,605 | 1,332,594 | 1,326,356 | ||||||||||||||||||||
Total | $ | 10,801,572 | $ | 10,753,633 | $ | 9,676,857 | $ | 9,670,507 | ||||||||||||||||
Summary of other investments, including available for sale and fair value option components | The following table summarizes the Company’s other investments, including available for sale and fair value option components: | |||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Available for sale securities: | ||||||||||||||||||||||||
Asian and emerging markets | $ | 236,586 | $ | 331,984 | ||||||||||||||||||||
Investment grade fixed income | 59,638 | 159,115 | ||||||||||||||||||||||
Other | — | 7,211 | ||||||||||||||||||||||
Total available for sale | 296,224 | 498,310 | ||||||||||||||||||||||
Fair value option: | ||||||||||||||||||||||||
Term loan investments (par value: $1,076,011 and $360,204) | 1,073,649 | 399,591 | ||||||||||||||||||||||
Mezzanine debt funds | 121,341 | 102,172 | ||||||||||||||||||||||
Credit related funds | 114,436 | 63,271 | ||||||||||||||||||||||
Investment grade fixed income | 69,108 | 75,062 | ||||||||||||||||||||||
Asian and emerging markets | 25,800 | 14,054 | ||||||||||||||||||||||
Other (1) | 147,573 | 119,130 | ||||||||||||||||||||||
Total fair value option | 1,551,907 | 773,280 | ||||||||||||||||||||||
Total | $ | 1,848,131 | $ | 1,271,590 | ||||||||||||||||||||
-1 | Includes fund investments with strategies in mortgage servicing rights, transportation and infrastructure assets and other. | |||||||||||||||||||||||
Summary of assets and liabilities accounted for using the fair value option | The following table summarizes the Company’s assets and liabilities which are accounted for using the fair value option: | |||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Fixed maturities | $ | 632,024 | $ | 448,254 | ||||||||||||||||||||
Other investments | 1,551,907 | 773,280 | ||||||||||||||||||||||
Short term investments | 251,601 | — | ||||||||||||||||||||||
Investments accounted for using the fair value option | $ | 2,435,532 | $ | 1,221,534 | ||||||||||||||||||||
Components of net investment income | The components of net investment income were derived from the following sources: | |||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
Fixed maturities | $ | 265,219 | $ | 249,833 | $ | 281,140 | ||||||||||||||||||
Term loan investments | 39,940 | 20,608 | 15,283 | |||||||||||||||||||||
Equity securities (dividends) | 13,005 | 8,919 | 7,963 | |||||||||||||||||||||
Short-term investments | 1,888 | 1,259 | 1,980 | |||||||||||||||||||||
Other (1) | 28,869 | 19,710 | 14,196 | |||||||||||||||||||||
Gross investment income | 348,921 | 300,329 | 320,562 | |||||||||||||||||||||
Investment expenses | (46,336 | ) | (33,110 | ) | (25,667 | ) | ||||||||||||||||||
Net investment income | $ | 302,585 | $ | 267,219 | $ | 294,895 | ||||||||||||||||||
-1 | Includes dividends on investment funds and other items. | |||||||||||||||||||||||
Summary of net realized gains (losses) | Net realized gains (losses) were as follows, excluding the other-than-temporary impairment provisions: | |||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
Available for sale securities: | ||||||||||||||||||||||||
Gross gains on investment sales | $ | 248,031 | $ | 239,421 | $ | 247,291 | ||||||||||||||||||
Gross losses on investment sales | (145,808 | ) | (203,077 | ) | (71,722 | ) | ||||||||||||||||||
Change in fair value of assets and liabilities accounted for using the fair value option: | ||||||||||||||||||||||||
Fixed maturities | (20,743 | ) | 54 | 13,195 | ||||||||||||||||||||
Other investments | 2,672 | 17,503 | 7,383 | |||||||||||||||||||||
Equity securities | — | 704 | (73 | ) | ||||||||||||||||||||
Short term investments | (395 | ) | — | — | ||||||||||||||||||||
Derivative instruments (1) | 43,934 | 20,912 | (1,326 | ) | ||||||||||||||||||||
Other (2) | (24,774 | ) | (1,499 | ) | (520 | ) | ||||||||||||||||||
Net realized gains | $ | 102,917 | $ | 74,018 | $ | 194,228 | ||||||||||||||||||
-1 | See Note 11 for information on the Company’s derivative instruments. | |||||||||||||||||||||||
-2 | Includes accretion of contingent consideration liability amounts related to the acquisition of the CMG Entities (see Note 2 for further details). | |||||||||||||||||||||||
Summary of OTTI recognized in earnings by asset class | The Company performs quarterly reviews of its available for sale investments in order to determine whether declines in fair value below the amortized cost basis were considered other-than-temporary in accordance with applicable guidance. The following table details the net impairment losses recognized in earnings by asset class: | |||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
Fixed maturities: | ||||||||||||||||||||||||
Corporate bonds | $ | (2,062 | ) | $ | (88 | ) | $ | (1,512 | ) | |||||||||||||||
Mortgage backed securities | (1,525 | ) | (295 | ) | (2,491 | ) | ||||||||||||||||||
Asset backed securities | (40 | ) | (128 | ) | (127 | ) | ||||||||||||||||||
Non-U.S. government securities | — | — | (261 | ) | ||||||||||||||||||||
Commercial mortgage backed securities | (7 | ) | — | (211 | ) | |||||||||||||||||||
U.S. government and government agencies | — | — | (10 | ) | ||||||||||||||||||||
Total | (3,634 | ) | (511 | ) | (4,612 | ) | ||||||||||||||||||
Other investments | (25,410 | ) | — | — | ||||||||||||||||||||
Equity securities | (1,106 | ) | (3,275 | ) | (6,689 | ) | ||||||||||||||||||
Investment of funds received under securities lending agreements | — | — | (87 | ) | ||||||||||||||||||||
Net impairment losses recognized in earnings | $ | (30,150 | ) | $ | (3,786 | ) | $ | (11,388 | ) | |||||||||||||||
Rollforward of the amount related to credit losses recognized in earnings for which a portion was recognized in AOCI | The following table provides a roll forward of the amount related to credit losses recognized in earnings for which a portion of an OTTI was recognized in accumulated other comprehensive income: | |||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||
Balance at start of year | $ | 60,062 | $ | 62,001 | $ | 66,545 | ||||||||||||||||||
Credit loss impairments recognized on securities not previously impaired | 691 | 423 | 1,962 | |||||||||||||||||||||
Credit loss impairments recognized on securities previously impaired | 162 | 88 | 2,735 | |||||||||||||||||||||
Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security | — | — | — | |||||||||||||||||||||
Reductions for securities sold during the period | (40,719 | ) | (2,450 | ) | (9,241 | ) | ||||||||||||||||||
Balance at end of year | $ | 20,196 | $ | 60,062 | $ | 62,001 | ||||||||||||||||||
Summary of restricted assets | The following table details the value of the Company’s restricted assets: | |||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Assets used for collateral or guarantees: | ||||||||||||||||||||||||
Affiliated transactions | $ | 4,138,527 | $ | 4,060,533 | ||||||||||||||||||||
Third party agreements | 970,120 | 856,890 | ||||||||||||||||||||||
Deposits with U.S. regulatory authorities | 337,981 | 302,809 | ||||||||||||||||||||||
Trust funds | 72,461 | 75,264 | ||||||||||||||||||||||
Deposits with non-U.S. regulatory authorities | — | 6,546 | ||||||||||||||||||||||
Total restricted assets | $ | 5,519,089 | $ | 5,302,042 | ||||||||||||||||||||
Fair_Value_Tables
Fair Value (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||
Fair value hierarchy | The following table presents the Company’s financial assets and liabilities measured at fair value by level at December 31, 2014: | |||||||||||||||||||||||
Fair Value Measurement Using: | ||||||||||||||||||||||||
Estimated | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||||||||||
Fair Value | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||||
Assets measured at fair value: | ||||||||||||||||||||||||
Available for sale securities: | ||||||||||||||||||||||||
Fixed maturities and fixed maturities pledged under securities lending agreements (1): | ||||||||||||||||||||||||
Corporate bonds | $ | 3,108,513 | $ | — | $ | 3,108,513 | $ | — | ||||||||||||||||
Mortgage backed securities | 943,343 | — | 943,343 | — | ||||||||||||||||||||
Municipal bonds | 1,494,122 | — | 1,494,122 | — | ||||||||||||||||||||
Commercial mortgage backed securities | 1,114,528 | — | 1,114,528 | — | ||||||||||||||||||||
U.S. government and government agencies | 1,447,972 | 1,447,972 | — | — | ||||||||||||||||||||
Non-U.S. government securities | 1,015,153 | — | 1,015,153 | — | ||||||||||||||||||||
Asset backed securities | 1,677,941 | — | 1,620,441 | 57,500 | ||||||||||||||||||||
Total | 10,801,572 | 1,447,972 | 9,296,100 | 57,500 | ||||||||||||||||||||
Equity securities | 658,182 | 658,182 | — | — | ||||||||||||||||||||
Other investments | 296,224 | — | 192,687 | 103,537 | ||||||||||||||||||||
Short-term investments | 797,226 | 759,621 | 37,605 | — | ||||||||||||||||||||
Fair value option: | ||||||||||||||||||||||||
Investments accounted for using the fair value option: | ||||||||||||||||||||||||
Corporate bonds | 497,101 | — | 497,101 | — | ||||||||||||||||||||
Non-U.S. government bonds | 88,411 | — | 88,411 | — | ||||||||||||||||||||
Mortgage backed securities | 22,190 | — | 22,190 | — | ||||||||||||||||||||
Asset backed securities | 24,322 | — | 24,322 | — | ||||||||||||||||||||
Other investments | 1,551,907 | — | 1,085,557 | 466,350 | ||||||||||||||||||||
Short-term investments | 251,601 | 250,580 | 1,021 | — | ||||||||||||||||||||
Total | 2,435,532 | 250,580 | 1,718,602 | 466,350 | ||||||||||||||||||||
Total assets measured at fair value | $ | 14,988,736 | $ | 3,116,355 | $ | 11,244,994 | $ | 627,387 | ||||||||||||||||
Liabilities measured at fair value: | ||||||||||||||||||||||||
Contingent consideration liability | $ | (61,845 | ) | $ | — | $ | — | $ | (61,845 | ) | ||||||||||||||
Total liabilities measured at fair value | $ | (61,845 | ) | $ | — | $ | — | $ | (61,845 | ) | ||||||||||||||
-1 | In securities lending transactions, the Company receives collateral in excess of the fair value of the fixed maturities and short-term investments pledged. For purposes of this table, the Company has excluded the collateral received and reinvested and included the fixed maturities and short-term investments pledged. | |||||||||||||||||||||||
The following table presents the Company’s financial assets and liabilities measured at fair value by level at December 31, 2013: | ||||||||||||||||||||||||
Fair Value Measurement Using: | ||||||||||||||||||||||||
Estimated | Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||||||||||
Fair Value | (Level 1) | (Level 2) | (Level 3) | |||||||||||||||||||||
Assets measured at fair value: | ||||||||||||||||||||||||
Available for sale securities: | ||||||||||||||||||||||||
Fixed maturities and fixed maturities pledged under securities lending agreements (1): | ||||||||||||||||||||||||
Corporate bonds | $ | 2,267,263 | $ | — | $ | 2,265,218 | $ | 2,045 | ||||||||||||||||
Mortgage backed securities | 1,133,095 | — | 1,133,095 | — | ||||||||||||||||||||
Municipal bonds | 1,481,738 | — | 1,481,738 | — | ||||||||||||||||||||
Commercial mortgage backed securities | 1,074,497 | — | 1,074,497 | — | ||||||||||||||||||||
U.S. government and government agencies | 1,301,809 | 1,301,809 | — | — | ||||||||||||||||||||
Non-U.S. government securities | 1,085,861 | — | 1,085,861 | — | ||||||||||||||||||||
Asset backed securities | 1,332,594 | — | 1,332,594 | — | ||||||||||||||||||||
Total | 9,676,857 | 1,301,809 | 8,373,003 | 2,045 | ||||||||||||||||||||
Equity securities | 496,824 | 496,738 | 86 | — | ||||||||||||||||||||
Other investments | 498,310 | — | 327,890 | 170,420 | ||||||||||||||||||||
Short-term investments | 1,478,367 | 1,427,744 | 50,623 | — | ||||||||||||||||||||
Fair value option: | ||||||||||||||||||||||||
Investments accounted for using the fair value option: | ||||||||||||||||||||||||
Corporate bonds | 334,065 | — | 334,065 | — | ||||||||||||||||||||
Non-U.S. government bonds | 73,156 | — | 73,156 | — | ||||||||||||||||||||
Mortgage backed securities | 41,033 | — | 41,033 | — | ||||||||||||||||||||
Other investments | 773,280 | — | 395,755 | 377,525 | ||||||||||||||||||||
Total | 1,221,534 | — | 844,009 | 377,525 | ||||||||||||||||||||
Total assets measured at fair value | $ | 13,371,892 | $ | 3,226,291 | $ | 9,595,611 | $ | 549,990 | ||||||||||||||||
-1 | In securities lending transactions, the Company receives collateral in excess of the fair value of the fixed maturities and short-term investments pledged. For purposes of this table, the Company has excluded the collateral received and reinvested and included the fixed maturities and short-term investments pledged. | |||||||||||||||||||||||
Rollforward of Level 3 investments | The following table presents a reconciliation of the beginning and ending balances for all investments measured at fair value on a recurring basis using Level 3 inputs for 2014, 2013 and 2012: | |||||||||||||||||||||||
Fair Value Measurements Using: | ||||||||||||||||||||||||
Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||
Assets | Liabilities | |||||||||||||||||||||||
Available for sale | Fair value option | |||||||||||||||||||||||
Asset Backed Securities | Corporate Bonds | Other Investments | Other Investments | Total | Contingent | |||||||||||||||||||
Consideration | ||||||||||||||||||||||||
Liability | ||||||||||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||||||||||
Balance at beginning of year | $ | — | $ | 2,045 | $ | 170,420 | $ | 377,525 | $ | 549,990 | $ | — | ||||||||||||
Total gains or (losses) (realized/unrealized) | ||||||||||||||||||||||||
Included in earnings (1) | — | — | (39 | ) | 16,818 | 16,779 | (20,083 | ) | ||||||||||||||||
Included in other comprehensive income | — | — | (680 | ) | 932 | 252 | — | |||||||||||||||||
Purchases, issuances and settlements | ||||||||||||||||||||||||
Purchases | — | — | — | 185,224 | 185,224 | — | ||||||||||||||||||
Issuances | — | — | — | — | — | (41,762 | ) | |||||||||||||||||
Sales | — | (2,045 | ) | (66,164 | ) | — | (68,209 | ) | — | |||||||||||||||
Settlements | — | — | — | (114,149 | ) | (114,149 | ) | — | ||||||||||||||||
Transfers in and/or out of Level 3 | 57,500 | — | — | — | 57,500 | — | ||||||||||||||||||
Balance at end of year | $ | 57,500 | $ | — | $ | 103,537 | $ | 466,350 | $ | 627,387 | $ | (61,845 | ) | |||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||||||
Balance at beginning of year | $ | — | $ | 98,404 | $ | 184,202 | $ | 195,350 | $ | 477,956 | $ | — | ||||||||||||
Total gains or (losses) (realized/unrealized) | ||||||||||||||||||||||||
Included in earnings (1) | — | 4,679 | 8,915 | 11,743 | 25,337 | — | ||||||||||||||||||
Included in other comprehensive income | — | (3,051 | ) | 473 | — | (2,578 | ) | — | ||||||||||||||||
Purchases, issuances and settlements | ||||||||||||||||||||||||
Purchases | — | — | 25,000 | 275,067 | 300,067 | — | ||||||||||||||||||
Issuances | — | — | — | — | — | — | ||||||||||||||||||
Sales | — | (96,655 | ) | — | (20,156 | ) | (116,811 | ) | — | |||||||||||||||
Settlements | — | (1,332 | ) | (48,170 | ) | (84,479 | ) | (133,981 | ) | — | ||||||||||||||
Transfers in and/or out of Level 3 | — | — | — | — | — | — | ||||||||||||||||||
Balance at end of year | $ | — | $ | 2,045 | $ | 170,420 | $ | 377,525 | $ | 549,990 | $ | — | ||||||||||||
-1 | Gains or losses on corporate bonds were included in net realized gains (losses) while gains or losses on other investments were included in net realized gains (losses) or net investment income. Amounts related to the contingent consideration liability were included in net realized gains (losses). |
Derivative_Instruments_Tables
Derivative Instruments (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||
Fair value and notional amount of derivatives | The following table summarizes information on the fair values and notional values of the Company’s derivative instruments. The fair value of TBAs is included in “fixed maturities available for sale, at fair value.” | |||||||||||||||
Asset | Liability Derivatives | Net | ||||||||||||||
Derivatives | Derivatives | |||||||||||||||
Fair Value | Fair Value | Fair Value | Notional | |||||||||||||
Value (1) | ||||||||||||||||
31-Dec-14 | ||||||||||||||||
Futures contracts | $ | 2,156 | $ | (1,907 | ) | $ | 249 | $ | 2,549,027 | |||||||
Foreign currency forward contracts | 10,511 | (1,145 | ) | 9,366 | 397,106 | |||||||||||
TBAs | 10,592 | — | 10,592 | 10,056 | ||||||||||||
Other | 3,209 | (2,345 | ) | 864 | 735,684 | |||||||||||
Total | $ | 26,468 | $ | (5,397 | ) | $ | 21,071 | |||||||||
31-Dec-13 | ||||||||||||||||
Futures contracts | $ | 461 | $ | (110 | ) | $ | 351 | $ | 475,967 | |||||||
Foreign currency forward contracts | 5,023 | (3,090 | ) | 1,933 | 330,746 | |||||||||||
TBAs | 33,455 | (21,731 | ) | 11,724 | 56,160 | |||||||||||
Other | 920 | (1,541 | ) | (621 | ) | 347,916 | ||||||||||
Total | $ | 39,859 | $ | (26,472 | ) | $ | 13,387 | |||||||||
-1 | Represents the absolute notional value of all outstanding contracts, consisting of long and short positions. | |||||||||||||||
Summary of net realized gains (losses) recorded in the consolidated statements of income | The following table summarizes net realized gains (losses) recorded on the Company’s derivative instruments in the consolidated statements of income: | |||||||||||||||
Derivatives not designated | Year Ended December 31, | |||||||||||||||
as hedging instruments | 2014 | 2013 | 2012 | |||||||||||||
Futures contracts | $ | 30,444 | $ | 10,742 | $ | (3,307 | ) | |||||||||
Foreign currency forward contracts | 13,430 | 9,762 | (214 | ) | ||||||||||||
TBAs | (342 | ) | (1,623 | ) | 4,413 | |||||||||||
Other | 402 | 2,031 | (2,218 | ) | ||||||||||||
Total | $ | 43,934 | $ | 20,912 | $ | (1,326 | ) | |||||||||
Other_Comprehensive_Income_Tab
Other Comprehensive Income (Tables) | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
Comprehensive Income Note Disclosure [Abstract] | |||||||||||||||
Schedule of changes in each component of AOCI | The following table presents the changes in each component of accumulated other comprehensive income (“AOCI”), net of tax: | ||||||||||||||
Unrealized Appreciation on Available-For-Sale Investments | Foreign Currency Translation Adjustments | Total | |||||||||||||
Year Ended December 31, 2014 | |||||||||||||||
Beginning balance | $ | 80,692 | $ | (5,728 | ) | $ | 74,964 | ||||||||
Other comprehensive income (loss) before reclassifications | 146,010 | (27,014 | ) | 118,996 | |||||||||||
Amounts reclassified from accumulated other comprehensive income | (65,104 | ) | — | (65,104 | ) | ||||||||||
Net current period other comprehensive income (loss) | 80,906 | (27,014 | ) | 53,892 | |||||||||||
Ending balance | $ | 161,598 | $ | (32,742 | ) | $ | 128,856 | ||||||||
Year Ended December 31, 2013 | |||||||||||||||
Beginning balance | $ | 289,956 | $ | (2,939 | ) | $ | 287,017 | ||||||||
Other comprehensive income (loss) before reclassifications | (176,578 | ) | (2,789 | ) | (179,367 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive income | (32,686 | ) | — | (32,686 | ) | ||||||||||
Net current period other comprehensive income (loss) | (209,264 | ) | (2,789 | ) | (212,053 | ) | |||||||||
Ending balance | $ | 80,692 | $ | (5,728 | ) | $ | 74,964 | ||||||||
Year Ended December 31, 2012 | |||||||||||||||
Beginning balance | $ | 174,636 | $ | (20,713 | ) | $ | 153,923 | ||||||||
Other comprehensive income (loss) before reclassifications | 273,144 | 17,774 | 290,918 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income | (157,824 | ) | — | (157,824 | ) | ||||||||||
Net current period other comprehensive income (loss) | 115,320 | 17,774 | 133,094 | ||||||||||||
Ending balance | $ | 289,956 | $ | (2,939 | ) | $ | 287,017 | ||||||||
Details about amounts reclassified from AOCI | The following table presents details about amounts reclassified from accumulated other comprehensive income: | ||||||||||||||
Consolidated Statement of Income | Amounts Reclassed from AOCI | ||||||||||||||
Line Item That Includes | Year Ended December 31, | ||||||||||||||
Details About AOCI Components | Reclassification | 2014 | 2013 | 2012 | |||||||||||
Unrealized appreciation on available-for-sale investments | |||||||||||||||
Net realized gains | $ | 102,223 | $ | 39,308 | $ | 180,144 | |||||||||
Other-than-temporary impairment losses | (30,470 | ) | (3,961 | ) | (12,175 | ) | |||||||||
Total before tax | 71,753 | 35,347 | 167,969 | ||||||||||||
Income tax expense | (6,649 | ) | (2,661 | ) | (10,145 | ) | |||||||||
Net of tax | $ | 65,104 | $ | 32,686 | $ | 157,824 | |||||||||
Schedule of comprehensive income (loss) | Following are the related tax effects allocated to each component of other comprehensive income (loss): | ||||||||||||||
Before | Tax | Net | |||||||||||||
Tax | Expense | of Tax | |||||||||||||
Amount | (Benefit) | Amount | |||||||||||||
Year Ended December 31, 2014 | |||||||||||||||
Unrealized appreciation (decline) in value of available-for-sale investments: | |||||||||||||||
Unrealized holding losses arising during period | $ | 161,685 | $ | 15,355 | $ | 146,330 | |||||||||
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss) | (320 | ) | — | (320 | ) | ||||||||||
Less reclassification of net realized gains included in net income | 71,753 | 6,649 | 65,104 | ||||||||||||
Foreign currency translation adjustments | (27,014 | ) | — | (27,014 | ) | ||||||||||
Other comprehensive income (loss) | $ | 62,598 | $ | 8,706 | $ | 53,892 | |||||||||
Year Ended December 31, 2013 | |||||||||||||||
Unrealized appreciation (decline) in value of available-for-sale investments: | |||||||||||||||
Unrealized holding gains arising during period | $ | (201,386 | ) | $ | (24,983 | ) | $ | (176,403 | ) | ||||||
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss) | (175 | ) | — | (175 | ) | ||||||||||
Less reclassification of net realized gains included in net income | 35,347 | 2,661 | 32,686 | ||||||||||||
Foreign currency translation adjustments | (2,789 | ) | — | (2,789 | ) | ||||||||||
Other comprehensive income (loss) | $ | (239,697 | ) | $ | (27,644 | ) | $ | (212,053 | ) | ||||||
Year Ended December 31, 2012 | |||||||||||||||
Unrealized appreciation (decline) in value of available-for-sale investments: | |||||||||||||||
Unrealized holding gains arising during period | $ | 278,917 | $ | 4,986 | $ | 273,931 | |||||||||
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss) | (787 | ) | — | (787 | ) | ||||||||||
Less reclassification of net realized gains included in net income | 167,969 | 10,145 | 157,824 | ||||||||||||
Foreign currency translation adjustments | 18,748 | 974 | 17,774 | ||||||||||||
Other comprehensive income (loss) | $ | 128,909 | $ | (4,185 | ) | $ | 133,094 | ||||||||
Earnings_Per_Common_Share_Tabl
Earnings Per Common Share (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Earnings Per Share [Abstract] | ||||||||||||
Schedule of computation of basic and diluted earnings per common share | The following table sets forth the computation of basic and diluted earnings per common share: | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Numerator: | ||||||||||||
Net income | $ | 821,260 | $ | 709,731 | $ | 593,397 | ||||||
Amounts attributable to noncontrolling interests | 13,095 | — | — | |||||||||
Net income available to Arch | 834,355 | 709,731 | 593,397 | |||||||||
Preferred dividends | (21,938 | ) | (21,938 | ) | (25,079 | ) | ||||||
Loss on repurchase of preferred shares | — | — | (10,612 | ) | ||||||||
Net income available to Arch common shareholders | $ | 812,417 | $ | 687,793 | $ | 557,706 | ||||||
Denominator: | ||||||||||||
Weighted average common shares outstanding – basic | 130,817,610 | 131,355,392 | 134,446,158 | |||||||||
Effect of dilutive common share equivalents: | ||||||||||||
Nonvested restricted shares | 1,128,540 | 1,090,100 | 857,174 | |||||||||
Stock options (1) | 2,976,172 | 3,331,691 | 2,955,515 | |||||||||
Weighted average common shares and common share | 134,922,322 | 135,777,183 | 138,258,847 | |||||||||
equivalents outstanding – diluted | ||||||||||||
Earnings per common share: | ||||||||||||
Basic | $ | 6.21 | $ | 5.24 | $ | 4.15 | ||||||
Diluted | $ | 6.02 | $ | 5.07 | $ | 4.03 | ||||||
-1 | Certain stock options were not included in the computation of diluted earnings per share where the exercise price of the stock options exceeded the average market price and would have been anti-dilutive or where, when applying the treasury stock method to in-the-money options, the sum of the proceeds, including unrecognized compensation, exceeded the average market price and would have been anti-dilutive. For 2014, 2013 and 2012, the number of stock options excluded were 1,435,955, 892,439 and 839,414, respectively. |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Components of income taxes attributable to operations | The components of income taxes attributable to operations were as follows: | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Current expense (benefit): | ||||||||||||
United States | $ | 29,749 | $ | 27,537 | $ | 8,267 | ||||||
Non-U.S. | 801 | 5,159 | 737 | |||||||||
30,550 | 32,696 | 9,004 | ||||||||||
Deferred expense (benefit): | ||||||||||||
United States | (8,168 | ) | 1,937 | (9,779 | ) | |||||||
Non-U.S. | 605 | (1,859 | ) | (3,235 | ) | |||||||
(7,563 | ) | 78 | (13,014 | ) | ||||||||
Income tax expense (benefit) | $ | 22,987 | $ | 32,774 | $ | (4,010 | ) | |||||
Schedule of income or loss before income taxes by jurisdiction | The Company’s income or loss before income taxes was earned in the following jurisdictions: | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Income (Loss) Before Income Taxes: | ||||||||||||
Bermuda | $ | 794,926 | $ | 717,661 | $ | 609,710 | ||||||
United States | 53,055 | 87,032 | 9,600 | |||||||||
Other | (3,734 | ) | (62,188 | ) | (29,923 | ) | ||||||
Total | $ | 844,247 | $ | 742,505 | $ | 589,387 | ||||||
Reconciliation of the differences between the provision for income taxes and the expected tax provision at the weighted average tax rate | A reconciliation of the difference between the provision for income taxes and the expected tax provision at the weighted average tax rate follows: | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Expected income tax expense (benefit) computed on pre-tax income | $ | 18,178 | $ | 17,506 | $ | (3,426 | ) | |||||
at weighted average income tax rate | ||||||||||||
Addition (reduction) in income tax expense (benefit) resulting from: | ||||||||||||
Tax-exempt investment income | (8,048 | ) | (8,255 | ) | (9,257 | ) | ||||||
Meals and entertainment | 711 | 599 | 688 | |||||||||
State taxes, net of U.S. federal tax benefit | 1,281 | 431 | 270 | |||||||||
Foreign branch taxes | 464 | 703 | 544 | |||||||||
Prior year adjustment | 320 | 2,810 | (1,581 | ) | ||||||||
Foreign exchange gains & losses | 746 | (1,254 | ) | (436 | ) | |||||||
Changes in applicable tax rate | (51 | ) | 2,007 | 1,193 | ||||||||
Dividend withholding taxes | 3,276 | 4,619 | 2,511 | |||||||||
Change in valuation allowance | (736 | ) | 11,795 | 4,281 | ||||||||
Contingent consideration | 6,763 | — | — | |||||||||
Other | 83 | 1,813 | 1,203 | |||||||||
Income tax expense (benefit) | $ | 22,987 | $ | 32,774 | $ | (4,010 | ) | |||||
Significant components of deferred income tax assets and liabilities | Significant components of the Company’s deferred income tax assets and liabilities were as follows: | |||||||||||
December 31, | ||||||||||||
2014 | 2013 | |||||||||||
Deferred income tax assets: | ||||||||||||
Net operating loss | $ | 12,017 | $ | 15,294 | ||||||||
AMT credit carryforward | 5,309 | 14,456 | ||||||||||
Discounting of net loss reserves | 63,880 | 53,293 | ||||||||||
Net unearned premium reserve | 34,087 | 30,698 | ||||||||||
Compensation liabilities | 27,765 | 26,481 | ||||||||||
Foreign tax credit carryforward | 4,628 | 4,343 | ||||||||||
Interest expense | 5,208 | 6,049 | ||||||||||
Goodwill | 885 | — | ||||||||||
Tax and loss bonds | 21,247 | — | ||||||||||
Other, net | 13,408 | 13,347 | ||||||||||
Deferred tax assets before valuation allowance | 188,434 | 163,961 | ||||||||||
Valuation allowance | (12,624 | ) | (15,548 | ) | ||||||||
Deferred tax assets net of valuation allowance | 175,810 | 148,413 | ||||||||||
Deferred income tax liabilities: | ||||||||||||
Depreciation and amortization | (7,579 | ) | (3,810 | ) | ||||||||
Deferred acquisition costs, net | (2,744 | ) | (3,369 | ) | ||||||||
Deposit accounting liability | (4,170 | ) | (4,581 | ) | ||||||||
Contingency reserve | (18,480 | ) | — | |||||||||
Net unrealized appreciation of investments | (11,695 | ) | (6,354 | ) | ||||||||
Other, net | (150 | ) | (1,738 | ) | ||||||||
Total deferred tax liabilities | (44,818 | ) | (19,852 | ) | ||||||||
Net deferred income tax assets | $ | 130,992 | $ | 128,561 | ||||||||
Summary of open tax years potentially subject to examination, by jurisdiction | The following table details open tax years that are potentially subject to examination by local tax authorities, in the following major jurisdictions: | |||||||||||
Jurisdiction | Tax Years | |||||||||||
United States | 2009-2014 | |||||||||||
United Kingdom | 2009-2014 | |||||||||||
Ireland | 2010-2014 | |||||||||||
Canada | 2010-2014 | |||||||||||
Switzerland | 2011-2014 | |||||||||||
Denmark | 2011-2014 |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Summary of future minimum lease payments | At December 31, 2014, the future minimum rental commitments, exclusive of escalation clauses and maintenance costs and net of rental income, for all of the Company’s operating leases are as follows: | |||
2015 | $ | 23,343 | ||
2016 | 23,670 | |||
2017 | 22,539 | |||
2018 | 20,803 | |||
2019 | 17,705 | |||
Thereafter | 46,672 | |||
Total | $ | 154,732 | ||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||
Analysis of goodwill and intangible assets | The following table shows an analysis of goodwill and intangible assets: | |||||||||||||||
Goodwill | Intangible assets with an indefinite life | Intangible assets with finite life | Total | |||||||||||||
Net balance at December 31, 2012 | $ | — | $ | 16,666 | $ | 21,593 | $ | 38,259 | ||||||||
Acquisitions | — | — | — | — | ||||||||||||
Amortization | — | — | (11,170 | ) | (11,170 | ) | ||||||||||
Foreign currency translation adjustment | — | — | 230 | 230 | ||||||||||||
Net balance at December 31, 2013 | — | 16,666 | 10,653 | 27,319 | ||||||||||||
Acquisitions | 14,965 | 16,858 | 76,435 | 108,258 | ||||||||||||
Amortization | — | — | (25,520 | ) | (25,520 | ) | ||||||||||
Foreign currency translation adjustment | (19 | ) | — | (499 | ) | (518 | ) | |||||||||
Net balance at December 31, 2014 | $ | 14,946 | $ | 33,524 | $ | 61,069 | $ | 109,539 | ||||||||
Gross balance at December 31, 2014 | $ | 14,965 | $ | 33,524 | $ | 124,908 | $ | 173,397 | ||||||||
Accumulated amortization | — | — | (63,439 | ) | (63,439 | ) | ||||||||||
Foreign currency translation adjustment | (19 | ) | — | (400 | ) | (419 | ) | |||||||||
Net balance at December 31, 2014 | $ | 14,946 | $ | 33,524 | $ | 61,069 | $ | 109,539 | ||||||||
Summary of components of intangible assets | The following table presents the components of intangible assets: | |||||||||||||||
Gross Balance | Accumulated | Foreign Currency Translation Adjustment | Net | |||||||||||||
Amortization | Balance | |||||||||||||||
31-Dec-14 | ||||||||||||||||
Acquired insurance contracts | $ | 77,574 | $ | (47,710 | ) | $ | (107 | ) | $ | 29,757 | ||||||
Operating platform | 29,900 | (5,482 | ) | 24,418 | ||||||||||||
Customer relationships | 25,910 | (12,283 | ) | (293 | ) | 13,334 | ||||||||||
Goodwill | 14,965 | — | (19 | ) | 14,946 | |||||||||||
Insurance licenses | 33,524 | — | — | 33,524 | ||||||||||||
Unfavorable service contract | (9,533 | ) | 2,229 | — | (7,304 | ) | ||||||||||
Other | 1,057 | (193 | ) | — | 864 | |||||||||||
Total | $ | 173,397 | $ | (63,439 | ) | $ | (419 | ) | $ | 109,539 | ||||||
31-Dec-13 | ||||||||||||||||
Acquired insurance contracts | $ | 31,102 | $ | (28,208 | ) | $ | — | $ | 2,894 | |||||||
Customer relationships | 17,371 | (9,711 | ) | 99 | 7,759 | |||||||||||
Insurance licenses | 16,666 | — | — | 16,666 | ||||||||||||
Total | $ | 65,139 | $ | (37,919 | ) | $ | 99 | $ | 27,319 | |||||||
Shareholders_Equity_Tables
Shareholders' Equity (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Stockholders' Equity Note [Abstract] | |||||||||
Roll-forward of changes in issued and outstanding Common Shares | The following table presents a roll-forward of changes in the Company’s issued and outstanding Common Shares: | ||||||||
Year Ended December 31, | |||||||||
2014 | 2013 | 2012 | |||||||
Common Shares: | |||||||||
Shares issued and outstanding, beginning of year | 169,560,591 | 168,255,572 | 164,636,338 | ||||||
Shares issued (1) | 1,493,524 | 811,732 | 2,066,065 | ||||||
Restricted shares issued, net of cancellations | 618,293 | 493,287 | 1,553,169 | ||||||
Shares issued, end of year | 171,672,408 | 169,560,591 | 168,255,572 | ||||||
Common shares in treasury, end of year | (44,304,474 | ) | (35,885,707 | ) | (34,412,959 | ) | |||
Shares issued and outstanding, end of year | 127,367,934 | 133,674,884 | 133,842,613 | ||||||
-1 | Includes shares issued from the exercise of stock options and stock appreciation rights, and shares issued from the employee share purchase plan. |
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||
Valuation assumptions | |||||||||
Year Ended December 31, | |||||||||
2014 | 2013 | 2012 | |||||||
Dividend yield | 0 | % | 0 | % | 0 | % | |||
Expected volatility | 22.8 | % | 23.6 | % | 24.3 | % | |||
Risk free interest rate | 1.9 | % | 1 | % | 1 | % | |||
Expected option life | 6.0 years | 6.0 years | 6.25 years | ||||||
Option activity | A summary of stock option and SAR activity under the Company’s Long Term Incentive and Share Award Plans during 2014 is presented below: | ||||||||
Year Ended December 31, 2014 | |||||||||
Number of | Weighted Average Exercise Price | ||||||||
Options / SARs | |||||||||
Outstanding, beginning of year | 8,338,480 | $ | 28.82 | ||||||
Granted | 1,078,036 | $ | 56.71 | ||||||
Exercised | (1,542,828 | ) | $ | 18.62 | |||||
Forfeited or expired | (69,655 | ) | $ | 46.91 | |||||
Outstanding, end of year | 7,804,033 | $ | 34.52 | ||||||
Exercisable, end of year | 5,558,439 | $ | 28.91 | ||||||
Unvested restricted share and unit activity | A summary of unvested restricted share and unit activity under the Company’s Long Term Incentive and Share Award Plans for 2014 is presented below: | ||||||||
Year Ended December 31, 2014 | |||||||||
Restricted | Restricted | ||||||||
Common | Unit | ||||||||
Shares | Awards | ||||||||
Unvested Shares: | |||||||||
Unvested balance, beginning of year | 1,943,125 | 308,322 | |||||||
Granted | 660,043 | 107,426 | |||||||
Vested | (591,576 | ) | (88,210 | ) | |||||
Forfeited | (41,750 | ) | (22,405 | ) | |||||
Unvested balance, end of year | 1,969,842 | 305,133 | |||||||
Weighted Average Grant Date Fair Value: | |||||||||
Unvested balance, beginning of year | $ | 43.55 | $ | 43.32 | |||||
Granted | $ | 56.94 | $ | 57.18 | |||||
Vested | $ | 41.89 | $ | 41.86 | |||||
Forfeited | $ | 46.54 | $ | 45.07 | |||||
Unvested balance, end of year | $ | 48.47 | $ | 48.49 | |||||
Statutory_Information_Tables
Statutory Information (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Disclosure Statutory Information [Abstract] | ||||||||||||||||
Summary of statutory capital, surplus and net income | The actual and required statutory capital and surplus for the Company’s principal operating subsidiaries at December 31, 2014 and 2013 was as follows: | |||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||
Actual (1) | Required (1) | Actual (1) | Required (1) | |||||||||||||
Statutory capital and surplus (1): | ||||||||||||||||
Bermuda | $ | 6,447,803 | $ | 2,209,757 | $ | 5,416,948 | $ | 2,077,442 | ||||||||
Ireland | 553,561 | 463,877 | 533,283 | 458,666 | ||||||||||||
United States | 1,454,282 | 467,797 | 1,013,228 | 335,442 | ||||||||||||
United Kingdom | 384,525 | 307,596 | 392,734 | 353,330 | ||||||||||||
Canada | 79,123 | 58,837 | 77,877 | 74,951 | ||||||||||||
-1 | Such amounts include ownership interests in affiliated insurance and reinsurance subsidiaries. | |||||||||||||||
The statutory net income (loss) for the Company’s principal operating subsidiaries for 2014, 2013 and 2012 was as follows: | ||||||||||||||||
Year Ended December 31, | ||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Statutory net income (loss): | ||||||||||||||||
Bermuda | $ | 692,676 | $ | 719,267 | $ | 631,483 | ||||||||||
Ireland | 43,197 | (24,410 | ) | (1,940 | ) | |||||||||||
United States | 46,110 | 62,605 | (21,517 | ) | ||||||||||||
United Kingdom | 13,016 | (11,353 | ) | (4,449 | ) | |||||||||||
Canada | 1,517 | (36,203 | ) | — | ||||||||||||
Unaudited_Condensed_Quarterly_1
Unaudited Condensed Quarterly Financial Information (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
Summary of condensed quarterly financial information | The following table summarizes the Company’s 2014 and 2013 unaudited condensed quarterly financial information (including the results of the ‘other’ segment): | |||||||||||||||
Fourth | Third | Second | First | |||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||
Net premiums written | $ | 895,481 | $ | 959,539 | $ | 971,928 | $ | 1,064,990 | ||||||||
Net premiums earned | 923,165 | 903,651 | 907,152 | 859,780 | ||||||||||||
Net investment income | 82,496 | 80,105 | 72,990 | 66,994 | ||||||||||||
Net realized gains | 10,561 | 18,515 | 54,144 | 19,697 | ||||||||||||
Net impairment losses recognized in earnings | (3,837 | ) | (8,593 | ) | (14,749 | ) | (2,971 | ) | ||||||||
Underwriting income | 113,464 | 101,087 | 124,091 | 132,456 | ||||||||||||
Net income | 207,134 | 223,264 | 211,717 | 179,145 | ||||||||||||
Preferred dividends | (5,485 | ) | (5,484 | ) | (5,485 | ) | (5,484 | ) | ||||||||
Net income available to Arch common shareholders | 209,679 | 223,191 | 202,531 | 177,016 | ||||||||||||
Net income per common share -- basic | $ | 1.65 | $ | 1.69 | $ | 1.53 | $ | 1.34 | ||||||||
Net income per common share -- diluted | $ | 1.6 | $ | 1.64 | $ | 1.48 | $ | 1.3 | ||||||||
Year Ended December 31, 2013 | ||||||||||||||||
Net premiums written | $ | 748,921 | $ | 839,135 | $ | 810,535 | $ | 952,776 | ||||||||
Net premiums earned | 839,366 | 795,000 | 758,816 | 752,770 | ||||||||||||
Net investment income | 67,095 | 66,083 | 68,369 | 65,672 | ||||||||||||
Net realized gains (losses) | 9,048 | (6,022 | ) | 12,652 | 58,340 | |||||||||||
Net impairment losses recognized in earnings | (88 | ) | (728 | ) | (724 | ) | (2,246 | ) | ||||||||
Underwriting income | 128,318 | 110,992 | 96,029 | 116,398 | ||||||||||||
Net income | 161,490 | 114,825 | 176,940 | 256,476 | ||||||||||||
Preferred dividends | (5,485 | ) | (5,484 | ) | (5,485 | ) | (5,484 | ) | ||||||||
Net income available to Arch common shareholders | 156,005 | 109,341 | 171,455 | 250,992 | ||||||||||||
Net income per common share -- basic | $ | 1.19 | $ | 0.83 | $ | 1.31 | $ | 1.92 | ||||||||
Net income per common share -- diluted | $ | 1.14 | $ | 0.8 | $ | 1.26 | $ | 1.85 | ||||||||
Guarantor_Financial_Informatio1
Guarantor Financial Information (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ||||||||||||||||||||
Condensed consolidating balance sheet | ||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||
Condensed Consolidating Balance Sheet | ACGL (Parent Guarantor) | Arch-U.S. (Subsidiary Issuer) | Other ACGL Subsidiaries | Consolidating Adjustments and Eliminations | ACGL Consolidated | |||||||||||||||
Assets | ||||||||||||||||||||
Total investments | $ | 107 | $ | 62,867 | $ | 15,268,275 | $ | — | $ | 15,331,249 | ||||||||||
Cash | 3,218 | 2,787 | 479,697 | — | 485,702 | |||||||||||||||
Investments in subsidiaries | 6,536,644 | 1,685,185 | — | (8,221,829 | ) | — | ||||||||||||||
Due from subsidiaries and affiliates | 48 | 7,517 | 370,429 | (377,994 | ) | — | ||||||||||||||
Premiums receivable | — | — | 1,331,511 | (382,816 | ) | 948,695 | ||||||||||||||
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses | — | — | 5,584,973 | (3,772,128 | ) | 1,812,845 | ||||||||||||||
Contractholder receivables | — | — | 1,309,192 | — | 1,309,192 | |||||||||||||||
Prepaid reinsurance premiums | — | — | 1,373,008 | (995,930 | ) | 377,078 | ||||||||||||||
Deferred acquisition costs, net | — | — | 414,525 | — | 414,525 | |||||||||||||||
Other assets | 7,590 | 49,576 | 1,689,670 | (416,579 | ) | 1,330,257 | ||||||||||||||
Total assets | $ | 6,547,607 | $ | 1,807,932 | $ | 27,821,280 | $ | (14,167,276 | ) | $ | 22,009,543 | |||||||||
Liabilities | ||||||||||||||||||||
Reserve for losses and loss adjustment expenses | $ | — | $ | — | $ | 12,784,030 | $ | (3,747,582 | ) | $ | 9,036,448 | |||||||||
Unearned premiums | — | — | 3,227,508 | (995,930 | ) | 2,231,578 | ||||||||||||||
Reinsurance balances payable | — | — | 589,289 | (369,977 | ) | 219,312 | ||||||||||||||
Contractholder payables | — | — | 1,309,192 | — | 1,309,192 | |||||||||||||||
Deposit accounting liabilities | — | — | 587,050 | (259,666 | ) | 327,384 | ||||||||||||||
Senior notes | 300,000 | 500,000 | — | — | 800,000 | |||||||||||||||
Revolving credit agreement borrowings | 100,000 | — | — | — | 100,000 | |||||||||||||||
Due to subsidiaries and affiliates | 417 | 7,505 | 370,072 | (377,994 | ) | — | ||||||||||||||
Other liabilities | 17,137 | 49,403 | 994,741 | (194,298 | ) | 866,983 | ||||||||||||||
Total liabilities | 417,554 | 556,908 | 19,861,882 | (5,945,447 | ) | 14,890,897 | ||||||||||||||
Redeemable noncontrolling interests (1) | — | — | 219,512 | — | 219,512 | |||||||||||||||
Shareholders' Equity | ||||||||||||||||||||
Total shareholders' equity available to Arch | 6,130,053 | 1,251,024 | 6,970,805 | (8,221,829 | ) | 6,130,053 | ||||||||||||||
Non-redeemable noncontrolling interests (1) | — | — | 769,081 | — | 769,081 | |||||||||||||||
Total shareholders' equity | 6,130,053 | 1,251,024 | 7,739,886 | (8,221,829 | ) | 6,899,134 | ||||||||||||||
Total liabilities, noncontrolling interests and shareholders' equity | $ | 6,547,607 | $ | 1,807,932 | $ | 27,821,280 | $ | (14,167,276 | ) | $ | 22,009,543 | |||||||||
(1) See Note 4. | ||||||||||||||||||||
31-Dec-13 | ||||||||||||||||||||
Condensed Consolidating Balance Sheet | ACGL (Parent Guarantor) | Arch-U.S. (Subsidiary Issuer) | Other ACGL Subsidiaries | Consolidating Adjustments and Eliminations | ACGL Consolidated | |||||||||||||||
Assets | ||||||||||||||||||||
Total investments | $ | 2,530 | $ | 408,957 | $ | 13,200,247 | $ | — | $ | 13,611,734 | ||||||||||
Cash | 3,223 | 509 | 430,325 | — | 434,057 | |||||||||||||||
Investments in subsidiaries | 6,046,060 | 1,258,889 | — | (7,304,949 | ) | — | ||||||||||||||
Due from subsidiaries and affiliates | 2,251 | — | 405,110 | (407,361 | ) | — | ||||||||||||||
Premiums receivable | — | — | 1,085,369 | (331,445 | ) | 753,924 | ||||||||||||||
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses | — | — | 5,645,156 | (3,840,826 | ) | 1,804,330 | ||||||||||||||
Contractholder receivables | — | — | 1,064,246 | — | 1,064,246 | |||||||||||||||
Prepaid reinsurance premiums | — | — | 1,109,312 | (780,969 | ) | 328,343 | ||||||||||||||
Deferred acquisition costs, net | — | — | 342,314 | — | 342,314 | |||||||||||||||
Other assets | 6,598 | 60,342 | 1,714,651 | (554,445 | ) | 1,227,146 | ||||||||||||||
Total assets | $ | 6,060,662 | $ | 1,728,697 | $ | 24,996,730 | $ | (13,219,995 | ) | $ | 19,566,094 | |||||||||
Liabilities | ||||||||||||||||||||
Reserve for losses and loss adjustment expenses | $ | — | $ | — | $ | 12,625,766 | $ | (3,801,070 | ) | $ | 8,824,696 | |||||||||
Unearned premiums | — | — | 2,677,334 | (780,969 | ) | 1,896,365 | ||||||||||||||
Reinsurance balances payable | — | — | 662,394 | (466,227 | ) | 196,167 | ||||||||||||||
Contractholder payables | — | — | 1,064,246 | — | 1,064,246 | |||||||||||||||
Deposit accounting liabilities | — | — | 758,490 | (337,193 | ) | 421,297 | ||||||||||||||
Senior notes | 300,000 | 500,000 | — | — | 800,000 | |||||||||||||||
Revolving credit agreement borrowings | 100,000 | — | — | — | 100,000 | |||||||||||||||
Due to subsidiaries and affiliates | 18 | 10,250 | 397,093 | (407,361 | ) | — | ||||||||||||||
Other liabilities | 13,148 | 33,206 | 691,699 | (122,226 | ) | 615,827 | ||||||||||||||
Total liabilities | 413,166 | 543,456 | 18,877,022 | (5,915,046 | ) | 13,918,598 | ||||||||||||||
Redeemable noncontrolling interests | — | — | — | — | — | |||||||||||||||
Shareholders' Equity | ||||||||||||||||||||
Total shareholders' equity available to Arch | 5,647,496 | 1,185,241 | 6,119,708 | (7,304,949 | ) | 5,647,496 | ||||||||||||||
Non-redeemable noncontrolling interests | — | — | — | — | — | |||||||||||||||
Total shareholders' equity | 5,647,496 | 1,185,241 | 6,119,708 | (7,304,949 | ) | 5,647,496 | ||||||||||||||
Total liabilities, noncontrolling interests and shareholders' equity | $ | 6,060,662 | $ | 1,728,697 | $ | 24,996,730 | $ | (13,219,995 | ) | $ | 19,566,094 | |||||||||
Condensed consolidating statement of income and comprehensive income | ||||||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||||||
Condensed Consolidating Statement of Income and Comprehensive Income | ACGL (Parent Guarantor) | Arch-U.S. (Subsidiary Issuer) | Other ACGL Subsidiaries | Consolidating Adjustments and Eliminations | ACGL Consolidated | |||||||||||||||
Revenues | ||||||||||||||||||||
Net premiums earned | $ | — | $ | — | $ | 3,593,748 | $ | — | $ | 3,593,748 | ||||||||||
Net investment income | — | — | 326,831 | (24,246 | ) | 302,585 | ||||||||||||||
Net realized gains | — | 5 | 102,912 | — | 102,917 | |||||||||||||||
Net impairment losses recognized in earnings | — | — | (30,150 | ) | — | (30,150 | ) | |||||||||||||
Other underwriting income | — | — | 10,142 | — | 10,142 | |||||||||||||||
Equity in net income of investment funds accounted for using the equity method | — | — | 19,883 | — | 19,883 | |||||||||||||||
Other income (loss) | — | — | (10,252 | ) | — | (10,252 | ) | |||||||||||||
Total revenues | — | 5 | 4,013,114 | (24,246 | ) | 3,988,873 | ||||||||||||||
Expenses | ||||||||||||||||||||
Losses and loss adjustment expenses | — | — | 1,919,250 | — | 1,919,250 | |||||||||||||||
Acquisition expenses | — | — | 657,262 | — | 657,262 | |||||||||||||||
Other operating expenses | 46,074 | 3,387 | 556,763 | — | 606,224 | |||||||||||||||
Interest expense | 23,423 | 25,817 | 20,640 | (24,246 | ) | 45,634 | ||||||||||||||
Net foreign exchange gains | — | — | (53,222 | ) | (30,522 | ) | (83,744 | ) | ||||||||||||
Total expenses | 69,497 | 29,204 | 3,100,693 | (54,768 | ) | 3,144,626 | ||||||||||||||
Income (loss) before income taxes | (69,497 | ) | (29,199 | ) | 912,421 | 30,522 | 844,247 | |||||||||||||
Income tax benefit (expense) | — | 10,125 | (33,112 | ) | — | (22,987 | ) | |||||||||||||
Income (loss) before equity in net income of subsidiaries | (69,497 | ) | (19,074 | ) | 879,309 | 30,522 | 821,260 | |||||||||||||
Equity in net income of subsidiaries | 903,852 | 53,584 | — | (957,436 | ) | — | ||||||||||||||
Net income | 834,355 | 34,510 | 879,309 | (926,914 | ) | 821,260 | ||||||||||||||
Amounts attributable to noncontrolling interests (1) | — | — | 13,095 | — | 13,095 | |||||||||||||||
Net income available to Arch | 834,355 | 34,510 | 892,404 | (926,914 | ) | 834,355 | ||||||||||||||
Preferred dividends | (21,938 | ) | — | — | — | (21,938 | ) | |||||||||||||
Net income available to Arch common shareholders | $ | 812,417 | $ | 34,510 | $ | 892,404 | $ | (926,914 | ) | $ | 812,417 | |||||||||
Comprehensive income available to Arch | $ | 888,247 | $ | 33,671 | $ | 976,821 | $ | (1,010,492 | ) | $ | 888,247 | |||||||||
(1) See Note 4. | ||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||
Condensed Consolidating Statement of Income and Comprehensive Income | ACGL (Parent Guarantor) | Arch-U.S. (Subsidiary Issuer) | Other ACGL Subsidiaries | Consolidating Adjustments and Eliminations | ACGL Consolidated | |||||||||||||||
Revenues | ||||||||||||||||||||
Net premiums earned | $ | — | $ | — | $ | 3,145,952 | $ | — | $ | 3,145,952 | ||||||||||
Net investment income | — | 31 | 307,449 | (40,261 | ) | 267,219 | ||||||||||||||
Net realized gains | — | — | 74,018 | — | 74,018 | |||||||||||||||
Net impairment losses recognized in earnings | — | — | (3,786 | ) | — | (3,786 | ) | |||||||||||||
Other underwriting income | — | — | 7,639 | — | 7,639 | |||||||||||||||
Equity in net income of investment funds accounted for using the equity method | — | — | 35,701 | — | 35,701 | |||||||||||||||
Other income (loss) | — | — | (586 | ) | — | (586 | ) | |||||||||||||
Total revenues | — | 31 | 3,566,387 | (40,261 | ) | 3,526,157 | ||||||||||||||
Expenses | ||||||||||||||||||||
Losses and loss adjustment expenses | — | — | 1,679,424 | — | 1,679,424 | |||||||||||||||
Acquisition expenses | — | — | 564,103 | — | 564,103 | |||||||||||||||
Other operating expenses | 38,702 | 2,691 | 459,337 | — | 500,730 | |||||||||||||||
Interest expense | 23,272 | 1,316 | 42,733 | (40,261 | ) | 27,060 | ||||||||||||||
Net foreign exchange losses | — | — | 2,145 | 10,190 | 12,335 | |||||||||||||||
Total expenses | 61,974 | 4,007 | 2,747,742 | (30,071 | ) | 2,783,652 | ||||||||||||||
Income (loss) before income taxes | (61,974 | ) | (3,976 | ) | 818,645 | (10,190 | ) | 742,505 | ||||||||||||
Income tax benefit (expense) | — | 1,383 | (34,157 | ) | — | (32,774 | ) | |||||||||||||
Income (loss) before equity in net income of subsidiaries | (61,974 | ) | (2,593 | ) | 784,488 | (10,190 | ) | 709,731 | ||||||||||||
Equity in net income of subsidiaries | 771,705 | 25,644 | — | (797,349 | ) | — | ||||||||||||||
Net income | 709,731 | 23,051 | 784,488 | (807,539 | ) | 709,731 | ||||||||||||||
Amounts attributable to noncontrolling interests | — | — | — | — | — | |||||||||||||||
Net income available to Arch | 709,731 | 23,051 | 784,488 | (807,539 | ) | 709,731 | ||||||||||||||
Preferred dividends | (21,938 | ) | — | — | — | (21,938 | ) | |||||||||||||
Net income available to Arch common shareholders | $ | 687,793 | $ | 23,051 | $ | 784,488 | $ | (807,539 | ) | $ | 687,793 | |||||||||
Comprehensive income (loss) available to Arch | $ | 497,678 | $ | (28,330 | ) | $ | 562,245 | $ | (533,915 | ) | $ | 497,678 | ||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||
Condensed Consolidating Statement of Income and Comprehensive Income | ACGL (Parent Guarantor) | Arch-U.S. (Subsidiary Issuer) | Other ACGL Subsidiaries | Consolidating Adjustments and Eliminations | ACGL Consolidated | |||||||||||||||
Revenues | ||||||||||||||||||||
Net premiums earned | $ | — | $ | — | $ | 2,935,140 | $ | — | $ | 2,935,140 | ||||||||||
Net investment income | 4 | 8 | 321,805 | (26,922 | ) | 294,895 | ||||||||||||||
Net realized gains | — | — | 194,228 | — | 194,228 | |||||||||||||||
Net impairment losses recognized in earnings | — | — | (11,388 | ) | — | (11,388 | ) | |||||||||||||
Other underwriting income | — | — | 8,090 | — | 8,090 | |||||||||||||||
Equity in net income of investment funds accounted for using the equity method | — | — | 73,510 | — | 73,510 | |||||||||||||||
Other income (loss) | — | — | (12,094 | ) | — | (12,094 | ) | |||||||||||||
Total revenues | 4 | 8 | 3,509,291 | (26,922 | ) | 3,482,381 | ||||||||||||||
Expenses | ||||||||||||||||||||
Losses and loss adjustment expenses | — | — | 1,861,277 | — | 1,861,277 | |||||||||||||||
Acquisition expenses | — | — | 508,884 | — | 508,884 | |||||||||||||||
Other operating expenses | 35,570 | 1,218 | 428,565 | — | 465,353 | |||||||||||||||
Interest expense | 23,496 | — | 31,951 | (26,922 | ) | 28,525 | ||||||||||||||
Net foreign exchange losses | — | — | 21,787 | 7,168 | 28,955 | |||||||||||||||
Total expenses | 59,066 | 1,218 | 2,852,464 | (19,754 | ) | 2,892,994 | ||||||||||||||
Income (loss) before income taxes | (59,062 | ) | (1,210 | ) | 656,827 | (7,168 | ) | 589,387 | ||||||||||||
Income tax benefit | — | 424 | 3,586 | — | 4,010 | |||||||||||||||
Income (loss) before equity in net income of subsidiaries | (59,062 | ) | (786 | ) | 660,413 | (7,168 | ) | 593,397 | ||||||||||||
Equity in net income of subsidiaries | 652,459 | 9,738 | — | (662,197 | ) | — | ||||||||||||||
Net income | 593,397 | 8,952 | 660,413 | (669,365 | ) | 593,397 | ||||||||||||||
Amounts attributable to noncontrolling interests | — | — | — | — | — | |||||||||||||||
Net income available to Arch | 593,397 | 8,952 | 660,413 | (669,365 | ) | 593,397 | ||||||||||||||
Preferred dividends | (25,079 | ) | — | — | — | (25,079 | ) | |||||||||||||
Loss on repurchase of preferred shares | (10,612 | ) | — | — | — | (10,612 | ) | |||||||||||||
Net income available to Arch common shareholders | $ | 557,706 | $ | 8,952 | $ | 660,413 | $ | (669,365 | ) | $ | 557,706 | |||||||||
Comprehensive income available to Arch | $ | 726,491 | $ | 2,796 | $ | 786,338 | $ | (789,134 | ) | $ | 726,491 | |||||||||
Condensed consolidating statement of cash flows | ||||||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||||||
Condensed Consolidating Statement | ACGL (Parent Guarantor) | Arch-U.S. (Subsidiary Issuer) | Other ACGL Subsidiaries | Consolidating Adjustments and Eliminations | ACGL Consolidated | |||||||||||||||
of Cash Flows | ||||||||||||||||||||
Operating Activities | ||||||||||||||||||||
Net Cash Provided By (Used For) | $ | 467,091 | $ | 8,142 | $ | 1,077,597 | $ | (515,700 | ) | $ | 1,037,130 | |||||||||
Operating Activities | ||||||||||||||||||||
Investing Activities | ||||||||||||||||||||
Purchases of fixed maturity investments | — | (78,509 | ) | (28,666,770 | ) | — | (28,745,279 | ) | ||||||||||||
Purchases of equity securities | — | — | (520,817 | ) | — | (520,817 | ) | |||||||||||||
Purchases of other investments | — | — | (2,257,481 | ) | — | (2,257,481 | ) | |||||||||||||
Proceeds from the sales of fixed maturity investments | — | 16,011 | 26,807,181 | — | 26,823,192 | |||||||||||||||
Proceeds from the sales of equity securities | — | — | 411,362 | — | 411,362 | |||||||||||||||
Proceeds from the sales of other investments | — | — | 1,643,000 | — | 1,643,000 | |||||||||||||||
Proceeds from redemptions and maturities of fixed maturity investments | — | — | 762,995 | — | 762,995 | |||||||||||||||
Net (purchases) sales of short-term investments | 2,423 | 408,591 | 166,112 | — | 577,126 | |||||||||||||||
Change in investment of securities lending collateral | — | — | 57,470 | — | 57,470 | |||||||||||||||
Contributions to subsidiaries | — | (341,707 | ) | (128,825 | ) | 470,532 | — | |||||||||||||
Issuance of intercompany loans | — | (7,500 | ) | (7,500 | ) | 15,000 | — | |||||||||||||
Repayments of intercompany loans | — | — | 38,964 | (38,964 | ) | — | ||||||||||||||
Purchase of business, net of cash acquired | — | — | (237,106 | ) | — | (237,106 | ) | |||||||||||||
Purchases of furniture, equipment and other assets | (271 | ) | — | (19,612 | ) | — | (19,883 | ) | ||||||||||||
Net Cash Provided By (Used For) | 2,152 | (3,114 | ) | (1,951,027 | ) | 446,568 | (1,505,421 | ) | ||||||||||||
Investing Activities | ||||||||||||||||||||
Financing Activities | ||||||||||||||||||||
Purchases of common shares under share repurchase program | (454,137 | ) | — | — | — | (454,137 | ) | |||||||||||||
Proceeds from common shares issued, net | 6,827 | — | 470,532 | (470,532 | ) | 6,827 | ||||||||||||||
Proceeds from intercompany loans | — | 7,500 | 7,500 | (15,000 | ) | — | ||||||||||||||
Repayments of intercompany loans | — | (10,250 | ) | (28,714 | ) | 38,964 | — | |||||||||||||
Change in securities lending collateral | — | — | (57,470 | ) | — | (57,470 | ) | |||||||||||||
Third party investment in non-redeemable noncontrolling interests (1) | — | — | 796,903 | — | 796,903 | |||||||||||||||
Third party investment in redeemable noncontrolling interests (1) | — | — | 219,233 | — | 219,233 | |||||||||||||||
Dividends paid to redeemable noncontrolling interests (1) | — | — | (14,448 | ) | — | (14,448 | ) | |||||||||||||
Dividends paid to parent (2) | — | — | (515,700 | ) | 515,700 | — | ||||||||||||||
Other | — | — | 64,973 | — | 64,973 | |||||||||||||||
Preferred dividends paid | (21,938 | ) | — | — | — | (21,938 | ) | |||||||||||||
Net Cash Provided By (Used For) | (469,248 | ) | (2,750 | ) | 942,809 | 69,132 | 539,943 | |||||||||||||
Financing Activities | ||||||||||||||||||||
Effects of exchange rates changes on foreign currency cash | — | — | (20,007 | ) | — | (20,007 | ) | |||||||||||||
Increase (decrease) in cash | (5 | ) | 2,278 | 49,372 | — | 51,645 | ||||||||||||||
Cash beginning of year | 3,223 | 509 | 430,325 | — | 434,057 | |||||||||||||||
Cash end of year | $ | 3,218 | $ | 2,787 | $ | 479,697 | $ | — | $ | 485,702 | ||||||||||
(1) See Note 4. | ||||||||||||||||||||
(2) Included in net cash provided by (used for) operating activities in the ACGL (Parent Guarantor) column. | ||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||
Condensed Consolidating Statement | ACGL (Parent Guarantor) | Arch-U.S. (Subsidiary Issuer) | Other ACGL Subsidiaries | Consolidating Adjustments and Eliminations | ACGL Consolidated | |||||||||||||||
of Cash Flows | ||||||||||||||||||||
Operating Activities | ||||||||||||||||||||
Net Cash Provided By (Used For) | $ | 68,562 | $ | (6,569 | ) | $ | 908,375 | $ | (119,500 | ) | $ | 850,868 | ||||||||
Operating Activities | ||||||||||||||||||||
Investing Activities | ||||||||||||||||||||
Purchases of fixed maturity investments | — | — | (18,174,988 | ) | — | (18,174,988 | ) | |||||||||||||
Purchases of equity securities | — | — | (535,857 | ) | — | (535,857 | ) | |||||||||||||
Purchases of other investments | — | — | (1,326,729 | ) | — | (1,326,729 | ) | |||||||||||||
Proceeds from the sales of fixed maturity investments | — | — | 17,196,614 | — | 17,196,614 | |||||||||||||||
Proceeds from the sales of equity securities | — | — | 462,787 | — | 462,787 | |||||||||||||||
Proceeds from the sales of other investments | — | — | 1,162,707 | — | 1,162,707 | |||||||||||||||
Proceeds from redemptions and maturities of fixed maturity investments | — | — | 731,708 | — | 731,708 | |||||||||||||||
Net (purchases) sales of short-term investments | 5,799 | (400,162 | ) | (356,250 | ) | — | (750,613 | ) | ||||||||||||
Change in investment of securities lending collateral | — | — | (55,643 | ) | — | (55,643 | ) | |||||||||||||
Contributions to subsidiaries | (160 | ) | (97,850 | ) | (20,250 | ) | 118,260 | — | ||||||||||||
Issuance of intercompany loans | — | — | (10,250 | ) | 10,250 | — | ||||||||||||||
Purchases of furniture, equipment and other assets | (712 | ) | — | (16,787 | ) | — | (17,499 | ) | ||||||||||||
Net Cash Provided By (Used For) | 4,927 | (498,012 | ) | (942,938 | ) | 128,510 | (1,307,513 | ) | ||||||||||||
Investing Activities | ||||||||||||||||||||
Financing Activities | ||||||||||||||||||||
Purchases of common shares under share repurchase program | (57,796 | ) | — | — | — | (57,796 | ) | |||||||||||||
Proceeds from common shares issued, net | 3,051 | — | 118,260 | (118,260 | ) | 3,051 | ||||||||||||||
Proceeds from intercompany loans | — | 10,250 | — | (10,250 | ) | — | ||||||||||||||
Proceeds from borrowings | — | 494,228 | — | — | 494,228 | |||||||||||||||
Change in securities lending collateral | — | — | 55,643 | — | 55,643 | |||||||||||||||
Dividends paid to parent (1) | — | — | (119,500 | ) | 119,500 | — | ||||||||||||||
Other | — | — | 50,830 | — | 50,830 | |||||||||||||||
Preferred dividends paid | (21,938 | ) | — | — | — | (21,938 | ) | |||||||||||||
Net Cash Provided By (Used For) | (76,683 | ) | 504,478 | 105,233 | (9,010 | ) | 524,018 | |||||||||||||
Financing Activities | ||||||||||||||||||||
Effects of exchange rates changes on foreign currency cash | — | — | (4,357 | ) | — | (4,357 | ) | |||||||||||||
Increase (decrease) in cash | (3,194 | ) | (103 | ) | 66,313 | — | 63,016 | |||||||||||||
Cash beginning of year | 6,417 | 612 | 364,012 | — | 371,041 | |||||||||||||||
Cash end of year | $ | 3,223 | $ | 509 | $ | 430,325 | $ | — | $ | 434,057 | ||||||||||
(1) Included in net cash provided by (used for) operating activities in the ACGL (Parent Guarantor) column. | ||||||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||
Condensed Consolidating Statement | ACGL (Parent Guarantor) | Arch-U.S. (Subsidiary Issuer) | Other ACGL Subsidiaries | Consolidating Adjustments and Eliminations | ACGL Consolidated | |||||||||||||||
of Cash Flows | ||||||||||||||||||||
Operating Activities | ||||||||||||||||||||
Net Cash Provided By (Used For) | $ | 209,500 | $ | (8,086 | ) | $ | 978,679 | $ | (258,490 | ) | $ | 921,603 | ||||||||
Operating Activities | ||||||||||||||||||||
Investing Activities | ||||||||||||||||||||
Purchases of fixed maturity investments | — | — | (17,568,592 | ) | — | (17,568,592 | ) | |||||||||||||
Purchases of equity securities | — | — | (268,999 | ) | — | (268,999 | ) | |||||||||||||
Purchases of other investments | — | — | (1,000,049 | ) | — | (1,000,049 | ) | |||||||||||||
Proceeds from the sales of fixed maturity investments | — | — | 16,366,306 | — | 16,366,306 | |||||||||||||||
Proceeds from the sales of equity securities | — | — | 313,617 | — | 313,617 | |||||||||||||||
Proceeds from the sales of other investments | — | — | 443,630 | — | 443,630 | |||||||||||||||
Proceeds from redemptions and maturities of fixed maturity investments | — | — | 1,115,594 | — | 1,115,594 | |||||||||||||||
Net (purchases) sales of short-term investments | (5,094 | ) | 1,986 | 189,027 | — | 185,919 | ||||||||||||||
Change in investment of securities lending collateral | — | — | 6,190 | — | 6,190 | |||||||||||||||
Contributions to subsidiaries | — | — | (38,576 | ) | 38,576 | — | ||||||||||||||
Purchase of business, net of cash acquired | — | — | 28,948 | — | 28,948 | |||||||||||||||
Purchases of furniture, equipment and other assets | (65 | ) | — | (18,467 | ) | — | (18,532 | ) | ||||||||||||
Net Cash Provided By (Used For) | (5,159 | ) | 1,986 | (431,371 | ) | 38,576 | (395,968 | ) | ||||||||||||
Investing Activities | ||||||||||||||||||||
Financing Activities | ||||||||||||||||||||
Proceeds from issuance of Series C preferred shares issued, net | 315,763 | — | — | — | 315,763 | |||||||||||||||
Repurchase of Series A and B preferred shares | (325,000 | ) | — | — | — | (325,000 | ) | |||||||||||||
Purchases of common shares under share repurchase program | (172,056 | ) | — | — | — | (172,056 | ) | |||||||||||||
Proceeds from common shares issued, net | 7,033 | — | 38,576 | (38,576 | ) | 7,033 | ||||||||||||||
Repayments of borrowings | — | — | (310,868 | ) | — | (310,868 | ) | |||||||||||||
Change in securities lending collateral | — | — | (6,190 | ) | — | (6,190 | ) | |||||||||||||
Dividends paid to parent (1) | — | — | (258,490 | ) | 258,490 | — | ||||||||||||||
Other | — | — | 6,664 | — | 6,664 | |||||||||||||||
Preferred dividends paid | (28,381 | ) | — | — | — | (28,381 | ) | |||||||||||||
Net Cash Provided By (Used For) | (202,641 | ) | — | (530,308 | ) | 219,914 | (513,035 | ) | ||||||||||||
Financing Activities | ||||||||||||||||||||
Effects of exchange rates changes on foreign currency cash | — | — | 6,742 | — | 6,742 | |||||||||||||||
Increase (decrease) in cash | 1,700 | (6,100 | ) | 23,742 | — | 19,342 | ||||||||||||||
Cash beginning of year | 4,717 | 6,712 | 340,270 | — | 351,699 | |||||||||||||||
Cash end of year | $ | 6,417 | $ | 612 | $ | 364,012 | $ | — | $ | 371,041 | ||||||||||
(1) Included in net cash provided by (used for) operating activities in the ACGL (Parent Guarantor) column. |
General_Details
General (Details) (USD $) | 1 Months Ended | 0 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Oct. 30, 2001 | Mar. 20, 2014 | Dec. 31, 2014 | Dec. 31, 2013 |
Variable Interest Entity [Line Items] | ||||
Proceeds from from common shares issued | $763.20 | |||
Common shares, par value per share | $0.00 | $0.00 | ||
Watford Holdings Ltd | Variable Interest Entity, Primary Beneficiary | ||||
Variable Interest Entity [Line Items] | ||||
Percentage ownership | 11.00% | |||
Initial investment contribution amount | $100 |
Business_Acquired_Summary_of_t
Business Acquired - Summary of the fair value of net assets acquired and allocation of purchase price (Details) (USD $) | 0 Months Ended | |||
In Thousands, unless otherwise specified | Jan. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Liabilities acquired | ||||
Goodwill | $14,946 | $0 | $0 | |
CMG Mortgage Insurance Company | ||||
Purchase price | ||||
Cash paid | 245,157 | |||
Contingent consideration liability | 41,762 | |||
Total purchase price | 286,919 | |||
Assets acquired | ||||
Cash | 9,579 | |||
Investments, at fair value | 312,093 | |||
Other assets acquired | 21,691 | |||
Total assets acquired | 437,650 | |||
Liabilities acquired | ||||
Reserves for losses and loss adjustment expenses | 121,572 | |||
Unearned premiums | 26,261 | |||
Intangible liability - unfavorable service contract | 9,533 | |||
Other liabilities acquired | 7,217 | |||
Total liabilities acquired | 164,583 | |||
Net assets acquired | 273,067 | |||
Goodwill | 13,852 | |||
Useful lives of acquired intangibles | ||||
Finite-lived intangible liabilities, useful life | 9 years | |||
CMG Mortgage Insurance Company | Insurance licenses | ||||
Assets acquired | ||||
Indefinite-lived intangible assets | 16,858 | |||
CMG Mortgage Insurance Company | Acquired insurance contracts | ||||
Assets acquired | ||||
Finite-lived intangible assets | 46,473 | |||
Useful lives of acquired intangibles | ||||
Finite-lived intangible assets, useful life | 5 years | |||
CMG Mortgage Insurance Company | Operating platform | ||||
Assets acquired | ||||
Finite-lived intangible assets | 29,900 | |||
Useful lives of acquired intangibles | ||||
Finite-lived intangible assets, useful life | 5 years | |||
CMG Mortgage Insurance Company | Favorable lease contract | ||||
Assets acquired | ||||
Finite-lived intangible assets | $1,056 | |||
Useful lives of acquired intangibles | ||||
Finite-lived intangible assets, useful life | 5 years |
Business_Acquired_Narrative_De
Business Acquired - Narrative (Details) (USD $) | 0 Months Ended | 12 Months Ended | 11 Months Ended | ||
Jan. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2012 | |
Business Acquisition [Line Items] | |||||
Discount rate, percentage | 15.00% | ||||
Amortization of intangible assets | $25,520,000 | $11,170,000 | |||
Goodwill | 14,946,000 | 0 | 14,946,000 | 0 | |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 61,845,000 | 61,845,000 | |||
CMG Mortgage Insurance Company | |||||
Business Acquisition [Line Items] | |||||
Percentage of voting interests acquired | 100.00% | ||||
Quota share agreement, percentage | 100.00% | ||||
Quota share reinsurance agreement limit | 25,000,000,000 | ||||
Cash paid | 245,157,000 | ||||
Contingent consideration, upper bound | 136,900,000 | ||||
Contingent consideration liability | 41,762,000 | ||||
Amortization of intangible assets | 20,100,000 | ||||
Goodwill | 13,852,000 | ||||
Goodwill, deferred tax asset | 48,000,000 | 48,000,000 | |||
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 61,845,000 | 61,845,000 | |||
CMG Mortgage Insurance Company | New mortgage insurance business (post closing) | |||||
Business Acquisition [Line Items] | |||||
Quota share agreement, percentage | 20.00% | ||||
CMG Mortgage Insurance Company | Minimum | |||||
Business Acquisition [Line Items] | |||||
Extension period | 1 year | ||||
CMG Mortgage Insurance Company | Maximum | |||||
Business Acquisition [Line Items] | |||||
Percentage of book value | 150.00% | ||||
Extension period | 3 years | ||||
CMG Mortgage Insurance Company | Stock Purchase Agreement (SPA) | |||||
Business Acquisition [Line Items] | |||||
Cash paid | 160,600,000 | ||||
Percentage of book value | 80.00% | ||||
CMG Mortgage Insurance Company | Asset Purchase Agreement (APA) | |||||
Business Acquisition [Line Items] | |||||
Cash paid | $84,600,000 |
Significant_Accounting_Policie2
Significant Accounting Policies (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Significant Accounting Policies [Line Items] | ||
Premium revenue recognition period | 12 months | |
Deposit accounting liabilities | $327,384,000 | $421,297,000 |
Deposit accounting assets | $284,400,000 | $370,500,000 |
Securities lending rate of collateral required (percentage) | 102.00% | |
Equity method investments, time lag for reporting - low end of range | 1 month | |
Equity method investments, time lag for reporting - high end of range | 3 months | |
Vesting period, share-based awards | 3 years | |
Requisite service period, share-based awards | 5 years | |
Losses occurring | ||
Significant Accounting Policies [Line Items] | ||
Premium revenue recognition period | 12 months | |
Risks attaching | ||
Significant Accounting Policies [Line Items] | ||
Premium revenue recognition period | 24 months |
Variable_Interest_Entity_and_N2
Variable Interest Entity and Noncontrolling Interests - Variable interest entity (Details) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | |||
Share data in Millions, unless otherwise specified | Oct. 30, 2001 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2014 | Dec. 31, 2011 |
Variable Interest Entity [Line Items] | ||||||
Proceeds from from common shares issued, net | $763,200,000 | |||||
Proceeds on issuance of preference shares | 0 | 0 | 315,763,000 | |||
Unearned premiums | 2,231,578,000 | 1,896,365,000 | ||||
Reserve for losses and loss adjustment expenses | 9,036,448,000 | 8,824,696,000 | 8,933,292,000 | 8,456,210,000 | ||
Net cash provided by (used in) operating activities | 1,037,130,000 | 850,868,000 | 921,603,000 | |||
Net cash provided by (used in) financing activities | 539,943,000 | 524,018,000 | -513,035,000 | |||
Net cash provided by (used in) investing activities | 1,505,421,000 | 1,307,513,000 | 395,968,000 | |||
Variable Interest Entity, Primary Beneficiary | Watford Re | ||||||
Variable Interest Entity [Line Items] | ||||||
Initial capitalization amount | 1,100,000,000 | |||||
Proceeds from from common shares issued, net | 907,300,000 | |||||
Net proceeds from issuance of common shares | 895,600,000 | |||||
Proceeds on issuance of preference shares | 226,600,000 | |||||
Net proceeds on issuance of preference shares | 219,200,000 | |||||
Initial investment contribution amount | 100,000,000 | |||||
Ownership percentage | 11.00% | |||||
Number of warrants received in capital raising | 1.7 | |||||
Unearned premiums | 180,000,000 | |||||
Reserve for losses and loss adjustment expenses | 66,300,000 | |||||
Net cash provided by (used in) operating activities | 39,300,000 | |||||
Net cash provided by (used in) financing activities | 1,160,000,000 | |||||
Net cash provided by (used in) investing activities | $1,180,000,000 |
Variable_Interest_Entity_and_N3
Variable Interest Entity and Noncontrolling Interests - Non-redeemable noncontrolling interest (Details) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Noncontrolling Interest [Line Items] | ||||||
Non-redeemable noncontrolling interest, beginning of year | $0 | [1] | $0 | [1] | ||
Amounts attributable to noncontrolling interests | -27,823 | 0 | 0 | |||
Non-redeemable noncontrolling interest, end of year | 769,081 | [1] | 0 | [1] | 0 | [1] |
Watford Re | Noncontrolling Interest [Member] | ||||||
Noncontrolling Interest [Line Items] | ||||||
Non-redeemable noncontrolling interest, beginning of year | 0 | |||||
Sale of shares to noncontrolling interests | 796,904 | |||||
Amounts attributable to noncontrolling interests | -27,823 | |||||
Non-redeemable noncontrolling interest, end of year | $769,081 | |||||
Common shares | Watford Re | Noncontrolling Interest [Member] | ||||||
Noncontrolling Interest [Line Items] | ||||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 89.00% | |||||
[1] | See Note 4. |
Variable_Interest_Entity_and_N4
Variable Interest Entity and Noncontrolling Interests - Redeemable noncontrolling interest (Details) (USD $) | 12 Months Ended | |||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Redeemable Noncontrolling Interest [Line Items] | ||||||
Preferred shares, par value per share | $0.01 | |||||
Amounts attributable to noncontrolling interests | $13,095 | [1] | $0 | [1] | $0 | [1] |
Amounts attributable to noncontrolling interests | -27,823 | 0 | 0 | |||
Dividends attributable to redeemable noncontrolling interests | 14,728 | 0 | 0 | |||
Watford Re | ||||||
Redeemable Noncontrolling Interest [Line Items] | ||||||
Preference shares, number of shares issued | 9,065,200 | |||||
Preferred shares, par value per share | $0.01 | |||||
Liquidation preference per share | $25 | |||||
Issue price per share | $24.50 | |||||
Preferred shares, dividend rate (as a percent) | 8.50% | |||||
Other | ||||||
Redeemable Noncontrolling Interest [Line Items] | ||||||
Amounts attributable to noncontrolling interests | -27,823 | 0 | 0 | |||
Dividends attributable to redeemable noncontrolling interests | 14,728 | 0 | 0 | |||
3 month US dollar LIBOR | Watford Re | ||||||
Redeemable Noncontrolling Interest [Line Items] | ||||||
Preferred shares, dividend rate (as a percent) | 1.00% | |||||
Redeemable preference shares | Watford Re | ||||||
Redeemable Noncontrolling Interest [Line Items] | ||||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 100.00% | |||||
Noncontrolling Interest [Member] | Watford Re | ||||||
Redeemable Noncontrolling Interest [Line Items] | ||||||
Amounts attributable to noncontrolling interests | ($27,823) | |||||
[1] | See Note 4. |
Segment_Information_Analysis_o
Segment Information - Analysis of underwriting income by segment and reconciliation to net income available to common shareholders (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Segment Reporting Information [Line Items] | ||||||||||||||
Gross premiums written | $4,840,616 | $4,196,623 | $3,869,161 | |||||||||||
Premiums ceded | -948,678 | -845,256 | -816,926 | |||||||||||
Net premiums written | 895,481 | 959,539 | 971,928 | 1,064,990 | 748,921 | 839,135 | 810,535 | 952,776 | 3,891,938 | 3,351,367 | 3,052,235 | |||
Change in unearned premiums | -298,190 | -205,415 | -117,095 | |||||||||||
Net premiums earned | 923,165 | 903,651 | 907,152 | 859,780 | 839,366 | 795,000 | 758,816 | 752,770 | 3,593,748 | 3,145,952 | 2,935,140 | |||
Other underwriting income | 10,142 | 7,639 | 8,090 | |||||||||||
Losses and loss adjustment expenses | -1,919,250 | -1,679,424 | -1,861,277 | |||||||||||
Acquisition expenses, net | -657,262 | -564,103 | -508,884 | |||||||||||
Other operating expenses | -556,280 | -458,327 | -430,035 | |||||||||||
Underwriting income (loss) | 113,464 | 101,087 | 124,091 | 132,456 | 128,318 | 110,992 | 96,029 | 116,398 | 471,098 | 451,737 | 143,034 | |||
Net investment income | 82,496 | 80,105 | 72,990 | 66,994 | 67,095 | 66,083 | 68,369 | 65,672 | 302,585 | 267,219 | 294,895 | |||
Net realized gains | 10,561 | 18,515 | 54,144 | 19,697 | 9,048 | -6,022 | 12,652 | 58,340 | 102,917 | 74,018 | 194,228 | |||
Net impairment losses recognized in earnings | -3,837 | -8,593 | -14,749 | -2,971 | -88 | -728 | -724 | -2,246 | -30,150 | -3,786 | -11,388 | |||
Equity in net income (loss) of investment funds accounted for using the equity method | 19,883 | 35,701 | 73,510 | |||||||||||
Other income (loss) | -10,252 | -586 | -12,094 | |||||||||||
Other expenses | -49,944 | -42,403 | -35,318 | |||||||||||
Interest expense | -45,634 | -27,060 | -28,525 | |||||||||||
Net foreign exchange (gains) losses | 83,744 | -12,335 | -28,955 | |||||||||||
Income before income taxes | 844,247 | 742,505 | 589,387 | |||||||||||
Income tax (expense) benefit | -22,987 | -32,774 | 4,010 | |||||||||||
Net income | 207,134 | 223,264 | 211,717 | 179,145 | 161,490 | 114,825 | 176,940 | 256,476 | 821,260 | 709,731 | 593,397 | |||
Dividends attributable to redeemable noncontrolling interests | -14,728 | 0 | 0 | |||||||||||
Amounts attributable to noncontrolling interests | 27,823 | 0 | 0 | |||||||||||
Net income available to Arch | 834,355 | 709,731 | 593,397 | |||||||||||
Preferred dividends | -5,485 | -5,484 | -5,485 | -5,484 | -5,485 | -5,484 | -5,485 | -5,484 | -21,938 | -21,938 | -25,079 | |||
Loss on repurchase of preferred shares | 0 | 0 | -10,612 | |||||||||||
Net income available to common shareholders | 209,679 | 223,191 | 202,531 | 177,016 | 156,005 | 109,341 | 171,455 | 250,992 | 812,417 | 687,793 | 557,706 | |||
Underwriting Ratios | ||||||||||||||
Loss ratio | 53.40% | 53.40% | 63.40% | |||||||||||
Acquisition expense ratio | 18.30% | 17.90% | 17.30% | |||||||||||
Other operating expense ratio | 15.50% | 14.60% | 14.70% | |||||||||||
Combined ratio | 87.20% | 85.90% | 95.40% | |||||||||||
Goodwill and intangible assets | 109,539 | 27,319 | 109,539 | 27,319 | 38,259 | |||||||||
Investable assets | 15,773,209 | 14,049,525 | 15,773,209 | 14,049,525 | 13,045,134 | |||||||||
Total assets | 22,009,543 | 19,566,094 | 22,009,543 | 19,566,094 | 17,816,762 | |||||||||
Total liabilities | 14,890,897 | 13,918,598 | 14,890,897 | 13,918,598 | 12,647,884 | |||||||||
Insurance | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Premiums ceded | -862,015 | [1] | -763,713 | [1] | -768,625 | [1] | ||||||||
Net premiums written | 2,146,654 | 1,948,796 | 1,825,334 | |||||||||||
Reinsurance | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Premiums ceded | -261,255 | [1] | -86,620 | [1] | -55,099 | [1] | ||||||||
Net premiums written | 1,265,991 | 1,313,001 | 1,158,790 | |||||||||||
Mortgage | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Premiums ceded | -22,519 | [1] | 0 | [1] | 0 | [1] | ||||||||
Net premiums written | 204,837 | 89,570 | 68,111 | |||||||||||
Other | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Number of segments | 2 | |||||||||||||
Gross premiums written | 288,627 | [2] | 0 | [2] | 0 | [2] | ||||||||
Premiums ceded | -14,171 | [1] | 0 | 0 | ||||||||||
Net premiums written | 274,456 | 0 | 0 | |||||||||||
Change in unearned premiums | -170,979 | 0 | 0 | |||||||||||
Net premiums earned | 103,477 | 0 | 0 | |||||||||||
Other underwriting income | 0 | 0 | 0 | |||||||||||
Losses and loss adjustment expenses | -70,173 | 0 | 0 | |||||||||||
Acquisition expenses, net | -30,116 | 0 | 0 | |||||||||||
Other operating expenses | -6,268 | 0 | 0 | |||||||||||
Underwriting income (loss) | -3,080 | 0 | 0 | |||||||||||
Net investment income | 18,249 | 0 | 0 | |||||||||||
Net realized gains | -30,467 | 0 | 0 | |||||||||||
Net impairment losses recognized in earnings | 0 | 0 | 0 | |||||||||||
Equity in net income (loss) of investment funds accounted for using the equity method | 0 | 0 | 0 | |||||||||||
Other income (loss) | 0 | 0 | 0 | |||||||||||
Other expenses | -2,329 | 0 | 0 | |||||||||||
Interest expense | 0 | 0 | 0 | |||||||||||
Net foreign exchange (gains) losses | 1,086 | 0 | 0 | |||||||||||
Income before income taxes | -16,541 | 0 | 0 | |||||||||||
Income tax (expense) benefit | 0 | 0 | 0 | |||||||||||
Net income | -16,541 | 0 | 0 | |||||||||||
Dividends attributable to redeemable noncontrolling interests | -14,728 | 0 | 0 | |||||||||||
Amounts attributable to noncontrolling interests | 27,823 | 0 | 0 | |||||||||||
Net income available to Arch | -3,446 | 0 | 0 | |||||||||||
Preferred dividends | 0 | 0 | 0 | |||||||||||
Loss on repurchase of preferred shares | 0 | |||||||||||||
Net income available to common shareholders | -3,446 | 0 | 0 | |||||||||||
Underwriting Ratios | ||||||||||||||
Loss ratio | 67.80% | 0.00% | 0.00% | |||||||||||
Acquisition expense ratio | 29.10% | 0.00% | 0.00% | |||||||||||
Other operating expense ratio | 6.10% | 0.00% | 0.00% | |||||||||||
Combined ratio | 103.00% | 0.00% | 0.00% | |||||||||||
Goodwill and intangible assets | 0 | 0 | 0 | 0 | 0 | |||||||||
Investable assets | 1,163,240 | 0 | 1,163,240 | 0 | 0 | |||||||||
Total assets | 1,482,516 | 0 | 1,482,516 | 0 | 0 | |||||||||
Total liabilities | 398,660 | 0 | 398,660 | 0 | 0 | |||||||||
Underwriting segments | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Number of segments | 3 | |||||||||||||
Gross premiums written | 4,760,394 | [2] | 4,196,623 | [2] | 3,869,161 | [2] | ||||||||
Premiums ceded | -1,142,912 | -845,256 | -816,926 | |||||||||||
Net premiums written | 3,617,482 | 3,351,367 | 3,052,235 | |||||||||||
Change in unearned premiums | -127,211 | -205,415 | -117,095 | |||||||||||
Net premiums earned | 3,490,271 | 3,145,952 | 2,935,140 | |||||||||||
Other underwriting income | 10,142 | 7,639 | 8,090 | |||||||||||
Losses and loss adjustment expenses | -1,849,077 | -1,679,424 | -1,861,277 | |||||||||||
Acquisition expenses, net | -627,146 | -564,103 | -508,884 | |||||||||||
Other operating expenses | -550,012 | -458,327 | -430,035 | |||||||||||
Underwriting income (loss) | 474,178 | 451,737 | 143,034 | |||||||||||
Net investment income | 284,336 | 267,219 | 294,895 | |||||||||||
Net realized gains | 133,384 | 74,018 | 194,228 | |||||||||||
Net impairment losses recognized in earnings | -30,150 | -3,786 | -11,388 | |||||||||||
Equity in net income (loss) of investment funds accounted for using the equity method | 19,883 | 35,701 | 73,510 | |||||||||||
Other income (loss) | -10,252 | -586 | -12,094 | |||||||||||
Other expenses | -47,615 | -42,403 | -35,318 | |||||||||||
Interest expense | -45,634 | -27,060 | -28,525 | |||||||||||
Net foreign exchange (gains) losses | 82,658 | -12,335 | -28,955 | |||||||||||
Income before income taxes | 860,788 | 742,505 | 589,387 | |||||||||||
Income tax (expense) benefit | -22,987 | -32,774 | 4,010 | |||||||||||
Net income | 837,801 | 709,731 | 593,397 | |||||||||||
Dividends attributable to redeemable noncontrolling interests | 0 | 0 | 0 | |||||||||||
Amounts attributable to noncontrolling interests | 0 | 0 | 0 | |||||||||||
Net income available to Arch | 837,801 | 709,731 | 593,397 | |||||||||||
Preferred dividends | -21,938 | -21,938 | -25,079 | |||||||||||
Loss on repurchase of preferred shares | -10,612 | |||||||||||||
Net income available to common shareholders | 815,863 | 687,793 | 557,706 | |||||||||||
Underwriting Ratios | ||||||||||||||
Loss ratio | 53.00% | 53.40% | 63.40% | |||||||||||
Acquisition expense ratio | 18.00% | 17.90% | 17.30% | |||||||||||
Other operating expense ratio | 15.80% | 14.60% | 14.70% | |||||||||||
Combined ratio | 86.80% | 85.90% | 95.40% | |||||||||||
Goodwill and intangible assets | 109,539 | 27,319 | 109,539 | 27,319 | 38,259 | |||||||||
Investable assets | 14,609,969 | 14,049,525 | 14,609,969 | 14,049,525 | 13,045,134 | |||||||||
Total assets | 20,527,027 | 19,566,094 | 20,527,027 | 19,566,094 | 17,816,762 | |||||||||
Total liabilities | 14,492,237 | 13,918,598 | 14,492,237 | 13,918,598 | 12,647,884 | |||||||||
Underwriting segments | Insurance | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Gross premiums written | 3,008,669 | [2] | 2,712,509 | [2] | 2,593,959 | [2] | ||||||||
Premiums ceded | -862,015 | -763,713 | -768,625 | |||||||||||
Net premiums written | 2,146,654 | 1,948,796 | 1,825,334 | |||||||||||
Change in unearned premiums | -129,284 | -72,782 | -24,991 | |||||||||||
Net premiums earned | 2,017,370 | 1,876,014 | 1,800,343 | |||||||||||
Other underwriting income | 2,135 | 2,122 | 2,335 | |||||||||||
Losses and loss adjustment expenses | -1,260,953 | -1,188,445 | -1,283,841 | |||||||||||
Acquisition expenses, net | -316,308 | -311,904 | -298,983 | |||||||||||
Other operating expenses | -335,157 | -315,387 | -307,489 | |||||||||||
Underwriting income (loss) | 107,087 | 62,400 | -87,635 | |||||||||||
Underwriting Ratios | ||||||||||||||
Loss ratio | 62.50% | 63.30% | 71.30% | |||||||||||
Acquisition expense ratio | 15.70% | 16.60% | 16.60% | |||||||||||
Other operating expense ratio | 16.60% | 16.80% | 17.10% | |||||||||||
Combined ratio | 94.80% | 96.70% | 105.00% | |||||||||||
Goodwill and intangible assets | 28,331 | 20,419 | 28,331 | 20,419 | 21,357 | |||||||||
Underwriting segments | Reinsurance | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Gross premiums written | 1,527,245 | [2] | 1,399,621 | [2] | 1,213,889 | [2] | ||||||||
Premiums ceded | -261,254 | -86,620 | -55,099 | |||||||||||
Net premiums written | 1,265,991 | 1,313,001 | 1,158,790 | |||||||||||
Change in unearned premiums | 13,337 | -94,329 | -40,663 | |||||||||||
Net premiums earned | 1,279,328 | 1,218,672 | 1,118,127 | |||||||||||
Other underwriting income | 3,167 | 5,258 | 5,755 | |||||||||||
Losses and loss adjustment expenses | -532,450 | -486,236 | -574,821 | |||||||||||
Acquisition expenses, net | -261,438 | -234,373 | -204,903 | |||||||||||
Other operating expenses | -147,964 | -134,563 | -118,245 | |||||||||||
Underwriting income (loss) | 340,643 | 368,758 | 225,913 | |||||||||||
Underwriting Ratios | ||||||||||||||
Loss ratio | 41.60% | 39.90% | 51.40% | |||||||||||
Acquisition expense ratio | 20.40% | 19.20% | 18.30% | |||||||||||
Other operating expense ratio | 11.60% | 11.00% | 10.60% | |||||||||||
Combined ratio | 73.60% | 70.10% | 80.30% | |||||||||||
Goodwill and intangible assets | 3,333 | 6,900 | 3,333 | 6,900 | 16,902 | |||||||||
Underwriting segments | Mortgage | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Gross premiums written | 227,356 | [2] | 89,570 | [2] | 68,111 | [2] | ||||||||
Premiums ceded | -22,519 | 0 | 0 | |||||||||||
Net premiums written | 204,837 | 89,570 | 68,111 | |||||||||||
Change in unearned premiums | -11,264 | -38,304 | -51,441 | |||||||||||
Net premiums earned | 193,573 | 51,266 | 16,670 | |||||||||||
Other underwriting income | 4,840 | 259 | 0 | |||||||||||
Losses and loss adjustment expenses | -55,674 | -4,743 | -2,615 | |||||||||||
Acquisition expenses, net | -49,400 | -17,826 | -4,998 | |||||||||||
Other operating expenses | -66,891 | -8,377 | -4,301 | |||||||||||
Underwriting income (loss) | 26,448 | 20,579 | 4,756 | |||||||||||
Underwriting Ratios | ||||||||||||||
Loss ratio | 28.80% | 9.30% | 15.70% | |||||||||||
Acquisition expense ratio | 25.50% | 34.80% | 30.00% | |||||||||||
Other operating expense ratio | 34.60% | 16.30% | 25.80% | |||||||||||
Combined ratio | 88.90% | 60.40% | 71.50% | |||||||||||
Goodwill and intangible assets | $77,875 | $0 | $77,875 | $0 | $0 | |||||||||
[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. | |||||||||||||
[2] | Certain amounts included in the gross premiums written of each segment are related to intersegment transactions. 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. |
Segment_Information_Summary_of
Segment Information - Summary of net premiums written and earned by major line of business and net premiums written by location (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | $895,481 | $959,539 | $971,928 | $1,064,990 | $748,921 | $839,135 | $810,535 | $952,776 | $3,891,938 | $3,351,367 | $3,052,235 | |||
Net premiums earned | 923,165 | 903,651 | 907,152 | 859,780 | 839,366 | 795,000 | 758,816 | 752,770 | 3,593,748 | 3,145,952 | 2,935,140 | |||
Reinsurance | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 1,265,991 | 1,313,001 | 1,158,790 | |||||||||||
Insurance | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 2,146,654 | 1,948,796 | 1,825,334 | |||||||||||
Mortgage | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 204,837 | 89,570 | 68,111 | |||||||||||
Other | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 274,456 | 0 | 0 | |||||||||||
Net premiums earned | 103,477 | 0 | 0 | |||||||||||
Other | Client Location [Member] | United States | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 186,795 | [1] | 0 | [1] | 0 | [1] | ||||||||
Other | Client Location [Member] | Europe | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 54,131 | [1] | 0 | [1] | 0 | [1] | ||||||||
Other | Client Location [Member] | Bermuda | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 27,977 | [1] | 0 | [1] | 0 | [1] | ||||||||
Other | Client Location [Member] | Other geographic location | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 5,553 | [1] | 0 | [1] | 0 | [1] | ||||||||
Other | Other specialty [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 66,524 | [1],[2] | 0 | [1],[2] | 0 | [1],[2] | ||||||||
Net premiums earned | 24,157 | [1],[2] | 0 | [1],[2] | 0 | [1],[2] | ||||||||
Other | Property excluding property catastrophe [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 564 | [1] | 0 | [1] | 0 | [1] | ||||||||
Net premiums earned | 182 | [1] | 0 | [1] | 0 | [1] | ||||||||
Other | Casualty [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 179,054 | [1],[3] | 0 | [1],[3] | 0 | [1],[3] | ||||||||
Net premiums earned | 72,395 | [1],[3] | 0 | [1],[3] | 0 | [1],[3] | ||||||||
Other | Property catastrophe [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 9,280 | [1] | 0 | [1] | 0 | [1] | ||||||||
Net premiums earned | 5,115 | [1] | 0 | [1] | 0 | [1] | ||||||||
Other | Marine and aviation [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 1,251 | [1] | 0 | [1] | 0 | [1] | ||||||||
Net premiums earned | 789 | [1] | 0 | [1] | 0 | [1] | ||||||||
Other | Other [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 17,783 | [1],[4] | 0 | [1],[4] | 0 | [1],[4] | ||||||||
Net premiums earned | 839 | [1],[4] | 0 | [1],[4] | 0 | [1],[4] | ||||||||
Underwriting segments | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 3,617,482 | 3,351,367 | 3,052,235 | |||||||||||
Net premiums earned | 3,490,271 | 3,145,952 | 2,935,140 | |||||||||||
Underwriting segments | Reinsurance | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 1,265,991 | 1,313,001 | 1,158,790 | |||||||||||
Net premiums earned | 1,279,328 | 1,218,672 | 1,118,127 | |||||||||||
Underwriting segments | Reinsurance | Pro Rata [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 663,135 | [5] | 692,024 | [5] | 530,763 | [5] | ||||||||
Net premiums earned | 686,201 | [5] | 608,586 | [5] | 499,094 | [5] | ||||||||
Underwriting segments | Reinsurance | Excess Of Loss [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 602,856 | [5] | 620,977 | [5] | 628,027 | [5] | ||||||||
Net premiums earned | 593,127 | [5] | 610,086 | [5] | 619,033 | [5] | ||||||||
Underwriting segments | Reinsurance | Client Location [Member] | United States | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 589,255 | [5] | 706,388 | [5] | 568,043 | [5] | ||||||||
Underwriting segments | Reinsurance | Client Location [Member] | Europe | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 355,735 | [5] | 327,059 | [5] | 341,653 | [5] | ||||||||
Underwriting segments | Reinsurance | Client Location [Member] | Asia and Pacific | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 142,626 | [5] | 94,252 | [5] | 97,879 | [5] | ||||||||
Underwriting segments | Reinsurance | Client Location [Member] | Bermuda | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 77,620 | [5] | 87,047 | [5] | 72,864 | [5] | ||||||||
Underwriting segments | Reinsurance | Client Location [Member] | Other geographic location | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 100,755 | [5] | 98,255 | [5] | 78,351 | [5] | ||||||||
Underwriting segments | Reinsurance | Underwriting Location [Member] | United States | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 492,891 | [5] | 507,183 | [5] | 379,239 | [5] | ||||||||
Underwriting segments | Reinsurance | Underwriting Location [Member] | Europe | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 394,351 | [5] | 459,467 | [5] | 527,909 | [5] | ||||||||
Underwriting segments | Reinsurance | Underwriting Location [Member] | Bermuda | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 343,823 | [5] | 309,129 | [5] | 225,470 | [5] | ||||||||
Underwriting segments | Reinsurance | Underwriting Location [Member] | Other geographic location | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 34,926 | [5] | 37,222 | [5] | 26,172 | [5] | ||||||||
Underwriting segments | Reinsurance | Other specialty [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 405,126 | [5],[6] | 417,865 | [5],[6] | 308,104 | [5],[6] | ||||||||
Net premiums earned | 424,725 | [5],[6] | 387,630 | [5],[6] | 309,101 | [5],[6] | ||||||||
Underwriting segments | Reinsurance | Property excluding property catastrophe [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 343,043 | [5],[7] | 292,536 | [5],[7] | 265,783 | [5],[7] | ||||||||
Net premiums earned | 303,496 | [5],[7] | 274,719 | [5],[7] | 254,338 | [5],[7] | ||||||||
Underwriting segments | Reinsurance | Casualty [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 317,996 | [5],[8] | 306,304 | [5],[8] | 205,925 | [5],[8] | ||||||||
Net premiums earned | 327,518 | [5],[8] | 241,774 | [5],[8] | 188,963 | [5],[8] | ||||||||
Underwriting segments | Reinsurance | Property catastrophe [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 137,471 | [5] | 220,749 | [5] | 283,677 | [5] | ||||||||
Net premiums earned | 150,761 | [5] | 232,423 | [5] | 280,185 | [5] | ||||||||
Underwriting segments | Reinsurance | Marine and aviation [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 50,444 | [5] | 64,380 | [5] | 84,649 | [5] | ||||||||
Net premiums earned | 61,118 | [5] | 70,105 | [5] | 76,145 | [5] | ||||||||
Underwriting segments | Reinsurance | Other [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 11,911 | [5],[9] | 11,167 | [5],[9] | 10,652 | [5],[9] | ||||||||
Net premiums earned | 11,710 | [5],[9] | 12,021 | [5],[9] | 9,395 | [5],[9] | ||||||||
Underwriting segments | Insurance | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 2,146,654 | 1,948,796 | 1,825,334 | |||||||||||
Net premiums earned | 2,017,370 | 1,876,014 | 1,800,343 | |||||||||||
Underwriting segments | Insurance | Client Location [Member] | United States | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 1,726,181 | [10] | 1,526,156 | [10] | 1,314,577 | [10] | ||||||||
Underwriting segments | Insurance | Client Location [Member] | Europe | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 240,136 | [10] | 226,254 | [10] | 271,278 | [10] | ||||||||
Underwriting segments | Insurance | Client Location [Member] | Asia and Pacific | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 79,564 | [10] | 95,970 | [10] | 120,492 | [10] | ||||||||
Underwriting segments | Insurance | Client Location [Member] | Other geographic location | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 100,773 | [10] | 100,416 | [10] | 118,987 | [10] | ||||||||
Underwriting segments | Insurance | Underwriting Location [Member] | United States | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 1,688,887 | [10] | 1,478,930 | [10] | 1,254,623 | [10] | ||||||||
Underwriting segments | Insurance | Underwriting Location [Member] | Europe | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 394,430 | [10] | 389,763 | [10] | 472,132 | [10] | ||||||||
Underwriting segments | Insurance | Underwriting Location [Member] | Other geographic location | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 63,337 | [10] | 80,103 | [10] | 98,579 | [10] | ||||||||
Underwriting segments | Insurance | Programs [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 480,580 | [10] | 419,673 | [10] | 340,130 | [10] | ||||||||
Net premiums earned | 460,392 | [10] | 386,840 | [10] | 318,740 | [10] | ||||||||
Underwriting segments | Insurance | Professional lines [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 476,604 | [10],[11] | 476,193 | [10],[11] | 548,423 | [10],[11] | ||||||||
Net premiums earned | 456,508 | [10],[11] | 491,791 | [10],[11] | 536,971 | [10],[11] | ||||||||
Underwriting segments | Insurance | Construction and national accounts [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 286,994 | [10] | 271,110 | [10] | 211,130 | [10] | ||||||||
Net premiums earned | 277,811 | [10] | 250,729 | [10] | 209,217 | [10] | ||||||||
Underwriting segments | Insurance | Property, energy, marine and aviation [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 244,640 | [10] | 280,551 | [10] | 294,690 | [10] | ||||||||
Net premiums earned | 244,974 | [10] | 304,294 | [10] | 313,081 | [10] | ||||||||
Underwriting segments | Insurance | Excess and surplus casualty [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 212,519 | [10],[12] | 149,286 | [10],[12] | 112,307 | [10],[12] | ||||||||
Net premiums earned | 182,024 | [10],[12] | 118,395 | [10],[12] | 113,597 | [10],[12] | ||||||||
Underwriting segments | Insurance | Travel, accident and health [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 145,732 | [10] | 104,903 | [10] | 106,871 | [10] | ||||||||
Net premiums earned | 127,691 | [10] | 97,135 | [10] | 98,686 | [10] | ||||||||
Underwriting segments | Insurance | Lenders products [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 100,407 | [10] | 101,576 | [10] | 99,724 | [10] | ||||||||
Net premiums earned | 94,438 | [10] | 99,847 | [10] | 103,478 | [10] | ||||||||
Underwriting segments | Insurance | Other [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 199,178 | [10],[13] | 145,504 | [10],[13] | 112,059 | [10],[13] | ||||||||
Net premiums earned | 173,532 | [10],[13] | 126,983 | [10],[13] | 106,573 | [10],[13] | ||||||||
Underwriting segments | Mortgage | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 204,837 | 89,570 | 68,111 | |||||||||||
Net premiums earned | 193,573 | 51,266 | 16,670 | |||||||||||
Underwriting segments | Mortgage | Client Location [Member] | United States | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 184,333 | 63,692 | 61,571 | |||||||||||
Underwriting segments | Mortgage | Client Location [Member] | Other geographic location | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 20,504 | 25,878 | 6,540 | |||||||||||
Underwriting segments | Mortgage | Underwriting Location [Member] | United States | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | 98,809 | 0 | 0 | |||||||||||
Underwriting segments | Mortgage | Underwriting Location [Member] | Other geographic location | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Net premiums written | $106,028 | $89,570 | $68,111 | |||||||||||
[1] | Other segment results include premiums written and earned assumed through intersegment transactions and exclude premiums written and earned ceded through intersegment transactions. | |||||||||||||
[2] | Includes non-excess motor and other. | |||||||||||||
[3] | Includes professional liability, excess motor, programs and other. | |||||||||||||
[4] | Includes mortgage and other. | |||||||||||||
[5] | Reinsurance segment results include premiums written and earned assumed through intersegment transactions and exclude premiums written and earned ceded through intersegment transactions. | |||||||||||||
[6] | Includes non-excess motor, surety, accident and health, workers’ compensation catastrophe, agriculture, trade credit and other. | |||||||||||||
[7] | Includes facultative business. | |||||||||||||
[8] | Includes executive assurance, professional liability, workers’ compensation, excess motor, healthcare and other. | |||||||||||||
[9] | Includes life, casualty clash and other. | |||||||||||||
[10] | Insurance segment results include premiums written and earned assumed through intersegment transactions and exclude premiums written and earned ceded through intersegment transactions. | |||||||||||||
[11] | Includes professional liability, executive assurance and healthcare business. | |||||||||||||
[12] | Includes casualty and contract binding business. | |||||||||||||
[13] | Includes alternative markets, excess workers' compensation and surety business. |
Reserve_for_Losses_and_Loss_Ad2
Reserve for Losses and Loss Adjustment Expenses - Reconciliation of beginning and ending balances of losses and loss adjustment reserves (Details) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract] | ||||||
Reserve for losses and loss adjustment expenses at beginning of year | $8,824,696 | $8,933,292 | $8,456,210 | |||
Unpaid losses and loss adjustment expenses recoverable | 1,748,250 | 1,829,070 | 1,818,047 | |||
Net reserve for losses and loss adjustment expenses at beginning of year | 7,076,446 | 7,104,222 | 6,638,163 | |||
Net incurred losses and loss adjustment expenses relating to losses occurring in: | ||||||
Current year | 2,246,152 | 1,943,466 | 2,082,805 | |||
Prior years | -326,902 | -264,042 | -221,528 | |||
Total net incurred losses and loss adjustment expenses | 1,919,250 | 1,679,424 | 1,861,277 | |||
Net losses and loss adjustment expense reserves of acquired business (1) | 120,671 | [1] | 0 | [1] | 31,977 | [1] |
Foreign exchange (gains) losses | -160,486 | 1,617 | 38,184 | |||
Net paid losses and loss adjustment expenses relating to losses occurring in: | ||||||
Current year | -347,270 | -288,114 | -295,984 | |||
Prior years | -1,350,466 | -1,420,703 | -1,169,395 | |||
Total net paid losses and loss adjustment expenses | -1,697,736 | -1,708,817 | -1,465,379 | |||
Net reserve for losses and loss adjustment expenses at end of year | 7,258,145 | 7,076,446 | 7,104,222 | |||
Unpaid losses and loss adjustment expenses recoverable | 1,778,303 | 1,748,250 | 1,829,070 | |||
Reserve for losses and loss adjustment expenses at end of year | $9,036,448 | $8,824,696 | $8,933,292 | |||
[1] | 2014 amount relates to the Company’s acquisition of Arch MI U.S. while the 2012 amount relates to the Company’s acquisition of the trade credit and surety operations of Ariel Reinsurance Company. |
Reserve_for_Losses_and_Loss_Ad3
Reserve for Losses and Loss Adjustment Expenses - Prior years reserve development (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | ($326,902) | ($264,042) | ($221,528) |
Underwriting segments | Reinsurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | -267,300 | -217,900 | -190,300 |
Prior year reserve development (points) | 20.90% | 17.90% | 17.00% |
Underwriting segments | Insurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | -58,700 | -45,100 | -31,200 |
Prior year reserve development (points) | 2.90% | 2.40% | 1.70% |
Underwriting segments | Mortgage | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | -900 | -1,000 | |
Underwriting segments | Short tailed lines [Member] | Reinsurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | -146,700 | -111,100 | -117,600 |
Underwriting segments | Short tailed lines [Member] | Insurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | -73,500 | -67,000 | -79,300 |
Underwriting segments | Medium tailed and long tailed lines [Member] | Reinsurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | -120,600 | -106,800 | -72,700 |
Underwriting segments | Medium tailed and long tailed lines [Member] | Insurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | 14,800 | 21,900 | 48,100 |
Underwriting segments | Casualty [Member] | Medium tailed and long tailed lines [Member] | Reinsurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | -101,600 | ||
Underwriting segments | Property [Member] | Short tailed lines [Member] | Insurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | -60,500 | ||
Underwriting segments | Property [Member] | Short tailed lines [Member] | Insurance | Named catastrophic events [Member] | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | -7,900 | ||
Underwriting segments | Specialty Casualty [Member] | Medium tailed and long tailed lines [Member] | Insurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | 28,000 | ||
Underwriting segments | Programs [Member] | Insurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | 26,200 | ||
Underwriting segments | Professional liability [Member] | Medium tailed and long tailed lines [Member] | Insurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | 19,800 | ||
Underwriting segments | 2011-2013 | Property catastrophe and property other than property catastrophe [Member] | Short tailed lines [Member] | Reinsurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | -107,600 | ||
Underwriting segments | 2011-2013 | Surety [Member] | Medium tailed and long tailed lines [Member] | Insurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | 7,800 | ||
Underwriting segments | 2005-2013 | Property catastrophe and property other than property catastrophe [Member] | Short tailed lines [Member] | Reinsurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | -23,300 | ||
Underwriting segments | 2008-2012 | Marine and aviation [Member] | Medium tailed and long tailed lines [Member] | Reinsurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | -14,700 | ||
Underwriting segments | 2009-2013 | Construction [Member] | Medium tailed and long tailed lines [Member] | Insurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | 41,300 | ||
Underwriting segments | 2011 and 2012 | Programs [Member] | Medium tailed and long tailed lines [Member] | Insurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | 26,200 | ||
Underwriting segments | 2003-2011 | Professional liability [Member] | Medium tailed and long tailed lines [Member] | Insurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | 39,000 | ||
Underwriting segments | 2009-2012 | Property catastrophe and property other than property catastrophe [Member] | Short tailed lines [Member] | Reinsurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | -110,100 | ||
Underwriting segments | 2005-2012 | Property catastrophe [Member] | Short tailed lines [Member] | Reinsurance | Named catastrophic events [Member] | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | -28,600 | ||
Underwriting segments | 2005-2012 | Property [Member] | Short tailed lines [Member] | Insurance | Named catastrophic events [Member] | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | -15,900 | ||
Underwriting segments | 2003-2009 | Casualty [Member] | Medium tailed and long tailed lines [Member] | Reinsurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | -98,800 | -55,900 | |
Underwriting segments | 2007 and 2009 | Marine and aviation [Member] | Medium tailed and long tailed lines [Member] | Reinsurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | -8,100 | ||
Underwriting segments | 2008-2011 | Property catastrophe and property other than property catastrophe [Member] | Short tailed lines [Member] | Reinsurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | -92,100 | ||
Underwriting segments | 2008-2011 | Property [Member] | Short tailed lines [Member] | Insurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | -62,400 | ||
Underwriting segments | 2008-2010 | Marine and aviation [Member] | Medium tailed and long tailed lines [Member] | Reinsurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | -16,800 | ||
Underwriting segments | 2007-2011 | Property [Member] | Short tailed lines [Member] | Insurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | -69,000 | ||
Underwriting segments | 2005-2011 | Property catastrophe [Member] | Short tailed lines [Member] | Reinsurance | Named catastrophic events [Member] | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | -16,800 | ||
Underwriting segments | 2005-2011 | Property [Member] | Short tailed lines [Member] | Insurance | Named catastrophic events [Member] | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | -19,100 | ||
Underwriting segments | 2003-2005 | Specialty Casualty [Member] | Medium tailed and long tailed lines [Member] | Insurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | 23,000 | ||
Underwriting segments | 2011 | Programs [Member] | Insurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development, percentage attributable to a singe cause | 0.9 | ||
Underwriting segments | United Kingdom | 2007-2010 | Medium tailed and long tailed lines [Member] | Insurance | |||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||
Prior year reserve development | $38,900 |
Reinsurance_Effects_of_reinsur
Reinsurance - Effects of reinsurance (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Premiums Written | |||||||||||
Direct | $3,100,946 | $2,754,582 | $2,673,864 | ||||||||
Assumed | 1,739,670 | 1,442,041 | 1,195,297 | ||||||||
Ceded | -948,678 | -845,256 | -816,926 | ||||||||
Net | 895,481 | 959,539 | 971,928 | 1,064,990 | 748,921 | 839,135 | 810,535 | 952,776 | 3,891,938 | 3,351,367 | 3,052,235 |
Premiums Earned | |||||||||||
Direct | 2,914,755 | 2,666,104 | 2,572,078 | ||||||||
Assumed | 1,574,049 | 1,296,048 | 1,165,371 | ||||||||
Ceded | -895,056 | -816,200 | -802,309 | ||||||||
Net premiums earned | 923,165 | 903,651 | 907,152 | 859,780 | 839,366 | 795,000 | 758,816 | 752,770 | 3,593,748 | 3,145,952 | 2,935,140 |
Losses and Loss Adjustment Expenses | |||||||||||
Direct | 1,763,492 | 1,603,369 | 1,725,707 | ||||||||
Assumed | 621,346 | 450,618 | 578,081 | ||||||||
Ceded | -465,588 | -374,563 | -442,511 | ||||||||
Net | $1,919,250 | $1,679,424 | $1,861,277 |
Reinsurance_Ceded_credit_risk_
Reinsurance - Ceded credit risk (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Concentration Risk [Line Items] | ||
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses | 1,812,845 | 1,804,330 |
Reinsurer concentration risk | Stockholders' equity | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 3.70% | 4.20% |
AM Best Aminus Or Better Rating | ||
Concentration Risk [Line Items] | ||
Percentage of reinsurance recoverable | 83.00% | 86.50% |
Investment_Information_Summary
Investment Information - Summary of Available for Sale Securities (Details) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | ||
Available for sale securities: | ||||
Estimated Fair Value | $12,553,204 | $12,150,358 | ||
Gross Unrealized Gains | 282,262 | 232,673 | ||
Gross Unrealized Losses | -111,730 | -152,368 | ||
Cost or Amortized Cost | 12,382,672 | 12,070,053 | ||
OTTI Unrealized Losses | -3,646 | -12,942 | ||
Fixed maturities and fixed maturities pledged under securities lending agreements | ||||
Available for sale securities: | ||||
Estimated Fair Value | 10,801,572 | 9,676,857 | ||
Gross Unrealized Gains | 140,673 | [1] | 133,450 | [1] |
Gross Unrealized Losses | -92,734 | [1] | -127,100 | [1] |
Cost or Amortized Cost | 10,753,633 | 9,670,507 | ||
OTTI Unrealized Losses | -3,646 | [2] | -12,942 | [2] |
Fixed maturities and fixed maturities pledged under securities lending agreements | Corporate bonds | ||||
Available for sale securities: | ||||
Estimated Fair Value | 3,108,513 | 2,267,263 | ||
Gross Unrealized Gains | 37,928 | [1] | 35,289 | [1] |
Gross Unrealized Losses | -38,974 | [1] | -35,537 | [1] |
Cost or Amortized Cost | 3,109,559 | 2,267,511 | ||
OTTI Unrealized Losses | -317 | [2] | -16 | [2] |
Fixed maturities and fixed maturities pledged under securities lending agreements | Mortgage backed securities | ||||
Available for sale securities: | ||||
Estimated Fair Value | 943,343 | 1,133,095 | ||
Gross Unrealized Gains | 18,843 | [1] | 16,270 | [1] |
Gross Unrealized Losses | -3,842 | [1] | -22,209 | [1] |
Cost or Amortized Cost | 928,342 | 1,139,034 | ||
OTTI Unrealized Losses | -3,307 | [2] | -9,269 | [2] |
Fixed maturities and fixed maturities pledged under securities lending agreements | Municipal bonds | ||||
Available for sale securities: | ||||
Estimated Fair Value | 1,494,122 | 1,481,738 | ||
Gross Unrealized Gains | 31,227 | [1] | 29,378 | [1] |
Gross Unrealized Losses | -1,044 | [1] | -9,730 | [1] |
Cost or Amortized Cost | 1,463,939 | 1,462,090 | ||
OTTI Unrealized Losses | 0 | [2] | -17 | [2] |
Fixed maturities and fixed maturities pledged under securities lending agreements | Commercial mortgage backed securities | ||||
Available for sale securities: | ||||
Estimated Fair Value | 1,114,528 | 1,074,497 | ||
Gross Unrealized Gains | 14,594 | [1] | 13,972 | [1] |
Gross Unrealized Losses | -3,822 | [1] | -15,224 | [1] |
Cost or Amortized Cost | 1,103,756 | 1,075,749 | ||
OTTI Unrealized Losses | 0 | [2] | -199 | [2] |
Fixed maturities and fixed maturities pledged under securities lending agreements | US government and government agencies | ||||
Available for sale securities: | ||||
Estimated Fair Value | 1,447,972 | 1,301,809 | ||
Gross Unrealized Gains | 8,345 | [1] | 3,779 | [1] |
Gross Unrealized Losses | -1,760 | [1] | -11,242 | [1] |
Cost or Amortized Cost | 1,441,387 | 1,309,272 | ||
OTTI Unrealized Losses | 0 | [2] | -19 | [2] |
Fixed maturities and fixed maturities pledged under securities lending agreements | Non-US government securities | ||||
Available for sale securities: | ||||
Estimated Fair Value | 1,015,153 | 1,085,861 | ||
Gross Unrealized Gains | 21,311 | [1] | 14,729 | [1] |
Gross Unrealized Losses | -37,203 | [1] | -19,363 | [1] |
Cost or Amortized Cost | 1,031,045 | 1,090,495 | ||
OTTI Unrealized Losses | 0 | [2] | 0 | [2] |
Fixed maturities and fixed maturities pledged under securities lending agreements | Asset backed securities | ||||
Available for sale securities: | ||||
Estimated Fair Value | 1,677,941 | 1,332,594 | ||
Gross Unrealized Gains | 8,425 | [1] | 20,033 | [1] |
Gross Unrealized Losses | -6,089 | [1] | -13,795 | [1] |
Cost or Amortized Cost | 1,675,605 | 1,326,356 | ||
OTTI Unrealized Losses | -22 | [2] | -3,422 | [2] |
Equity securities | ||||
Available for sale securities: | ||||
Estimated Fair Value | 658,182 | 496,824 | ||
Gross Unrealized Gains | 109,012 | [1] | 69,487 | [1] |
Gross Unrealized Losses | -13,364 | [1] | -5,938 | [1] |
Cost or Amortized Cost | 562,534 | 433,275 | ||
OTTI Unrealized Losses | 0 | 0 | ||
Other investments | ||||
Available for sale securities: | ||||
Estimated Fair Value | 296,224 | 498,310 | ||
Gross Unrealized Gains | 31,839 | [1] | 28,082 | [1] |
Gross Unrealized Losses | -362 | [1] | -18,459 | [1] |
Cost or Amortized Cost | 264,747 | 488,687 | ||
OTTI Unrealized Losses | 0 | 0 | ||
Short-term investments | ||||
Available for sale securities: | ||||
Estimated Fair Value | 797,226 | 1,478,367 | ||
Gross Unrealized Gains | 738 | [1] | 1,654 | [1] |
Gross Unrealized Losses | -5,270 | [1] | -871 | [1] |
Cost or Amortized Cost | 801,758 | 1,477,584 | ||
OTTI Unrealized Losses | $0 | $0 | ||
[1] | In securities lending transactions, the Company receives collateral in excess of the fair value of the fixed maturities and short-term investments pledged. For purposes of this table, the Company has excluded the collateral received and reinvested and included the fixed maturities and short-term investments pledged. See “—Securities Lending Agreements.†| |||
[2] | Represents the total other-than-temporary impairments (“OTTIâ€) recognized in accumulated other comprehensive income (“AOCIâ€). It does not include the change in fair value subsequent to the impairment measurement date. At December 31, 2014, the net unrealized gain related to securities for which a non-credit OTTI was recognized in AOCI was $0.9 million, compared to a net unrealized gain of $6.0 million at December 31, 2013. |
Investment_Information_Aging_o
Investment Information - Aging of Available For Sale Securities in an Unrealized Loss Position (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Available for sale securities: | ||||
Estimated Fair Value - Less than 12 Months | $4,108,030 | [1] | $6,158,245 | [1] |
Gross Unrealized Losses - Less than 12 Months | -90,017 | [1] | -137,655 | [1] |
Estimated Fair Value - 12 Months or More | 641,407 | [1] | 258,290 | [1] |
Gross Unrealized Losses - 12 Months or More | -21,713 | [1] | -14,713 | [1] |
Estimated Fair Value - Total | 4,749,437 | [1] | 6,416,535 | [1] |
Gross Unrealized Losses - Total | -111,730 | [1] | -152,368 | [1] |
Fixed maturities and fixed maturities pledged under securities lending agreements | ||||
Available for sale securities: | ||||
Estimated Fair Value - Less than 12 Months | 3,788,119 | [1] | 5,887,621 | [1] |
Gross Unrealized Losses - Less than 12 Months | -71,021 | [1] | -115,071 | [1] |
Estimated Fair Value - 12 Months or More | 641,407 | [1] | 210,974 | [1] |
Gross Unrealized Losses - 12 Months or More | -21,713 | [1] | -12,029 | [1] |
Estimated Fair Value - Total | 4,429,526 | [1] | 6,098,595 | [1] |
Gross Unrealized Losses - Total | -92,734 | [1] | -127,100 | [1] |
Fixed maturities and fixed maturities pledged under securities lending agreements | Corporate bonds | ||||
Available for sale securities: | ||||
Estimated Fair Value - Less than 12 Months | 1,309,637 | [1] | 1,183,625 | [1] |
Gross Unrealized Losses - Less than 12 Months | -32,903 | [1] | -32,837 | [1] |
Estimated Fair Value - 12 Months or More | 148,963 | [1] | 46,673 | [1] |
Gross Unrealized Losses - 12 Months or More | -6,071 | [1] | -2,700 | [1] |
Estimated Fair Value - Total | 1,458,600 | [1] | 1,230,298 | [1] |
Gross Unrealized Losses - Total | -38,974 | [1] | -35,537 | [1] |
Fixed maturities and fixed maturities pledged under securities lending agreements | Mortgage backed securities | ||||
Available for sale securities: | ||||
Estimated Fair Value - Less than 12 Months | 293,624 | [1] | 778,693 | [1] |
Gross Unrealized Losses - Less than 12 Months | -1,476 | [1] | -20,253 | [1] |
Estimated Fair Value - 12 Months or More | 59,107 | [1] | 43,634 | [1] |
Gross Unrealized Losses - 12 Months or More | -2,366 | [1] | -1,956 | [1] |
Estimated Fair Value - Total | 352,731 | [1] | 822,327 | [1] |
Gross Unrealized Losses - Total | -3,842 | [1] | -22,209 | [1] |
Fixed maturities and fixed maturities pledged under securities lending agreements | Municipal bonds | ||||
Available for sale securities: | ||||
Estimated Fair Value - Less than 12 Months | 210,614 | [1] | 589,009 | [1] |
Gross Unrealized Losses - Less than 12 Months | -588 | [1] | -9,422 | [1] |
Estimated Fair Value - 12 Months or More | 13,643 | [1] | 6,092 | [1] |
Gross Unrealized Losses - 12 Months or More | -456 | [1] | -308 | [1] |
Estimated Fair Value - Total | 224,257 | [1] | 595,101 | [1] |
Gross Unrealized Losses - Total | -1,044 | [1] | -9,730 | [1] |
Fixed maturities and fixed maturities pledged under securities lending agreements | Commercial mortgage backed securities | ||||
Available for sale securities: | ||||
Estimated Fair Value - Less than 12 Months | 232,147 | [1] | 677,617 | [1] |
Gross Unrealized Losses - Less than 12 Months | -770 | [1] | -15,110 | [1] |
Estimated Fair Value - 12 Months or More | 125,894 | [1] | 1,612 | [1] |
Gross Unrealized Losses - 12 Months or More | -3,052 | [1] | -114 | [1] |
Estimated Fair Value - Total | 358,041 | [1] | 679,229 | [1] |
Gross Unrealized Losses - Total | -3,822 | [1] | -15,224 | [1] |
Fixed maturities and fixed maturities pledged under securities lending agreements | US government and government agencies | ||||
Available for sale securities: | ||||
Estimated Fair Value - Less than 12 Months | 618,381 | [1] | 1,144,809 | [1] |
Gross Unrealized Losses - Less than 12 Months | -1,626 | [1] | -11,242 | [1] |
Estimated Fair Value - 12 Months or More | 3,438 | [1] | 0 | [1] |
Gross Unrealized Losses - 12 Months or More | -134 | [1] | 0 | [1] |
Estimated Fair Value - Total | 621,819 | [1] | 1,144,809 | [1] |
Gross Unrealized Losses - Total | -1,760 | [1] | -11,242 | [1] |
Fixed maturities and fixed maturities pledged under securities lending agreements | Non-US government securities | ||||
Available for sale securities: | ||||
Estimated Fair Value - Less than 12 Months | 510,766 | [1] | 821,506 | [1] |
Gross Unrealized Losses - Less than 12 Months | -31,172 | [1] | -15,776 | [1] |
Estimated Fair Value - 12 Months or More | 46,910 | [1] | 24,334 | [1] |
Gross Unrealized Losses - 12 Months or More | -6,031 | [1] | -3,587 | [1] |
Estimated Fair Value - Total | 557,676 | [1] | 845,840 | [1] |
Gross Unrealized Losses - Total | -37,203 | [1] | -19,363 | [1] |
Fixed maturities and fixed maturities pledged under securities lending agreements | Asset backed securities | ||||
Available for sale securities: | ||||
Estimated Fair Value - Less than 12 Months | 612,950 | [1] | 692,362 | [1] |
Gross Unrealized Losses - Less than 12 Months | -2,486 | [1] | -10,431 | [1] |
Estimated Fair Value - 12 Months or More | 243,452 | [1] | 88,629 | [1] |
Gross Unrealized Losses - 12 Months or More | -3,603 | [1] | -3,364 | [1] |
Estimated Fair Value - Total | 856,402 | [1] | 780,991 | [1] |
Gross Unrealized Losses - Total | -6,089 | [1] | -13,795 | [1] |
Equity securities | ||||
Available for sale securities: | ||||
Estimated Fair Value - Less than 12 Months | 181,002 | [1] | 76,563 | [1] |
Gross Unrealized Losses - Less than 12 Months | -13,364 | [1] | -5,938 | [1] |
Estimated Fair Value - 12 Months or More | 0 | [1] | 0 | [1] |
Gross Unrealized Losses - 12 Months or More | 0 | [1] | 0 | [1] |
Estimated Fair Value - Total | 181,002 | [1] | 76,563 | [1] |
Gross Unrealized Losses - Total | -13,364 | [1] | -5,938 | [1] |
Other investments | ||||
Available for sale securities: | ||||
Estimated Fair Value - Less than 12 Months | 59,638 | [1] | 165,891 | [1] |
Gross Unrealized Losses - Less than 12 Months | -362 | [1] | -15,775 | [1] |
Estimated Fair Value - 12 Months or More | 0 | [1] | 47,316 | [1] |
Gross Unrealized Losses - 12 Months or More | 0 | [1] | -2,684 | [1] |
Estimated Fair Value - Total | 59,638 | [1] | 213,207 | [1] |
Gross Unrealized Losses - Total | -362 | [1] | -18,459 | [1] |
Short-term investments | ||||
Available for sale securities: | ||||
Estimated Fair Value - Less than 12 Months | 79,271 | [1] | 28,170 | [1] |
Gross Unrealized Losses - Less than 12 Months | -5,270 | [1] | -871 | [1] |
Estimated Fair Value - 12 Months or More | 0 | [1] | 0 | [1] |
Gross Unrealized Losses - 12 Months or More | 0 | [1] | 0 | [1] |
Estimated Fair Value - Total | 79,271 | [1] | 28,170 | [1] |
Gross Unrealized Losses - Total | ($5,270) | [1] | ($871) | [1] |
[1] | In securities lending transactions, the Company receives collateral in excess of the fair value of the fixed maturities and short-term investments pledged. For purposes of this table, the Company has excluded the collateral received and reinvested and included the fixed maturities and short-term investments pledged. See “—Securities Lending Agreements.†|
Investment_Information_Maturit
Investment Information - Maturity Profile of Available For Sale Securities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Estimated Fair Value: | ||
Estimated fair value | $10,750,770 | $9,571,776 |
Amortized Cost: | ||
Amortized cost | 10,701,557 | 9,564,634 |
Fixed maturities and fixed maturities pledged under securities lending agreements | ||
Estimated Fair Value: | ||
Due in one year or less | 235,930 | 235,330 |
Due after one year through five years | 4,074,562 | 3,738,500 |
Due after five years through 10 years | 2,475,726 | 1,966,536 |
Due after 10 years | 279,542 | 196,305 |
Single maturity date | 7,065,760 | 6,136,671 |
Estimated fair value | 10,801,572 | 9,676,857 |
Amortized Cost: | ||
Due in one year or less | 233,794 | 232,652 |
Due after one year through five years | 4,077,408 | 3,718,920 |
Due after five years through 10 years | 2,461,356 | 1,979,510 |
Due after 10 years | 273,372 | 198,286 |
Single maturity date | 7,045,930 | 6,129,368 |
Amortized cost | 10,753,633 | 9,670,507 |
Fixed maturities and fixed maturities pledged under securities lending agreements | Mortgage backed securities | ||
Estimated Fair Value: | ||
Securities without single maturity date | 943,343 | 1,133,095 |
Amortized Cost: | ||
Securities without single maturity date | 928,342 | 1,139,034 |
Fixed maturities and fixed maturities pledged under securities lending agreements | Commercial mortgage backed securities | ||
Estimated Fair Value: | ||
Securities without single maturity date | 1,114,528 | 1,074,497 |
Amortized Cost: | ||
Securities without single maturity date | 1,103,756 | 1,075,749 |
Fixed maturities and fixed maturities pledged under securities lending agreements | Asset backed securities | ||
Estimated Fair Value: | ||
Securities without single maturity date | 1,677,941 | 1,332,594 |
Amortized Cost: | ||
Securities without single maturity date | $1,675,605 | $1,326,356 |
Investment_Information_Other_I
Investment Information - Other Investments (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Schedule Of Other Investments [Line Items] | ||||
Other investments and fair value option investments | $1,848,131 | $1,271,590 | ||
Available for sale | ||||
Schedule Of Other Investments [Line Items] | ||||
Other investments and fair value option investments | 296,224 | 498,310 | ||
Available for sale | Asian and emerging markets | ||||
Schedule Of Other Investments [Line Items] | ||||
Other investments and fair value option investments | 236,586 | 331,984 | ||
Available for sale | Investment grade fixed income | ||||
Schedule Of Other Investments [Line Items] | ||||
Other investments and fair value option investments | 59,638 | 159,115 | ||
Available for sale | Other | ||||
Schedule Of Other Investments [Line Items] | ||||
Other investments and fair value option investments | 0 | 7,211 | ||
Fair value option | ||||
Schedule Of Other Investments [Line Items] | ||||
Other investments and fair value option investments | 1,551,907 | 773,280 | ||
Fair value option | Asian and emerging markets | ||||
Schedule Of Other Investments [Line Items] | ||||
Other investments and fair value option investments | 25,800 | 14,054 | ||
Fair value option | Investment grade fixed income | ||||
Schedule Of Other Investments [Line Items] | ||||
Other investments and fair value option investments | 69,108 | 75,062 | ||
Fair value option | Other | ||||
Schedule Of Other Investments [Line Items] | ||||
Other investments and fair value option investments | 147,573 | [1] | 119,130 | [1] |
Fair value option | Term loan investments | ||||
Schedule Of Other Investments [Line Items] | ||||
Other investments and fair value option investments | 1,073,649 | 399,591 | ||
Other investments par | 1,076,011 | 360,204 | ||
Fair value option | Mezzanine Debt Funds [Member] | ||||
Schedule Of Other Investments [Line Items] | ||||
Other investments and fair value option investments | 121,341 | 102,172 | ||
Fair value option | Credit Related Funds [Member] | ||||
Schedule Of Other Investments [Line Items] | ||||
Other investments and fair value option investments | $114,436 | $63,271 | ||
[1] | Includes fund investments with strategies in mortgage servicing rights, transportation and infrastructure assets and other. |
Investment_Information_Fair_Va
Investment Information - Fair Value Option (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Investments accounted for using the fair value option | $2,435,532 | $1,221,534 |
Fixed Maturities | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Investments accounted for using the fair value option | 632,024 | 448,254 |
Other investments | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Investments accounted for using the fair value option | 1,551,907 | 773,280 |
Short-term investments | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Investments accounted for using the fair value option | $251,601 | $0 |
Investment_Information_Net_Inv
Investment Information - Net Investment Income (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Net investment income: | ||||||||||||||
Gross investment income | $348,921 | $300,329 | $320,562 | |||||||||||
Investment expenses | -46,336 | -33,110 | -25,667 | |||||||||||
Net investment income | 82,496 | 80,105 | 72,990 | 66,994 | 67,095 | 66,083 | 68,369 | 65,672 | 302,585 | 267,219 | 294,895 | |||
Fixed Maturities | ||||||||||||||
Net investment income: | ||||||||||||||
Gross investment income | 265,219 | 249,833 | 281,140 | |||||||||||
Term loan investments | ||||||||||||||
Net investment income: | ||||||||||||||
Gross investment income | 39,940 | 20,608 | 15,283 | |||||||||||
Short-term investments | ||||||||||||||
Net investment income: | ||||||||||||||
Gross investment income | 1,888 | 1,259 | 1,980 | |||||||||||
Equity securities | ||||||||||||||
Net investment income: | ||||||||||||||
Gross investment income | 13,005 | 8,919 | 7,963 | |||||||||||
Other | ||||||||||||||
Net investment income: | ||||||||||||||
Gross investment income | $28,869 | [1] | $19,710 | [1] | $14,196 | [1] | ||||||||
[1] | Includes dividends on investment funds and other items. |
Investment_Information_Net_Rea
Investment Information - Net Realized Gains and Losses (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Net realized gains and losses: | ||||||||||||||
Available for sale securities, gross gains on investment sales | $248,031 | $239,421 | $247,291 | |||||||||||
Available for sale securities, gross losses on investment sales | -145,808 | -203,077 | -71,722 | |||||||||||
Change in fair value of assets and liabilities accounted for using the fair value option - derivatives | 43,934 | [1] | 20,912 | [1] | -1,326 | [1] | ||||||||
Change in fair value of assets and liabilities accounted for using the fair value option - other investments | -24,774 | [2] | -1,499 | [2] | -520 | [2] | ||||||||
Net realized gains | 10,561 | 18,515 | 54,144 | 19,697 | 9,048 | -6,022 | 12,652 | 58,340 | 102,917 | 74,018 | 194,228 | |||
Fixed Maturities | ||||||||||||||
Net realized gains and losses: | ||||||||||||||
Change in fair value of assets and liabilities accounted for using the fair value option | -20,743 | 54 | 13,195 | |||||||||||
Equity securities | ||||||||||||||
Net realized gains and losses: | ||||||||||||||
Change in fair value of assets and liabilities accounted for using the fair value option | 0 | 704 | -73 | |||||||||||
Other investments | ||||||||||||||
Net realized gains and losses: | ||||||||||||||
Change in fair value of assets and liabilities accounted for using the fair value option | 2,672 | 17,503 | 7,383 | |||||||||||
Short-term investments | ||||||||||||||
Net realized gains and losses: | ||||||||||||||
Change in fair value of assets and liabilities accounted for using the fair value option | ($395) | $0 | $0 | |||||||||||
[1] | See Note 11 for information on the Company’s derivative instruments. | |||||||||||||
[2] | Includes accretion of contingent consideration liability amounts related to the acquisition of the CMG Entities (see Note 2 for further details). |
Investment_Information_Other_T
Investment Information - Other Than Temporary Impairments Recognized in Earnings (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | |||||||||||
Net impairment losses recognized in earnings | ($3,837) | ($8,593) | ($14,749) | ($2,971) | ($88) | ($728) | ($724) | ($2,246) | ($30,150) | ($3,786) | ($11,388) |
Fixed Maturities | |||||||||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | |||||||||||
Net impairment losses recognized in earnings | -3,634 | -511 | -4,612 | ||||||||
Fixed Maturities | Mortgage backed securities | |||||||||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | |||||||||||
Net impairment losses recognized in earnings | -1,525 | -295 | -2,491 | ||||||||
Fixed Maturities | Corporate bonds | |||||||||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | |||||||||||
Net impairment losses recognized in earnings | -2,062 | -88 | -1,512 | ||||||||
Fixed Maturities | Non-US government securities | |||||||||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | |||||||||||
Net impairment losses recognized in earnings | 0 | 0 | -261 | ||||||||
Fixed Maturities | Commercial mortgage backed securities | |||||||||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | |||||||||||
Net impairment losses recognized in earnings | -7 | 0 | -211 | ||||||||
Fixed Maturities | Asset backed securities | |||||||||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | |||||||||||
Net impairment losses recognized in earnings | -40 | -128 | -127 | ||||||||
Fixed Maturities | US government and government agencies | |||||||||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | |||||||||||
Net impairment losses recognized in earnings | 0 | 0 | -10 | ||||||||
Other investments | |||||||||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | |||||||||||
Net impairment losses recognized in earnings | -25,410 | 0 | 0 | ||||||||
Investment of funds received under securities lending arrangements | |||||||||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | |||||||||||
Net impairment losses recognized in earnings | 0 | 0 | -87 | ||||||||
Equity securities | |||||||||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | |||||||||||
Net impairment losses recognized in earnings | ($1,106) | ($3,275) | ($6,689) |
Investment_Information_Other_T1
Investment Information - Other Than Temporary Impairments Rollforward (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Rollforward: | |||
Balance at start of year | $60,062 | $62,001 | $66,545 |
Credit loss impairments recognized on securities not previously impaired | 691 | 423 | 1,962 |
Credit loss impairments recognized on securities previously impaired | 162 | 88 | 2,735 |
Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security | 0 | 0 | 0 |
Reductions for securities sold during the period | -40,719 | -2,450 | -9,241 |
Balance at end of year | $20,196 | $60,062 | $62,001 |
Investment_Information_Restric
Investment Information - Restricted Assets (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Restricted Assets [Line Items] | ||
Restricted assets | $5,519,089 | $5,302,042 |
Collateral or guarantees - affiliated transactions | ||
Restricted Assets [Line Items] | ||
Restricted assets | 4,138,527 | 4,060,533 |
Collateral or guarantees - third party agreements | ||
Restricted Assets [Line Items] | ||
Restricted assets | 970,120 | 856,890 |
Deposits with US regulatory authorities | ||
Restricted Assets [Line Items] | ||
Restricted assets | 337,981 | 302,809 |
Deposits with non-US regulatory authorities | ||
Restricted Assets [Line Items] | ||
Restricted assets | 0 | 6,546 |
Trust funds | ||
Restricted Assets [Line Items] | ||
Restricted assets | $72,461 | $75,264 |
Investment_Information_Narrati
Investment Information - Narrative (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
lots | lots | ||
Segment Reporting Information [Line Items] | |||
Investable assets | $15,773,209,000 | $14,049,525,000 | $13,045,134,000 |
OTTI unrealized losses at current fair value | 900,000 | 6,000,000 | |
Continuous unrealized loss, qualitative disclosures: | |||
Number of positions in an unrealized loss position (lots) | 1,900 | 2,080 | |
Total number of positions (lots) | 4,790 | 4,400 | |
Largest single loss | 2,900,000 | 3,500,000 | |
OTTI Unrealized Losses | 3,646,000 | 12,942,000 | |
Securities lending, qualitative disclosures: | |||
Fair value of fixed maturities and short-term investments pledged under securities lending agreements | 50,800,000 | 105,100,000 | |
Amortized cost of fixed maturities and short-term investments pledged under securities lending agreements | 52,100,000 | 105,900,000 | |
Approximate fair value of sub-prime securities backing the securities lending program | 5,800,000 | 6,300,000 | |
Equity Method Investment, Financial Statement, Reported Amounts [Abstract] | |||
Equity in net income (loss) of investment funds accounted for using the equity method | 19,883,000 | 35,701,000 | 73,510,000 |
Equity method investments, time lag for reporting - low end of range | 1 month | ||
Equity method investments, time lag for reporting - high end of range | 3 months | ||
Investments accounted for using the equity method | 349,014,000 | 244,339,000 | |
ACGL | |||
Segment Reporting Information [Line Items] | |||
Investable assets | 14,610,000,000 | ||
Watford Re | |||
Segment Reporting Information [Line Items] | |||
Investable assets | $1,160,000,000 |
Fair_Value_Fair_Value_Hierarch
Fair Value - Fair Value Hierarchy (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Liabilities measured at fair value | ($61,845) | |||
Contingent consideration liability | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Liabilities measured at fair value | -61,845 | |||
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Liabilities measured at fair value | 0 | |||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Contingent consideration liability | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Liabilities measured at fair value | 0 | |||
Significant Other Observable Inputs (Level 2) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Liabilities measured at fair value | 0 | |||
Significant Other Observable Inputs (Level 2) | Contingent consideration liability | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Liabilities measured at fair value | 0 | |||
Significant Unobservable Inputs (Level 3) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Liabilities measured at fair value | -61,845 | |||
Significant Unobservable Inputs (Level 3) | Contingent consideration liability | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Liabilities measured at fair value | -61,845 | |||
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 3,116,355 | 3,226,291 | ||
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed maturities and fixed maturities pledged under securities lending agreements | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 1,447,972 | 1,301,809 | ||
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed maturities and fixed maturities pledged under securities lending agreements | Corporate bonds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | [1] | 0 | [1] |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed maturities and fixed maturities pledged under securities lending agreements | Mortgage backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | [1] | 0 | [1] |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed maturities and fixed maturities pledged under securities lending agreements | Municipal bonds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | [1] | 0 | [1] |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed maturities and fixed maturities pledged under securities lending agreements | Commercial mortgage backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | [1] | 0 | [1] |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed maturities and fixed maturities pledged under securities lending agreements | US government and government agencies | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 1,447,972 | [1] | 1,301,809 | [1] |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed maturities and fixed maturities pledged under securities lending agreements | Non-US government securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | [1] | 0 | [1] |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed maturities and fixed maturities pledged under securities lending agreements | Asset backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | [1] | 0 | [1] |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Equity securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 658,182 | 496,738 | ||
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | 0 | ||
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Short-term investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 759,621 | 1,427,744 | ||
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair value option | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 250,580 | 0 | ||
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair value option | Corporate bonds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | 0 | ||
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair value option | Mortgage backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | 0 | ||
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair value option | Non-US government securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | 0 | ||
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair value option | Asset backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | |||
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair value option | Other investments fair value option | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | 0 | ||
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair value option | Short-term investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 250,580 | |||
Recurring | Significant Other Observable Inputs (Level 2) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 11,244,994 | 9,595,611 | ||
Recurring | Significant Other Observable Inputs (Level 2) | Fixed maturities and fixed maturities pledged under securities lending agreements | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 9,296,100 | 8,373,003 | ||
Recurring | Significant Other Observable Inputs (Level 2) | Fixed maturities and fixed maturities pledged under securities lending agreements | Corporate bonds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 3,108,513 | [1] | 2,265,218 | [1] |
Recurring | Significant Other Observable Inputs (Level 2) | Fixed maturities and fixed maturities pledged under securities lending agreements | Mortgage backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 943,343 | [1] | 1,133,095 | [1] |
Recurring | Significant Other Observable Inputs (Level 2) | Fixed maturities and fixed maturities pledged under securities lending agreements | Municipal bonds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 1,494,122 | [1] | 1,481,738 | [1] |
Recurring | Significant Other Observable Inputs (Level 2) | Fixed maturities and fixed maturities pledged under securities lending agreements | Commercial mortgage backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 1,114,528 | [1] | 1,074,497 | [1] |
Recurring | Significant Other Observable Inputs (Level 2) | Fixed maturities and fixed maturities pledged under securities lending agreements | US government and government agencies | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | [1] | 0 | [1] |
Recurring | Significant Other Observable Inputs (Level 2) | Fixed maturities and fixed maturities pledged under securities lending agreements | Non-US government securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 1,015,153 | [1] | 1,085,861 | [1] |
Recurring | Significant Other Observable Inputs (Level 2) | Fixed maturities and fixed maturities pledged under securities lending agreements | Asset backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 1,620,441 | [1] | 1,332,594 | [1] |
Recurring | Significant Other Observable Inputs (Level 2) | Equity securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | 86 | ||
Recurring | Significant Other Observable Inputs (Level 2) | Other investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 192,687 | 327,890 | ||
Recurring | Significant Other Observable Inputs (Level 2) | Short-term investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 37,605 | 50,623 | ||
Recurring | Significant Other Observable Inputs (Level 2) | Fair value option | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 1,718,602 | 844,009 | ||
Recurring | Significant Other Observable Inputs (Level 2) | Fair value option | Corporate bonds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 497,101 | 334,065 | ||
Recurring | Significant Other Observable Inputs (Level 2) | Fair value option | Mortgage backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 22,190 | 41,033 | ||
Recurring | Significant Other Observable Inputs (Level 2) | Fair value option | Non-US government securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 88,411 | 73,156 | ||
Recurring | Significant Other Observable Inputs (Level 2) | Fair value option | Asset backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 24,322 | |||
Recurring | Significant Other Observable Inputs (Level 2) | Fair value option | Other investments fair value option | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 1,085,557 | 395,755 | ||
Recurring | Significant Other Observable Inputs (Level 2) | Fair value option | Short-term investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 1,021 | |||
Recurring | Significant Unobservable Inputs (Level 3) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 627,387 | 549,990 | ||
Recurring | Significant Unobservable Inputs (Level 3) | Fixed maturities and fixed maturities pledged under securities lending agreements | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 57,500 | 2,045 | ||
Recurring | Significant Unobservable Inputs (Level 3) | Fixed maturities and fixed maturities pledged under securities lending agreements | Corporate bonds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | [1] | 2,045 | [1] |
Recurring | Significant Unobservable Inputs (Level 3) | Fixed maturities and fixed maturities pledged under securities lending agreements | Mortgage backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | [1] | 0 | [1] |
Recurring | Significant Unobservable Inputs (Level 3) | Fixed maturities and fixed maturities pledged under securities lending agreements | Municipal bonds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | [1] | 0 | [1] |
Recurring | Significant Unobservable Inputs (Level 3) | Fixed maturities and fixed maturities pledged under securities lending agreements | Commercial mortgage backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | [1] | 0 | [1] |
Recurring | Significant Unobservable Inputs (Level 3) | Fixed maturities and fixed maturities pledged under securities lending agreements | US government and government agencies | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | [1] | 0 | [1] |
Recurring | Significant Unobservable Inputs (Level 3) | Fixed maturities and fixed maturities pledged under securities lending agreements | Non-US government securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | [1] | 0 | [1] |
Recurring | Significant Unobservable Inputs (Level 3) | Fixed maturities and fixed maturities pledged under securities lending agreements | Asset backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 57,500 | [1] | 0 | [1] |
Recurring | Significant Unobservable Inputs (Level 3) | Equity securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | 0 | ||
Recurring | Significant Unobservable Inputs (Level 3) | Other investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 103,537 | 170,420 | ||
Recurring | Significant Unobservable Inputs (Level 3) | Short-term investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | 0 | ||
Recurring | Significant Unobservable Inputs (Level 3) | Fair value option | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 466,350 | 377,525 | ||
Recurring | Significant Unobservable Inputs (Level 3) | Fair value option | Corporate bonds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | 0 | ||
Recurring | Significant Unobservable Inputs (Level 3) | Fair value option | Mortgage backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | 0 | ||
Recurring | Significant Unobservable Inputs (Level 3) | Fair value option | Non-US government securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | 0 | ||
Recurring | Significant Unobservable Inputs (Level 3) | Fair value option | Asset backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | |||
Recurring | Significant Unobservable Inputs (Level 3) | Fair value option | Other investments fair value option | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 466,350 | 377,525 | ||
Recurring | Significant Unobservable Inputs (Level 3) | Fair value option | Short-term investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 0 | |||
Recurring | Estimated Fair Value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 14,988,736 | 13,371,892 | ||
Recurring | Estimated Fair Value | Fixed maturities and fixed maturities pledged under securities lending agreements | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 10,801,572 | 9,676,857 | ||
Recurring | Estimated Fair Value | Fixed maturities and fixed maturities pledged under securities lending agreements | Corporate bonds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 3,108,513 | 2,267,263 | ||
Recurring | Estimated Fair Value | Fixed maturities and fixed maturities pledged under securities lending agreements | Mortgage backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 943,343 | 1,133,095 | ||
Recurring | Estimated Fair Value | Fixed maturities and fixed maturities pledged under securities lending agreements | Municipal bonds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 1,494,122 | 1,481,738 | ||
Recurring | Estimated Fair Value | Fixed maturities and fixed maturities pledged under securities lending agreements | Commercial mortgage backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 1,114,528 | 1,074,497 | ||
Recurring | Estimated Fair Value | Fixed maturities and fixed maturities pledged under securities lending agreements | US government and government agencies | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 1,447,972 | 1,301,809 | ||
Recurring | Estimated Fair Value | Fixed maturities and fixed maturities pledged under securities lending agreements | Non-US government securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 1,015,153 | 1,085,861 | ||
Recurring | Estimated Fair Value | Fixed maturities and fixed maturities pledged under securities lending agreements | Asset backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 1,677,941 | 1,332,594 | ||
Recurring | Estimated Fair Value | Equity securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 658,182 | 496,824 | ||
Recurring | Estimated Fair Value | Other investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 296,224 | 498,310 | ||
Recurring | Estimated Fair Value | Short-term investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 797,226 | 1,478,367 | ||
Recurring | Estimated Fair Value | Fair value option | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 2,435,532 | 1,221,534 | ||
Recurring | Estimated Fair Value | Fair value option | Corporate bonds | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 497,101 | 334,065 | ||
Recurring | Estimated Fair Value | Fair value option | Mortgage backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 22,190 | 41,033 | ||
Recurring | Estimated Fair Value | Fair value option | Non-US government securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 88,411 | 73,156 | ||
Recurring | Estimated Fair Value | Fair value option | Asset backed securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 24,322 | |||
Recurring | Estimated Fair Value | Fair value option | Other investments fair value option | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | 1,551,907 | 773,280 | ||
Recurring | Estimated Fair Value | Fair value option | Short-term investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets measured at fair value | $251,601 | |||
[1] | In securities lending transactions, the Company receives collateral in excess of the fair value of the fixed maturities and short-term investments pledged. For purposes of this table, the Company has excluded the collateral received and reinvested and included the fixed maturities and short-term investments pledged. |
Fair_Value_Rollforward_of_Leve
Fair Value - Rollforward of Level 3 assets and liabilities (Details) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | ||
Level 3 assets rollforward | ||||
Balance at beginning of year | $549,990 | $477,956 | ||
Total gains or (losses) (realized/unrealized) - included in earnings | 16,779 | [1] | 25,337 | [1] |
Total gains or (losses) (realized/unrealized) - included in other comprehensive income | 252 | -2,578 | ||
Purchases, issuances, sales and settlements | ||||
Purchases | 185,224 | 300,067 | ||
Issuances | 0 | 0 | ||
Sales | -68,209 | -116,811 | ||
Settlements | -114,149 | -133,981 | ||
Transfers in and/or out of Level 3 | 57,500 | 0 | ||
Balance at end of year | 627,387 | 549,990 | ||
Contingent consideration liability | ||||
Level 3 liabilities rollforward | ||||
Balance at beginning of year | 0 | 0 | ||
Total gains or (losses) (realized/unrealized) - included in earnings | -20,083 | [1] | 0 | [1] |
Total gains or (losses) (realized/unrealized) - included in other comprehensive income | 0 | 0 | ||
Purchases, issuances, sales and settlements | ||||
Purchases | 0 | 0 | ||
Issuances | -41,762 | 0 | ||
Sales | 0 | 0 | ||
Settlements | 0 | 0 | ||
Transfers in and/or out of Level 3 | 0 | 0 | ||
Balance at end of year | -61,845 | 0 | ||
Available for sale | Asset backed securities | ||||
Level 3 assets rollforward | ||||
Balance at beginning of year | 0 | 0 | ||
Total gains or (losses) (realized/unrealized) - included in earnings | 0 | [1] | 0 | [1] |
Total gains or (losses) (realized/unrealized) - included in other comprehensive income | 0 | 0 | ||
Purchases, issuances, sales and settlements | ||||
Purchases | 0 | 0 | ||
Issuances | 0 | 0 | ||
Sales | 0 | 0 | ||
Settlements | 0 | 0 | ||
Transfers in and/or out of Level 3 | 57,500 | 0 | ||
Balance at end of year | 57,500 | 0 | ||
Available for sale | Corporate bonds | ||||
Level 3 assets rollforward | ||||
Balance at beginning of year | 2,045 | 98,404 | ||
Total gains or (losses) (realized/unrealized) - included in earnings | 0 | [1] | 4,679 | [1] |
Total gains or (losses) (realized/unrealized) - included in other comprehensive income | 0 | -3,051 | ||
Purchases, issuances, sales and settlements | ||||
Purchases | 0 | 0 | ||
Issuances | 0 | 0 | ||
Sales | -2,045 | -96,655 | ||
Settlements | 0 | -1,332 | ||
Transfers in and/or out of Level 3 | 0 | 0 | ||
Balance at end of year | 0 | 2,045 | ||
Available for sale | Other investments | ||||
Level 3 assets rollforward | ||||
Balance at beginning of year | 170,420 | 184,202 | ||
Total gains or (losses) (realized/unrealized) - included in earnings | -39 | [1] | 8,915 | [1] |
Total gains or (losses) (realized/unrealized) - included in other comprehensive income | -680 | 473 | ||
Purchases, issuances, sales and settlements | ||||
Purchases | 0 | 25,000 | ||
Issuances | 0 | 0 | ||
Sales | -66,164 | 0 | ||
Settlements | 0 | -48,170 | ||
Transfers in and/or out of Level 3 | 0 | 0 | ||
Balance at end of year | 103,537 | 170,420 | ||
Fair value option | Other investments | ||||
Level 3 assets rollforward | ||||
Balance at beginning of year | 377,525 | 195,350 | ||
Total gains or (losses) (realized/unrealized) - included in earnings | 16,818 | [1] | 11,743 | [1] |
Total gains or (losses) (realized/unrealized) - included in other comprehensive income | 932 | 0 | ||
Purchases, issuances, sales and settlements | ||||
Purchases | 185,224 | 275,067 | ||
Issuances | 0 | 0 | ||
Sales | 0 | -20,156 | ||
Settlements | -114,149 | -84,479 | ||
Transfers in and/or out of Level 3 | 0 | 0 | ||
Balance at end of year | $466,350 | $377,525 | ||
[1] | Gains or losses on corporate bonds were included in net realized gains (losses) while gains or losses on other investments were included in net realized gains (losses) or net investment income. Amounts related to the contingent consideration liability were included in net realized gains (losses). |
Fair_Value_Narrative_Details
Fair Value - Narrative (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Fair Value Disclosures [Abstract] | ||
Total assets and liabilities measured at fair value | $15,100,000,000 | $13,400,000,000 |
Total assets and liabilities measured at fair value priced using non-binding broker quotes | 260,800,000 | 601,900,000 |
Total assets and liabilities measured at fair value priced using non-binding broker quotes (percentage) | 1.70% | 4.50% |
Transfers in and/or out of Level 3 | 57,500,000 | 0 |
Gains (losses) including in earnings attributable to the change in unrealized gains or losses related to assets still held at balance sheet date | $11,500,000 | $22,000,000 |
Investment_in_Joint_Venture_De
Investment in Joint Venture (Details) (USD $) | 12 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | 31-May-08 | Oct. 01, 2014 | |
Schedule of Equity Method Investments [Line Items] | |||||
Investment in joint venture, at cost | $100,000,000 | $100,000,000 | |||
Income (loss) from joint venture investme | 19,883,000 | 35,701,000 | 73,510,000 | ||
Gulf Re | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Investment in joint venture, at cost | 100,000,000 | ||||
Joint venture, ownership percentage | 50.00% | ||||
Initial capital amount | 200,000,000 | ||||
Income (loss) from joint venture investme | 14,100,000 | 400,000 | 1,100,000 | ||
Quota share agreement, percentage | 90.00% | ||||
Gulf Re | Unearned premium reserves | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Portfolio transfer amount | 50,000,000 | ||||
Gulf Re | Reserves for losses and loss expenses | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Portfolio transfer amount | $65,000,000 |
Derivative_Instruments_Details
Derivative Instruments (Details) (USD $) | 12 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||
Derivative offsetting [Abstract] | ||||||
Derivative assets subject to master netting agreements | $25,300,000 | $28,000,000 | ||||
Derivative liabilities subject to master netting agreements | 5,400,000 | 14,600,000 | ||||
Net realized gains (losses) on derivative instruments | ||||||
Net realized gains (losses) on derivative instruments | 43,934,000 | [1] | 20,912,000 | [1] | -1,326,000 | [1] |
Not Designated as Hedging Instrument [Member] | ||||||
Derivative [Line Items] | ||||||
Asset derivatives - fair value | 26,468,000 | 39,859,000 | ||||
Liability derivatives - fair value | -5,397,000 | -26,472,000 | ||||
Net derivatives - fair value | 21,071,000 | 13,387,000 | ||||
Net realized gains (losses) on derivative instruments | ||||||
Net realized gains (losses) on derivative instruments | 43,934,000 | 20,912,000 | -1,326,000 | |||
Not Designated as Hedging Instrument [Member] | Futures contracts | ||||||
Net realized gains (losses) on derivative instruments | ||||||
Net realized gains (losses) on derivative instruments | 30,444,000 | 10,742,000 | -3,307,000 | |||
Not Designated as Hedging Instrument [Member] | Futures contracts | Other investments available for sale, at fair value | ||||||
Derivative [Line Items] | ||||||
Asset derivatives - fair value | 2,156,000 | 461,000 | ||||
Liability derivatives - fair value | -1,907,000 | -110,000 | ||||
Net derivatives - fair value | 249,000 | 351,000 | ||||
Net derivatives - notional value | 2,549,027,000 | [2] | 475,967,000 | [2] | ||
Not Designated as Hedging Instrument [Member] | Foreign currency forward contracts | ||||||
Net realized gains (losses) on derivative instruments | ||||||
Net realized gains (losses) on derivative instruments | 13,430,000 | 9,762,000 | -214,000 | |||
Not Designated as Hedging Instrument [Member] | Foreign currency forward contracts | Other investments available for sale, at fair value | ||||||
Derivative [Line Items] | ||||||
Asset derivatives - fair value | 10,511,000 | 5,023,000 | ||||
Liability derivatives - fair value | -1,145,000 | -3,090,000 | ||||
Net derivatives - fair value | 9,366,000 | 1,933,000 | ||||
Net derivatives - notional value | 397,106,000 | [2] | 330,746,000 | [2] | ||
Not Designated as Hedging Instrument [Member] | TBAs | ||||||
Net realized gains (losses) on derivative instruments | ||||||
Net realized gains (losses) on derivative instruments | -342,000 | -1,623,000 | 4,413,000 | |||
Not Designated as Hedging Instrument [Member] | TBAs | Fixed maturities available for sale, at fair value | ||||||
Derivative [Line Items] | ||||||
Asset derivatives - fair value | 10,592,000 | 33,455,000 | ||||
Liability derivatives - fair value | 0 | -21,731,000 | ||||
Net derivatives - fair value | 10,592,000 | 11,724,000 | ||||
Net derivatives - notional value | 10,056,000 | [2] | 56,160,000 | [2] | ||
Not Designated as Hedging Instrument [Member] | Other | ||||||
Net realized gains (losses) on derivative instruments | ||||||
Net realized gains (losses) on derivative instruments | 402,000 | 2,031,000 | -2,218,000 | |||
Not Designated as Hedging Instrument [Member] | Other | Other investments available for sale, at fair value | ||||||
Derivative [Line Items] | ||||||
Asset derivatives - fair value | 3,209,000 | 920,000 | ||||
Liability derivatives - fair value | -2,345,000 | -1,541,000 | ||||
Net derivatives - fair value | 864,000 | -621,000 | ||||
Net derivatives - notional value | $735,684,000 | [2] | $347,916,000 | [2] | ||
[1] | See Note 11 for information on the Company’s derivative instruments. | |||||
[2] | Represents the absolute notional value of all outstanding contracts, consisting of long and short positions. |
Other_Comprehensive_Income_Com
Other Comprehensive Income - Components of accumulated other comprehensive income (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | $74,964 | $287,017 | $153,923 |
Other comprehensive income (loss) before reclassifications | 118,996 | -179,367 | 290,918 |
Amounts reclassified from accumulated other comprehensive income | -65,104 | -32,686 | -157,824 |
Net current period other comprehensive income (loss) | 53,892 | -212,053 | 133,094 |
Ending balance | 128,856 | 74,964 | 287,017 |
Unrealized Appreciation on Available-For-Sale Investments | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | 80,692 | 289,956 | 174,636 |
Other comprehensive income (loss) before reclassifications | 146,010 | -176,578 | 273,144 |
Amounts reclassified from accumulated other comprehensive income | -65,104 | -32,686 | -157,824 |
Net current period other comprehensive income (loss) | 80,906 | -209,264 | 115,320 |
Ending balance | 161,598 | 80,692 | 289,956 |
Foreign Currency Translation Adjustments | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | -5,728 | -2,939 | -20,713 |
Other comprehensive income (loss) before reclassifications | -27,014 | -2,789 | 17,774 |
Amounts reclassified from accumulated other comprehensive income | 0 | 0 | 0 |
Net current period other comprehensive income (loss) | -27,014 | -2,789 | 17,774 |
Ending balance | ($32,742) | ($5,728) | ($2,939) |
Other_Comprehensive_Income_Amo
Other Comprehensive Income - Amounts reclassified from accumulated other comprehensive income (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Other-than-temporary impairment losses | ($3,837) | ($8,593) | ($14,749) | ($2,971) | ($88) | ($728) | ($724) | ($2,246) | ($30,150) | ($3,786) | ($11,388) |
Income before income taxes | 844,247 | 742,505 | 589,387 | ||||||||
Income tax expense | -22,987 | -32,774 | 4,010 | ||||||||
Net of tax | 834,355 | 709,731 | 593,397 | ||||||||
Reclassification out of accumulated other comprehensive income | Unrealized Appreciation on Available-For-Sale Investments | |||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Net realized gains | 102,223 | 39,308 | 180,144 | ||||||||
Other-than-temporary impairment losses | -30,470 | -3,961 | -12,175 | ||||||||
Income before income taxes | 71,753 | 35,347 | 167,969 | ||||||||
Income tax expense | -6,649 | -2,661 | -10,145 | ||||||||
Net of tax | $65,104 | $32,686 | $157,824 |
Other_Comprehensive_Income_Com1
Other Comprehensive Income - Components of other comprehensive income (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Before tax amount: | |||
Unrealized holding gains (losses) arising during period, before tax | $161,685 | ($201,386) | $278,917 |
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss), before tax | -320 | -175 | -787 |
Less reclassification of net realized gains included in net income, before tax | 71,753 | 35,347 | 167,969 |
Foreign currency translation adjustments, before tax | -27,014 | -2,789 | 18,748 |
Other comprehensive income (loss), before tax | 62,598 | -239,697 | 128,909 |
Tax expense (benefit): | |||
Unrealized holding gains (losses) arising during period, tax | 15,355 | -24,983 | 4,986 |
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss), tax | 0 | 0 | 0 |
Less reclassification of net realized gains included in net income, tax | 6,649 | 2,661 | 10,145 |
Foreign currency translation adjustments, tax | 0 | 0 | 974 |
Other comprehensive income (loss), tax | 8,706 | -27,644 | -4,185 |
Net of tax amount: | |||
Unrealized holding gains (losses) arising during period, net of tax | 146,330 | -176,403 | 273,931 |
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss), net of tax | -320 | -175 | -787 |
Less reclassification of net realized gains included in net income, net of tax | 65,104 | 32,686 | 157,824 |
Foreign currency translation adjustments, net of tax | -27,014 | -2,789 | 17,774 |
Net current period other comprehensive income (loss) | $53,892 | ($212,053) | $133,094 |
Earnings_Per_Common_Share_Deta
Earnings Per Common Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Numerator: | ||||||||||||||
Net income | $207,134 | $223,264 | $211,717 | $179,145 | $161,490 | $114,825 | $176,940 | $256,476 | $821,260 | $709,731 | $593,397 | |||
Amounts attributable to noncontrolling interests | 13,095 | [1] | 0 | [1] | 0 | [1] | ||||||||
Net income available to Arch | 834,355 | 709,731 | 593,397 | |||||||||||
Preferred dividends | -5,485 | -5,484 | -5,485 | -5,484 | -5,485 | -5,484 | -5,485 | -5,484 | -21,938 | -21,938 | -25,079 | |||
Loss on repurchase of preferred shares | 0 | 0 | -10,612 | |||||||||||
Net income available to common shareholders | $209,679 | $223,191 | $202,531 | $177,016 | $156,005 | $109,341 | $171,455 | $250,992 | $812,417 | $687,793 | $557,706 | |||
Denominator: | ||||||||||||||
Weighted average common shares outstanding — basic | 130,817,610 | 131,355,392 | 134,446,158 | |||||||||||
Effect of dilutive common share equivalents: | ||||||||||||||
Nonvested restricted shares | 1,128,540 | 1,090,100 | 857,174 | |||||||||||
Stock options | 2,976,172 | [2] | 3,331,691 | [2] | 2,955,515 | [2] | ||||||||
Weighted average common shares and common share equivalents outstanding — diluted | 134,922,322 | 135,777,183 | 138,258,847 | |||||||||||
Earnings per common share: | ||||||||||||||
Basic (per share) | $1.65 | $1.69 | $1.53 | $1.34 | $1.19 | $0.83 | $1.31 | $1.92 | $6.21 | $5.24 | $4.15 | |||
Diluted (per share) | $1.60 | $1.64 | $1.48 | $1.30 | $1.14 | $0.80 | $1.26 | $1.85 | $6.02 | $5.07 | $4.03 | |||
Stock Options | ||||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||||||||
Antidilutive securities excluded from computation of earnings per common share (shares) | 1,435,955 | 892,439 | 839,414 | |||||||||||
[1] | See Note 4. | |||||||||||||
[2] | Certain stock options were not included in the computation of diluted earnings per share where the exercise price of the stock options exceeded the average market price and would have been anti-dilutive or where, when applying the treasury stock method to in-the-money options, the sum of the proceeds, including unrecognized compensation, exceeded the average market price and would have been anti-dilutive. For 2014, 2013 and 2012, the number of stock options excluded were 1,435,955, 892,439 and 839,414, respectively. |
Income_Taxes_Components_of_inc
Income Taxes - Components of income tax (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current expense (benefit): | |||
United States | $29,749 | $27,537 | $8,267 |
Non-U.S. | 801 | 5,159 | 737 |
Current Income Tax Expense (Benefit) | 30,550 | 32,696 | 9,004 |
Deferred expense (benefit): | |||
United States | -8,168 | 1,937 | -9,779 |
Non-U.S. | 605 | -1,859 | -3,235 |
Deferred Income Tax Expense (Benefit) | -7,563 | 78 | -13,014 |
Income tax expense (benefit) | $22,987 | $32,774 | ($4,010) |
Income_Taxes_Income_before_tax
Income Taxes - Income before taxes by jurisdiction (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Line Items] | |||
Income (loss) before income taxes | $844,247 | $742,505 | $589,387 |
Bermuda | |||
Income Tax Disclosure [Line Items] | |||
Income (loss) before income taxes | 794,926 | 717,661 | 609,710 |
United States | |||
Income Tax Disclosure [Line Items] | |||
Income (loss) before income taxes | 53,055 | 87,032 | 9,600 |
Other | |||
Income Tax Disclosure [Line Items] | |||
Income (loss) before income taxes | ($3,734) | ($62,188) | ($29,923) |
Income_Taxes_Statutory_tax_rat
Income Taxes - Statutory tax rate by jurisdiction (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Bermuda | |
Income Tax Disclosure [Line Items] | |
Statutory tax rate (percentage) | 0.00% |
United States | |
Income Tax Disclosure [Line Items] | |
Statutory tax rate (percentage) | 35.00% |
United Kingdom | |
Income Tax Disclosure [Line Items] | |
Statutory tax rate (percentage) | 21.50% |
Ireland | |
Income Tax Disclosure [Line Items] | |
Statutory tax rate (percentage) | 12.50% |
Denmark | |
Income Tax Disclosure [Line Items] | |
Statutory tax rate (percentage) | 24.50% |
Canada | |
Income Tax Disclosure [Line Items] | |
Statutory tax rate (percentage) | 24.00% |
Gibraltar | |
Income Tax Disclosure [Line Items] | |
Statutory tax rate (percentage) | 10.00% |
Netherlands | |
Income Tax Disclosure [Line Items] | |
Statutory tax rate (percentage) | 23.90% |
Income_Taxes_Reconciliation_of
Income Taxes - Reconciliation of effective tax rate (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||
Expected income tax expense (benefit) computed on pre-tax income at weighted average income tax rate | $18,178 | $17,506 | ($3,426) |
Addition (reduction) in income tax expense (benefit) resulting from: | |||
Tax-exempt investment income | -8,048 | -8,255 | -9,257 |
Meals and entertainment | 711 | 599 | 688 |
State taxes, net of U.S. federal tax benefit | 1,281 | 431 | 270 |
Foreign branch taxes | 464 | 703 | 544 |
Prior year adjustment | 320 | 2,810 | -1,581 |
Foreign exchange gains & losses | 746 | -1,254 | -436 |
Changes in applicable tax rate | -51 | 2,007 | 1,193 |
Dividend withholding taxes | 3,276 | 4,619 | 2,511 |
Change in valuation allowance | -736 | 11,795 | 4,281 |
Contingent consideration | 6,763 | 0 | 0 |
Other | 83 | 1,813 | 1,203 |
Income tax expense (benefit) | $22,987 | $32,774 | ($4,010) |
Income_Taxes_Components_of_def
Income Taxes - Components of deferred tax assets and liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred income tax assets: | ||
Net operating loss | $12,017 | $15,294 |
AMT credit carryforward | 5,309 | 14,456 |
Discounting of net loss reserves | 63,880 | 53,293 |
Net unearned premium reserve | 34,087 | 30,698 |
Compensation liabilities | 27,765 | 26,481 |
Foreign tax credit carryforward | 4,628 | 4,343 |
Interest expense | 5,208 | 6,049 |
Goodwill | 885 | 0 |
Tax and loss bonds | 21,247 | 0 |
Other, net | 13,408 | 13,347 |
Deferred tax assets before valuation allowance | 188,434 | 163,961 |
Valuation allowance | -12,624 | -15,548 |
Deferred tax assets net of valuation allowance | 175,810 | 148,413 |
Deferred income tax liabilities: | ||
Depreciation and amortization | -7,579 | -3,810 |
Deferred acquisition costs, net | -2,744 | -3,369 |
Deposit accounting liability | -4,170 | -4,581 |
Contingency reserve | -18,480 | 0 |
Net unrealized appreciation of investments | -11,695 | -6,354 |
Other, net | -150 | -1,738 |
Total deferred tax liabilities | -44,818 | -19,852 |
Net deferred income tax assets | $130,992 | $128,561 |
Income_Taxes_Summary_of_open_t
Income Taxes - Summary of open tax years by major jurisdiction (Details) | 12 Months Ended |
Dec. 31, 2014 | |
United States | Minimum | |
Income Tax Contingency [Line Items] | |
Open tax year | 2009 |
United States | Maximum | |
Income Tax Contingency [Line Items] | |
Open tax year | 2014 |
United Kingdom | Minimum | |
Income Tax Contingency [Line Items] | |
Open tax year | 2009 |
United Kingdom | Maximum | |
Income Tax Contingency [Line Items] | |
Open tax year | 2014 |
Ireland | Minimum | |
Income Tax Contingency [Line Items] | |
Open tax year | 2010 |
Ireland | Maximum | |
Income Tax Contingency [Line Items] | |
Open tax year | 2014 |
Canada | Minimum | |
Income Tax Contingency [Line Items] | |
Open tax year | 2010 |
Canada | Maximum | |
Income Tax Contingency [Line Items] | |
Open tax year | 2014 |
Switzerland | Minimum | |
Income Tax Contingency [Line Items] | |
Open tax year | 2011 |
Switzerland | Maximum | |
Income Tax Contingency [Line Items] | |
Open tax year | 2014 |
Denmark | Minimum | |
Income Tax Contingency [Line Items] | |
Open tax year | 2011 |
Denmark | Maximum | |
Income Tax Contingency [Line Items] | |
Open tax year | 2014 |
Income_Taxes_Narrative_Details
Income Taxes - Narrative (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Operating Loss Carryforwards [Line Items] | ||
Net operating loss | $12,017,000 | $15,294,000 |
Valuation allowance | 12,624,000 | 15,548,000 |
Foreign tax credit carryforward | 4,628,000 | 4,343,000 |
AMT credit carryforward | 5,309,000 | 14,456,000 |
Tax and loss bonds | 21,247,000 | 0 |
Current income tax payable | 3,600,000 | |
United Kingdom | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss | 1,200,000 | |
Operating loss carryforwards | 20,700,000 | |
Foreign tax credit carryforward | 4,600,000 | |
Operating loss carryforward, valuation allowance | 200,000 | |
Tax credit carryforward, valuation allowance | 4,600,000 | |
Ireland | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss | 2,500,000 | |
Operating loss carryforwards | 10,000,000 | |
Operating loss carryforward, valuation allowance | 300,000 | |
United States | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 18,900,000 | |
Operating loss carryforward, portion subject to utilization limits | 12,100,000 | |
Operating loss carryforward, annual utilization limit | $600,000 |
Transactions_with_Related_Part1
Transactions with Related Parties (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2006 | |
Related Party Transaction [Line Items] | ||||
Investment commitments | $968,900,000 | |||
Purchases of other investments | 2,257,481,000 | 1,326,729,000 | 1,000,049,000 | |
Aeolus LP | Investee | ||||
Related Party Transaction [Line Items] | ||||
Initial contribution amount | 50,000,000 | |||
Ownership percentage | 4.00% | |||
Dividends received | 600,000 | 2,100,000 | 19,800,000 | |
The Carlyle Group | Common director | ||||
Related Party Transaction [Line Items] | ||||
Investment commitments | 395,900,000 | |||
Unfunded commitments | 260,200,000 | |||
Purchases of other investments | 51,700,000 | 60,800,000 | 43,000,000 | |
Aggregate distributions received | $33,600,000 | $15,000,000 | $4,500,000 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Concentrations of credit risk (Details) (USD $) | 12 Months Ended | ||
In Billions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Concentration Risk [Line Items] | |||
Net reinsurance recoverables | 1.97 | 1.94 | |
Aon Corporation [Member] | Customer Concentration Risk [Member] | Gross Written Premiums [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 13.40% | 16.00% | 20.30% |
Marsh And McLennan Companies [Member] | Customer Concentration Risk [Member] | Gross Written Premiums [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 15.00% | 17.00% | 14.10% |
Commitments_and_Contingencies_2
Commitments and Contingencies - Future minimum rental payments (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Rent expense | |||
Rental expense net of income from subleases | $23,100,000 | $18,700,000 | $17,100,000 |
Office Space [Member] | |||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
2015 | 23,343,000 | ||
2016 | 23,670,000 | ||
2017 | 22,539,000 | ||
2018 | 20,803,000 | ||
2019 | 17,705,000 | ||
Thereafter | 46,672,000 | ||
Total | $154,732,000 |
Commitments_and_Contingencies_3
Commitments and Contingencies - Credit facilities and other commitments (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Line of Credit Facility [Line Items] | ||
Investment commitments | $968,900,000 | |
Estimated purchase commitments, primarily related to software and computerized systems | 22,200,000 | 35,900,000 |
Line of Credit Facility [Abstract] | ||
Amount outstanding | 100,000,000 | 100,000,000 |
LOC Facilities | ||
Line of Credit Facility [Abstract] | ||
Amount outstanding | 423,200,000 | |
Investments pledged as collateral | 483,500,000 | |
Aggregate limit on unsecured letters of credit | ||
Line of Credit Facility [Abstract] | ||
Maximum borrowing capacity | 100,000,000 | |
Credit Agreement | ||
Line of Credit Facility [Abstract] | ||
Debt to total capital ratio (expressed as a percent) | 0.35 | |
Minimum tangible net worth | 3,950,000,000 | |
Percentage of aggregate future net income for each quarterly period | 25.00% | |
Percentage of future aggregate proceeds from issuance of common or preferred equity | 25.00% | |
Unsecured revolving loan and letter of credit facility | ||
Line of Credit Facility [Abstract] | ||
Maximum borrowing capacity | 300,000,000 | |
Secured letter of credit facility | ||
Line of Credit Facility [Abstract] | ||
Maximum borrowing capacity | 500,000,000 | |
Other secured letter of credit facilities | ||
Line of Credit Facility [Abstract] | ||
Maximum borrowing capacity | 190,900,000 | |
Watford Re | ||
Line of Credit Facility [Abstract] | ||
Maximum borrowing capacity | 200,000,000 | |
Amount outstanding | $26,000,000 |
Senior_Notes_Details
Senior Notes (Details) (Unsecured debt, USD $) | Dec. 31, 2014 | Dec. 31, 2013 | 4-May-04 | Dec. 13, 2013 |
In Millions, unless otherwise specified | ||||
7.35% senior notes due 2034 | ||||
Debt Instrument [Line Items] | ||||
Face amount of issued debt | $300 | |||
Stated interest rate (percentage) | 7.35% | |||
Estimated fair value of senior notes | 462.4 | 381 | ||
5.144% senior notes due 2043 | ||||
Debt Instrument [Line Items] | ||||
Face amount of issued debt | 500 | |||
Stated interest rate (percentage) | 5.14% | |||
Estimated fair value of senior notes | $609.90 | $514.10 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets - Analysis of goodwill and intangible assets (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Schedule of Goodwill And Intangible Assets [Line Items] | ||
Goodwill, beginning of year | $0 | $0 |
Goodwill, acquisitions | 14,965 | 0 |
Goodwill, foreign currency translation adjustment | -19 | 0 |
Goodwill, end of year | 14,946 | 0 |
Intangible assets with an indefinite life, beginning of year | 16,666 | 16,666 |
Intangible assets with an indefinite life, acquisitions | 16,858 | 0 |
Intangible assets with an indefinite life, foreign currency translation adjustment | 0 | 0 |
Intangible assets with an indefinite life, end of year | 33,524 | 16,666 |
Intangible assets with a finite life, beginning of year | 10,653 | 21,593 |
Intangible assets with a finite life, acquisitions | 76,435 | 0 |
Intangible assets with a finite life, amortization | -25,520 | -11,170 |
Intangible assets with a finite life, foreign currency translation adjustment | -499 | 230 |
Intangible assets with a finite life, end of year | 61,069 | 10,653 |
Goodwill and intangible assets, beginning of year | 27,319 | 38,259 |
Goodwill and intangible assets, acquisitions | 108,258 | 0 |
Goodwill and intangible assets, foreign currency translation adjustment | -518 | 230 |
Goodwill and intangible assets, end of year | 109,539 | 27,319 |
Goodwill and intangible assets, gross balance | 173,397 | |
Intangible assets with a finite life, accumulated amortization | -63,439 | -37,919 |
Goodwill and intangible assets, accumulated foreign currency translation adjustment | -419 | 99 |
Goodwill and intangible assets, net balance | 109,539 | 27,319 |
Goodwill | ||
Schedule of Goodwill And Intangible Assets [Line Items] | ||
Goodwill, end of year | 14,946 | |
Goodwill and intangible assets, end of year | 14,946 | |
Goodwill, gross balance | 14,965 | |
Goodwill and intangible assets, accumulated foreign currency translation adjustment | -19 | |
Goodwill and intangible assets, net balance | 14,946 | |
Intangible assets with an indefinite life | ||
Schedule of Goodwill And Intangible Assets [Line Items] | ||
Intangible assets with an indefinite life, end of year | 33,524 | |
Goodwill and intangible assets, accumulated foreign currency translation adjustment | 0 | |
Intangible assets with a finite life | ||
Schedule of Goodwill And Intangible Assets [Line Items] | ||
Intangible assets with a finite life, end of year | 61,069 | |
Intangible assets with a finite life, gross balance | 124,908 | |
Intangible assets with a finite life, accumulated amortization | -63,439 | |
Goodwill and intangible assets, accumulated foreign currency translation adjustment | ($400) |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets - Summary of intangible assets by major class (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Schedule of Goodwill And Intangible Assets [Line Items] | |||
Goodwill and intangible assets, gross balance | $173,397 | $65,139 | |
Intangible assets with a finite life, accumulated amortization | -63,439 | -37,919 | |
Goodwill and intangible assets, accumulated foreign currency translation adjustment | -419 | 99 | |
Goodwill and intangible assets, net balance | 109,539 | 27,319 | 38,259 |
Intangible liability - unfavorable service contract | |||
Schedule of Goodwill And Intangible Assets [Line Items] | |||
Goodwill and intangible assets, gross balance | -9,533 | ||
Intangible assets with a finite life, accumulated amortization | 2,229 | ||
Goodwill and intangible assets, accumulated foreign currency translation adjustment | 0 | ||
Goodwill and intangible assets, net balance | -7,304 | ||
Intangible assets with a finite life | |||
Schedule of Goodwill And Intangible Assets [Line Items] | |||
Intangible assets with a finite life, accumulated amortization | -63,439 | ||
Goodwill and intangible assets, accumulated foreign currency translation adjustment | -400 | ||
Intangible assets with a finite life | Other | |||
Schedule of Goodwill And Intangible Assets [Line Items] | |||
Goodwill and intangible assets, gross balance | 1,057 | ||
Intangible assets with a finite life, accumulated amortization | -193 | ||
Goodwill and intangible assets, accumulated foreign currency translation adjustment | 0 | ||
Goodwill and intangible assets, net balance | 864 | ||
Intangible assets with a finite life | Acquired insurance contracts | |||
Schedule of Goodwill And Intangible Assets [Line Items] | |||
Goodwill and intangible assets, gross balance | 77,574 | 31,102 | |
Intangible assets with a finite life, accumulated amortization | -47,710 | -28,208 | |
Goodwill and intangible assets, accumulated foreign currency translation adjustment | -107 | 0 | |
Goodwill and intangible assets, net balance | 29,757 | 2,894 | |
Intangible assets with a finite life | Operating platform | |||
Schedule of Goodwill And Intangible Assets [Line Items] | |||
Goodwill and intangible assets, gross balance | 29,900 | ||
Intangible assets with a finite life, accumulated amortization | -5,482 | ||
Goodwill and intangible assets, net balance | 24,418 | ||
Intangible assets with a finite life | Customer relationships | |||
Schedule of Goodwill And Intangible Assets [Line Items] | |||
Goodwill and intangible assets, gross balance | 25,910 | 17,371 | |
Intangible assets with a finite life, accumulated amortization | -12,283 | -9,711 | |
Goodwill and intangible assets, accumulated foreign currency translation adjustment | -293 | 99 | |
Goodwill and intangible assets, net balance | 13,334 | 7,759 | |
Intangible assets with an indefinite life | |||
Schedule of Goodwill And Intangible Assets [Line Items] | |||
Goodwill and intangible assets, accumulated foreign currency translation adjustment | 0 | ||
Intangible assets with an indefinite life | Insurance licenses | |||
Schedule of Goodwill And Intangible Assets [Line Items] | |||
Goodwill and intangible assets, gross balance | 33,524 | 16,666 | |
Goodwill and intangible assets, accumulated foreign currency translation adjustment | 0 | 0 | |
Goodwill and intangible assets, net balance | 33,524 | 16,666 | |
Goodwill | |||
Schedule of Goodwill And Intangible Assets [Line Items] | |||
Goodwill and intangible assets, gross balance | 14,965 | ||
Goodwill and intangible assets, accumulated foreign currency translation adjustment | -19 | ||
Goodwill and intangible assets, net balance | $14,946 |
Goodwill_and_Intangible_Assets4
Goodwill and Intangible Assets - Narrative (Details) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Future amortization expense, 2015 | 21.8 |
Future amortization expense, 2016 | 17 |
Future amortization expense, 2017 | 13.3 |
Future amortization expense, 2018 | 9.4 |
Future amortization expense, 2019 | 0.8 |
Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Remaining useful lives of intangible assets | 2 years |
Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Remaining useful lives of intangible assets | 8 years |
Shareholders_Equity_Rollforwar
Shareholders' Equity - Roll-forward of changes in issued and outstanding common shares (Details) (USD $) | 12 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||
Authorized and Issued: | ||||||
Common shares authorized | 600,000,000 | |||||
Common shares, par value per share | $0.00 | $0.00 | ||||
Preferred shares authorized | 50,000,000 | |||||
Preferred shares, par value per share | $0.01 | |||||
Common Shares: | ||||||
Shares issued, beginning of year | 169,560,591 | 168,255,572 | 164,636,338 | |||
Shares issued | 1,493,524 | [1] | 811,732 | [1] | 2,066,065 | [1] |
Restricted shares issued, net of cancellations | 618,293 | 493,287 | 1,553,169 | |||
Shares issued, end of year | 171,672,408 | 169,560,591 | 168,255,572 | |||
Common shares held in treasury, end of year | -44,304,474 | -35,885,707 | -34,412,959 | |||
Common shares outstanding, end of year | 127,367,934 | 133,674,884 | 133,842,613 | |||
[1] | Includes shares issued from the exercise of stock options and stock appreciation rights, and shares issued from the employee share purchase plan. |
Shareholders_Equity_Share_repu
Shareholders' Equity - Share repurchases and treasury shares (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Class of Stock [Line Items] | |||
Common shares held in treasury (shares) | 44,304,474 | 35,885,707 | 34,412,959 |
Common shares held in treasury, at cost | $1,562,019,000 | $1,094,704,000 | |
Common shares | |||
Class of Stock [Line Items] | |||
Cumulative number of shares acquired since inception of share repurchase program | 118,100,000 | ||
Aggregate purchase price of shares acquired since inception of share repurchase program | 3,240,000,000 | ||
Treasury stock, shares acquired (shares) | 8,200,000 | 1,300,000 | 3,900,000 |
Treasury stock, value of shares acquired | 454,100,000 | 57,800,000 | 172,100,000 |
Reduction to weighted average shares outstanding as a result of share repurchases | 111,900,000 | 109,600,000 | 105,000,000 |
Remaining authorized repurchase amount | 887,100,000 | ||
February 2007 | Common shares | |||
Class of Stock [Line Items] | |||
Share repurchase authorizations, amount | 1,000,000,000 | ||
May 2008 | Common shares | |||
Class of Stock [Line Items] | |||
Share repurchase authorizations, amount | 500,000,000 | ||
November 2009 | Common shares | |||
Class of Stock [Line Items] | |||
Share repurchase authorizations, amount | 1,000,000,000 | ||
February 2011 | Common shares | |||
Class of Stock [Line Items] | |||
Share repurchase authorizations, amount | 1,000,000,000 | ||
November 2014 | Common shares | |||
Class of Stock [Line Items] | |||
Share repurchase authorizations, amount | $629,200,000 |
Shareholders_Equity_Preferred_
Shareholders' Equity - Preferred shares (Details) (USD $) | 12 Months Ended | 0 Months Ended | |||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | 2-May-12 | Apr. 02, 2012 |
Class of Stock [Line Items] | |||||
Shares issued - Series C | $0 | $0 | $315,763 | ||
Preferred dividends paid | 21,938 | 21,938 | 28,381 | ||
Series A and B Preferred Shares | |||||
Class of Stock [Line Items] | |||||
Preferred shares, redemption price per share | $25 | ||||
Series A Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Shares redeemed during period, value | 200,000 | ||||
Preferred shares, dividend rate (as a percent) | 8.00% | ||||
Series B Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Shares redeemed during period, value | 125,000 | ||||
Preferred shares, dividend rate (as a percent) | 7.88% | ||||
Series C Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Shares issued - Series C | $325,000 | ||||
Preferred shares, dividend rate (as a percent) | 6.75% | 6.75% | |||
Preferred shares, redemption price per share | $25 |
ShareBased_Compensation_Long_T
Share-Based Compensation - Long Term Incentive Plan (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
2002 Long Term Incentive and Share Award Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares reserved for issuance | 9,497,490 | ||
2007 Long Term Incentive and Share Award Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for issuance transferred | 3,153,924 | ||
2007 Employee Share Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares reserved for issuance | 2,250,000 | ||
Shares available for issuance | 762,293 | ||
Length of offering period, in months | 27 months | ||
Maximum employee subscription rate | 20.00% | ||
Purchase price (percentage of market value) | 85.00% | ||
Maximum number of shares per employee | 3,000 | ||
Maximum accumulation per calendar year | $25,000 | ||
Share based compensation expense | 1,600,000 | 1,400,000 | 1,100,000 |
Tax benefit | $100,000 | $100,000 | $100,000 |
2012 Long Term Incentive and Share Award Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares reserved for issuance | 4,280,000 | ||
Total number of shares reserved under plan | 7,433,924 | ||
Maximum percentage of awards to be issued in connection with full value awarrds | 50.00% | ||
Maximum number of incentive stock options | 2,000,000 | ||
Shares available for issuance | 980,571 |
ShareBased_Compensation_Valuat
Share-Based Compensation - Valuation assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Dividend yield | 0.00% | 0.00% | 0.00% |
Expected volatility | 22.80% | 23.60% | 24.30% |
Risk free interest rate | 1.90% | 1.00% | 1.00% |
Expected option life | 6 years | 6 years | 6 years 3 months |
ShareBased_Compensation_Stock_
Share-Based Compensation - Stock option activity (Details) (Stock Options, USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Stock Options | |
Number of Options / SARs | |
Outstanding, beginning of year (in shares) | 8,338,480 |
Granted (in shares) | 1,078,036 |
Exercised (in shares) | -1,542,828 |
Forfeited or expired (in shares) | -69,655 |
Outstanding, end of year (in shares) | 7,804,033 |
Exercisable, end of year (in shares) | 5,558,439 |
Weighted Average Exercise Price | |
Outstanding, beginning of year, weighted average exercise price | $28.82 |
Granted, weighted average exercise price | $56.71 |
Exercised, weighted average exercise price | $18.62 |
Forfeited or expired, weighted average exercise price | $46.91 |
Outstanding, end of year, weighted average exercise price | $34.52 |
Exercisable, end of year, weighted average exercise price | $28.91 |
ShareBased_Compensation_Restri
Share-Based Compensation - Restricted common shares and restricted stock units activity (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Restricted Common Shares | |
Unvested Shares: | |
Unvested balance, beginning of year (in shares) | 1,943,125 |
Granted (in shares) | 660,043 |
Vested (in shares) | -591,576 |
Forfeited (in shares) | -41,750 |
Unvested balance, end of year (in shares) | 1,969,842 |
Weighted Average Grant Date Fair Value: | |
Unvested balance, beginning of year, weighted average grant date fair value | $43.55 |
Granted, weighted average grant date fair value | $56.94 |
Vested, weighted average grant date fair value | $41.89 |
Forfeited, weighted average grant date fair value | $46.54 |
Unvested balance, end of year, weighted average grant date fair value | $48.47 |
Restricted Unit Awards | |
Unvested Shares: | |
Unvested balance, beginning of year (in shares) | 308,322 |
Granted (in shares) | 107,426 |
Vested (in shares) | -88,210 |
Forfeited (in shares) | -22,405 |
Unvested balance, end of year (in shares) | 305,133 |
Weighted Average Grant Date Fair Value: | |
Unvested balance, beginning of year, weighted average grant date fair value | $43.32 |
Granted, weighted average grant date fair value | $57.18 |
Vested, weighted average grant date fair value | $41.86 |
Forfeited, weighted average grant date fair value | $45.07 |
Unvested balance, end of year, weighted average grant date fair value | $48.49 |
ShareBased_Compensation_Additi
Share-Based Compensation - Additional information (Details) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Life of award | 10 years | ||
Share based compensation expense | $12.50 | $10.60 | $8.50 |
Tax benefit | 2.1 | 2 | 1.8 |
Unrecognized compensation cost related to unvested awards | 14.8 | ||
Expected period for recognition (years) | 1 year 9 months 18 days | ||
Weighted average grant date fair value | $14.77 | $12.96 | $10.61 |
Aggregate intrinsic value of options exercised | 58.4 | 21.7 | 64 |
Aggregate intrinsic value of options outstanding | 191.8 | ||
Aggregate intrinsic value of options exercisable | 167.8 | ||
Options outstanding, weighted average remaining contractual term (in years) | 5 years 8 months 12 days | ||
Options exercisable, weighted average remaining contractual term (in years) | 4 years 7 months 6 days | ||
Proceeds from stock options exercised | 11 | ||
Tax benefit from stock options exercised | 8.9 | ||
Restricted Common Shares And Restricted Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Share based compensation expense | 30 | 27.4 | 24.6 |
Tax benefit | 8.4 | 7.8 | 6.3 |
Granted (in shares) | 767,469 | 590,118 | 1,819,657 |
Granted, weighted average grant date fair value | $56.97 | $53.21 | $40.75 |
Aggregate fair value of awards that vested in the period | 38.6 | 41 | 33.2 |
Restricted Common Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost related to unvested awards | 48.5 | ||
Expected period for recognition (years) | 1 year 8 months 12 days | ||
Granted (in shares) | 660,043 | ||
Granted, weighted average grant date fair value | $56.94 | ||
Restricted Unit Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost related to unvested awards | 8.1 | ||
Expected period for recognition (years) | 1 year 9 months 18 days | ||
Granted (in shares) | 107,426 | ||
Granted, weighted average grant date fair value | $57.18 | ||
Aggregate intrinsic value of awards outstanding | 26.4 | ||
Aggregate intrinsic value of awards exercisable | $8.40 |
Retirement_Plans_Details
Retirement Plans (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Compensation and Retirement Disclosure [Abstract] | |||
Defined contribution plan, expense | $26.80 | $21.50 | $19.30 |
Statutory_Information_Summary_
Statutory Information - Summary of statutory capital, surplus and net income (Details) (USD $) | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
Bermuda | |||||
Statutory Accounting Practices [Line Items] | |||||
Actual statutory capital and surplus | $6,447,803 | [1] | $5,416,948 | [1] | |
Required statutory capital and surplus | 2,209,757 | [1] | 2,077,442 | [1] | |
Statutory net income (loss) | 692,676 | 719,267 | 631,483 | ||
Ireland | |||||
Statutory Accounting Practices [Line Items] | |||||
Actual statutory capital and surplus | 553,561 | [1] | 533,283 | [1] | |
Required statutory capital and surplus | 463,877 | [1] | 458,666 | [1] | |
Statutory net income (loss) | 43,197 | -24,410 | -1,940 | ||
United States | |||||
Statutory Accounting Practices [Line Items] | |||||
Actual statutory capital and surplus | 1,454,282 | [1] | 1,013,228 | [1] | |
Required statutory capital and surplus | 467,797 | [1] | 335,442 | [1] | |
Statutory net income (loss) | 46,110 | 62,605 | -21,517 | ||
United Kingdom | |||||
Statutory Accounting Practices [Line Items] | |||||
Actual statutory capital and surplus | 384,525 | [1] | 392,734 | [1] | |
Required statutory capital and surplus | 307,596 | [1] | 353,330 | [1] | |
Statutory net income (loss) | 13,016 | -11,353 | -4,449 | ||
Canada | |||||
Statutory Accounting Practices [Line Items] | |||||
Actual statutory capital and surplus | 79,123 | [1] | 77,877 | [1] | |
Required statutory capital and surplus | 58,837 | [1] | 74,951 | [1] | |
Statutory net income (loss) | $1,517 | ($36,203) | $0 | ||
[1] | Such amounts include ownership interests in affiliated insurance and reinsurance subsidiaries. |
Statutory_Information_Narrativ
Statutory Information - Narrative (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | |||
Bermuda | ||||
Statutory Accounting Practices [Line Items] | ||||
Required statutory capital and surplus | $2,209,757,000 | [1] | $2,077,442,000 | [1] |
United States | ||||
Statutory Accounting Practices [Line Items] | ||||
Required statutory capital and surplus | 467,797,000 | [1] | 335,442,000 | [1] |
Arch Re Bermuda | Bermuda | ||||
Statutory Accounting Practices [Line Items] | ||||
Dividends, percentage permitted | 25.00% | |||
Dividend required notice period | 7 days | |||
Capital reduction, percentage permitted | 15.00% | |||
Dividends available for payment in 2014 without prior regulatory approval | 1,360,000,000 | |||
Arch Re US | United States | ||||
Statutory Accounting Practices [Line Items] | ||||
Dividends available for payment in 2014, total | 110,000,000 | |||
Arch MI US | United States | ||||
Statutory Accounting Practices [Line Items] | ||||
Statutory minimum capital funding required | 400,000,000 | |||
Required statutory capital and surplus | $260,000,000 | |||
Maximum allowable risk to capital ratio | 18 | |||
Dividend restriction period | 3 years | |||
[1] | Such amounts include ownership interests in affiliated insurance and reinsurance subsidiaries. |
Unaudited_Condensed_Quarterly_2
Unaudited Condensed Quarterly Financial Information (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net premiums written | $895,481 | $959,539 | $971,928 | $1,064,990 | $748,921 | $839,135 | $810,535 | $952,776 | $3,891,938 | $3,351,367 | $3,052,235 |
Net premiums earned | 923,165 | 903,651 | 907,152 | 859,780 | 839,366 | 795,000 | 758,816 | 752,770 | 3,593,748 | 3,145,952 | 2,935,140 |
Net investment income | 82,496 | 80,105 | 72,990 | 66,994 | 67,095 | 66,083 | 68,369 | 65,672 | 302,585 | 267,219 | 294,895 |
Net realized gains | 10,561 | 18,515 | 54,144 | 19,697 | 9,048 | -6,022 | 12,652 | 58,340 | 102,917 | 74,018 | 194,228 |
Net impairment losses recognized in earnings | -3,837 | -8,593 | -14,749 | -2,971 | -88 | -728 | -724 | -2,246 | -30,150 | -3,786 | -11,388 |
Underwriting Income Loss Segment | 113,464 | 101,087 | 124,091 | 132,456 | 128,318 | 110,992 | 96,029 | 116,398 | 471,098 | 451,737 | 143,034 |
Net income | 207,134 | 223,264 | 211,717 | 179,145 | 161,490 | 114,825 | 176,940 | 256,476 | 821,260 | 709,731 | 593,397 |
Dividends declared on preferred shares | -5,485 | -5,484 | -5,485 | -5,484 | -5,485 | -5,484 | -5,485 | -5,484 | -21,938 | -21,938 | -25,079 |
Net income available to common shareholders | 209,679 | 223,191 | 202,531 | 177,016 | 156,005 | 109,341 | 171,455 | 250,992 | 812,417 | 687,793 | 557,706 |
Loss on repurchase of preferred shares | $0 | $0 | $10,612 | ||||||||
Basic (per share) | $1.65 | $1.69 | $1.53 | $1.34 | $1.19 | $0.83 | $1.31 | $1.92 | $6.21 | $5.24 | $4.15 |
Diluted (per share) | $1.60 | $1.64 | $1.48 | $1.30 | $1.14 | $0.80 | $1.26 | $1.85 | $6.02 | $5.07 | $4.03 |
Guarantor_Financial_Informatio2
Guarantor Financial Information - Condensed consolidating balance sheet (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
In Thousands, unless otherwise specified | |||||||
Assets | |||||||
Total investments | $15,331,249 | $13,611,734 | |||||
Cash | 485,702 | 434,057 | 371,041 | 351,699 | |||
Investment in subsidiaries | 0 | 0 | |||||
Due from subsidiaries and affiliates | 0 | 0 | |||||
Premiums receivable | 948,695 | 753,924 | |||||
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses | 1,812,845 | 1,804,330 | |||||
Contractholder receivables | 1,309,192 | 1,064,246 | |||||
Prepaid reinsurance premiums | 377,078 | 328,343 | |||||
Deferred acquisition costs, net | 414,525 | 342,314 | |||||
Other assets | 1,330,257 | 1,227,146 | |||||
Total assets | 22,009,543 | 19,566,094 | 17,816,762 | ||||
Liabilities | |||||||
Reserve for losses and loss adjustment expenses | 9,036,448 | 8,824,696 | 8,933,292 | 8,456,210 | |||
Unearned premiums | 2,231,578 | 1,896,365 | |||||
Reinsurance balances payable | 219,312 | 196,167 | |||||
Contractholder payables | 1,309,192 | 1,064,246 | |||||
Deposit accounting liabilities | 327,384 | 421,297 | |||||
Senior notes | 800,000 | 800,000 | |||||
Revolving credit agreement borrowings | 100,000 | 100,000 | |||||
Due to subsidiaries and affiliates | 0 | 0 | |||||
Other liabilities | 866,983 | 615,827 | |||||
Total liabilities | 14,890,897 | 13,918,598 | 12,647,884 | ||||
Redeemable noncontrolling interests | 219,512 | [1] | 0 | [1] | |||
Shareholders’ Equity | |||||||
Total shareholders' equity available to Arch | 6,130,053 | 5,647,496 | 5,168,878 | ||||
Non-redeemable noncontrolling interests | 769,081 | [1] | 0 | [1] | 0 | [1] | |
Total shareholders' equity | 6,899,134 | 5,647,496 | 5,168,878 | ||||
Total liabilities, noncontrolling interests and shareholders' equity | 22,009,543 | 19,566,094 | |||||
Reportable legal entities | ACGL (Parent Guarantor) | |||||||
Assets | |||||||
Total investments | 107 | 2,530 | |||||
Cash | 3,218 | 3,223 | 6,417 | 4,717 | |||
Investment in subsidiaries | 6,536,644 | 6,046,060 | |||||
Due from subsidiaries and affiliates | 48 | 2,251 | |||||
Premiums receivable | 0 | 0 | |||||
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses | 0 | 0 | |||||
Contractholder receivables | 0 | 0 | |||||
Prepaid reinsurance premiums | 0 | 0 | |||||
Deferred acquisition costs, net | 0 | 0 | |||||
Other assets | 7,590 | 6,598 | |||||
Total assets | 6,547,607 | 6,060,662 | |||||
Liabilities | |||||||
Reserve for losses and loss adjustment expenses | 0 | 0 | |||||
Unearned premiums | 0 | 0 | |||||
Reinsurance balances payable | 0 | 0 | |||||
Contractholder payables | 0 | 0 | |||||
Deposit accounting liabilities | 0 | 0 | |||||
Senior notes | 300,000 | 300,000 | |||||
Revolving credit agreement borrowings | 100,000 | 100,000 | |||||
Due to subsidiaries and affiliates | 417 | 18 | |||||
Other liabilities | 17,137 | 13,148 | |||||
Total liabilities | 417,554 | 413,166 | |||||
Redeemable noncontrolling interests | 0 | 0 | |||||
Shareholders’ Equity | |||||||
Total shareholders' equity available to Arch | 6,130,053 | 5,647,496 | |||||
Non-redeemable noncontrolling interests | 0 | [1] | 0 | ||||
Total shareholders' equity | 6,130,053 | 5,647,496 | |||||
Total liabilities, noncontrolling interests and shareholders' equity | 6,547,607 | 6,060,662 | |||||
Reportable legal entities | Arch-U.S. (Subsidiary Issuer) | |||||||
Assets | |||||||
Total investments | 62,867 | 408,957 | |||||
Cash | 2,787 | 509 | 612 | 6,712 | |||
Investment in subsidiaries | 1,685,185 | 1,258,889 | |||||
Due from subsidiaries and affiliates | 7,517 | 0 | |||||
Premiums receivable | 0 | 0 | |||||
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses | 0 | 0 | |||||
Contractholder receivables | 0 | 0 | |||||
Prepaid reinsurance premiums | 0 | 0 | |||||
Deferred acquisition costs, net | 0 | 0 | |||||
Other assets | 49,576 | 60,342 | |||||
Total assets | 1,807,932 | 1,728,697 | |||||
Liabilities | |||||||
Reserve for losses and loss adjustment expenses | 0 | 0 | |||||
Unearned premiums | 0 | 0 | |||||
Reinsurance balances payable | 0 | 0 | |||||
Contractholder payables | 0 | 0 | |||||
Deposit accounting liabilities | 0 | 0 | |||||
Senior notes | 500,000 | 500,000 | |||||
Revolving credit agreement borrowings | 0 | 0 | |||||
Due to subsidiaries and affiliates | 7,505 | 10,250 | |||||
Other liabilities | 49,403 | 33,206 | |||||
Total liabilities | 556,908 | 543,456 | |||||
Redeemable noncontrolling interests | 0 | 0 | |||||
Shareholders’ Equity | |||||||
Total shareholders' equity available to Arch | 1,251,024 | 1,185,241 | |||||
Non-redeemable noncontrolling interests | 0 | [1] | 0 | ||||
Total shareholders' equity | 1,251,024 | 1,185,241 | |||||
Total liabilities, noncontrolling interests and shareholders' equity | 1,807,932 | 1,728,697 | |||||
Reportable legal entities | Other ACGL Subsidiaries | |||||||
Assets | |||||||
Total investments | 15,268,275 | 13,200,247 | |||||
Cash | 479,697 | 430,325 | 364,012 | 340,270 | |||
Investment in subsidiaries | 0 | 0 | |||||
Due from subsidiaries and affiliates | 370,429 | 405,110 | |||||
Premiums receivable | 1,331,511 | 1,085,369 | |||||
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses | 5,584,973 | 5,645,156 | |||||
Contractholder receivables | 1,309,192 | 1,064,246 | |||||
Prepaid reinsurance premiums | 1,373,008 | 1,109,312 | |||||
Deferred acquisition costs, net | 414,525 | 342,314 | |||||
Other assets | 1,689,670 | 1,714,651 | |||||
Total assets | 27,821,280 | 24,996,730 | |||||
Liabilities | |||||||
Reserve for losses and loss adjustment expenses | 12,784,030 | 12,625,766 | |||||
Unearned premiums | 3,227,508 | 2,677,334 | |||||
Reinsurance balances payable | 589,289 | 662,394 | |||||
Contractholder payables | 1,309,192 | 1,064,246 | |||||
Deposit accounting liabilities | 587,050 | 758,490 | |||||
Senior notes | 0 | 0 | |||||
Revolving credit agreement borrowings | 0 | 0 | |||||
Due to subsidiaries and affiliates | 370,072 | 397,093 | |||||
Other liabilities | 994,741 | 691,699 | |||||
Total liabilities | 19,861,882 | 18,877,022 | |||||
Redeemable noncontrolling interests | 219,512 | 0 | |||||
Shareholders’ Equity | |||||||
Total shareholders' equity available to Arch | 6,970,805 | 6,119,708 | |||||
Non-redeemable noncontrolling interests | 769,081 | [1] | 0 | ||||
Total shareholders' equity | 7,739,886 | 6,119,708 | |||||
Total liabilities, noncontrolling interests and shareholders' equity | 27,821,280 | 24,996,730 | |||||
Consolidating adjustments and eliminations | |||||||
Assets | |||||||
Total investments | 0 | 0 | |||||
Cash | 0 | 0 | 0 | 0 | |||
Investment in subsidiaries | -8,221,829 | -7,304,949 | |||||
Due from subsidiaries and affiliates | -377,994 | -407,361 | |||||
Premiums receivable | -382,816 | -331,445 | |||||
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses | -3,772,128 | -3,840,826 | |||||
Contractholder receivables | 0 | 0 | |||||
Prepaid reinsurance premiums | -995,930 | -780,969 | |||||
Deferred acquisition costs, net | 0 | 0 | |||||
Other assets | -416,579 | -554,445 | |||||
Total assets | -14,167,276 | -13,219,995 | |||||
Liabilities | |||||||
Reserve for losses and loss adjustment expenses | -3,747,582 | -3,801,070 | |||||
Unearned premiums | -995,930 | -780,969 | |||||
Reinsurance balances payable | -369,977 | -466,227 | |||||
Contractholder payables | 0 | 0 | |||||
Deposit accounting liabilities | -259,666 | -337,193 | |||||
Senior notes | 0 | 0 | |||||
Revolving credit agreement borrowings | 0 | 0 | |||||
Due to subsidiaries and affiliates | -377,994 | -407,361 | |||||
Other liabilities | -194,298 | -122,226 | |||||
Total liabilities | -5,945,447 | -5,915,046 | |||||
Redeemable noncontrolling interests | 0 | 0 | |||||
Shareholders’ Equity | |||||||
Total shareholders' equity available to Arch | -8,221,829 | -7,304,949 | |||||
Non-redeemable noncontrolling interests | 0 | [1] | 0 | ||||
Total shareholders' equity | -8,221,829 | -7,304,949 | |||||
Total liabilities, noncontrolling interests and shareholders' equity | ($14,167,276) | ($13,219,995) | |||||
[1] | See Note 4. |
Guarantor_Financial_Informatio3
Guarantor Financial Information - Condensed consolidating statement of income and comprehensive income (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Revenues | ||||||||||||||
Net premiums earned | $923,165 | $903,651 | $907,152 | $859,780 | $839,366 | $795,000 | $758,816 | $752,770 | $3,593,748 | $3,145,952 | $2,935,140 | |||
Net investment income | 82,496 | 80,105 | 72,990 | 66,994 | 67,095 | 66,083 | 68,369 | 65,672 | 302,585 | 267,219 | 294,895 | |||
Net realized gains | 10,561 | 18,515 | 54,144 | 19,697 | 9,048 | -6,022 | 12,652 | 58,340 | 102,917 | 74,018 | 194,228 | |||
Net impairment losses recognized in earnings | -3,837 | -8,593 | -14,749 | -2,971 | -88 | -728 | -724 | -2,246 | -30,150 | -3,786 | -11,388 | |||
Other underwriting income | 10,142 | 7,639 | 8,090 | |||||||||||
Equity in net income of investment funds accounted for using the equity method | 19,883 | 35,701 | 73,510 | |||||||||||
Other income (loss) | -10,252 | -586 | -12,094 | |||||||||||
Total revenues | 3,988,873 | 3,526,157 | 3,482,381 | |||||||||||
Expenses | ||||||||||||||
Losses and loss adjustment expenses | 1,919,250 | 1,679,424 | 1,861,277 | |||||||||||
Acquisition expenses | 657,262 | 564,103 | 508,884 | |||||||||||
Other operating expenses | 606,224 | 500,730 | 465,353 | |||||||||||
Interest expense | 45,634 | 27,060 | 28,525 | |||||||||||
Net foreign exchange (gains) losses | -83,744 | 12,335 | 28,955 | |||||||||||
Total expenses | 3,144,626 | 2,783,652 | 2,892,994 | |||||||||||
Income (loss) before income taxes | 844,247 | 742,505 | 589,387 | |||||||||||
Income tax (expense) benefit | -22,987 | -32,774 | 4,010 | |||||||||||
Income (loss) before equity in net income of subsidiaries | 821,260 | 709,731 | 593,397 | |||||||||||
Equity in net income of subsidiaries | 0 | 0 | 0 | |||||||||||
Net income | 207,134 | 223,264 | 211,717 | 179,145 | 161,490 | 114,825 | 176,940 | 256,476 | 821,260 | 709,731 | 593,397 | |||
Amounts attributable to noncontrolling interests | 13,095 | [1] | 0 | [1] | 0 | [1] | ||||||||
Net income available to Arch | 834,355 | 709,731 | 593,397 | |||||||||||
Preferred dividends | -5,485 | -5,484 | -5,485 | -5,484 | -5,485 | -5,484 | -5,485 | -5,484 | -21,938 | -21,938 | -25,079 | |||
Loss on repurchase of preferred shares | 0 | 0 | -10,612 | |||||||||||
Net income available to common shareholders | 209,679 | 223,191 | 202,531 | 177,016 | 156,005 | 109,341 | 171,455 | 250,992 | 812,417 | 687,793 | 557,706 | |||
Comprehensive Income | 888,247 | 497,678 | 726,491 | |||||||||||
Reportable legal entities | ACGL (Parent Guarantor) | ||||||||||||||
Revenues | ||||||||||||||
Net premiums earned | 0 | 0 | 0 | |||||||||||
Net investment income | 0 | 0 | 4 | |||||||||||
Net realized gains | 0 | 0 | 0 | |||||||||||
Net impairment losses recognized in earnings | 0 | 0 | 0 | |||||||||||
Other underwriting income | 0 | 0 | 0 | |||||||||||
Equity in net income of investment funds accounted for using the equity method | 0 | 0 | 0 | |||||||||||
Other income (loss) | 0 | 0 | 0 | |||||||||||
Total revenues | 0 | 0 | 4 | |||||||||||
Expenses | ||||||||||||||
Losses and loss adjustment expenses | 0 | 0 | 0 | |||||||||||
Acquisition expenses | 0 | 0 | 0 | |||||||||||
Other operating expenses | 46,074 | 38,702 | 35,570 | |||||||||||
Interest expense | 23,423 | 23,272 | 23,496 | |||||||||||
Net foreign exchange (gains) losses | 0 | 0 | 0 | |||||||||||
Total expenses | 69,497 | 61,974 | 59,066 | |||||||||||
Income (loss) before income taxes | -69,497 | -61,974 | -59,062 | |||||||||||
Income tax (expense) benefit | 0 | 0 | 0 | |||||||||||
Income (loss) before equity in net income of subsidiaries | -69,497 | -61,974 | -59,062 | |||||||||||
Equity in net income of subsidiaries | 903,852 | 771,705 | 652,459 | |||||||||||
Net income | 834,355 | 709,731 | 593,397 | |||||||||||
Amounts attributable to noncontrolling interests | 0 | [1] | 0 | 0 | ||||||||||
Net income available to Arch | 834,355 | 709,731 | 593,397 | |||||||||||
Preferred dividends | -21,938 | -21,938 | -25,079 | |||||||||||
Loss on repurchase of preferred shares | -10,612 | |||||||||||||
Net income available to common shareholders | 812,417 | 687,793 | 557,706 | |||||||||||
Comprehensive Income | 888,247 | 497,678 | 726,491 | |||||||||||
Reportable legal entities | Arch-U.S. (Subsidiary Issuer) | ||||||||||||||
Revenues | ||||||||||||||
Net premiums earned | 0 | 0 | 0 | |||||||||||
Net investment income | 0 | 31 | 8 | |||||||||||
Net realized gains | 5 | 0 | 0 | |||||||||||
Net impairment losses recognized in earnings | 0 | 0 | 0 | |||||||||||
Other underwriting income | 0 | 0 | 0 | |||||||||||
Equity in net income of investment funds accounted for using the equity method | 0 | 0 | 0 | |||||||||||
Other income (loss) | 0 | 0 | 0 | |||||||||||
Total revenues | 5 | 31 | 8 | |||||||||||
Expenses | ||||||||||||||
Losses and loss adjustment expenses | 0 | 0 | 0 | |||||||||||
Acquisition expenses | 0 | 0 | 0 | |||||||||||
Other operating expenses | 3,387 | 2,691 | 1,218 | |||||||||||
Interest expense | 25,817 | 1,316 | 0 | |||||||||||
Net foreign exchange (gains) losses | 0 | 0 | 0 | |||||||||||
Total expenses | 29,204 | 4,007 | 1,218 | |||||||||||
Income (loss) before income taxes | -29,199 | -3,976 | -1,210 | |||||||||||
Income tax (expense) benefit | 10,125 | 1,383 | 424 | |||||||||||
Income (loss) before equity in net income of subsidiaries | -19,074 | -2,593 | -786 | |||||||||||
Equity in net income of subsidiaries | 53,584 | 25,644 | 9,738 | |||||||||||
Net income | 34,510 | 23,051 | 8,952 | |||||||||||
Amounts attributable to noncontrolling interests | 0 | [1] | 0 | 0 | ||||||||||
Net income available to Arch | 34,510 | 23,051 | 8,952 | |||||||||||
Preferred dividends | 0 | 0 | 0 | |||||||||||
Loss on repurchase of preferred shares | 0 | |||||||||||||
Net income available to common shareholders | 34,510 | 23,051 | 8,952 | |||||||||||
Comprehensive Income | 33,671 | -28,330 | 2,796 | |||||||||||
Reportable legal entities | Other ACGL Subsidiaries | ||||||||||||||
Revenues | ||||||||||||||
Net premiums earned | 3,593,748 | 3,145,952 | 2,935,140 | |||||||||||
Net investment income | 326,831 | 307,449 | 321,805 | |||||||||||
Net realized gains | 102,912 | 74,018 | 194,228 | |||||||||||
Net impairment losses recognized in earnings | -30,150 | -3,786 | -11,388 | |||||||||||
Other underwriting income | 10,142 | 7,639 | 8,090 | |||||||||||
Equity in net income of investment funds accounted for using the equity method | 19,883 | 35,701 | 73,510 | |||||||||||
Other income (loss) | -10,252 | -586 | -12,094 | |||||||||||
Total revenues | 4,013,114 | 3,566,387 | 3,509,291 | |||||||||||
Expenses | ||||||||||||||
Losses and loss adjustment expenses | 1,919,250 | 1,679,424 | 1,861,277 | |||||||||||
Acquisition expenses | 657,262 | 564,103 | 508,884 | |||||||||||
Other operating expenses | 556,763 | 459,337 | 428,565 | |||||||||||
Interest expense | 20,640 | 42,733 | 31,951 | |||||||||||
Net foreign exchange (gains) losses | -53,222 | 2,145 | 21,787 | |||||||||||
Total expenses | 3,100,693 | 2,747,742 | 2,852,464 | |||||||||||
Income (loss) before income taxes | 912,421 | 818,645 | 656,827 | |||||||||||
Income tax (expense) benefit | -33,112 | -34,157 | 3,586 | |||||||||||
Income (loss) before equity in net income of subsidiaries | 879,309 | 784,488 | 660,413 | |||||||||||
Equity in net income of subsidiaries | 0 | 0 | 0 | |||||||||||
Net income | 879,309 | 784,488 | 660,413 | |||||||||||
Amounts attributable to noncontrolling interests | 13,095 | [1] | 0 | 0 | ||||||||||
Net income available to Arch | 892,404 | 784,488 | 660,413 | |||||||||||
Preferred dividends | 0 | 0 | 0 | |||||||||||
Loss on repurchase of preferred shares | 0 | |||||||||||||
Net income available to common shareholders | 892,404 | 784,488 | 660,413 | |||||||||||
Comprehensive Income | 976,821 | 562,245 | 786,338 | |||||||||||
Consolidating adjustments and eliminations | ||||||||||||||
Revenues | ||||||||||||||
Net premiums earned | 0 | 0 | 0 | |||||||||||
Net investment income | -24,246 | -40,261 | -26,922 | |||||||||||
Net realized gains | 0 | 0 | 0 | |||||||||||
Net impairment losses recognized in earnings | 0 | 0 | 0 | |||||||||||
Other underwriting income | 0 | 0 | 0 | |||||||||||
Equity in net income of investment funds accounted for using the equity method | 0 | 0 | 0 | |||||||||||
Other income (loss) | 0 | 0 | 0 | |||||||||||
Total revenues | -24,246 | -40,261 | -26,922 | |||||||||||
Expenses | ||||||||||||||
Losses and loss adjustment expenses | 0 | 0 | 0 | |||||||||||
Acquisition expenses | 0 | 0 | 0 | |||||||||||
Other operating expenses | 0 | 0 | 0 | |||||||||||
Interest expense | -24,246 | -40,261 | -26,922 | |||||||||||
Net foreign exchange (gains) losses | -30,522 | 10,190 | 7,168 | |||||||||||
Total expenses | -54,768 | -30,071 | -19,754 | |||||||||||
Income (loss) before income taxes | 30,522 | -10,190 | -7,168 | |||||||||||
Income tax (expense) benefit | 0 | 0 | 0 | |||||||||||
Income (loss) before equity in net income of subsidiaries | 30,522 | -10,190 | -7,168 | |||||||||||
Equity in net income of subsidiaries | -957,436 | -797,349 | -662,197 | |||||||||||
Net income | -926,914 | -807,539 | -669,365 | |||||||||||
Amounts attributable to noncontrolling interests | 0 | [1] | 0 | 0 | ||||||||||
Net income available to Arch | -926,914 | -807,539 | -669,365 | |||||||||||
Preferred dividends | 0 | 0 | 0 | |||||||||||
Loss on repurchase of preferred shares | 0 | |||||||||||||
Net income available to common shareholders | -926,914 | -807,539 | -669,365 | |||||||||||
Comprehensive Income | ($1,010,492) | ($533,915) | ($789,134) | |||||||||||
[1] | See Note 4. |
Guarantor_Financial_Informatio4
Guarantor Financial Information - Condensed consolidating statement of cash flows (Details) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Operating Activities | ||||||
Net Cash Provided by (Used in) Operating Activities | $1,037,130 | $850,868 | $921,603 | |||
Investing Activities | ||||||
Purchases of fixed maturity investments | -28,745,279 | -18,174,988 | -17,568,592 | |||
Purchases of equity securities | -520,817 | -535,857 | -268,999 | |||
Purchases of other investments | -2,257,481 | -1,326,729 | -1,000,049 | |||
Proceeds from the sale of fixed maturity investments | 26,823,192 | 17,196,614 | 16,366,306 | |||
Proceeds from the sale of equity securities | 411,362 | 462,787 | 313,617 | |||
Proceeds from sales, redemptions and maturities of other investments | 1,643,000 | 1,162,707 | 443,630 | |||
Proceeds from redemptions and maturities of fixed maturity investments | 762,995 | 731,708 | 1,115,594 | |||
Net (purchases) sales of short-term investments | 577,126 | -750,613 | 185,919 | |||
Change in investment of securities lending collateral | 57,470 | -55,643 | 6,190 | |||
Contributions to subsidiaries | 0 | 0 | 0 | |||
Intercompany loans issued | 0 | 0 | ||||
Repayments of intercompany loans | 0 | |||||
Purchase of business, net of cash acquired | -237,106 | 0 | 28,948 | |||
Purchases of furniture, equipment and other assets | -19,883 | -17,499 | -18,532 | |||
Net Cash Used For Investing Activities | -1,505,421 | -1,307,513 | -395,968 | |||
Financing Activities | ||||||
Proceeds from issuance of Series C preferred shares, net | 0 | 0 | 315,763 | |||
Repurchase of Series A and B preferred shares | 0 | 0 | -325,000 | |||
Purchases of common shares under share repurchase program | -454,137 | -57,796 | -172,056 | |||
Proceeds from common shares issued, net | 6,827 | 3,051 | 7,033 | |||
Proceeds from intercompany loans | 0 | 0 | ||||
Repayments of intercompany loans | 0 | |||||
Proceeds from borrowings | 0 | 494,228 | 0 | |||
Repayments of borrowings | 0 | 0 | -310,868 | |||
Change in securities lending collateral | -57,470 | 55,643 | -6,190 | |||
Third party investment in non-redeemable noncontrolling interests | 796,903 | 0 | 0 | |||
Third party investment in redeemable noncontrolling interests | 219,233 | 0 | 0 | |||
Dividends paid to redeemable noncontrolling interests | -14,448 | 0 | 0 | |||
Dividends paid to parent | 0 | [1] | 0 | [1] | 0 | [1] |
Other | 64,973 | 50,830 | 6,664 | |||
Preferred dividends paid | -21,938 | -21,938 | -28,381 | |||
Net Cash Used For Financing Activities | 539,943 | 524,018 | -513,035 | |||
Effects of exchange rate changes on foreign currency cash | -20,007 | -4,357 | 6,742 | |||
Increase (decrease) in cash | 51,645 | 63,016 | 19,342 | |||
Cash beginning of year | 434,057 | 371,041 | 351,699 | |||
Cash end of period | 485,702 | 434,057 | 371,041 | |||
Reportable legal entities | ACGL (Parent Guarantor) | ||||||
Operating Activities | ||||||
Net Cash Provided by (Used in) Operating Activities | 467,091 | 68,562 | 209,500 | |||
Investing Activities | ||||||
Purchases of fixed maturity investments | 0 | 0 | 0 | |||
Purchases of equity securities | 0 | 0 | 0 | |||
Purchases of other investments | 0 | 0 | 0 | |||
Proceeds from the sale of fixed maturity investments | 0 | 0 | 0 | |||
Proceeds from the sale of equity securities | 0 | 0 | 0 | |||
Proceeds from sales, redemptions and maturities of other investments | 0 | 0 | 0 | |||
Proceeds from redemptions and maturities of fixed maturity investments | 0 | 0 | 0 | |||
Net (purchases) sales of short-term investments | 2,423 | 5,799 | -5,094 | |||
Change in investment of securities lending collateral | 0 | 0 | 0 | |||
Contributions to subsidiaries | 0 | -160 | 0 | |||
Intercompany loans issued | 0 | 0 | ||||
Repayments of intercompany loans | 0 | |||||
Purchase of business, net of cash acquired | 0 | 0 | ||||
Purchases of furniture, equipment and other assets | -271 | -712 | -65 | |||
Net Cash Used For Investing Activities | 2,152 | 4,927 | -5,159 | |||
Financing Activities | ||||||
Proceeds from issuance of Series C preferred shares, net | 315,763 | |||||
Repurchase of Series A and B preferred shares | -325,000 | |||||
Purchases of common shares under share repurchase program | -454,137 | -57,796 | -172,056 | |||
Proceeds from common shares issued, net | 6,827 | 3,051 | 7,033 | |||
Proceeds from intercompany loans | 0 | 0 | ||||
Repayments of intercompany loans | 0 | |||||
Proceeds from borrowings | 0 | |||||
Repayments of borrowings | 0 | |||||
Change in securities lending collateral | 0 | 0 | 0 | |||
Third party investment in non-redeemable noncontrolling interests | 0 | [2] | ||||
Third party investment in redeemable noncontrolling interests | 0 | [2] | ||||
Dividends paid to redeemable noncontrolling interests | 0 | [2] | ||||
Dividends paid to parent | 0 | [1] | 0 | [1] | 0 | [1] |
Other | 0 | 0 | 0 | |||
Preferred dividends paid | -21,938 | -21,938 | -28,381 | |||
Net Cash Used For Financing Activities | -469,248 | -76,683 | -202,641 | |||
Effects of exchange rate changes on foreign currency cash | 0 | 0 | 0 | |||
Increase (decrease) in cash | -5 | -3,194 | 1,700 | |||
Cash beginning of year | 3,223 | 6,417 | 4,717 | |||
Cash end of period | 3,218 | 3,223 | 6,417 | |||
Reportable legal entities | Arch-U.S. (Subsidiary Issuer) | ||||||
Operating Activities | ||||||
Net Cash Provided by (Used in) Operating Activities | 8,142 | -6,569 | -8,086 | |||
Investing Activities | ||||||
Purchases of fixed maturity investments | -78,509 | 0 | 0 | |||
Purchases of equity securities | 0 | 0 | 0 | |||
Purchases of other investments | 0 | 0 | 0 | |||
Proceeds from the sale of fixed maturity investments | 16,011 | 0 | 0 | |||
Proceeds from the sale of equity securities | 0 | 0 | 0 | |||
Proceeds from sales, redemptions and maturities of other investments | 0 | 0 | 0 | |||
Proceeds from redemptions and maturities of fixed maturity investments | 0 | 0 | 0 | |||
Net (purchases) sales of short-term investments | 408,591 | -400,162 | 1,986 | |||
Change in investment of securities lending collateral | 0 | 0 | 0 | |||
Contributions to subsidiaries | -341,707 | -97,850 | 0 | |||
Intercompany loans issued | -7,500 | 0 | ||||
Repayments of intercompany loans | 0 | |||||
Purchase of business, net of cash acquired | 0 | 0 | ||||
Purchases of furniture, equipment and other assets | 0 | 0 | 0 | |||
Net Cash Used For Investing Activities | -3,114 | -498,012 | 1,986 | |||
Financing Activities | ||||||
Proceeds from issuance of Series C preferred shares, net | 0 | |||||
Repurchase of Series A and B preferred shares | 0 | |||||
Purchases of common shares under share repurchase program | 0 | 0 | 0 | |||
Proceeds from common shares issued, net | 0 | 0 | 0 | |||
Proceeds from intercompany loans | 7,500 | 10,250 | ||||
Repayments of intercompany loans | -10,250 | |||||
Proceeds from borrowings | 494,228 | |||||
Repayments of borrowings | 0 | |||||
Change in securities lending collateral | 0 | 0 | 0 | |||
Third party investment in non-redeemable noncontrolling interests | 0 | [2] | ||||
Third party investment in redeemable noncontrolling interests | 0 | [2] | ||||
Dividends paid to redeemable noncontrolling interests | 0 | [2] | ||||
Dividends paid to parent | 0 | [1] | 0 | [1] | 0 | [1] |
Other | 0 | 0 | 0 | |||
Preferred dividends paid | 0 | 0 | 0 | |||
Net Cash Used For Financing Activities | -2,750 | 504,478 | 0 | |||
Effects of exchange rate changes on foreign currency cash | 0 | 0 | 0 | |||
Increase (decrease) in cash | 2,278 | -103 | -6,100 | |||
Cash beginning of year | 509 | 612 | 6,712 | |||
Cash end of period | 2,787 | 509 | 612 | |||
Reportable legal entities | Other ACGL Subsidiaries | ||||||
Operating Activities | ||||||
Net Cash Provided by (Used in) Operating Activities | 1,077,597 | 908,375 | 978,679 | |||
Investing Activities | ||||||
Purchases of fixed maturity investments | -28,666,770 | -18,174,988 | -17,568,592 | |||
Purchases of equity securities | -520,817 | -535,857 | -268,999 | |||
Purchases of other investments | -2,257,481 | -1,326,729 | -1,000,049 | |||
Proceeds from the sale of fixed maturity investments | 26,807,181 | 17,196,614 | 16,366,306 | |||
Proceeds from the sale of equity securities | 411,362 | 462,787 | 313,617 | |||
Proceeds from sales, redemptions and maturities of other investments | 1,643,000 | 1,162,707 | 443,630 | |||
Proceeds from redemptions and maturities of fixed maturity investments | 762,995 | 731,708 | 1,115,594 | |||
Net (purchases) sales of short-term investments | 166,112 | -356,250 | 189,027 | |||
Change in investment of securities lending collateral | 57,470 | -55,643 | 6,190 | |||
Contributions to subsidiaries | -128,825 | -20,250 | -38,576 | |||
Intercompany loans issued | -7,500 | -10,250 | ||||
Repayments of intercompany loans | 38,964 | |||||
Purchase of business, net of cash acquired | -237,106 | 28,948 | ||||
Purchases of furniture, equipment and other assets | -19,612 | -16,787 | -18,467 | |||
Net Cash Used For Investing Activities | -1,951,027 | -942,938 | -431,371 | |||
Financing Activities | ||||||
Proceeds from issuance of Series C preferred shares, net | 0 | |||||
Repurchase of Series A and B preferred shares | 0 | |||||
Purchases of common shares under share repurchase program | 0 | 0 | 0 | |||
Proceeds from common shares issued, net | 470,532 | 118,260 | 38,576 | |||
Proceeds from intercompany loans | 7,500 | 0 | ||||
Repayments of intercompany loans | -28,714 | |||||
Proceeds from borrowings | 0 | |||||
Repayments of borrowings | -310,868 | |||||
Change in securities lending collateral | -57,470 | 55,643 | -6,190 | |||
Third party investment in non-redeemable noncontrolling interests | 796,903 | [2] | ||||
Third party investment in redeemable noncontrolling interests | 219,233 | [2] | ||||
Dividends paid to redeemable noncontrolling interests | -14,448 | [2] | ||||
Dividends paid to parent | -515,700 | [1] | -119,500 | [1] | -258,490 | [1] |
Other | 64,973 | 50,830 | 6,664 | |||
Preferred dividends paid | 0 | 0 | 0 | |||
Net Cash Used For Financing Activities | 942,809 | 105,233 | -530,308 | |||
Effects of exchange rate changes on foreign currency cash | -20,007 | -4,357 | 6,742 | |||
Increase (decrease) in cash | 49,372 | 66,313 | 23,742 | |||
Cash beginning of year | 430,325 | 364,012 | 340,270 | |||
Cash end of period | 479,697 | 430,325 | 364,012 | |||
Consolidating adjustments and eliminations | ||||||
Operating Activities | ||||||
Net Cash Provided by (Used in) Operating Activities | -515,700 | -119,500 | -258,490 | |||
Investing Activities | ||||||
Purchases of fixed maturity investments | 0 | 0 | 0 | |||
Purchases of equity securities | 0 | 0 | 0 | |||
Purchases of other investments | 0 | 0 | 0 | |||
Proceeds from the sale of fixed maturity investments | 0 | 0 | 0 | |||
Proceeds from the sale of equity securities | 0 | 0 | 0 | |||
Proceeds from sales, redemptions and maturities of other investments | 0 | 0 | 0 | |||
Proceeds from redemptions and maturities of fixed maturity investments | 0 | 0 | 0 | |||
Net (purchases) sales of short-term investments | 0 | 0 | 0 | |||
Change in investment of securities lending collateral | 0 | 0 | 0 | |||
Contributions to subsidiaries | 470,532 | 118,260 | 38,576 | |||
Intercompany loans issued | 15,000 | 10,250 | ||||
Repayments of intercompany loans | -38,964 | |||||
Purchase of business, net of cash acquired | 0 | 0 | ||||
Purchases of furniture, equipment and other assets | 0 | 0 | 0 | |||
Net Cash Used For Investing Activities | 446,568 | 128,510 | 38,576 | |||
Financing Activities | ||||||
Proceeds from issuance of Series C preferred shares, net | 0 | |||||
Repurchase of Series A and B preferred shares | 0 | |||||
Purchases of common shares under share repurchase program | 0 | 0 | 0 | |||
Proceeds from common shares issued, net | -470,532 | -118,260 | -38,576 | |||
Proceeds from intercompany loans | -15,000 | -10,250 | ||||
Repayments of intercompany loans | 38,964 | |||||
Proceeds from borrowings | 0 | |||||
Repayments of borrowings | 0 | |||||
Change in securities lending collateral | 0 | 0 | 0 | |||
Third party investment in non-redeemable noncontrolling interests | 0 | [2] | ||||
Third party investment in redeemable noncontrolling interests | 0 | [2] | ||||
Dividends paid to redeemable noncontrolling interests | 0 | [2] | ||||
Dividends paid to parent | 515,700 | [1] | 119,500 | [1] | 258,490 | [1] |
Other | 0 | 0 | 0 | |||
Preferred dividends paid | 0 | 0 | 0 | |||
Net Cash Used For Financing Activities | 69,132 | -9,010 | 219,914 | |||
Effects of exchange rate changes on foreign currency cash | 0 | 0 | 0 | |||
Increase (decrease) in cash | 0 | 0 | 0 | |||
Cash beginning of year | 0 | 0 | 0 | |||
Cash end of period | $0 | $0 | $0 | |||
[1] | Included in net cash provided by (used for) operating activities in the ACGL (Parent Guarantor) column. | |||||
[2] | See Note 4. |
Schedule_III_Supplementary_Ins1
Schedule III - Supplementary Insurance Information (Details) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Supplementary Insurance Information, by Segment [Line Items] | ||||||
Deferred Acquisition Costs, Net | $414,525 | $342,314 | $262,822 | |||
Reserves for Losses and Loss Adjustment Expenses | 9,036,448 | 8,824,696 | 8,933,292 | |||
Unearned Premiums | 2,231,578 | 1,896,365 | 1,647,978 | |||
Net Premiums Earned | 3,593,748 | 3,145,952 | 2,935,140 | |||
Net Losses and Loss Adjustment Expenses Incurred | 1,919,250 | 1,679,424 | 1,861,277 | |||
Amortization of Deferred Acquisition Costs | 657,262 | 564,103 | 508,884 | |||
Other Operating Expenses | 556,280 | [1] | 458,327 | [1] | 430,035 | [1] |
Net Premiums Written | 3,891,938 | 3,351,367 | 3,052,235 | |||
Insurance | ||||||
Supplementary Insurance Information, by Segment [Line Items] | ||||||
Deferred Acquisition Costs, Net | 178,545 | 158,121 | 141,962 | |||
Reserves for Losses and Loss Adjustment Expenses | 6,161,500 | 6,137,121 | 6,149,247 | |||
Unearned Premiums | 1,237,099 | 1,192,188 | 1,077,211 | |||
Net Premiums Earned | 2,017,370 | 1,876,014 | 1,800,343 | |||
Net Losses and Loss Adjustment Expenses Incurred | 1,260,953 | 1,188,445 | 1,283,841 | |||
Amortization of Deferred Acquisition Costs | 316,308 | 311,904 | 298,983 | |||
Other Operating Expenses | 335,157 | [1] | 315,387 | [1] | 307,489 | [1] |
Net Premiums Written | 2,146,654 | 1,948,796 | 1,825,334 | |||
Reinsurance | ||||||
Supplementary Insurance Information, by Segment [Line Items] | ||||||
Deferred Acquisition Costs, Net | 148,130 | 167,642 | 106,677 | |||
Reserves for Losses and Loss Adjustment Expenses | 2,690,070 | 2,680,288 | 2,781,424 | |||
Unearned Premiums | 666,233 | 612,725 | 517,619 | |||
Net Premiums Earned | 1,279,328 | 1,218,672 | 1,118,127 | |||
Net Losses and Loss Adjustment Expenses Incurred | 532,450 | 486,236 | 574,821 | |||
Amortization of Deferred Acquisition Costs | 261,438 | 234,373 | 204,903 | |||
Other Operating Expenses | 147,964 | [1] | 134,563 | [1] | 118,245 | [1] |
Net Premiums Written | 1,265,991 | 1,313,001 | 1,158,790 | |||
Mortgage | ||||||
Supplementary Insurance Information, by Segment [Line Items] | ||||||
Deferred Acquisition Costs, Net | 38,321 | 16,551 | 14,183 | |||
Reserves for Losses and Loss Adjustment Expenses | 118,550 | 7,287 | 2,621 | |||
Unearned Premiums | 148,232 | 91,452 | 53,148 | |||
Net Premiums Earned | 193,573 | 51,266 | 16,670 | |||
Net Losses and Loss Adjustment Expenses Incurred | 55,674 | 4,743 | 2,615 | |||
Amortization of Deferred Acquisition Costs | 49,400 | 17,826 | 4,998 | |||
Other Operating Expenses | 66,891 | [1] | 8,377 | [1] | 4,301 | [1] |
Net Premiums Written | 204,837 | 89,570 | 68,111 | |||
Other | ||||||
Supplementary Insurance Information, by Segment [Line Items] | ||||||
Deferred Acquisition Costs, Net | 49,529 | |||||
Reserves for Losses and Loss Adjustment Expenses | 66,328 | |||||
Unearned Premiums | 180,014 | |||||
Net Premiums Earned | 103,477 | |||||
Net Losses and Loss Adjustment Expenses Incurred | 70,173 | |||||
Amortization of Deferred Acquisition Costs | 30,116 | |||||
Other Operating Expenses | 6,268 | [1] | ||||
Net Premiums Written | $274,456 | |||||
[1] | Certain other operating expenses relate to the Company’s corporate segment (non-underwriting). Such amounts are not reflected in the table above. See Note 5. |
Schedule_IV_Reinsurance_Detail
Schedule IV - Reinsurance (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ||||||||||||||
Gross Amount | $3,100,946 | $2,754,582 | $2,673,864 | |||||||||||
Ceded to other Companies | -948,678 | -845,256 | -816,926 | |||||||||||
Assumed From Other Companies | 1,739,670 | 1,442,041 | 1,195,297 | |||||||||||
Net Amount | 895,481 | 959,539 | 971,928 | 1,064,990 | 748,921 | 839,135 | 810,535 | 952,776 | 3,891,938 | 3,351,367 | 3,052,235 | |||
Percentage of Amount Assumed to Net | 44.70% | 43.00% | 39.20% | |||||||||||
Insurance | ||||||||||||||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ||||||||||||||
Gross Amount | 2,974,996 | 2,682,446 | 2,562,788 | |||||||||||
Ceded to other Companies | -862,015 | [1] | -763,713 | [1] | -768,625 | [1] | ||||||||
Assumed From Other Companies | 33,673 | [1] | 30,063 | [1] | 31,171 | [1] | ||||||||
Net Amount | 2,146,654 | 1,948,796 | 1,825,334 | |||||||||||
Percentage of Amount Assumed to Net | 1.60% | 1.50% | 1.70% | |||||||||||
Reinsurance | ||||||||||||||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ||||||||||||||
Gross Amount | 22,405 | 72,136 | 111,076 | |||||||||||
Ceded to other Companies | -261,255 | [1] | -86,620 | [1] | -55,099 | [1] | ||||||||
Assumed From Other Companies | 1,504,841 | [1] | 1,327,485 | [1] | 1,102,813 | [1] | ||||||||
Net Amount | 1,265,991 | 1,313,001 | 1,158,790 | |||||||||||
Percentage of Amount Assumed to Net | 118.90% | 101.10% | 95.20% | |||||||||||
Mortgage | ||||||||||||||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ||||||||||||||
Gross Amount | 103,545 | 0 | 0 | |||||||||||
Ceded to other Companies | -22,519 | [1] | 0 | [1] | 0 | [1] | ||||||||
Assumed From Other Companies | 123,811 | [1] | 89,570 | [1] | 68,111 | [1] | ||||||||
Net Amount | 204,837 | 89,570 | 68,111 | |||||||||||
Percentage of Amount Assumed to Net | 60.40% | 100.00% | 100.00% | |||||||||||
Other | ||||||||||||||
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items] | ||||||||||||||
Gross Amount | 0 | |||||||||||||
Ceded to other Companies | -14,171 | [1] | 0 | 0 | ||||||||||
Assumed From Other Companies | 288,627 | [1] | ||||||||||||
Net Amount | $274,456 | $0 | $0 | |||||||||||
Percentage of Amount Assumed to Net | 105.20% | |||||||||||||
[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. |
Schedule_VI_Supplementary_Info1
Schedule VI - Supplementary Information For Property and Casualty Insurance Underwriters (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items] | |||||||||||
Net investment income | $82,496 | $80,105 | $72,990 | $66,994 | $67,095 | $66,083 | $68,369 | $65,672 | $302,585 | $267,219 | $294,895 |
Net Losees and Loss Adjustment Expenses Incurred Related to Current Year | 2,246,152 | 1,943,466 | 2,082,805 | ||||||||
Net Losees and Loss Adjustment Expenses Incurred Related to Prior Years | -326,902 | -264,042 | -221,528 | ||||||||
Consolidated Subsidiaries | |||||||||||
Supplemental Information for Property, Casualty Insurance Underwriters [Line Items] | |||||||||||
Deferred Acquisition Costs, Net | 414,525 | 342,314 | 414,525 | 342,314 | 262,822 | ||||||
Reserves for Losses and Loss Adjustment Expenses | 9,036,448 | 8,824,696 | 9,036,448 | 8,824,696 | 8,933,292 | ||||||
Discount, if any, deducted in Column C | 14,732 | 12,539 | 14,732 | 12,539 | 10,485 | ||||||
Unearned Premiums | 2,231,578 | 1,896,365 | 2,231,578 | 1,896,365 | 1,647,978 | ||||||
Net Premiums Earned | 3,593,748 | 3,145,952 | 2,935,140 | ||||||||
Net Losees and Loss Adjustment Expenses Incurred Related to Current Year | 2,246,152 | 1,943,466 | 2,082,805 | ||||||||
Net Losees and Loss Adjustment Expenses Incurred Related to Prior Years | -326,902 | -264,042 | -221,528 | ||||||||
Amortization of Deferred Acquisition Costs | 657,262 | 564,103 | 508,884 | ||||||||
Net Paid Losses and Loss Adjustment Expenses | 1,697,736 | 1,708,817 | 1,465,379 | ||||||||
Net Premiums Written | $3,891,938 | $3,351,367 | $3,052,235 |