Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 06, 2023 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-16209 | |
Entity Registrant Name | ARCH CAPITAL GROUP LTD. | |
Entity Incorporation, State or Country Code | D0 | |
Entity Tax Identification Number | 98-0374481 | |
Entity Address, Address Line One | Waterloo House, Ground Floor | |
Entity Address, Address Line Two | 100 Pitts Bay Road, | |
Entity Address, City or Town | Pembroke | |
Entity Address, Postal Zip Code | HM 08, | |
Entity Address, Country | BM | |
City Area Code | (441) | |
Local Phone Number | 278-9250 | |
Entity Listings [Line Items] | ||
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 373,171,909 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0000947484 | |
Amendment Flag | false | |
Common shares | ||
Entity Listings [Line Items] | ||
Title of 12(b) Security | Common shares, $0.0011 par value per share | |
Trading Symbol | ACGL | |
Security Exchange Name | NASDAQ | |
Series F Depositary Share Equivalent | ||
Entity Listings [Line Items] | ||
Title of 12(b) Security | Depositary shares, each representing a 1/1000th interest in a 5.45% Series F preferred share | |
Trading Symbol | ACGLO | |
Security Exchange Name | NASDAQ | |
Series G Depositary Share Equivalent | ||
Entity Listings [Line Items] | ||
Title of 12(b) Security | Depositary shares, each representing a 1/1000th interest in a 4.55% Series G preferred share | |
Trading Symbol | ACGLN | |
Security Exchange Name | NASDAQ |
Unaudited Consolidated Balance
Unaudited Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Investments: | ||
Debt securities available for sale, at fair value | $ 24,167 | $ 21,015 |
Equity securities, at fair value | 894 | 860 |
Other investments, at fair value | 2,068 | 1,644 |
Investments accounted for using the equity method | 4,251 | 3,774 |
Total investments | 31,380 | 27,293 |
Cash | 859 | 855 |
Accrued investment income | 217 | 159 |
Investment in operating affiliates | 1,000 | 965 |
Premiums receivable (net of allowance for credit losses: $34 and $35) | 4,937 | 3,625 |
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses (net of allowance for credit losses: $23 and $22) | 6,821 | 6,564 |
Contractholder receivables (net of allowance for credit losses: $3 and $3) | 1,805 | 1,731 |
Ceded unearned premiums | 2,444 | 1,799 |
Deferred acquisition costs | 1,483 | 1,264 |
Receivable for securities sold | 59 | 12 |
Goodwill and intangible assets | 739 | 804 |
Other assets | 3,483 | 2,919 |
Total assets | 55,227 | 47,990 |
Liabilities | ||
Reserve for losses and loss adjustment expenses | 21,836 | 20,032 |
Unearned premiums | 9,074 | 7,337 |
Reinsurance balances payable | 2,215 | 1,530 |
Contractholder payables | 1,807 | 1,734 |
Collateral held for insured obligations | 274 | 249 |
Senior notes | 2,726 | 2,725 |
Payable for securities purchased | 417 | 95 |
Other liabilities | 1,637 | 1,367 |
Total liabilities | 39,986 | 35,069 |
Commitments and contingencies (refer to Note 10) | ||
Redeemable noncontrolling interests | 2 | 11 |
Shareholders' Equity | ||
Non-cumulative preferred shares | 830 | 830 |
Common shares ($0.0011 par, shares issued: 591.4 and 588.3) | 1 | 1 |
Additional paid-in capital | 2,297 | 2,211 |
Retained earnings | 17,971 | 15,892 |
Accumulated other comprehensive income (loss), net of deferred income tax | (1,453) | (1,646) |
Common shares held in treasury, at cost (shares: 218.3 and 217.9) | (4,407) | (4,378) |
Total shareholders' equity available to Arch | 15,239 | 12,910 |
Total liabilities, noncontrolling interests and shareholders' equity | 55,227 | 47,990 |
Fixed maturities available for sale, at fair value (amortized cost: $23,882 and $21,282; net of allowance for credit losses: $57 and $41) | ||
Investments: | ||
Debt securities available for sale, at fair value | 22,485 | 19,683 |
Short-term investments available for sale, at fair value (amortized cost: $1,680 and $1,333; net of allowance for credit losses: $0 and $0) | ||
Investments: | ||
Debt securities available for sale, at fair value | $ 1,682 | $ 1,332 |
Unaudited Consolidated Balanc_2
Unaudited Consolidated Balance Sheets (Parentheticals) - USD ($) shares in Millions, $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Available for sale securities, amortized cost | $ 25,562 | $ 22,615 |
Allowance for credit losses on investments | 57 | 41 |
Allowance for credit losses on premiums receivable | 34 | 35 |
Allowance for credit losses on reinsurance recoverable | 23 | 22 |
Allowance for credit losses on contractholder receivable | $ 3 | $ 3 |
Common shares, par value per share | $ 0.0011 | $ 0.0011 |
Common shares issued (shares) | 591.4 | 588.3 |
Common shares held in treasury (shares) | 218.3 | 217.9 |
Fixed maturities | ||
Available for sale securities, amortized cost | $ 23,882 | $ 21,282 |
Allowance for credit losses on investments | 57 | 41 |
Short-term investments | ||
Available for sale securities, amortized cost | 1,680 | 1,333 |
Allowance for credit losses on investments | $ 0 | $ 0 |
Unaudited Consolidated Statemen
Unaudited Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues | ||||
Net premiums earned | $ 3,248 | $ 2,471 | $ 9,096 | $ 6,918 |
Net investment income | 269 | 129 | 710 | 315 |
Net realized gains (losses) | (248) | (184) | (354) | (743) |
Other underwriting income | 5 | 3 | 21 | 12 |
Equity in net income (loss) of investment funds accounted for using the equity method | 59 | (19) | 176 | 75 |
Other income (loss) | (4) | (14) | 10 | (35) |
Total revenues | 3,329 | 2,386 | 9,659 | 6,542 |
Expenses | ||||
Losses and loss adjustment expenses | 1,647 | 1,683 | 4,609 | 3,787 |
Acquisition expenses | 575 | 448 | 1,669 | 1,239 |
Other operating expenses | 310 | 275 | 942 | 842 |
Corporate expenses | 20 | 18 | 71 | 78 |
Amortization of intangible assets | 24 | 26 | 71 | 80 |
Interest expense | 34 | 33 | 99 | 99 |
Net foreign exchange (gains) losses | (22) | (91) | 1 | (183) |
Total expenses | 2,588 | 2,392 | 7,462 | 5,942 |
Income (loss) before income taxes and income (loss) from operating affiliates | 741 | (6) | 2,197 | 600 |
Income tax (expense) benefit | (72) | 15 | (203) | (19) |
Income (loss) from operating affiliates | 54 | 9 | 115 | 39 |
Net income (loss) | 723 | 18 | 2,109 | 620 |
Net (income) loss attributable to noncontrolling interests | 0 | (1) | 0 | (3) |
Net income (loss) available to Arch | 723 | 17 | 2,109 | 617 |
Preferred dividends | (10) | (10) | (30) | (30) |
Net income (loss) available to Arch common shareholders | $ 713 | $ 7 | $ 2,079 | $ 587 |
Net income per common share and common share equivalent | ||||
Basic (per share) | $ 1.93 | $ 0.02 | $ 5.64 | $ 1.59 |
Diluted (per share) | $ 1.88 | $ 0.02 | $ 5.50 | $ 1.55 |
Weighted average common shares and common share equivalents outstanding | ||||
Basic (shares) | 369.2 | 365.2 | 368.4 | 369.5 |
Diluted (shares) | 379.4 | 373.7 | 378.3 | 378.4 |
Unaudited Consolidated Statem_2
Unaudited Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Comprehensive Income | ||||
Net income (loss) | $ 723 | $ 18 | $ 2,109 | $ 620 |
Unrealized appreciation (decline) in value of available-for-sale investments: | ||||
Unrealized holding gains (losses) arising during period | (190) | (610) | (118) | (1,892) |
Reclassification of net realized (gains) losses, included in net income (loss) | 96 | 46 | 344 | 206 |
Foreign currency translation adjustments | (40) | (70) | (33) | (141) |
Comprehensive income (loss) | 589 | (616) | 2,302 | (1,207) |
Net (income) loss attributable to noncontrolling interests | 0 | (1) | 0 | (3) |
Comprehensive income (loss) available to Arch | $ 589 | $ (617) | $ 2,302 | $ (1,210) |
Unaudited Consolidated Statem_3
Unaudited Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Millions | Total | Non-cumulative preferred shares | Common shares | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss), net of deferred income tax | Unrealized appreciation (decline) in value of available-for-sale securities, net of deferred income tax | Foreign currency translation adjustments, net of deferred income tax | Common shares held in treasury, at cost |
Balance at beginning of period at Dec. 31, 2021 | $ 830 | $ 1 | $ 2,085 | $ 14,456 | $ (65) | $ 13 | $ (78) | $ (3,761) | |
Amortization of share-based compensation | 80 | ||||||||
Other changes | 22 | ||||||||
Net income (loss) | $ 620 | 620 | |||||||
Net (income) loss attributable to noncontrolling interests | (3) | (3) | |||||||
Preferred share dividends | (30) | (30) | |||||||
Unrealized holding gains (losses) during period, net of reclassification adjustment | (1,686) | ||||||||
Foreign currency translation adjustments | (141) | (141) | |||||||
Shares repurchased for treasury | (612) | ||||||||
Balance at end of period at Sep. 30, 2022 | 11,796 | 830 | 1 | 2,187 | 15,043 | (1,892) | (1,673) | (219) | (4,373) |
Balance at beginning of period at Jun. 30, 2022 | 830 | 1 | 2,170 | 15,036 | (1,258) | (1,109) | (149) | (4,361) | |
Amortization of share-based compensation | 14 | ||||||||
Other changes | 3 | ||||||||
Net income (loss) | 18 | 18 | |||||||
Net (income) loss attributable to noncontrolling interests | (1) | (1) | |||||||
Preferred share dividends | (10) | (10) | |||||||
Unrealized holding gains (losses) during period, net of reclassification adjustment | (564) | ||||||||
Foreign currency translation adjustments | (70) | (70) | |||||||
Shares repurchased for treasury | (12) | ||||||||
Balance at end of period at Sep. 30, 2022 | 11,796 | 830 | 1 | 2,187 | 15,043 | (1,892) | (1,673) | (219) | (4,373) |
Balance at beginning of period at Dec. 31, 2022 | 12,910 | 830 | 1 | 2,211 | 15,892 | (1,646) | (1,512) | (134) | (4,378) |
Amortization of share-based compensation | 73 | ||||||||
Other changes | 13 | ||||||||
Net income (loss) | 2,109 | 2,109 | |||||||
Net (income) loss attributable to noncontrolling interests | 0 | 0 | |||||||
Preferred share dividends | (30) | (30) | |||||||
Unrealized holding gains (losses) during period, net of reclassification adjustment | 226 | ||||||||
Foreign currency translation adjustments | (33) | (33) | |||||||
Shares repurchased for treasury | (29) | ||||||||
Balance at end of period at Sep. 30, 2023 | 15,239 | 830 | 1 | 2,297 | 17,971 | (1,453) | (1,286) | (167) | (4,407) |
Balance at beginning of period at Jun. 30, 2023 | 830 | 1 | 2,278 | 17,258 | (1,319) | (1,192) | (127) | (4,407) | |
Amortization of share-based compensation | 15 | ||||||||
Other changes | 4 | ||||||||
Net income (loss) | 723 | 723 | |||||||
Net (income) loss attributable to noncontrolling interests | 0 | 0 | |||||||
Preferred share dividends | (10) | (10) | |||||||
Unrealized holding gains (losses) during period, net of reclassification adjustment | (94) | ||||||||
Foreign currency translation adjustments | (40) | (40) | |||||||
Shares repurchased for treasury | 0 | ||||||||
Balance at end of period at Sep. 30, 2023 | $ 15,239 | $ 830 | $ 1 | $ 2,297 | $ 17,971 | $ (1,453) | $ (1,286) | $ (167) | $ (4,407) |
Unaudited Consolidated Statem_4
Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Operating Activities | ||
Net income (loss) | $ 2,109 | $ 620 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Net realized (gains) losses | 367 | 742 |
Equity in net (income) or loss of investment funds accounted for using the equity method and other income or loss | (104) | 107 |
Amortization of intangible assets | 71 | 80 |
Share-based compensation | 73 | 80 |
Changes in: | ||
Reserve for losses and loss adjustment expenses, net of unpaid losses and loss adjustment expenses recoverable | 1,604 | 1,554 |
Unearned premiums, net of ceded unearned premiums | 1,111 | 1,125 |
Premiums receivable | (1,333) | (1,096) |
Deferred acquisition costs | (190) | (242) |
Reinsurance balances payable | 692 | 128 |
Other items, net | (316) | (264) |
Net cash provided by operating activities | 4,084 | 2,834 |
Investing Activities | ||
Purchases of fixed maturity investments | (13,024) | (13,065) |
Purchases of equity securities | (176) | (787) |
Purchases of other investments | (1,112) | (1,270) |
Proceeds from sales of fixed maturity investments | 9,655 | 9,990 |
Proceeds from sales of equity securities | 216 | 1,540 |
Proceeds from sales, redemptions and maturities of other investments | 345 | 1,075 |
Proceeds from redemptions and maturities of fixed maturity investments | 589 | 578 |
Net settlements of derivative instruments | (69) | (106) |
Net (purchases) sales of short-term investments | (323) | (152) |
Purchases of fixed assets | (37) | (37) |
Other | 0 | 128 |
Net cash used for investing activities | (3,936) | (2,106) |
Financing Activities | ||
Purchases of common shares under share repurchase program | 0 | (586) |
Proceeds from common shares issued, net | 5 | (3) |
Change in third party investment in redeemable noncontrolling interests | (22) | 0 |
Other | (5) | (85) |
Preferred dividends paid | (30) | (30) |
Net cash used for financing activities | (52) | (704) |
Effects of exchange rate changes on foreign currency cash and restricted cash | (14) | (80) |
Increase (decrease) in cash and restricted cash | 82 | (56) |
Cash and restricted cash, beginning of year | 1,273 | 1,314 |
Cash and restricted cash, end of period | $ 1,355 | $ 1,258 |
Basis of Presentation and Recen
Basis of Presentation and Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Recent Accounting Pronouncements | General Arch Capital Group Ltd. (“Arch Capital”) is a publicly listed Bermuda exempted company which provides insurance, reinsurance and mortgage insurance on a worldwide basis through its wholly-owned subsidiaries. As used herein, the “Company” means Arch Capital and its subsidiaries. Basis of Presentation The interim consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). 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 materially from those estimates and assumptions. In the opinion of management, the accompanying unaudited interim consolidated financial statements reflect all adjustments (consisting of normally recurring accruals) necessary for a fair statement of results on an interim basis. The results of any interim period are not necessarily indicative of the results for a full year or any future periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted; however, management believes that the disclosures are adequate to make the information presented not misleading. This report should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (“2022 Form 10-K”), including the Company’s audited consolidated financial statements and related notes. 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, comprehensive income, shareholders’ equity or cash flows. All amounts are in millions, except per share amounts, unless otherwise noted. Recent Accounting Pronouncements Recently Issued Accounting Standards Adopted For information regarding additional accounting standards that the Company has not yet adopted, see note 3(t), “Significant Accounting Policies—Recent Accounting Pronouncements,” of the notes to consolidated financial statements in the Company’s 2022 Form 10-K. |
Share Transactions
Share Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
Share transactions | Share Repurchases The Board of Directors of Arch Capital has authorized the investment in Arch Capital’s common shares through a share repurchase program. At September 30, 2023, $1.0 billion 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 through December 31, 2024. 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. Employee Share Purchase Plan Upon shareholder approval on May 4, 2023, the Amended and Restated Arch Capital Group Ltd. 2007 Employee Share Purchase Plan (the “ESPP”) became effective. The total common shares that may be purchased under the ESPP was increased by 3.0 million shares for a total of 12.75 million shares authorized. The purpose of the ESPP is to give employees of the Company an opportunity to purchase common shares through payroll deductions, thereby encouraging employees to share in the economic growth and success of the Company. The ESPP is designed to qualify as an “employee share purchase plan” under Section 423 of the Internal Revenue Code of 1986, as amended. At September 30, 2023, 3.7 million shares remain available for issuance. |
Earnings Per Common Share
Earnings Per Common Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | The following table sets forth the computation of basic and diluted earnings per common share: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Numerator: Net income (loss) $ 723 $ 18 $ 2,109 $ 620 Net (income) loss attributable to noncontrolling interests — (1) — (3) Net income (loss) available to Arch 723 17 2,109 617 Preferred dividends (10) (10) (30) (30) Net income (loss) available to Arch common shareholders $ 713 $ 7 $ 2,079 $ 587 Denominator: Weighted average common shares and common share equivalents outstanding — basic 369.2 365.2 368.4 369.5 Effect of dilutive common share equivalents: Nonvested restricted shares 2.6 2.3 2.4 2.2 Stock options (1) 7.6 6.2 7.5 6.7 Weighted average common shares and common share equivalents outstanding — diluted 379.4 373.7 378.3 378.4 Earnings per common share: Basic $ 1.93 $ 0.02 $ 5.64 $ 1.59 Diluted $ 1.88 $ 0.02 $ 5.50 $ 1.55 (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 the 2023 third quarter and 2022 third quarter, the number of stock options excluded were 0.3 million and 0.8 million, respectively. For the nine months ended September 30, 2023 and 2022, the number of stock options excluded were 0.5 million and 0.8 million, respectively. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | 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 Chief Executive Officer, the Chief Financial Officer and Treasurer and the President and Chief Underwriting Officer are the Company’s chief operating decision makers. They 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 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 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; professional lines; programs; property, energy, marine and aviation; travel, accident and health; warranty and lenders solutions; 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 includes the Company’s U.S. primary mortgage insurance business, investment and services related to U.S. credit-risk transfer (“CRT”) which are predominately with government sponsored enterprises (“GSEs”) and international mortgage insurance and reinsurance operations. Arch Mortgage Insurance Company and United Guaranty Residential Insurance Company (combined “Arch MI U.S.”) are approved as eligible mortgage insurers by Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”), each a GSE. Arch MI U.S. also includes Arch Mortgage Guaranty Company, which is not a GSE-approved entity. The corporate segment results include net investment income, net realized gains or losses (which includes realized and unrealized changes in the fair value of equity securities and assets accounted for using the fair value option, realized and unrealized gains and losses on derivative instruments and changes in the allowance for credit losses on financial assets), equity in net income or loss of investment funds accounted for using the equity method, other income (loss), corporate expenses, transaction costs and other, amortization of intangible assets, interest expense, net foreign exchange gains or losses, income taxes items, income or loss from operating affiliates and items related to the Company’s non cumulative preferred shares. The following tables summarize the Company’s underwriting income or loss by segment, together with a reconciliation of underwriting income or loss to net income available to Arch common shareholders: Three Months Ended September 30, 2023 Insurance Reinsurance Mortgage Total Gross premiums written (1) $ 2,043 $ 2,138 $ 347 $ 4,527 Premiums ceded (521) (576) (76) (1,172) Net premiums written 1,522 1,562 271 3,355 Change in unearned premiums (110) (19) 22 (107) Net premiums earned 1,412 1,543 293 3,248 Other underwriting income (loss) — 2 3 5 Losses and loss adjustment expenses (812) (870) 35 (1,647) Acquisition expenses (269) (304) (2) (575) Other operating expenses (202) (61) (47) (310) Underwriting income (loss) $ 129 $ 310 $ 282 721 Net investment income 269 Net realized gains (losses) (248) Equity in net income (loss) of investment funds accounted for using the equity method 59 Other income (loss) (4) Corporate expenses (2) (20) Transaction costs and other (2) — Amortization of intangible assets (24) Interest expense (34) Net foreign exchange gains (losses) 22 Income (loss) before income taxes and income (loss) from operating affiliates 741 Income tax (expense) benefit (72) Income (loss) from operating affiliates 54 Net income (loss) 723 Net (income) loss attributable to noncontrolling interests — Net income (loss) available to Arch 723 Preferred dividends (10) Net income (loss) available to Arch common shareholders $ 713 Underwriting Ratios Loss ratio 57.5 % 56.4 % (12.1) % 50.7 % Acquisition expense ratio 19.1 % 19.7 % 0.6 % 17.7 % Other operating expense ratio 14.3 % 3.9 % 16.2 % 9.5 % Combined ratio 90.9 % 80.0 % 4.7 % 77.9 % Goodwill and intangible assets $ 220 $ 132 $ 387 $ 739 (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. (2) Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘transaction costs and other.’ Three Months Ended September 30, 2022 Insurance Reinsurance Mortgage Total Gross premiums written (1) $ 1,862 $ 1,639 $ 362 $ 3,861 Premiums ceded (493) (560) (86) (1,137) Net premiums written 1,369 1,079 276 2,724 Change in unearned premiums (182) (77) 6 (253) Net premiums earned 1,187 1,002 282 2,471 Other underwriting income (loss) — — 3 3 Losses and loss adjustment expenses (823) (928) 68 (1,683) Acquisition expenses (233) (208) (7) (448) Other operating expenses (165) (63) (47) (275) Underwriting income (loss) $ (34) $ (197) $ 299 68 Net investment income 129 Net realized gains (losses) (184) Equity in net income (loss) of investment funds accounted for using the equity method (19) Other income (loss) (14) Corporate expenses (2) (18) Transaction costs and other (2) — Amortization of intangible assets (26) Interest expense (33) Net foreign exchange gains (losses) 91 Income (loss) before income taxes and income (loss) from operating affiliates (6) Income tax (expense) benefit 15 Income (loss) from operating affiliates 9 Net income (loss) 18 Net (income) loss attributable to noncontrolling interests (1) Net income (loss) available to Arch 17 Preferred dividends (10) Net income (loss) available to Arch common shareholders $ 7 Underwriting Ratios Loss ratio 69.3 % 92.6 % (24.1) % 68.1 % Acquisition expense ratio 19.6 % 20.8 % 2.4 % 18.1 % Other operating expense ratio 13.9 % 6.3 % 16.5 % 11.1 % Combined ratio 102.8 % 119.7 % (5.2) % 97.3 % Goodwill and intangible assets $ 225 $ 141 $ 441 $ 807 (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. (2) Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘transaction costs and other.’ Nine Months Ended September 30, 2023 Insurance Reinsurance Mortgage Total Gross premiums written (1) $ 5,977 $ 7,142 $ 1,037 $ 14,152 Premiums ceded (1,564) (2,145) (240) (3,945) Net premiums written 4,413 4,997 797 10,207 Change in unearned premiums (416) (781) 86 (1,111) Net premiums earned 3,997 4,216 883 9,096 Other underwriting income (loss) — 9 12 21 Losses and loss adjustment expenses (2,276) (2,379) 46 (4,609) Acquisition expenses (778) (875) (16) (1,669) Other operating expenses (592) (203) (147) (942) Underwriting income (loss) $ 351 $ 768 $ 778 1,897 Net investment income 710 Net realized gains (losses) (354) Equity in net income (loss) of investment funds accounted for using the equity method 176 Other income (loss) 10 Corporate expenses (2) (69) Transaction costs and other (2) (2) Amortization of intangible assets (71) Interest expense (99) Net foreign exchange gains (losses) (1) Income (loss) before income taxes and income (loss) from operating affiliates 2,197 Income tax (expense) benefit (203) Income (loss) from operating affiliates 115 Net income (loss) 2,109 Net (income) loss attributable to noncontrolling interests — Net income (loss) available to Arch 2,109 Preferred dividends (30) Net income (loss) available to Arch common shareholders $ 2,079 Underwriting Ratios Loss ratio 57.0 % 56.4 % (5.3) % 50.7 % Acquisition expense ratio 19.5 % 20.7 % 1.8 % 18.3 % Other operating expense ratio 14.8 % 4.8 % 16.7 % 10.4 % Combined ratio 91.3 % 81.9 % 13.2 % 79.4 % (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. (2) Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘transaction costs and other.’ Nine Months Ended September 30, 2022 Insurance Reinsurance Mortgage Total Gross premiums written (1) $ 5,287 $ 5,151 $ 1,099 $ 11,532 Premiums ceded (1,483) (1,770) (241) (3,489) Net premiums written 3,804 3,381 858 8,043 Change in unearned premiums (488) (647) 10 (1,125) Net premiums earned 3,316 2,734 868 6,918 Other underwriting income (loss) — 6 6 12 Losses and loss adjustment expenses (2,054) (1,920) 187 (3,787) Acquisition expenses (643) (569) (27) (1,239) Other operating expenses (493) (199) (150) (842) Underwriting income (loss) $ 126 $ 52 $ 884 1,062 Net investment income 315 Net realized gains (losses) (743) Equity in net income (loss) of investment funds accounted for using the equity method 75 Other income (loss) (35) Corporate expenses (2) (78) Transaction costs and other (2) — Amortization of intangible assets (80) Interest expense (99) Net foreign exchange gains (losses) 183 Income (loss) before income taxes and income (loss) from operating affiliates 600 Income tax (expense) benefit (19) Income (loss) from operating affiliates 39 Net income (loss) 620 Net (income) loss attributable to noncontrolling interests (3) Net income (loss) available to Arch 617 Preferred dividends (30) Net income (loss) available to Arch common shareholders $ 587 Underwriting Ratios Loss ratio 61.9 % 70.2 % (21.6) % 54.7 % Acquisition expense ratio 19.4 % 20.8 % 3.2 % 17.9 % Other operating expense ratio 14.9 % 7.3 % 17.3 % 12.2 % Combined ratio 96.2 % 98.3 % (1.1) % 84.8 % (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. |
Reserve for Losses and Loss Adj
Reserve for Losses and Loss Adjustment Expenses | 9 Months Ended |
Sep. 30, 2023 | |
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract] | |
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: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Reserve for losses and loss adjustment expenses at beginning of period $ 21,268 $ 18,194 $ 20,032 $ 17,757 Unpaid losses and loss adjustment expenses recoverable 6,394 5,686 6,280 5,599 Net reserve for losses and loss adjustment expenses at beginning of period 14,874 12,508 13,752 12,158 Net incurred losses and loss adjustment expenses relating to losses occurring in: Current year 1,793 1,863 5,012 4,279 Prior years (146) (180) (403) (492) Total net incurred losses and loss adjustment expenses 1,647 1,683 4,609 3,787 Net foreign exchange (gains) losses and other (123) (245) (24) (527) Net paid losses and loss adjustment expenses relating to losses occurring in: Current year (345) (227) (700) (464) Prior years (713) (538) (2,297) (1,773) Total net paid losses and loss adjustment expenses (1,058) (765) (2,997) (2,237) Net reserve for losses and loss adjustment expenses at end of period 15,340 13,181 15,340 13,181 Unpaid losses and loss adjustment expenses recoverable 6,496 6,107 6,496 6,107 Reserve for losses and loss adjustment expenses at end of period $ 21,836 $ 19,288 $ 21,836 $ 19,288 Development on Prior Year Loss Reserves 2023 Third Quarter During the 2023 third quarter, the Company recorded net favorable development on prior year loss reserves of $146 million, which consisted of $10 million from the insurance segment, $44 million from the reinsurance segment and $92 million from the mortgage segment. The insurance segment’s net favorable development of $10 million, or 0.7 loss ratio points, for the 2023 third quarter consisted of $30 million of net favorable development in short-tailed and long-tailed lines and $20 million of net adverse development in medium-tailed lines. Net favorable development in short-tailed lines included $8 million of favorable development in property (excluding marine), primarily from the 2021 and 2022 accident years ( i.e. , the year in which a loss occurred), $6 million of favorable development in warranty and lenders solutions and $6 million favorable development related to travel and accident business, both primarily from the 2022 accident year. Net favorable development in long-tailed lines included $7 million of favorable development in executive assurance business, primarily from the 2019, 2021 and 2022 accident years, and $7 million of favorable development in alternative markets business, spread across most prior accident years. Net adverse development in medium-tailed lines included $25 million of adverse development in professional liability, primarily from 2019 and 2020 accident years. The reinsurance segment’s net favorable development of $44 million, or 2.8 loss ratio points, for the 2023 third quarter consisted of $69 million of net favorable development in short-tailed lines and $25 million of net adverse development in medium and long-tailed lines. Net favorable development in short-tailed lines included $29 million of favorable development related to property other than property catastrophe business, primarily from the 2020 to 2022 underwriting years ( i.e. , all premiums and losses attributable to contracts having an inception or renewal date within the given twelve-month period), $22 million of favorable development related to property catastrophe business, primarily from the 2021 and 2022 underwriting years, and $19 million of favorable development related to other specialty lines, primarily from the 2021 and prior underwriting years. Net adverse development in medium-tailed lines included $4 million in marine and aviation lines, primarily from the 2021 underwriting year, while net adverse development in long-tailed lines reflected $21 million of adverse development in casualty business, primarily from the 2016 to 2020 underwriting years. The mortgage segment’s net favorable development was $92 million, or 31.4 loss ratio points, for the 2023 third quarter. Such amounts were primarily related to reductions on reserves for delinquent loans associated with the U.S. first lien portfolio from the 2020 through 2022 accident years. The Company’s credit risk transfer and international businesses also contributed to the favorable development. 2022 Third Quarter During the 2022 third quarter, the Company recorded net favorable development on prior year loss reserves of $180 million, which consisted of $5 million from the insurance segment, $49 million from the reinsurance segment and $126 million from the mortgage segment. The insurance segment’s net favorable development of $5 million, or 0.5 loss ratio points, for the 2022 third quarter consisted of $16 million of net favorable development in short-tailed lines and $11 million of net adverse development in medium-tailed and long-tailed lines. Net favorable development in short-tailed lines reflected $9 million of favorable development in property (excluding marine), primarily from 2020 and 2021 accident years and $6 million of favorable development in warranty and lenders solutions products, primarily from the 2021 accident year. Net adverse development in medium-tailed lines included $11 million of adverse development in professional liability business, primarily from the 2013 to 2016 and 2020 accident years, partially offset by favorable development in marine business of $6 million, across most accident years. Net adverse development in long-tailed lines reflected $12 million related to casualty business, primarily from the 2014 and 2020 accident years, partially offset by favorable development in construction, executive assurance and other lines of business. The reinsurance segment’s net favorable development of $49 million, or 4.9 loss ratio points, for the 2022 third quarter consisted of $58 million of net favorable development in short-tailed and medium-tailed lines and $9 million of net adverse development in long-tailed lines. Net favorable development in short-tailed lines reflected $36 million of favorable development related to property other than property catastrophe business, primarily from 2015 to 2021 underwriting years and $13 million of favorable development related to property catastrophe business, primarily from the 2014 to 2017 underwriting years. Net favorable development in medium-tailed lines included $8 million in marine and aviation lines, across most underwriting years. Net adverse development in long-tailed lines reflected $10 million related to casualty business, primarily from the 2014 to 2017 underwriting years. The mortgage segment’s net favorable development was $126 million, or 44.7 loss ratio points, for the 2022 third quarter, with the largest contributor being reserve releases associated with the U.S. first lien portfolio from the 2020 and 2021 accident years. The Company’s credit risk transfer, international, second lien and student loan businesses also contributed to the favorable development. Nine Months Ended September 30, 2023 During the nine months ended September 30, 2023, the Company recorded net favorable development on prior year loss reserves of $403 million, which consisted of $34 million from the insurance segment, $126 million from the reinsurance segment and $243 million from the mortgage segment. The insurance segment’s net favorable development of $34 million, or 0.8 loss ratio points, for the 2023 period consisted of $86 million of net favorable development in short and long-tailed lines and $52 million of net adverse development in medium-tailed lines. Net favorable development in short-tailed lines reflected $33 million of favorable development in property (excluding marine), primarily from the 2022 accident year, $20 million of favorable development related to warranty and lenders solutions business, primarily from the 2022 accident year and $11 million of favorable development related to travel and accident business, primarily from the 2020 and 2022 accident years. Net favorable development in long-tailed lines included $24 million of favorable development in executive assurance business, primarily from the 2019 and 2021 accident years, and $13 million of favorable development in alternative markets business, from 2021 and prior accident years. Net adverse development in medium-tailed lines included $48 million of adverse development in professional liability business, primarily from the 2017 to 2020 accident years, and $11 million of adverse development in contract binding business, primarily from the 2014 to 2017 accident years. Such amounts were partially offset by $11 million of favorable development in marine business, primarily from 2021 and 2022 accident years. The reinsurance segment’s net favorable development of $126 million, or 3.0 loss ratio points, for the 2023 period consisted of $168 million of net favorable development from short and medium-tailed lines, partially offset by $42 million of net adverse development from long-tailed lines. Net favorable development in short-tailed lines reflected $75 million of favorable development from property other than property catastrophe business, primarily from the 2021 and 2022 underwriting years, $29 million of favorable development from property catastrophe, primarily from the 2019 and 2022 underwriting years, $46 million from other specialty business, primarily from the 2021 underwriting year, and $12 million of favorable development from other lines of business, primarily from the 2020 underwriting year. Net favorable development in medium-tailed lines included $5 million in marine and aviation lines, primarily from the 2019 and prior underwriting years. Net adverse development in long-tailed lines primarily reflected $39 million in casualty, primarily from the 2014 to 2020 underwriting years. The mortgage segment’s net favorable development was $243 million, or 27.5 loss ratio points, for the 2023 period, with the largest contributor being reserve releases associated with the U.S. first lien portfolio from the 2020 to 2022 accident years. The Company’s credit risk transfer and international businesses also contributed to the favorable development. Nine Months Ended September 30, 2022 During the nine months ended September 30, 2022, the Company recorded net favorable development on prior year loss reserves of $492 million, which consisted of $19 million from the insurance segment, $127 million from the reinsurance segment, $346 million from the mortgage segment. The insurance segment’s net favorable development of $19 million, or 0.6 loss ratio points, for the 2022 period consisted of $49 million of net favorable development in short-tailed and $30 million of net adverse development in medium and long-tailed lines. Net favorable development in short-tailed lines reflected $37 million of favorable development in warranty and lenders solutions business, primarily from the 2021 accident year, and $14 million of favorable development related to travel and accident business, primarily from the 2019 to 2021 accident years. Net adverse development in medium-tailed lines included $25 million of adverse development in professional liability business, primarily from the 2013 to 2015 and 2018 to 2020 accident years, and $6 million of adverse development in contract binding business, across most accident years, partially offset by $11 million of favorable development in marine business, across most accident years. Net adverse development in long-tailed lines reflected $18 million of adverse development related to casualty business, primarily from the 2020 and 2021 accident years, partially offset by $17 million of favorable development in other business, including alternative markets and excess workers’ compensation, primarily from the 2019 and prior accident years. The reinsurance segment’s net favorable development of $127 million, or 4.7 loss ratio points, for the 2022 period consisted of $148 million of net favorable development from short and medium-tailed lines, partially offset by $20 million of net adverse development from long-tailed lines. Net favorable development in short-tailed lines reflected $83 million of favorable development from property other than property catastrophe business, primarily from the 2015 to 2021 underwriting years, $22 million of favorable development from property catastrophe, primarily from the 2018 to 2020 underwriting years, and $20 million from other specialty business, primarily from the 2021 underwriting year. Net favorable development in medium-tailed lines included $23 million in marine and aviation lines, across most underwriting years. Net adverse development in long-tailed lines primarily reflected $19 million in casualty reserves, primarily from the 2021 underwriting year. The mortgage segment’s net favorable development was $346 million, or 39.9 loss ratio points, for the 2022 period, with the largest contributor being reserve releases associated with the U.S. first lien portfolio from the 2020 and 2021 accident years. The Company’s credit risk transfer, international, second lien and student loan businesses also contributed to the favorable development. |
Allowance for Expected Credit L
Allowance for Expected Credit Losses | 9 Months Ended |
Sep. 30, 2023 | |
Credit Loss [Abstract] | |
Allowance for expected credit losses | Premiums Receivable The following table provides a roll forward of the allowance for expected credit losses of the Company’s premium receivables: Premium Receivables, Net of Allowance Allowance for Expected Credit Losses Three Months Ended September 30, 2023 Balance at beginning of period $ 5,296 $ 34 Change for provision of expected credit losses (1) $ — Balance at end of period $ 4,937 $ 34 Three Months Ended September 30, 2022 Balance at beginning of period $ 3,634 $ 38 Change for provision of expected credit losses (1) $ — Balance at end of period $ 3,579 $ 38 Nine Months Ended September 30, 2023 Balance at beginning of period $ 3,625 $ 35 Change for provision of expected credit losses (1) (1) Balance at end of period $ 4,937 $ 34 Nine Months Ended September 30, 2022 Balance at beginning of period $ 2,633 $ 40 Change for provision of expected credit losses (1) (2) Balance at end of period $ 3,579 $ 38 (1) Amounts deemed uncollectible are written-off in operating expenses. For the 2023 third quarter and 2022 third quarter, amounts written off were nil and $2 million, respectively. For the nine months ended September 30, 2023 and 2022 period, amounts written off were $2 million and $7 million, respectively. Reinsurance Recoverables The following table provides a roll forward of the allowance for expected credit losses of the Company’s reinsurance recoverables: Reinsurance Recoverables, Net of Allowance Allowance for Expected Credit Losses Three Months Ended September 30, 2023 Balance at beginning of period $ 6,717 $ 22 Change for provision of expected credit losses 1 Balance at end of period $ 6,821 $ 23 Three Months Ended September 30, 2022 Balance at beginning of period $ 5,939 $ 15 Change for provision of expected credit losses 2 Balance at end of period $ 6,356 $ 17 Nine Months Ended September 30, 2023 Balance at beginning of period $ 6,564 $ 22 Change for provision of expected credit losses 1 Balance at end of period $ 6,821 $ 23 Nine Months Ended September 30, 2022 Balance at beginning of period $ 5,881 $ 13 Change for provision of expected credit losses 4 Balance at end of period $ 6,356 $ 17 The following table summarizes the Company’s reinsurance recoverables on paid and unpaid losses (not including ceded unearned premiums): September 30, December 31 2023 2022 Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses $ 6,821 $ 6,564 % due from carriers with A.M. Best rating of “A-” or better 66.7 % 68.8 % % due from all other rated carriers 0.2 % 0.1 % % due from all other carriers with no A.M. Best rating (1) 33.1 % 31.1 % Largest balance due from any one carrier as % of total shareholders’ equity 8.3 % 9.0 % (1) At September 30, 2023 and December 31, 2022 over 95% of such amount were collateralized through reinsurance trusts, funds withheld arrangements, letters of credit or other, respectively. Contractholder Receivables The following table provides a roll forward of the allowance for expected credit losses of the Company’s contractholder receivables: Contract-holder Receivables, Net of Allowance Allowance for Expected Credit Losses Three Months Ended September 30, 2023 Balance at beginning of period $ 1,761 $ 3 Change for provision of expected credit losses — Balance at end of period $ 1,805 $ 3 Three Months Ended September 30, 2022 Balance at beginning of period $ 1,758 $ 3 Change for provision of expected credit losses (1) Balance at end of period 1,736 $ 2 Nine Months Ended September 30, 2023 Balance at beginning of period $ 1,731 $ 3 Change for provision of expected credit losses — Balance at end of period $ 1,805 $ 3 Nine Months Ended September 30, 2022 Balance at beginning of period $ 1,829 $ 3 Change for provision of expected credit losses (1) Balance at end of period 1,736 $ 2 |
Investment Information
Investment Information | 9 Months Ended |
Sep. 30, 2023 | |
Disclosure Investment Information [Abstract] | |
Investment | Available For Sale Investments 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 Allowance for Expected Credit Losses Cost or September 30, 2023 Fixed maturities: Corporate bonds $ 10,064 $ 33 $ (747) $ (47) $ 10,825 U.S. government and government agencies 5,662 15 (240) — 5,887 Asset backed securities 2,342 10 (76) (5) 2,413 Non-U.S. government securities 2,052 9 (173) (2) 2,218 Commercial mortgage backed securities 1,102 — (46) (3) 1,151 Residential mortgage backed securities 965 5 (100) — 1,060 Municipal bonds 298 2 (32) — 328 Total 22,485 74 (1,414) (57) 23,882 Short-term investments 1,682 3 (1) — 1,680 Total $ 24,167 $ 77 $ (1,415) $ (57) $ 25,562 December 31, 2022 Fixed maturities: Corporate bonds $ 8,020 $ 55 $ (781) $ (30) $ 8,776 U.S. government and government agencies 5,162 15 (343) — 5,490 Asset backed securities 1,927 1 (107) (6) 2,039 Non-U.S. government securities 2,313 9 (238) (2) 2,544 Commercial mortgage backed securities 1,047 1 (58) (3) 1,107 Residential mortgage backed securities 795 5 (87) — 877 Municipal bonds 419 3 (33) — 449 Total 19,683 89 (1,647) (41) 21,282 Short-term investments 1,332 1 (2) — 1,333 Total $ 21,015 $ 90 $ (1,649) $ (41) $ 22,615 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 September 30, 2023 Fixed maturities: Corporate bonds $ 4,813 $ (141) $ 5,272 $ (606) $ 10,085 $ (747) U.S. government and government agencies 3,922 (93) 1,294 (147) 5,216 (240) Non-U.S. government securities 1,002 (25) 956 (148) 1,958 (173) Residential mortgage backed securities 420 (15) 521 (85) 941 (100) Asset backed securities 190 (4) 1,287 (72) 1,477 (76) Commercial mortgage backed securities 153 (3) 907 (43) 1,060 (46) Municipal bonds 84 (5) 212 (27) 296 (32) Total 10,584 (286) 10,449 (1,128) 21,033 (1,414) Short-term investments 192 (1) — — 192 (1) Total $ 10,776 $ (287) $ 10,449 $ (1,128) $ 21,225 $ (1,415) December 31, 2022 Fixed maturities: Corporate bonds $ 4,823 $ (393) $ 2,559 $ (388) $ 7,382 $ (781) U.S. government and government agencies 3,557 (197) 1,443 (146) 5,000 (343) Non-U.S. government securities 1,703 (154) 542 (84) 2,245 (238) Residential mortgage backed securities 546 (52) 154 (35) 700 (87) Asset backed securities 1,148 (66) 512 (41) 1,660 (107) Commercial mortgage backed securities 598 (35) 445 (23) 1,043 (58) Municipal bonds 364 (30) 16 (3) 380 (33) Total 12,739 (927) 5,671 (720) 18,410 (1,647) Short-term investments 237 (2) — — 237 (2) Total $ 12,976 $ (929) $ 5,671 $ (720) $ 18,647 $ (1,649) At September 30, 2023, on a lot level basis, approximately 11,140 security lots out of a total of approximately 14,320 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 $6 million. At December 31, 2022, on a lot level basis, approximately 9,810 security lots out of a total of approximately 12,590 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 $7 million. The contractual maturities of the Company’s fixed maturities 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. September 30, 2023 December 31, 2022 Maturity Estimated Amortized Estimated Amortized Due in one year or less $ 683 $ 708 $ 511 $ 537 Due after one year through five years 12,561 13,123 11,016 11,715 Due after five years through 10 years 4,515 5,035 3,984 4,527 Due after 10 years 317 392 403 480 18,076 19,258 15,914 17,259 Residential mortgage backed securities 965 1,060 795 877 Commercial mortgage backed securities 1,102 1,151 1,047 1,107 Asset backed securities 2,342 2,413 1,927 2,039 Total $ 22,485 $ 23,882 $ 19,683 $ 21,282 Equity Securities, at Fair Value At September 30, 2023, the Company held $894 million of equity securities, at fair value, compared to $860 million at December 31, 2022. Such holdings include publicly traded common stocks primarily in the consumer cyclical and non-cyclical, technology, communication and financial sectors and exchange-traded funds in fixed income, equity and other sectors. Other Investments, at Fair Value The following table summarizes the Company’s other investments and other investable assets: September 30, December 31, Other investments $ 1,404 $ 1,043 Fixed maturities 644 554 Equity securities 7 14 Short-term investments 13 33 Total $ 2,068 $ 1,644 The following table summarizes the Company’s other investments, as detailed in the previous table, by strategy: September 30, December 31, Lending $ 460 $ 406 Investment grade fixed income 418 271 Term loan investments 242 164 Private equity 182 123 Credit related funds 84 56 Energy 18 23 Total $ 1,404 $ 1,043 Investments Accounted For Using the Equity Method The following table summarizes the Company’s investments accounted for using the equity method, by strategy: September 30, December 31, Credit related funds $ 1,165 $ 1,136 Private equity 1,083 917 Real estate 620 535 Lending 555 531 Infrastructure 298 245 Fixed income 258 130 Equities 171 169 Energy 101 111 Total $ 4,251 $ 3,774 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. Limited Partnership Interests In the normal course of its activities, the Company invests in limited partnerships as part of its overall investment strategy. Such amounts are included in ‘investments accounted for using the equity method’ and ‘investments accounted for using the fair value option.’ The Company has determined that it is not required to consolidate these investments because it is not the primary beneficiary of the funds. 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 following table summarizes investments in limited partnership interests where the Company has a variable interest by balance sheet line item: September 30, December 31, Investments accounted for using the equity method (1) $ 4,251 $ 3,774 Investments accounted for using the fair value option (2) 128 131 Total $ 4,379 $ 3,905 (1) Aggregate unfunded commitments were $3.0 billion at September 30, 2023, compared with $2.6 billion at December 31, 2022. (2) Aggregate unfunded commitments were $32 million at September 30, 2023, compared to $17 million at December 31, 2022. Net Investment Income The components of net investment income were derived from the following sources: September 30, 2023 2022 Three Months Ended Fixed maturities $ 243 $ 124 Equity securities 5 4 Short-term investments 19 9 Other (1) 22 9 Gross investment income 289 146 Investment expenses (20) (17) Net investment income $ 269 $ 129 Nine Months Ended Fixed maturities $ 645 $ 311 Equity securities 15 16 Short-term investments 48 16 Other (1) 60 29 Gross investment income 768 372 Investment expenses (58) (57) Net investment income $ 710 $ 315 (1) Amounts include dividends and other distributions on investment funds, term loan investments, funds held balances, cash balances and other items. Net Realized Gains (Losses) Net realized gains (losses), which include changes in the allowance for credit losses on financial assets and net impairment losses recognized in earnings were as follows: September 30, 2023 2022 Three Months Ended Available for sale securities: Gross gains on investment sales $ 12 $ 18 Gross losses on investment sales (116) (74) Change in fair value of assets and liabilities accounted for using the fair value option: Fixed maturities (16) (19) Other investments 3 (18) Equity securities — (1) Short-term investments — (1) Equity securities, at fair value: Net realized gains (losses) on sales during the period 14 (6) Net unrealized gains (losses) on equity securities still held at reporting date (46) (36) Allowance for credit losses: Investments related — 9 Underwriting related (1) (4) Derivative instruments (1) (102) (48) Other 4 (4) Net realized gains (losses) $ (248) $ (184) Nine Months Ended Available for sale securities: Gross gains on investment sales $ 51 $ 53 Gross losses on investment sales (396) (239) Change in fair value of assets and liabilities accounted for using the fair value option: Fixed maturities (12) (89) Other investments 17 (37) Equity securities 1 (6) Short-term investments — (3) Equity securities, at fair value: Net realized gains (losses) on sales during the period 50 76 Net unrealized gains (losses) on equity securities still held at reporting date 17 (318) Allowance for credit losses: Investments related (23) (48) Underwriting related (2) (7) Derivative instruments (1) (61) (118) Other 4 (7) Net realized gains (losses) $ (354) $ (743) (1) See note 9 for information on the Company’s derivative instruments. Equity in Net Income (Loss) of Investment Funds Accounted for Using the Equity Method The Company recorded income of $59 million related to investment funds accounted for using the equity method in the 2023 third quarter, compared to a loss of $19 million for the 2022 third quarter and income of $176 million for the nine months ended September 30, 2023, compared to income of $75 million for nine months ended September 30, 2022. In applying the equity method, 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 market value of the underlying securities in the funds). Such investments are generally recorded on a one Investments in Operating Affiliates Investments in which the Company has significant influence over the operating and financial policies are classified as ‘investments in operating affiliates’ on the Company’s balance sheets and are accounted for under the equity method. Such investments primarily include the Company’s investment in Coface SA (“Coface”), Greysbridge Holdings Ltd., (“Greysbridge”) and Premia Holdings Ltd. Investments in Coface and Premia Holdings Ltd. are generally recorded on a three month lag, while the Company’s investment in Greysbridge is not recorded on a lag. As of September 30, 2023, the Company owned approximately 29.9% of the issued shares of Coface, or 30% excluding treasury shares, with a carrying value of $521 million, compared to $563 million at December 31, 2022. As of September 30, 2023, the Company owned 40% of Greysbridge with a carrying value of $362 million, compared to $306 million at December 31, 2022. Income from operating affiliates for the 2023 third quarter was $54 million, compared to $9 million, for the 2022 third quarter, and income of $115 million for the nine months ended September 30, 2023, compared to income of $39 million for nine months ended September 30, 2022. See note 15 for information on Company’s transactions with related parties. Allowance for Expected Credit Losses The following table provides a roll forward of the allowance for expected credit losses of the Company’s securities classified as available for sale: Structured Securities (1) Corporate Non-U.S. Total Three Months Ended September 30, 2023 Balance at beginning of period $ 8 $ 50 $ 3 $ 61 Additions for current-period provision for expected credit losses 2 4 — 6 Additions (reductions) for previously recognized expected credit losses — (3) — (3) Reductions due to disposals (2) (4) (1) (7) Balance at end of period $ 8 $ 47 $ 2 $ 57 Three Months Ended September 30, 2022 Balance at beginning of period $ 19 $ 40 $ — $ 59 Additions for current-period provision for expected credit losses 2 2 — 4 Additions (reductions) for previously recognized expected credit losses (10) (3) — (13) Reductions due to disposals (2) (2) — (4) Balance at end of period $ 9 $ 37 $ — $ 46 Nine Months Ended September 30, 2023 Balance at beginning of period $ 9 $ 30 $ 2 $ 41 Additions for current-period provision for expected credit losses 2 5 — 7 Additions (reductions) for previously recognized expected credit losses (1) 18 1 18 Reductions due to disposals (2) (6) (1) (9) Balance at end of period $ 8 $ 47 $ 2 $ 57 Nine Months Ended September 30, 2022 Balance at beginning of period $ 1 $ 2 $ — $ 3 Additions for current-period provision for expected credit losses 13 40 — 53 Additions (reductions) for previously recognized expected credit losses (3) (3) — (6) Reductions due to disposals (2) (2) — (4) Balance at end of period $ 9 $ 37 $ — $ 46 (1) Includes asset backed securities, residential mortgage backed securities and commercial mortgage backed securities. The Company is required to maintain assets on deposit, which primarily consist of fixed maturities, with various regulatory authorities to support its underwriting operations. The Company’s subsidiaries maintain assets in trust accounts as collateral for 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 18, “Commitments and Contingencies,” of the notes to consolidated financial statements in the Company’s 2022 Form 10-K. The following table details the value of the Company’s restricted assets: September 30, December 31, Assets used for collateral or guarantees: Affiliated transactions $ 4,572 $ 4,254 Third party agreements 2,849 2,633 Deposits with U.S. regulatory authorities 788 776 Other (1) 1,250 1,038 Total restricted assets $ 9,459 $ 8,701 (1) Primarily includes Funds at Lloyds, deposits with non-U.S. regulatory authorities and other restricted assets. Reconciliation of Cash and Restricted Cash The following table details reconciliation of cash and restricted cash within the Consolidated Balance Sheets: September 30, December 31, Cash $ 859 $ 855 Restricted cash (included in ‘other assets’) 496 418 Cash and restricted cash $ 1,355 $ 1,273 |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
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 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 reviews its securities measured at fair value and discusses the proper classification of such investments with investment advisers and others. 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) a comparison of the fair value estimates to the Company’s 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. 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. The Company did not adjust any of the prices obtained from the independent pricing sources at September 30, 2023. 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. Where quotes are unavailable, fair value is determined by the Investment Manager using quantitative and qualitative assessments such as internally modeled values. Of the $27.5 billion of financial assets and liabilities measured at fair value at September 30, 2023, approximately $15 million, or 0.1%, were priced using non-binding broker-dealer quotes or modeled valuations. Of the $23.8 billion of financial assets and liabilities measured at fair value at December 31, 2022, approximately $13 million, or 0.1%, were priced using non-binding broker-dealer quotes or modeled valuations. Fixed maturities The Company uses the market approach valuation technique to estimate the fair value of its fixed maturity securities, when possible. The market approach includes obtaining prices from independent pricing services, such as index providers and pricing vendors, as well as to a lesser extent quotes from broker-dealers. 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. The following describes the significant inputs generally used to determine the fair value of the Company’s fixed maturity securities by asset class: U.S. government and government agencies – valuations provided by independent pricing services, with all prices provided through index providers and pricing vendors. 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. The fair values of U.S. government agency securities are generally determined using the spread above the risk-free yield curve. As the yields for the risk-free yield curve and the spreads for these securities are observable market inputs, the fair values of U.S. government agency securities are classified within Level 2. Corporate bonds – valuations provided by independent pricing services, substantially all through index providers and pricing vendors with a small amount through broker-dealers. The fair values of these securities are generally determined using the spread above the risk-free yield curve. These spreads are generally obtained from the new issue market, secondary trading and from broker-dealers who trade in the relevant security market. As the significant inputs used in the pricing process for corporate bonds are observable market inputs, the fair value of these securities are classified within Level 2. A small number of securities are included in Level 3 due to a low level of transparency on the inputs used in the pricing process. Municipal bonds – valuations provided by independent pricing services, with all prices provided through index providers and pricing vendors. The fair values of these securities are generally determined using spreads obtained from broker-dealers who trade in the relevant security market, trade prices and the new issue market. As the significant inputs used in the pricing process for municipal bonds are observable market inputs, the fair value of these securities are classified within Level 2. Residential mortgage-backed securities – valuations provided by independent pricing services, substantially all through pricing vendors and index providers with a small amount through broker-dealers. The fair values of these securities are generally determined through the use of pricing models (including Option Adjusted Spread) which use spreads to determine the expected average life of the securities. These spreads are generally obtained from the new issue market, secondary trading and from broker-dealers who trade in the relevant security market. The pricing services also review prepayment speeds and other indicators, when applicable. As the significant inputs used in the pricing process for mortgage-backed securities are observable market inputs, the fair value of these securities are classified within Level 2. A small number of securities are included in Level 3 due to a low level of transparency on the inputs used in the pricing process. Commercial mortgage-backed securities – valuations provided by independent pricing services, substantially all through index providers and pricing vendors with a small amount through broker-dealers. The fair values of these securities are generally determined through the use of pricing models which use spreads to determine the appropriate average life of the securities. These spreads are generally obtained from the new issue market, secondary trading and from broker-dealers who trade in the relevant security market. The pricing services also review prepayment speeds and other indicators, when applicable. As the significant inputs used in the pricing process for commercial mortgage-backed securities are observable market inputs, the fair value of these securities are classified within Level 2. Non-U.S. government securities – valuations provided by independent pricing services, with all prices provided through index providers and pricing vendors. The fair values of these securities are generally based on international indices or valuation models which include daily observed yield curves, cross-currency basis index spreads and country credit spreads. As the significant inputs used in the pricing process for non-U.S. government securities are observable market inputs, the fair value of these securities are classified within Level 2. Asset-backed securities – valuations provided by independent pricing services, substantially all through index providers and pricing vendors with a small amount through broker-dealers. The fair values of these securities are generally determined through the use of pricing models (including Option Adjusted Spread) which use spreads to determine the appropriate average life of the securities. These spreads are generally obtained from the new issue market, secondary trading and from broker-dealers who trade in the relevant security market. The pricing services also review prepayment speeds and other indicators, when applicable. As the significant inputs used in the pricing process for asset-backed securities are observable market inputs, the fair value of these securities are classified within Level 2. 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. Certain equity securities are included in Level 2 of the valuation hierarchy as the significant inputs used in the pricing process for such securities are observable market inputs. Other equity securities are included in Level 3 due to the lack of an available independent price source for such securities. As the significant inputs used to price these securities are unobservable, the fair value of such securities are classified as Level 3. Other investments The Company’s other investments include term loan investments for which fair values are estimated by using quoted prices of term loan investments with similar characteristics, pricing models or matrix pricing. Such investments are generally classified within Level 2. The fair values for certain of the Company’s other investments are determined using net asset values as advised by external fund managers. The net asset value is based on the fund manager’s valuation of the underlying holdings in accordance with the fund’s governing documents. In accordance with applicable accounting guidance, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. A small number of securities are included in Level 3 due to the lack of an available independent price source for such securities. Derivative instruments The Company’s futures contracts, foreign currency forward contracts, interest rate swaps and other derivatives trade in the over-the-counter derivative market. The Company uses the market approach valuation technique to estimate the fair value for these derivatives based on significant observable market inputs from third party pricing vendors, non-binding broker-dealer quotes and/or recent trading activity. As the significant inputs used in the pricing process for these derivative instruments are observable market inputs, the fair value of these securities are classified within Level 2. Short-term investments The Company determined that certain of its short-term investments held in highly liquid money market-type funds, Treasury bills and commercial paper would be included in Level 1 as their fair values are based on quoted market prices in active markets. The fair values of certain short-term investments are generally determined using the spread above the risk-free yield curve and are classified within Level 2. Other short-term investments are included in Level 3 due to the lack of an available independent price source for such securities. As the significant inputs used to price these short-term securities are unobservable, the fair value of such securities are classified as Level 3. Residential mortgage loans The Company’s residential mortgage loans (included in ‘other assets’ in the consolidated balance sheets) include amounts related to the Company’s whole mortgage loan purchase and sell program. Fair values of residential mortgage loans are generally determined based on market prices. As significant inputs used in pricing process for these residential mortgage loans are observable market inputs, the fair value of these securities are classified within Level 2. Other liabilities The Company’s other liabilities include contingent and deferred consideration liabilities related to the Company’s acquisitions. Contingent consideration liabilities are remeasured at fair value at each balance sheet date with changes in fair value recognized in ‘net realized gains (losses).’ To determine the fair value of contingent consideration liabilities, the Company estimates the future payments using an income approach based on modeled inputs which include a weighted average cost of capital. Deferred consideration liabilities are measured at fair value on the transaction date. The Company determined that contingent and deferred consideration liabilities would be included within Level 3. The following table presents the Company’s financial assets and liabilities measured at fair value by level at September 30, 2023: Estimated Fair Value Measurements Using: Estimated Quoted Prices in Significant Significant Assets measured at fair value: Available for sale securities: Fixed maturities: Corporate bonds $ 10,064 $ — $ 9,940 $ 124 U.S. government and government agencies 5,662 5,640 22 — Asset backed securities 2,342 — 2,342 — Non-U.S. government securities 2,052 — 2,052 — Commercial mortgage backed securities 1,102 — 1,102 — Residential mortgage backed securities 965 — 965 — Municipal bonds 298 — 298 — Total 22,485 5,640 16,721 124 Short-term investments 1,682 1,635 47 — Equity securities, at fair value 894 860 29 5 Derivative instruments (2) 192 — 192 — Residential mortgage loans 2 — 2 — Fair value option: Corporate bonds 620 — 620 — Non-U.S. government bonds 15 — 15 — Asset backed securities 2 — 2 — U.S. government and government agencies 7 7 — — Short-term investments 13 1 8 4 Equity securities 7 3 — 4 Other investments 341 — 241 100 Other investments measured at net asset value (1) 1,063 Total 2,068 11 886 108 Total assets measured at fair value $ 27,323 $ 8,146 $ 17,877 $ 237 Liabilities measured at fair value: Other liabilities $ (21) $ — $ — $ (21) Derivative instruments (2) (114) — (114) — Total liabilities measured at fair value $ (135) $ — $ (114) $ (21) (1) In accordance with applicable accounting guidance, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets. (2) See note 9 . The following table presents the Company’s financial assets and liabilities measured at fair value by level at December 31, 2022: Estimated Fair Value Measurements Using: Estimated Quoted Prices in Significant Significant Assets measured at fair value: Available for sale securities: Fixed maturities: Corporate bonds $ 8,020 $ — $ 7,899 $ 121 U.S. government and government agencies 5,162 5,145 17 — Asset backed securities 1,927 — 1,927 — Non-U.S. government securities 2,313 — 2,313 — Commercial mortgage backed securities 1,047 — 1,047 — Residential mortgage backed securities 795 — 795 — Municipal bonds 419 — 419 — Total 19,683 5,145 14,417 121 Short-term investments 1,332 1,198 134 — Equity securities, at fair value 860 829 28 3 Derivative instruments (2) 149 — 149 — Residential mortgage loans 2 — 2 — Fair value option: Corporate bonds 543 — 543 — Non-U.S. government bonds 4 — 4 — Asset backed securities 2 — 2 — U.S. government and government agencies 5 5 — — Short-term investments 33 1 32 — Equity securities 14 10 — 4 Other investments 196 — 163 33 Other investments measured at net asset value (1) 847 Total 1,644 16 744 37 Total assets measured at fair value $ 23,670 $ 7,188 $ 15,474 $ 161 Liabilities measured at fair value: Other liabilities $ (14) $ — $ — $ (14) Derivative instruments (2) (76) — (76) — Total liabilities measured at fair value $ (90) $ — $ (76) $ (14) (1) In accordance with applicable accounting guidance, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets. (2) See note 9 . The following table presents a reconciliation of the beginning and ending balances for all financial assets and liabilities measured at fair value on a recurring basis using Level 3 inputs: Assets Liabilities s Available For Sale Fair Value Option Fair Value Structured Securities (1) Corporate Other Short-tem Equity Equity Other Liabilities Three Months Ended September 30, 2023 Balance at beginning of period $ — $ 100 $ 86 $ — $ 4 $ 5 $ (19) Total gains or (losses) (realized/unrealized) Included in earnings (2) — — — — — — — Included in other comprehensive income — (1) — — — — — Purchases, issuances, sales and settlements Purchases — 25 29 4 — — — Issuances — — — — — — (4) Sales — — (6) — — — — Settlements — — (9) — — — 2 Transfers in and/or out of Level 3 — — — — — — — Balance at end of period $ — $ 124 $ 100 $ 4 $ 4 $ 5 $ (21) Three Months Ended September 30, 2022 Balance at beginning of period $ 3 $ 4 $ 34 $ — $ 5 $ 3 $ (17) Total gains or (losses) (realized/unrealized) Included in earnings (2) (1) — — — — — — Included in other comprehensive income — — — — — — 1 Purchases, issuances, sales and settlements Purchases — — 1 — — — — Issuances — — — — — — — Sales (2) (4) (1) — — — — Settlements — — — — — — 2 Transfers in and/or out of Level 3 — — — — — — — Balance at end of period $ — $ — $ 34 $ — $ 5 $ 3 $ (14) Nine Months Ended September 30, 2023 Balance at beginning of year $ — $ 121 $ 33 $ — $ 4 $ 4 $ (14) Total gains or (losses) (realized/unrealized) Included in earnings (2) — 1 (1) — — — — Included in other comprehensive income — (1) — — — — — Purchases, issuances, sales and settlements Purchases — 68 87 4 — 1 — Issuances — — — — — — (9) Sales — — (10) — — — — Settlements — (65) (9) — — — 2 Transfers in and/or out of Level 3 — — — — — — — Balance at end of period $ — $ 124 $ 100 $ 4 $ 4 $ 5 $ (21) Nine Months Ended September 30, 2022 Balance at beginning of year $ 3 $ — $ 28 $ — $ 5 $ 3 $ (17) Total gains or (losses) (realized/unrealized) Included in earnings (2) (1) — — — — — — Included in other comprehensive income — — — — — — 1 Purchases, issuances, sales and settlements Purchases — — 12 — — — — Issuances — — — — — — — Sales (2) (4) (3) — — — — Settlements — — (3) — — — 2 Transfers in and/or out of Level 3 — 4 — — — — — Balance at end of period $ — $ — $ 34 $ — $ 5 $ 3 $ (14) (1) Includes asset backed securities, residential mortgage backed securities and commercial mortgage backed securities. (2) Gains or losses were included in net realized gains (losses). Financial Instruments Disclosed, But Not Carried, At Fair Value The Company uses various financial instruments in the normal course of its business. The carrying values of cash, accrued investment income, receivable for securities sold, certain other assets, payable for securities purchased and certain other liabilities approximated their fair values at September 30, 2023, due to their respective short maturities. As these financial instruments are not actively traded, their respective fair values are classified within Level 2. |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | The Company’s investment strategy allows for the use of derivative instruments. The Company’s derivative instruments are recorded on its consolidated balance sheets at fair value. 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 and the Company routinely utilizes foreign currency forward contracts, currency options, index futures contracts and other derivatives as part of its total return objective. In addition, certain of the Company’s investments are managed in portfolios which incorporate the use of foreign currency forward contracts which are intended to provide an economic hedge against foreign currency movements. From time to time, 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 following table summarizes information on the fair values and notional values of the Company’s derivative instruments: Estimated Fair Value Asset Derivatives (1) Liability Derivatives (1) Notional September 30, 2023 Futures contracts $ 129 $ (62) $ 4,515 Foreign currency forward contracts 32 (35) 1,481 Other (3) 31 (17) 275 Total $ 192 $ (114) December 31, 2022 Futures contracts $ 51 $ (17) $ 3,138 Foreign currency forward contracts 39 (35) 1,136 Other (3) 59 (24) 3,592 Total $ 149 $ (76) (1) The fair value of asset derivatives are included in ‘ other assets other liabilities (2) Represents the absolute notional value of all outstanding contracts, consisting of long and short positions. (3) Includes swaps, options and other derivatives contracts. The Company did not hold any derivatives which were designated as hedging instruments at September 30, 2023 or December 31, 2022. The Company’s derivative instruments can be 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. Contractual close-out netting reduces derivatives credit exposure from gross to net exposure. At September 30, 2023, asset derivatives and liability derivatives of $192 million and $114 million, respectively, were subject to a master netting agreement, compared to $147 million and $73 million, respectively, at December 31, 2022. The remaining derivatives included in the preceding table were not subject to a master netting agreement. Realized and unrealized contract gains and losses on the Company’s derivative instruments are reflected in ‘net realized gains (losses)’ in the consolidated statements of income, as summarized in the following table: Derivatives not designated as September 30, hedging instruments: 2023 2022 Three Months Ended Net realized gains (losses): Futures contracts $ (87) $ (26) Foreign currency forward contracts (20) (18) Other (1) 5 (4) Total $ (102) $ (48) Nine Months Ended Net realized gains (losses): Futures contracts $ (73) $ (112) Foreign currency forward contracts 4 (46) Other (1) 8 40 Total $ (61) $ (118) (1) Includes realized gains and losses on swaps, options and other derivatives contracts. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Letter of Credit and Revolving Credit Facilities In the normal course of its operations, the Company enters into agreements with financial institutions to obtain secured and unsecured credit facilities. On August 23, 2023, Arch Capital and certain of its subsidiaries amended the existing credit agreement (the “Credit Facility”). The Credit Facility, as amended, consists of a $425 million secured facility for letters of credit (the “Secured Facility”) and a $500 million unsecured facility for revolving loans and letters of credit (the “Unsecured Facility”). Obligations of each borrower for letters of credit under the Secured Facility are secured by cash and eligible securities of such borrower and held in collateral accounts. Commitments under the Credit Facility may be increased up to, but not exceeding, an aggregate of $1.5 billion. Arch Capital has a one-time option to convert any or all outstanding revolving loans of Arch Capital and/or Arch Capital Group (U.S.) Inc. (“Arch-U.S.”) to term loans with the same terms as the revolving loans except that any prepayments may not be re-borrowed. Borrowings of revolving loans may be made at a variable rate based on Secured Overnight Financing Rate (“SOFR”). Secured letters of credit are available for issuance on behalf of certain Arch Capital subsidiaries. Arch Capital guarantees the obligations of Arch-U.S. and Arch U.S. MI Holdings Inc., Arch-U.S. guarantees the obligations of Arch Capital, and Arch Capital Finance LLC guarantees the obligations of Arch Capital and Arch-U.S. The commitments under the Credit Agreement will expire on August 23, 2028, and all loans then outstanding under the Credit Facility must be repaid at such time. Letters of credit issued under the Credit Facility will not have an expiration date later than August 23, 2029. On September 27, 2023, Arch Reinsurance Ltd., (“Arch Re Bermuda”) a wholly-owned subsidiary of Arch Capital, entered as the borrower into a Letter of Credit Facility Agreement (the “LOC Agreement”) with Lloyds Bank Corporate Markets plc (“Lloyds Bank”). The LOC Agreement provides for a $175 million unsecured facility for letters of credit. The commitments under the LOC Agreement will expire on September 27, 2025. At September 30, 2023, the $425 million secured letter of credit facility had $355 million of letters of credit outstanding and remaining capacity of $70 million. In addition, certain of Arch Capital’s subsidiaries had outstanding secured and unsecured letters of credit through other facilities of $35 million and $400 million respectively, which were issued in the normal course of business. See note 16, “Subsequent Events.” 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 $3.1 billion at September 30, 2023, compared to $2.9 billion at December 31, 2022. Interest Paid Interest paid on the Company’s senior notes and other borrowings was $63 million for the nine months ended September 30, 2023, compared to $65 million for the 2022 period. |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2023 | |
Noncontrolling Interest [Abstract] | |
Variable Interest Entity Disclosure | Bellemeade Re The Company has entered into aggregate excess of loss mortgage reinsurance agreements with various special purpose reinsurance companies domiciled in Bermuda (the “Bellemeade Agreements”). At the time the Bellemeade Agreements were entered into, the applicability of the accounting guidance that addresses VIEs was evaluated. As a result of the evaluation of the Bellemeade Agreements, the Company concluded that these entities are VIEs. However, given that the ceding insurers do not have the unilateral power to direct those activities that are significant to their economic performance, the Company does not consolidate such entities in its consolidated financial statements. The reinsurance premium paid in regard to the Bellemeade Agreements is calculated by multiplying the outstanding reinsurance coverage amount at the beginning of the period by the coupon rate, which is the SOFR plus a contractual risk margin, less the actual investment income collected during the preceding month on the assets included in the underlying reinsurance trusts. In the event the assets included in the underlying reinsurance trusts (became severely impaired or worthless and the special purpose reinsurance companies were unable to meet their future obligations, the Company’s mortgage insurance subsidiaries would be liable to fulfill claim payments to policyholders. The Company’s maximum exposure to loss associated with these VIEs is determined as the amount of mortgage insurance claim payments on the insured policies, net of aggregate reinsurance payments previously received, up to the full aggregate excess of loss reinsurance coverage amounts. See note 16, “Subsequent Events.” The following table summarizes the total assets of the Bellemeade entities: September 30, December 31, 2022 Bellemeade Entities Total VIE Assets Coverage Remaining from Reinsurers (1) Total VIE 2017-1 Ltd. (Oct-17) $ — $ — $ 37 2018-1 Ltd. (Apr-18) 51 — 90 2018-3 Ltd. (Oct-18) 154 — 199 2019-1 Ltd. (Mar-19) 80 — 108 2019-2 Ltd. (Apr-19) 265 — 325 2019-3 Ltd. (Jul-19) 120 — 223 2019-4 Ltd. (Oct-19) 218 — 266 2020-2 Ltd. (Sep-20) 54 — 105 2020-3 Ltd. (Nov-20) 183 4 244 2020-4 Ltd. (Dec-20) 67 2 98 2021-1 Ltd. (Mar-21) 388 17 467 2021-2 Ltd. (Jun-21) 380 58 458 2021-3 Ltd. (Sep-21) 444 116 490 2022-1 Ltd. (Jan-22) 269 30 284 2022-2 Ltd. (Sep-22) 201 126 201 Total $ 2,874 $ 353 $ 3,595 (1) Coverage from a separate panel of reinsurers remaining at September 30, 2023. |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2023 | |
Comprehensive Income Note Disclosure [Abstract] | |
Other Comprehensive Income (Loss) | The following tables present details about amounts reclassified from accumulated other comprehensive income and the tax effects allocated to each component of other comprehensive income (loss): Amounts Reclassified from AOCI Consolidated Statement of Income Three Months Ended Nine Months Ended Details About Line Item That Includes September 30, September 30, AOCI Components Reclassification 2023 2022 2023 2022 Unrealized appreciation (decline) on available-for-sale investments Net realized gains (losses) $ (104) $ (56) $ (345) $ (186) Provision for credit losses — 9 (23) (48) Total before tax (104) (47) (368) (234) Income tax (expense) benefit 8 1 24 28 Net of tax $ (96) $ (46) $ (344) $ (206) Before Tax Amount Tax Expense (Benefit) Net of Tax Amount Three Months Ended September 30, 2023 Unrealized appreciation (decline) in value of investments: Unrealized holding gains (losses) arising during period $ (208) $ (18) $ (190) Less reclassification of net realized gains (losses) included in net income (104) (8) (96) Foreign currency translation adjustments (40) — (40) Other comprehensive income (loss) $ (144) $ (10) $ (134) Three Months Ended September 30, 2022 Unrealized appreciation (decline) in value of investments: Unrealized holding gains (losses) arising during period $ (672) $ (62) $ (610) Less reclassification of net realized gains (losses) included in net income (47) (1) (46) Foreign currency translation adjustments (70) — (70) Other comprehensive income (loss) $ (695) $ (61) $ (634) Nine Months Ended September 30, 2023 Unrealized appreciation (decline) in value of investments: Unrealized holding gains (losses) arising during period $ (131) $ (13) $ (118) Less reclassification of net realized gains (losses) included in net income (368) (24) (344) Foreign currency translation adjustments (33) — (33) Other comprehensive income (loss) $ 204 $ 11 $ 193 Nine Months Ended September 30, 2022 Unrealized appreciation (decline) in value of investments: Unrealized holding gains (losses) arising during period $ (2,132) $ (240) $ (1,892) Less reclassification of net realized gains (losses) included in net income (234) (28) (206) Foreign currency translation adjustments (141) — (141) Other comprehensive income (loss) $ (2,039) $ (212) $ (1,827) |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | The Company’s income tax provision on income before income taxes, including income (loss) from operating affiliates, resulted in an effective tax rate of 8.8% for the nine months ended September 30, 2023, compared to 3.0% for the nine months ended September 30, 2022. The Company’s effective tax rate, which is based upon the expected annual effective tax rate, may fluctuate from period to period based on the relative mix of income or loss reported by jurisdiction and the varying tax rates in each jurisdiction. The effective tax rate for the nine months ended September 30, 2023 and 2022, included discrete income tax benefits of $6 million and $37 million, which had the effect of decreasing the effective tax rate on net income available to Arch common shareholders by 0.3% and 5.7%, respectively. The discrete tax items in the 2023 and 2022 periods were primarily related to equity compensation windfall benefits and the release of a valuation allowance on certain U.K. deferred tax assets, respectively.The Company had a net deferred tax asset of $496 million at September 30, 2023, compared to a net deferred tax asset of $531 million at December 31, 2022. The change is primarily a result of market value fluctuations in the Company’s investment portfolio. In addition, the Company paid $127 million and $202 million of income taxes for the nine months ended September 30, 2023 and 2022, respectively |
Legal Proceedings
Legal Proceedings | 9 Months Ended |
Sep. 30, 2023 | |
Disclosure Legal Proceedings [Abstract] | |
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 September 30, 2023, 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. |
Transactions With Related Parti
Transactions With Related Parties | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Transactions with related parties | Premia Reinsurance Ltd. is a multi-line Bermuda reinsurance company (and its affiliates together with Premia Holdings Ltd., “Premia”). The Company has entered into certain reinsurance transactions with Premia. For the nine months ended September 30, 2023, the Company recorded net premiums written and earned of approximately $80 million, compared to a de minimis amount for the nine months ended September 30, 2022. At September 30, 2023, the Company recorded a funds held asset from Premia of $176 million, compared to $119 million at December 31, 2022.Somers Group Holdings Ltd. and its wholly owned subsidiaries (collectively, “Somers”) are wholly owned by Greysbridge. The Company has entered into certain reinsurance transactions with Somers. For the nine months ended September 30, 2023, the Company’s net premiums written was reduced by $457 million, compared to $552 million for the nine months ended September 30, 2022. In addition, Somers paid certain acquisition costs and administrative fees to the Company. At September 30, 2023, the Company recorded a reinsurance recoverable on unpaid and paid losses from Somers of $1.3 billion and a reinsurance balance payable to Somers of $499 million, compared to $1.2 billion and $414 million, respectively, at December 31, 2022. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Event | Bellemeade Re 2023-1 Ltd. In October 2023, the Company’s U.S. mortgage insurance subsidiaries entered into an aggregate excess of loss reinsurance agreement with Bellemeade Re 2023-1 Ltd. (“Bellemeade 2023-1”), a special purpose reinsurance company domiciled in Bermuda. The Bellemeade 2023-1 agreement provides for up to $233 million of aggregate excess of loss reinsurance coverage at inception in excess of $62 million of aggregate losses for new delinquencies on a portfolio of in-force policies primarily issued from January 2023 through September 2023. The coverage amount decreases over a ten-year period as the underlying covered mortgages amortize. Bellemeade 2023-1 financed the coverage through the issuance of mortgage insurance-linked notes in an aggregate amount of approximately $187 million to unrelated investors (the “Notes”) and an additional $46 million capacity was provided directly to Arch MI U.S. by a separate panel of reinsurers. The maturity date of the Notes is October 25, 2033. The Notes will be redeemed prior to maturity upon the occurrence of a mandatory termination event or if the ceding insurers trigger a termination of the reinsurance agreement following the occurrence of an optional termination event. All of the proceeds paid to Bellemeade 2023-1 from the sale of the Notes were deposited into a reinsurance trust as security for Bellemeade 2023-1’s obligations. At all times, funds in the reinsurance trust account are required to be invested in high credit quality money market funds. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net income available to Arch | $ 723 | $ 17 | $ 2,109 | $ 617 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Basis of Presentation and Rec_2
Basis of Presentation and Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of accounting | The interim consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). 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 materially from those estimates and assumptions. In the opinion of management, the accompanying unaudited interim consolidated financial statements reflect all adjustments (consisting of normally recurring accruals) necessary for a fair statement of results on an interim basis. The results of any interim period are not necessarily indicative of the results for a full year or any future periods. |
Reclassification of prior periods | 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, comprehensive income, shareholders’ equity or cash flows. |
Recent accounting pronouncements | Recently Issued Accounting Standards AdoptedFor information regarding additional accounting standards that the Company has not yet adopted, see note 3(t), “Significant Accounting Policies—Recent Accounting Pronouncements,” of the notes to consolidated financial statements in the Company’s 2022 Form 10-K |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Numerator: Net income (loss) $ 723 $ 18 $ 2,109 $ 620 Net (income) loss attributable to noncontrolling interests — (1) — (3) Net income (loss) available to Arch 723 17 2,109 617 Preferred dividends (10) (10) (30) (30) Net income (loss) available to Arch common shareholders $ 713 $ 7 $ 2,079 $ 587 Denominator: Weighted average common shares and common share equivalents outstanding — basic 369.2 365.2 368.4 369.5 Effect of dilutive common share equivalents: Nonvested restricted shares 2.6 2.3 2.4 2.2 Stock options (1) 7.6 6.2 7.5 6.7 Weighted average common shares and common share equivalents outstanding — diluted 379.4 373.7 378.3 378.4 Earnings per common share: Basic $ 1.93 $ 0.02 $ 5.64 $ 1.59 Diluted $ 1.88 $ 0.02 $ 5.50 $ 1.55 (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 the 2023 third quarter and 2022 third quarter, the number of stock options excluded were 0.3 million and 0.8 million, respectively. For the nine months ended September 30, 2023 and 2022, the number of stock options excluded were 0.5 million and 0.8 million, respectively. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Analysis of underwriting income or loss 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 or loss to net income available to Arch common shareholders: Three Months Ended September 30, 2023 Insurance Reinsurance Mortgage Total Gross premiums written (1) $ 2,043 $ 2,138 $ 347 $ 4,527 Premiums ceded (521) (576) (76) (1,172) Net premiums written 1,522 1,562 271 3,355 Change in unearned premiums (110) (19) 22 (107) Net premiums earned 1,412 1,543 293 3,248 Other underwriting income (loss) — 2 3 5 Losses and loss adjustment expenses (812) (870) 35 (1,647) Acquisition expenses (269) (304) (2) (575) Other operating expenses (202) (61) (47) (310) Underwriting income (loss) $ 129 $ 310 $ 282 721 Net investment income 269 Net realized gains (losses) (248) Equity in net income (loss) of investment funds accounted for using the equity method 59 Other income (loss) (4) Corporate expenses (2) (20) Transaction costs and other (2) — Amortization of intangible assets (24) Interest expense (34) Net foreign exchange gains (losses) 22 Income (loss) before income taxes and income (loss) from operating affiliates 741 Income tax (expense) benefit (72) Income (loss) from operating affiliates 54 Net income (loss) 723 Net (income) loss attributable to noncontrolling interests — Net income (loss) available to Arch 723 Preferred dividends (10) Net income (loss) available to Arch common shareholders $ 713 Underwriting Ratios Loss ratio 57.5 % 56.4 % (12.1) % 50.7 % Acquisition expense ratio 19.1 % 19.7 % 0.6 % 17.7 % Other operating expense ratio 14.3 % 3.9 % 16.2 % 9.5 % Combined ratio 90.9 % 80.0 % 4.7 % 77.9 % Goodwill and intangible assets $ 220 $ 132 $ 387 $ 739 (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. (2) Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘transaction costs and other.’ Three Months Ended September 30, 2022 Insurance Reinsurance Mortgage Total Gross premiums written (1) $ 1,862 $ 1,639 $ 362 $ 3,861 Premiums ceded (493) (560) (86) (1,137) Net premiums written 1,369 1,079 276 2,724 Change in unearned premiums (182) (77) 6 (253) Net premiums earned 1,187 1,002 282 2,471 Other underwriting income (loss) — — 3 3 Losses and loss adjustment expenses (823) (928) 68 (1,683) Acquisition expenses (233) (208) (7) (448) Other operating expenses (165) (63) (47) (275) Underwriting income (loss) $ (34) $ (197) $ 299 68 Net investment income 129 Net realized gains (losses) (184) Equity in net income (loss) of investment funds accounted for using the equity method (19) Other income (loss) (14) Corporate expenses (2) (18) Transaction costs and other (2) — Amortization of intangible assets (26) Interest expense (33) Net foreign exchange gains (losses) 91 Income (loss) before income taxes and income (loss) from operating affiliates (6) Income tax (expense) benefit 15 Income (loss) from operating affiliates 9 Net income (loss) 18 Net (income) loss attributable to noncontrolling interests (1) Net income (loss) available to Arch 17 Preferred dividends (10) Net income (loss) available to Arch common shareholders $ 7 Underwriting Ratios Loss ratio 69.3 % 92.6 % (24.1) % 68.1 % Acquisition expense ratio 19.6 % 20.8 % 2.4 % 18.1 % Other operating expense ratio 13.9 % 6.3 % 16.5 % 11.1 % Combined ratio 102.8 % 119.7 % (5.2) % 97.3 % Goodwill and intangible assets $ 225 $ 141 $ 441 $ 807 (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. (2) Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘transaction costs and other.’ Nine Months Ended September 30, 2023 Insurance Reinsurance Mortgage Total Gross premiums written (1) $ 5,977 $ 7,142 $ 1,037 $ 14,152 Premiums ceded (1,564) (2,145) (240) (3,945) Net premiums written 4,413 4,997 797 10,207 Change in unearned premiums (416) (781) 86 (1,111) Net premiums earned 3,997 4,216 883 9,096 Other underwriting income (loss) — 9 12 21 Losses and loss adjustment expenses (2,276) (2,379) 46 (4,609) Acquisition expenses (778) (875) (16) (1,669) Other operating expenses (592) (203) (147) (942) Underwriting income (loss) $ 351 $ 768 $ 778 1,897 Net investment income 710 Net realized gains (losses) (354) Equity in net income (loss) of investment funds accounted for using the equity method 176 Other income (loss) 10 Corporate expenses (2) (69) Transaction costs and other (2) (2) Amortization of intangible assets (71) Interest expense (99) Net foreign exchange gains (losses) (1) Income (loss) before income taxes and income (loss) from operating affiliates 2,197 Income tax (expense) benefit (203) Income (loss) from operating affiliates 115 Net income (loss) 2,109 Net (income) loss attributable to noncontrolling interests — Net income (loss) available to Arch 2,109 Preferred dividends (30) Net income (loss) available to Arch common shareholders $ 2,079 Underwriting Ratios Loss ratio 57.0 % 56.4 % (5.3) % 50.7 % Acquisition expense ratio 19.5 % 20.7 % 1.8 % 18.3 % Other operating expense ratio 14.8 % 4.8 % 16.7 % 10.4 % Combined ratio 91.3 % 81.9 % 13.2 % 79.4 % (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. (2) Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘transaction costs and other.’ Nine Months Ended September 30, 2022 Insurance Reinsurance Mortgage Total Gross premiums written (1) $ 5,287 $ 5,151 $ 1,099 $ 11,532 Premiums ceded (1,483) (1,770) (241) (3,489) Net premiums written 3,804 3,381 858 8,043 Change in unearned premiums (488) (647) 10 (1,125) Net premiums earned 3,316 2,734 868 6,918 Other underwriting income (loss) — 6 6 12 Losses and loss adjustment expenses (2,054) (1,920) 187 (3,787) Acquisition expenses (643) (569) (27) (1,239) Other operating expenses (493) (199) (150) (842) Underwriting income (loss) $ 126 $ 52 $ 884 1,062 Net investment income 315 Net realized gains (losses) (743) Equity in net income (loss) of investment funds accounted for using the equity method 75 Other income (loss) (35) Corporate expenses (2) (78) Transaction costs and other (2) — Amortization of intangible assets (80) Interest expense (99) Net foreign exchange gains (losses) 183 Income (loss) before income taxes and income (loss) from operating affiliates 600 Income tax (expense) benefit (19) Income (loss) from operating affiliates 39 Net income (loss) 620 Net (income) loss attributable to noncontrolling interests (3) Net income (loss) available to Arch 617 Preferred dividends (30) Net income (loss) available to Arch common shareholders $ 587 Underwriting Ratios Loss ratio 61.9 % 70.2 % (21.6) % 54.7 % Acquisition expense ratio 19.4 % 20.8 % 3.2 % 17.9 % Other operating expense ratio 14.9 % 7.3 % 17.3 % 12.2 % Combined ratio 96.2 % 98.3 % (1.1) % 84.8 % (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. |
Reserve for Losses and Loss A_2
Reserve for Losses and Loss Adjustment Expenses (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Reserve for losses and loss adjustment expenses at beginning of period $ 21,268 $ 18,194 $ 20,032 $ 17,757 Unpaid losses and loss adjustment expenses recoverable 6,394 5,686 6,280 5,599 Net reserve for losses and loss adjustment expenses at beginning of period 14,874 12,508 13,752 12,158 Net incurred losses and loss adjustment expenses relating to losses occurring in: Current year 1,793 1,863 5,012 4,279 Prior years (146) (180) (403) (492) Total net incurred losses and loss adjustment expenses 1,647 1,683 4,609 3,787 Net foreign exchange (gains) losses and other (123) (245) (24) (527) Net paid losses and loss adjustment expenses relating to losses occurring in: Current year (345) (227) (700) (464) Prior years (713) (538) (2,297) (1,773) Total net paid losses and loss adjustment expenses (1,058) (765) (2,997) (2,237) Net reserve for losses and loss adjustment expenses at end of period 15,340 13,181 15,340 13,181 Unpaid losses and loss adjustment expenses recoverable 6,496 6,107 6,496 6,107 Reserve for losses and loss adjustment expenses at end of period $ 21,836 $ 19,288 $ 21,836 $ 19,288 |
Allowance for Expected Credit_2
Allowance for Expected Credit Losses (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Credit Loss [Abstract] | |
Premiums receivable | The following table provides a roll forward of the allowance for expected credit losses of the Company’s premium receivables: Premium Receivables, Net of Allowance Allowance for Expected Credit Losses Three Months Ended September 30, 2023 Balance at beginning of period $ 5,296 $ 34 Change for provision of expected credit losses (1) $ — Balance at end of period $ 4,937 $ 34 Three Months Ended September 30, 2022 Balance at beginning of period $ 3,634 $ 38 Change for provision of expected credit losses (1) $ — Balance at end of period $ 3,579 $ 38 Nine Months Ended September 30, 2023 Balance at beginning of period $ 3,625 $ 35 Change for provision of expected credit losses (1) (1) Balance at end of period $ 4,937 $ 34 Nine Months Ended September 30, 2022 Balance at beginning of period $ 2,633 $ 40 Change for provision of expected credit losses (1) (2) Balance at end of period $ 3,579 $ 38 (1) Amounts deemed uncollectible are written-off in operating expenses. For the 2023 third quarter and 2022 third quarter, amounts written off were nil and $2 million, respectively. For the nine months ended September 30, 2023 and 2022 period, amounts written off were $2 million and $7 million, respectively. |
Reinsurance recoverables | The following table provides a roll forward of the allowance for expected credit losses of the Company’s reinsurance recoverables: Reinsurance Recoverables, Net of Allowance Allowance for Expected Credit Losses Three Months Ended September 30, 2023 Balance at beginning of period $ 6,717 $ 22 Change for provision of expected credit losses 1 Balance at end of period $ 6,821 $ 23 Three Months Ended September 30, 2022 Balance at beginning of period $ 5,939 $ 15 Change for provision of expected credit losses 2 Balance at end of period $ 6,356 $ 17 Nine Months Ended September 30, 2023 Balance at beginning of period $ 6,564 $ 22 Change for provision of expected credit losses 1 Balance at end of period $ 6,821 $ 23 Nine Months Ended September 30, 2022 Balance at beginning of period $ 5,881 $ 13 Change for provision of expected credit losses 4 Balance at end of period $ 6,356 $ 17 |
Ceded credit risk | The following table summarizes the Company’s reinsurance recoverables on paid and unpaid losses (not including ceded unearned premiums): September 30, December 31 2023 2022 Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses $ 6,821 $ 6,564 % due from carriers with A.M. Best rating of “A-” or better 66.7 % 68.8 % % due from all other rated carriers 0.2 % 0.1 % % due from all other carriers with no A.M. Best rating (1) 33.1 % 31.1 % Largest balance due from any one carrier as % of total shareholders’ equity 8.3 % 9.0 % (1) At September 30, 2023 and December 31, 2022 over 95% of such amount were collateralized through reinsurance trusts, funds withheld arrangements, letters of credit or other, respectively. |
Contractholder receivables | The following table provides a roll forward of the allowance for expected credit losses of the Company’s contractholder receivables: Contract-holder Receivables, Net of Allowance Allowance for Expected Credit Losses Three Months Ended September 30, 2023 Balance at beginning of period $ 1,761 $ 3 Change for provision of expected credit losses — Balance at end of period $ 1,805 $ 3 Three Months Ended September 30, 2022 Balance at beginning of period $ 1,758 $ 3 Change for provision of expected credit losses (1) Balance at end of period 1,736 $ 2 Nine Months Ended September 30, 2023 Balance at beginning of period $ 1,731 $ 3 Change for provision of expected credit losses — Balance at end of period $ 1,805 $ 3 Nine Months Ended September 30, 2022 Balance at beginning of period $ 1,829 $ 3 Change for provision of expected credit losses (1) Balance at end of period 1,736 $ 2 |
Investment Information (Tables)
Investment Information (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 Allowance for Expected Credit Losses Cost or September 30, 2023 Fixed maturities: Corporate bonds $ 10,064 $ 33 $ (747) $ (47) $ 10,825 U.S. government and government agencies 5,662 15 (240) — 5,887 Asset backed securities 2,342 10 (76) (5) 2,413 Non-U.S. government securities 2,052 9 (173) (2) 2,218 Commercial mortgage backed securities 1,102 — (46) (3) 1,151 Residential mortgage backed securities 965 5 (100) — 1,060 Municipal bonds 298 2 (32) — 328 Total 22,485 74 (1,414) (57) 23,882 Short-term investments 1,682 3 (1) — 1,680 Total $ 24,167 $ 77 $ (1,415) $ (57) $ 25,562 December 31, 2022 Fixed maturities: Corporate bonds $ 8,020 $ 55 $ (781) $ (30) $ 8,776 U.S. government and government agencies 5,162 15 (343) — 5,490 Asset backed securities 1,927 1 (107) (6) 2,039 Non-U.S. government securities 2,313 9 (238) (2) 2,544 Commercial mortgage backed securities 1,047 1 (58) (3) 1,107 Residential mortgage backed securities 795 5 (87) — 877 Municipal bonds 419 3 (33) — 449 Total 19,683 89 (1,647) (41) 21,282 Short-term investments 1,332 1 (2) — 1,333 Total $ 21,015 $ 90 $ (1,649) $ (41) $ 22,615 |
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 September 30, 2023 Fixed maturities: Corporate bonds $ 4,813 $ (141) $ 5,272 $ (606) $ 10,085 $ (747) U.S. government and government agencies 3,922 (93) 1,294 (147) 5,216 (240) Non-U.S. government securities 1,002 (25) 956 (148) 1,958 (173) Residential mortgage backed securities 420 (15) 521 (85) 941 (100) Asset backed securities 190 (4) 1,287 (72) 1,477 (76) Commercial mortgage backed securities 153 (3) 907 (43) 1,060 (46) Municipal bonds 84 (5) 212 (27) 296 (32) Total 10,584 (286) 10,449 (1,128) 21,033 (1,414) Short-term investments 192 (1) — — 192 (1) Total $ 10,776 $ (287) $ 10,449 $ (1,128) $ 21,225 $ (1,415) December 31, 2022 Fixed maturities: Corporate bonds $ 4,823 $ (393) $ 2,559 $ (388) $ 7,382 $ (781) U.S. government and government agencies 3,557 (197) 1,443 (146) 5,000 (343) Non-U.S. government securities 1,703 (154) 542 (84) 2,245 (238) Residential mortgage backed securities 546 (52) 154 (35) 700 (87) Asset backed securities 1,148 (66) 512 (41) 1,660 (107) Commercial mortgage backed securities 598 (35) 445 (23) 1,043 (58) Municipal bonds 364 (30) 16 (3) 380 (33) Total 12,739 (927) 5,671 (720) 18,410 (1,647) Short-term investments 237 (2) — — 237 (2) Total $ 12,976 $ (929) $ 5,671 $ (720) $ 18,647 $ (1,649) |
Contractual maturities of the Company's fixed maturities | The contractual maturities of the Company’s fixed maturities 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. September 30, 2023 December 31, 2022 Maturity Estimated Amortized Estimated Amortized Due in one year or less $ 683 $ 708 $ 511 $ 537 Due after one year through five years 12,561 13,123 11,016 11,715 Due after five years through 10 years 4,515 5,035 3,984 4,527 Due after 10 years 317 392 403 480 18,076 19,258 15,914 17,259 Residential mortgage backed securities 965 1,060 795 877 Commercial mortgage backed securities 1,102 1,151 1,047 1,107 Asset backed securities 2,342 2,413 1,927 2,039 Total $ 22,485 $ 23,882 $ 19,683 $ 21,282 |
Summary of other investments and other investable assets | The following table summarizes the Company’s other investments and other investable assets: September 30, December 31, Other investments $ 1,404 $ 1,043 Fixed maturities 644 554 Equity securities 7 14 Short-term investments 13 33 Total $ 2,068 $ 1,644 The following table summarizes the Company’s other investments, as detailed in the previous table, by strategy: September 30, December 31, Lending $ 460 $ 406 Investment grade fixed income 418 271 Term loan investments 242 164 Private equity 182 123 Credit related funds 84 56 Energy 18 23 Total $ 1,404 $ 1,043 |
Summary of investments accounted for using equity method | The following table summarizes the Company’s investments accounted for using the equity method, by strategy: September 30, December 31, Credit related funds $ 1,165 $ 1,136 Private equity 1,083 917 Real estate 620 535 Lending 555 531 Infrastructure 298 245 Fixed income 258 130 Equities 171 169 Energy 101 111 Total $ 4,251 $ 3,774 |
Summary of investments in limited partnership interests where the Company has a variable interest | The following table summarizes investments in limited partnership interests where the Company has a variable interest by balance sheet line item: September 30, December 31, Investments accounted for using the equity method (1) $ 4,251 $ 3,774 Investments accounted for using the fair value option (2) 128 131 Total $ 4,379 $ 3,905 (1) Aggregate unfunded commitments were $3.0 billion at September 30, 2023, compared with $2.6 billion at December 31, 2022. (2) Aggregate unfunded commitments were $32 million at September 30, 2023, compared to $17 million at December 31, 2022. |
Components of net investment income | The components of net investment income were derived from the following sources: September 30, 2023 2022 Three Months Ended Fixed maturities $ 243 $ 124 Equity securities 5 4 Short-term investments 19 9 Other (1) 22 9 Gross investment income 289 146 Investment expenses (20) (17) Net investment income $ 269 $ 129 Nine Months Ended Fixed maturities $ 645 $ 311 Equity securities 15 16 Short-term investments 48 16 Other (1) 60 29 Gross investment income 768 372 Investment expenses (58) (57) Net investment income $ 710 $ 315 |
Summary of net realized gains (losses), including change in allowance for credit losses on financial assets and net impairment losses recognized in earnings | Net realized gains (losses), which include changes in the allowance for credit losses on financial assets and net impairment losses recognized in earnings were as follows: September 30, 2023 2022 Three Months Ended Available for sale securities: Gross gains on investment sales $ 12 $ 18 Gross losses on investment sales (116) (74) Change in fair value of assets and liabilities accounted for using the fair value option: Fixed maturities (16) (19) Other investments 3 (18) Equity securities — (1) Short-term investments — (1) Equity securities, at fair value: Net realized gains (losses) on sales during the period 14 (6) Net unrealized gains (losses) on equity securities still held at reporting date (46) (36) Allowance for credit losses: Investments related — 9 Underwriting related (1) (4) Derivative instruments (1) (102) (48) Other 4 (4) Net realized gains (losses) $ (248) $ (184) Nine Months Ended Available for sale securities: Gross gains on investment sales $ 51 $ 53 Gross losses on investment sales (396) (239) Change in fair value of assets and liabilities accounted for using the fair value option: Fixed maturities (12) (89) Other investments 17 (37) Equity securities 1 (6) Short-term investments — (3) Equity securities, at fair value: Net realized gains (losses) on sales during the period 50 76 Net unrealized gains (losses) on equity securities still held at reporting date 17 (318) Allowance for credit losses: Investments related (23) (48) Underwriting related (2) (7) Derivative instruments (1) (61) (118) Other 4 (7) Net realized gains (losses) $ (354) $ (743) (1) See note 9 for information on the Company’s derivative instruments. |
Rollforward of the allowance for expected credit losses of securities classified as available for sale | The following table provides a roll forward of the allowance for expected credit losses of the Company’s securities classified as available for sale: Structured Securities (1) Corporate Non-U.S. Total Three Months Ended September 30, 2023 Balance at beginning of period $ 8 $ 50 $ 3 $ 61 Additions for current-period provision for expected credit losses 2 4 — 6 Additions (reductions) for previously recognized expected credit losses — (3) — (3) Reductions due to disposals (2) (4) (1) (7) Balance at end of period $ 8 $ 47 $ 2 $ 57 Three Months Ended September 30, 2022 Balance at beginning of period $ 19 $ 40 $ — $ 59 Additions for current-period provision for expected credit losses 2 2 — 4 Additions (reductions) for previously recognized expected credit losses (10) (3) — (13) Reductions due to disposals (2) (2) — (4) Balance at end of period $ 9 $ 37 $ — $ 46 Nine Months Ended September 30, 2023 Balance at beginning of period $ 9 $ 30 $ 2 $ 41 Additions for current-period provision for expected credit losses 2 5 — 7 Additions (reductions) for previously recognized expected credit losses (1) 18 1 18 Reductions due to disposals (2) (6) (1) (9) Balance at end of period $ 8 $ 47 $ 2 $ 57 Nine Months Ended September 30, 2022 Balance at beginning of period $ 1 $ 2 $ — $ 3 Additions for current-period provision for expected credit losses 13 40 — 53 Additions (reductions) for previously recognized expected credit losses (3) (3) — (6) Reductions due to disposals (2) (2) — (4) Balance at end of period $ 9 $ 37 $ — $ 46 (1) Includes asset backed securities, residential mortgage backed securities and commercial mortgage backed securities. |
Summary of restricted assets | The following table details the value of the Company’s restricted assets: September 30, December 31, Assets used for collateral or guarantees: Affiliated transactions $ 4,572 $ 4,254 Third party agreements 2,849 2,633 Deposits with U.S. regulatory authorities 788 776 Other (1) 1,250 1,038 Total restricted assets $ 9,459 $ 8,701 (1) Primarily includes Funds at Lloyds, deposits with non-U.S. regulatory authorities and other restricted assets. |
Reconciliation of cash and restricted cash | The following table details reconciliation of cash and restricted cash within the Consolidated Balance Sheets: September 30, December 31, Cash $ 859 $ 855 Restricted cash (included in ‘other assets’) 496 418 Cash and restricted cash $ 1,355 $ 1,273 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023: Estimated Fair Value Measurements Using: Estimated Quoted Prices in Significant Significant Assets measured at fair value: Available for sale securities: Fixed maturities: Corporate bonds $ 10,064 $ — $ 9,940 $ 124 U.S. government and government agencies 5,662 5,640 22 — Asset backed securities 2,342 — 2,342 — Non-U.S. government securities 2,052 — 2,052 — Commercial mortgage backed securities 1,102 — 1,102 — Residential mortgage backed securities 965 — 965 — Municipal bonds 298 — 298 — Total 22,485 5,640 16,721 124 Short-term investments 1,682 1,635 47 — Equity securities, at fair value 894 860 29 5 Derivative instruments (2) 192 — 192 — Residential mortgage loans 2 — 2 — Fair value option: Corporate bonds 620 — 620 — Non-U.S. government bonds 15 — 15 — Asset backed securities 2 — 2 — U.S. government and government agencies 7 7 — — Short-term investments 13 1 8 4 Equity securities 7 3 — 4 Other investments 341 — 241 100 Other investments measured at net asset value (1) 1,063 Total 2,068 11 886 108 Total assets measured at fair value $ 27,323 $ 8,146 $ 17,877 $ 237 Liabilities measured at fair value: Other liabilities $ (21) $ — $ — $ (21) Derivative instruments (2) (114) — (114) — Total liabilities measured at fair value $ (135) $ — $ (114) $ (21) (1) In accordance with applicable accounting guidance, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets. (2) See note 9 . The following table presents the Company’s financial assets and liabilities measured at fair value by level at December 31, 2022: Estimated Fair Value Measurements Using: Estimated Quoted Prices in Significant Significant Assets measured at fair value: Available for sale securities: Fixed maturities: Corporate bonds $ 8,020 $ — $ 7,899 $ 121 U.S. government and government agencies 5,162 5,145 17 — Asset backed securities 1,927 — 1,927 — Non-U.S. government securities 2,313 — 2,313 — Commercial mortgage backed securities 1,047 — 1,047 — Residential mortgage backed securities 795 — 795 — Municipal bonds 419 — 419 — Total 19,683 5,145 14,417 121 Short-term investments 1,332 1,198 134 — Equity securities, at fair value 860 829 28 3 Derivative instruments (2) 149 — 149 — Residential mortgage loans 2 — 2 — Fair value option: Corporate bonds 543 — 543 — Non-U.S. government bonds 4 — 4 — Asset backed securities 2 — 2 — U.S. government and government agencies 5 5 — — Short-term investments 33 1 32 — Equity securities 14 10 — 4 Other investments 196 — 163 33 Other investments measured at net asset value (1) 847 Total 1,644 16 744 37 Total assets measured at fair value $ 23,670 $ 7,188 $ 15,474 $ 161 Liabilities measured at fair value: Other liabilities $ (14) $ — $ — $ (14) Derivative instruments (2) (76) — (76) — Total liabilities measured at fair value $ (90) $ — $ (76) $ (14) (1) In accordance with applicable accounting guidance, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets. (2) See note 9 . |
Rollforward of Level 3 investments | The following table presents a reconciliation of the beginning and ending balances for all financial assets and liabilities measured at fair value on a recurring basis using Level 3 inputs: Assets Liabilities s Available For Sale Fair Value Option Fair Value Structured Securities (1) Corporate Other Short-tem Equity Equity Other Liabilities Three Months Ended September 30, 2023 Balance at beginning of period $ — $ 100 $ 86 $ — $ 4 $ 5 $ (19) Total gains or (losses) (realized/unrealized) Included in earnings (2) — — — — — — — Included in other comprehensive income — (1) — — — — — Purchases, issuances, sales and settlements Purchases — 25 29 4 — — — Issuances — — — — — — (4) Sales — — (6) — — — — Settlements — — (9) — — — 2 Transfers in and/or out of Level 3 — — — — — — — Balance at end of period $ — $ 124 $ 100 $ 4 $ 4 $ 5 $ (21) Three Months Ended September 30, 2022 Balance at beginning of period $ 3 $ 4 $ 34 $ — $ 5 $ 3 $ (17) Total gains or (losses) (realized/unrealized) Included in earnings (2) (1) — — — — — — Included in other comprehensive income — — — — — — 1 Purchases, issuances, sales and settlements Purchases — — 1 — — — — Issuances — — — — — — — Sales (2) (4) (1) — — — — Settlements — — — — — — 2 Transfers in and/or out of Level 3 — — — — — — — Balance at end of period $ — $ — $ 34 $ — $ 5 $ 3 $ (14) Nine Months Ended September 30, 2023 Balance at beginning of year $ — $ 121 $ 33 $ — $ 4 $ 4 $ (14) Total gains or (losses) (realized/unrealized) Included in earnings (2) — 1 (1) — — — — Included in other comprehensive income — (1) — — — — — Purchases, issuances, sales and settlements Purchases — 68 87 4 — 1 — Issuances — — — — — — (9) Sales — — (10) — — — — Settlements — (65) (9) — — — 2 Transfers in and/or out of Level 3 — — — — — — — Balance at end of period $ — $ 124 $ 100 $ 4 $ 4 $ 5 $ (21) Nine Months Ended September 30, 2022 Balance at beginning of year $ 3 $ — $ 28 $ — $ 5 $ 3 $ (17) Total gains or (losses) (realized/unrealized) Included in earnings (2) (1) — — — — — — Included in other comprehensive income — — — — — — 1 Purchases, issuances, sales and settlements Purchases — — 12 — — — — Issuances — — — — — — — Sales (2) (4) (3) — — — — Settlements — — (3) — — — 2 Transfers in and/or out of Level 3 — 4 — — — — — Balance at end of period $ — $ — $ 34 $ — $ 5 $ 3 $ (14) (1) Includes asset backed securities, residential mortgage backed securities and commercial mortgage backed securities. |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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: Estimated Fair Value Asset Derivatives (1) Liability Derivatives (1) Notional September 30, 2023 Futures contracts $ 129 $ (62) $ 4,515 Foreign currency forward contracts 32 (35) 1,481 Other (3) 31 (17) 275 Total $ 192 $ (114) December 31, 2022 Futures contracts $ 51 $ (17) $ 3,138 Foreign currency forward contracts 39 (35) 1,136 Other (3) 59 (24) 3,592 Total $ 149 $ (76) (1) The fair value of asset derivatives are included in ‘ other assets other liabilities (2) Represents the absolute notional value of all outstanding contracts, consisting of long and short positions. (3) Includes swaps, options and other derivatives contracts. |
Summary of net realized gains (losses) recorded in the consolidated statements of income | Realized and unrealized contract gains and losses on the Company’s derivative instruments are reflected in ‘net realized gains (losses)’ in the consolidated statements of income, as summarized in the following table: Derivatives not designated as September 30, hedging instruments: 2023 2022 Three Months Ended Net realized gains (losses): Futures contracts $ (87) $ (26) Foreign currency forward contracts (20) (18) Other (1) 5 (4) Total $ (102) $ (48) Nine Months Ended Net realized gains (losses): Futures contracts $ (73) $ (112) Foreign currency forward contracts 4 (46) Other (1) 8 40 Total $ (61) $ (118) (1) Includes realized gains and losses on swaps, options and other derivatives contracts. |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Noncontrolling Interest [Abstract] | |
Total assets and maximum exposure to loss associated with VIEs | The following table summarizes the total assets of the Bellemeade entities: September 30, December 31, 2022 Bellemeade Entities Total VIE Assets Coverage Remaining from Reinsurers (1) Total VIE 2017-1 Ltd. (Oct-17) $ — $ — $ 37 2018-1 Ltd. (Apr-18) 51 — 90 2018-3 Ltd. (Oct-18) 154 — 199 2019-1 Ltd. (Mar-19) 80 — 108 2019-2 Ltd. (Apr-19) 265 — 325 2019-3 Ltd. (Jul-19) 120 — 223 2019-4 Ltd. (Oct-19) 218 — 266 2020-2 Ltd. (Sep-20) 54 — 105 2020-3 Ltd. (Nov-20) 183 4 244 2020-4 Ltd. (Dec-20) 67 2 98 2021-1 Ltd. (Mar-21) 388 17 467 2021-2 Ltd. (Jun-21) 380 58 458 2021-3 Ltd. (Sep-21) 444 116 490 2022-1 Ltd. (Jan-22) 269 30 284 2022-2 Ltd. (Sep-22) 201 126 201 Total $ 2,874 $ 353 $ 3,595 (1) Coverage from a separate panel of reinsurers remaining at September 30, 2023. |
Other Comprehensive Income (L_2
Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Comprehensive Income Note Disclosure [Abstract] | |
Details about amounts reclassified from AOCI | The following tables present details about amounts reclassified from accumulated other comprehensive income and the tax effects allocated to each component of other comprehensive income (loss): Amounts Reclassified from AOCI Consolidated Statement of Income Three Months Ended Nine Months Ended Details About Line Item That Includes September 30, September 30, AOCI Components Reclassification 2023 2022 2023 2022 Unrealized appreciation (decline) on available-for-sale investments Net realized gains (losses) $ (104) $ (56) $ (345) $ (186) Provision for credit losses — 9 (23) (48) Total before tax (104) (47) (368) (234) Income tax (expense) benefit 8 1 24 28 Net of tax $ (96) $ (46) $ (344) $ (206) |
Schedule of comprehensive income (loss) | Before Tax Amount Tax Expense (Benefit) Net of Tax Amount Three Months Ended September 30, 2023 Unrealized appreciation (decline) in value of investments: Unrealized holding gains (losses) arising during period $ (208) $ (18) $ (190) Less reclassification of net realized gains (losses) included in net income (104) (8) (96) Foreign currency translation adjustments (40) — (40) Other comprehensive income (loss) $ (144) $ (10) $ (134) Three Months Ended September 30, 2022 Unrealized appreciation (decline) in value of investments: Unrealized holding gains (losses) arising during period $ (672) $ (62) $ (610) Less reclassification of net realized gains (losses) included in net income (47) (1) (46) Foreign currency translation adjustments (70) — (70) Other comprehensive income (loss) $ (695) $ (61) $ (634) Nine Months Ended September 30, 2023 Unrealized appreciation (decline) in value of investments: Unrealized holding gains (losses) arising during period $ (131) $ (13) $ (118) Less reclassification of net realized gains (losses) included in net income (368) (24) (344) Foreign currency translation adjustments (33) — (33) Other comprehensive income (loss) $ 204 $ 11 $ 193 Nine Months Ended September 30, 2022 Unrealized appreciation (decline) in value of investments: Unrealized holding gains (losses) arising during period $ (2,132) $ (240) $ (1,892) Less reclassification of net realized gains (losses) included in net income (234) (28) (206) Foreign currency translation adjustments (141) — (141) Other comprehensive income (loss) $ (2,039) $ (212) $ (1,827) |
Share Transactions - Share repu
Share Transactions - Share repurchases (Details) $ in Billions | Sep. 30, 2023 USD ($) |
Common shares | |
Class of Stock [Line Items] | |
Remaining authorized repurchase amount | $ 1 |
Share Transactions - Employee S
Share Transactions - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan - 2007 Employee Share Purchase Plan - shares | May 04, 2023 | Sep. 30, 2023 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Increase in number of shares authorized (in shares) | 3,000,000 | |
Number of shares authorized (in shares) | 12,750,000 | |
Number of shares available for future issuance (in shares) | 3,700,000 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Numerator: | |||||
Net income (loss) | $ 723 | $ 18 | $ 2,109 | $ 620 | |
Net (income) loss attributable to noncontrolling interests | 0 | (1) | 0 | (3) | |
Net income available to Arch | 723 | 17 | 2,109 | 617 | |
Preferred dividends | (10) | (10) | (30) | (30) | |
Net income (loss) available to Arch common shareholders | $ 713 | $ 7 | $ 2,079 | $ 587 | |
Denominator: | |||||
Weighted average common shares outstanding — basic | 369.2 | 365.2 | 368.4 | 369.5 | |
Effect of dilutive common share equivalents: | |||||
Nonvested restricted shares | 2.6 | 2.3 | 2.4 | 2.2 | |
Stock options | [1] | 7.6 | 6.2 | 7.5 | 6.7 |
Weighted average common shares and common share equivalents outstanding — diluted | 379.4 | 373.7 | 378.3 | 378.4 | |
Earnings per common share: | |||||
Basic (per share) | $ 1.93 | $ 0.02 | $ 5.64 | $ 1.59 | |
Diluted (per share) | $ 1.88 | $ 0.02 | $ 5.50 | $ 1.55 | |
Stock options | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per common share (shares) | 0.3 | 0.8 | 0.5 | 0.8 | |
[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 the 2023 third quarter and 2022 third quarter, the number of stock options excluded were 0.3 million and 0.8 million, respectively. For the nine months ended September 30, 2023 and 2022, the number of stock options excluded were 0.5 million and 0.8 million, respectively. |
Segment Information - Summary o
Segment Information - Summary of underwriting income or loss by segment (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) segment | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | ||
Segment Reporting Information [Line Items] | ||||||
Number of segments | segment | 3 | |||||
Gross premiums written | $ 4,527 | $ 3,861 | $ 14,152 | $ 11,532 | ||
Premiums ceded | (1,172) | (1,137) | (3,945) | (3,489) | ||
Net premiums written | 3,355 | 2,724 | 10,207 | 8,043 | ||
Change in unearned premiums | (107) | (253) | (1,111) | (1,125) | ||
Net premiums earned | 3,248 | 2,471 | 9,096 | 6,918 | ||
Other underwriting income | 5 | 3 | 21 | 12 | ||
Losses and loss adjustment expenses | (1,647) | (1,683) | (4,609) | (3,787) | ||
Acquisition expenses | (575) | (448) | (1,669) | (1,239) | ||
Other operating expenses | (310) | (275) | (942) | (842) | ||
Underwriting income (loss) | 721 | 68 | 1,897 | 1,062 | ||
Net investment income | 269 | 129 | 710 | 315 | ||
Net realized gains (losses) | (248) | (184) | (354) | (743) | ||
Equity in net income (loss) of investment funds accounted for using the equity method | 59 | (19) | 176 | 75 | ||
Other income (loss) | (4) | (14) | 10 | (35) | ||
Corporate expenses | [1] | (20) | (18) | (69) | (78) | |
Transaction costs and other | [1] | 0 | 0 | (2) | 0 | |
Amortization of intangible assets | (24) | (26) | (71) | (80) | ||
Interest expense | (34) | (33) | (99) | (99) | ||
Net foreign exchange gains (losses) | 22 | 91 | (1) | 183 | ||
Income (loss) before income taxes and income (loss) from operating affiliates | 741 | (6) | 2,197 | 600 | ||
Income tax expense (benefit) | (72) | 15 | (203) | (19) | ||
Income (loss) from operating affiliates | 54 | 9 | 115 | 39 | ||
Net income (loss) | 723 | 18 | 2,109 | 620 | ||
Net (income) loss attributable to noncontrolling interests | 0 | (1) | 0 | (3) | ||
Net income (loss) available to Arch | 723 | 17 | 2,109 | 617 | ||
Preferred dividends | (10) | (10) | (30) | (30) | ||
Net income (loss) available to Arch common shareholders | $ 713 | $ 7 | $ 2,079 | $ 587 | ||
Underwriting Ratios | ||||||
Loss ratio | 50.70% | 68.10% | 50.70% | 54.70% | ||
Acquisition expense ratio | 17.70% | 18.10% | 18.30% | 17.90% | ||
Other operating expense ratio | 9.50% | 11.10% | 10.40% | 12.20% | ||
Combined ratio | 77.90% | 97.30% | 79.40% | 84.80% | ||
Goodwill and intangible assets | $ 739 | $ 807 | $ 739 | $ 807 | $ 804 | |
Operating segments | Insurance | ||||||
Segment Reporting Information [Line Items] | ||||||
Gross premiums written | [2] | 2,043 | 1,862 | 5,977 | 5,287 | |
Premiums ceded | (521) | (493) | (1,564) | (1,483) | ||
Net premiums written | 1,522 | 1,369 | 4,413 | 3,804 | ||
Change in unearned premiums | (110) | (182) | (416) | (488) | ||
Net premiums earned | 1,412 | 1,187 | 3,997 | 3,316 | ||
Other underwriting income | 0 | 0 | 0 | 0 | ||
Losses and loss adjustment expenses | (812) | (823) | (2,276) | (2,054) | ||
Acquisition expenses | (269) | (233) | (778) | (643) | ||
Other operating expenses | (202) | (165) | (592) | (493) | ||
Underwriting income (loss) | $ 129 | $ (34) | $ 351 | $ 126 | ||
Underwriting Ratios | ||||||
Loss ratio | 57.50% | 69.30% | 57% | 61.90% | ||
Acquisition expense ratio | 19.10% | 19.60% | 19.50% | 19.40% | ||
Other operating expense ratio | 14.30% | 13.90% | 14.80% | 14.90% | ||
Combined ratio | 90.90% | 102.80% | 91.30% | 96.20% | ||
Goodwill and intangible assets | $ 220 | $ 225 | $ 220 | $ 225 | ||
Operating segments | Reinsurance | ||||||
Segment Reporting Information [Line Items] | ||||||
Gross premiums written | [2] | 2,138 | 1,639 | 7,142 | 5,151 | |
Premiums ceded | (576) | (560) | (2,145) | (1,770) | ||
Net premiums written | 1,562 | 1,079 | 4,997 | 3,381 | ||
Change in unearned premiums | (19) | (77) | (781) | (647) | ||
Net premiums earned | 1,543 | 1,002 | 4,216 | 2,734 | ||
Other underwriting income | 2 | 0 | 9 | 6 | ||
Losses and loss adjustment expenses | (870) | (928) | (2,379) | (1,920) | ||
Acquisition expenses | (304) | (208) | (875) | (569) | ||
Other operating expenses | (61) | (63) | (203) | (199) | ||
Underwriting income (loss) | $ 310 | $ (197) | $ 768 | $ 52 | ||
Underwriting Ratios | ||||||
Loss ratio | 56.40% | 92.60% | 56.40% | 70.20% | ||
Acquisition expense ratio | 19.70% | 20.80% | 20.70% | 20.80% | ||
Other operating expense ratio | 3.90% | 6.30% | 4.80% | 7.30% | ||
Combined ratio | 80% | 119.70% | 81.90% | 98.30% | ||
Goodwill and intangible assets | $ 132 | $ 141 | $ 132 | $ 141 | ||
Operating segments | Mortgage | ||||||
Segment Reporting Information [Line Items] | ||||||
Gross premiums written | [2] | 347 | 362 | 1,037 | 1,099 | |
Premiums ceded | (76) | (86) | (240) | (241) | ||
Net premiums written | 271 | 276 | 797 | 858 | ||
Change in unearned premiums | 22 | 6 | 86 | 10 | ||
Net premiums earned | 293 | 282 | 883 | 868 | ||
Other underwriting income | 3 | 3 | 12 | 6 | ||
Losses and loss adjustment expenses | 35 | 68 | 46 | 187 | ||
Acquisition expenses | (2) | (7) | (16) | (27) | ||
Other operating expenses | (47) | (47) | (147) | (150) | ||
Underwriting income (loss) | $ 282 | $ 299 | $ 778 | $ 884 | ||
Underwriting Ratios | ||||||
Loss ratio | (12.10%) | (24.10%) | (5.30%) | (21.60%) | ||
Acquisition expense ratio | 0.60% | 2.40% | 1.80% | 3.20% | ||
Other operating expense ratio | 16.20% | 16.50% | 16.70% | 17.30% | ||
Combined ratio | 4.70% | (5.20%) | 13.20% | (1.10%) | ||
Goodwill and intangible assets | $ 387 | $ 441 | $ 387 | $ 441 | ||
[1]Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘transaction costs and other.’[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. |
Reserve for Losses and Loss A_3
Reserve for Losses and Loss Adjustment Expenses - Reconciliation of beginning and ending balances of losses and loss adjustment reserves (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract] | ||||
Reserve for losses and loss adjustment expenses at beginning of period | $ 21,268 | $ 18,194 | $ 20,032 | $ 17,757 |
Unpaid losses and loss adjustment expenses recoverable | 6,394 | 5,686 | 6,280 | 5,599 |
Net reserve for losses and loss adjustment expenses at beginning of period | 14,874 | 12,508 | 13,752 | 12,158 |
Net incurred losses and loss adjustment expenses relating to losses occurring in: | ||||
Current year | 1,793 | 1,863 | 5,012 | 4,279 |
Prior years | (146) | (180) | (403) | (492) |
Total net incurred losses and loss adjustment expenses | 1,647 | 1,683 | 4,609 | 3,787 |
Net foreign exchange (gains) losses and other | (123) | (245) | (24) | (527) |
Net paid losses and loss adjustment expenses relating to losses occurring in: | ||||
Current year | (345) | (227) | (700) | (464) |
Prior years | (713) | (538) | (2,297) | (1,773) |
Total net paid losses and loss adjustment expenses | (1,058) | (765) | (2,997) | (2,237) |
Net reserve for losses and loss adjustment expenses at end of period | 15,340 | 13,181 | 15,340 | 13,181 |
Unpaid losses and loss adjustment expenses recoverable | 6,496 | 6,107 | 6,496 | 6,107 |
Reserve for losses and loss adjustment expenses at end of period | $ 21,836 | $ 19,288 | $ 21,836 | $ 19,288 |
Reserve for Losses and Loss A_4
Reserve for Losses and Loss Adjustment Expenses - Prior year development (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | $ 146 | $ 180 | $ 403 | $ 492 |
Operating segments | Insurance | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | $ 10 | $ 5 | $ 34 | $ 19 |
Percentage of prior year development | 0.70% | 0.50% | 0.80% | 0.60% |
Operating segments | Insurance | Medium tailed lines | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | $ (20) | $ (52) | ||
Operating segments | Insurance | Medium tailed lines | Professional liability | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | (25) | $ (11) | (48) | $ (25) |
Operating segments | Insurance | Medium tailed lines | Contract binding | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | (11) | (6) | ||
Operating segments | Insurance | Medium tailed lines | Marine | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | 6 | 11 | 11 | |
Operating segments | Insurance | Long tailed lines | Casualty | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | (12) | (18) | ||
Operating segments | Insurance | Long tailed lines | Executive assurance | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | 7 | 24 | ||
Operating segments | Insurance | Long tailed lines | Other lines | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | 17 | |||
Operating segments | Insurance | Long tailed lines | Alternative markets | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | 7 | 13 | ||
Operating segments | Insurance | Short tailed lines | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | 16 | 49 | ||
Operating segments | Insurance | Short tailed lines | Property excluding marine | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | 8 | 9 | 33 | |
Operating segments | Insurance | Short tailed lines | Warranty and lenders solutions | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | 6 | 6 | 20 | 37 |
Operating segments | Insurance | Short tailed lines | Travel and accident | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | 6 | 11 | 14 | |
Operating segments | Insurance | Medium tailed and long tailed lines | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | (11) | (30) | ||
Operating segments | Insurance | Short tailed and long tailed lines | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | 30 | 86 | ||
Operating segments | Reinsurance | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | $ 44 | $ 49 | $ 126 | $ 127 |
Percentage of prior year development | 2.80% | 4.90% | 3% | 4.70% |
Operating segments | Reinsurance | Medium tailed lines | Marine and aviation | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | $ (4) | $ 8 | $ 5 | $ 23 |
Operating segments | Reinsurance | Long tailed lines | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | (9) | (42) | (20) | |
Operating segments | Reinsurance | Long tailed lines | Casualty | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | (21) | (10) | (39) | (19) |
Operating segments | Reinsurance | Short tailed and medium tailed lines | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | 58 | 168 | 148 | |
Operating segments | Reinsurance | Short tailed lines | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | 69 | |||
Operating segments | Reinsurance | Short tailed lines | Property catastrophe | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | 22 | 13 | 29 | 22 |
Operating segments | Reinsurance | Short tailed lines | Property other than property catastrophe | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | 29 | 36 | 75 | 83 |
Operating segments | Reinsurance | Short tailed lines | Other specialty lines and other lines | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | 19 | |||
Operating segments | Reinsurance | Short tailed lines | Other specialty lines | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | 46 | 20 | ||
Operating segments | Reinsurance | Short tailed lines | Other lines | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | 12 | |||
Operating segments | Reinsurance | Medium tailed and long tailed lines | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | (25) | |||
Operating segments | Mortgage | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Prior year development favorable (unfavorable) | $ 92 | $ 126 | $ 243 | $ 346 |
Percentage of prior year development | 31.40% | 44.70% | 27.50% | 39.90% |
Allowance for Expected Credit_3
Allowance for Expected Credit Losses - Premiums receivable (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Credit Loss [Abstract] | |||||
Balance at beginning of period | $ 5,296 | $ 3,634 | $ 3,625 | $ 2,633 | |
Balance at end of period | 4,937 | 3,579 | 4,937 | 3,579 | |
Allowance for Expected Credit Losses | |||||
Balance at beginning of period | 34 | 38 | 35 | 40 | |
Change for provision of expected credit losses | [1] | 0 | 0 | (1) | (2) |
Balance at end of period | 34 | 38 | 34 | 38 | |
Premium receivable, write-offs during the period | $ 0 | $ 2 | $ 2 | $ 7 | |
[1]Amounts deemed uncollectible are written-off in operating expenses. For the 2023 third quarter and 2022 third quarter, amounts written off were nil and $2 million, respectively. For the nine months ended September 30, 2023 and 2022 period, amounts written off were $2 million and $7 million, respectively. |
Allowance for Expected Credit_4
Allowance for Expected Credit Losses - Reinsurance recoverables (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Credit Loss [Abstract] | ||||
Balance at beginning of period | $ 6,717 | $ 5,939 | $ 6,564 | $ 5,881 |
Balance at end of period | 6,821 | 6,356 | 6,821 | 6,356 |
Allowance for Expected Credit Losses | ||||
Balance at beginning of period | 22 | 15 | 22 | 13 |
Change for provision of expected credit losses | 1 | 2 | 1 | 4 |
Balance at end of period | $ 23 | $ 17 | $ 23 | $ 17 |
Allowance for Expected Credit_5
Allowance for Expected Credit Losses - Ceded credit risk (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | ||
Ceded Credit Risk [Line Items] | |||||||
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses | $ 6,821 | $ 6,564 | $ 6,717 | $ 6,356 | $ 5,939 | $ 5,881 | |
Reinsurance recoverable | Reinsurer concentration risk | AM Best A minus Or Better Rating | |||||||
Ceded Credit Risk [Line Items] | |||||||
Concentration risk percentage | 66.70% | 68.80% | |||||
Reinsurance recoverable | Reinsurer concentration risk | AM Best Rating Below A Minus | All Other Carriers | |||||||
Ceded Credit Risk [Line Items] | |||||||
Concentration risk percentage | 0.20% | 0.10% | |||||
Reinsurance recoverable | Reinsurer concentration risk | Not Rated | All Other Carriers | |||||||
Ceded Credit Risk [Line Items] | |||||||
Concentration risk percentage | [1] | 33.10% | 31.10% | ||||
Reinsurance recoverable | Reinsurer concentration risk | Not Rated | Ceded credit risk, secured | |||||||
Ceded Credit Risk [Line Items] | |||||||
Concentration risk percentage | 95% | 95% | |||||
Stockholders' equity | Reinsurer concentration risk | Largest Balance Due From Any One Carrier | |||||||
Ceded Credit Risk [Line Items] | |||||||
Concentration risk percentage | 8.30% | 9% | |||||
[1]At September 30, 2023 and December 31, 2022 over 95% of such amount were collateralized through reinsurance trusts, funds withheld arrangements, letters of credit or other, respectively |
Allowance for Expected Credit_6
Allowance for Expected Credit Losses - Contractholder receivables (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Credit Loss [Abstract] | ||||
Balance at beginning of period | $ 1,761 | $ 1,758 | $ 1,731 | $ 1,829 |
Balance at end of period | 1,805 | 1,736 | 1,805 | 1,736 |
Allowance for Expected Credit Losses | ||||
Balance at beginning of period | 3 | 3 | 3 | 3 |
Change for provision of expected credit losses | 0 | (1) | 0 | (1) |
Balance at end of period | $ 3 | $ 2 | $ 3 | $ 2 |
Investment Information - Summar
Investment Information - Summary of available for sale securities (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||||||
Estimated Fair Value | $ 24,167 | $ 21,015 | ||||
Gross Unrealized Gains | 77 | 90 | ||||
Gross Unrealized Losses | (1,415) | (1,649) | ||||
Allowance for Expected Credit Losses | (57) | (41) | ||||
Cost or Amortized Cost | 25,562 | 22,615 | ||||
Fixed maturities | ||||||
Debt Securities, Available-for-sale [Line Items] | ||||||
Estimated Fair Value | 22,485 | 19,683 | ||||
Gross Unrealized Gains | 74 | 89 | ||||
Gross Unrealized Losses | (1,414) | (1,647) | ||||
Allowance for Expected Credit Losses | (57) | $ (61) | (41) | $ (46) | $ (59) | $ (3) |
Cost or Amortized Cost | 23,882 | 21,282 | ||||
Fixed maturities | Corporate bonds | ||||||
Debt Securities, Available-for-sale [Line Items] | ||||||
Estimated Fair Value | 10,064 | 8,020 | ||||
Gross Unrealized Gains | 33 | 55 | ||||
Gross Unrealized Losses | (747) | (781) | ||||
Allowance for Expected Credit Losses | (47) | (50) | (30) | (37) | (40) | (2) |
Cost or Amortized Cost | 10,825 | 8,776 | ||||
Fixed maturities | U.S. government and government agencies | ||||||
Debt Securities, Available-for-sale [Line Items] | ||||||
Estimated Fair Value | 5,662 | 5,162 | ||||
Gross Unrealized Gains | 15 | 15 | ||||
Gross Unrealized Losses | (240) | (343) | ||||
Allowance for Expected Credit Losses | 0 | 0 | ||||
Cost or Amortized Cost | 5,887 | 5,490 | ||||
Fixed maturities | Asset backed securities | ||||||
Debt Securities, Available-for-sale [Line Items] | ||||||
Estimated Fair Value | 2,342 | 1,927 | ||||
Gross Unrealized Gains | 10 | 1 | ||||
Gross Unrealized Losses | (76) | (107) | ||||
Allowance for Expected Credit Losses | (5) | (6) | ||||
Cost or Amortized Cost | 2,413 | 2,039 | ||||
Fixed maturities | Non-U.S. government securities | ||||||
Debt Securities, Available-for-sale [Line Items] | ||||||
Estimated Fair Value | 2,052 | 2,313 | ||||
Gross Unrealized Gains | 9 | 9 | ||||
Gross Unrealized Losses | (173) | (238) | ||||
Allowance for Expected Credit Losses | (2) | $ (3) | (2) | $ 0 | $ 0 | $ 0 |
Cost or Amortized Cost | 2,218 | 2,544 | ||||
Fixed maturities | Commercial mortgage backed securities | ||||||
Debt Securities, Available-for-sale [Line Items] | ||||||
Estimated Fair Value | 1,102 | 1,047 | ||||
Gross Unrealized Gains | 0 | 1 | ||||
Gross Unrealized Losses | (46) | (58) | ||||
Allowance for Expected Credit Losses | (3) | (3) | ||||
Cost or Amortized Cost | 1,151 | 1,107 | ||||
Fixed maturities | Residential mortgage backed securities | ||||||
Debt Securities, Available-for-sale [Line Items] | ||||||
Estimated Fair Value | 965 | 795 | ||||
Gross Unrealized Gains | 5 | 5 | ||||
Gross Unrealized Losses | (100) | (87) | ||||
Allowance for Expected Credit Losses | 0 | 0 | ||||
Cost or Amortized Cost | 1,060 | 877 | ||||
Fixed maturities | Municipal bonds | ||||||
Debt Securities, Available-for-sale [Line Items] | ||||||
Estimated Fair Value | 298 | 419 | ||||
Gross Unrealized Gains | 2 | 3 | ||||
Gross Unrealized Losses | (32) | (33) | ||||
Allowance for Expected Credit Losses | 0 | 0 | ||||
Cost or Amortized Cost | 328 | 449 | ||||
Short-term investments | ||||||
Debt Securities, Available-for-sale [Line Items] | ||||||
Estimated Fair Value | 1,682 | 1,332 | ||||
Gross Unrealized Gains | 3 | 1 | ||||
Gross Unrealized Losses | (1) | (2) | ||||
Allowance for Expected Credit Losses | 0 | 0 | ||||
Cost or Amortized Cost | $ 1,680 | $ 1,333 |
Investment Information - Aging
Investment Information - Aging of available for sale securities in an unrealized loss position (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Estimated Fair Value [Abstract] | ||
Estimated Fair Value - Less than 12 Months | $ 10,776 | $ 12,976 |
Estimated Fair Value - 12 Months or More | 10,449 | 5,671 |
Estimated Fair Value | 21,225 | 18,647 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Gross Unrealized Losses - Less than 12 Months | (287) | (929) |
Gross Unrealized Losses - 12 Months or More | (1,128) | (720) |
Gross Unrealized Losses | (1,415) | (1,649) |
Fixed maturities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position, Estimated Fair Value [Abstract] | ||
Estimated Fair Value - Less than 12 Months | 10,584 | 12,739 |
Estimated Fair Value - 12 Months or More | 10,449 | 5,671 |
Estimated Fair Value | 21,033 | 18,410 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Gross Unrealized Losses - Less than 12 Months | (286) | (927) |
Gross Unrealized Losses - 12 Months or More | (1,128) | (720) |
Gross Unrealized Losses | (1,414) | (1,647) |
Fixed maturities | Corporate bonds | ||
Debt Securities, Available-for-sale, Unrealized Loss Position, Estimated Fair Value [Abstract] | ||
Estimated Fair Value - Less than 12 Months | 4,813 | 4,823 |
Estimated Fair Value - 12 Months or More | 5,272 | 2,559 |
Estimated Fair Value | 10,085 | 7,382 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Gross Unrealized Losses - Less than 12 Months | (141) | (393) |
Gross Unrealized Losses - 12 Months or More | (606) | (388) |
Gross Unrealized Losses | (747) | (781) |
Fixed maturities | U.S. government and government agencies | ||
Debt Securities, Available-for-sale, Unrealized Loss Position, Estimated Fair Value [Abstract] | ||
Estimated Fair Value - Less than 12 Months | 3,922 | 3,557 |
Estimated Fair Value - 12 Months or More | 1,294 | 1,443 |
Estimated Fair Value | 5,216 | 5,000 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Gross Unrealized Losses - Less than 12 Months | (93) | (197) |
Gross Unrealized Losses - 12 Months or More | (147) | (146) |
Gross Unrealized Losses | (240) | (343) |
Fixed maturities | Non-U.S. government securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position, Estimated Fair Value [Abstract] | ||
Estimated Fair Value - Less than 12 Months | 1,002 | 1,703 |
Estimated Fair Value - 12 Months or More | 956 | 542 |
Estimated Fair Value | 1,958 | 2,245 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Gross Unrealized Losses - Less than 12 Months | (25) | (154) |
Gross Unrealized Losses - 12 Months or More | (148) | (84) |
Gross Unrealized Losses | (173) | (238) |
Fixed maturities | Residential mortgage backed securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position, Estimated Fair Value [Abstract] | ||
Estimated Fair Value - Less than 12 Months | 420 | 546 |
Estimated Fair Value - 12 Months or More | 521 | 154 |
Estimated Fair Value | 941 | 700 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Gross Unrealized Losses - Less than 12 Months | (15) | (52) |
Gross Unrealized Losses - 12 Months or More | (85) | (35) |
Gross Unrealized Losses | (100) | (87) |
Fixed maturities | Asset backed securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position, Estimated Fair Value [Abstract] | ||
Estimated Fair Value - Less than 12 Months | 190 | 1,148 |
Estimated Fair Value - 12 Months or More | 1,287 | 512 |
Estimated Fair Value | 1,477 | 1,660 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Gross Unrealized Losses - Less than 12 Months | (4) | (66) |
Gross Unrealized Losses - 12 Months or More | (72) | (41) |
Gross Unrealized Losses | (76) | (107) |
Fixed maturities | Commercial mortgage backed securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position, Estimated Fair Value [Abstract] | ||
Estimated Fair Value - Less than 12 Months | 153 | 598 |
Estimated Fair Value - 12 Months or More | 907 | 445 |
Estimated Fair Value | 1,060 | 1,043 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Gross Unrealized Losses - Less than 12 Months | (3) | (35) |
Gross Unrealized Losses - 12 Months or More | (43) | (23) |
Gross Unrealized Losses | (46) | (58) |
Fixed maturities | Municipal bonds | ||
Debt Securities, Available-for-sale, Unrealized Loss Position, Estimated Fair Value [Abstract] | ||
Estimated Fair Value - Less than 12 Months | 84 | 364 |
Estimated Fair Value - 12 Months or More | 212 | 16 |
Estimated Fair Value | 296 | 380 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Gross Unrealized Losses - Less than 12 Months | (5) | (30) |
Gross Unrealized Losses - 12 Months or More | (27) | (3) |
Gross Unrealized Losses | (32) | (33) |
Short-term investments | ||
Debt Securities, Available-for-sale, Unrealized Loss Position, Estimated Fair Value [Abstract] | ||
Estimated Fair Value - Less than 12 Months | 192 | 237 |
Estimated Fair Value - 12 Months or More | 0 | 0 |
Estimated Fair Value | 192 | 237 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Gross Unrealized Losses - Less than 12 Months | (1) | (2) |
Gross Unrealized Losses - 12 Months or More | 0 | 0 |
Gross Unrealized Losses | $ (1) | $ (2) |
Investment Information - Maturi
Investment Information - Maturity profile of available for sale securities) (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Estimated Fair Value | ||
Estimated Fair Value | $ 24,167 | $ 21,015 |
Amortized Cost | ||
Cost or Amortized Cost | 25,562 | 22,615 |
Fixed maturities | ||
Estimated Fair Value | ||
Due in one year or less | 683 | 511 |
Due after one year through five years | 12,561 | 11,016 |
Due after five years through 10 years | 4,515 | 3,984 |
Due after 10 years | 317 | 403 |
Single maturity date | 18,076 | 15,914 |
Estimated Fair Value | 22,485 | 19,683 |
Amortized Cost | ||
Due in one year or less | 708 | 537 |
Due after one year through five years | 13,123 | 11,715 |
Due after five years through 10 years | 5,035 | 4,527 |
Due after 10 years | 392 | 480 |
Single maturity date | 19,258 | 17,259 |
Cost or Amortized Cost | 23,882 | 21,282 |
Fixed maturities | Residential mortgage backed securities | ||
Estimated Fair Value | ||
Securities without single maturity date | 965 | 795 |
Estimated Fair Value | 965 | 795 |
Amortized Cost | ||
Securities without single maturity date | 1,060 | 877 |
Cost or Amortized Cost | 1,060 | 877 |
Fixed maturities | Commercial mortgage backed securities | ||
Estimated Fair Value | ||
Securities without single maturity date | 1,102 | 1,047 |
Estimated Fair Value | 1,102 | 1,047 |
Amortized Cost | ||
Securities without single maturity date | 1,151 | 1,107 |
Cost or Amortized Cost | 1,151 | 1,107 |
Fixed maturities | Asset backed securities | ||
Estimated Fair Value | ||
Securities without single maturity date | 2,342 | 1,927 |
Estimated Fair Value | 2,342 | 1,927 |
Amortized Cost | ||
Securities without single maturity date | 2,413 | 2,039 |
Cost or Amortized Cost | $ 2,413 | $ 2,039 |
Investment Information - Other
Investment Information - Other investments, at fair value (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Schedule Of Other Investments [Line Items] | ||
Other investments, at fair value | $ 2,068 | $ 1,644 |
Other investments | ||
Schedule Of Other Investments [Line Items] | ||
Other investments, at fair value | 1,404 | 1,043 |
Other investments | Lending | ||
Schedule Of Other Investments [Line Items] | ||
Other investments, at fair value | 460 | 406 |
Other investments | Investment grade fixed income | ||
Schedule Of Other Investments [Line Items] | ||
Other investments, at fair value | 418 | 271 |
Other investments | Term loan investments | ||
Schedule Of Other Investments [Line Items] | ||
Other investments, at fair value | 242 | 164 |
Other investments | Private equity | ||
Schedule Of Other Investments [Line Items] | ||
Other investments, at fair value | 182 | 123 |
Other investments | Credit related funds | ||
Schedule Of Other Investments [Line Items] | ||
Other investments, at fair value | 84 | 56 |
Other investments | Energy | ||
Schedule Of Other Investments [Line Items] | ||
Other investments, at fair value | 18 | 23 |
Fixed maturities | ||
Schedule Of Other Investments [Line Items] | ||
Other investments, at fair value | 644 | 554 |
Equity securities | ||
Schedule Of Other Investments [Line Items] | ||
Other investments, at fair value | 7 | 14 |
Short-term investments | ||
Schedule Of Other Investments [Line Items] | ||
Other investments, at fair value | $ 13 | $ 33 |
Investment Information - Equity
Investment Information - Equity method investments (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Schedule of Equity Method Investments [Line Items] | ||
Investments accounted for using the equity method | $ 4,251 | $ 3,774 |
Credit related funds | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments accounted for using the equity method | 1,165 | 1,136 |
Private equity | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments accounted for using the equity method | 1,083 | 917 |
Real estate | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments accounted for using the equity method | 620 | 535 |
Lending | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments accounted for using the equity method | 555 | 531 |
Infrastructure | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments accounted for using the equity method | 298 | 245 |
Fixed income | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments accounted for using the equity method | 258 | 130 |
Equity securities | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments accounted for using the equity method | 171 | 169 |
Energy | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments accounted for using the equity method | $ 101 | $ 111 |
Investment Information - Limite
Investment Information - Limited partnership interests (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | |
Schedule of Equity Method Investments [Line Items] | |||
Maximum Exposure to Loss | $ 4,379 | $ 3,905 | |
Aggregate unfunded commitments | 3,100 | 2,900 | |
Equity method investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Maximum Exposure to Loss | [1] | 4,251 | 3,774 |
Aggregate unfunded commitments | 3,000 | 2,600 | |
Fair value option | |||
Schedule of Equity Method Investments [Line Items] | |||
Maximum Exposure to Loss | [2] | 128 | 131 |
Aggregate unfunded commitments | $ 32 | $ 17 | |
[1]Aggregate unfunded commitments were $3.0 billion at September 30, 2023, compared with $2.6 billion at December 31, 2022.[2]Aggregate unfunded commitments were $32 million at September 30, 2023, compared to $17 million at December 31, 2022. |
Investment Information - Net in
Investment Information - Net investment income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Net investment income: | |||||
Gross investment income | $ 289 | $ 146 | $ 768 | $ 372 | |
Investment expenses | (20) | (17) | (58) | (57) | |
Net investment income | 269 | 129 | 710 | 315 | |
Fixed maturities | |||||
Net investment income: | |||||
Gross investment income | 243 | 124 | 645 | 311 | |
Equity securities | |||||
Net investment income: | |||||
Gross investment income | 5 | 4 | 15 | 16 | |
Short-term investments | |||||
Net investment income: | |||||
Gross investment income | 19 | 9 | 48 | 16 | |
Other | |||||
Net investment income: | |||||
Gross investment income | [1] | $ 22 | $ 9 | $ 60 | $ 29 |
[1]Amounts include dividends and other distributions on investment funds, term loan investments, funds held balances, cash balances and other items. |
Investment Information - Net re
Investment Information - Net realized gains and losses (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Available for sale securities: | |||||
Available for sale securities, gross gains on investment sales | $ 12 | $ 18 | $ 51 | $ 53 | |
Available for sale securities, gross losses on investment sales | (116) | (74) | (396) | (239) | |
Equity securities, at fair value: | |||||
Net realized gains (losses) on sales during the period | 14 | (6) | 50 | 76 | |
Net unrealized gains (losses) on equity securities still held at reporting date | (46) | (36) | 17 | (318) | |
Allowance for credit losses: | |||||
Allowance for credit losses - investments related | 0 | 9 | (23) | (48) | |
Allowance for credit losses - underwriting related | (1) | (4) | (2) | (7) | |
Derivative instruments | [1] | (102) | (48) | (61) | (118) |
Other | 4 | (4) | 4 | (7) | |
Net realized gains (losses) | (248) | (184) | (354) | (743) | |
Fixed maturities | |||||
Available for sale securities: | |||||
Change in fair value of assets and liabilities accounted for using the fair value option | (16) | (19) | (12) | (89) | |
Other investments | |||||
Available for sale securities: | |||||
Change in fair value of assets and liabilities accounted for using the fair value option | 3 | (18) | 17 | (37) | |
Equity securities | |||||
Available for sale securities: | |||||
Change in fair value of assets and liabilities accounted for using the fair value option | 0 | (1) | 1 | (6) | |
Short-term investments | |||||
Available for sale securities: | |||||
Change in fair value of assets and liabilities accounted for using the fair value option | $ 0 | $ (1) | $ 0 | $ (3) | |
[1]See note 9 for information on the Company’s derivative instruments. |
Investment Information - Invest
Investment Information - Investment in operating affiliates (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Schedule of Equity Method Investments [Line Items] | |||||
Investment in operating affiliates | $ 1,000 | $ 1,000 | $ 965 | ||
Income (loss) from operating affiliates | $ 54 | $ 9 | $ 115 | $ 39 | |
Coface | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Percentage ownership | 29.90% | 29.90% | |||
Investment in operating affiliates | $ 521 | $ 521 | 563 | ||
Greysbridge Holdings Ltd | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Percentage ownership | 40% | 40% | |||
Investment in operating affiliates | $ 362 | $ 362 | $ 306 | ||
Issued Shares Excluding Treasury Stock | Coface | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Percentage ownership | 30% | 30% |
Investment Information - Allowa
Investment Information - Allowance for expected credit losses (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Allowance for expected credit losses | |||||
Balance at beginning of period | $ 41 | ||||
Balance at end of period | $ 57 | 57 | |||
Fixed maturities | |||||
Allowance for expected credit losses | |||||
Balance at beginning of period | 61 | $ 59 | 41 | $ 3 | |
Additions for current-period provision for expected credit losses | 6 | 4 | 7 | 53 | |
Additions (reductions) for previously recognized expected credit losses | (3) | (13) | 18 | (6) | |
Reductions due to disposals | (7) | (4) | (9) | (4) | |
Balance at end of period | 57 | 46 | 57 | 46 | |
Fixed maturities | Structured securities | |||||
Allowance for expected credit losses | |||||
Balance at beginning of period | [1] | 8 | 19 | 9 | 1 |
Additions for current-period provision for expected credit losses | [1] | 2 | 2 | 2 | 13 |
Additions (reductions) for previously recognized expected credit losses | [1] | 0 | (10) | (1) | (3) |
Reductions due to disposals | [1] | (2) | (2) | (2) | (2) |
Balance at end of period | [1] | 8 | 9 | 8 | 9 |
Fixed maturities | Corporate bonds | |||||
Allowance for expected credit losses | |||||
Balance at beginning of period | 50 | 40 | 30 | 2 | |
Additions for current-period provision for expected credit losses | 4 | 2 | 5 | 40 | |
Additions (reductions) for previously recognized expected credit losses | (3) | (3) | 18 | (3) | |
Reductions due to disposals | (4) | (2) | (6) | (2) | |
Balance at end of period | 47 | 37 | 47 | 37 | |
Fixed maturities | Non-U.S. government securities | |||||
Allowance for expected credit losses | |||||
Balance at beginning of period | 3 | 0 | 2 | 0 | |
Additions for current-period provision for expected credit losses | 0 | 0 | 0 | 0 | |
Additions (reductions) for previously recognized expected credit losses | 0 | 0 | 1 | 0 | |
Reductions due to disposals | (1) | 0 | (1) | 0 | |
Balance at end of period | $ 2 | $ 0 | $ 2 | $ 0 | |
[1]Includes asset backed securities, residential mortgage backed securities and commercial mortgage backed securities. |
Investment Information - Restri
Investment Information - Restricted assets (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | |
Restricted Assets [Line Items] | |||
Restricted assets | $ 9,459 | $ 8,701 | |
Collateral or guarantees - affiliated transactions | |||
Restricted Assets [Line Items] | |||
Restricted assets | 4,572 | 4,254 | |
Collateral or guarantees - third party agreements | |||
Restricted Assets [Line Items] | |||
Restricted assets | 2,849 | 2,633 | |
Deposits with US regulatory authorities | |||
Restricted Assets [Line Items] | |||
Restricted assets | 788 | 776 | |
Other | |||
Restricted Assets [Line Items] | |||
Restricted assets | [1] | $ 1,250 | $ 1,038 |
[1]Primarily includes Funds at Lloyds, deposits with non-U.S. regulatory authorities and other restricted assets |
Investment Information - Cash a
Investment Information - Cash and restricted cash (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Disclosure Investment Information [Abstract] | ||||
Cash | $ 859 | $ 855 | ||
Restricted cash (included in ‘other assets’) | 496 | 418 | ||
Cash and restricted cash | $ 1,355 | $ 1,273 | $ 1,258 | $ 1,314 |
Investment Information - Narrat
Investment Information - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 USD ($) lots | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) lots | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) lots | |
Continuous unrealized loss, qualitative disclosures: | |||||
Number of positions in an unrealized loss position (lots) | lots | 11,140 | 11,140 | 9,810 | ||
Total number of positions (lots) | lots | 14,320 | 14,320 | 12,590 | ||
Largest single loss | $ 6 | $ 6 | $ 7 | ||
Narrative items: | |||||
Equity securities, at fair value | 894 | 894 | $ 860 | ||
Equity in net (loss) income of investment funds accounted for using the equity method | $ 59 | $ (19) | $ 176 | $ 75 | |
Minimum | |||||
Narrative items: | |||||
Time lag for reporting | 1 month | ||||
Maximum | |||||
Narrative items: | |||||
Time lag for reporting | 3 months |
Fair Value - Fair Value Hierarc
Fair Value - Fair Value Hierarchy (Details) - Recurring - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | |
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 | $ 8,146 | $ 7,188 | |
Liabilities measured at fair value | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other liabilities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities measured at fair value | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Derivative instruments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities measured at fair value | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Residential mortgage loans | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed maturities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 5,640 | 5,145 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed maturities | Corporate bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed maturities | U.S. government and government agencies | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 5,640 | 5,145 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed maturities | Asset backed securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed maturities | Non-U.S. government securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed maturities | Commercial mortgage backed securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed maturities | Residential mortgage backed securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 0 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed maturities | Municipal bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 0 | 0 | |
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 | 1,635 | 1,198 | |
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 | 860 | 829 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Derivative instruments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 0 | 0 | |
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 | 11 | 16 | |
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 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair value option | U.S. government and government agencies | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 7 | 5 | |
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 | 0 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair value option | Non-U.S. government securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 0 | 0 | |
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 | 1 | 1 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair value option | Equity securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 3 | 10 | |
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 | |
Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 17,877 | 15,474 | |
Liabilities measured at fair value | (114) | (76) | |
Significant Other Observable Inputs (Level 2) | Other liabilities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities measured at fair value | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | Derivative instruments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities measured at fair value | (114) | (76) | |
Significant Other Observable Inputs (Level 2) | Residential mortgage loans | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 2 | 2 | |
Significant Other Observable Inputs (Level 2) | Fixed maturities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 16,721 | 14,417 | |
Significant Other Observable Inputs (Level 2) | Fixed maturities | Corporate bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 9,940 | 7,899 | |
Significant Other Observable Inputs (Level 2) | Fixed maturities | U.S. government and government agencies | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 22 | 17 | |
Significant Other Observable Inputs (Level 2) | Fixed maturities | Asset backed securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 2,342 | 1,927 | |
Significant Other Observable Inputs (Level 2) | Fixed maturities | Non-U.S. government securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 2,052 | 2,313 | |
Significant Other Observable Inputs (Level 2) | Fixed maturities | Commercial mortgage backed securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 1,102 | 1,047 | |
Significant Other Observable Inputs (Level 2) | Fixed maturities | Residential mortgage backed securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 965 | 795 | |
Significant Other Observable Inputs (Level 2) | Fixed maturities | Municipal bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 298 | 419 | |
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 | 47 | 134 | |
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 | 29 | 28 | |
Significant Other Observable Inputs (Level 2) | Derivative instruments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 192 | 149 | |
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 | 886 | 744 | |
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 | 620 | 543 | |
Significant Other Observable Inputs (Level 2) | Fair value option | U.S. government and government agencies | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 0 | 0 | |
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 | 2 | 2 | |
Significant Other Observable Inputs (Level 2) | Fair value option | Non-U.S. government securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 15 | 4 | |
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 | 8 | 32 | |
Significant Other Observable Inputs (Level 2) | Fair value option | Equity securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 0 | 0 | |
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 | 241 | 163 | |
Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 237 | 161 | |
Liabilities measured at fair value | (21) | (14) | |
Significant Unobservable Inputs (Level 3) | Other liabilities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities measured at fair value | (21) | (14) | |
Significant Unobservable Inputs (Level 3) | Derivative instruments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities measured at fair value | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Residential mortgage loans | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Fixed maturities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 124 | 121 | |
Significant Unobservable Inputs (Level 3) | Fixed maturities | Corporate bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 124 | 121 | |
Significant Unobservable Inputs (Level 3) | Fixed maturities | U.S. government and government agencies | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Fixed maturities | Asset backed securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Fixed maturities | Non-U.S. government securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Fixed maturities | Commercial mortgage backed securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Fixed maturities | Residential mortgage backed securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 0 | 0 | |
Significant Unobservable Inputs (Level 3) | Fixed maturities | Municipal bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 0 | 0 | |
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 | |
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 | 5 | 3 | |
Significant Unobservable Inputs (Level 3) | Derivative instruments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 0 | 0 | |
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 | 108 | 37 | |
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 | |
Significant Unobservable Inputs (Level 3) | Fair value option | U.S. government and government agencies | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 0 | 0 | |
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 | 0 | |
Significant Unobservable Inputs (Level 3) | Fair value option | Non-U.S. government securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 0 | 0 | |
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 | 4 | 0 | |
Significant Unobservable Inputs (Level 3) | Fair value option | Equity securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 4 | 4 | |
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 | 100 | 33 | |
Estimated Fair Value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 27,323 | 23,670 | |
Liabilities measured at fair value | (135) | (90) | |
Estimated Fair Value | Other liabilities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities measured at fair value | (21) | (14) | |
Estimated Fair Value | Derivative instruments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities measured at fair value | (114) | (76) | |
Estimated Fair Value | Residential mortgage loans | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 2 | 2 | |
Estimated Fair Value | Fixed maturities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 22,485 | 19,683 | |
Estimated Fair Value | Fixed maturities | Corporate bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 10,064 | 8,020 | |
Estimated Fair Value | Fixed maturities | U.S. government and government agencies | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 5,662 | 5,162 | |
Estimated Fair Value | Fixed maturities | Asset backed securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 2,342 | 1,927 | |
Estimated Fair Value | Fixed maturities | Non-U.S. government securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 2,052 | 2,313 | |
Estimated Fair Value | Fixed maturities | Commercial mortgage backed securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 1,102 | 1,047 | |
Estimated Fair Value | Fixed maturities | Residential mortgage backed securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 965 | 795 | |
Estimated Fair Value | Fixed maturities | Municipal bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 298 | 419 | |
Estimated Fair Value | Short-term investments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 1,682 | 1,332 | |
Estimated Fair Value | Equity securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 894 | 860 | |
Estimated Fair Value | Derivative instruments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 192 | 149 | |
Estimated Fair Value | Fair value option | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 2,068 | 1,644 | |
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 | 620 | 543 | |
Estimated Fair Value | Fair value option | U.S. government and government agencies | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 7 | 5 | |
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 | 2 | 2 | |
Estimated Fair Value | Fair value option | Non-U.S. government securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 15 | 4 | |
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 | 13 | 33 | |
Estimated Fair Value | Fair value option | Equity securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 7 | 14 | |
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 | 341 | 196 | |
Estimated Fair Value | Fair value option | Other investments measured at net asset value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | [1] | $ 1,063 | $ 847 |
[1]In accordance with applicable accounting guidance, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets. |
Fair Value - Rollforward of Lev
Fair Value - Rollforward of Level 3 assets and liabilities (Details) - Recurring - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Other liabilities | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Balance at beginning of period | $ (19) | $ (17) | $ (14) | $ (17) | |
Total gains or (losses) (realized/unrealized) - included in earnings | [1] | 0 | 0 | 0 | 0 |
Total gains or (losses) (realized/unrealized) - included in other comprehensive income | 0 | 1 | 0 | 1 | |
Purchases, issuances, sales and settlements | |||||
Purchases | 0 | 0 | 0 | 0 | |
Issuances | (4) | 0 | (9) | 0 | |
Sales | 0 | 0 | 0 | 0 | |
Settlements | 2 | 2 | 2 | 2 | |
Transfers in and/or out of Level 3 | 0 | 0 | 0 | 0 | |
Balance at end of period | (21) | (14) | (21) | (14) | |
Available for sale | Structured securities | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Balance at beginning of period | [2] | 0 | 3 | 0 | 3 |
Total gains or (losses) (realized/unrealized) - included in earnings | [1],[2] | 0 | (1) | 0 | (1) |
Total gains or (losses) (realized/unrealized) - included in other comprehensive income | [2] | 0 | 0 | 0 | 0 |
Purchases, issuances, sales and settlements | |||||
Purchases | [2] | 0 | 0 | 0 | 0 |
Issuances | [2] | 0 | 0 | 0 | 0 |
Sales | [2] | 0 | (2) | 0 | (2) |
Settlements | [2] | 0 | 0 | 0 | 0 |
Transfers in and/or out of Level 3 | [2] | 0 | 0 | 0 | 0 |
Balance at end of period | [2] | 0 | 0 | 0 | 0 |
Available for sale | Corporate bonds | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Balance at beginning of period | 100 | 4 | 121 | 0 | |
Total gains or (losses) (realized/unrealized) - included in earnings | [1] | 0 | 0 | 1 | 0 |
Total gains or (losses) (realized/unrealized) - included in other comprehensive income | (1) | 0 | (1) | 0 | |
Purchases, issuances, sales and settlements | |||||
Purchases | 25 | 0 | 68 | 0 | |
Issuances | 0 | 0 | 0 | 0 | |
Sales | 0 | (4) | 0 | (4) | |
Settlements | 0 | 0 | (65) | 0 | |
Transfers in and/or out of Level 3 | 0 | 0 | 0 | 4 | |
Balance at end of period | 124 | 0 | 124 | 0 | |
Fair value option | Other investments | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Balance at beginning of period | 86 | 34 | 33 | 28 | |
Total gains or (losses) (realized/unrealized) - included in earnings | [1] | 0 | 0 | (1) | 0 |
Total gains or (losses) (realized/unrealized) - included in other comprehensive income | 0 | 0 | 0 | 0 | |
Purchases, issuances, sales and settlements | |||||
Purchases | 29 | 1 | 87 | 12 | |
Issuances | 0 | 0 | 0 | 0 | |
Sales | (6) | (1) | (10) | (3) | |
Settlements | (9) | 0 | (9) | (3) | |
Transfers in and/or out of Level 3 | 0 | 0 | 0 | 0 | |
Balance at end of period | 100 | 34 | 100 | 34 | |
Fair value option | Short-term investments | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Balance at beginning of period | 0 | 0 | 0 | 0 | |
Total gains or (losses) (realized/unrealized) - included in earnings | [1] | 0 | 0 | 0 | 0 |
Total gains or (losses) (realized/unrealized) - included in other comprehensive income | 0 | 0 | 0 | 0 | |
Purchases, issuances, sales and settlements | |||||
Purchases | 4 | 0 | 4 | 0 | |
Issuances | 0 | 0 | 0 | 0 | |
Sales | 0 | 0 | 0 | 0 | |
Settlements | 0 | 0 | 0 | 0 | |
Transfers in and/or out of Level 3 | 0 | 0 | 0 | 0 | |
Balance at end of period | 4 | 0 | 4 | 0 | |
Fair value option | Equity securities | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Balance at beginning of period | 4 | 5 | 4 | 5 | |
Total gains or (losses) (realized/unrealized) - included in earnings | [1] | 0 | 0 | 0 | 0 |
Total gains or (losses) (realized/unrealized) - included in other comprehensive income | 0 | 0 | 0 | 0 | |
Purchases, issuances, sales and settlements | |||||
Purchases | 0 | 0 | 0 | 0 | |
Issuances | 0 | 0 | 0 | 0 | |
Sales | 0 | 0 | 0 | 0 | |
Settlements | 0 | 0 | 0 | 0 | |
Transfers in and/or out of Level 3 | 0 | 0 | 0 | 0 | |
Balance at end of period | 4 | 5 | 4 | 5 | |
Equity securities | |||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Balance at beginning of period | 5 | 3 | 4 | 3 | |
Total gains or (losses) (realized/unrealized) - included in earnings | [1] | 0 | 0 | 0 | 0 |
Total gains or (losses) (realized/unrealized) - included in other comprehensive income | 0 | 0 | 0 | 0 | |
Purchases, issuances, sales and settlements | |||||
Purchases | 0 | 0 | 1 | 0 | |
Issuances | 0 | 0 | 0 | 0 | |
Sales | 0 | 0 | 0 | 0 | |
Settlements | 0 | 0 | 0 | 0 | |
Transfers in and/or out of Level 3 | 0 | 0 | 0 | 0 | |
Balance at end of period | $ 5 | $ 3 | $ 5 | $ 3 | |
[1]Gains or losses were included in net realized gains (losses).[2]Includes asset backed securities, residential mortgage backed securities and commercial mortgage backed securities. |
Fair Value - Narrative (Details
Fair Value - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value Disclosures [Abstract] | ||
Total assets and liabilities measured at fair value | $ 27,500 | $ 23,800 |
Total assets and liabilities measured at fair value priced using non-binding broker quotes | $ 15 | $ 13 |
Total assets and liabilities measured at fair value priced using non-binding broker quotes (percentage) | 0.10% | 0.10% |
Senior notes | $ 2,726 | $ 2,725 |
Estimated fair value of senior notes | $ 2,300 | $ 2,400 |
Derivative Instruments - Fair v
Derivative Instruments - Fair value and notional amount of derivatives (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | |
Derivative offsetting | |||
Derivative assets subject to master netting agreements | $ 192 | $ 147 | |
Derivative liabilities subject to master netting agreements | $ 114 | $ 73 | |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | Other assets | |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other liabilities | Other liabilities | |
Not designated as hedging instrument | |||
Derivative [Line Items] | |||
Asset derivatives - fair value | $ 192 | $ 149 | |
Liability derivatives - fair value | (114) | (76) | |
Not designated as hedging instrument | Futures contracts | |||
Derivative [Line Items] | |||
Asset derivatives - fair value | [1] | 129 | 51 |
Liability derivatives - fair value | [1] | (62) | (17) |
Net derivatives - notional value | [2] | 4,515 | 3,138 |
Not designated as hedging instrument | Foreign currency forward contracts | |||
Derivative [Line Items] | |||
Asset derivatives - fair value | [1] | 32 | 39 |
Liability derivatives - fair value | [1] | (35) | (35) |
Net derivatives - notional value | [2] | 1,481 | 1,136 |
Not designated as hedging instrument | Other | |||
Derivative [Line Items] | |||
Asset derivatives - fair value | [1],[3] | 31 | 59 |
Liability derivatives - fair value | [1],[3] | (17) | (24) |
Net derivatives - notional value | [2],[3] | $ 275 | $ 3,592 |
[1]The fair value of asset derivatives are included in ‘ other assets other liabilities |
Derivative Instruments - Summar
Derivative Instruments - Summary of net realized gains (losses) recorded in the consolidated statements of income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Net realized gains (losses) on derivative instruments | |||||
Net realized gains (losses) on derivative instruments | [1] | $ (102) | $ (48) | $ (61) | $ (118) |
Not designated as hedging instrument | |||||
Net realized gains (losses) on derivative instruments | |||||
Net realized gains (losses) on derivative instruments | (102) | (48) | (61) | (118) | |
Not designated as hedging instrument | Futures contracts | |||||
Net realized gains (losses) on derivative instruments | |||||
Net realized gains (losses) on derivative instruments | (87) | (26) | (73) | (112) | |
Not designated as hedging instrument | Foreign currency forward contracts | |||||
Net realized gains (losses) on derivative instruments | |||||
Net realized gains (losses) on derivative instruments | (20) | (18) | 4 | (46) | |
Not designated as hedging instrument | Other | |||||
Net realized gains (losses) on derivative instruments | |||||
Net realized gains (losses) on derivative instruments | [2] | $ 5 | $ (4) | $ 8 | $ 40 |
[1]See note 9 for information on the Company’s derivative instruments. |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 27, 2023 | Dec. 31, 2022 | |
Line of Credit Facility [Line Items] | ||||
Investment commitments | $ 3,100 | $ 2,900 | ||
Interest paid on senior notes and other borrowings | 63 | $ 65 | ||
Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Optional increased capacity | 1,500 | |||
Secured letter of credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | 425 | |||
Revolving credit agreement borrowings | 355 | |||
Remaining capacity | 70 | |||
Unsecured revolving loan and letter of credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | 500 | |||
Subsidiaries | Secured letter of credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Revolving credit agreement borrowings | 35 | |||
Subsidiaries | Unsecured revolving loan and letter of credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Revolving credit agreement borrowings | $ 400 | |||
Subsidiaries | ArchRe | Letter Of Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 175 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | |
Variable Interest Entity [Line Items] | |||
Total VIE Assets | $ 55,227 | $ 47,990 | |
Variable Interest Entity, Not Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Total VIE Assets | 2,874 | 3,595 | |
Remaining Coverage, Amount | 353 | ||
Variable Interest Entity, Not Primary Beneficiary | 2017-1 Ltd. (Oct-17) | |||
Variable Interest Entity [Line Items] | |||
Total VIE Assets | 0 | 37 | |
Variable Interest Entity, Not Primary Beneficiary | 2018-1 Ltd. (Apr-18) | |||
Variable Interest Entity [Line Items] | |||
Total VIE Assets | 51 | 90 | |
Variable Interest Entity, Not Primary Beneficiary | 2018-3 Ltd. (Oct-18) | |||
Variable Interest Entity [Line Items] | |||
Total VIE Assets | 154 | 199 | |
Variable Interest Entity, Not Primary Beneficiary | 2019-1 Ltd. (Mar-19) | |||
Variable Interest Entity [Line Items] | |||
Total VIE Assets | 80 | 108 | |
Variable Interest Entity, Not Primary Beneficiary | 2019-2 Ltd. (Apr-19) | |||
Variable Interest Entity [Line Items] | |||
Total VIE Assets | 265 | 325 | |
Variable Interest Entity, Not Primary Beneficiary | 2019-3 Ltd. (Jul-19) | |||
Variable Interest Entity [Line Items] | |||
Total VIE Assets | 120 | 223 | |
Variable Interest Entity, Not Primary Beneficiary | 2019-4 Ltd. (Oct-19) | |||
Variable Interest Entity [Line Items] | |||
Total VIE Assets | 218 | 266 | |
Variable Interest Entity, Not Primary Beneficiary | 2020-2 Ltd. (Sep-20) | |||
Variable Interest Entity [Line Items] | |||
Total VIE Assets | 54 | 105 | |
Variable Interest Entity, Not Primary Beneficiary | 2020-3 Ltd. (Nov-20) | |||
Variable Interest Entity [Line Items] | |||
Total VIE Assets | 183 | 244 | |
Remaining Coverage, Amount | [1] | 4 | |
Variable Interest Entity, Not Primary Beneficiary | 2020-4 Ltd. (Dec-20) | |||
Variable Interest Entity [Line Items] | |||
Total VIE Assets | 67 | 98 | |
Remaining Coverage, Amount | [1] | 2 | |
Variable Interest Entity, Not Primary Beneficiary | 2021-1 Ltd. (Mar-21) | |||
Variable Interest Entity [Line Items] | |||
Total VIE Assets | 388 | 467 | |
Remaining Coverage, Amount | [1] | 17 | |
Variable Interest Entity, Not Primary Beneficiary | 2021-2 Ltd. (Jun-21) | |||
Variable Interest Entity [Line Items] | |||
Total VIE Assets | 380 | 458 | |
Remaining Coverage, Amount | [1] | 58 | |
Variable Interest Entity, Not Primary Beneficiary | 2021-3 Ltd. (Sep-21) | |||
Variable Interest Entity [Line Items] | |||
Total VIE Assets | 444 | 490 | |
Remaining Coverage, Amount | [1] | 116 | |
Variable Interest Entity, Not Primary Beneficiary | 2022-1 Ltd. (Jan-22) | |||
Variable Interest Entity [Line Items] | |||
Total VIE Assets | 269 | 284 | |
Remaining Coverage, Amount | [1] | 30 | |
Variable Interest Entity, Not Primary Beneficiary | 2022-2 Ltd. (Sep-22) | |||
Variable Interest Entity [Line Items] | |||
Total VIE Assets | 201 | $ 201 | |
Remaining Coverage, Amount | [1] | $ 126 | |
[1]Coverage from a separate panel of reinsurers remaining at September 30, 2023. |
Other Comprehensive Income (L_3
Other Comprehensive Income (Loss) - Amounts reclassified from accumulated other comprehensive income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Provision for credit losses | $ 0 | $ 9 | $ (23) | $ (48) |
Income (loss) before income taxes and income (loss) from operating affiliates | 741 | (6) | 2,197 | 600 |
Income tax (expense) benefit | (72) | 15 | (203) | (19) |
Net of tax | 723 | 18 | 2,109 | 620 |
Reclassification out of accumulated other comprehensive income | Unrealized appreciation (decline) on available-for-sale investments | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net realized gains (losses) | (104) | (56) | (345) | (186) |
Provision for credit losses | 0 | 9 | (23) | (48) |
Income (loss) before income taxes and income (loss) from operating affiliates | (104) | (47) | (368) | (234) |
Income tax (expense) benefit | 8 | 1 | 24 | 28 |
Net of tax | $ (96) | $ (46) | $ (344) | $ (206) |
Other Comprehensive Income (L_4
Other Comprehensive Income (Loss) - Components of other comprehensive income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Before tax amount: | ||||
Unrealized holding gains (losses) arising during period, before tax | $ (208) | $ (672) | $ (131) | $ (2,132) |
Less reclassification of net realized gains included in net income, before tax | (104) | (47) | (368) | (234) |
Foreign currency translation adjustments, before tax | (40) | (70) | (33) | (141) |
Other comprehensive income (loss), before tax | (144) | (695) | 204 | (2,039) |
Tax expense (benefit): | ||||
Unrealized holding gains (losses) arising during period, tax | (18) | (62) | (13) | (240) |
Less reclassification of net realized gains included in net income, tax | (8) | (1) | (24) | (28) |
Foreign currency translation adjustments, tax | 0 | 0 | 0 | 0 |
Other comprehensive income (loss), tax | (10) | (61) | 11 | (212) |
Net of tax amount: | ||||
Unrealized holding gains (losses) arising during period, net of tax | (190) | (610) | (118) | (1,892) |
Less reclassification of net realized gains included in net income, net of tax | (96) | (46) | (344) | (206) |
Foreign currency translation adjustments, net of tax | (40) | (70) | (33) | (141) |
Net current period other comprehensive income (loss) | $ (134) | $ (634) | $ 193 | $ (1,827) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |||
Effective tax rate on income before income taxes (percentage) | 8.80% | 3% | |
Tax benefit from equity compensation windfall benefits | $ 6 | ||
Tax benefit from change in valuation allowance on certain UK deferred tax assets | $ 37 | ||
Decrease in effective tax rate due to equity compensation windfall benefits | 0.30% | ||
Decrease in effective tax rate due to change in valuation allowance on certain UK deferred tax assets | 5.70% | ||
Net deferred tax asset | $ 496 | $ 531 | |
Income taxes paid | $ 127 | $ 202 |
Transactions With Related Par_2
Transactions With Related Parties (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | ||||||||
Net premiums written | $ 3,355 | $ 2,724 | $ 10,207 | $ 8,043 | ||||
Net premiums earned | 3,248 | 2,471 | 9,096 | 6,918 | ||||
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses | 6,821 | $ 6,356 | 6,821 | 6,356 | $ 6,717 | $ 6,564 | $ 5,939 | $ 5,881 |
Reinsurance balances payable | 2,215 | 2,215 | 1,530 | |||||
Operating affiliates | Somers | ||||||||
Related Party Transaction [Line Items] | ||||||||
Net premiums written | 457 | $ 552 | ||||||
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses | 1,300 | 1,300 | 1,200 | |||||
Reinsurance balances payable | 499 | 499 | 414 | |||||
Equity Method Investee | Premia | ||||||||
Related Party Transaction [Line Items] | ||||||||
Net premiums written | 80 | |||||||
Net premiums earned | 80 | |||||||
Funds held asset | $ 176 | $ 176 | $ 119 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - USD ($) $ in Millions | 1 Months Ended | |
Oct. 31, 2023 | Oct. 25, 2023 | |
Subsidiaries | Arch Re Bermuda | Letter Of Credit Facility | ||
Subsequent Event [Line Items] | ||
Maximum borrowing capacity | $ 530 | |
Revolving credit agreement borrowings | $ 530 | |
Variable Interest Entity, Primary Beneficiary | Bellemeade Re 2023-1 Ltd. | ||
Subsequent Event [Line Items] | ||
Excess of loss agreement, initial coverage at issuance | $ 233 | |
Aggregate losses for new delinquencies, amount | $ 62 | |
Excess of loss agreement, amortization period | 10 years | |
Mortgage insurance-linked notes, amount | $ 187 | |
Directly provided capacity, amount | $ 46 |