Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | May 03, 2024 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
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 | 375,494,237 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2024 | |
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 | Mar. 31, 2024 | Dec. 31, 2023 |
Investments: | ||
Debt securities available for sale, at fair value | $ 25,770 | $ 25,616 |
Equity securities, at fair value | 1,720 | 1,186 |
Other investments, at fair value | 2,886 | 2,488 |
Investments accounted for using the equity method | 4,842 | 4,566 |
Total investments | 35,218 | 33,856 |
Cash | 993 | 917 |
Accrued investment income | 236 | 236 |
Investment in operating affiliates | 1,174 | 1,119 |
Premiums receivable (net of allowance for credit losses: $32 and $34) | 5,765 | 4,644 |
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses (net of allowance for credit losses: $16 and $21) | 7,509 | 7,064 |
Contractholder receivables (net of allowance for credit losses: $3 and $3) | 1,907 | 1,814 |
Ceded unearned premiums | 2,717 | 2,170 |
Deferred acquisition costs | 1,625 | 1,531 |
Receivable for securities sold | 166 | 63 |
Goodwill and intangible assets | 778 | 731 |
Other assets | 4,680 | 4,761 |
Total assets | 62,768 | 58,906 |
Liabilities | ||
Reserve for losses and loss adjustment expenses | 23,705 | 22,752 |
Unearned premiums | 9,971 | 8,808 |
Reinsurance balances payable | 2,497 | 2,000 |
Contractholder payables | 1,910 | 1,817 |
Collateral held for insured obligations | 263 | 259 |
Senior notes | 2,727 | 2,726 |
Payable for securities purchased | 433 | 247 |
Other liabilities | 1,905 | 1,942 |
Total liabilities | 43,411 | 40,551 |
Commitments and contingencies (refer to Note 10) | ||
Redeemable noncontrolling interests | 2 | 2 |
Shareholders' Equity | ||
Non-cumulative preferred shares | 830 | 830 |
Common shares ($0.0000 par, shares issued: 594.3 and 591.9) | 1 | 1 |
Additional paid-in capital | 2,401 | 2,327 |
Retained earnings | 21,405 | 20,295 |
Accumulated other comprehensive income (loss), net of deferred income tax | (821) | (676) |
Common shares held in treasury, at cost (shares: 219.0 and 218.5) | (4,461) | (4,424) |
Total shareholders' equity available to Arch | 19,355 | 18,353 |
Total liabilities, noncontrolling interests and shareholders' equity | 62,768 | 58,906 |
Fixed maturities available for sale, at fair value (amortized cost: $24,338 and $24,131; net of allowance for credit losses: $32 and $28) | ||
Investments: | ||
Debt securities available for sale, at fair value | 23,628 | 23,553 |
Short-term investments available for sale, at fair value (amortized cost: $2,143 and $2,064; net of allowance for credit losses: $0 and $0) | ||
Investments: | ||
Debt securities available for sale, at fair value | $ 2,142 | $ 2,063 |
Unaudited Consolidated Balanc_2
Unaudited Consolidated Balance Sheets (Parentheticals) - USD ($) shares in Millions, $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Available for sale securities, amortized cost | $ 26,481 | $ 26,195 |
Allowance for credit losses on investments | 32 | 28 |
Allowance for credit losses on premiums receivable | 32 | 34 |
Allowance for credit losses on reinsurance recoverable | 16 | 21 |
Allowance for credit losses on contractholder receivable | $ 3 | $ 3 |
Common shares, par value per share | $ 0.0011 | $ 0.0011 |
Common shares issued (shares) | 594.3 | 591.9 |
Common shares held in treasury (shares) | 219 | 218.5 |
Fixed maturities | ||
Available for sale securities, amortized cost | $ 24,338 | $ 24,131 |
Allowance for credit losses on investments | 32 | 28 |
Short-term investments | ||
Available for sale securities, amortized cost | 2,143 | 2,064 |
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 | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenues | ||
Net premiums earned | $ 3,422 | $ 2,883 |
Net investment income | 327 | 199 |
Net realized gains (losses) | 67 | 17 |
Other underwriting income | 12 | 10 |
Equity in net income (loss) of investment funds accounted for using the equity method | 99 | 48 |
Other income (loss) | 14 | 11 |
Total revenues | 3,941 | 3,168 |
Expenses | ||
Losses and loss adjustment expenses | 1,728 | 1,471 |
Acquisition expenses | 607 | 533 |
Other operating expenses | 363 | 319 |
Corporate expenses | 53 | 30 |
Amortization of intangible assets | 21 | 23 |
Interest expense | 34 | 32 |
Net foreign exchange (gains) losses | (31) | 18 |
Total expenses | 2,775 | 2,426 |
Income (loss) before income taxes and income (loss) from operating affiliates | 1,166 | 742 |
Income tax (expense) benefit | (101) | (64) |
Income (loss) from operating affiliates | 55 | 39 |
Net income (loss) | 1,120 | 717 |
Net (income) loss attributable to noncontrolling interests | 0 | (2) |
Net income (loss) available to Arch | 1,120 | 715 |
Preferred dividends | (10) | (10) |
Net income (loss) available to Arch common shareholders | $ 1,110 | $ 705 |
Net income per common share and common share equivalent | ||
Basic (per share) | $ 2.99 | $ 1.92 |
Diluted (per share) | $ 2.92 | $ 1.87 |
Weighted average common shares and common share equivalents outstanding | ||
Basic (shares) | 370.9 | 367.3 |
Diluted (shares) | 380.5 | 377.6 |
Unaudited Consolidated Statem_2
Unaudited Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Comprehensive Income | ||
Net income (loss) | $ 1,120 | $ 717 |
Unrealized appreciation (decline) in value of available-for-sale investments: | ||
Unrealized holding gains (losses) arising during period | (141) | 245 |
Reclassification of net realized (gains) losses, included in net income (loss) | 29 | 99 |
Foreign currency translation adjustments | (33) | 5 |
Comprehensive income (loss) | 975 | 1,066 |
Net (income) loss attributable to noncontrolling interests | 0 | (2) |
Comprehensive income (loss) available to Arch | $ 975 | $ 1,064 |
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, 2022 | $ 830 | $ 1 | $ 2,211 | $ 15,892 | $ (1,646) | $ (1,512) | $ (134) | $ (4,378) | |
Amortization of share-based compensation | 41 | ||||||||
Other changes | 8 | ||||||||
Net income (loss) | $ 717 | 717 | |||||||
Net (income) loss attributable to noncontrolling interests | (2) | (2) | |||||||
Preferred share dividends | (10) | (10) | |||||||
Unrealized holding gains (losses) during period, net of reclassification adjustment | 344 | ||||||||
Foreign currency translation adjustments | 5 | 5 | |||||||
Shares repurchased for treasury | (25) | ||||||||
Balance at end of period at Mar. 31, 2023 | 13,988 | 830 | 1 | 2,260 | 16,597 | (1,297) | (1,168) | (129) | (4,403) |
Balance at beginning of period at Dec. 31, 2023 | 18,353 | 830 | 1 | 2,327 | 20,295 | (676) | (565) | (111) | (4,424) |
Amortization of share-based compensation | 68 | ||||||||
Other changes | 6 | ||||||||
Net income (loss) | 1,120 | 1,120 | |||||||
Net (income) loss attributable to noncontrolling interests | 0 | 0 | |||||||
Preferred share dividends | (10) | (10) | |||||||
Unrealized holding gains (losses) during period, net of reclassification adjustment | (112) | ||||||||
Foreign currency translation adjustments | (33) | (33) | |||||||
Shares repurchased for treasury | (37) | ||||||||
Balance at end of period at Mar. 31, 2024 | $ 19,355 | $ 830 | $ 1 | $ 2,401 | $ 21,405 | $ (821) | $ (677) | $ (144) | $ (4,461) |
Unaudited Consolidated Statem_4
Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Operating Activities | ||
Net income (loss) | $ 1,120 | $ 717 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Net realized (gains) losses | (52) | (17) |
Equity in net (income) or loss of investment funds accounted for using the equity method and other income or loss | (112) | (66) |
Amortization of intangible assets | 21 | 23 |
Share-based compensation | 68 | 41 |
Changes in: | ||
Reserve for losses and loss adjustment expenses, net of unpaid losses and loss adjustment expenses recoverable | 660 | 603 |
Unearned premiums, net of ceded unearned premiums | 663 | 541 |
Premiums receivable | (1,159) | (871) |
Deferred acquisition costs | (82) | (75) |
Reinsurance balances payable | 521 | 279 |
Deferred income tax assets, net | 24 | 34 |
Other items, net | (108) | (246) |
Net cash provided by operating activities | 1,564 | 963 |
Investing Activities | ||
Purchases of fixed maturity investments | (8,325) | (3,901) |
Purchases of equity securities | (509) | (8) |
Purchases of other investments | (494) | (266) |
Proceeds from sales of fixed maturity investments | 7,529 | 3,034 |
Proceeds from sales of equity securities | 65 | 75 |
Proceeds from sales, redemptions and maturities of other investments | 116 | 96 |
Proceeds from redemptions and maturities of fixed maturity investments | 363 | 180 |
Net settlements of derivative instruments | 5 | 14 |
Net (purchases) sales of short-term investments | (90) | (208) |
Purchases of fixed assets | (15) | (11) |
Other | (54) | (1) |
Net cash used for investing activities | (1,409) | (996) |
Financing Activities | ||
Proceeds from common shares issued, net | (32) | (18) |
Other | 0 | (2) |
Preferred dividends paid | (10) | (10) |
Net cash used for financing activities | (42) | (30) |
Effects of exchange rate changes on foreign currency cash and restricted cash | (11) | 5 |
Increase (decrease) in cash and restricted cash | 102 | (58) |
Cash and restricted cash, beginning of year | 1,498 | 1,273 |
Cash and restricted cash, end of period | 1,600 | 1,215 |
Income taxes paid (received) | (6) | 4 |
Interest paid | $ 0 | $ 0 |
Basis of Presentation and Recen
Basis of Presentation and Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2024 | |
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, 2023 (“2023 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 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 2023 Form 10-K. |
Share Transactions
Share Transactions | 3 Months Ended |
Mar. 31, 2024 | |
Stockholders' Equity Note [Abstract] | |
Share transactions | Share-Based Compensation During the 2024 first quarter, the Company granted 0.4 million stock options, 0.5 million performance share awards and performance share units (“PSAs/PSUs”) and 0.7 million restricted shares and units to certain employees. The stock options were valued at the grant date using the Black-Scholes option pricing model. The weighted average grant-date fair value of the stock options, PSAs/PSUs and restricted shares and units granted during the 2024 first quarter were approximately $30.73, $93.28 and $87.22 per share, respectively. Such values are being amortized over the respective substantive vesting period. |
Earnings Per Common Share
Earnings Per Common Share | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 2023 Numerator: Net income (loss) $ 1,120 $ 717 Net (income) loss attributable to noncontrolling interests — (2) Net income (loss) available to Arch 1,120 715 Preferred dividends (10) (10) Net income (loss) available to Arch common shareholders $ 1,110 $ 705 Denominator: Weighted average common shares and common share equivalents outstanding — basic 370.9 367.3 Effect of dilutive common share equivalents: Nonvested restricted shares 2.3 2.8 Stock options (1) 7.3 7.5 Weighted average common shares and common share equivalents outstanding — diluted 380.5 377.6 Earnings per common share: Basic $ 2.99 $ 1.92 Diluted $ 2.92 $ 1.87 (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 2024 first quarter and 2023 first quarter, the number of stock options excluded were 0.6 million and 0.5 million, respectively. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2024 | |
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 tax 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 March 31, 2024 Insurance Reinsurance Mortgage Total Gross premiums written (1) $ 2,126 $ 3,467 $ 341 $ 5,933 Premiums ceded (1) (584) (1,201) (64) (1,848) Net premiums written 1,542 2,266 277 4,085 Change in unearned premiums (91) (600) 28 (663) Net premiums earned 1,451 1,666 305 3,422 Other underwriting income (loss) — 2 10 12 Losses and loss adjustment expenses (854) (883) 9 (1,728) Acquisition expenses (276) (331) — (607) Other operating expenses (235) (75) (53) (363) Underwriting income (loss) $ 86 $ 379 $ 271 736 Net investment income 327 Net realized gains (losses) 67 Equity in net income (loss) of investment funds accounted for using the equity method 99 Other income (loss) 14 Corporate expenses (2) (46) Transaction costs and other (2) (7) Amortization of intangible assets (21) Interest expense (34) Net foreign exchange gains (losses) 31 Income (loss) before income taxes and income (loss) from operating affiliates 1,166 Income tax (expense) benefit (101) Income (loss) from operating affiliates 55 Net income (loss) available to Arch 1,120 Preferred dividends (10) Net income (loss) available to Arch common shareholders $ 1,110 Underwriting Ratios Loss ratio 58.9 % 53.0 % (3.0) % 50.5 % Acquisition expense ratio 19.0 % 19.9 % — % 17.7 % Other operating expense ratio 16.2 % 4.5 % 17.5 % 10.6 % Combined ratio 94.1 % 77.4 % 14.5 % 78.8 % Goodwill and intangible assets $ 293 $ 121 $ 364 $ 778 (1) Certain assumed and ceded amounts related to intersegment transactions are included in individual segment results. Accordingly, the sum of such transactions for each segment does not agree to the total due to eliminations. (2) Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘transaction costs and other.’ Three Months Ended March 31, 2023 Insurance Reinsurance Mortgage Total Gross premiums written (1) $ 1,979 $ 2,460 $ 343 $ 4,780 Premiums ceded (1) (542) (734) (82) (1,356) Net premiums written 1,437 1,726 261 3,424 Change in unearned premiums (180) (396) 35 (541) Net premiums earned 1,257 1,330 296 2,883 Other underwriting income (loss) — 4 6 10 Losses and loss adjustment expenses (703) (766) (2) (1,471) Acquisition expenses (245) (281) (7) (533) Other operating expenses (195) (74) (50) (319) Underwriting income (loss) $ 114 $ 213 $ 243 570 Net investment income 199 Net realized gains (losses) 17 Equity in net income (loss) of investment funds accounted for using the equity method 48 Other income (loss) 11 Corporate expenses (2) (29) Transaction costs and other (2) (1) Amortization of intangible assets (23) Interest expense (32) Net foreign exchange gains (losses) (18) Income (loss) before income taxes and income (loss) from operating affiliates 742 Income tax (expense) benefit (64) Income (loss) from operating affiliates 39 Net income (loss) 717 Net (income) loss attributable to noncontrolling interests (2) Net income (loss) available to Arch 715 Preferred dividends (10) Net income (loss) available to Arch common shareholders $ 705 Underwriting Ratios Loss ratio 55.9 % 57.6 % 0.6 % 51.0 % Acquisition expense ratio 19.5 % 21.1 % 2.5 % 18.5 % Other operating expense ratio 15.5 % 5.6 % 16.9 % 11.1 % Combined ratio 90.9 % 84.3 % 20.0 % 80.6 % Goodwill and intangible assets $ 228 $ 142 $ 415 $ 785 (1) Certain assumed and ceded amounts related to intersegment transactions are included in individual segment results. Accordingly, the sum of such transactions for each segment does not agree to the total due to eliminations. |
Reserve for Losses and Loss Adj
Reserve for Losses and Loss Adjustment Expenses | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 2023 Reserve for losses and loss adjustment expenses at beginning of period $ 22,752 $ 20,032 Unpaid losses and loss adjustment expenses recoverable 6,690 6,280 Net reserve for losses and loss adjustment expenses at beginning of period 16,062 13,752 Net incurred losses and loss adjustment expenses relating to losses occurring in: Current year 1,852 1,607 Prior years (124) (136) Total net incurred losses and loss adjustment expenses 1,728 1,471 Net foreign exchange (gains) losses and other (84) 55 Net paid losses and loss adjustment expenses relating to losses occurring in: Current year (92) (140) Prior years (978) (727) Total net paid losses and loss adjustment expenses (1,070) (867) Net reserve for losses and loss adjustment expenses at end of period 16,636 14,411 Unpaid losses and loss adjustment expenses recoverable 7,069 6,347 Reserve for losses and loss adjustment expenses at end of period $ 23,705 $ 20,758 Development on Prior Year Loss Reserves 2024 First Quarter During the 2024 first quarter, the Company recorded net favorable development on prior year loss reserves of $124 million, which consisted of $10 million from the insurance segment, $40 million from the reinsurance segment and $74 million from the mortgage segment. The insurance segment’s net favorable development of $10 million, or 0.7 loss ratio points, for the 2024 first 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 $18 million of favorable development in property (excluding marine), primarily from the 2019, 2022 and 2023 accident years ( i.e. , the year in which a loss occurred), and $10 million of favorable development related to travel and accident business, primarily from the 2022 and 2023 accident years. Net favorable development in long-tailed lines included $7 million of favorable development in executive assurance business, primarily from the 2018 to 2021 accident years, and $3 million of favorable development in alternative markets business, primarily from 2020 and prior accident years, which was partially offset by $7 million of adverse development in construction and national accounts, primarily from the 2023 accident year. Net adverse development in medium-tailed lines included $17 million of adverse development in marine business, primarily from the 2022 accident year. The reinsurance segment’s net favorable development of $40 million, or 2.4 loss ratio points, for the 2024 first quarter consisted of $44 million of net favorable development in short-tailed lines and $4 million of net adverse development in medium and long-tailed lines. Net favorable development in short-tailed lines included $33 million of favorable development related to other specialty business, primarily from the 2019 to 2023 underwriting years ( i.e. , all premiums and losses attributable to contracts having an inception or renewal date within the given twelve-month period), and $21 million of favorable development related to property other than property catastrophe business, primarily from the 2022 and 2023 underwriting years, which was partially offset by $8 million of adverse development from property catastrophe business, primarily from the 2023 underwriting year. Net adverse development in medium-tailed lines included $2 million in marine and aviation lines, primarily from the 2020 and 2023 underwriting years, while net adverse development in long-tailed lines reflected $2 million of adverse development in casualty business, primarily from the 2017 underwriting year. The mortgage segment’s net favorable development was $74 million, or 24.4 loss ratio points, for the 2024 first quarter. Such amounts were primarily related to reductions on reserves for delinquent loans associated with the U.S. first lien portfolio from the 2022 and 2023 accident years. The Company’s credit risk transfer and international businesses also contributed to the favorable development. 2023 First Quarter During the 2023 first quarter, the Company recorded net favorable development on prior year loss reserves of $136 million, which consisted of $12 million from the insurance segment, $53 million from the reinsurance segment and $71 million from the mortgage segment. The insurance segment’s net favorable development of $12 million, or 0.9 loss ratio points, for the 2023 first quarter consisted of $25 million of net favorable development in short-tailed and long-tailed lines and $13 million of net adverse development in medium-tailed lines. Net favorable development in short-tailed lines reflected $9 million of favorable development in property (excluding marine), primarily from 2020 and 2022 accident years, $8 million of favorable development related to travel and accident business, primarily from the 2020 to 2022 accident years, and $7 million of favorable development in warranty and lenders solutions, primarily from the 2022 accident year. Net favorable development in long-tailed lines of $1 million included favorable development in executive assurance business, partially offset by adverse development in casualty and healthcare. Net adverse development in medium-tailed lines included $18 million of adverse development in professional liability business, primarily from the 2017 to 2019 accident years, partially offset by favorable development in marine business of $7 million, primarily from the 2021 and 2022 accident years. The reinsurance segment’s net favorable development of $53 million, or 4.0 loss ratio points, for the 2023 first quarter consisted of $49 million of net favorable development in short-tailed lines and $3 million of net favorable development in medium-tailed and long-tailed lines. Net favorable development in short-tailed lines reflected $23 million of favorable development related to property other than property catastrophe business, across most underwriting years, $18 million of favorable development related to other specialty and other short-tailed lines, primarily from the 2020 and 2021 underwriting years, and $8 million of favorable development related to property catastrophe business, primarily from the 2018, 2019 and 2022 underwriting years. Net favorable development in medium-tailed lines included $2 million in marine and aviation lines, while net favorable development in long-tailed lines included $3 million in casualty business. The mortgage segment’s net favorable development was $71 million, or 23.9 loss ratio points, for the 2023 first quarter. Such amounts were primarily related to reductions on reserves for loans becoming delinquent after the onset of the COVID-19 pandemic. The Company’s credit risk transfer and international businesses also contributed to the favorable development. |
Allowance for Expected Credit L
Allowance for Expected Credit Losses | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 Balance at beginning of period $ 4,644 $ 34 Change for provision of expected credit losses (1) $ (2) Balance at end of period $ 5,765 $ 32 Three Months Ended March 31, 2023 Balance at beginning of period $ 3,625 $ 35 Change for provision of expected credit losses (1) $ 1 Balance at end of period $ 4,513 $ 36 (1) Amounts deemed uncollectible are written-off in operating expenses. For the 2024 first quarter and 2023 first quarter, amounts written off were nil and $1 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 March 31, 2024 Balance at beginning of period $ 7,064 $ 21 Change for provision of expected credit losses (5) Balance at end of period $ 7,509 $ 16 Three Months Ended March 31, 2023 Balance at beginning of period $ 6,564 $ 22 Change for provision of expected credit losses (1) Balance at end of period $ 6,612 $ 21 The following table summarizes the Company’s reinsurance recoverables on paid and unpaid losses (not including ceded unearned premiums): March 31, December 31 2024 2023 Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses $ 7,509 $ 7,064 % due from carriers with A.M. Best rating of “A-” or better 66.6 % 66.8 % % due from all other rated carriers — % 0.1 % % due from all other carriers with no A.M. Best rating (1) 33.4 % 33.1 % Largest balance due from any one carrier as % of total shareholders’ equity 7.1 % 7.2 % (1) At March 31, 2024 and December 31, 2023 over 94% and 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 March 31, 2024 Balance at beginning of period $ 1,814 $ 3 Change for provision of expected credit losses — Balance at end of period $ 1,907 $ 3 Three Months Ended March 31, 2023 Balance at beginning of period $ 1,731 $ 3 Change for provision of expected credit losses (1) Balance at end of period 1,750 $ 2 |
Investment Information
Investment Information | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 Fixed maturities: Corporate bonds $ 11,698 $ 98 $ (442) $ (24) $ 12,066 U.S. government and government agencies 4,370 6 (109) — 4,473 Asset backed securities 2,762 15 (44) (5) 2,796 Non-U.S. government securities 2,195 20 (113) (1) 2,289 Commercial mortgage backed securities 1,197 3 (30) (2) 1,226 Residential mortgage backed securities 1,179 4 (69) — 1,244 Municipal bonds 227 1 (18) — 244 Total 23,628 147 (825) (32) 24,338 Short-term investments 2,142 2 (3) — 2,143 Total $ 25,770 $ 149 $ (828) $ (32) $ 26,481 December 31, 2023 Fixed maturities: Corporate bonds $ 10,855 $ 157 $ (464) $ (20) $ 11,182 U.S. government and government agencies 5,814 63 (86) — 5,837 Asset backed securities 2,250 11 (55) (5) 2,299 Non-U.S. government securities 2,062 33 (100) (1) 2,130 Commercial mortgage backed securities 1,213 3 (34) (2) 1,246 Residential mortgage backed securities 1,103 7 (66) — 1,162 Municipal bonds 256 1 (20) — 275 Total 23,553 275 (825) (28) 24,131 Short-term investments 2,063 1 (2) — 2,064 Total $ 25,616 $ 276 $ (827) $ (28) $ 26,195 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 March 31, 2024 Fixed maturities: Corporate bonds $ 3,314 $ (50) $ 4,419 $ (392) $ 7,733 $ (442) U.S. government and government agencies 3,093 (36) 763 (73) 3,856 (109) Non-U.S. government securities 829 (10) 821 (103) 1,650 (113) Residential mortgage backed securities 267 (4) 508 (65) 775 (69) Asset backed securities 489 (1) 729 (43) 1,218 (44) Commercial mortgage backed securities 88 (1) 892 (29) 980 (30) Municipal bonds 18 — 197 (18) 215 (18) Total 8,098 (102) 8,329 (723) 16,427 (825) Short-term investments 727 (3) — — 727 (3) Total $ 8,825 $ (105) $ 8,329 $ (723) $ 17,154 $ (828) December 31, 2023 Fixed maturities: Corporate bonds $ 1,559 $ (45) $ 4,959 $ (419) $ 6,518 $ (464) U.S. government and government agencies 1,066 (10) 941 (76) 2,007 (86) Non-U.S. government securities 365 (4) 897 (96) 1,262 (100) Residential mortgage backed securities 221 (3) 522 (63) 743 (66) Asset backed securities 234 (1) 1,112 (54) 1,346 (55) Commercial mortgage backed securities 100 (1) 909 (33) 1,009 (34) Municipal bonds 20 (1) 215 (19) 235 (20) Total 3,565 (65) 9,555 (760) 13,120 (825) Short-term investments 302 (2) — — 302 (2) Total $ 3,867 $ (67) $ 9,555 $ (760) $ 13,422 $ (827) At March 31, 2024, on a lot level basis, approximately 8,380 security lots out of a total of approximately 16,400 security lots were in an unrealized loss position and the largest single unrealized loss from a single lot in the Company’s fixed maturity portfolio was $5 million. At December 31, 2023, on a lot level basis, approximately 7,100 security lots out of a total of approximately 15,720 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. 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. March 31, 2024 December 31, 2023 Maturity Estimated Amortized Estimated Amortized Due in one year or less $ 536 $ 554 $ 480 $ 499 Due after one year through five years 12,998 13,299 12,924 13,101 Due after five years through 10 years 4,632 4,860 5,249 5,450 Due after 10 years 324 359 334 374 18,490 19,072 18,987 19,424 Residential mortgage backed securities 1,179 1,244 1,103 1,162 Commercial mortgage backed securities 1,197 1,226 1,213 1,246 Asset backed securities 2,762 2,796 2,250 2,299 Total $ 23,628 $ 24,338 $ 23,553 $ 24,131 Equity Securities, at Fair Value At March 31, 2024, the Company held $1.7 billion of equity securities, at fair value, compared to $1.2 billion at December 31, 2023. 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: March 31, December 31, Other investments $ 1,914 $ 1,777 Fixed maturities 930 683 Short term investments 35 21 Equity securities 7 7 Total $ 2,886 $ 2,488 The following table summarizes the Company’s other investments, as detailed in the previous table, by strategy: March 31, December 31, Lending $ 442 $ 427 Investment grade fixed income 799 754 Term loan investments 344 272 Private equity 191 182 Credit related funds 120 124 Energy 18 18 Total $ 1,914 $ 1,777 Net Investment Income The components of net investment income were derived from the following sources: March 31, 2024 2023 Three Months Ended Fixed maturities $ 280 $ 188 Short term investments 29 14 Equity securities 8 4 Other (1) 33 13 Gross investment income 350 219 Investment expenses (23) (20) Net investment income $ 327 $ 199 (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: March 31, 2024 2023 Three Months Ended Available for sale securities: Gross gains on investment sales $ 50 $ 17 Gross losses on investment sales (78) (111) Change in fair value of assets and liabilities accounted for using the fair value option: Fixed maturities 2 6 Other investments (2) 9 Equity securities — 1 Equity securities, at fair value: Net realized gains (losses) on sales during the period 11 19 Net unrealized gains (losses) on equity securities still held at reporting date 82 38 Allowance for credit losses: Investments related (6) (16) Underwriting related 1 — Derivative instruments (1) (10) 56 Other 17 (2) Net realized gains (losses) $ 67 $ 17 (1) See note 9 for information on the Company’s derivative instruments. Investments Accounted For Using the Equity Method The following table summarizes the Company’s investments accounted for using the equity method, by strategy: March 31, December 31, Credit related funds $ 1,320 $ 1,258 Private equity 1,341 1,175 Real estate 671 666 Lending 582 597 Infrastructure 323 320 Fixed income 327 277 Equities 188 178 Energy 90 95 Total $ 4,842 $ 4,566 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: March 31, December 31, Investments accounted for using the equity method (1) $ 4,842 $ 4,566 Investments accounted for using the fair value option (2) 109 114 Total $ 4,951 $ 4,680 (1) Aggregate unfunded commitments were $3.5 billion at March 31, 2024, compared with $3.4 billion at December 31, 2023. (2) Aggregate unfunded commitments were $29 million at March 31, 2024, compared to $32 million at December 31, 2023. Equity in Net Income (Loss) of Investment Funds Accounted for Using the Equity Method Income from investment funds accounted for using the equity method for the 2024 first quarter was $99 million, compared to $48 million for the 2023 first quarter. 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 March 31, 2024, the Company owned approximately 29.9% of the issued shares of Coface, or 30.1% excluding treasury shares, with a carrying value of $586 million, compared to $570 million at December 31, 2023. As of March 31, 2024, the Company owned 40% of Greysbridge with a carrying value of $472 million, compared to $430 million at December 31, 2023. Income from operating affiliates for the 2024 first quarter was $55 million, compared to $39 million for the 2023 first quarter. 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 March 31, 2024 Balance at beginning of period $ 7 $ 20 $ 1 $ 28 Additions for current-period provision for expected credit losses — — — — Additions (reductions) for previously recognized expected credit losses — 5 — 5 Reductions due to disposals — (1) — (1) Balance at end of period $ 7 $ 24 $ 1 $ 32 Three Months Ended March 31, 2023 Balance at beginning of period $ 9 $ 30 $ 2 $ 41 Additions for current-period provision for expected credit losses — 1 — 1 Additions (reductions) for previously recognized expected credit losses (1) 15 1 15 Reductions due to disposals — (1) — (1) Balance at end of period $ 8 $ 45 $ 3 $ 56 (1) Includes asset backed securities, residential mortgage backed securities and commercial mortgage backed securities. Restricted Assets 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 2023 Form 10-K. The following table details the value of the Company’s restricted assets: March 31, December 31, Assets used for collateral or guarantees: Affiliated transactions $ 4,874 $ 4,854 Third party agreements 2,694 2,869 Deposits with U.S. regulatory authorities 828 833 Other (1) 1,343 1,376 Total restricted assets $ 9,739 $ 9,932 (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: March 31, December 31, Cash $ 993 $ 917 Restricted cash (included in ‘other assets’) 607 581 Cash and restricted cash $ 1,600 $ 1,498 |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024. 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 $30.6 billion of financial assets and liabilities measured at fair value at March 31, 2024, approximately $15 million, or 0.0%, were priced using non-binding broker-dealer quotes or modeled valuations. Of the $29.6 billion of financial assets and liabilities measured at fair value at December 31, 2023, approximately $14 million, or 0.0%, 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 March 31, 2024: Estimated Fair Value Measurements Using: Estimated Quoted Prices in Significant Significant Assets measured at fair value: Available for sale securities: Fixed maturities: Corporate bonds $ 11,698 $ — $ 11,538 $ 160 U.S. government and government agencies 4,370 4,342 28 — Asset backed securities 2,762 — 2,762 — Non-U.S. government securities 2,195 — 2,195 — Commercial mortgage backed securities 1,197 — 1,197 — Residential mortgage backed securities 1,179 — 1,179 — Municipal bonds 227 — 227 — Total 23,628 4,342 19,126 160 Short-term investments 2,142 1,885 160 97 Equity securities, at fair value 1,720 1,686 29 5 Derivative instruments (2) 120 — 120 — Residential mortgage loans 2 — 2 — Fair value option: Corporate bonds 910 — 910 — Non-U.S. government bonds 5 — 5 — Asset backed securities 2 — 2 — U.S. government and government agencies 13 13 — — Short-term investments 35 1 17 17 Equity securities 7 3 — 4 Other investments 249 — 123 126 Other investments measured at net asset value (1) 1,665 Total 2,886 17 1,057 147 Total assets measured at fair value $ 30,498 $ 7,930 $ 20,494 $ 409 Liabilities measured at fair value: Other liabilities $ (22) $ — $ — $ (22) Derivative instruments (2) (57) — (57) — Total liabilities measured at fair value $ (79) $ — $ (57) $ (22) (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, 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 $ 10,855 $ — $ 10,708 $ 147 U.S. government and government agencies 5,814 5,792 22 — Asset backed securities 2,250 — 2,250 — Non-U.S. government securities 2,062 — 2,062 — Commercial mortgage backed securities 1,213 — 1,213 — Residential mortgage backed securities 1,103 — 1,103 — Municipal bonds 256 — 256 — Total 23,553 5,792 17,614 147 Short-term investments 2,063 1,786 193 84 Equity securities, at fair value 1,186 1,151 30 5 Derivative instruments (2) 197 — 197 — Residential mortgage loans 2 — 2 — Fair value option: Corporate bonds 662 — 662 — Non-U.S. government bonds 6 — 6 — Asset backed securities 2 — 2 — U.S. government and government agencies 13 13 — — Short-term investments 21 — 11 10 Equity securities 7 3 — 4 Other investments 316 — 210 106 Other investments measured at net asset value (1) 1,461 Total 2,488 16 891 120 Total assets measured at fair value $ 29,489 $ 8,745 $ 18,927 $ 356 Liabilities measured at fair value: Other liabilities $ (22) $ — $ — $ (22) Derivative instruments (2) (119) — (119) — Total liabilities measured at fair value $ (141) $ — $ (119) $ (22) (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 Corporate Short-term Other Short-term Equity Equity Other Liabilities Three Months Ended March 31, 2024 Balance at beginning of period $ 147 $ 84 $ 106 $ 10 $ 4 $ 5 $ (22) Total gains or (losses) (realized/unrealized) Included in earnings (1) — — (4) — — — — Included in other comprehensive income 2 1 — — — — — Purchases, issuances, sales and settlements Purchases 98 12 30 7 — — — Issuances — — — — — — — Sales — — — — — — — Settlements (87) — (6) — — — — Transfers in and/or out of Level 3 — — — — — — — Balance at end of period $ 160 $ 97 $ 126 $ 17 $ 4 $ 5 $ (22) Three Months Ended March 31, 2023 Balance at beginning of period $ 121 $ — $ 33 $ — $ 4 $ 4 $ (14) Total gains or (losses) (realized/unrealized) Included in earnings (1) 1 — (1) — — — — Included in other comprehensive income — — — — — — — Purchases, issuances, sales and settlements Purchases — — 18 — — 1 — Issuances — — — — — — — Sales — — (4) — — — — Settlements (53) — — — — — — Transfers in and/or out of Level 3 — — — — — — — Balance at end of period $ 69 $ — $ 46 $ — $ 4 $ 5 $ (14) (1) 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 March 31, 2024, 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 | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 Futures contracts $ 72 $ (14) $ 3,035 Foreign currency forward contracts 9 (13) 1,183 Other (3) 39 (30) 371 Total $ 120 $ (57) December 31, 2023 Futures contracts $ 139 $ (61) $ 3,746 Foreign currency forward contracts 27 (32) 1,224 Other (3) 31 (26) 512 Total $ 197 $ (119) (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 March 31, 2024 or December 31, 2023. 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 March 31, 2024, asset derivatives and liability derivatives of $120 million and $57 million, respectively, were subject to a master netting agreement, compared to $197 million and $119 million, respectively, at December 31, 2023. 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 March 31, hedging instruments: 2024 2023 Three Months Ended Net realized gains (losses): Futures contracts $ (14) $ 39 Foreign currency forward contracts (1) 9 Other (1) 5 8 Total $ (10) $ 56 (1) Includes realized gains and losses on swaps, options and other derivatives contracts. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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 $3.7 billion at March 31, 2024, compared to $3.6 billion at December 31, 2023. |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2024 | |
Variable Interest Entity, Not Primary Beneficiary, Disclosures [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. The following table summarizes the total assets of the Bellemeade entities: March 31, December 31, 2023 Bellemeade Entities Total VIE Assets Coverage Remaining from Reinsurers (1) Total VIE 2019-1 Ltd. (Mar-19) $ — $ — $ 71 2019-3 Ltd. (Jul-19) 75 — 99 2021-3 Ltd. (Sep-21) 414 108 429 2022-1 Ltd. (Jan-22) 244 23 256 2022-2 Ltd. (Sep-22) 201 126 201 2023-1 Ltd. (Oct-23) 186 47 186 Total $ 1,120 $ 304 $ 1,242 (1) Coverage from a separate panel of reinsurers remaining at March 31, 2024. |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2024 | |
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 Details About Line Item That Includes March 31, AOCI Components Reclassification 2024 2023 Unrealized appreciation (decline) on available-for-sale investments Net realized gains (losses) $ (28) $ (94) Provision for credit losses (6) (16) Total before tax (34) (110) Income tax (expense) benefit 5 11 Net of tax $ (29) $ (99) Before Tax Amount Tax Expense (Benefit) Net of Tax Amount Three Months Ended March 31, 2024 Unrealized appreciation (decline) in value of investments: Unrealized holding gains (losses) arising during period $ (151) $ (10) $ (141) Less reclassification of net realized gains (losses) included in net income (34) (5) (29) Foreign currency translation adjustments (33) — (33) Other comprehensive income (loss) $ (150) $ (5) $ (145) Three Months Ended March 31, 2023 Unrealized appreciation (decline) in value of investments: Unrealized holding gains (losses) arising during period $ 281 $ 36 $ 245 Less reclassification of net realized gains (losses) included in net income (110) (11) (99) Foreign currency translation adjustments 5 — 5 Other comprehensive income (loss) $ 396 $ 47 $ 349 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
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 8.3% for the three months ended March 31, 2024, compared to 8.2% for the three months ended March 31, 2023. 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. |
Legal Proceedings
Legal Proceedings | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024, 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 | 3 Months Ended |
Mar. 31, 2024 | |
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 three months ended March 31, 2024, the Company recorded de minims net premiums written and earned, compared to $75 million for the three months ended March 31, 2023. At March 31, 2024, the Company recorded a funds held asset from Premia of $144 million, compared to $158 million at December 31, 2023. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Event | Business Acquired. On April 5, 2024, the Company announced that it has entered into a master transaction agreement to acquire the U.S. middle market and entertainment insurance businesses, including select specialty insurance programs, from Allianz Global Corporate & Specialty SE (“Allianz”) for a $450 million cash consideration to Allianz. This transaction is expected to close in the second half of 2024 and is subject to regulatory approvals. Castel Sale. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net income available to Arch | $ 1,120 | $ 715 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
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) | 3 Months Ended |
Mar. 31, 2024 | |
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 | 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 2023 Form 10-K |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 2023 Numerator: Net income (loss) $ 1,120 $ 717 Net (income) loss attributable to noncontrolling interests — (2) Net income (loss) available to Arch 1,120 715 Preferred dividends (10) (10) Net income (loss) available to Arch common shareholders $ 1,110 $ 705 Denominator: Weighted average common shares and common share equivalents outstanding — basic 370.9 367.3 Effect of dilutive common share equivalents: Nonvested restricted shares 2.3 2.8 Stock options (1) 7.3 7.5 Weighted average common shares and common share equivalents outstanding — diluted 380.5 377.6 Earnings per common share: Basic $ 2.99 $ 1.92 Diluted $ 2.92 $ 1.87 (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 2024 first quarter and 2023 first quarter, the number of stock options excluded were 0.6 million and 0.5 million, respectively. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 Insurance Reinsurance Mortgage Total Gross premiums written (1) $ 2,126 $ 3,467 $ 341 $ 5,933 Premiums ceded (1) (584) (1,201) (64) (1,848) Net premiums written 1,542 2,266 277 4,085 Change in unearned premiums (91) (600) 28 (663) Net premiums earned 1,451 1,666 305 3,422 Other underwriting income (loss) — 2 10 12 Losses and loss adjustment expenses (854) (883) 9 (1,728) Acquisition expenses (276) (331) — (607) Other operating expenses (235) (75) (53) (363) Underwriting income (loss) $ 86 $ 379 $ 271 736 Net investment income 327 Net realized gains (losses) 67 Equity in net income (loss) of investment funds accounted for using the equity method 99 Other income (loss) 14 Corporate expenses (2) (46) Transaction costs and other (2) (7) Amortization of intangible assets (21) Interest expense (34) Net foreign exchange gains (losses) 31 Income (loss) before income taxes and income (loss) from operating affiliates 1,166 Income tax (expense) benefit (101) Income (loss) from operating affiliates 55 Net income (loss) available to Arch 1,120 Preferred dividends (10) Net income (loss) available to Arch common shareholders $ 1,110 Underwriting Ratios Loss ratio 58.9 % 53.0 % (3.0) % 50.5 % Acquisition expense ratio 19.0 % 19.9 % — % 17.7 % Other operating expense ratio 16.2 % 4.5 % 17.5 % 10.6 % Combined ratio 94.1 % 77.4 % 14.5 % 78.8 % Goodwill and intangible assets $ 293 $ 121 $ 364 $ 778 (1) Certain assumed and ceded amounts related to intersegment transactions are included in individual segment results. Accordingly, the sum of such transactions for each segment does not agree to the total due to eliminations. (2) Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘transaction costs and other.’ Three Months Ended March 31, 2023 Insurance Reinsurance Mortgage Total Gross premiums written (1) $ 1,979 $ 2,460 $ 343 $ 4,780 Premiums ceded (1) (542) (734) (82) (1,356) Net premiums written 1,437 1,726 261 3,424 Change in unearned premiums (180) (396) 35 (541) Net premiums earned 1,257 1,330 296 2,883 Other underwriting income (loss) — 4 6 10 Losses and loss adjustment expenses (703) (766) (2) (1,471) Acquisition expenses (245) (281) (7) (533) Other operating expenses (195) (74) (50) (319) Underwriting income (loss) $ 114 $ 213 $ 243 570 Net investment income 199 Net realized gains (losses) 17 Equity in net income (loss) of investment funds accounted for using the equity method 48 Other income (loss) 11 Corporate expenses (2) (29) Transaction costs and other (2) (1) Amortization of intangible assets (23) Interest expense (32) Net foreign exchange gains (losses) (18) Income (loss) before income taxes and income (loss) from operating affiliates 742 Income tax (expense) benefit (64) Income (loss) from operating affiliates 39 Net income (loss) 717 Net (income) loss attributable to noncontrolling interests (2) Net income (loss) available to Arch 715 Preferred dividends (10) Net income (loss) available to Arch common shareholders $ 705 Underwriting Ratios Loss ratio 55.9 % 57.6 % 0.6 % 51.0 % Acquisition expense ratio 19.5 % 21.1 % 2.5 % 18.5 % Other operating expense ratio 15.5 % 5.6 % 16.9 % 11.1 % Combined ratio 90.9 % 84.3 % 20.0 % 80.6 % Goodwill and intangible assets $ 228 $ 142 $ 415 $ 785 (1) Certain assumed and ceded amounts related to intersegment transactions are included in individual segment results. Accordingly, the sum of such transactions for each segment does not agree to the total due to eliminations. |
Reserve for Losses and Loss A_2
Reserve for Losses and Loss Adjustment Expenses (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 2023 Reserve for losses and loss adjustment expenses at beginning of period $ 22,752 $ 20,032 Unpaid losses and loss adjustment expenses recoverable 6,690 6,280 Net reserve for losses and loss adjustment expenses at beginning of period 16,062 13,752 Net incurred losses and loss adjustment expenses relating to losses occurring in: Current year 1,852 1,607 Prior years (124) (136) Total net incurred losses and loss adjustment expenses 1,728 1,471 Net foreign exchange (gains) losses and other (84) 55 Net paid losses and loss adjustment expenses relating to losses occurring in: Current year (92) (140) Prior years (978) (727) Total net paid losses and loss adjustment expenses (1,070) (867) Net reserve for losses and loss adjustment expenses at end of period 16,636 14,411 Unpaid losses and loss adjustment expenses recoverable 7,069 6,347 Reserve for losses and loss adjustment expenses at end of period $ 23,705 $ 20,758 |
Allowance for Expected Credit_2
Allowance for Expected Credit Losses (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 Balance at beginning of period $ 4,644 $ 34 Change for provision of expected credit losses (1) $ (2) Balance at end of period $ 5,765 $ 32 Three Months Ended March 31, 2023 Balance at beginning of period $ 3,625 $ 35 Change for provision of expected credit losses (1) $ 1 Balance at end of period $ 4,513 $ 36 (1) |
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 March 31, 2024 Balance at beginning of period $ 7,064 $ 21 Change for provision of expected credit losses (5) Balance at end of period $ 7,509 $ 16 Three Months Ended March 31, 2023 Balance at beginning of period $ 6,564 $ 22 Change for provision of expected credit losses (1) Balance at end of period $ 6,612 $ 21 |
Ceded credit risk | The following table summarizes the Company’s reinsurance recoverables on paid and unpaid losses (not including ceded unearned premiums): March 31, December 31 2024 2023 Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses $ 7,509 $ 7,064 % due from carriers with A.M. Best rating of “A-” or better 66.6 % 66.8 % % due from all other rated carriers — % 0.1 % % due from all other carriers with no A.M. Best rating (1) 33.4 % 33.1 % Largest balance due from any one carrier as % of total shareholders’ equity 7.1 % 7.2 % (1) At March 31, 2024 and December 31, 2023 over 94% and 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 March 31, 2024 Balance at beginning of period $ 1,814 $ 3 Change for provision of expected credit losses — Balance at end of period $ 1,907 $ 3 Three Months Ended March 31, 2023 Balance at beginning of period $ 1,731 $ 3 Change for provision of expected credit losses (1) Balance at end of period 1,750 $ 2 |
Investment Information (Tables)
Investment Information (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 Fixed maturities: Corporate bonds $ 11,698 $ 98 $ (442) $ (24) $ 12,066 U.S. government and government agencies 4,370 6 (109) — 4,473 Asset backed securities 2,762 15 (44) (5) 2,796 Non-U.S. government securities 2,195 20 (113) (1) 2,289 Commercial mortgage backed securities 1,197 3 (30) (2) 1,226 Residential mortgage backed securities 1,179 4 (69) — 1,244 Municipal bonds 227 1 (18) — 244 Total 23,628 147 (825) (32) 24,338 Short-term investments 2,142 2 (3) — 2,143 Total $ 25,770 $ 149 $ (828) $ (32) $ 26,481 December 31, 2023 Fixed maturities: Corporate bonds $ 10,855 $ 157 $ (464) $ (20) $ 11,182 U.S. government and government agencies 5,814 63 (86) — 5,837 Asset backed securities 2,250 11 (55) (5) 2,299 Non-U.S. government securities 2,062 33 (100) (1) 2,130 Commercial mortgage backed securities 1,213 3 (34) (2) 1,246 Residential mortgage backed securities 1,103 7 (66) — 1,162 Municipal bonds 256 1 (20) — 275 Total 23,553 275 (825) (28) 24,131 Short-term investments 2,063 1 (2) — 2,064 Total $ 25,616 $ 276 $ (827) $ (28) $ 26,195 |
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 March 31, 2024 Fixed maturities: Corporate bonds $ 3,314 $ (50) $ 4,419 $ (392) $ 7,733 $ (442) U.S. government and government agencies 3,093 (36) 763 (73) 3,856 (109) Non-U.S. government securities 829 (10) 821 (103) 1,650 (113) Residential mortgage backed securities 267 (4) 508 (65) 775 (69) Asset backed securities 489 (1) 729 (43) 1,218 (44) Commercial mortgage backed securities 88 (1) 892 (29) 980 (30) Municipal bonds 18 — 197 (18) 215 (18) Total 8,098 (102) 8,329 (723) 16,427 (825) Short-term investments 727 (3) — — 727 (3) Total $ 8,825 $ (105) $ 8,329 $ (723) $ 17,154 $ (828) December 31, 2023 Fixed maturities: Corporate bonds $ 1,559 $ (45) $ 4,959 $ (419) $ 6,518 $ (464) U.S. government and government agencies 1,066 (10) 941 (76) 2,007 (86) Non-U.S. government securities 365 (4) 897 (96) 1,262 (100) Residential mortgage backed securities 221 (3) 522 (63) 743 (66) Asset backed securities 234 (1) 1,112 (54) 1,346 (55) Commercial mortgage backed securities 100 (1) 909 (33) 1,009 (34) Municipal bonds 20 (1) 215 (19) 235 (20) Total 3,565 (65) 9,555 (760) 13,120 (825) Short-term investments 302 (2) — — 302 (2) Total $ 3,867 $ (67) $ 9,555 $ (760) $ 13,422 $ (827) |
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. March 31, 2024 December 31, 2023 Maturity Estimated Amortized Estimated Amortized Due in one year or less $ 536 $ 554 $ 480 $ 499 Due after one year through five years 12,998 13,299 12,924 13,101 Due after five years through 10 years 4,632 4,860 5,249 5,450 Due after 10 years 324 359 334 374 18,490 19,072 18,987 19,424 Residential mortgage backed securities 1,179 1,244 1,103 1,162 Commercial mortgage backed securities 1,197 1,226 1,213 1,246 Asset backed securities 2,762 2,796 2,250 2,299 Total $ 23,628 $ 24,338 $ 23,553 $ 24,131 |
Summary of other investments, at fair value | The following table summarizes the Company’s other investments and other investable assets: March 31, December 31, Other investments $ 1,914 $ 1,777 Fixed maturities 930 683 Short term investments 35 21 Equity securities 7 7 Total $ 2,886 $ 2,488 The following table summarizes the Company’s other investments, as detailed in the previous table, by strategy: March 31, December 31, Lending $ 442 $ 427 Investment grade fixed income 799 754 Term loan investments 344 272 Private equity 191 182 Credit related funds 120 124 Energy 18 18 Total $ 1,914 $ 1,777 |
Components of net investment income | The components of net investment income were derived from the following sources: March 31, 2024 2023 Three Months Ended Fixed maturities $ 280 $ 188 Short term investments 29 14 Equity securities 8 4 Other (1) 33 13 Gross investment income 350 219 Investment expenses (23) (20) Net investment income $ 327 $ 199 |
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: March 31, 2024 2023 Three Months Ended Available for sale securities: Gross gains on investment sales $ 50 $ 17 Gross losses on investment sales (78) (111) Change in fair value of assets and liabilities accounted for using the fair value option: Fixed maturities 2 6 Other investments (2) 9 Equity securities — 1 Equity securities, at fair value: Net realized gains (losses) on sales during the period 11 19 Net unrealized gains (losses) on equity securities still held at reporting date 82 38 Allowance for credit losses: Investments related (6) (16) Underwriting related 1 — Derivative instruments (1) (10) 56 Other 17 (2) Net realized gains (losses) $ 67 $ 17 (1) See note 9 for information on the Company’s derivative instruments. |
Summary of investments accounted for using equity method | The following table summarizes the Company’s investments accounted for using the equity method, by strategy: March 31, December 31, Credit related funds $ 1,320 $ 1,258 Private equity 1,341 1,175 Real estate 671 666 Lending 582 597 Infrastructure 323 320 Fixed income 327 277 Equities 188 178 Energy 90 95 Total $ 4,842 $ 4,566 |
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: March 31, December 31, Investments accounted for using the equity method (1) $ 4,842 $ 4,566 Investments accounted for using the fair value option (2) 109 114 Total $ 4,951 $ 4,680 (1) Aggregate unfunded commitments were $3.5 billion at March 31, 2024, compared with $3.4 billion at December 31, 2023. (2) Aggregate unfunded commitments were $29 million at March 31, 2024, compared to $32 million at December 31, 2023. |
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 March 31, 2024 Balance at beginning of period $ 7 $ 20 $ 1 $ 28 Additions for current-period provision for expected credit losses — — — — Additions (reductions) for previously recognized expected credit losses — 5 — 5 Reductions due to disposals — (1) — (1) Balance at end of period $ 7 $ 24 $ 1 $ 32 Three Months Ended March 31, 2023 Balance at beginning of period $ 9 $ 30 $ 2 $ 41 Additions for current-period provision for expected credit losses — 1 — 1 Additions (reductions) for previously recognized expected credit losses (1) 15 1 15 Reductions due to disposals — (1) — (1) Balance at end of period $ 8 $ 45 $ 3 $ 56 (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: March 31, December 31, Assets used for collateral or guarantees: Affiliated transactions $ 4,874 $ 4,854 Third party agreements 2,694 2,869 Deposits with U.S. regulatory authorities 828 833 Other (1) 1,343 1,376 Total restricted assets $ 9,739 $ 9,932 (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: March 31, December 31, Cash $ 993 $ 917 Restricted cash (included in ‘other assets’) 607 581 Cash and restricted cash $ 1,600 $ 1,498 |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024: Estimated Fair Value Measurements Using: Estimated Quoted Prices in Significant Significant Assets measured at fair value: Available for sale securities: Fixed maturities: Corporate bonds $ 11,698 $ — $ 11,538 $ 160 U.S. government and government agencies 4,370 4,342 28 — Asset backed securities 2,762 — 2,762 — Non-U.S. government securities 2,195 — 2,195 — Commercial mortgage backed securities 1,197 — 1,197 — Residential mortgage backed securities 1,179 — 1,179 — Municipal bonds 227 — 227 — Total 23,628 4,342 19,126 160 Short-term investments 2,142 1,885 160 97 Equity securities, at fair value 1,720 1,686 29 5 Derivative instruments (2) 120 — 120 — Residential mortgage loans 2 — 2 — Fair value option: Corporate bonds 910 — 910 — Non-U.S. government bonds 5 — 5 — Asset backed securities 2 — 2 — U.S. government and government agencies 13 13 — — Short-term investments 35 1 17 17 Equity securities 7 3 — 4 Other investments 249 — 123 126 Other investments measured at net asset value (1) 1,665 Total 2,886 17 1,057 147 Total assets measured at fair value $ 30,498 $ 7,930 $ 20,494 $ 409 Liabilities measured at fair value: Other liabilities $ (22) $ — $ — $ (22) Derivative instruments (2) (57) — (57) — Total liabilities measured at fair value $ (79) $ — $ (57) $ (22) (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, 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 $ 10,855 $ — $ 10,708 $ 147 U.S. government and government agencies 5,814 5,792 22 — Asset backed securities 2,250 — 2,250 — Non-U.S. government securities 2,062 — 2,062 — Commercial mortgage backed securities 1,213 — 1,213 — Residential mortgage backed securities 1,103 — 1,103 — Municipal bonds 256 — 256 — Total 23,553 5,792 17,614 147 Short-term investments 2,063 1,786 193 84 Equity securities, at fair value 1,186 1,151 30 5 Derivative instruments (2) 197 — 197 — Residential mortgage loans 2 — 2 — Fair value option: Corporate bonds 662 — 662 — Non-U.S. government bonds 6 — 6 — Asset backed securities 2 — 2 — U.S. government and government agencies 13 13 — — Short-term investments 21 — 11 10 Equity securities 7 3 — 4 Other investments 316 — 210 106 Other investments measured at net asset value (1) 1,461 Total 2,488 16 891 120 Total assets measured at fair value $ 29,489 $ 8,745 $ 18,927 $ 356 Liabilities measured at fair value: Other liabilities $ (22) $ — $ — $ (22) Derivative instruments (2) (119) — (119) — Total liabilities measured at fair value $ (141) $ — $ (119) $ (22) (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 Corporate Short-term Other Short-term Equity Equity Other Liabilities Three Months Ended March 31, 2024 Balance at beginning of period $ 147 $ 84 $ 106 $ 10 $ 4 $ 5 $ (22) Total gains or (losses) (realized/unrealized) Included in earnings (1) — — (4) — — — — Included in other comprehensive income 2 1 — — — — — Purchases, issuances, sales and settlements Purchases 98 12 30 7 — — — Issuances — — — — — — — Sales — — — — — — — Settlements (87) — (6) — — — — Transfers in and/or out of Level 3 — — — — — — — Balance at end of period $ 160 $ 97 $ 126 $ 17 $ 4 $ 5 $ (22) Three Months Ended March 31, 2023 Balance at beginning of period $ 121 $ — $ 33 $ — $ 4 $ 4 $ (14) Total gains or (losses) (realized/unrealized) Included in earnings (1) 1 — (1) — — — — Included in other comprehensive income — — — — — — — Purchases, issuances, sales and settlements Purchases — — 18 — — 1 — Issuances — — — — — — — Sales — — (4) — — — — Settlements (53) — — — — — — Transfers in and/or out of Level 3 — — — — — — — Balance at end of period $ 69 $ — $ 46 $ — $ 4 $ 5 $ (14) |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 Futures contracts $ 72 $ (14) $ 3,035 Foreign currency forward contracts 9 (13) 1,183 Other (3) 39 (30) 371 Total $ 120 $ (57) December 31, 2023 Futures contracts $ 139 $ (61) $ 3,746 Foreign currency forward contracts 27 (32) 1,224 Other (3) 31 (26) 512 Total $ 197 $ (119) (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 March 31, hedging instruments: 2024 2023 Three Months Ended Net realized gains (losses): Futures contracts $ (14) $ 39 Foreign currency forward contracts (1) 9 Other (1) 5 8 Total $ (10) $ 56 (1) Includes realized gains and losses on swaps, options and other derivatives contracts. |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Variable Interest Entity, Not Primary Beneficiary, Disclosures [Abstract] | |
Total assets and maximum exposure to loss associated with VIEs | The following table summarizes the total assets of the Bellemeade entities: March 31, December 31, 2023 Bellemeade Entities Total VIE Assets Coverage Remaining from Reinsurers (1) Total VIE 2019-1 Ltd. (Mar-19) $ — $ — $ 71 2019-3 Ltd. (Jul-19) 75 — 99 2021-3 Ltd. (Sep-21) 414 108 429 2022-1 Ltd. (Jan-22) 244 23 256 2022-2 Ltd. (Sep-22) 201 126 201 2023-1 Ltd. (Oct-23) 186 47 186 Total $ 1,120 $ 304 $ 1,242 (1) Coverage from a separate panel of reinsurers remaining at March 31, 2024. |
Other Comprehensive Income (L_2
Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 Details About Line Item That Includes March 31, AOCI Components Reclassification 2024 2023 Unrealized appreciation (decline) on available-for-sale investments Net realized gains (losses) $ (28) $ (94) Provision for credit losses (6) (16) Total before tax (34) (110) Income tax (expense) benefit 5 11 Net of tax $ (29) $ (99) |
Schedule of comprehensive income (loss) | Before Tax Amount Tax Expense (Benefit) Net of Tax Amount Three Months Ended March 31, 2024 Unrealized appreciation (decline) in value of investments: Unrealized holding gains (losses) arising during period $ (151) $ (10) $ (141) Less reclassification of net realized gains (losses) included in net income (34) (5) (29) Foreign currency translation adjustments (33) — (33) Other comprehensive income (loss) $ (150) $ (5) $ (145) Three Months Ended March 31, 2023 Unrealized appreciation (decline) in value of investments: Unrealized holding gains (losses) arising during period $ 281 $ 36 $ 245 Less reclassification of net realized gains (losses) included in net income (110) (11) (99) Foreign currency translation adjustments 5 — 5 Other comprehensive income (loss) $ 396 $ 47 $ 349 |
Share Transactions - Share-base
Share Transactions - Share-based compensation (Details) - $ / shares shares in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grants during period, options (shares) | 0.4 | 0.5 |
Weighted average grant date fair value, options (per share) | $ 30.73 | $ 23.49 |
Performance shares and units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grants during period, other than options (shares) | 0.5 | 0.6 |
Weighted average grant date fair value, other than options (per share) | $ 93.28 | $ 74.06 |
Restricted shares and units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grants during period, other than options (shares) | 0.7 | 0.8 |
Weighted average grant date fair value, other than options (per share) | $ 87.22 | $ 69.25 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Numerator: | |||
Net income (loss) | $ 1,120 | $ 717 | |
Net (income) loss attributable to noncontrolling interests | 0 | (2) | |
Net income available to Arch | 1,120 | 715 | |
Preferred dividends | (10) | (10) | |
Net income (loss) available to Arch common shareholders | $ 1,110 | $ 705 | |
Denominator: | |||
Weighted average common shares outstanding — basic | 370.9 | 367.3 | |
Effect of dilutive common share equivalents: | |||
Nonvested restricted shares | 2.3 | 2.8 | |
Stock options | [1] | 7.3 | 7.5 |
Weighted average common shares and common share equivalents outstanding — diluted | 380.5 | 377.6 | |
Earnings per common share: | |||
Basic (per share) | $ 2.99 | $ 1.92 | |
Diluted (per share) | $ 2.92 | $ 1.87 | |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per common share (shares) | 0.6 | 0.5 | |
[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 2024 first quarter and 2023 first quarter, the number of stock options excluded were 0.6 million and 0.5 million, respectively. |
Segment Information - Summary o
Segment Information - Summary of underwriting income or loss by segment (Details) $ in Millions | 3 Months Ended | |||
Mar. 31, 2024 USD ($) segment | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | ||
Segment Reporting Information [Line Items] | ||||
Number of segments | segment | 3 | |||
Gross premiums written | $ 5,933 | $ 4,780 | ||
Premiums ceded | (1,848) | (1,356) | ||
Net premiums written | 4,085 | 3,424 | ||
Change in unearned premiums | (663) | (541) | ||
Net premiums earned | 3,422 | 2,883 | ||
Other underwriting income | 12 | 10 | ||
Losses and loss adjustment expenses | (1,728) | (1,471) | ||
Acquisition expenses | (607) | (533) | ||
Other operating expenses | (363) | (319) | ||
Underwriting income (loss) | 736 | 570 | ||
Net investment income | 327 | 199 | ||
Net realized gains (losses) | 67 | 17 | ||
Equity in net income (loss) of investment funds accounted for using the equity method | 99 | 48 | ||
Other income (loss) | 14 | 11 | ||
Corporate expenses | [1] | (46) | (29) | |
Transaction costs and other | [1] | (7) | (1) | |
Amortization of intangible assets | (21) | (23) | ||
Interest expense | (34) | (32) | ||
Net foreign exchange gains (losses) | 31 | (18) | ||
Income (loss) before income taxes and income (loss) from operating affiliates | 1,166 | 742 | ||
Income tax expense (benefit) | (101) | (64) | ||
Income (loss) from operating affiliates | 55 | 39 | ||
Net income (loss) | 1,120 | 717 | ||
Net (income) loss attributable to noncontrolling interests | 0 | (2) | ||
Net income available to Arch | 1,120 | 715 | ||
Preferred dividends | (10) | (10) | ||
Net income (loss) available to Arch common shareholders | $ 1,110 | $ 705 | ||
Underwriting Ratios | ||||
Loss ratio | 50.50% | 51% | ||
Acquisition expense ratio | 17.70% | 18.50% | ||
Other operating expense ratio | 10.60% | 11.10% | ||
Combined ratio | 78.80% | 80.60% | ||
Goodwill and intangible assets | $ 778 | $ 785 | $ 731 | |
Operating segments | Insurance | ||||
Segment Reporting Information [Line Items] | ||||
Gross premiums written | [2] | 2,126 | 1,979 | |
Premiums ceded | [2] | (584) | (542) | |
Net premiums written | 1,542 | 1,437 | ||
Change in unearned premiums | (91) | (180) | ||
Net premiums earned | 1,451 | 1,257 | ||
Other underwriting income | 0 | 0 | ||
Losses and loss adjustment expenses | (854) | (703) | ||
Acquisition expenses | (276) | (245) | ||
Other operating expenses | (235) | (195) | ||
Underwriting income (loss) | $ 86 | $ 114 | ||
Underwriting Ratios | ||||
Loss ratio | 58.90% | 55.90% | ||
Acquisition expense ratio | 19% | 19.50% | ||
Other operating expense ratio | 16.20% | 15.50% | ||
Combined ratio | 94.10% | 90.90% | ||
Goodwill and intangible assets | $ 293 | $ 228 | ||
Operating segments | Reinsurance | ||||
Segment Reporting Information [Line Items] | ||||
Gross premiums written | [2] | 3,467 | 2,460 | |
Premiums ceded | [2] | (1,201) | (734) | |
Net premiums written | 2,266 | 1,726 | ||
Change in unearned premiums | (600) | (396) | ||
Net premiums earned | 1,666 | 1,330 | ||
Other underwriting income | 2 | 4 | ||
Losses and loss adjustment expenses | (883) | (766) | ||
Acquisition expenses | (331) | (281) | ||
Other operating expenses | (75) | (74) | ||
Underwriting income (loss) | $ 379 | $ 213 | ||
Underwriting Ratios | ||||
Loss ratio | 53% | 57.60% | ||
Acquisition expense ratio | 19.90% | 21.10% | ||
Other operating expense ratio | 4.50% | 5.60% | ||
Combined ratio | 77.40% | 84.30% | ||
Goodwill and intangible assets | $ 121 | $ 142 | ||
Operating segments | Mortgage | ||||
Segment Reporting Information [Line Items] | ||||
Gross premiums written | [2] | 341 | 343 | |
Premiums ceded | [2] | (64) | (82) | |
Net premiums written | 277 | 261 | ||
Change in unearned premiums | 28 | 35 | ||
Net premiums earned | 305 | 296 | ||
Other underwriting income | 10 | 6 | ||
Losses and loss adjustment expenses | 9 | (2) | ||
Acquisition expenses | 0 | (7) | ||
Other operating expenses | (53) | (50) | ||
Underwriting income (loss) | $ 271 | $ 243 | ||
Underwriting Ratios | ||||
Loss ratio | (3.00%) | 0.60% | ||
Acquisition expense ratio | 0% | 2.50% | ||
Other operating expense ratio | 17.50% | 16.90% | ||
Combined ratio | 14.50% | 20% | ||
Goodwill and intangible assets | $ 364 | $ 415 | ||
[1]Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘transaction costs and other.’[2]Certain assumed and ceded amounts related to intersegment transactions are included in individual segment results. Accordingly, the sum of such transactions for each segment does not agree to the total due to eliminations. |
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 | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract] | ||
Reserve for losses and loss adjustment expenses at beginning of period | $ 22,752 | $ 20,032 |
Unpaid losses and loss adjustment expenses recoverable | 6,690 | 6,280 |
Net reserve for losses and loss adjustment expenses at beginning of period | 16,062 | 13,752 |
Net incurred losses and loss adjustment expenses relating to losses occurring in: | ||
Current year | 1,852 | 1,607 |
Prior years | (124) | (136) |
Total net incurred losses and loss adjustment expenses | 1,728 | 1,471 |
Net foreign exchange (gains) losses and other | (84) | 55 |
Net paid losses and loss adjustment expenses relating to losses occurring in: | ||
Current year | (92) | (140) |
Prior years | (978) | (727) |
Total net paid losses and loss adjustment expenses | (1,070) | (867) |
Net reserve for losses and loss adjustment expenses at end of period | 16,636 | 14,411 |
Unpaid losses and loss adjustment expenses recoverable | 7,069 | 6,347 |
Reserve for losses and loss adjustment expenses at end of period | $ 23,705 | $ 20,758 |
Reserve for Losses and Loss A_4
Reserve for Losses and Loss Adjustment Expenses - Prior year development (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||
Prior year development favorable (unfavorable) | $ 124 | $ 136 |
Operating segments | Insurance | ||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||
Prior year development favorable (unfavorable) | $ 10 | $ 12 |
Percentage of prior year development | 0.70% | 0.90% |
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) | $ (13) |
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) | (18) | |
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) | (17) | 7 |
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 | 1 |
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) | 3 | |
Operating segments | Insurance | Long tailed lines | Construction and national accounts | ||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||
Prior year development favorable (unfavorable) | (7) | |
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) | 18 | 9 |
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) | 7 | |
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) | 10 | 8 |
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 | 25 |
Operating segments | Reinsurance | ||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||
Prior year development favorable (unfavorable) | $ 40 | $ 53 |
Percentage of prior year development | 2.40% | 4% |
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) | $ (2) | $ 2 |
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) | (2) | 3 |
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) | 44 | 49 |
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) | (8) | 8 |
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) | 21 | 23 |
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) | 18 | |
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) | 33 | |
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) | (4) | 3 |
Operating segments | Mortgage | ||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||
Prior year development favorable (unfavorable) | $ 74 | $ 71 |
Percentage of prior year development | 24.40% | 23.90% |
Allowance for Expected Credit_3
Allowance for Expected Credit Losses - Premiums receivable (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Credit Loss [Abstract] | |||
Balance at beginning of period | $ 4,644 | $ 3,625 | |
Balance at end of period | 5,765 | 4,513 | |
Allowance for Expected Credit Losses | |||
Balance at beginning of period | 34 | 35 | |
Change for provision of expected credit losses | [1] | (2) | 1 |
Balance at end of period | 32 | 36 | |
Premium receivable, write-offs during the period | $ 0 | $ 1 | |
[1] Amounts deemed uncollectible are written-off in operating expenses. For the 2024 first quarter and 2023 first quarter, amounts written off were nil and $1 million, respectively. |
Allowance for Expected Credit_4
Allowance for Expected Credit Losses - Reinsurance recoverables (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Credit Loss [Abstract] | ||
Balance at beginning of period | $ 7,064 | $ 6,564 |
Balance at end of period | 7,509 | 6,612 |
Allowance for Expected Credit Losses | ||
Balance at beginning of period | 21 | 22 |
Change for provision of expected credit losses | (5) | (1) |
Balance at end of period | $ 16 | $ 21 |
Allowance for Expected Credit_5
Allowance for Expected Credit Losses - Ceded credit risk (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | ||
Ceded Credit Risk [Line Items] | |||||
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses | $ 7,509 | $ 7,064 | $ 6,612 | $ 6,564 | |
Reinsurance recoverable | Reinsurer concentration risk | AM Best A minus Or Better Rating | |||||
Ceded Credit Risk [Line Items] | |||||
Concentration risk percentage | 66.60% | 66.80% | |||
Reinsurance recoverable | Reinsurer concentration risk | AM Best Rating Below A Minus | All Other Carriers | |||||
Ceded Credit Risk [Line Items] | |||||
Concentration risk percentage | 0% | 0.10% | |||
Reinsurance recoverable | Reinsurer concentration risk | Not Rated | All Other Carriers | |||||
Ceded Credit Risk [Line Items] | |||||
Concentration risk percentage | [1] | 33.40% | 33.10% | ||
Reinsurance recoverable | Reinsurer concentration risk | Not Rated | Ceded credit risk, secured | |||||
Ceded Credit Risk [Line Items] | |||||
Concentration risk percentage | 94% | 95% | |||
Stockholders' equity | Reinsurer concentration risk | Largest Balance Due From Any One Carrier | |||||
Ceded Credit Risk [Line Items] | |||||
Concentration risk percentage | 7.10% | 7.20% | |||
[1]At March 31, 2024 and December 31, 2023 over 94% and 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 | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Credit Loss [Abstract] | ||
Balance at beginning of period | $ 1,814 | $ 1,731 |
Balance at end of period | 1,907 | 1,750 |
Allowance for Expected Credit Losses | ||
Balance at beginning of period | 3 | 3 |
Change for provision of expected credit losses | 0 | (1) |
Balance at end of period | $ 3 | $ 2 |
Investment Information - Summar
Investment Information - Summary of available for sale securities (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-sale [Line Items] | ||||
Estimated Fair Value | $ 25,770 | $ 25,616 | ||
Gross Unrealized Gains | 149 | 276 | ||
Gross Unrealized Losses | (828) | (827) | ||
Allowance for Expected Credit Losses | (32) | (28) | ||
Cost or Amortized Cost | 26,481 | 26,195 | ||
Fixed maturities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Estimated Fair Value | 23,628 | 23,553 | ||
Gross Unrealized Gains | 147 | 275 | ||
Gross Unrealized Losses | (825) | (825) | ||
Allowance for Expected Credit Losses | (32) | (28) | $ (56) | $ (41) |
Cost or Amortized Cost | 24,338 | 24,131 | ||
Corporate bonds | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Estimated Fair Value | 11,698 | 10,855 | ||
Gross Unrealized Gains | 98 | 157 | ||
Gross Unrealized Losses | (442) | (464) | ||
Allowance for Expected Credit Losses | (24) | (20) | (45) | (30) |
Cost or Amortized Cost | 12,066 | 11,182 | ||
U.S. government and government agencies | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Estimated Fair Value | 4,370 | 5,814 | ||
Gross Unrealized Gains | 6 | 63 | ||
Gross Unrealized Losses | (109) | (86) | ||
Allowance for Expected Credit Losses | 0 | 0 | ||
Cost or Amortized Cost | 4,473 | 5,837 | ||
Asset backed securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Estimated Fair Value | 2,762 | 2,250 | ||
Gross Unrealized Gains | 15 | 11 | ||
Gross Unrealized Losses | (44) | (55) | ||
Allowance for Expected Credit Losses | (5) | (5) | ||
Cost or Amortized Cost | 2,796 | 2,299 | ||
Non-U.S. government securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Estimated Fair Value | 2,195 | 2,062 | ||
Gross Unrealized Gains | 20 | 33 | ||
Gross Unrealized Losses | (113) | (100) | ||
Allowance for Expected Credit Losses | (1) | (1) | $ (3) | $ (2) |
Cost or Amortized Cost | 2,289 | 2,130 | ||
Commercial mortgage backed securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Estimated Fair Value | 1,197 | 1,213 | ||
Gross Unrealized Gains | 3 | 3 | ||
Gross Unrealized Losses | (30) | (34) | ||
Allowance for Expected Credit Losses | (2) | (2) | ||
Cost or Amortized Cost | 1,226 | 1,246 | ||
Residential mortgage backed securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Estimated Fair Value | 1,179 | 1,103 | ||
Gross Unrealized Gains | 4 | 7 | ||
Gross Unrealized Losses | (69) | (66) | ||
Allowance for Expected Credit Losses | 0 | 0 | ||
Cost or Amortized Cost | 1,244 | 1,162 | ||
Municipal bonds | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Estimated Fair Value | 227 | 256 | ||
Gross Unrealized Gains | 1 | 1 | ||
Gross Unrealized Losses | (18) | (20) | ||
Allowance for Expected Credit Losses | 0 | 0 | ||
Cost or Amortized Cost | 244 | 275 | ||
Short-term investments | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Estimated Fair Value | 2,142 | 2,063 | ||
Gross Unrealized Gains | 2 | 1 | ||
Gross Unrealized Losses | (3) | (2) | ||
Allowance for Expected Credit Losses | 0 | 0 | ||
Cost or Amortized Cost | $ 2,143 | $ 2,064 |
Investment Information - Aging
Investment Information - Aging of available for sale securities in an unrealized loss position (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Estimated Fair Value [Abstract] | ||
Estimated Fair Value - Less than 12 Months | $ 8,825 | $ 3,867 |
Estimated Fair Value - 12 Months or More | 8,329 | 9,555 |
Estimated Fair Value | 17,154 | 13,422 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Gross Unrealized Losses - Less than 12 Months | (105) | (67) |
Gross Unrealized Losses - 12 Months or More | (723) | (760) |
Gross Unrealized Losses | (828) | (827) |
Fixed maturities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position, Estimated Fair Value [Abstract] | ||
Estimated Fair Value - Less than 12 Months | 8,098 | 3,565 |
Estimated Fair Value - 12 Months or More | 8,329 | 9,555 |
Estimated Fair Value | 16,427 | 13,120 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Gross Unrealized Losses - Less than 12 Months | (102) | (65) |
Gross Unrealized Losses - 12 Months or More | (723) | (760) |
Gross Unrealized Losses | (825) | (825) |
Corporate bonds | ||
Debt Securities, Available-for-sale, Unrealized Loss Position, Estimated Fair Value [Abstract] | ||
Estimated Fair Value - Less than 12 Months | 3,314 | 1,559 |
Estimated Fair Value - 12 Months or More | 4,419 | 4,959 |
Estimated Fair Value | 7,733 | 6,518 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Gross Unrealized Losses - Less than 12 Months | (50) | (45) |
Gross Unrealized Losses - 12 Months or More | (392) | (419) |
Gross Unrealized Losses | (442) | (464) |
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 | 3,093 | 1,066 |
Estimated Fair Value - 12 Months or More | 763 | 941 |
Estimated Fair Value | 3,856 | 2,007 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Gross Unrealized Losses - Less than 12 Months | (36) | (10) |
Gross Unrealized Losses - 12 Months or More | (73) | (76) |
Gross Unrealized Losses | (109) | (86) |
Non-U.S. government securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position, Estimated Fair Value [Abstract] | ||
Estimated Fair Value - Less than 12 Months | 829 | 365 |
Estimated Fair Value - 12 Months or More | 821 | 897 |
Estimated Fair Value | 1,650 | 1,262 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Gross Unrealized Losses - Less than 12 Months | (10) | (4) |
Gross Unrealized Losses - 12 Months or More | (103) | (96) |
Gross Unrealized Losses | (113) | (100) |
Residential mortgage backed securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position, Estimated Fair Value [Abstract] | ||
Estimated Fair Value - Less than 12 Months | 267 | 221 |
Estimated Fair Value - 12 Months or More | 508 | 522 |
Estimated Fair Value | 775 | 743 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Gross Unrealized Losses - Less than 12 Months | (4) | (3) |
Gross Unrealized Losses - 12 Months or More | (65) | (63) |
Gross Unrealized Losses | (69) | (66) |
Asset backed securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position, Estimated Fair Value [Abstract] | ||
Estimated Fair Value - Less than 12 Months | 489 | 234 |
Estimated Fair Value - 12 Months or More | 729 | 1,112 |
Estimated Fair Value | 1,218 | 1,346 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Gross Unrealized Losses - Less than 12 Months | (1) | (1) |
Gross Unrealized Losses - 12 Months or More | (43) | (54) |
Gross Unrealized Losses | (44) | (55) |
Commercial mortgage backed securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position, Estimated Fair Value [Abstract] | ||
Estimated Fair Value - Less than 12 Months | 88 | 100 |
Estimated Fair Value - 12 Months or More | 892 | 909 |
Estimated Fair Value | 980 | 1,009 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Gross Unrealized Losses - Less than 12 Months | (1) | (1) |
Gross Unrealized Losses - 12 Months or More | (29) | (33) |
Gross Unrealized Losses | (30) | (34) |
Municipal bonds | ||
Debt Securities, Available-for-sale, Unrealized Loss Position, Estimated Fair Value [Abstract] | ||
Estimated Fair Value - Less than 12 Months | 18 | 20 |
Estimated Fair Value - 12 Months or More | 197 | 215 |
Estimated Fair Value | 215 | 235 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Gross Unrealized Losses - Less than 12 Months | 0 | (1) |
Gross Unrealized Losses - 12 Months or More | (18) | (19) |
Gross Unrealized Losses | (18) | (20) |
Short-term investments | ||
Debt Securities, Available-for-sale, Unrealized Loss Position, Estimated Fair Value [Abstract] | ||
Estimated Fair Value - Less than 12 Months | 727 | 302 |
Estimated Fair Value - 12 Months or More | 0 | 0 |
Estimated Fair Value | 727 | 302 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Gross Unrealized Losses - Less than 12 Months | (3) | (2) |
Gross Unrealized Losses - 12 Months or More | 0 | 0 |
Gross Unrealized Losses | $ (3) | $ (2) |
Investment Information - Maturi
Investment Information - Maturity profile of available for sale securities) (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Estimated Fair Value | ||
Due in one year or less | $ 536 | $ 480 |
Due after one year through five years | 12,998 | 12,924 |
Due after five years through 10 years | 4,632 | 5,249 |
Due after 10 years | 324 | 334 |
Single maturity date | 18,490 | 18,987 |
Estimated Fair Value | 25,770 | 25,616 |
Amortized Cost | ||
Due in one year or less | 554 | 499 |
Due after one year through five years | 13,299 | 13,101 |
Due after five years through 10 years | 4,860 | 5,450 |
Due after 10 years | 359 | 374 |
Single maturity date | 19,072 | 19,424 |
Cost or Amortized Cost | 26,481 | 26,195 |
Fixed maturities | ||
Estimated Fair Value | ||
Estimated Fair Value | 23,628 | 23,553 |
Amortized Cost | ||
Cost or Amortized Cost | 24,338 | 24,131 |
Residential mortgage backed securities | ||
Estimated Fair Value | ||
Securities without single maturity date | 1,179 | 1,103 |
Estimated Fair Value | 1,179 | 1,103 |
Amortized Cost | ||
Securities without single maturity date | 1,244 | 1,162 |
Cost or Amortized Cost | 1,244 | 1,162 |
Commercial mortgage backed securities | ||
Estimated Fair Value | ||
Securities without single maturity date | 1,197 | 1,213 |
Estimated Fair Value | 1,197 | 1,213 |
Amortized Cost | ||
Securities without single maturity date | 1,226 | 1,246 |
Cost or Amortized Cost | 1,226 | 1,246 |
Asset backed securities | ||
Estimated Fair Value | ||
Securities without single maturity date | 2,762 | 2,250 |
Estimated Fair Value | 2,762 | 2,250 |
Amortized Cost | ||
Securities without single maturity date | 2,796 | 2,299 |
Cost or Amortized Cost | $ 2,796 | $ 2,299 |
Investment Information - Other
Investment Information - Other investments, at fair value (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Schedule Of Other Investments [Line Items] | ||
Other investments, at fair value | $ 2,886 | $ 2,488 |
Other investments | ||
Schedule Of Other Investments [Line Items] | ||
Other investments, at fair value | 1,914 | 1,777 |
Lending | ||
Schedule Of Other Investments [Line Items] | ||
Other investments, at fair value | 442 | 427 |
Investment grade fixed income | ||
Schedule Of Other Investments [Line Items] | ||
Other investments, at fair value | 799 | 754 |
Term loan investments | ||
Schedule Of Other Investments [Line Items] | ||
Other investments, at fair value | 344 | 272 |
Private equity | ||
Schedule Of Other Investments [Line Items] | ||
Other investments, at fair value | 191 | 182 |
Credit related funds | ||
Schedule Of Other Investments [Line Items] | ||
Other investments, at fair value | 120 | 124 |
Energy | ||
Schedule Of Other Investments [Line Items] | ||
Other investments, at fair value | 18 | 18 |
Fixed maturities | ||
Schedule Of Other Investments [Line Items] | ||
Other investments, at fair value | 930 | 683 |
Short term investments | ||
Schedule Of Other Investments [Line Items] | ||
Other investments, at fair value | 35 | 21 |
Equity securities | ||
Schedule Of Other Investments [Line Items] | ||
Other investments, at fair value | $ 7 | $ 7 |
Investment Information - Net in
Investment Information - Net investment income (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Net investment income: | |||
Gross investment income | $ 350 | $ 219 | |
Investment expenses | (23) | (20) | |
Net investment income | 327 | 199 | |
Fixed maturities | |||
Net investment income: | |||
Gross investment income | 280 | 188 | |
Short-term investments | |||
Net investment income: | |||
Gross investment income | 29 | 14 | |
Equity securities | |||
Net investment income: | |||
Gross investment income | 8 | 4 | |
Other | |||
Net investment income: | |||
Gross investment income | [1] | $ 33 | $ 13 |
[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 | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Available for sale securities: | |||
Available for sale securities, gross gains on investment sales | $ 50 | $ 17 | |
Available for sale securities, gross losses on investment sales | (78) | (111) | |
Equity securities, at fair value: | |||
Net realized gains (losses) on sales during the period | 11 | 19 | |
Net unrealized gains (losses) on equity securities still held at reporting date | 82 | 38 | |
Allowance for credit losses: | |||
Allowance for credit losses - investments related | (6) | (16) | |
Allowance for credit losses - underwriting related | 1 | 0 | |
Derivative instruments | [1] | (10) | 56 |
Other | 17 | (2) | |
Net realized gains (losses) | 67 | 17 | |
Fixed maturities | |||
Available for sale securities: | |||
Change in fair value of assets and liabilities accounted for using the fair value option | 2 | 6 | |
Other investments | |||
Available for sale securities: | |||
Change in fair value of assets and liabilities accounted for using the fair value option | (2) | 9 | |
Equity securities | |||
Available for sale securities: | |||
Change in fair value of assets and liabilities accounted for using the fair value option | $ 0 | $ 1 | |
[1]See note 9 for information on the Company’s derivative instruments. |
Investment Information - Invest
Investment Information - Investments accounted for using the equity method (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Schedule of Equity Method Investments [Line Items] | ||
Investments accounted for using the equity method | $ 4,842 | $ 4,566 |
Credit related funds | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments accounted for using the equity method | 1,320 | 1,258 |
Private equity | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments accounted for using the equity method | 1,341 | 1,175 |
Real estate | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments accounted for using the equity method | 671 | 666 |
Lending | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments accounted for using the equity method | 582 | 597 |
Infrastructure | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments accounted for using the equity method | 323 | 320 |
Fixed income | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments accounted for using the equity method | 327 | 277 |
Equity securities | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments accounted for using the equity method | 188 | 178 |
Energy | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments accounted for using the equity method | $ 90 | $ 95 |
Investment Information - Limite
Investment Information - Limited partnership interests (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 | |
Schedule of Equity Method Investments [Line Items] | |||
Maximum Exposure to Loss | $ 4,951 | $ 4,680 | |
Aggregate unfunded commitments | 3,700 | 3,600 | |
Equity method investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Maximum Exposure to Loss | [1] | 4,842 | 4,566 |
Aggregate unfunded commitments | 3,500 | 3,400 | |
Fair value option | |||
Schedule of Equity Method Investments [Line Items] | |||
Maximum Exposure to Loss | [2] | 109 | 114 |
Aggregate unfunded commitments | $ 29 | $ 32 | |
[1]Aggregate unfunded commitments were $3.5 billion at March 31, 2024, compared with $3.4 billion at December 31, 2023.[2]Aggregate unfunded commitments were $29 million at March 31, 2024, compared to $32 million at December 31, 2023 |
Investment Information - Inve_2
Investment Information - Investment in operating affiliates (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Schedule of Equity Method Investments [Line Items] | |||
Investment in operating affiliates | $ 1,174 | $ 1,119 | |
Income (loss) from operating affiliates | $ 55 | $ 39 | |
Coface | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage ownership | 29.90% | ||
Investment in operating affiliates | $ 586 | 570 | |
Greysbridge Holdings Ltd | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage ownership | 40% | ||
Investment in operating affiliates | $ 472 | $ 430 | |
Issued Shares Excluding Treasury Stock | Coface | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage ownership | 30.10% |
Investment Information - Allowa
Investment Information - Allowance for expected credit losses (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Allowance for expected credit losses | |||
Balance at beginning of period | $ 28 | ||
Balance at end of period | 32 | ||
Fixed maturities | |||
Allowance for expected credit losses | |||
Balance at beginning of period | 28 | $ 41 | |
Additions for current-period provision for expected credit losses | 0 | 1 | |
Additions (reductions) for previously recognized expected credit losses | 5 | 15 | |
Reductions due to disposals | (1) | (1) | |
Balance at end of period | 32 | 56 | |
Structured securities | |||
Allowance for expected credit losses | |||
Balance at beginning of period | [1] | 7 | 9 |
Additions for current-period provision for expected credit losses | [1] | 0 | 0 |
Additions (reductions) for previously recognized expected credit losses | [1] | 0 | (1) |
Reductions due to disposals | [1] | 0 | 0 |
Balance at end of period | [1] | 7 | 8 |
Corporate bonds | |||
Allowance for expected credit losses | |||
Balance at beginning of period | 20 | 30 | |
Additions for current-period provision for expected credit losses | 0 | 1 | |
Additions (reductions) for previously recognized expected credit losses | 5 | 15 | |
Reductions due to disposals | (1) | (1) | |
Balance at end of period | 24 | 45 | |
Non-U.S. government securities | |||
Allowance for expected credit losses | |||
Balance at beginning of period | 1 | 2 | |
Additions for current-period provision for expected credit losses | 0 | 0 | |
Additions (reductions) for previously recognized expected credit losses | 0 | 1 | |
Reductions due to disposals | 0 | 0 | |
Balance at end of period | $ 1 | $ 3 | |
[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 | Mar. 31, 2024 | Dec. 31, 2023 | |
Restricted Assets [Line Items] | |||
Restricted assets | $ 9,739 | $ 9,932 | |
Collateral or guarantees - affiliated transactions | |||
Restricted Assets [Line Items] | |||
Restricted assets | 4,874 | 4,854 | |
Collateral or guarantees - third party agreements | |||
Restricted Assets [Line Items] | |||
Restricted assets | 2,694 | 2,869 | |
Deposits with US regulatory authorities | |||
Restricted Assets [Line Items] | |||
Restricted assets | 828 | 833 | |
Other | |||
Restricted Assets [Line Items] | |||
Restricted assets | [1] | $ 1,343 | $ 1,376 |
[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 | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Disclosure Investment Information [Abstract] | ||||
Cash | $ 993 | $ 917 | ||
Restricted cash (included in ‘other assets’) | 607 | 581 | ||
Cash and restricted cash | $ 1,600 | $ 1,498 | $ 1,215 | $ 1,273 |
Investment Information - Narrat
Investment Information - Narrative (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 USD ($) lots | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) lots | |
Continuous unrealized loss, qualitative disclosures: | |||
Number of positions in an unrealized loss position (lots) | lots | 8,380 | 7,100 | |
Total number of positions (lots) | lots | 16,400 | 15,720 | |
Largest single loss | $ 5 | $ 6 | |
Narrative items: | |||
Equity securities, at fair value | 1,720 | $ 1,186 | |
Equity in net (loss) income of investment funds accounted for using the equity method | $ 99 | $ 48 | |
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 | Mar. 31, 2024 | Dec. 31, 2023 | |
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 | $ 7,930 | $ 8,745 | |
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 | 4,342 | 5,792 | |
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 | 4,342 | 5,792 | |
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 | 1,885 | 1,786 | |
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 | 1,686 | 1,151 | |
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 | 17 | 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 | 13 | 13 | |
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 | 0 | |
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 | 3 | |
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 | 20,494 | 18,927 | |
Liabilities measured at fair value | (57) | (119) | |
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 | (57) | (119) | |
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 | 19,126 | 17,614 | |
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 | 11,538 | 10,708 | |
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 | 28 | 22 | |
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 | 2,762 | 2,250 | |
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 | 2,195 | 2,062 | |
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 | 1,197 | 1,213 | |
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 | 1,179 | 1,103 | |
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 | 227 | 256 | |
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 | 160 | 193 | |
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 | 30 | |
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 | 120 | 197 | |
Significant Other Observable Inputs (Level 2) | Fair value option | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 1,057 | 891 | |
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 | 910 | 662 | |
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 | 5 | 6 | |
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 | 17 | 11 | |
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 | 123 | 210 | |
Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 409 | 356 | |
Liabilities measured at fair value | (22) | (22) | |
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 | (22) | (22) | |
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 | 160 | 147 | |
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 | 160 | 147 | |
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 | 97 | 84 | |
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 | 5 | |
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 | 147 | 120 | |
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 | 17 | 10 | |
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 | 126 | 106 | |
Estimated Fair Value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 30,498 | 29,489 | |
Liabilities measured at fair value | (79) | (141) | |
Estimated Fair Value | Other liabilities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities measured at fair value | (22) | (22) | |
Estimated Fair Value | Derivative instruments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities measured at fair value | (57) | (119) | |
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 | 23,628 | 23,553 | |
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 | 11,698 | 10,855 | |
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 | 4,370 | 5,814 | |
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 | 2,762 | 2,250 | |
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 | 2,195 | 2,062 | |
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 | 1,197 | 1,213 | |
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 | 1,179 | 1,103 | |
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 | 227 | 256 | |
Estimated Fair Value | Short-term investments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 2,142 | 2,063 | |
Estimated Fair Value | Equity securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 1,720 | 1,186 | |
Estimated Fair Value | Derivative instruments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 120 | 197 | |
Estimated Fair Value | Fair value option | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets measured at fair value | 2,886 | 2,488 | |
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 | 910 | 662 | |
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 | 13 | 13 | |
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 | 5 | 6 | |
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 | 35 | 21 | |
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 | 7 | |
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 | 249 | 316 | |
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] | $ 1,665 | $ 1,461 |
[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 | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Other liabilities | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | $ (22) | $ (14) | |
Total gains or (losses) (realized/unrealized) - included in earnings | [1] | 0 | 0 |
Total gains or (losses) (realized/unrealized) - included in other comprehensive income | 0 | 0 | |
Purchases, issuances, sales and settlements | |||
Purchases | 0 | 0 | |
Issuances | 0 | 0 | |
Sales | 0 | 0 | |
Settlements | 0 | 0 | |
Transfers in and/or out of Level 3 | 0 | 0 | |
Balance at end of period | (22) | (14) | |
Available for sale | Corporate bonds | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | 147 | 121 | |
Total gains or (losses) (realized/unrealized) - included in earnings | [1] | 0 | 1 |
Total gains or (losses) (realized/unrealized) - included in other comprehensive income | 2 | 0 | |
Purchases, issuances, sales and settlements | |||
Purchases | 98 | 0 | |
Issuances | 0 | 0 | |
Sales | 0 | 0 | |
Settlements | (87) | (53) | |
Transfers in and/or out of Level 3 | 0 | 0 | |
Balance at end of period | 160 | 69 | |
Available for sale | Short-term investments | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | 84 | 0 | |
Total gains or (losses) (realized/unrealized) - included in earnings | [1] | 0 | 0 |
Total gains or (losses) (realized/unrealized) - included in other comprehensive income | 1 | 0 | |
Purchases, issuances, sales and settlements | |||
Purchases | 12 | 0 | |
Issuances | 0 | 0 | |
Sales | 0 | 0 | |
Settlements | 0 | 0 | |
Transfers in and/or out of Level 3 | 0 | 0 | |
Balance at end of period | 97 | 0 | |
Fair value option | Other investments | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | 106 | 33 | |
Total gains or (losses) (realized/unrealized) - included in earnings | [1] | (4) | (1) |
Total gains or (losses) (realized/unrealized) - included in other comprehensive income | 0 | 0 | |
Purchases, issuances, sales and settlements | |||
Purchases | 30 | 18 | |
Issuances | 0 | 0 | |
Sales | 0 | (4) | |
Settlements | (6) | 0 | |
Transfers in and/or out of Level 3 | 0 | 0 | |
Balance at end of period | 126 | 46 | |
Fair value option | Short term investments | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | 10 | 0 | |
Total gains or (losses) (realized/unrealized) - included in earnings | [1] | 0 | 0 |
Total gains or (losses) (realized/unrealized) - included in other comprehensive income | 0 | 0 | |
Purchases, issuances, sales and settlements | |||
Purchases | 7 | 0 | |
Issuances | 0 | 0 | |
Sales | 0 | 0 | |
Settlements | 0 | 0 | |
Transfers in and/or out of Level 3 | 0 | 0 | |
Balance at end of period | 17 | 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 | 4 | |
Total gains or (losses) (realized/unrealized) - included in earnings | [1] | 0 | 0 |
Total gains or (losses) (realized/unrealized) - included in other comprehensive income | 0 | 0 | |
Purchases, issuances, sales and settlements | |||
Purchases | 0 | 0 | |
Issuances | 0 | 0 | |
Sales | 0 | 0 | |
Settlements | 0 | 0 | |
Transfers in and/or out of Level 3 | 0 | 0 | |
Balance at end of period | 4 | 4 | |
Equity securities | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at beginning of period | 5 | 4 | |
Total gains or (losses) (realized/unrealized) - included in earnings | [1] | 0 | 0 |
Total gains or (losses) (realized/unrealized) - included in other comprehensive income | 0 | 0 | |
Purchases, issuances, sales and settlements | |||
Purchases | 0 | 1 | |
Issuances | 0 | 0 | |
Sales | 0 | 0 | |
Settlements | 0 | 0 | |
Transfers in and/or out of Level 3 | 0 | 0 | |
Balance at end of period | $ 5 | $ 5 | |
[1]Gains or losses were included in net realized gains (losses). |
Fair Value - Narrative (Details
Fair Value - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value Disclosures [Abstract] | ||
Total assets and liabilities measured at fair value | $ 30,600 | $ 29,600 |
Total assets and liabilities measured at fair value priced using non-binding broker quotes | $ 15 | $ 14 |
Total assets and liabilities measured at fair value priced using non-binding broker quotes (percentage) | 0% | 0% |
Senior notes | $ 2,727 | $ 2,726 |
Estimated fair value of senior notes | $ 2,500 | $ 2,500 |
Derivative Instruments - Fair v
Derivative Instruments - Fair value and notional amount of derivatives (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 | |
Derivative offsetting | |||
Derivative assets subject to master netting agreements | $ 120 | $ 197 | |
Derivative liabilities subject to master netting agreements | $ 57 | $ 119 | |
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 | $ 120 | $ 197 | |
Liability derivatives - fair value | (57) | (119) | |
Not designated as hedging instrument | Futures contracts | |||
Derivative [Line Items] | |||
Asset derivatives - fair value | [1] | 72 | 139 |
Liability derivatives - fair value | [1] | (14) | (61) |
Net derivatives - notional value | [2] | 3,035 | 3,746 |
Not designated as hedging instrument | Foreign currency forward contracts | |||
Derivative [Line Items] | |||
Asset derivatives - fair value | [1] | 9 | 27 |
Liability derivatives - fair value | [1] | (13) | (32) |
Net derivatives - notional value | [2] | 1,183 | 1,224 |
Not designated as hedging instrument | Other | |||
Derivative [Line Items] | |||
Asset derivatives - fair value | [1],[3] | 39 | 31 |
Liability derivatives - fair value | [1],[3] | (30) | (26) |
Net derivatives - notional value | [2],[3] | $ 371 | $ 512 |
[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 | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Net realized gains (losses) on derivative instruments | |||
Net realized gains (losses) on derivative instruments | [1] | $ (10) | $ 56 |
Not designated as hedging instrument | |||
Net realized gains (losses) on derivative instruments | |||
Net realized gains (losses) on derivative instruments | (10) | 56 | |
Not designated as hedging instrument | Futures contracts | |||
Net realized gains (losses) on derivative instruments | |||
Net realized gains (losses) on derivative instruments | (14) | 39 | |
Not designated as hedging instrument | Foreign currency forward contracts | |||
Net realized gains (losses) on derivative instruments | |||
Net realized gains (losses) on derivative instruments | (1) | 9 | |
Not designated as hedging instrument | Other | |||
Net realized gains (losses) on derivative instruments | |||
Net realized gains (losses) on derivative instruments | [2] | $ 5 | $ 8 |
[1]See note 9 for information on the Company’s derivative instruments. |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Billions | Mar. 31, 2024 | Dec. 31, 2023 |
Commitments and Contingencies Disclosure [Abstract] | ||
Investment commitments | $ 3.7 | $ 3.6 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 | |
Variable Interest Entity [Line Items] | |||
Total VIE Assets | $ 62,768 | $ 58,906 | |
Variable Interest Entity, Not Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Total VIE Assets | 1,120 | 1,242 | |
Remaining Coverage, Amount | 304 | ||
Variable Interest Entity, Not Primary Beneficiary | 2019-1 Ltd. (Mar-19) | |||
Variable Interest Entity [Line Items] | |||
Total VIE Assets | 0 | 71 | |
Variable Interest Entity, Not Primary Beneficiary | 2019-3 Ltd. (Jul-19) | |||
Variable Interest Entity [Line Items] | |||
Total VIE Assets | 75 | 99 | |
Variable Interest Entity, Not Primary Beneficiary | 2021-3 Ltd. (Sep-21) | |||
Variable Interest Entity [Line Items] | |||
Total VIE Assets | 414 | 429 | |
Remaining Coverage, Amount | [1] | 108 | |
Variable Interest Entity, Not Primary Beneficiary | 2022-1 Ltd. (Jan-22) | |||
Variable Interest Entity [Line Items] | |||
Total VIE Assets | 244 | 256 | |
Remaining Coverage, Amount | [1] | 23 | |
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 | |
Variable Interest Entity, Not Primary Beneficiary | 2023-1 Ltd. (Oct-23) | |||
Variable Interest Entity [Line Items] | |||
Total VIE Assets | 186 | $ 186 | |
Remaining Coverage, Amount | $ 47 | ||
[1]Coverage from a separate panel of reinsurers remaining at March 31, 2024. |
Other Comprehensive Income (L_3
Other Comprehensive Income (Loss) - Amounts reclassified from accumulated other comprehensive income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Provision for credit losses | $ (6) | $ (16) |
Income (loss) before income taxes and income (loss) from operating affiliates | 1,166 | 742 |
Income tax (expense) benefit | (101) | (64) |
Net of tax | 1,120 | 717 |
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) | (28) | (94) |
Provision for credit losses | (6) | (16) |
Income (loss) before income taxes and income (loss) from operating affiliates | (34) | (110) |
Income tax (expense) benefit | 5 | 11 |
Net of tax | $ (29) | $ (99) |
Other Comprehensive Income (L_4
Other Comprehensive Income (Loss) - Components of other comprehensive income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Before tax amount: | ||
Unrealized holding gains (losses) arising during period, before tax | $ (151) | $ 281 |
Less reclassification of net realized gains included in net income, before tax | (34) | (110) |
Foreign currency translation adjustments, before tax | (33) | 5 |
Other comprehensive income (loss), before tax | (150) | 396 |
Tax expense (benefit): | ||
Unrealized holding gains (losses) arising during period, tax | (10) | 36 |
Less reclassification of net realized gains included in net income, tax | (5) | (11) |
Foreign currency translation adjustments, tax | 0 | 0 |
Other comprehensive income (loss), tax | (5) | 47 |
Net of tax amount: | ||
Unrealized holding gains (losses) arising during period, net of tax | (141) | 245 |
Less reclassification of net realized gains included in net income, net of tax | (29) | (99) |
Foreign currency translation adjustments, net of tax | (33) | 5 |
Net current period other comprehensive income (loss) | $ (145) | $ 349 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |||
Effective tax rate on income before income taxes (percentage) | 8.30% | 8.20% | |
Net deferred tax asset | $ 1,600 | $ 1,600 | |
Income taxes paid (received) | $ (6) | $ 4 |
Transactions With Related Par_2
Transactions With Related Parties (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | ||||
Net premiums written | $ 4,085 | $ 3,424 | ||
Net premiums earned | 3,422 | 2,883 | ||
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses | 7,509 | 6,612 | $ 7,064 | $ 6,564 |
Reinsurance balances payable | 2,497 | 2,000 | ||
Operating affiliates | Premia | ||||
Related Party Transaction [Line Items] | ||||
Net premiums written | 75 | |||
Net premiums earned | 75 | |||
Funds held asset | 144 | 158 | ||
Operating affiliates | Somers | ||||
Related Party Transaction [Line Items] | ||||
Net premiums written | 219 | $ 155 | ||
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses | 1,400 | 1,300 | ||
Reinsurance balances payable | $ 584 | $ 475 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Apr. 05, 2024 USD ($) |
Subsequent Event | Allianz Global Corporate & Specialty SE | |
Subsequent Event [Line Items] | |
Business Combination, Price of Acquisition, Expected | $ 450 |