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Segment Information
 12 Months Ended
Dec. 31, 2021
Segment Reporting [Abstract]  
Segment Information
The Company classifies its businesses into three underwriting segments– insurance, reinsurance and mortgage– and two operating segments– corporate and ‘other.’ The Company determined its reportable segments using the management approach described in accounting guidance regarding disclosures about segments of an enterprise and related information. The accounting policies of the segments are the same as those used for the preparation of the Company’s consolidated financial statements. Intersegment business is allocated to the segment accountable for the underwriting results.
The Company’s insurance, reinsurance and mortgage segments each have managers who are responsible for the overall profitability of their respective segments and who are directly accountable to the Company’s chief operating decision makers, the Chief Executive Officer of Arch Capital, Chief Financial Officer and Treasurer of Arch Capital and the President and Chief Underwriting Officer of Arch Capital. The chief operating decision makers do not assess performance, measure return on equity or make resource allocation decisions on a line of business basis. Management measures segment performance for its three underwriting segments based on underwriting income or loss. The Company does not manage its assets by underwriting segment, with the exception of goodwill and intangible assets, and, accordingly, investment income is not allocated to each underwriting segment.
The insurance segment consists of the Company’s insurance underwriting units which offer specialty product lines on a worldwide basis. Product lines include:
•    Construction and national accounts: primary and excess casualty coverages to middle and large accounts in the construction industry and a wide range of products for middle and large national accounts, specializing in loss sensitive primary casualty insurance programs (including large deductible, self-insured retention and retrospectively rated programs).
•    Excess and surplus casualty: primary and excess casualty insurance coverages, including middle market energy business, and contract binding, which primarily provides casualty coverage through a network of appointed agents to small and medium risks.
•    Lenders products: collateral protection, debt cancellation and service contract reimbursement products to banks, credit unions, automotive dealerships and original equipment manufacturers and other specialty programs that pertain to automotive lending and leasing.
•    Professional lines: directors’ and officers’ liability, errors and omissions liability, employment practices liability, fiduciary liability, crime, professional indemnity and other financial related coverages for corporate, private equity, venture capital, real estate investment trust, limited partnership, financial institution and not-for-profit clients of all sizes and medical professional and general liability insurance coverages for the healthcare industry. The business is predominately written on a claims-made basis.
•    Programs: primarily package policies, underwriting workers’ compensation and umbrella liability business in support of desirable package programs, targeting program managers with unique expertise and niche products offering general liability, commercial automobile, inland marine and property business with minimal catastrophe exposure.
•    Property, energy, marine and aviation: primary and excess general property insurance coverages, including catastrophe-exposed property coverage, for commercial clients. Coverages for marine include hull, war, specie and liability. Aviation and stand-alone terrorism are also offered.
•    Travel, accident and health: specialty travel and accident and related insurance products for individual, group travelers, travel agents and suppliers, as well as accident and health, which provides accident, disability and medical plan insurance coverages for employer groups, medical plan members, students and other participant groups.
•    Other: includes alternative market risks (including captive insurance programs), excess workers’ compensation and employer’s liability insurance coverages for qualified self-insured groups, associations and trusts, and contract and commercial surety coverages, including contract bonds (payment and performance bonds) primarily for medium and large contractors and commercial surety bonds for Fortune 1000 companies and smaller transaction business programs.
The reinsurance segment consists of the Company’s reinsurance underwriting units which offer specialty product lines on a worldwide basis. Product lines include:
•Casualty: provides coverage to ceding company clients on third party liability and workers’ compensation exposures from ceding company clients, primarily on a treaty basis. Exposures include, among others, executive assurance, professional liability, workers’ compensation, excess and umbrella liability, excess motor and healthcare business.
•Marine and aviation: provides coverage for energy, hull, cargo, specie, liability and transit, and aviation business, including airline and general aviation risks. Business written may also include space business, which includes coverages for satellite assembly, launch and operation for commercial space programs.
•Other specialty: provides coverage to ceding company clients for proportional motor and other lines including surety, accident and health, workers’ compensation catastrophe, agriculture, trade credit and political risk.
•Property catastrophe: provides protection for most catastrophic losses that are covered in the underlying policies written by reinsureds, including hurricane, earthquake, flood, tornado, hail and fire, and coverage for other perils on a case-by-case basis. Property catastrophe reinsurance provides coverage on an excess of loss basis when aggregate losses and loss adjustment expense from a single occurrence of a covered peril exceed the retention specified in the contract.
•Property excluding property catastrophe: provides coverage for both personal lines and commercial property exposures and principally covers buildings, structures, equipment and contents. The primary perils in this business include fire, explosion, collapse, riot, vandalism, wind, tornado, flood and earthquake. Business is assumed on both a proportional and excess of loss basis. In addition, facultative business is written which focuses on commercial property risks on an excess of loss basis.
•Other. includes life reinsurance business on both a proportional and non-proportional basis, casualty clash business and, in limited instances, non-traditional business which is intended to provide insurers with risk management solutions that complement traditional reinsurance.
The mortgage segment includes the Company’s U.S. primary mortgage insurance, U.S. credit risk transfer (“CRT”) which are predominately with government sponsored enterprises (“GSE”) and international mortgage insurance and reinsurance operations. AMIC and UGRIC (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 changes in the allowance for credit losses on financial assets and net impairment losses recognized in earnings), equity in net income or loss of investments accounted for using the equity method, other income (loss), corporate expenses, transaction costs and other, amortization of intangible assets, interest expense, net foreign exchange gains or losses, income taxes, income or loss from operating affiliates and items related to the Company’s non-cumulative preferred shares. Such amounts exclude the results of the ‘other’ segment.
The ‘other’ segment included the results of Somers through June 30, 2021. In July 2021, the Company completed the previously disclosed acquisition of Somers by Greysbridge. Based on the governing documents of Greysbridge, the Company concluded that, while it retains significant influence over Somers, Somers no longer constitutes a variable interest entity. Accordingly, effective July 1, 2021, Arch no longer consolidates the results of Somers in its consolidated financial statements (see note 12, “Variable Interest Entity and Noncontrolling Interests”).

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, summary information regarding net premiums written and earned by major line of business and net premiums written by location:
Year Ended December 31, 2021
InsuranceReinsuranceMortgageSub-TotalOtherTotal
Gross premiums written (1)$5,867,734 $5,093,930 $1,507,825 $12,463,788 $457,465 $12,752,487 
Premiums ceded(1,719,541)(1,839,556)(246,757)(3,800,153)(102,763)(3,734,150)
Net premiums written4,148,193 3,254,374 1,261,068 8,663,635 354,702 9,018,337 
Change in unearned premiums(521,725)(413,931)22,351 (913,305)(22,734)(936,039)
Net premiums earned3,626,468 2,840,443 1,283,419 7,750,330 331,968 8,082,298 
Other underwriting income (loss)— 3,669 17,665 21,334 739 22,073 
Losses and loss adjustment expenses(2,344,365)(1,924,719)(56,677)(4,325,761)(259,042)(4,584,803)
Acquisition expenses(606,265)(536,754)(97,418)(1,240,437)(62,741)(1,303,178)
Other operating expenses(558,906)(212,810)(194,010)(965,726)(32,869)(998,595)
Underwriting income (loss)$116,932 $169,829 $952,979 1,239,740 (21,945)1,217,795 
Net investment income346,808 42,310 389,118 
Net realized gains (losses)299,207 80,638 379,845 
Equity in net income (loss) of investments accounted for using the equity method366,402 — 366,402 
Other income (loss)10,244 — 10,244 
Corporate expenses (77,119)— (77,119)
Transaction costs and other(1,103)(935)(2,038)
Amortization of intangible assets(82,057)(898)(82,955)
Interest expense(131,060)(8,410)(139,470)
Net foreign exchange gains (losses)42,854 (1,325)41,529 
Income (loss) before income taxes and income (loss) from operating affiliates2,013,916 89,435 2,103,351 
Income tax expense(128,348)(234)(128,582)
Income (loss) from operating affiliates264,693 — 264,693 
Net income (loss)2,150,261 89,201 2,239,462 
Amounts attributable to redeemable noncontrolling interests(2,346)(1,953)(4,299)
Amounts attributable to nonredeemable noncontrolling interests— (78,314)(78,314)
Net income (loss) available to Arch2,147,915 8,934 2,156,849 
Preferred dividends(48,343)— (48,343)
Loss on redemption of preferred shares(15,101)— (15,101)
Net income (loss) available to Arch common shareholders$2,084,471 $8,934 $2,093,405 
Underwriting Ratios
Loss ratio64.6 %67.8 %4.4 %55.8 %78.0 %56.7 %
Acquisition expense ratio16.7 %18.9 %7.6 %16.0 %18.9 %16.1 %
Other operating expense ratio15.4 %7.5 %15.1 %12.5 %9.9 %12.4 %
Combined ratio96.7 %94.2 %27.1 %84.3 %106.8 %85.2 %
Goodwill and intangible assets$256,434 $183,523 $505,026 $944,983 $— $944,983 
Total investable assets$27,442,153 $— $27,442,153 
Total assets45,100,945 — 45,100,945 
Total liabilities31,545,816 — 31,545,816 
(1)    Certain amounts included in the gross premiums written of each segment are related to intersegment transactions. Accordingly, the sum of gross premiums written for each segment does not agree to the total gross premiums written as shown in the table above due to the elimination of intersegment transactions in the total.
Year Ended December 31, 2020
InsuranceReinsuranceMortgageSub-TotalOtherTotal
Gross premiums written (1)$4,688,562 $3,472,086 $1,473,999 $9,632,691 $728,546 $10,088,068 
Premiums ceded(1,525,655)(1,014,716)(194,149)(2,732,564)(190,957)(2,650,352)
Net premiums written3,162,907 2,457,370 1,279,850 6,900,127 537,589 7,437,716 
Change in unearned premiums(291,487)(295,141)118,085 (468,543)22,762 (445,781)
Net premiums earned2,871,420 2,162,229 1,397,935 6,431,584 560,351 6,991,935 
Other underwriting income(31)4,454 20,316 24,739 2,045 26,784 
Losses and loss adjustment expenses(2,092,453)(1,628,320)(528,344)(4,249,117)(440,482)(4,689,599)
Acquisition expenses, net(418,483)(354,048)(134,240)(906,771)(98,071)(1,004,842)
Other operating expenses(489,153)(168,011)(162,202)(819,366)(55,810)(875,176)
Underwriting income (loss)$(128,700)$16,304 $593,465 481,069 (31,967)449,102 
Net investment income401,908 117,700 519,608 
Net realized gains (losses)813,781 9,679 823,460 
Equity in net income (loss) of investments accounted for using the equity method146,693 — 146,693 
Other income (loss)29 — 29 
Corporate expenses(68,492)— (68,492)
Transaction costs and other(9,456)(4,040)(13,496)
Amortization of intangible assets(69,031)— (69,031)
Interest expense(120,214)(23,242)(143,456)
Net foreign exchange gains (losses)(80,161)(3,473)(83,634)
Income (loss) before income taxes and income (loss) from operating affiliates1,496,126 64,657 1,560,783 
Income tax (expense) benefit(111,812)(26)(111,838)
Income (loss) from operating affiliates16,766 — 16,766 
Net income (loss)1,401,080 64,631 1,465,711 
Amounts attributable to redeemable noncontrolling interests(2,997)(4,117)(7,114)
Amounts attributable to nonredeemable noncontrolling interests— (53,076)(53,076)
Net income (loss) available to Arch1,398,083 7,438 1,405,521 
Preferred dividends(41,612)— (41,612)
Net income (loss) available to Arch common shareholders$1,356,471 $7,438 $1,363,909 
Underwriting Ratios
Loss ratio72.9 %75.3 %37.8 %66.1 %78.6 %67.1 %
Acquisition expense ratio14.6 %16.4 %9.6 %14.1 %17.5 %14.4 %
Other operating expense ratio17.0 %7.8 %11.6 %12.7 %10.0 %12.5 %
Combined ratio104.5 %99.5 %59.0 %92.9 %106.1 %94.0 %
Goodwill and intangible assets$280,978 $18,963 $385,272 $685,213 $7,650 $692,863 
Total investable assets$26,856,295 $2,657,612 $29,513,907 
Total assets39,791,983 3,490,314 43,282,297 
Total liabilities26,789,149 2,505,707 29,294,856 
(1)    Certain amounts included in the gross premiums written of each segment are related to intersegment transactions. Accordingly, the sum of gross premiums written for each segment does not agree to the total gross premiums written as shown in the table above due to the elimination of intersegment transactions in the total.
Year Ended December 31, 2019
InsuranceReinsuranceMortgageSub-TotalOtherTotal
Gross premiums written (1)$3,907,993 $2,323,223 $1,466,265 $7,695,645 $754,881 $8,138,960 
Premiums ceded(1,266,267)(720,500)(204,509)(2,189,440)(222,019)(2,099,893)
Net premiums written2,641,726 1,602,723 1,261,756 5,506,205 532,862 6,039,067 
Change in unearned premiums(244,646)(136,334)104,584 (276,396)23,827 (252,569)
Net premiums earned2,397,080 1,466,389 1,366,340 5,229,809 556,689 5,786,498 
Other underwriting income— 6,444 16,005 22,449 2,412 24,861 
Losses and loss adjustment expenses(1,615,475)(1,011,329)(53,513)(2,680,317)(453,135)(3,133,452)
Acquisition expenses, net(361,614)(239,032)(134,319)(734,965)(105,980)(840,945)
Other operating expenses(454,770)(141,484)(153,092)(749,346)(51,651)(800,997)
Underwriting income (loss)$(34,779)$80,988 $1,041,421 1,087,630 (51,665)1,035,965 
Net investment income491,067 136,671 627,738 
Net realized gains (losses)348,037 15,161 363,198 
Equity in net income (loss) of investments accounted for using the equity method123,672 — 123,672 
Corporate expenses(65,667)— (65,667)
Transaction costs and other(14,444)— (14,444)
Amortization of intangible assets(82,104)— (82,104)
Interest expense(93,735)(27,137)(120,872)
Net foreign exchange gains (losses)(9,252)(11,357)(20,609)
Income (loss) before income taxes and income (loss) from operating affiliates1,785,204 61,673 1,846,877 
Income tax benefit(155,790)(20)(155,810)
Income (loss) from operating affiliates2,233 — 2,233 
Net income1,631,647 61,653 1,693,300 
Amounts attributable to redeemable noncontrolling interests— (16,909)(16,909)
Amounts attributable to nonredeemable noncontrolling interests— (40,072)(40,072)
Net income (loss) available to Arch1,631,647 4,672 1,636,319 
Preferred dividends(41,612)— (41,612)
Net income (loss) available to Arch common shareholders$1,590,035 $4,672 $1,594,707 
Underwriting Ratios
Loss ratio67.4 %69.0 %3.9 %51.3 %81.4 %54.2 %
Acquisition expense ratio15.1 %16.3 %9.8 %14.1 %19.0 %14.5 %
Other operating expense ratio19.0 %9.6 %11.2 %14.3 %9.3 %13.8 %
Combined ratio101.5 %94.9 %24.9 %79.7 %109.7 %82.5 %
Goodwill and intangible assets$289,021 $2,516 $438,896 $730,433 $7,650 $738,083 
Total investable assets$22,285,676 $2,704,589 $24,990,265 
Total assets34,374,468 3,510,893 37,885,361 
Total liabilities22,977,636 2,592,173 25,569,809 
(1)    Certain amounts included in the gross premiums written of each segment are related to intersegment transactions. Accordingly, the sum of gross premiums written for each segment does not agree to the total gross premiums written as shown in the table above due to the elimination of intersegment transactions in the total.
The following tables provide summary information regarding net premiums earned by major line of business and net premiums written by underwriting location:
INSURANCE SEGMENTYear Ended December 31,
202120202019
Net premiums earned (1)
Professional Lines (2)$942,817 $655,872 $499,224 
Property, energy, marine and aviation702,693517,247298,966
Programs506,867432,854414,103
Construction and national accounts381,306387,934325,687
Excess and surplus casualty (3)318,027270,620200,615
Travel, accident and health255,590190,944305,085
Lenders products153,958114,68766,079
Other (4)365,210301,262287,321
Total$3,626,468 $2,871,420 $2,397,080 
Net premiums written by underwriting location (1)
United States$2,813,039 $2,158,415 $1,983,476 
Europe1,125,192856,572559,214
Other209,962 147,920 99,036 
Total$4,148,193 $3,162,907 $2,641,726 
(1)    Insurance segment results include premiums assumed through intersegment transactions and exclude premiums ceded through intersegment transactions.
(2)     Includes professional liability, executive assurance and healthcare business.
(3)    Includes casualty and contract binding business.
(4)    Includes alternative markets, excess workers' compensation and surety business.
REINSURANCE SEGMENTYear Ended December 31,
202120202019
Net premiums earned (1)
Property excluding property catastrophe$836,573 $562,208 $362,841 
Other Specialty (2)818,801626,409478,517
Casualty (3)666,754549,056429,288
Property catastrophe280,738237,73690,934
Marine and aviation152,955109,62448,274
Other (4)84,62277,19656,535
Total$2,840,443 $2,162,229 $1,466,389 
Net premiums written by underwriting location (1)
United States$828,504 $687,622 $529,943 
Bermuda1,557,2941,001,990578,618 
Europe and other868,576767,758494,162 
Total$3,254,374 $2,457,370 $1,602,723 
(1)    Reinsurance segment results include premiums assumed through intersegment transactions and exclude premiums ceded through intersegment transactions.
(2)    Includes proportional motor, surety, accident and health, workers’ compensation catastrophe, agriculture, trade credit and other.
(3)    Includes executive assurance, professional liability, workers’ compensation, excess motor, healthcare and other.
(4)    Includes life, casualty clash and other.
MORTGAGE SEGMENTYear Ended December 31,
202120202019
Net premiums earned by underwriting location
United States$970,507 $1,158,563 $1,134,849 
Other312,912 239,372 231,491 
Total$1,283,419 $1,397,935 $1,366,340 
Net premiums written by underwriting location
United States$914,477 $1,021,950 $1,032,868 
Other346,591 257,900 228,888 
Total$1,261,068 $1,279,850 $1,261,756 

OTHER SEGMENTYear Ended December 31,
202120202019
Net premiums earned (1)
Casualty (2)$138,551 $245,272 $246,894 
Other specialty (3)118,356 186,717 185,547 
Property catastrophe15,235 23,037 13,399 
Property excluding property catastrophe6,578 1,130 3,503 
Marine and aviation190 429 — 
Other (4)53,058 103,766 107,346 
Total$331,968 $560,351 $556,689 
Net premiums written by underwriting location (1)
United States$63,403 $115,471 $127,176 
Europe91,499 $97,753 $52,065 
Bermuda199,800 $324,365 $353,621 
Total$354,702 $537,589 $532,862 
(1)    Other segment results include premiums assumed through intersegment transactions and exclude premiums ceded through intersegment transactions.
(2)    Includes professional liability, excess motor, programs and other.
(3)    Includes proportional motor and other.
(4)    Includes mortgage, US programs and other.