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Arch PRESS RELEASE NASDAQ Symbol : ACGL For Immediate Release April 27 , 2021 ARCH CAPITAL GROUP LTD . REPORTS 2021 FIRST QUARTER RESULTS Arch Capital Group Ltd. Waterloo House , Ground Floor 100 Pitts Bay Road Pembroke HM 08 Bermuda PEMBROKE , BERMUDA -- ( BUSINESS WIRE ) -- Arch Capital Group Ltd. ( NASDAQ : ACGL ) announces its 2021 first quarter results . The results included : • • • • • • • • • • • Net income available to Arch common shareholders of $ 427.8 million , or $ 1.05 per share , a 13.9 % annualized return on average common equity , compared to $ 133.7 million , or $ 0.32 per share , for the 2020 first quarter ; After - tax operating income available to Arch common shareholders ( ¹ ) of $ 239.8 million , or $ 0.59 per share , a 7.8 % annualized return on average common equity , compared to $ 189.8 million , or $ 0.46 per share , for the 2020 first quarter ; Pre - tax current accident year catastrophic losses for the Company's insurance and reinsurance segments , net of reinsurance and reinstatement premiums ( ¹ ) of $ 188.3 million , including $ 0.6 million of COVID - 19 related losses ; Favorable development in prior year loss reserves , net of related adjustments ( ) of $ 41.7 million ; Combined ratio excluding catastrophic activity and prior year development ( ¹ ) of 81.0 % , compared to 84.2 % for the 2020 first quarter ; The percentage of loans in default on U.S. primary mortgage business was 3.86 % at March 31 , 2021 , compared to 4.19 % at December 31 , 2020 ; Results for the 2021 first quarter reflect a one - time gain of $ 74.5 million , or $ 0.18 per share , related to the purchase of a 29.5 % stake in Coface . Such amount is reflected in income ( loss ) from operating affiliates and included in after - tax operating income available to Arch common shareholders ; Total return on investments ( ¹ ) of -0.18 % ; Book value per common share of $ 30.54 at March 31 , 2021 , a 0.8 % increase from December 31 , 2020 and a 17.0 % increase from March 31 , 2020 ; 5.3 million shares repurchased at an aggregate cost of $ 179.3 million ; Regulatory approvals are ongoing for the announced acquisition of Watford Holdings Ltd. Shareholder approval has been obtained . The Company expects the transaction to close in the second quarter of 2021 . All earnings per share amounts discussed in this release are on a diluted basis . The following table summarizes the Company's underwriting results , both ( i ) on a consolidated basis and ( ii ) on a consolidated basis excluding the ' other ' segment ( i.e. , results of Watford ) : ( U.S. dollars in thousands ) Consolidated Consolidated Excluding ' Other ' Segment Three Months Ended March 31 , ( 1 ) Three Months Ended March 31 , 2021 2020 % Change 2021 2020 % Change Gross premiums written $ 3,397,206 $ 2,832,830 19.9 $ 3,277,293 $ 2,698,537 21.4 Net premiums written Net premiums earned Underwriting income 2,508,457 1,948,422 2,137,246 1,744,444 17.4 2,329,146 11.7 1,800,691 1,950,546 1,604,405 19.4 12.2 185,918 154,050 20.7 198,997 160,060 24.3 % Point Underwriting Ratios Change % Point Change Loss ratio 61.7 % 63.9 % ( 2.2 ) Underwriting expense ratio 29.0 % 27.6 % 1.4 60.2 % 29.0 % 62.6 % 27.9 % ( 2.4 ) Combined ratio 90.7 % 91.5 % ( 0.8 ) 89.2 % 90.5 % 1.1 ( 1.3 ) Combined ratio excluding catastrophic activity and prior year development ( ¹ ) 81.0 % 84.2 % ( 3.2 ) ( 1 ) Presentation represents a " non - GAAP ” financial measure as defined in Regulation G. Such presentation excludes the results of Watford Holdings Ltd. ( " Watford " ) . Pursuant to GAAP , the Company consolidates the results of Watford in its financial statements , although it only owns approximately 10 % of Watford's outstanding common equity as of March 31 , 2021. See ' Comments on Regulation G ' for further details . 1