Arch Capital Group Ltd. Announces Updated Catastrophe Loss Estimates and Other Information Related to Operations
January 10 2019 - 4:05PM
Business Wire
- Estimated pre-tax losses of $110
million to $130 million related to 2018 fourth quarter catastrophic
events, primarily due to Hurricane Michael and the California
wildfires.
- Estimated 12 to 15 percent effective
tax rate on pre-tax operating income for the 2018 fourth
quarter.
During the fourth quarter of 2018, there were a number of
catastrophes around the globe, including Hurricane Michael,
wildfires in California and a series of smaller events. Arch
Capital Group Ltd. [NASDAQ: ACGL] has established a range of
pre-tax losses of $110 million to $130 million for these events,
net of reinsurance recoveries and reinstatement premiums. For
clarity, this estimated range incorporates and updates the $40
million to $60 million range previously disclosed by the Company in
its Quarterly Report on Form 10-Q for the 2018 third quarter. The
previous range reflected only Hurricane Michael, whereas this
current range also reflects the California wildfires and other
catastrophic events from around the globe. At this time, there are
significant uncertainties surrounding the number of claims and
scope of damage for these events. The Company’s estimate for these
events is based on currently available information derived from
modeling techniques, industry assessment of exposure, preliminary
claims information obtained from the Company’s clients and brokers
to date and a review of in-force contracts. Actual losses from
these events may vary materially from the estimates due to the
inherent uncertainties in making such determinations.
Additionally, the Company estimates that the effective tax rate
on pre-tax operating income for the fourth quarter of 2018 will be
in a range of 12 to 15 percent. This estimate is based on both
statutory income tax rates applied to underwriting income, expenses
and investment returns by jurisdiction, as well as an amalgam of
discrete items. The effective tax rate for the 2018 fourth quarter
reflects a higher proportion of U.S.-based operating income. The
losses related to the 2018 fourth quarter catastrophic occurrences
emanated mostly from our non-U.S. underwriting operations. This tax
rate range is subject to change as analyses of group-wide loss
reserves and investment returns, among other areas, are
finalized.
Arch Capital Group Ltd., a Bermuda-based company with
approximately $11.21 billion in capital at September 30, 2018,
provides insurance, reinsurance and mortgage insurance on a
worldwide basis through its wholly owned subsidiaries.
Cautionary Note Regarding Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for forward−looking statements. This release or any
other written or oral statements made by or on behalf of Arch
Capital Group Ltd. and its subsidiaries may include forward−looking
statements, which reflect our current views with respect to future
events and financial performance. All statements other than
statements of historical fact included in or incorporated by
reference in this release are forward−looking statements.
Forward−looking statements can generally be identified by the
use of forward−looking terminology such as "may," "will," "expect,"
"intend," "estimate," "anticipate," "believe" or "continue" or
their negative or variations or similar terminology.
Forward−looking statements involve our current assessment of risks
and uncertainties. Actual events and results may differ materially
from those expressed or implied in these statements. A
non-exclusive list of the important factors that could cause actual
results to differ materially from those in such forward-looking
statements includes the following: adverse general economic and
market conditions; increased competition; pricing and policy term
trends; fluctuations in the actions of rating agencies and our
ability to maintain and improve our ratings; investment
performance; the loss of key personnel; the adequacy of our loss
reserves, severity and/or frequency of losses, greater than
expected loss ratios and adverse development on claim and/or claim
expense liabilities; greater frequency or severity of unpredictable
natural and man-made catastrophic events; the impact of acts
of terrorism and acts of war; changes in regulations and/or tax
laws in the United States or elsewhere; our ability to successfully
integrate, establish and maintain operating procedures as well as
integrate the businesses we have acquired or may acquire into the
existing operations; changes in accounting principles or policies;
material differences between actual and expected assessments for
guaranty funds and mandatory pooling arrangements; availability and
cost to us of reinsurance to manage our gross and net exposures;
the failure of others to meet their obligations to us; and other
factors identified in our filings with the U.S. Securities and
Exchange Commission.
The foregoing review of important factors should not be
construed as exhaustive and should be read in conjunction with
other cautionary statements that are included herein or elsewhere.
All subsequent written and oral forward−looking statements
attributable to us or persons acting on our behalf are expressly
qualified in their entirety by these cautionary statements. We
undertake no obligation to publicly update or revise any
forward−looking statement, whether as a result of new information,
future events or otherwise.
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Arch Capital Group Ltd.François Morin(441) 278-9250
Arch Capital (NASDAQ:ACGL)
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