Arch Capital (ACGL) Increases Buyback to $1.5 Billion, Announces Catastrophe Loss Estimates
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Arch Capital Group Ltd. [NASDAQ: ACGL; “the Company”] reports that its 2021 third quarter results will be negatively impacted by the effects of Hurricane Ida and the July flooding events in Central Europe, as well as from other minor global events. As a result, the Company has established a range of pre-tax catastrophe losses of $330 million to $345 million in the 2021 third quarter across its property casualty insurance and reinsurance segments, net of reinsurance recoveries and reinstatement premiums.
The Company’s estimates are commensurate with estimated insured losses across the global property/casualty insurance industry in excess of $45 billion this quarter, comprised of industry estimates of approximately $30 billion for Hurricane Ida, $12 billion for the European floods and over $5 billion for other global events. Approximately two-thirds of the Company’s losses relate to its reinsurance segment.
At this time, there are significant uncertainties surrounding the ultimate number of claims and scope of damage resulting from these events. The Company’s estimates across its insurance and reinsurance segments are based on currently available information derived from modeling techniques, including preliminary claims information obtained from the Company’s clients and brokers, a review of relevant in-force contracts and estimates of reinsurance recoverables. These estimates include losses only related to claims incurred as of Sept. 30, 2021. Actual losses from these events may vary materially from the estimates due to several factors, including the inherent uncertainties in making such determinations.
Separately, the Company announced that its Board of Directors has increased its share repurchase program to an aggregate of up to $1.5 billion, which may be effected from time to time in open market or privately negotiated transactions through Dec. 31, 2022. The timing and amount of the repurchase transactions under this program will depend on a variety of factors, including market conditions and corporate and regulatory considerations. This new program will replace the Company's existing share repurchase authorization, which has been fully utilized.
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