Our Business

As a global (re)insurer, we provide services and insurance coverages that allow our clients to rebuild after major losses and improve their resilience; we integrate ESG considerations into our underwriting to reduce risk and take advantage of opportunities for the benefit of our stakeholders.

Enterprise Risk Management Strategy

Our Enterprise Risk Management team formally identifies and integrates ESG performance, including climate change and climate-related risks, into our Risk Register and extends that analysis to specific climate-related business risk evaluations in line with the recommendations of TCFD. See our TCFD Report, which discusses climate risks and opportunities applicable to our business across the short-, medium-, and long-term.

  • Risk management responsibilities are delegated across our organization through a “Three Lines of Defense” approach to risk governance. See the detailed table below.
  • Our Board of Directors and its committees are responsible for governing the organization and overseeing its activities and the performance of executive management in implementing corporate strategies. See the workflow of our Board’s oversight of key sustainability risks on the respective committees’ expertise on page 7 of our Sustainability Report.
  • Specific areas of research and focus in 2022 included U.S. hurricane, U.K. flood, Japan wind and European windstorm. In addition, our natural catastrophe modeling teams performed a comprehensive climate change study.

Evaluating Environmental Exposures

Thermal Coal Policy. We take a proactive approach to reducing risks and integrating environmental concerns into our underwriting of thermal coal business accounts. Our Thermal Coal Policy, applicable to our global insurance operations, is designed to evaluate risk and trigger escalations, as necessary. In 2022, our U.K. insurance operations adopted sector-specific guidelines regarding arctic energy exploration and production and oil sands mining. The chart shows the outcome of our 2022 Submissions.

2022 Submissions

Since implementation of our Thermal Coal Policy, we have decreased our underwriting of thermal coal accounts for various reasons including:

  • Submission had no climate-related transition plan.
  • Insured was benefiting from deforestation.

This chart represents our 2022 worldwide escalations, including global coal escalations (one from our U.S. underwriting group) and nine referrals from our U.K. business related to oil sands and arctic energy exploration and drilling (all proceeded/bound). Our U.S. underwriting groups phased out of the majority of coal accounts at the end of 2021.

Financing the Climate Transition

We are taking steps to address the climate challenge and help insureds adapt and build resilience. Through our specialty insurance products and solutions, we:

  • Focus on opportunities in the renewable energy industry, notably solar, wind, battery/energy storage, biomass and hydro.
  • Incentivize our customers to practice responsible environmental behaviors through programs in our Commercial Property, Retail Energy and Onshore Energy groups.
  • Offer health and safety support to our customers through our comprehensive Risk Control service platform.

Access to Finance and Social Equity Products

We offer a range of products and customer-oriented solutions that help to build safer, stronger and more inclusive communities. Additional information on socially responsible products can be found on page 7 of our 2022 Sustainability Report.

  • Through our mortgage insurance (MI) products, we enable families to purchase homes and accumulate wealth. In 2022, 211,000 families in the U.S. were able to afford a home with Arch MI, of which approximately 25% were low-income buyers1.
  • Our sovereign credit and political risk underwriting programs help the governments of developing countries gain financing. We facilitate these opportunities by insuring the lenders against the risk of a sovereign default. We have cultivated relationships with top-tier multilateral organizations to support projects that deliver improved economic and social growth that align with Arch’s values.
  • Through our agency with the London Lloyd’s market, effective March 2022, we participate in an initiative to help relieve the humanitarian crisis in Yemen.
  • Our subsidiary, McNeil & Company, Inc., has insured firefighters and emergency responders through our insurance programs and we also host a risk management webinar series. We offer over 500 courses on an E-learning platform with over 115,000 users from 5,000 organizations.

1 Loans where the qualifying income was less than 80% of the area median income in their census tract; includes both purchase and refinance.

Three Lines of Defense

Risk management responsibilities are delegated across our organization through a “Three Lines of Defense” approach to risk governance. This risk management framework, supported by key controls, is embedded within our operations and enables us to limit risk and evaluate opportunities. We view ESG related risks not as standalone risks but as enterprise-wide in their scope.

Board of Directors - Accountable for Organizational Oversight
Management - Takes Actions (including managing risk) to achieve our strategic goals. Independent Assurance.

First Line

These are our people on the front lines — such as our underwriters, pricing actuaries and investment professionals. They’re managing risk, complying with regulations and standards, and carrying out our risk control processes daily.


Second Line

These roles are responsible for oversight and challenge of the front line. They develop and implement risk management processes policies and procedures.


Third Line

Their role is to independently assess and report on the work of the management lines of defense.

Key Controls

  • Underwriting guidelines.
  • Business segment reviews.
  • Peer reviews and quality control.
  • Pricing models.
  • Reinsurance purchases.
  • Natural catastrophe modeling and assessment.
  • Predictive analytics.
  • Investment guidelines.
  • Customer vetting.
  • IT Access Controls and cybersecurity.
  • Risk Management Board Reporting.
  • Aggregate exposure measurement and monitoring.
  • Risk Assessments and Control Mapping.
  • Own Risk and Solvency Assessment.
  • Capital modeling and forecasting.
  • Operational Risk Committee.
  • Regulatory issues reporting.
  • Third-party service provider approval and monitoring
  • Board Underwriting Oversight Committee.
  • Board Audit Committee.
  • Board Finance, Investment and Risk Committee.
  • Board Nominating and Governance Committee.
  • Board annual approval of risk appetite, policies and assessment.
  • Compensation plan.
  • Internal Audit Enterprise Reviews

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