Arch Capital Group Ltd. (ACGL) Earnings

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Dec 2026upcoming

Next quarter

Expected to report Feb 8, 2027 — estimated from last year’s reporting date.

Consensus is $2.53 EPS for Dec 2026 across 7 estimates, ranging $2.35 to $2.84.

ACGL Sep 2026

Reported Oct 27, 2026 · after the close

: 24.19%
: +2.15%

: $2.15
: $2.67
: —
: —

Highlights

EPS beat: After-tax operating income was $910 million, or $2.67 per diluted share, 24.2% above the $2.15 consensus; operating EPS was down 3.6% from $2.77 a year earlier.
Underwriting: Arch generated $702 million of underwriting income, with an 82.5% combined ratio versus 79.8% a year ago; $179 million of favorable prior-year development helped, while catastrophe losses were $234 million.
Capital returns: Arch repurchased 14.8 million shares for $1.4 billion during the quarter; year-to-date buybacks equaled about 109% of net income.
Reinsurance: Underwriting income was $393 million, down from $482 million a year earlier, as net premiums written fell 9.3%; the 78.3% combined ratio benefited from favorable reserve development and light catastrophe activity.
Insurance: Underwriting income was $108 million versus $129 million a year ago, with a 94.4% combined ratio. Net premiums written rose 2.7%, partly reflecting marine war-risk business and a new captive program.
Mortgage: Underwriting income of $201 million was below $250 million a year ago, as earned premiums declined and favorable reserve development moderated; the delinquency rate remained low at 2.2%.
Investments: Pre-tax net investment income increased 10.5% year over year to $451 million, and equity-method income rose to $224 million from $134 million.
Book value: Book value per share was $67.90, down 0.2% sequentially but up from $62.32 a year earlier; management said tangible book value per share excluding AOCI grew about 15% year over year.

Analysis

Arch’s September-quarter operating EPS of $2.67 beat the $2.15 consensus by 24.2%, although it was 3.6% below the $2.77 earned a year earlier. Net income available to common shareholders was $1.025 billion, down from $1.340 billion year over year and slightly below the prior quarter’s $1.047 billion; diluted GAAP EPS was $3.00, unchanged sequentially and below $3.56 a year ago. Revenue of $4.655 billion was essentially flat with Q2’s $4.668 billion and 8.9% lower than the year-ago $5.109 billion.

The quarter was defined by solid underwriting and investment income, set against a tougher year-over-year comparison and increasingly competitive insurance and reinsurance markets. Underwriting income fell 19.4% year over year, and the combined ratio rose to 82.5% from 79.8%; favorable prior-year reserve development of $179 million and $234 million of catastrophe losses shaped the result. Investment income provided support, with net investment income up 10.5% to $451 million and equity-method income at $224 million. Management emphasized selective deployment of capital rather than premium growth for its own sake, and returned $1.4 billion through share repurchases. Book value per share was nearly unchanged from Q2 at $67.90.

Underwriting and earnings

Operating earnings held up well relative to expectations, but underwriting income and reported net income were lower than a year ago. Premium volume also softened: gross premiums written were $5.391 billion, down 0.4%, while net premiums written fell 3.0% to $3.845 billion and net premiums earned declined 6.3% to $4.014 billion.

Combined ratio: The 82.5% ratio compared with 79.8% in Q3 2025. Favorable prior-year development contributed $179 million, or 4.5 points, while current-year catastrophe losses were $234 million net of reinsurance and reinstatement premiums.
Underlying performance: The three underwriting segments produced an 81.2% ex-cat accident-year combined ratio, up 70 basis points year over year.
Earnings mix: After-tax operating income was $910 million, or $2.67 per diluted share, versus $1.042 billion and $2.77 a year ago. GAAP net income available to common shareholders was $1.025 billion; net realized losses of $99 million compared with $210 million of gains in the year-ago quarter.

Reinsurance cycle management

Reinsurance remained the largest underwriting contributor, but Arch is deliberately reducing exposure where pricing and terms no longer meet its return objectives. Gross premiums written declined about 8% year over year, and net premiums written fell 9.3%, reflecting softer rates and lower participation, especially in property and short-tail business.

Quarterly result: Underwriting income was $393 million versus $482 million a year earlier. The combined ratio was 78.3%, compared with 76.1%.
Loss experience: Catastrophe activity added 6.9 points to the loss ratio, while favorable prior-year reserve development reduced it by 7.4 points; the combined ratio excluding catastrophe activity and prior-year development was 78.4%, versus 76.8% a year ago.
Capacity and deployment: Management cited abundant market capacity and expects continued pressure on property rates, including at January 1 renewals. Third-party capital helps manage net exposure and provide capacity, while Arch intends to remain selective rather than pursue volume.

Insurance underwriting

Insurance net premiums written increased 2.7% year over year, but management said quarterly growth exceeded the underlying trend. The increase reflected selective opportunities, including a new captive program and marine war-risk writings associated with the Iran conflict; management expected a similar level of marine war-risk premium in Q4.

Quarterly result: Underwriting income was $108 million, down from $129 million, and the combined ratio was 94.4%, versus 93.4%. Current accident-year catastrophe losses equaled 5.7% of net premiums earned.
Underlying growth: After adjusting for the planned reduction in middle-market commercial program business, year-to-date gross premiums written increased 4.2% and net premiums written increased 1.6%.
Market selection: Arch sees attractive opportunities in areas such as excess and surplus casualty, construction and national-account casualty, but is more restrained in competitive property and short-tail markets. Management described casualty pricing as around loss-cost trend overall, while saying its chosen business still meets return thresholds.

Mortgage earnings

Mortgage continued to contribute meaningfully, though underwriting income declined from the prior year and the previous quarter. Management attributed the sequential reduction primarily to lower U.S. primary mortgage premiums and higher ceded premiums, as well as international single-premium terminations that had benefited Q2. New mortgage origination volume remains constrained, with mortgage rates above 7%.

Quarterly result: Underwriting income was $201 million versus $250 million a year earlier; the combined ratio was 25.5%, compared with 13.5%. The year-ago comparison included stronger favorable reserve development.
Portfolio indicators: The delinquency rate was 2.2% at quarter-end. Total mortgage risk in force was $88.3 billion, including $73.6 billion in U.S. primary mortgage insurance.
Persistency and outlook: Persistency was 79.2%, supporting future premium flows as higher mortgage rates reduce refinancing. Management said a proposed mortgage-insurance cancellation pilot presented no near-term concern and was expected to apply prospectively.

Investments and capital

Investment income was a significant earnings support, while market movements weighed on comprehensive income and book value during the quarter. Management said the short duration of the fixed-income portfolio and new-money yields running about 65–70 basis points above book yield should support investment income as assets reinvest.

Investment contribution: Pre-tax net investment income rose 10.5% year over year to $451 million. Equity-method income was $224 million, up from $134 million, bringing the combined contribution of the two sources to $675 million.
Market marks: Total investment return was negative 0.42%, versus positive 1.80% a year earlier. Comprehensive income available to Arch was $372 million, down from $1.398 billion; book value per share slipped from $68.04 in Q2 to $67.90.
Share repurchases: Arch bought back 14.8 million shares for $1.433 billion, reducing period-end common shares outstanding to 326.4 million from 341.0 million at June 30. Management said repurchases remain sensitive to the share price and that capital would first be deployed into attractive business opportunities.

Arch Capital Group Ltd.

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