10-Q · May 5, 2026
Arch Capital Group Ltd. reported Q1 2026 results showing a mixed performance with increased EPS of $2.50, beating estimates yet experiencing a revenue shortfall at $3.99 billion, lower than the expected $4.56 billion.…
Earnings analysis · 10-Q
ACGL earnings analysis
Filed August 4, 2026 · Our reading of the company's report
The latest report
Arch delivered Q2 GAAP diluted EPS of $3.00, while net income available to common shareholders declined to $1.047B from $1.227B a year earlier and annualized ROAE fell to 18.0% from 22.9%. Underwriting results were…
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Arch delivered Q2 GAAP diluted EPS of $3.00, while net income available to common shareholders declined to $1.047B from $1.227B a year earlier and annualized ROAE fell to 18.0% from 22.9%. Underwriting results were mixed: reinsurance remained strong with a 77.5% combined ratio, but insurance nearly reached break-even at a 98.5% combined ratio and both insurance and reinsurance premium volumes declined. Liquidity remained ample, with $2.510B of first-half operating cash flow, although debt increased to $4.286B and debt-to-capital rose to 15.1%.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $3.0
What stood out
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Strong profitability and book-value accretion
Net income available to common shareholders was $1.047B and annualized net-income ROAE was 18.0% in Q2 2026. Book value per share rose 2.8% sequentially to $68.04 at June 30, 2026, from $66.19 at March 31, 2026.
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Investment income advanced
Net investment income increased to $417M from $405M a year earlier, supported by growth in average invested assets. Equity-method investment income also rose to $196M from $162M.
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Reinsurance underwriting remained highly profitable
Reinsurance generated $410M of underwriting income and improved its combined ratio by 1.0 point to 77.5%. Favorable prior-period reserve development was $97M, or 5.3 points.
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Mortgage production and credit quality favorable
Mortgage net premiums written increased 7.5% to $272M, while U.S. new insurance written increased to $15.624B from $12.254B. The weighted-average credit score of U.S. primary risk in force was 751.
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Capital return was substantial
The company repurchased 12.4M shares for $1.2B during Q2 at an average $94.40 per share. It repurchased approximately $1.9B in shares during the first half.
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Operating cash generation remained strong
Operating cash flow remained robust at $2.510B for the first six months of 2026, only modestly below $2.582B in the prior-year period.
What to watch
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Insurance margin deteriorated sharply
Insurance underwriting income dropped 79.1% to $27M as the combined ratio increased 5.1 points to 98.5%. Current-year catastrophe activity was 7.6 points, including losses tied primarily to the Iran conflict and U.S. severe convective storms.
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Reinsurance premium base is contracting
Reinsurance net premiums written declined 10.4% to $1.844B and net premiums earned fell 12.8% to $1.820B. Management attributed the contraction to pricing pressure, cedants' higher retentions, non-renewals, share reductions and increased retrocessions.
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Leverage increased following debt issuance
Debt rose to $4.286B from $2.729B at December 31, 2025, lifting debt-to-total-capital to 15.1% from 10.1%. The company issued $2.0B of senior notes during June, including $1.4B due 2056 at 5.950%.
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Material catastrophe exposure remains
The peak modeled Florida Tri-County windstorm loss is $1.8B, or 8.0% of tangible shareholders' equity. Management notes actual catastrophe losses could vary materially from modeled amounts.
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Mortgage earnings benefited less from reserves
Mortgage segment underwriting income declined 7.6% to $220M and its combined ratio rose 7.6 points to 22.8%, as favorable reserve development fell to $45M from $64M. The U.S. primary mortgage delinquency rate was 2.07%.
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Risk-factor section unchanged; inflation persists
No material changes were reported to the risk factors disclosed in the 2025 Form 10-K. However, management says inflation may remain elevated and could affect long-tail loss-reserve adequacy; total net loss reserves were $25.464B at June 30, 2026.
Management's outlook
No quantitative revenue or EPS guidance was provided in the 10-Q. Management said it expects the mortgage segment to remain a steady diversifying earnings contributor; it also described insurance and reinsurance markets as constructive but increasingly competitive.
Earlier filings 4
10-K · February 26, 2026
Arch Capital positions itself as a specialty-focused, cycle-aware insurer/reinsurer that leverages underwriting expertise, analytics and targeted acquisitions (notably the Aug. 1, 2024 MCE Acquisition) to grow its U.S.…
10-Q · November 7, 2024
Arch Capital reported strong Q3 results with total revenues of $4,722 million and net premiums earned of $3,970 million (Q3 2023: $3,248 million). Diluted EPS was $2.56 (Q3 2023: $1.88) and net income available to Arch…
10-Q · August 6, 2024
Arch Capital reported strong second-quarter results: total revenues of $4,229 million and diluted EPS of $3.30 (Q2 2024) versus $3,162 million and $1.75 in Q2 2023, driven by higher net premiums, investment income and…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.