ACGL earnings analysis
What we found in ACGL's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
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%.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- 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.
- 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.
- 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%.
- 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.
- 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%.
- 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.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $3.0
- Segment
- Insurance: net premiums earned $1.880B, down 4.5% year over year; underwriting income $27M, down 79.1%.
- Segment
- Reinsurance: net premiums earned $1.820B, down 12.8% year over year; underwriting income $410M, down 9.1%.
- Segment
- Mortgage: net premiums earned $285M, up 1.4% year over year; underwriting income $220M, down 7.6%.
What they said about what is next.
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.
The filing reads about the same as the one before it.
What came before.
- 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.…
- 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. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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