PRESS RELEASE Arch Capital
EXHIBIT 99.1 PRESS RELEASE Arch Capital Group Ltd. NASDAQ Symbol: Waterloo House, ACGL Ground Floor For Immediate 100 Pitts Bay Road Release October 27, 2026 Pembroke HM 08 Bermuda
ARCH CAPITAL GROUP LTD. REPORTS 2026 THIRD QUARTER RESULTS PEMBROKE, BERMUDA--(BUSINESS WIRE)--Arch Capital Group Ltd. (NASDAQ: ACGL; “Arch,” “our” or “the Company”) announces its 2026 third quarter results. The results included:
• Net income available to Arch common shareholders of $1.0 billion, or $3.00 per share, representing an 18.1% annualized net income return on average common equity, compared to net income available to Arch common shareholders of $1.3 billion, or $3.56 per share, for the 2025 third quarter.
• After-tax operating income available to Arch common shareholders (1) of $910 million, or $2.67 per share, representing a 16.0% annualized operating return on average common equity (1) , compared to $1.0 billion, or $2.77 per share, for the 2025 third quarter.
• Pre-tax current accident year catastrophic losses for the Company’s insurance and reinsurance segments, net of reinsurance and reinstatement premiums, of $234 million.
• Favorable development in prior year loss reserves, net of related adjustments, of $179 million.
• Book value per common share of $67.90 at September 30, 2026, a 0.2% decrease from June 30, 2026.
“We delivered a strong quarter, driven by solid underwriting performance across our three segments and continued strength from our investment portfolio,” said Arch CEO Nicolas Papadopoulo. “We are operating in a transitioning market where conditions are increasingly uneven, but we are prepared and welcome the challenge. The market will continue to evolve, but our core principles will not, and we remain focused on producing superior risk-adjusted returns over the long term. As Arch celebrates its first 25 years, I want to thank our employees for what we have built together: a global franchise, a strong brand and a culture anchored in our Values. I also want to thank our investors for their continued confidence in Arch.”
All earnings per share amounts discussed in this release are on a diluted basis.
(2) The ‘Underwriting expense ratio’ includes ‘Other underwriting income.’ See ‘Comments on Non-GAAP Financial Measures’ for further details. 1 The following table summarizes the Company’s consolidated financial data, including a reconciliation of net income or loss available to Arch common shareholders to after-tax operating income or loss available to Arch common shareholders and related diluted per share results (see ‘Comments on Non-GAAP Financial Measures’ for further details):
(U.S. Dollars in millions, except per Three Months Ended share data) September 30, 2026 2025 ────────────────────────────────────────────────────────────────────────────── Net income available to Arch common $ 1,025 $ 1,340 shareholders Net realized (gains) losses 99 -210 (1) Equity in net (income) of investments -224 -134 accounted for using the equity method Net foreign exchange -18 7 (gains) losses Transaction costs and other 17 21 Income tax expense 11 18 (benefit) (2) After-tax operating income available to $ 910 $ 1,042 Arch common shareholders Diluted per common share results: Net income available to Arch common $ 3.00 $ 3.56 shareholders Net realized (gains) losses 0.29 -0.56 (1) Equity in net (income) of investments -0.66 -0.36 accounted for using the equity method Net foreign exchange -0.04 0.02 (gains) losses Transaction costs and other 0.05 0.06 Income tax expense 0.03 0.05 (benefit) (2) After-tax operating income available to $ 2.67 $ 2.77 Arch common shareholders Weighted average common shares and common share equivalents 341.4 376.1 outstanding — diluted Beginning common $ 23,200 $ 22,211 shareholders’ equity Ending common shareholders’ 22,162 22,889 equity Average common $ 22,681 $ 22,550 shareholders’ equity Annualized net income return on average 18.1 % 23.8 % common equity Annualized operating return on average 16.0 % 18.5 % common equity
(1) Net realized gains or losses include, but are not limited to, realized and unrealized changes in the fair value of equity securities and assets accounted for using the fair value option, realized and unrealized gains and losses on derivative instruments, changes in the allowance for credit losses on financial assets and gains and losses realized from the acquisition or disposition of subsidiaries.
(2) Income tax expense (benefit) on net realized gains or losses, equity in net income of investments accounted for using the equity method, net foreign exchange gains or losses and transaction costs and other reflects the relative mix reported by jurisdiction and the varying tax rates in each jurisdiction. 2 Segment Information The following section provides analysis on the Company’s 2026 third quarter performance by reportable segments. For additional details regarding the Company’s reportable segments, please refer to the Company’s Financial Supplement dated September 30, 2026. On August 1, 2024, the insurance segment completed the acquisition of the U.S. MidCorp and Entertainment insurance businesses from Allianz (MCE Acquisition). The Company’s segment information includes the use of underwriting income (loss) and a combined ratio excluding catastrophic activity and prior year development (see ‘Comments on Non-GAAP Financial Measures’ for further details). Insurance Segment
Gross premiums written by the insurance segment in the 2026 third quarter were 7.8% higher than in the 2025 third quarter, while net premiums written were 2.7% higher than in the 2025 third quarter. Adjusting for the non-renewal of certain programs related to the MCE Acquisition, net premiums written would have increased by 5.8% compared to the same quarter one year ago and reflected strong growth in international business. Net premiums earned in the 2026 third quarter were 1.6% lower than in the 2025 third quarter and reflect changes in net premiums written over the previous five quarters.
The 2026 third quarter loss ratio reflected 5.7 points of current year catastrophic activity, which includes losses related to the Iran conflict, compared to 2.2 points in the 2025 third quarter. Estimated net favorable development of prior year loss reserves, before related adjustments, reduced the loss ratio by 0.7 points in the 2026 third quarter, compared to 0.7 points in the 2025 third quarter. The balance of the change in the loss ratio resulted, in part, from the incremental earned premium in the quarter resulting from the Iran conflict.
The underwriting expense ratio was 33.6% in the 2026 third quarter, compared to 34.4% in the 2025 third quarter. The 2026 third quarter ratio primarily reflected the benefit of Bermuda qualified refundable tax credits (“QRTCs”). 3
Gross premiums written by the reinsurance segment in the 2026 third quarter were 8.0% lower than in the 2025 third quarter, while net premiums written were 9.3% lower than in the 2025 third quarter. Reductions in net premiums written this quarter were due, in part, to non-renewals and share reductions. Net premiums earned in the 2026 third quarter were 10.3% lower than in the 2025 third quarter and reflect changes in net premiums written over the previous five quarters.
The 2026 third quarter loss ratio reflected 7.5 points of current year catastrophic activity, compared to 1.3 points in the 2025 third quarter. Estimated net favorable development of prior year loss reserves, before related adjustments, reduced the loss ratio by 7.4 points in the 2026 third quarter, compared to 2.6 points in the 2025 third quarter. The loss ratio was also impacted by changes in rate and mix of business.
The underwriting expense ratio was 22.4% in the 2026 third quarter, compared to 24.5% in the 2025 third quarter, with the decrease primarily reflecting the impact of higher commissions on retrocessions. The 2026 third quarter also reflected the benefit of QRTCs. 4
Gross premiums written by the mortgage segment in the 2026 third quarter were 4.2% lower than in the 2025 third quarter, with lower U.S. primary mortgage insurance monthly premiums and U.S. credit risk transfer premiums partially offset by growth in international business. Net premiums written were 4.0% lower than in the 2025 third quarter, primarily reflecting lower U.S. credit risk transfer premiums.
Estimated net favorable development of prior year loss reserves, before related adjustments, decreased the loss ratio by 15.4 points, compared to 18.1 points in the 2025 third quarter. Such amounts were primarily related to better than expected cure rates. The 2026 third quarter loss ratio, excluding net favorable development, reflected a modestly higher level of delinquencies compared to the 2025 third quarter.
The underwriting expense ratio was 18.6% in the 2026 third quarter, compared to 14.0% in the 2025 third quarter. The increase was primarily due to lower ceding and profit commissions. The 2026 third quarter ratio also reflected the impact of a lower level of net premiums earned. 5
The Company’s results include net investment income, net realized gains or losses (which include, but are not limited to, realized and unrealized changes in the fair value of equity securities and assets accounted for using the fair value option, realized and unrealized gains and losses on derivative instruments, changes in the allowance for credit losses on financial assets and gains and losses realized from the acquisition or disposition of subsidiaries), equity in net income or loss of investments accounted for using the equity method, other income (loss), corporate benefit (expenses), transaction costs and other, amortization of intangible assets, interest expense, net foreign exchange gains or losses, income tax items, income or loss from operating affiliates and items related to the Company’s non-cumulative preferred shares.
(1) Presented on an annualized basis and excluding the impact of investments for which returns are not included within investment income, such as investments accounted for using the equity method and certain equities.
Net investment income for the 2026 third quarter was $451 million, compared to $408 million in the 2025 third quarter, with the increase reflecting growth in average investable assets. Net realized losses were $99 million for the 2026 third quarter, compared to net realized gains of $210 million in the 2025 third quarter. The negative total return on investments for the 2026 third quarter primarily reflected the impact of rising interest rates on fixed income securities.
Corporate expenses for the 2026 third quarter were $5 million, compared to $28 million for the 2025 third quarter. Such expenses primarily represent certain holding company costs necessary to support our worldwide operations and costs associated with operating as a publicly traded company. The decline in the 2026 third quarter primarily reflected the benefit of QRTCs.
Amortization of intangible assets was $30 million for the 2026 third quarter, compared to $49 million for the 2025 third quarter. The decrease primarily related to lower amortization of intangible assets related to the MCE Acquisition.
Interest expense for the 2026 third quarter was $62 million, compared to $37 million for the 2025 third quarter. The increase primarily resulted from the Company’s June 2026 capital raising activity.
On a pre-tax basis, net foreign exchange gains were $18 million for the 2026 third quarter, compared to net foreign exchange losses of $7 million for the 2025 third quarter. For both periods, such amounts were primarily unrealized and resulted from the effects of revaluing the Company’s net insurance liabilities required to be settled in foreign currencies at each balance sheet date. Changes in the value of available-for-sale investments held in foreign currencies due to foreign currency rate movements are reflected as a direct increase or decrease to shareholders’ equity and are not included in the consolidated statements of income.
The Company’s effective tax rate on income before income taxes (based on the Company’s annual effective tax rate) was 15.1% for the 2026 third quarter, compared to 13.7% for the 2025 third quarter. The Company’s effective tax rate on pre-tax operating income available to Arch common shareholders was 15.8% for the 2026 third quarter consistent with 15.8% for the 2025 third quarter. The effective tax rate may fluctuate from period to period based upon the relative mix of income or loss reported by jurisdiction, the level of catastrophic loss activity incurred, and the varying tax rates in each jurisdiction.
Income from operating affiliates for the 2026 third quarter was $33 million, or $0.10 per share, compared to $62 million, or $0.16 per share, for the 2025 third quarter, and primarily reflects amounts related to the Company’s investment in Somers Group Holdings Ltd. and Coface SA. 6 Conference Call The Company will hold a conference call for investors and analysts at 10:00 a.m. Eastern Time on October 28, 2026. A live webcast of this call will be available via the Investors section of the Company’s website at http://www.archgroup.com/investors. A recording of the webcast will be available in the Investors section of the Company’s website approximately two hours after the event concludes. A transcript of the webcast will also be available in the Investors section of the Company’s website approximately 24 hours after the posting of the recording. Both the recording and the transcript will be archived on the site for one year.
Please refer to the Company’s Financial Supplement dated September 30, 2026, which is available via the Investors section of the Company’s website at http://www.archgroup.com/investors. The Financial Supplement provides additional detail regarding the financial performance of the Company. From time to time, the Company posts additional financial information and presentations to its website, including information with respect to its subsidiaries. Investors and other recipients of this information are encouraged to check the Company’s website regularly for additional information regarding the Company.
Arch Capital Group Ltd., is a publicly listed Bermuda exempted company with approximately $27.3 billion in capital at September 30, 2026. Arch, which is part of the S&P 500 index, provides insurance, reinsurance and mortgage insurance on a worldwide basis through its wholly owned subsidiaries. Comments on Non-GAAP Financial Measures Throughout this release, the Company presents its operations in the way it believes will be the most meaningful and useful to investors, analysts, rating agencies and others who use the Company’s financial information in evaluating the performance of the Company and that investors and such other persons benefit from having a consistent basis for comparison between quarters and for comparison with other companies within the industry. These measures may not, however, be comparable to similarly titled measures used by companies outside of the insurance industry. Investors are cautioned not to place undue reliance on these non-GAAP financial measures in assessing the Company’s overall financial performance.
This presentation includes the use of “after-tax operating income or loss available to Arch common shareholders,” which is defined as net income available to Arch common shareholders, excluding net realized gains or losses (which include, but are not limited to, realized and unrealized changes in the fair value of equity securities and assets accounted for using the fair value option, realized and unrealized gains and losses on derivative instruments, changes in the allowance for credit losses on financial assets and gains and losses realized from the acquisition or disposition of subsidiaries), equity in net income or loss of investments accounted for using the equity method, net foreign exchange gains or losses, transaction costs and other, net of income taxes and the use of annualized operating return on average common equity. The presentation of after-tax operating income available to Arch common shareholders and annualized operating return on average common equity are non-GAAP financial measures as defined in Regulation G. The reconciliation of such measures to net income available to Arch common shareholders and annualized net income return on average common equity (the most directly comparable GAAP financial measures) in accordance with Regulation G is included on page 2 of this release.
The Company believes that net realized gains or losses, equity in net income or loss of investments accounted for using the equity method, net foreign exchange gains or losses and transaction costs and other, in any particular period are not indicative of the performance of, or trends in, the Company’s business performance. Although net realized gains or losses, equity in net income or loss of investments accounted for using the equity method and net foreign exchange gains or losses are an integral part of the Company’s operations, the decision to realize these items are independent of the insurance underwriting process and result, in large part, from general economic and financial market conditions. Furthermore, certain users of the Company’s financial information believe that, for many companies, the timing of the realization of investment gains or losses is largely opportunistic. In addition, changes in the allowance for credit losses and net impairment losses recognized in earnings on the Company’s investments represent other-than-temporary declines in expected recovery values on securities without actual realization.
The use of the equity method on certain of the Company’s investments in certain funds that invest in fixed maturity securities is driven by the ownership structure of such funds (either limited partnerships or limited liability companies). In applying the equity method, these investments are initially recorded at cost and are subsequently adjusted based on the Company’s proportionate share of the net income or loss of the funds (which include changes in the fair value of the underlying securities in the funds). This method of accounting is different from the way the Company accounts for its other fixed maturity securities and the timing of the recognition of equity in net income or loss of investments accounted for using the equity method may differ from gains or losses in the future upon sale or maturity of such investments. 7 Transaction costs and other include integration, advisory, financing, legal, severance, incentive compensation and all other costs directly related to acquisitions. The Company believes that transaction costs and other, due to their non-recurring nature, are not indicative of the performance of, or trends in, the Company’s business performance.
The Company believes that showing net income available to Arch common shareholders exclusive of the items referred to above reflects the underlying fundamentals of the Company’s business since the Company evaluates the performance of and manages its business to produce an underwriting profit. In addition to presenting net income available to Arch common shareholders, the Company believes that this presentation enables investors and other users of the Company’s financial information to analyze the Company’s performance in a manner similar to how the Company’s management analyzes performance. The Company also believes that this measure follows industry practice and, therefore, allows the users of the Company’s financial information to compare the Company’s performance with its industry peer group. The Company believes that the equity analysts and certain rating agencies that follow the Company and the insurance industry as a whole generally exclude these items from their analyses for the same reasons.
The Company’s segment information includes the presentation of consolidated underwriting income or loss and a subtotal of underwriting income or loss. Such measures represent the pre-tax profitability of its underwriting operations and include net premiums earned plus other underwriting income, less losses and loss adjustment expenses, acquisition expenses and other operating expenses. Other operating expenses include those operating expenses that are incremental and/or directly attributable to the Company’s individual underwriting operations. Underwriting income or loss does not include certain income and expense items which are included in corporate. While these measures are presented in the Segment Information footnote to the Company’s Consolidated Financial Statements, they are considered non-GAAP financial measures when presented elsewhere on a consolidated basis. The reconciliations of underwriting income or loss to income before income taxes (the most directly comparable GAAP financial measure) on a consolidated basis, in accordance with Regulation G, is shown on the following pages.
Management measures segment performance for its three underwriting segments based on underwriting income or loss. The Company does not manage its assets by underwriting segment and, accordingly, investment income, income from operating affiliates and other items are not allocated to each underwriting segment.
In addition, the Company’s segment information includes the use of a combined ratio excluding catastrophic activity and prior year development, for the insurance and reinsurance segments, and a combined ratio excluding prior year development, for the mortgage segment. These ratios are non-GAAP financial measures as defined in Regulation G. The reconciliation of such measures to the combined ratio (the most directly comparable GAAP financial measure) in accordance with Regulation G are shown on the individual segment pages. The Company’s management utilizes the adjusted combined ratios excluding current accident year catastrophic events and favorable or adverse development in prior year loss reserves in its analysis of the underwriting performance of each of its underwriting segments. The ‘Other operating expense ratio’ includes ‘Other underwriting income.’
Total return on investments includes investment income, equity in net income or loss of investments accounted for using the equity method, net realized gains and losses (excluding changes in the allowance for credit losses on non- investment related financial assets) and the change in unrealized gains and losses generated by Arch’s investment portfolio. Total return is calculated on a pre-tax basis and before investment expenses and reflects the effect of financial market conditions along with foreign currency fluctuations. Management uses total return on investments as a key measure of the return generated to Arch common shareholders, and compares the return generated by the Company’s investment portfolio against benchmark returns during the periods presented. 8 The following tables summarize the Company’s results by segment for the 2026 third quarter and 2025 third quarter and a reconciliation of underwriting income or loss to income or loss before income taxes and net income or loss available to Arch common shareholders:
(1) Certain assumed and ceded amounts related to intersegment transactions are included in individual segment results. Accordingly, the sum of such transactions for each segment does not agree to the total due to eliminations.
(2) ‘Other underwriting income’ includes revenue earned from underwriting- related activities covered under existing service contracts. (3) Certain expenses have been excluded from ‘Corporate benefit (expenses)’ and reflected in ‘Transaction costs and other.’ See ‘Comments on Non-GAAP Financial Measures’ for a further discussion of such items.
(1) Certain assumed and ceded amounts related to intersegment transactions are included in individual segment results. Accordingly, the sum of such transactions for each segment does not agree to the total due to eliminations.
(2) ‘Other underwriting income’ includes revenue earned from underwriting- related activities covered under existing service contracts. (3) Certain expenses have been excluded from ‘Corporate benefit (expenses)’ and reflected in ‘Transaction costs and other.’ See ‘Comments on Non-GAAP Financial Measures’ for a further discussion of such items.
(4) The ‘Other operating expense ratio’ includes ‘Other underwriting income.’ 10 Cautionary Note Regarding Forward-Looking Statements The Private Securities Litigation Reform Act of 1995 (“PSLRA”) provides a “safe harbor” for forward-looking statements. This release or any other written or oral statements made by or on behalf of the Company may include forward-looking statements, which reflect the Company’s current views with respect to future events and financial performance. All statements other than statements of historical fact included in or incorporated by reference in this release are forward-looking statements. Forward-looking statements, for purposes of the PSLRA or otherwise, can generally be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” and similar statements of a future or forward-looking nature or their negative or variations or similar terminology.
Forward-looking statements involve the Company’s current assessment of risks and uncertainties. Actual events and results may differ materially from those expressed or implied in these statements. Important factors that could cause actual events or results to differ materially from those indicated in such statements are discussed below and elsewhere in this release and in the Company’s periodic reports filed with the Securities and Exchange Commission (the “SEC”), and include:
• the Company’s ability to successfully implement its business strategy during “soft” as well as “hard” markets;
• acceptance of the Company’s business strategy, security and financial condition by rating agencies and regulators, as well as by brokers and its insureds and reinsureds;
• the Company’s ability to consummate acquisitions and integrate any businesses it has acquired or may acquire into its existing operations;
• the Company’s ability to maintain or improve its ratings, which may be affected by its ability to raise additional equity or debt financings, by ratings agencies’ existing or new policies and practices, as well as other factors described herein;
• general economic and market conditions (including inflation, interest rates, unemployment, housing prices, foreign currency exchange rates, prevailing credit terms, tariffs, geopolitical instability and conflict and the depth and duration of a recession) and conditions specific to the reinsurance and insurance markets in which the Company operates;
• competition, including increased competition, on the basis of pricing, capacity (including alternative sources of capital), coverage terms or other factors;
• developments in the world’s financial and capital markets and the Company’s access to such markets;
• the Company’s ability to successfully enhance, integrate and maintain operating procedures (including information technology) to effectively support its current and new business;
• material differences between actual and expected assessments for guaranty funds and mandatory pooling arrangements;
• accuracy of those estimates and judgments utilized in the preparation of the Company’s financial statements, including those related to revenue recognition, insurance and other reserves, reinsurance recoverables, investment valuations, intangible assets, bad debts, income taxes, deferred tax assets, contingencies and litigation, and any determination to use the deposit method of accounting;
• greater than expected loss ratios on business written by the Company and adverse development on claim and/or claim expense liabilities related to business written by its insurance and reinsurance subsidiaries;
• greater frequency or severity of unpredictable natural and man-made catastrophic events;
• claims for natural catastrophic events or severe economic events in the Company’s insurance, reinsurance and mortgage businesses could cause large losses and substantial volatility in the Company’s results of operations;
• availability to the Company of reinsurance to manage our net exposures and the cost of such reinsurance;
• the failure of reinsurers, managing general agents, third party administrators or others to meet their obligations to the Company;
• the timing of loss payments being faster or the receipt of reinsurance recoverables being slower than anticipated by the Company;
• the Company’s investment performance, including legislative or regulatory developments that may adversely affect the fair value of the Company’s investments; 11 • changes in general economic conditions, resulting in downgrades of U.S. securities or sovereign debt by credit rating agencies, which could affect the Company’s business, financial condition and results of operations;
• an incident, disruption in operations or other cyber event caused by cyber attacks, the use of artificial intelligence technologies or other technology on the Company’s systems or those of the Company’s business partners and service providers, which could negatively impact the Company’s business and/or expose the Company to litigation;
• acts of terrorism, political unrest and other hostilities or other unforecasted and unpredictable events caused by humans;
• the volatility of the Company’s shareholders’ equity from foreign currency fluctuations, which could increase due to us not matching portions of the Company’s projected liabilities in foreign currencies with investments in the same currencies;
• changes in accounting principles or policies or in the Company’s application of such accounting principles or policies;
• changes in the political environment of certain countries in which the Company operate or underwrite business;
• statutory or regulatory developments, including as to tax matters and insurance and other regulatory matters such as the adoption of legislation that affects Bermuda-headquartered companies and/or Bermuda-based insurers or reinsurers and/or changes in regulations or tax laws applicable to the Company, its subsidiaries, brokers or customers, including the implementation of the Organization for Economic Cooperation and Development (“OECD”) Pillar I and Pillar II initiative and the enactment of the Bermuda corporate income tax; and
• the other matters set forth under Item 1A “Risk Factors”, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other sections of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 26, 2026 and of the Company’s latest Quarterly Reports on Form 10-Q, as well as the other factors set forth in the Company’s other documents on file with the SEC, and management’s response to any of the aforementioned factors.
All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included herein or elsewhere. The Company's forward-looking statements speak only as of the date of this press release or as of the date they are made, and the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Contacts Arch Capital Group Ltd. Investor Relations François Morin: (441) 278-9250 Donald Watson: (914) 872-3616; dwatson@archgroup.com Source: Arch Capital Group Ltd. arch-corporate
Full text with the tables
EXHIBIT 99.1
PRESS RELEASE Arch Capital
Group Ltd.
NASDAQ Symbol: Waterloo House,
ACGL Ground Floor
For Immediate 100 Pitts Bay Road
Release
October 27, 2026 Pembroke HM 08
Bermuda
ARCH CAPITAL GROUP LTD. REPORTS 2026 THIRD QUARTER RESULTS
PEMBROKE, BERMUDA--(BUSINESS WIRE)--Arch Capital Group Ltd. (NASDAQ: ACGL;
“Arch,” “our” or “the Company”) announces its 2026 third quarter results. The
results included:
• Net income available to Arch common shareholders of $1.0 billion, or $3.00 per
share, representing an 18.1% annualized net income return on average common
equity, compared to net income available to Arch common shareholders of $1.3
billion, or $3.56 per share, for the 2025 third quarter.
• After-tax operating income available to Arch common shareholders (1) of $910
million, or $2.67 per share, representing a 16.0% annualized operating return on
average common equity (1) , compared to $1.0 billion, or $2.77 per share, for
the 2025 third quarter.
• Pre-tax current accident year catastrophic losses for the Company’s insurance
and reinsurance segments, net of reinsurance and reinstatement premiums, of $234
million.
• Favorable development in prior year loss reserves, net of related adjustments,
of $179 million.
• Combined ratio excluding catastrophic activity and prior year development (1)
of 81.2%, compared to 80.5% for the 2025 third quarter.
• Share repurchases of $1.4 billion.
• Book value per common share of $67.90 at September 30, 2026, a 0.2% decrease
from June 30, 2026.
“We delivered a strong quarter, driven by solid underwriting performance across
our three segments and continued strength from our investment portfolio,” said
Arch CEO Nicolas Papadopoulo. “We are operating in a transitioning market where
conditions are increasingly uneven, but we are prepared and welcome the
challenge. The market will continue to evolve, but our core principles will not,
and we remain focused on producing superior risk-adjusted returns over the long
term. As Arch celebrates its first 25 years, I want to thank our employees for
what we have built together: a global franchise, a strong brand and a culture
anchored in our Values. I also want to thank our investors for their continued
confidence in Arch.”
All earnings per share amounts discussed in this release are on a diluted basis.
The following table summarizes the Company’s underwriting results:
Three
(U.S. Months
Dollars Ended
in September
millions) 30, 2026 2025 % Change
──────────────────────────────────────────────────────────────────────────────
Gross
premiums $ 5,391 $ 5,410 -0.4
written
Net
premiums 3,845 3,964 -3.0
written
Net
premiums 4,014 4,285 -6.3
earned
Underwri… 702 871 -19.4
income(1)
Underwri… % Point
Ratios Change
Loss 55.0 % 51.4 % 3.6
ratio
Underwri…
expense 27.5 % 28.4 % -0.9
ratio(2)
Combined 82.5 % 79.8 % 2.7
ratio
Combined
ratio
excluding
catastro… 81.2 % 80.5 % 0.7
activity
and prior
year
developm…
(1) See ‘Comments on Non-GAAP Financial Measures’ for further details.
(2) The ‘Underwriting expense ratio’ includes ‘Other underwriting income.’ See
‘Comments on Non-GAAP Financial Measures’ for further details.
1
The following table summarizes the Company’s consolidated financial data,
including a reconciliation of net income or loss available to Arch common
shareholders to after-tax operating income or loss available to Arch common
shareholders and related diluted per share results (see ‘Comments on Non-GAAP
Financial Measures’ for further details):
(U.S. Dollars in millions,
except per Three Months Ended
share data) September 30, 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net income available to
Arch common $ 1,025 $ 1,340
shareholders
Net realized (gains) losses 99 -210
(1)
Equity in net (income) of
investments -224 -134
accounted for using the
equity method
Net foreign exchange -18 7
(gains) losses
Transaction costs and other 17 21
Income tax expense 11 18
(benefit) (2)
After-tax operating income
available to $ 910 $ 1,042
Arch common shareholders
Diluted per common share
results:
Net income available to
Arch common $ 3.00 $ 3.56
shareholders
Net realized (gains) losses 0.29 -0.56
(1)
Equity in net (income) of
investments -0.66 -0.36
accounted for using the
equity method
Net foreign exchange -0.04 0.02
(gains) losses
Transaction costs and other 0.05 0.06
Income tax expense 0.03 0.05
(benefit) (2)
After-tax operating income
available to $ 2.67 $ 2.77
Arch common shareholders
Weighted average common
shares and
common share equivalents 341.4 376.1
outstanding —
diluted
Beginning common $ 23,200 $ 22,211
shareholders’ equity
Ending common shareholders’ 22,162 22,889
equity
Average common $ 22,681 $ 22,550
shareholders’ equity
Annualized net income
return on average 18.1 % 23.8 %
common equity
Annualized operating return
on average 16.0 % 18.5 %
common equity
(1) Net realized gains or losses include, but are not limited to, realized and
unrealized changes in the fair value of equity securities and assets accounted
for using the fair value option, realized and unrealized gains and losses on
derivative instruments, changes in the allowance for credit losses on financial
assets and gains and losses realized from the acquisition or disposition of
subsidiaries.
(2) Income tax expense (benefit) on net realized gains or losses, equity in net
income of investments accounted for using the equity method, net foreign
exchange gains or losses and transaction costs and other reflects the relative
mix reported by jurisdiction and the varying tax rates in each jurisdiction.
2
Segment Information
The following section provides analysis on the Company’s 2026 third quarter
performance by reportable segments. For additional details regarding the
Company’s reportable segments, please refer to the Company’s Financial
Supplement dated September 30, 2026. On August 1, 2024, the insurance segment
completed the acquisition of the U.S. MidCorp and Entertainment insurance
businesses from Allianz (MCE Acquisition). The Company’s segment information
includes the use of underwriting income (loss) and a combined ratio excluding
catastrophic activity and prior year development (see ‘Comments on Non-GAAP
Financial Measures’ for further details).
Insurance Segment
Three
(U.S. Months
Dollars Ended
in Septemb…
millions) 30, 2026 2025 % Change
──────────────────────────────────────────────────────────────────────────────
Gross
premiu… $ 2,766 $ 2,567 7.8
written
Net
premiu… 2,006 1,953 2.7
written
Net
premiu… 1,937 1,969 -1.6
earned
Other
underw… 15 9 66.7
income
Underw… $ 108 $ 129 -16.3
income
Underw… % Point
Ratios Change
Loss 60.8 % 59.0 % 1.8
ratio
Underw…
expense 33.6 % 34.4 % -0.8
ratio
Combin… 94.4 % 93.4 % 1.0
ratio
Catast…
activi…
and
prior
year
develo…
Current
accide…
year
catast…
events, 5.7 % 2.2 % 3.5
net of
reinsu…
and
reinst…
premiu…
Net
(favor…
adverse
develo…
in
prior
year
loss
reserv…
net of
related
adjust…
Loss
ratio -0.7 % -0.7 % —
impact
Underw…
expense 0.2 % 0.6 % -0.4
ratio
impact
Total -0.5 % -0.1 % -0.4
impact
Combin…
ratio
exclud…
catast…
activi… 89.2 % 91.3 % -2.1
and
prior
year
develo…
Gross premiums written by the insurance segment in the 2026 third quarter were
7.8% higher than in the 2025 third quarter, while net premiums written were 2.7%
higher than in the 2025 third quarter. Adjusting for the non-renewal of certain
programs related to the MCE Acquisition, net premiums written would have
increased by 5.8% compared to the same quarter one year ago and reflected strong
growth in international business. Net premiums earned in the 2026 third quarter
were 1.6% lower than in the 2025 third quarter and reflect changes in net
premiums written over the previous five quarters.
The 2026 third quarter loss ratio reflected 5.7 points of current year
catastrophic activity, which includes losses related to the Iran conflict,
compared to 2.2 points in the 2025 third quarter. Estimated net favorable
development of prior year loss reserves, before related adjustments, reduced the
loss ratio by 0.7 points in the 2026 third quarter, compared to 0.7 points in
the 2025 third quarter. The balance of the change in the loss ratio resulted, in
part, from the incremental earned premium in the quarter resulting from the Iran
conflict.
The underwriting expense ratio was 33.6% in the 2026 third quarter, compared to
34.4% in the 2025 third quarter. The 2026 third quarter ratio primarily
reflected the benefit of Bermuda qualified refundable tax credits (“QRTCs”).
3
Reinsurance Segment
Three
(U.S. Months
Dollars Ended
in Septemb…
millions) 30, 2026 2025 % Change
──────────────────────────────────────────────────────────────────────────────
Gross
premiu… $ 2,313 $ 2,515 -8.0
written
Net
premiu… 1,576 1,737 -9.3
written
Net
premiu… 1,807 2,015 -10.3
earned
Other
underw… 43 38 13.2
income
Underw… $ 393 $ 482 -18.5
income
Underw… % Point
Ratios Change
Loss 55.9 % 51.6 % 4.3
ratio
Underw…
expense 22.4 % 24.5 % -2.1
ratio
Combin… 78.3 % 76.1 % 2.2
ratio
Catast…
activi…
and
prior
year
develo…
Current
accide…
year
catast…
events, 6.9 % 1.5 % 5.4
net of
reinsu…
and
reinst…
premiu…
Net
(favor…
adverse
develo…
in
prior
year
loss
reserv…
net of
related
adjust…
Loss
ratio -7.4 % -2.6 % -4.8
impact
Underw…
expense 0.4 % 0.4 % —
ratio
impact
Total -7.0 % -2.2 % -4.8
impact
Combin…
ratio
exclud…
catast…
activi… 78.4 % 76.8 % 1.6
and
prior
year
develo…
Gross premiums written by the reinsurance segment in the 2026 third quarter were
8.0% lower than in the 2025 third quarter, while net premiums written were 9.3%
lower than in the 2025 third quarter. Reductions in net premiums written this
quarter were due, in part, to non-renewals and share reductions. Net premiums
earned in the 2026 third quarter were 10.3% lower than in the 2025 third quarter
and reflect changes in net premiums written over the previous five quarters.
The 2026 third quarter loss ratio reflected 7.5 points of current year
catastrophic activity, compared to 1.3 points in the 2025 third quarter.
Estimated net favorable development of prior year loss reserves, before related
adjustments, reduced the loss ratio by 7.4 points in the 2026 third quarter,
compared to 2.6 points in the 2025 third quarter. The loss ratio was also
impacted by changes in rate and mix of business.
The underwriting expense ratio was 22.4% in the 2026 third quarter, compared to
24.5% in the 2025 third quarter, with the decrease primarily reflecting the
impact of higher commissions on retrocessions. The 2026 third quarter also
reflected the benefit of QRTCs.
4
Mortgage Segment
Three
(U.S. Months
Dollars Ended
in Septemb…
millions) 30, 2026 2025 % Change
──────────────────────────────────────────────────────────────────────────────
Gross
premiu… $ 316 $ 330 -4.2
written
Net
premiu… 263 274 -4.0
written
Net
premiu… 270 301 -10.3
earned
Other
underw… 3 3 —
income
Underw… $ 201 $ 260 -22.7
income
Underw… % Point
Ratios Change
Loss 6.9 % -0.5 % 7.4
ratio
Underw…
expense 18.6 % 14.0 % 4.6
ratio
Combin… 25.5 % 13.5 % 12.0
ratio
Prior
year
develo…
Net
(favor…
adverse
develo…
in
prior
year
loss
reserv…
net of
related
adjust…
Loss
ratio -15.4 % -18.1 % 2.7
impact
Underw…
expense -0.7 % -1.1 % 0.4
ratio
impact
Total -16.1 % -19.2 % 3.1
impact
Combin…
ratio
exclud… 41.6 % 32.7 % 8.9
prior
year
develo…
Gross premiums written by the mortgage segment in the 2026 third quarter were
4.2% lower than in the 2025 third quarter, with lower U.S. primary mortgage
insurance monthly premiums and U.S. credit risk transfer premiums partially
offset by growth in international business. Net premiums written were 4.0% lower
than in the 2025 third quarter, primarily reflecting lower U.S. credit risk
transfer premiums.
Estimated net favorable development of prior year loss reserves, before related
adjustments, decreased the loss ratio by 15.4 points, compared to 18.1 points in
the 2025 third quarter. Such amounts were primarily related to better than
expected cure rates. The 2026 third quarter loss ratio, excluding net favorable
development, reflected a modestly higher level of delinquencies compared to the
2025 third quarter.
The underwriting expense ratio was 18.6% in the 2026 third quarter, compared to
14.0% in the 2025 third quarter. The increase was primarily due to lower ceding
and profit commissions. The 2026 third quarter ratio also reflected the impact
of a lower level of net premiums earned.
5
Corporate
The Company’s results include net investment income, net realized gains or
losses (which include, but are not limited to, realized and unrealized changes
in the fair value of equity securities and assets accounted for using the fair
value option, realized and unrealized gains and losses on derivative
instruments, changes in the allowance for credit losses on financial assets and
gains and losses realized from the acquisition or disposition of subsidiaries),
equity in net income or loss of investments accounted for using the equity
method, other income (loss), corporate benefit (expenses), transaction costs and
other, amortization of intangible assets, interest expense, net foreign exchange
gains or losses, income tax items, income or loss from operating affiliates and
items related to the Company’s non-cumulative preferred shares.
Investment returns were as follows:
(U.S.
Dolla…
in
milli…
except
per Three
share Months Septem… June Septem…
data) Ended 2026 30, 2026 30, 2025 30,
──────────────────────────────────────────────────────────────────────────────
Pre-t…
net $ 451 $ 417 $ 408
inves…
income
Per $ 1.32 $ 1.20 $ 1.08
share
Equity
in net
income
of
inves…
accou… $ 224 $ 196 $ 134
for
using
the
equity
method
Per $ 0.66 $ 0.56 $ 0.36
share
Pre-t…
inves…
income
yield, 4.09 % 3.91 % 4.07 %
at
amort…
cost
(1)
Total
return
on -0.42 % 1.62 % 1.80 %
inves…
(2)
(1) Presented on an annualized basis and excluding the impact of investments for
which returns are not included within investment income, such as investments
accounted for using the equity method and certain equities.
(2) See ‘Comments on Non-GAAP Financial Measures’ for further details.
Net investment income for the 2026 third quarter was $451 million, compared to
$408 million in the 2025 third quarter, with the increase reflecting growth in
average investable assets. Net realized losses were $99 million for the 2026
third quarter, compared to net realized gains of $210 million in the 2025 third
quarter. The negative total return on investments for the 2026 third quarter
primarily reflected the impact of rising interest rates on fixed income
securities.
Corporate expenses for the 2026 third quarter were $5 million, compared to $28
million for the 2025 third quarter. Such expenses primarily represent certain
holding company costs necessary to support our worldwide operations and costs
associated with operating as a publicly traded company. The decline in the 2026
third quarter primarily reflected the benefit of QRTCs.
Amortization of intangible assets was $30 million for the 2026 third quarter,
compared to $49 million for the 2025 third quarter. The decrease primarily
related to lower amortization of intangible assets related to the MCE
Acquisition.
Interest expense for the 2026 third quarter was $62 million, compared to $37
million for the 2025 third quarter. The increase primarily resulted from the
Company’s June 2026 capital raising activity.
On a pre-tax basis, net foreign exchange gains were $18 million for the 2026
third quarter, compared to net foreign exchange losses of $7 million for the
2025 third quarter. For both periods, such amounts were primarily unrealized and
resulted from the effects of revaluing the Company’s net insurance liabilities
required to be settled in foreign currencies at each balance sheet date. Changes
in the value of available-for-sale investments held in foreign currencies due to
foreign currency rate movements are reflected as a direct increase or decrease
to shareholders’ equity and are not included in the consolidated statements of
income.
The Company’s effective tax rate on income before income taxes (based on the
Company’s annual effective tax rate) was 15.1% for the 2026 third quarter,
compared to 13.7% for the 2025 third quarter. The Company’s effective tax rate
on pre-tax operating income available to Arch common shareholders was 15.8% for
the 2026 third quarter consistent with 15.8% for the 2025 third quarter. The
effective tax rate may fluctuate from period to period based upon the relative
mix of income or loss reported by jurisdiction, the level of catastrophic loss
activity incurred, and the varying tax rates in each jurisdiction.
Income from operating affiliates for the 2026 third quarter was $33 million, or
$0.10 per share, compared to $62 million, or $0.16 per share, for the 2025 third
quarter, and primarily reflects amounts related to the Company’s investment in
Somers Group Holdings Ltd. and Coface SA.
6
Conference Call
The Company will hold a conference call for investors and analysts at 10:00 a.m.
Eastern Time on October 28, 2026. A live webcast of this call will be available
via the Investors section of the Company’s website at
http://www.archgroup.com/investors. A recording of the webcast will be available
in the Investors section of the Company’s website approximately two hours after
the event concludes. A transcript of the webcast will also be available in the
Investors section of the Company’s website approximately 24 hours after the
posting of the recording. Both the recording and the transcript will be archived
on the site for one year.
Please refer to the Company’s Financial Supplement dated September 30, 2026,
which is available via the Investors section of the Company’s website at
http://www.archgroup.com/investors. The Financial Supplement provides additional
detail regarding the financial performance of the Company. From time to time,
the Company posts additional financial information and presentations to its
website, including information with respect to its subsidiaries. Investors and
other recipients of this information are encouraged to check the Company’s
website regularly for additional information regarding the Company.
Arch Capital Group Ltd., is a publicly listed Bermuda exempted company with
approximately $27.3 billion in capital at September 30, 2026. Arch, which is
part of the S&P 500 index, provides insurance, reinsurance and mortgage
insurance on a worldwide basis through its wholly owned subsidiaries.
Comments on Non-GAAP Financial Measures
Throughout this release, the Company presents its operations in the way it
believes will be the most meaningful and useful to investors, analysts, rating
agencies and others who use the Company’s financial information in evaluating
the performance of the Company and that investors and such other persons benefit
from having a consistent basis for comparison between quarters and for
comparison with other companies within the industry. These measures may not,
however, be comparable to similarly titled measures used by companies outside of
the insurance industry. Investors are cautioned not to place undue reliance on
these non-GAAP financial measures in assessing the Company’s overall financial
performance.
This presentation includes the use of “after-tax operating income or loss
available to Arch common shareholders,” which is defined as net income available
to Arch common shareholders, excluding net realized gains or losses (which
include, but are not limited to, realized and unrealized changes in the fair
value of equity securities and assets accounted for using the fair value option,
realized and unrealized gains and losses on derivative instruments, changes in
the allowance for credit losses on financial assets and gains and losses
realized from the acquisition or disposition of subsidiaries), equity in net
income or loss of investments accounted for using the equity method, net foreign
exchange gains or losses, transaction costs and other, net of income taxes and
the use of annualized operating return on average common equity. The
presentation of after-tax operating income available to Arch common shareholders
and annualized operating return on average common equity are non-GAAP financial
measures as defined in Regulation G. The reconciliation of such measures to net
income available to Arch common shareholders and annualized net income return on
average common equity (the most directly comparable GAAP financial measures) in
accordance with Regulation G is included on page 2 of this release.
The Company believes that net realized gains or losses, equity in net income or
loss of investments accounted for using the equity method, net foreign exchange
gains or losses and transaction costs and other, in any particular period are
not indicative of the performance of, or trends in, the Company’s business
performance. Although net realized gains or losses, equity in net income or loss
of investments accounted for using the equity method and net foreign exchange
gains or losses are an integral part of the Company’s operations, the decision
to realize these items are independent of the insurance underwriting process and
result, in large part, from general economic and financial market conditions.
Furthermore, certain users of the Company’s financial information believe that,
for many companies, the timing of the realization of investment gains or losses
is largely opportunistic. In addition, changes in the allowance for credit
losses and net impairment losses recognized in earnings on the Company’s
investments represent other-than-temporary declines in expected recovery values
on securities without actual realization.
The use of the equity method on certain of the Company’s investments in certain
funds that invest in fixed maturity securities is driven by the ownership
structure of such funds (either limited partnerships or limited liability
companies). In applying the equity method, these investments are initially
recorded at cost and are subsequently adjusted based on the Company’s
proportionate share of the net income or loss of the funds (which include
changes in the fair value of the underlying securities in the funds). This
method of accounting is different from the way the Company accounts for its
other fixed maturity securities and the timing of the recognition of equity in
net income or loss of investments accounted for using the equity method may
differ from gains or losses in the future upon sale or maturity of such
investments.
7
Transaction costs and other include integration, advisory, financing, legal,
severance, incentive compensation and all other costs directly related to
acquisitions. The Company believes that transaction costs and other, due to
their non-recurring nature, are not indicative of the performance of, or trends
in, the Company’s business performance.
The Company believes that showing net income available to Arch common
shareholders exclusive of the items referred to above reflects the underlying
fundamentals of the Company’s business since the Company evaluates the
performance of and manages its business to produce an underwriting profit. In
addition to presenting net income available to Arch common shareholders, the
Company believes that this presentation enables investors and other users of the
Company’s financial information to analyze the Company’s performance in a manner
similar to how the Company’s management analyzes performance. The Company also
believes that this measure follows industry practice and, therefore, allows the
users of the Company’s financial information to compare the Company’s
performance with its industry peer group. The Company believes that the equity
analysts and certain rating agencies that follow the Company and the insurance
industry as a whole generally exclude these items from their analyses for the
same reasons.
The Company’s segment information includes the presentation of consolidated
underwriting income or loss and a subtotal of underwriting income or loss. Such
measures represent the pre-tax profitability of its underwriting operations and
include net premiums earned plus other underwriting income, less losses and loss
adjustment expenses, acquisition expenses and other operating expenses. Other
operating expenses include those operating expenses that are incremental and/or
directly attributable to the Company’s individual underwriting operations.
Underwriting income or loss does not include certain income and expense items
which are included in corporate. While these measures are presented in the
Segment Information footnote to the Company’s Consolidated Financial Statements,
they are considered non-GAAP financial measures when presented elsewhere on a
consolidated basis. The reconciliations of underwriting income or loss to income
before income taxes (the most directly comparable GAAP financial measure) on a
consolidated basis, in accordance with Regulation G, is shown on the following
pages.
Management measures segment performance for its three underwriting segments
based on underwriting income or loss. The Company does not manage its assets by
underwriting segment and, accordingly, investment income, income from operating
affiliates and other items are not allocated to each underwriting segment.
In addition, the Company’s segment information includes the use of a combined
ratio excluding catastrophic activity and prior year development, for the
insurance and reinsurance segments, and a combined ratio excluding prior year
development, for the mortgage segment. These ratios are non-GAAP financial
measures as defined in Regulation G. The reconciliation of such measures to the
combined ratio (the most directly comparable GAAP financial measure) in
accordance with Regulation G are shown on the individual segment pages. The
Company’s management utilizes the adjusted combined ratios excluding current
accident year catastrophic events and favorable or adverse development in prior
year loss reserves in its analysis of the underwriting performance of each of
its underwriting segments. The ‘Other operating expense ratio’ includes ‘Other
underwriting income.’
Total return on investments includes investment income, equity in net income or
loss of investments accounted for using the equity method, net realized gains
and losses (excluding changes in the allowance for credit losses on non-
investment related financial assets) and the change in unrealized gains and
losses generated by Arch’s investment portfolio. Total return is calculated on a
pre-tax basis and before investment expenses and reflects the effect of
financial market conditions along with foreign currency fluctuations. Management
uses total return on investments as a key measure of the return generated to
Arch common shareholders, and compares the return generated by the Company’s
investment portfolio against benchmark returns during the periods presented.
8
The following tables summarize the Company’s results by segment for the 2026
third quarter and 2025 third quarter and a reconciliation of underwriting income
or loss to income or loss before income taxes and net income or loss available
to Arch common shareholders:
Three
Mont…
(U.… Ended
Dol… Sept…
in 30,
mil… 2026
──────────────────────────────────────────────────────────────────────────────
Insu… Rei… Mor… Total
Gro…
pre… $ 2,766 $ 2,313 $ 316 $ 5,3…
wri…
(1)
Pre…
ced… -760 -737 -53 -1,…
(1)
Net
pre… 2,006 1,576 263 3,8…
wri…
Cha…
in -69 231 7 169
une…
pre…
Net
pre… 1,937 1,807 270 4,0…
ear…
Oth…
und… 15 43 3 61
inc…
(2)
Los…
and
loss -1,1… -1,0… -18 -2,…
adj…
exp…
Acq… -371 -334 -7 -712
exp…
Oth…
ope… -295 -113 -47 -455
exp…
Und…
inc… $ 108 $ 393 $ 201 702
(lo…
Net
inv… 451
inc…
Net
rea… -99
gai…
(lo…
Equ…
in
net
inc…
of
inv… 224
acc…
for
usi…
the
equ…
met…
Oth…
inc… 4
(lo…
Cor…
ben… -5
(ex…
(3)
Tra…
cos…
and -17
oth…
(3)
Amo…
of -30
int…
ass…
Int… -62
exp…
Net
for…
exc… 18
gai…
(lo…
Inc…
(lo…
bef…
inc…
tax…
and 1,1…
inc…
(lo…
from
ope…
aff…
Inc…
tax -184
ben…
(ex…
Inc…
(lo…
from 33
ope…
aff…
Net
inc…
(lo… 1,0…
ava…
to
Arch
Pre… -10
div…
Net
inc…
(lo…
ava… $ 1,0…
to
Arch
com…
sha…
Und…
Rat…
Loss 60.8 % 55.9 % 6.9 % 55.0 %
rat…
Acq…
exp… 19.2 % 18.5 % 2.4 % 17.7 %
rat…
Oth…
ope…
exp… 14.4 % 3.9 % 16.2 % 9.8 %
rat…
(4)
Com… 94.4 % 78.3 % 25.5 % 82.5 %
rat…
Net
pre…
wri…
to 72.5 % 68.1 % 83.2 % 71.3 %
gro…
pre…
wri…
(1) Certain assumed and ceded amounts related to intersegment transactions are
included in individual segment results. Accordingly, the sum of such
transactions for each segment does not agree to the total due to eliminations.
(2) ‘Other underwriting income’ includes revenue earned from underwriting-
related activities covered under existing service contracts.
(3) Certain expenses have been excluded from ‘Corporate benefit (expenses)’ and
reflected in ‘Transaction costs and other.’ See ‘Comments on Non-GAAP Financial
Measures’ for a further discussion of such items.
(4) The ‘Other operating expense ratio’ includes ‘Other underwriting income.’
9
Three
Mont…
(U.… Ended
Dol… Sept…
in 30,
mil… 2025
──────────────────────────────────────────────────────────────────────────────
Insu… Rei… Mor… Total
Gro…
pre… $ 2,567 $ 2,515 $ 330 $ 5,4…
wri…
(1)
Pre…
ced… -614 -778 -56 -1,…
(1)
Net
pre… 1,953 1,737 274 3,9…
wri…
Cha…
in 16 278 27 321
une…
pre…
Net
pre… 1,969 2,015 301 4,2…
ear…
Oth…
und… 9 38 3 50
inc…
(2)
Los…
and
loss -1,1… -1,0… 2 -2,…
adj…
exp…
Acq… -386 -398 -2 -786
exp…
Oth…
ope… -301 -133 -44 -478
exp…
Und…
inc… $ 129 $ 482 $ 260 871
(lo…
Net
inv… 408
inc…
Net
rea… 210
gai…
(lo…
Equ…
in
net
inc…
of
inv… 134
acc…
for
usi…
the
equ…
met…
Oth…
inc… 22
(lo…
Cor…
ben… -28
(ex…
(3)
Tra…
cos…
and -21
oth…
(3)
Amo…
of -49
int…
ass…
Int… -37
exp…
Net
for…
exc… -7
gai…
(lo…
Inc…
(lo…
bef…
inc…
tax…
and 1,5…
inc…
(lo…
from
ope…
aff…
Inc…
tax -215
ben…
(ex…
Inc…
(lo…
from 62
ope…
aff…
Net
inc…
(lo… 1,3…
ava…
to
Arch
Pre… -10
div…
Net
inc…
(lo…
ava… $ 1,3…
to
Arch
com…
sha…
Und…
Rat…
Loss 59.0 % 51.6 % -0.5 % 51.4 %
rat…
Acq…
exp… 19.6 % 19.8 % 0.7 % 18.4 %
rat…
Oth…
ope…
exp… 14.8 % 4.7 % 13.3 % 10.0 %
rat…
(4)
Com… 93.4 % 76.1 % 13.5 % 79.8 %
rat…
Net
pre…
wri…
to 76.1 % 69.1 % 83.0 % 73.3 %
gro…
pre…
wri…
(1) Certain assumed and ceded amounts related to intersegment transactions are
included in individual segment results. Accordingly, the sum of such
transactions for each segment does not agree to the total due to eliminations.
(2) ‘Other underwriting income’ includes revenue earned from underwriting-
related activities covered under existing service contracts.
(3) Certain expenses have been excluded from ‘Corporate benefit (expenses)’ and
reflected in ‘Transaction costs and other.’ See ‘Comments on Non-GAAP Financial
Measures’ for a further discussion of such items.
(4) The ‘Other operating expense ratio’ includes ‘Other underwriting income.’
10
Cautionary Note Regarding Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 (“PSLRA”) provides a “safe
harbor” for forward-looking statements. This release or any other written or
oral statements made by or on behalf of the Company may include forward-looking
statements, which reflect the Company’s current views with respect to future
events and financial performance. All statements other than statements of
historical fact included in or incorporated by reference in this release are
forward-looking statements. Forward-looking statements, for purposes of the
PSLRA or otherwise, can generally be identified by the use of forward-looking
terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,”
“believe” or “continue” and similar statements of a future or forward-looking
nature or their negative or variations or similar terminology.
Forward-looking statements involve the Company’s current assessment of risks and
uncertainties. Actual events and results may differ materially from those
expressed or implied in these statements. Important factors that could cause
actual events or results to differ materially from those indicated in such
statements are discussed below and elsewhere in this release and in the
Company’s periodic reports filed with the Securities and Exchange Commission
(the “SEC”), and include:
• the Company’s ability to successfully implement its business strategy during
“soft” as well as “hard” markets;
• acceptance of the Company’s business strategy, security and financial
condition by rating agencies and regulators, as well as by brokers and its
insureds and reinsureds;
• the Company’s ability to consummate acquisitions and integrate any businesses
it has acquired or may acquire into its existing operations;
• the Company’s ability to maintain or improve its ratings, which may be
affected by its ability to raise additional equity or debt financings, by
ratings agencies’ existing or new policies and practices, as well as other
factors described herein;
• general economic and market conditions (including inflation, interest rates,
unemployment, housing prices, foreign currency exchange rates, prevailing credit
terms, tariffs, geopolitical instability and conflict and the depth and duration
of a recession) and conditions specific to the reinsurance and insurance markets
in which the Company operates;
• competition, including increased competition, on the basis of pricing,
capacity (including alternative sources of capital), coverage terms or other
factors;
• developments in the world’s financial and capital markets and the Company’s
access to such markets;
• the Company’s ability to successfully enhance, integrate and maintain
operating procedures (including information technology) to effectively support
its current and new business;
• the loss and addition of key personnel;
• material differences between actual and expected assessments for guaranty
funds and mandatory pooling arrangements;
• accuracy of those estimates and judgments utilized in the preparation of the
Company’s financial statements, including those related to revenue recognition,
insurance and other reserves, reinsurance recoverables, investment valuations,
intangible assets, bad debts, income taxes, deferred tax assets, contingencies
and litigation, and any determination to use the deposit method of accounting;
• greater than expected loss ratios on business written by the Company and
adverse development on claim and/or claim expense liabilities related to
business written by its insurance and reinsurance subsidiaries;
• the adequacy of the Company’s loss reserves;
• severity and/or frequency of losses;
• greater frequency or severity of unpredictable natural and man-made
catastrophic events;
• claims for natural catastrophic events or severe economic events in the
Company’s insurance, reinsurance and mortgage businesses could cause large
losses and substantial volatility in the Company’s results of operations;
• availability to the Company of reinsurance to manage our net exposures and the
cost of such reinsurance;
• the failure of reinsurers, managing general agents, third party administrators
or others to meet their obligations to the Company;
• the timing of loss payments being faster or the receipt of reinsurance
recoverables being slower than anticipated by the Company;
• the Company’s investment performance, including legislative or regulatory
developments that may adversely affect the fair value of the Company’s
investments;
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• changes in general economic conditions, resulting in downgrades of U.S.
securities or sovereign debt by credit rating agencies, which could affect the
Company’s business, financial condition and results of operations;
• an incident, disruption in operations or other cyber event caused by cyber
attacks, the use of artificial intelligence technologies or other technology on
the Company’s systems or those of the Company’s business partners and service
providers, which could negatively impact the Company’s business and/or expose
the Company to litigation;
• the effect of climate change on the Company’s business;
• the effect of contagious diseases or a pandemic on the Company’s business;
• acts of terrorism, political unrest and other hostilities or other
unforecasted and unpredictable events caused by humans;
• the volatility of the Company’s shareholders’ equity from foreign currency
fluctuations, which could increase due to us not matching portions of the
Company’s projected liabilities in foreign currencies with investments in the
same currencies;
• changes in accounting principles or policies or in the Company’s application
of such accounting principles or policies;
• changes in the political environment of certain countries in which the Company
operate or underwrite business;
• statutory or regulatory developments, including as to tax matters and
insurance and other regulatory matters such as the adoption of legislation that
affects Bermuda-headquartered companies and/or Bermuda-based insurers or
reinsurers and/or changes in regulations or tax laws applicable to the Company,
its subsidiaries, brokers or customers, including the implementation of the
Organization for Economic Cooperation and Development (“OECD”) Pillar I and
Pillar II initiative and the enactment of the Bermuda corporate income tax; and
• the other matters set forth under Item 1A “Risk Factors”, Item 7 “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and
other sections of the Company’s Annual Report on Form 10-K for the year ended
December 31, 2025, filed with the SEC on February 26, 2026 and of the Company’s
latest Quarterly Reports on Form 10-Q, as well as the other factors set forth in
the Company’s other documents on file with the SEC, and management’s response to
any of the aforementioned factors.
All subsequent written and oral forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by these cautionary statements. The foregoing review of important
factors should not be construed as exhaustive and should be read in conjunction
with other cautionary statements that are included herein or elsewhere. The
Company's forward-looking statements speak only as of the date of this press
release or as of the date they are made, and the Company undertakes no
obligation to publicly update or revise any forward-looking statement, whether
as a result of new information, future events or otherwise.
Contacts
Arch Capital Group Ltd. Investor Relations
François Morin: (441) 278-9250 Donald Watson: (914) 872-3616;
dwatson@archgroup.com
Source: Arch Capital Group Ltd.
arch-corporate
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