Arch Capital Group Ltd.ACGL reported third-quarter 2026 operating income of $2.67 per share, beating the Zacks Consensus Estimate by 24.2%. The bottom line declined 3.6% year over year.
ACGL's quarterly results benefited from higher net investment income and favorable prior-year reserve development. These positives were partially offset by lower premium volumes, increased catastrophe losses and weaker underwriting income.
Arch Capital Group Ltd. Price, Consensus and EPS Surprise
Arch Capital Group Ltd. price-consensus-eps-surprise-chart | Arch Capital Group Ltd. Quote
Behind the Headlines
Operating revenues of $4.47 billion decreased 5.2% year over year, primarily due to lower net premiums earned and net realized investment losses. Revenues beat the Zacks Consensus Estimate by 0.3%.
Gross premiums written decreased 0.4% year over year to $5.39 billion. Net premiums earned declined 6.3% to $4 billion, primarily reflecting lower reinsurance business volumes. The figure beat the Zacks Consensus Estimate by 0.2%.
Pre-tax net investment income increased 10.5% year over year to $451 million, reflecting growth in average investable assets. The figure was higher than our estimate of $432.2 million.
Pre-tax current accident year catastrophic losses for the company's Insurance and Reinsurance segments, net of reinsurance and reinstatement premiums, totaled $234 million.
Arch Capital Group's underwriting income declined 19.4% year over year to $702 million. The combined ratio, representing the percentage of premiums paid out as claims and expenses, deteriorated 270 basis points to 82.5 year over year, beating the Zacks Consensus Estimate of 88.6 and our model estimate of 92.1.
Q3 Segmental Results
Insurance: Gross premiums written increased 7.8% year over year to $2.77 billion. Net premiums written increased 2.7% year over year to $2.01 billion. Net premiums written were also higher than our estimate of $1.8 billion.
Underwriting income was $66 million, rebounding from a year-ago loss of $2 million, though it fell short of our estimate of $155.4 million. The combined ratio improved 360 basis points year over year to 96.5, marginally above the Zacks Consensus Estimate of 99.
Reinsurance: Gross premiums written decreased 8% year over year to $2.31 billion. Net premiums written declined 9.3% year over year to $1.58 billion, primarily due to non-renewals and share reductions. The figure was above our estimate.
Underwriting income declined 18.5% year over year to $393 million. The combined ratio deteriorated 220 basis points year over year to 78.3, significantly better than the Zacks Consensus Estimate of 87.5.
Mortgage: Gross premiums written declined 4.2% year over year to $316 million, primarily due to lower U.S. primary mortgage insurance monthly premiums and U.S. credit risk transfer premiums, partially offset by international growth. Net premiums written decreased 4% year over year to $263 million. The figure exceeded our estimate of $262 million.
Underwriting income declined 22.7% year over year to $201 million. The combined ratio deteriorated 1,200 basis points year over year to 25.5, well above the Zacks Consensus Estimate of 24.7.
ACGL's Financial Update
Arch Capital Group exited the third quarter with cash of $1.15 billion, up 16% from the 2025-end level.
Total debt was $4.29 billion as of Sept. 30, 2026, up from $2.73 billion at the end of 2025.
Book value per share was $67.90 as of Sept. 30, 2026, up 4.3% from the end-of-2025 level.
Annualized operating return on average common equity declined 250 basis points year over year to 16%.
Net cash provided by operating activities was $1.76 billion, down 19.5% year over year.
During the third quarter of 2026, ACGL repurchased common shares worth $1.43 billion.
ACGL's Zacks Rank
ACGL currently sports a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Property and Casualty Insurers
Chubb LimitedCB reported third-quarter 2026 core operating earnings of $7.66 per share, which beat the Zacks Consensus Estimate of $6.53 by 17.3%. The bottom line increased 0.8% year over year. Revenues of $16.81 billion surpassed the consensus mark of $16.72 billion by 0.55%.
Consolidated net premiums earned rose 3.9% year over year to $14.92 billion. P&C underwriting income declined 8.8% year over year to $2.06 billion. The combined ratio deteriorated 230 basis points to 84.1%. The Zacks Consensus Estimate is pegged at 87.
W.R. Berkley CorporationWRB reported third-quarter 2026 operating income of $1.17 per share, which beat the Zacks Consensus Estimate by 2.63%. The bottom line increased 6.4% year over year. Operating revenues of $3.76 billion rose 1.8% year over year but missed the consensus estimate by 1.19%. Net premiums earned jumped 1.8% year over year. W.R. Berkley's net premiums written increased 1.3% year over year to $3.27 billion.
Net investment income grew 9.2% year over year to $383.5 million, supported by higher income from the core investment portfolio. Income from fixed-maturity securities increased 10.3%, while the core portfolio contributed $369.1 million, up 12% year over year. The Zacks Consensus Estimate was pegged at $398.2 million. Our estimate was pegged at $384.3 billion.
The Travelers Companies, Inc.TRV reported third-quarter 2026 core earnings of $9.18 per share, which beat the Zacks Consensus Estimate of $7.07 by 29.8%. The bottom line increased 12.8% year over year. Revenues of $12.45 billion surpassed the consensus estimate of $12.40 billion by 0.4% and remained nearly flat year over year. Net written premiums totaled $11.48 billion during the quarter. Travelers generated core income of $1.95 billion, up 4.3% year over year, while net income increased 1.5% to $1.92 billion
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