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PEMBROKE, Bermuda - Arch Capital Group Ltd. (NASDAQ:ACGL) reported second-quarter earnings that exceeded analyst expectations, driven by solid underwriting performance across its insurance, reinsurance, and mortgage segments.
The Bermuda-based insurer posted adjusted earnings of $2.58 per share, surpassing the analyst consensus of $2.30. Revenue reached $4.35 billion, slightly above the $4.34 billion estimate. The company achieved a 22.9% annualized net income return on average common equity.
Arch’s consolidated combined ratio was 81.2% for the quarter, up from 78.7% in the same period last year. Despite this increase, the ratio remains well below the industry benchmark of 100%, indicating strong underwriting profitability.
"We achieved these results by staying true to our core principle of cycle management," said Arch CEO Nicolas Papadopoulo. "This disciplined underwriting approach, paired with dynamic capital management, positions us to consistently generate superior returns across market cycles."
The company reported pre-tax catastrophic losses of $154 million for its insurance and reinsurance segments, while favorable development in prior year loss reserves contributed $139 million. Gross premiums written increased 15.1% YoY to $6.2 billion.
Arch’s insurance segment saw impressive growth with gross premiums written up 27.5% to $2.68 billion, boosted by the acquisition of Allianz (ETR:ALVG)’s U.S. MidCorp and Entertainment insurance businesses. The reinsurance segment’s gross premiums written rose 8.7% to $3.2 billion, while the mortgage segment experienced a 5% decline to $323 million.
Book value per common share increased 7.3% from the previous quarter to $59.17. The company also repurchased approximately $163 million in shares during the period.
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