Arch Capital posts 84% jump in net income
The insurer reported annualized net income return on equity of 17.8%, up from 11.1% a year earlier.
Arch Capital Group (ACGL) delivered net income available to common shareholders of $1.0 billion in the first quarter of 2026, an 84% increase from $564 million a year earlier. The result drove annualized net income return on average common equity to 17.8%, a sharp improvement from 11.1% in the same period of 2025.
The quarter marked a continuation of underwriting strength, even as premium growth slowed. After-tax operating income rose 54% year-over-year to $901 million, or $2.50 a share, from $587 million, or $1.54 a share, in the 2025 first quarter. Annualized operating return on average common equity climbed to 15.4% from 11.5%.
Revenue metrics told a mixed story. Gross premiums written dipped 0.6% to $6.425 billion, while net premiums written fell 3.7% to $4.348 billion. The declines reflected uneven performance across segments: insurance premiums edged up 2.0% to $2.697 billion, reinsurance premiums slipped 2.3% to $3.414 billion, and mortgage premiums contracted 3.1% to $316 million.
Underwriting income surged 74.6% to $728 million, driven by a 9.4-point improvement in the loss ratio to 52.4% and an 8.4-point drop in the combined ratio to 81.7%. The reinsurance segment led the gains, with underwriting income jumping 164.1% to $441 million and the combined ratio falling 15.9 points to 75.9%. The insurance segment swung to a $66 million underwriting profit from a $2 million loss a year earlier.
Catastrophic losses moderated, with pre-tax current accident year losses declining to $174 million from $215 million in the prior quarter. Favorable prior-year reserve development, however, fell to $200 million from $257 million. Book value per common share rose 1.7% sequentially to $66.19.
Investment income softened. Pre-tax net investment income declined 6.0% to $408 million, reversing a rising trend from earlier quarters. Equity in net income of investments accounted for using the equity method increased to $160 million from $155 million in the prior quarter.
The company did not provide updated guidance for the full year. Share repurchases totaled $783 million, down from $798 million in the prior quarter.