Arch Capital Posts 82.1% Combined Ratio on $22.8 Billion of Premiums

Arch Capital Group Ltd. (NASDAQ: ACGL) reported an 82.1% combined ratio and $22.8 billion of gross premiums written for the trailing 12 months ended September 30, 2026, highlighting the contribution of its diversified insurance, reinsurance and mortgage operations. The third-quarter presentation did not provide a prior-period combined ratio or quarterly earnings figures.

Gross premiums written totaled $22.75 billion over the trailing 12 months. Insurance contributed $10.61 billion, or about 47% of the total, while reinsurance generated $10.87 billion, also about 47%. Mortgage accounted for the remaining 6%, with $1.28 billion. Segment figures do not exactly match the consolidated total because of intersegment eliminations.

Insurance net premiums written were $7.7 billion for the period, spread across North American and international specialty lines. Other liability occurrence business represented 17% of the insurance portfolio, followed by North American property and short-tail specialty at 16% and international property and short-tail specialty at 15%.

Reinsurance recorded $7.1 billion of net premiums written. Specialty products made up 33% of that portfolio, property 27%, casualty 21% and property catastrophe 11%, with marine and aviation and other business accounting for the balance.

Mortgage and investment income support diversification

The mortgage segment produced $892 million of underwriting income in the trailing 12 months. U.S. primary mortgage insurance generated 66% of that amount, while international mortgage insurance and reinsurance, U.S. credit risk transfer and other activities contributed 34%. Mortgage insurance in force stood at $477 billion as of September 30.

Arch’s investment operations generated $1.71 billion of net investment income and $735 million of equity-method income, for a combined $2.45 billion over the trailing 12 months. Net investment income is included in operating income, while equity-method income from investment funds is excluded.

Invested assets totaled $49.2 billion at quarter-end, including $33.3 billion of fixed-maturity securities. U.S. government and government-agency exposure represented 27.2% of fixed maturities, and the portfolio’s average credit ratings were AA- from S&P and Aa3 from Moody’s. Across total invested assets, corporate securities were the largest category at 31.4%, followed by U.S. government securities at 14.7% and equity-method funds at 14.5%.

Capital allocation remains focused on underwriting opportunities

Arch reported total capitalization of $27.3 billion as of September 30, with debt and preferred capital representing 18.8% of the total. Total shareholders’ equity was $23.0 billion, while non-GAAP tangible shareholders’ equity was $21.9 billion after deducting goodwill and intangible assets.

The company said it allocates capital toward business lines offering the strongest relative risk-adjusted returns. Its stated priorities for excess capital are reinvestment in the business, reduction of financial leverage and returns to shareholders through repurchases or dividends.

Arch’s estimated one-in-250-year peak-zone probable maximum loss was $1.87 billion as of October 1, equivalent to 8.6% of tangible shareholders’ equity. The measure reflects the company’s management of potential catastrophe exposure but remains subject to the assumptions and limitations of catastrophe modeling.

The presentation identified several factors that could cause actual results to differ from current expectations. These include economic and market conditions, competition and pricing trends, investment performance, reserve adequacy, catastrophe frequency and severity, regulatory and tax changes, reinsurance availability and cost, acquisition integration, counterparty defaults, cyber incidents and disruptions involving artificial intelligence or other technologies.