Cuộc họp công bố kết quả kinh doanh Q3 2026 của Arch Capital (ACGL): Lợi nhuận hoạt động 910 triệu USD, mua lại cổ phiếu 1,4 tỷ USD

Điểm tin chính

• Arch Capital Group (NASDAQ: ACGL) báo cáo lợi nhuận hoạt động sau thuế quý 3/2026 đạt 910 triệu USD, tương đương 2,67 USD/cổ phiếu. Tỷ suất lợi nhuận trên vốn cổ phần phổ thông bình quân (ROE hoạt động) năm hóa đạt 16,0%, trong khi ROE lợi nhuận thuần năm hóa đạt 18,1%.
• Hoạt động kinh doanh bảo hiểm tiếp tục có lãi ở cả ba mảng. Bảo hiểm, tái bảo hiểm và bảo hiểm thế chấp tạo ra lợi nhuận bảo hiểm lần lượt là 108 triệu USD, 393 triệu USD và 201 triệu USD.
• Tổn thất thảm họa trong năm hiện tại là 234 triệu USD, sau khi trừ đi tái bảo hiểm và phí bảo hiểm phục hồi. Dự phòng năm trước biến động thuận lợi đạt tổng cộng 179 triệu USD, giúp giảm tỷ lệ hợp nhất chung 4,5 điểm %.
• Arch đã mua lại 14,8 triệu cổ phiếu với giá 1,4 tỷ USD trong quý. Công ty cũng đã mua lại thêm khoảng 100 triệu USD cho đến trước đêm diễn ra cuộc họp công bố kết quả kinh doanh, đồng thời cho biết khả năng sẽ tiếp tục hoàn trả vốn nếu các cơ hội đầu tư tự thân tiếp tục bị hạn chế.
• Doanh số phí bảo hiểm tái bảo hiểm giảm do giá bảo hiểm tài sản và rủi ro ngắn hạn hạ nhiệt. Ban lãnh đạo dự báo áp lực sẽ tiếp tục duy trì trong đợt tái tục ngày 1/1 và cho biết tỷ lệ tổn thất tái bảo hiểm cơ bản có thể tăng thêm vài trăm điểm cơ bản theo thời gian.
• Mảng rủi ro chiến tranh hàng hải liên quan đến xung đột Iran đã hỗ trợ tăng trưởng phí bảo hiểm và cải thiện tỷ lệ tổn thất. Ban lãnh đạo kỳ vọng mức phí bảo hiểm liên quan trong quý 4/2026 sẽ tương đương, tùy thuộc vào các diễn biến địa chính trị.

Dữ liệu tài chính chính

Kết quả hoạt động và kinh doanh

Bảo hiểm

Lợi nhuận kinh doanh bảo hiểm đạt 108 triệu USD, với tỷ lệ hợp nhất 94,4% và tỷ lệ hợp nhất năm sự cố hiện tại không bao gồm thảm họa là 89,2%.

Tổng phí bảo hiểm gốc tăng 7,8% so với cùng kỳ năm trước, trong khi phí bảo hiểm thuần tăng 2,7%. Tăng trưởng được hưởng lợi từ một chương trình công ty bảo hiểm nội bộ (captive) mới ở các thị trường thay thế và phạm vi bảo hiểm hàng hải mở rộng trên toàn cầu liên quan đến xung đột Iran.

Trong 9 tháng đầu năm 2026, sau khi điều chỉnh theo kế hoạch cắt giảm mảng bảo hiểm thương mại thị trường tầm trung, tổng phí bảo hiểm gốc tăng 4,2% và phí bảo hiểm thuần tăng 1,6%.

Tỷ lệ tổn thất năm sự cố không bao gồm thảm họa được cải thiện 170 điểm cơ bản xuống 55,8%. Ban lãnh đạo cho biết phần lớn sự cải thiện này đến từ phí bảo hiểm đã hưởng tăng thêm của mảng bảo hiểm rủi ro chiến tranh hàng hải.

Arch tiếp tục tìm kiếm các cơ hội trong mảng bảo hiểm trách nhiệm vượt mức và phụ trội (E&S), xây dựng và trách nhiệm khách hàng doanh nghiệp lớn tại Bắc Mỹ. Trên quốc tế, nền tảng Lloyd's của công ty đã hỗ trợ tăng trưởng mảng chuyên biệt. Thị trường tài sản và rủi ro ngắn hạn cạnh tranh gay gắt hơn, trong khi đà tăng giá của mảng bảo hiểm trách nhiệm tiếp tục giảm tốc.

Tái bảo hiểm

Mảng tái bảo hiểm tạo ra 393 triệu USD lợi nhuận kinh doanh bảo hiểm với tỷ lệ hợp nhất là 78,3%. Tổng phí bảo hiểm gốc giảm khoảng 8%, trong khi phí bảo hiểm thuần giảm 9,3% so với cùng kỳ năm trước.

Mức sụt giảm này phản ánh mức giá thấp hơn và sự tham gia giảm bớt ở mảng tài sản cũng như các nghiệp vụ ngắn hạn khác. Tỷ lệ hợp nhất năm sự cố không bao gồm thảm họa tăng 160 điểm cơ bản lên 78,4%, do tỷ trọng các nghiệp vụ dài hạn lớn hơn và giá cả cạnh tranh hơn.

Arch đang sử dụng vốn của bên thứ ba một cách rộng rãi hơn để quản lý rủi ro thuần và duy trì mối quan hệ với khách hàng, đồng thời hạn chế lượng vốn tự có cam kết cho các nghiệp vụ có lợi nhuận thấp hơn. Ban lãnh đạo cho biết cơ hội tái bảo hiểm trách nhiệm vẫn còn, nhưng các điều khoản và điều kiện nhìn chung kém hấp dẫn hơn so với bảo hiểm gốc.

Bảo hiểm thế chấp

Lợi nhuận kinh doanh bảo hiểm thế chấp đạt 201 triệu USD. Tỷ lệ nợ quá hạn bảo hiểm thế chấp tại Mỹ duy trì ở mức thấp là 2,2% tính đến ngày 30 tháng 9, trong khi tỷ lệ duy trì hợp đồng của danh mục đầu tư đạt khoảng 80%.

Biến động dự phòng thuận lợi đã hạ nhiệt so với các năm trước, nhưng hoạt động khắc phục nợ xấu vẫn tích cực. Lãi suất thế chấp cao hơn tiếp tục hỗ trợ tỷ lệ duy trì hợp đồng bằng cách hạn chế hoạt động tái tài trợ vốn tự nguyện.

Các hoạt động kinh doanh ngoài mảng bảo hiểm thế chấp gốc tại Mỹ đã tạo ra 66 triệu USD phí bảo hiểm thuần trong quý. Ban lãnh đạo cho biết chương trình thí điểm hủy bỏ bảo hiểm thế chấp được công bố gần đây sẽ không có tác động trong ngắn hạn vì chương trình này chỉ áp dụng cho các khoản thế chấp mới phát sinh.

Đầu tư và Vốn

Thu nhập đầu tư thuần đạt 451 triệu USD, trong khi các khoản đầu tư theo phương pháp vốn chủ sở hữu đóng góp 224 triệu USD vào lợi nhuận thuần trước thuế. Lợi suất dòng vốn mới cao hơn lợi suất sổ sách của danh mục đầu tư thu nhập cố định khoảng 65 đến 70 điểm cơ bản, điều mà ban lãnh đạo kỳ vọng sẽ hỗ trợ thu nhập đầu tư trong tương lai.

Arch đã mua lại lượng cổ phiếu tương đương khoảng 109% lợi nhuận thuần trong 9 tháng đầu năm 2026. Ban lãnh đạo cho biết đợt phát hành trái phiếu tháng 6 đã cung cấp khoảng 1,1 tỷ USD vốn bổ sung cho các mục đích chung của công ty, bao gồm cả mua lại cổ phiếu. Một khoản nợ trị giá 500 triệu USD dự kiến sẽ đến hạn thanh toán vào tháng 12.

Triển vọng từ Ban lãnh đạo

Ban lãnh đạo dự kiến tăng trưởng bảo hiểm sẽ tiếp tục mang tính chọn lọc thay vì chạy theo doanh số. Công ty nhận thấy tiềm năng tăng trưởng ở thị trường tầm trung của Mỹ, mảng bảo hiểm trách nhiệm E&S, xây dựng và một số dòng sản phẩm chuyên biệt tại London trong năm 2027, mặc dù không đưa ra dự báo định lượng về phí bảo hiểm.

Tỷ lệ chi phí bảo hiểm có thể giảm nhẹ so với mức hiện tại. Ban lãnh đạo đã viện dẫn các khoản ưu đãi thuế định kỳ tại Bermuda, việc chấm dứt các chi phí trùng lặp khi tích hợp mảng thị trường tầm trung và các sáng kiến nâng cao hiệu quả tiếp diễn.

Trong quý 4/2026, ban lãnh đạo kỳ vọng phí bảo hiểm rủi ro chiến tranh hàng hải liên quan đến xung đột Iran sẽ duy trì ở mức tương đương quý 3, với giả định các điều kiện hiện tại tiếp tục kéo dài.

Trong mảng tái bảo hiểm, ban lãnh đạo dự báo áp lực giá sẽ tiếp diễn ở mảng thảm họa tài sản và các nghiệp vụ ngắn hạn khác trong đợt tái tục ngày 1/1. Tỷ lệ tổn thất cơ bản có thể tăng dần vài trăm điểm cơ bản, tùy thuộc vào giá tái tục và cơ cấu kinh doanh.

Ban lãnh đạo cho biết giá bảo hiểm trách nhiệm gốc đã giảm tốc xuống mức tương đương hoặc thấp hơn xu hướng chi phí tổn thất. Tuy nhiên, Arch tiếp tục đánh giá mảng bảo hiểm trách nhiệm cụ thể mà công ty khai thác vẫn mang lại lợi nhuận tuyệt đối ở mức chấp nhận được.

Rủi ro và Yếu tố cần theo dõi

• Nguồn công suất tái bảo hiểm dồi dào đang gây áp lực lên giá mảng tài sản và rủi ro ngắn hạn, mức độ tham gia cũng như tăng trưởng phí bảo hiểm.
• Giá bảo hiểm trách nhiệm đã giảm tốc, làm thu hẹp hoặc xóa bỏ biên lợi nhuận vượt trên xu hướng chi phí tổn thất ở một số phân khúc thị trường.
• Rủi ro từ xung đột Iran tạo ra cả phí bảo hiểm bổ sung lẫn tổn thất thảm họa. Xung đột này chiếm chưa đến một nửa tổng tổn thất thảm họa trong quý 3, nhưng kết quả trong tương lai sẽ phụ thuộc vào các diễn biến địa chính trị.
• Ban lãnh đạo nhấn mạnh sự không chắc chắn xung quanh các cấu trúc vốn của bên thứ ba tập trung vào mảng bảo hiểm trách nhiệm, đặc biệt là bên nào cuối cùng sẽ gánh chịu rủi ro đuôi (tail risk).
• Mức tổn thất tối đa có thể xảy ra do thiên tai thuần tại vùng rủi ro đỉnh của Arch cho một sự cố đơn lẻ chu kỳ 250 năm đã tăng nhẹ lên 1,9 tỷ USD, tương đương 8,6% vốn chủ sở hữu hữu hình của cổ đông.
• Cách xử lý tiềm năng đối với tài sản thuế thu nhập hoãn lại tại Bermuda vẫn chưa chắc chắn. Arch đánh giá vị thế vốn của mình trong cả hai trường hợp có và không có tài sản đó.

Tóm tắt phần Hỏi & Đáp với Chuyên gia phân tích

Hoàn trả vốn: Ban lãnh đạo cho biết mua lại cổ phiếu vẫn là phương thức hoàn trả vốn được ưu tiên ở mức giá cổ phiếu hiện tại. Tốc độ sẽ phụ thuộc vào định giá, cơ hội tự thân và các hạn chế về cửa sổ giao dịch. M&A được xem xét chủ yếu là một quyết định chiến lược hơn là một công cụ quản lý vốn.

Ứng phó với chu kỳ thị trường hạ nhiệt: Trong mảng tái bảo hiểm, Arch có kế hoạch quản lý rủi ro thuần bằng cách sử dụng vốn bên thứ ba trong khi vẫn duy trì mối quan hệ với môi giới và công ty nhượng tái bảo hiểm. Trong mảng bảo hiểm, ban lãnh đạo dự kiến sẽ điều chỉnh danh mục đầu tư có mục tiêu rõ ràng hơn thay vì không tái tục trên diện rộng, nhờ sự hỗ trợ của dữ liệu và phân tích chi tiết.

Cơ hội ở mảng bảo hiểm trách nhiệm: Các cơ hội rõ ràng nhất nằm ở mảng bảo hiểm gốc, đặc biệt là bảo hiểm trách nhiệm E&S thị trường tầm trung, xây dựng và một số rủi ro chuyên biệt được chọn lọc. Tăng trưởng mảng tái bảo hiểm trách nhiệm bị hạn chế hơn do các điều khoản nhượng lại vẫn mang tính cạnh tranh mặc dù mảng kinh doanh cơ bản khá hấp dẫn.

Quy định về bảo hiểm thế chấp: Ban lãnh đạo không kỳ vọng có tác động trong ngắn hạn từ chương trình thí điểm hủy bỏ. Khoảng 25% rủi ro bảo hiểm thế chấp đang có hiệu lực thuộc về các hợp đồng phát hành trước năm 2023, trong khi sáng kiến hiện tại chỉ áp dụng cho tương lai.

Trung tâm dữ liệu: Ban lãnh đạo đồng ý rằng ước tính của các bên môi giới về khoảng 10 tỷ USD phí bảo hiểm thị trường mới dường như là hợp lý. Arch tham gia thông qua đội ngũ xây dựng tại London, nhưng không kỳ vọng cơ hội này sẽ là động lực chính thúc đẩy phí bảo hiểm của công ty.

Toàn văn Biên bản Cuộc họp Công bố Kết quả Kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Good day, ladies and gentlemen, and welcome to the 3Q 2026 Arch Capital Earnings Conference Call.

[Operator Instructions]

As a reminder, this conference call is being recorded. Before the company gets started with its update, management wants to first remind everyone that certain statements in yesterday's press release and discussed on this call may constitute forward-looking statements under the federal securities laws. These statements are based upon management's current assessments and assumptions and are subject to a number of risks and uncertainties. Consequently, actual results may differ materially from those expressed or implied. For more information on the risks and other factors that may affect future performance, investors should review periodic reports that are filed by the company with the SEC from time to time including our annual report on Form 10-K for the 2025 fiscal year.

Additionally, certain statements contained in the call that are not based on historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The company intends the forward-looking statements in the call to be subject to the safe harbor created thereby. Management will also make reference to certain non-GAAP measures of financial performance. The reconciliations to GAAP for each non-GAAP financial measure can be found in the company's current report on Form 8-K furnished to the SEC yesterday, which contains the company's earnings press release and is available on the company's website at www.archgroup.com and on the SEC's website at www.sec.gov.

I would now like to introduce your host for today's conference, Mr. Nicolas Papadopoulo, and Mr. Francois Morin. Sirs, you may begin.

Nicolas Alain Papadopoulo

Good morning, and welcome to Arch's Third Quarter Earnings Call. Arch delivered very strong results this quarter, reflecting excellent underwriting performance across each of our businesses, and a relatively low level of catastrophe activity. After-tax operating income was $910 million or $2.67 per share resulting in an annualized operating return on average common equity of 16%. Strong returns from our equity method investment contributed to an annualized net income return on average common equity of 18.1%.

Despite increasingly competitive market conditions, we continue to generate strong returns, reflecting our ability to proactively shift capital to optimize long-term returns. This is the essence of cycle management and given this dynamic, we were able to return approximately $1.4 billion to our common shareholders through buybacks in the quarter. Book value per share was essentially flat in the quarter. However, it's worth noting that tangible book value per share, excluding AOCI, increased approximately 15% from a year ago. Arch's brand, underwriting expertise and relationships, combined with our diversified platform, give us broad access to business across insurance and reinsurance. In addition, continuing investments in data and analytics, enhance our risk selection and provide deeper insight into our portfolios. Each of these elements allows us to be highly selective about where and how we deploy capital.

Importantly, we are led by returns. Therefore, premium growth is not the ultimate objective. We continue to act on what we see growing where returns remain attractive, and exercising restraint where they do not. Let me now turn to our segment performance, starting with insurance. Insurance generated $108 million of underwriting income in the quarter with a combined ratio of 94.4%, and a current accident year combined ratio, excluding catastrophes, of 89.2%. Gross premiums written increased 7.8% and net premiums return increased 2.7% compared to the same quarter last year. Premium growth in the quarter benefited from a new captive program in alternative markets and increased writings of marine worldwide coverage related to the Iran conflict. The premium growth we saw this quarter was stronger than the underlying trend for the year. Year-to-date, adjusting for the planned reduction in middle market commercial program business, gross premiums written increased 4.2% and net premiums written increased 1.6% and compared to the first 9 months of last year. This low single-digit underlying growth is consistent with our expectations given current market condition.

In North America, we continue to see opportunities across excess and surplus casualty construction and national account casualty where rate and market conditions remain attractive. Internationally, we continue to benefit from our position as a lead market across many classes at Lloyd's. At the same time, property and short-tail markets remain more competitive while rate increases have moderated in some of our casualty lines. We continue to believe that adverse development emerging across the industry for more recent accident years, reinforces the need for casualty pricing to remain at or above loss cost trend. Moving to reinsurance, which delivered $393 million of underwriting income in the quarter with a combined ratio of 78.3%, aided by light catastrophe activity. Gross premiums written declined approximately 8% compared with the same quarter last year, reflecting abundant reinsurance capacity, particularly in property and short-tail lines.

Consistent with our cycle management approach, we are reducing participation where retailers no longer meet our objectives and increasingly leveraging third-party capital to manage net exposure and optimize returns on our own capital. While casualty generally remains attractive, additional capacity continues to enter the market. We will not chase growth for the sake of growth. We will remain patient and deploy capital where pricing and terms and conditions appropriately reflect the underlying risk. Our objective is not to become an index of the overall market. Our global reach, underwriting expertise and third-party capital platform allow us to take advantage of opportunities as they emerge and to construct a portfolio that delivers a require risk-adjusted returns. Our mortgage segment generated $201 million of underwriting income in the quarter and continues to be a valuable contributor to our results.

New origination volume remains constrained primarily due to mortgage interest rates currently above 7%, limiting near-term growth opportunities. Importantly, the underlying quality of our in-force portfolio remains strong. In USMI, favorable reserve development has moderated from prior years, while positive hormone credit condition continued to support a low delinquency rate of 2.2% at September 30. Higher mortgage rates also support persistency by reducing voluntary refinancing activity. Our business outside of primary U.S. mortgage insurance wrote $66 million of net premium in the quarter, and we continue to see opportunities in these businesses, providing diversification from our U.S. MI business. As always, the mortgage team remains focused on disciplined execution, optimizing the platform and managing expenses in line with the market environment.

Finally, investment contributed $451 million of pretax net investment income in the quarter. Our equity method investment also performed very well contributing $224 million to pretax net income. With $49.2 billion of investable assets Investment income is expected to remain an important contributor to Arch's overall earnings. Last Friday, Arch celebrated its 25th anniversary. I want to recognize this milestone and thank our employees for what we have built together, a global franchise, a strong brand and perhaps, most importantly, a unique culture anchored in our values. I also want to thank our investors for the confidence they have placed in Arch over the past 25 years.

As I reflect on my 25 years at Arch, one thing has remained consistent. Our ability to adapt and generate attractive returns across very different market environments. That has been our legacy for our first 25 years, and it remains our focus for the next 25. Today, we are operating in a transitioning market where conditions are becoming increasingly uneven. And as this quarter's results demonstrate, we are prepared for that environment, and we welcome the challenge. The market will continue to evolve, but our core principles will not. We will remain disciplined on the rider and thoughtful stewards of capital always focused on producing superior risk-adjusted returns over the long term. That gives me confidence in Arch's position today and the opportunities ahead over the next 25 years. With that, I will turn the call over to Francois.

François Morin

Thank you, Nicolas, and good morning to all. As you saw last night, our third quarter results were highlighted by strong underwriting performance and solid investment results. Capital management and capital returns also remain very much at the forefront of our initiatives this quarter as we took advantage of an attractive share price to repurchase 14.8 million of our common shares at an aggregate cost of $1.4 billion in the quarter. Through 9 months of 2026, we have repurchased approximately 109% of our net income in our own shares. While our first choice will always be to invest our capital in the business, a transitioning business environment presents an avenue to return excess capital to our shareholders.

Turning to our operating performance for the quarter. Our 3 business segments delivered excellent underlying results with an overall ex-cat accident year combined ratio of 81.2% and up 70 basis points from the same quarter last year. Our underwriting income included $179 million of favorable prior redevelopment on a pretax basis in the third quarter, or 4.5 points on the overall combined ratio. We recognized favorable development in all 3 of our segments and in many of our lines of business, but mainly in short tail lines in our P&C segments and in mortgage due to ongoing strong cure activity. Current year catastrophe losses were $234 million in the quarter, net of reinsurance and reinstatement premiums. These catastrophe losses originated from a variety of events across the globe and include losses associated with the Iran conflict. The Insurance segment's net premiums written increased 2.7% year-over-year as we were able to grow in select areas where expected returns met our underwriting criteria primarily in our international operations. These opportunities more than offset the headwinds from the nonrenewal of certain program business discussed on prior calls.

The [ ex-cat ] accident year loss ratio, net of reinstatement premiums improved by 170 basis points to 55.8% compared to the same quarter 1 year ago. Most of the improvement was due to the benefit of incremental marine war breach earned premium. Our insurance expense ratio was lower this quarter compared to the same quarter 1 year ago. reflecting the introduction of the Bermuda Q RTCs. Turning to our reinsurance segment. Net premiums written were down 9.3% from the same quarter 1 year ago. reflecting reduced writings from lower rates and reduced participations across many lines of business with the notable exception of casualty, where we were able to find growth opportunities. Overall, our ex-cat accident year combined ratio of 78.4% increased 160 basis points from last year. due to the shift in line of business mix towards longer tail lines and a more competitive rate environment. As I mentioned earlier, favorable prior year reserve development in the quarter was primarily from short-tail lines, with nominal movements in casualty and longer tail lines of business.

Our mortgage segment produced another very strong quarter with underwriting income of $201 million. The decrease in underwriting income reflects lower net premiums earned from last quarter, with the reduction occurring in our U.S. MI business due to lower monthly premiums and higher ceded premiums and in our international operations, where last quarter was favorably impacted by single premium terminations. Overall, the credit quality of our in-force portfolio remains very strong as reflected by a low delinquency rate and favorable cure activity. Persistency of our in-force portfolio remains at around 80%, is an important factor in the sustainability of future premium flows. On the investment front, we earned a combined $675 million from net investment income and income from funds accounted for using the equity method or $1.98 per share pretax up from the $1.76 per share we earned last quarter. We note that the returns on equity method funds contributed 340 basis points to our annualized net income return on average common equity on a year-to-date basis and represents an important part though variable of our book value growth over time.

Cash flow from operations remained very strong at $1.8 billion for the quarter, given the strong underwriting results of our operations. The recent increase in interest rates is also expected to provide a tailwind to net investment income, given the short duration of our fixed income portfolio and new money yields outpacing our book yield by approximately 65 to 70 basis points. Income from operating affiliates was $33 million for the quarter, down from $62 million from the same quarter 1 year ago. Our effective tax rate on pretax operating income was 15.8%, reflecting the mix of income by tax jurisdiction. As of October 1, our peak zone natural cap PML for a single event 1-in-250-year return period on a net basis is up slightly to $1.9 billion and now stands at 8.6% of tangible shareholders' equity. With these introductory comments, we are now prepared to take your questions.

Operator

[Operator Instructions]

Our first question comes from the line of Elyse Greenspan with Wells Fargo.

Phần hỏi đáp

Elyse Greenspan

I guess my first question is just on capital. You guys have been leaning into buyback of late -- so I was just hoping to get an update on how you're kind of balancing buyback and how you guys see some inorganic opportunities that are out there today? And then can you let us know -- provide an update on buybacks in the fourth quarter to date in October?

François Morin

Yes, sure. On the -- yes, through last night, we bought back just about another $100 million of buybacks in October. And again, our strategy has not changed over time. We look carefully at capital, we're best to deploy it. Last quarter was really -- and I mentioned it earlier, is really we thought the stock price was particularly attractive, and we have the opportunity to buy back a meaningful amount of shares in that period. So we're we seize the opportunity.

How do we think about the rest of the year in 2027? I mean we're in a good position. Obviously, our capital base is very strong. We're generating very strong earnings. And the challenge for us right now is growing. So in an environment where growth is a bit more difficult than -- we still generate very strong earnings. We'll be in a position to probably most likely return back even more capital as we move forward.

Nicolas Alain Papadopoulo

Yes. To answer your question, we don't think of inorganic growth as a capital management. I think for us, we think more M&A as strategic as...

Elyse Greenspan

Okay. And then my second question, you guys said right, the underlying insurance growth is kind of in the low single digits right now. Just as you guys think about the market evolving, not only like for the fourth quarter, I'm really more interested in 2017. How do you see the and underlying growth trending within the insurance business over the next 15 months or so?

Nicolas Alain Papadopoulo

So our view as a change is, I think we believe that we're trading in a pretty good market overall. And we see attractive opportunities in insurance, especially in the casualty lines of business and some of the specialty we write in London to be able to grow. I mean there is headwinds, continued headwinds on the property side that we are aware of. But overall, we feel good about markets we trade in.

François Morin

Yes. If you compare '26 to what we -- what could happen in '27, and compare really to '25. And we -- the decrease -- we had some headwinds in '26. We talked about, right, the nonrenewals of MC programs the property, cyber, there are some lines that were we shrunk because the market wasn't attractive to us. So now if you compare like '27 versus '26, like the reset, we think there's a good opportunity for us to grow at some level in '26, our middle market business in the U.S. We think we'll has an opportunity to grow. So there's a lot -- there's a number of areas where you compare like on a relative like '27 versus '26, we think we'll be in an environment that attractive in some places and we'll find a way to go get some of that business.

Operator

Your next question comes from the line of Pablo Singzon with JPMorgan.

Pablo Singzon

First question is on the expense ratio -- operating expense ratio. I was hoping you could frame that as we go into next year, it seems like there's going to be some pressure on your premium base -- but at the same time, you're getting a step-up in Bermuda tax credits and then, of course, the normal course expense management initiatives that you'll be implementing anyway. So just any perspective on how that might trend from here?

François Morin

Yes. If we focus on -- I mean, I'm assuming the question is more for insurance -- the way we think about it, and we always go back to trailing 12 months, like what's the run rate? Certainly, as you know, there's seasonality in some of our expenses and all that. But no question that the permit CRTCs is not a onetime event, right? So it's sustainable. So yes, in Q3 specific, we didn't have a Q3 '25, we had at Q3 '26. Yes, that's what we're trying to certainly communicate in the earnings release, and that will be there going forward.

And as you know, and you mentioned it, the credits are expected to go up in on a percentage basis based on what the permit government is committed to -- and then we had a couple of things that kind of we had to absorb this year, right? We had some -- a little bit of duplication of expenses around the integration of our middle market business. That is, for the most part, if not completely behind us in terms of the double counting or double expense. So that will be a benefit. And normal, call it, inflationary cost on expenses, we think should kind of track generally closely to the premium growth.

So premium expense ratio, you put it all together, we think has a chance to kind of be -- come down a little bit from the current levels. But -- and you mentioned it, we'll be working aggressively manage our expense base. There's potential improvements and efficiencies, et cetera, that we'll realize over time. But that's kind of how we think about it.

Pablo Singzon

And then the second question on the MI business and not specifically about the quarter, but I just wanted to get your thoughts on changes on the regulatory side there where there's a recent pilot announced best, think it's meant to streamline cancellation upon reaching some real LTVs, right, based on the home market values. So how do you see that affecting your business?

Nicolas Alain Papadopoulo

Yes. So the way we think about it is we don't see any near-term impact. I think the pilot is really for new mortgages and it's going to take some time to implement. So as far as we are concerned, I think we think mortgage remains a terrific business for us.

François Morin

Right. I think the pilot what's been identified, right, is to -- I think that there's the vision or this acknowledgment that there's some inertia in terms of -- because it's not a change, right, per se, like the current rules have always been in place, people have the ability to cancel their MI if they reach certain LTV levels, et cetera. So that's nothing new there. I think they're trying to have people realize that there's this optionality. They want to encourage it. They want to encourage home affordability we were fully supportive of that.

But I'd say where we -- where the MI product has been truly a massive benefit to promoting homeownership and home affordability is when we have the staff, we ran the SaaS recently. Last year, we through MI, we were able to support 75,000 first-time homebuyers in the U.S. So we think that's a very positive thing to promote homeownership and promote home affordability. So I think the consensus within the housing market is that there's definitely room and MI is a big part of that ecosystem. But obviously, having people get beyond a little bit the inertia of cancellation, et cetera. I think they're trying to develop a mechanism to make that a bit more efficient.

Operator

Your next question comes from the line of Alex Scott with Barclays.

Unknown Analyst

Wonder if you could dig a little bit more into the international growth for us, specifically kind of risk you're taking the kind of loss experience you've seen on that business, in particular, if it's Middle East and related?

Nicolas Alain Papadopoulo

Yes. So I think we are a leader in the London market and whether it's online or [indiscernible] breach. Those are coverage where we've with others, we provide, and we've been providing for a while. So I think we -- when we look at what's happening today in the Middle East, I think we look at our market share on those losses and the premium we get paid. And I think we see it more as an opportunity than anything else. So I think we trade carefully in that region, but we also want to support the insured we've been ensuring for a while in that region. So we take it seriously, and I think we trade carefully, but we see this as is doing our job in helping those insured at the time where they really need the insurance.

Unknown Analyst

Got it. That's helpful. Could you talk also about just what you're seeing in terms of private capital emergence and the reinsurance landscape and property as well, and just how Arch can take advantage of that, but also maybe some of the risks associated with the pricing environment that come along with it, your high-level perspective on some of that capital?

Nicolas Alain Papadopoulo

Yes. So third-party capital, it's a helpful tool for us, I think, for the industry in general. And I think it's -- and as pricing goes down, I think a capacity that has a lower cost of capital and the industry has been using it to provide solution to brokers and [indiscernible] and Arch is doing that. So on the property side, I think it's been there for a while. I think supply comes and goes. So I think as a carrier, we have to be able to manage that. But I think it's an interesting and valuable tool to have.

On the casualty side, I think it's on the reinsurance side, it's a little newer and untested. And it doesn't look that the product provides as much tail risk. So the question is who has the terror risk in the structure and that's still a question.

Operator

Your next question comes from the line of Cave Montazeri with Deutsche Bank.

Cave Montazeri

The first question is on the Marine Bridge premiums. As we think about your run rate -- underlying loss ratio, could you maybe help us quantify the impact had on -- during the quarter? How much did that kind of boost your action cat loss ratio this quarter?

François Morin

Yes. I mean I touched on my comments. I think it was most of the improvement. So you compare year-over-year, that was pretty much -- there's always gives and takes here and there, but try to make it clear or easy for you guys to think about it. There was most of the improvement. So you can see the premium flows through. Our international short tail and property specialty line of business in the supplement. And so it was definitely noticeable, so that's why we highlighted it.

Cave Montazeri

Got it. And thanks for the color on the insurance OpEx. I guess I'll maybe ask about that on the reinsurance side. Obviously, earned premium is coming down. But year-to-date, your OpEx ratio also improved, went down. So can you unpack what's driving that improvement? And is there anything we should keep in mind as we try to run rate that improvement going forward?

François Morin

I mean the nuance or maybe the slight -- the difference for reinsurance is there's certainly some profit commissions on third-party capital that come into play here, and it's been a relatively benign cat environment the last couple of years. So are we earning or is that a run rate? I mean that's for you guys to decide whether on a more normalized cat year, we would probably have slightly less in terms of profit commissions. But the rest, I mean, it's again, our teams are working hard to manage the expense base and kind of have that lined up with the growth in the premium, but that's, again, just back on the profit commissions that may be the one thing on reinsurance that is something to think about.

Operator

Your next question comes from the line of Andrew Kligerman with TD Cohen.

Andrew Kligerman

I'll skip my follow-up and ask this question as a couple of pieces to it. So I heard Nicolas say that casualty is attracting much more capital now. And at the same time, I think, Nicolas, you also said that you're seeing a lot of growth opportunities in insurance, casualty. And then later, I think Francois was saying he sees opportunities in casualty and reinsurance for growth. So it seems like that's the growth area.

So what I'm hoping to hear is a, where in both segments do you see the growth opportunities? And b, maybe that's -- maybe I should reverse the order. And the second part of it is in both segments what are rates terms and conditions doing? I hear in reinsurance, it's getting a little softer in terms of ceding commissions and maybe terms. So that's it.

Nicolas Alain Papadopoulo

Yes, I think you're right in a sense that the opportunity and the casualty probably more clear on the insurance than it is on the reinsurance side. And the insurance, you mentioned -- we mentioned in my comments, the lines of business that we've been growing. I think we have a decent value proposition, lots of data and historical data on the on the segments we're writing in. So we're not writing the entire market in casualty on the insurance side. We are writing -- we're not targeting the large account excess towers, which we think is still challenging. But the rest, I mean, the E&S casualty and some of the other specialty we write like construction, we feel very good about our brand and our expertise and the solutions we're solving clients in the current market environment.

On the reinsurance side, it's a little different. I think the underlying business that our guys target is very similar to what we do on the insurance side, but the terms and conditions are probably not where we'd want them to be. So I think to -- for them to be able like a piece of business, you need both the underlying to be attractive and the term condition to be attractive. And there is despite the fact that some of the major players have withdrawn, there is still an abundance of smaller players that are providing enough capacity to keep those terms and conditions in our view, too high. So it makes -- we find opportunities, but they are not as likely as in the insurance group. And the role of third-party capital it's hard. It adds another dimension to the supply on the reinsurance side. So I think it's -- it contributes to more supply, which makes it more difficult to find growth.

Andrew Kligerman

That was helpful. Maybe anything you could say on rates and casualty just in general?

Nicolas Alain Papadopoulo

So primary casualty rates have been decelerating, but there's still about loss trend. So I think we still think it's adequate overall.

Operator

Your next question comes from the line of Josh Shanker with Bank of America.

Joshua Shanker

So over the past year, you've returned 100% of your earnings to shareholders. And if you look at comprehensive income, you've returned more than 100%. So it's question you might be pushing into excess capital here. How big is that excess capital cushion that you hat you could be returning 100% of your capital or more for a while? And where does the Bermuda tax credit sit in that sort of capital availability?

François Morin

Well, I know you're hoping I'm going to give you the number, and I'm not. So that's like good try on that one. But yes, no question. I mean, right, I mean, excess capital, we talk about it a lot. We certainly don't look to carry excess capital too much of it. And we were in a position a few years ago when we are -- and our results have been very strong in the last few years, and we didn't buy back a whole lot in '24. We started buying back a little bit last year and more so in the second half of the year and a lot this year. So no question that the stock price is a factor in how much we return and how quickly.

But yes, we have accumulated a lot of excess capital over the years, and there's still some on the balance sheet. It's not -- as we've said before, it's not burning in our pockets. We're not going to go waste it, and we're very careful with it, and we want to be again, if there's a good opportunity where we can put it to work in the business, we'll absolutely -- that's always our top priority. But let's -- you look at our numbers, we do still have some excess capital that at the right time will be certainly absent some opportunity to deploy in the business, we'll return to shareholders. So that's part of that.

And part B of your question in terms of the Bermuda tax, there's no new developments. So we have talked about this potential kind of DTA going away. Is it going to be in the fourth quarter? Is it going to be next year? Is it not going to happen? There's a lot of discussions with both Bermuda government and OECD and lots of interested parties. So we're waiting or we're just -- we'll see -- we'll hear more probably over the coming months. But right now, no news to communicate.

Joshua Shanker

Well, it's probably about $900 million to $1 billion. Do you internally give yourself any capital credit for it to the rating agencies? How do you think about it when you're assessing your capital cushion?

François Morin

I mean it's capital, but internally, we look at it with and without. So we take the view, and we always run analyses with and without it because it's a possibility that we lose it. It's not a certainty. So for us, it's important to run scenarios or run models both ways.

Operator

Your next question comes from the line of Rowland Mayor with RBC Capital Markets.

Rowland Mayor

I wanted to go off Pablo's MI question. Could you maybe walk through the amount of capital that backs the pre-2023 loans that have significant HTA? I assume there would be a significant unlock there if there was a regulatory change or the friction with reduced the AI.

François Morin

Sorry, Roland, we couldn't quite -- can you repeat the question? You didn't come through clear to us. Sorry. We're not -- I mean did we lose them?

Rowland Mayor

Sorry phone issues. Going off Pablo's MI question, could you maybe walk through the amount of capital that backs pre-2023 loans that have significant HPA in case there is a regulatory change or AI reduces friction in terms of detaching those loans?

François Morin

Well, again, the -- it's in the supplement that you can look at the risk in force that is for pre-'23. We have the risk in force by year. So it's call it, pre '23, it's somewhere around 25% of our risk in force is in -- again, we got a category for 2016 and prior, which goes back longer. But big picture, call it, 25% of the risk in force.

Again, the executive order is very specific that it's going to be prospective. So it's a fair question you asked. But for us right now, it's not a concern. We were supportive of the initiative. But at this point, more to come in how the pilot program is going to work and what it's going to achieve.

Rowland Mayor

That's helpful. And then my second question, the buyback quarter-to-date, you said was a meaningful slowdown. Is that because the stock moved when you were in a blackout period? Or should we think about 3Q as a pull forward?

François Morin

Sorry, in the fourth quarter?

Rowland Mayor

Yes. I believe you said $100 million through last night, and that would be a sharp slowdown?

François Morin

I mean, again, it's -- there's a variety of considerations. It's -- I mean we were in a blackout period. So we put like a 10b5-1 plan in place, and there's limits on it, et cetera. So now that we'll be back in the open window starting tomorrow, we'll see what we do. But that's -- again, I don't want to kind of -- I want you guys to read too much into like what happened like on a daily basis because there's a lot of considerations that go into it.

Operator

Your next question comes from the line of David Motemaden with Evercore.

David Motemaden

You guys have spoken a bit about how you expect low single-digit insurance growth going forward. I'm wondering if you could just share your view on the reinsurance side just -- and maybe just touch on how you're thinking about the 1/1 property cat renewals.

Nicolas Alain Papadopoulo

Yes. We really don't give guidance. So keep that in mind. Clearly, we expect some continued pressure on the short tail book, catastrophe excess of loss and other property, which is a big part of the portfolio in reinsurance, much bigger part than in insurance. So that will put pressure on the top line. But we like the market we are in.

So I think we are trading well. We have a big book. We have great brands. So we're still finding opportunities. So I think -- and we also take underwriting actions as pricings are going down. So I think you have to put all of this together and figure out where we're going to end up at 1/1. The market on the property side, due to the fact that there hasn't been any -- it's been a light catastrophe year, you can expect continued pressure, I think, on the rates.

David Motemaden

Got it. That makes sense. I thought it was worth a try to ask about. Just maybe just following up. Interesting to hear you talk about casualty pricing still being attractive, but it sounds like moderating within North America E&S casualty and large account casualty. But at the same time, the Lloyd's pricing is moderating. Is -- it sounds like you said pricing is still above loss trend on casualty just broadly in insurance. Is that -- how narrow is that now? Like has that been narrowing enough where like that could potentially get to a point where you guys are thinking about pulling back? Or do you still think there's pretty -- still a pretty good runway to continue to grow in casualty?

Nicolas Alain Papadopoulo

So first correction is I think I said the pricing in casualty has decelerated, and now it's about loss trend to below. I think that margin now is 0 or turning negative. So that's one. The business we write, we think, has still very good margin in it. So I think there is a decent run rate in front of us for us to continue to find that business attractive.

François Morin

So I think just to clarify, we still like the absolute return. It's just that on a relative basis, it's not improving, but it's holding up. So we're still chasing or hoping to get more of that business because on an absolute level, returns are -- meet our threshold, and it's good business.

Operator

Your next question comes from the line of Tracy Benguigui with Wolfe Research.

Tracy Benguigui

I hate to be a dead horse on capital, but it was great to hear that you're in a position to return even more capital as you move forward and your buybacks this quarter were quite remarkable on a payout ratio basis. But I'm curious, if any way, if that level was debt funded. I'll just point out that out of your $2 billion debt raise, about $1.1 billion was incremental debt and the balance was prefunding. I'm also curious how you factor in negative marks in your capital return capabilities. I know at least S&P Capital cares about that.

François Morin

Well, I mean, part 1, no question, yes, we talked about it last quarter. The debt raise in June, you're right, had about $1.1 billion of incrementally new capital effectively that we earmarked for general corporate purposes and share buybacks being one of those. The buybacks in the third quarter, where does it come from exactly? It's all the same pot of money, right? But you're right, that certainly helped kind of help support the buybacks in the third quarter.

Our debt to leverage -- debt-to-capital ratio is still very low. We've got a debt maturing in December that will reduce it further, $500 million that will be redeemed or repaid back in December. So we're still in a very, very low leverage position in terms of debt to capital. So in terms of -- again, people ask about M&A, and we got capacity here. So we're -- and we want to maintain that capacity. It's just that we ended up effectively being at a -- we felt a level that was probably a little bit too conservative pre this debt issuance. So we're still in a very good spot. And discussions with the rating agencies, they are, I'd say, very supportive of our approach and our philosophy around capital management.

So right now, no concerns and the mark-to-market, I mean, our mark-to-market, the question part B on more on the move in interest rates, I think the impact for us was noticeable, obviously, in the third quarter, but not in a material way that we have like issues that we have to think about.

Tracy Benguigui

Yes. Understood. I have a big picture question. Arch is known for cycle management. But in the last soft cycle, you were much smaller and perhaps more nimble. So how should we expect you navigate this soft cycle? Is it fair to assume maybe a less intense push on nonrenewals?

Nicolas Alain Papadopoulo

So on the reinsurance side, I would say, yes. But again, we have different tools today that we had back then. I think if you look at our gross number and ceded number and net number on the reinsurance side, a large portion of our premium is already ceded to sidecars or third-party capital. So I think for us, the philosophy is to really manage the net portfolio and ultimately stay in front of our clients. We have a leadership position and really figuring out and working with third-party capital, which I mentioned have lower cost of capital to be able to solve -- find solutions for our cedents and brokers. So that's how we see it.

Tracy Benguigui

And on the insurance side?

Nicolas Alain Papadopoulo

Insurance side, I think it's a little different because our brand is a our relationship with distribution partners is a lot more relevant than it was probably 5 or 6 years ago, I think. So I think we -- and there is a flight to quality in terms of the company our distribution partner wants to trade with. So we're benefiting from that. And the solution we provide and the -- I think it is a lot more data analytical work that we've done to manage our portfolio, it's a lot more granular.

So I think we can maintain margin by just attacking a small portion of the business that is the worst part of any one portfolio. So I think we are much more granular in terms of our approach. I don't expect that managing the cycle in the next 3 or 4 years will mean cutting large portions of our business on the insurance side. I think it will be more being very laser focused on the worst business in our -- each of our portfolio and making sure that we change the mix towards business in that portfolio that have a better loss ratio. That's how we see it.

Operator

Your next question comes from the line of Brian Meredith with UBS.

Brian Meredith

Just quickly here, Francois. On the Iran conflict premiums that you had in the quarter, the marine stuff, I'm assuming that as long as the war is going on, you're still writing that business. So should we expect you'll see similar benefits in the fourth quarter from that? Or is the business just not as profitable as you maybe think it is and maybe you're dialing it back?

François Morin

No, you should absolutely expect similar levels in the fourth quarter. Beyond that, I mean, it will be a function of -- we just have to watch the news and you'll get a sense, but no question that the business is still priced very -- we think, at a very attractive level. I mean, there's inherent risk in that business. We get it. We understand it. Nicholas touched on it. I mean we're doing it carefully. But in terms of the amount of premium that we expect to write in the fourth quarter, I would expect a similar amount.

Brian Meredith

Makes sense. And then second question, just bigger picture. We're hearing -- continue to hear a lot about business moving from the non-admitted market to the admitted markets. I'm just curious, are you seeing that happening yourself? Obviously, you got non-admitted and admitted. And then when that happens, is that good or bad for you all if I think about going from non-admitted to admitted?

Nicolas Alain Papadopoulo

So anecdotally, we hear that. We hear some of our wholesale brokers when they lose an account and we lose the account complaining that it stayed with the retailer. So they found an admitted market. And it's true on property and real estate, and it's true on casualty. But we don't have a good line of sight into specific numbers. But certainly, we're hearing more of it.

So for us, I think we write very different -- we have very different channels. So we -- certain products we write on an E&S basis, certain products we write on the retail basis. So I think when the wholesaler lose the business to the retail market, I think it hurts our E&S franchise. For those particular risk, I don't think we pick them up on the retail side because we don't want channel conflict.

Operator

Your next question comes from the line of Bob Huang with Morgan Stanley.

Unknown Analyst

This is Sid on for Bob. One more question on the Iran conflict. I know you guys mentioned it impacted the cat losses in insurance, too. I was wondering if you could give us a sense of what was the like premium and the like cat loss dollar amounts in that?

François Morin

Well, I mean, it's a lot less on the loss side, the $230 million or so of cat losses, it's a lot less than half of that number in the quarter. We don't disclose individual numbers by event. So I mean that's how we think about it. And in terms of premium, again, I pointed you -- there is some premium on the reinsurance side that we're getting also given our reinsurance structures of some syndicates at Lloyd's.

So we're picking that up, but that's smaller, but more -- the bigger impact is on insurance, and I pointed you to the volume or the premium numbers in the supplement in the international kind of line of business for short-tail property. So that's kind of how you can get a sense of the amount of business we wrote there.

Unknown Analyst

Okay. And then a follow-up just on capital management. do you have any thoughts on continuing or accelerating share repurchases for the quarter versus potentially doing another special dividend?

François Morin

I mean, at this point, given the stock price, I think we're certainly more in favor or I think share buybacks make more sense to how we think about returning capital. So that would be the preferred approach at this point. And at the pace, again, we touched on it earlier. I think there's no set kind of number that we try to get to. It's a reaction a little bit to the stock price and what we see in the market. So could it go up? Could it go down? I mean we don't know. I mean, ultimately, it will be something that happens over time.

Operator

Your next question comes from the line of Mike Zaremski with BMO.

Michael Zaremski

Maybe first, kind of a macro question, given you guys have a bird's eye view into a lot of markets. In terms of kind of data center-related premiums, a couple of industry executives have talked about kind of $10 billion net new insurance premiums in the marketplace this year and likely to grow in the future. Just kind of curious if from your vantage point, you're seeing an opportunity there and you think that the opportunity is really indeed that large.

Nicolas Alain Papadopoulo

So yes, I think the number -- talking to the major brokers and if you look at what they're write and sum them up. I think it sounds right, around EUR $10 billion new business. For us, it's an opportunity, but it's a big opportunity. I think we write it at our London office. And so we have a construction team there that participate on some of the -- lead some of the panels, but premium-wise, I don't think it's a game changer for us.

Michael Zaremski

Got it. And follow-up on some of your playing offense, and I know you've been playing a bit of offense in E&S casualty a while. Is that more like small account or middle? I think you said it's not large. Just kind of curious what sandbox that is.

Nicolas Alain Papadopoulo

Yes. So it's not the national accounts, like the big chains or the big retailers or the -- we are more in the, I would say, middle market. I think the accounts are our average account premium is in the hundreds of thousands. So I think it's not small. We're not competing with the binding authority or the small E&S. I think we are we are more in the middle market, and I think our insured are the construction company, the energy companies, but not the contractors, but not the really national retail accounts.

Michael Zaremski

Got it. And maybe just sneaking one last one in, probably an easy one. But reinsurance margins continue to be excellent, especially on an underlying loss ratio basis. If the consensus is right that reinsurance pricing continues to decelerate or decline. Just the -- should we just continue to expect the underlying loss ratio to kind of glide path up from low 60s to mid-60s. I know there's lots of moving parts there, but directionally.

François Morin

Yes. I mean it certainly -- it should go up. I think just the reality of like rates coming down a little. I don't think it's going to it's going to -- it's big like that. It's not going to be a stair step. It's going to happen gradually and maybe it plateaus, if rates going to stabilize. But yes, I mean, it probably could go up. Couple of hundred basis points maybe over the next little while. I mean depending again on how -- I mean, 1/1 renewals will have an impact, et cetera. And then the mix obviously is always part of the answer.

Operator

Your next question comes from the line of Meyer Shields with KBW.

Meyer Shields

I just had a couple of quick questions. One, corporate expense is only $22 million in the quarter. Is there anything unusual there?

Nicolas Alain Papadopoulo

Well, again, the RTCs being a quarter over -- year-over-year, that's part of the answer, right? No question that we didn't have QRTC credits in Q3 of '25. We had them this quarter. So that's most of it. There's also a variety of expenses that we had last year, consulting, et cetera. So I mean it's too many to list, but the big item this quarter was definitely QR TCs. And again, that's sustainable. So as you look forward, something to think about.

Meyer Shields

Okay. Perfect. And second, does the rising interest rate environment have any implications for loss trends for short tail lines?

Nicolas Alain Papadopoulo

I would say it's neutral because the rate is applied to the values on the shorter lines. So if the underwriter does a good job or the broker does a good job, total -- some insured should be adjusted to reflect the inflation. It's never perfect. So there's as inflation step up, they may be momentarily an adjustment that we make to estimate the catch-up that needs to happen for the replacement cost. But I think it's not a big factor, I think, except in transition time.

Operator

Your next question comes from the line of Chris Hartwell with Autonomous Research.

Christopher Hartwell

A couple of quick ones. First of all, just on reinsurance. Think into and post Monte Carlo, the brokers have been increasingly talking about the need for reinsurers to take more frequency. I think given what we've seen on pricing over the course of this year, I was wondering if your views on how much scope there is for the reinsurance industry collectively and also your attitude to accepting that increased frequency.

Nicolas Alain Papadopoulo

So we don't have an issue with frequency. The -- I think we have to recognize that it's harder to price and severity and for us, we are agnostic as long as we get paid for the risk we take. So we do a lot of sublayers. We used to do it, and we still do some -- so yes, I think what the brokers have been talking about is selling more suppliers with pricing going up, attachment point have raised up. And so there is an opportunity to bring the attachment point of the program down. And I think we will support that as long as we get paid for the risk.

Christopher Hartwell

Okay. And secondly, just on some of the new law that's been around one of your equity investments as in recent weeks. I wondered if you could just, I guess, remind me of your sort of thoughts and views around that specific investment and how -- I guess, how important that relationship is to [indiscernible]

Nicolas Alain Papadopoulo

It's very important. I think we actually love the investment. I think we -- it's been good to us to -- so we -- there's nothing to complain. And we like the business. I think we like the business. We like the management team there, the CEO. We have a lot of confidence in their ability and they've done a great job. They were really the #3 players. And I think now they're probably competing to be the #1 player in the space. So I think we I think it's -- we like it a lot.

François Morin

Yes. I think the structure, people, yes, it's an investment, but we think of it as a quota share on a top-notch credit insurer. So it's almost slightly different structure, but the results have been terrific, and we're very happy with it.

Operator

Your next question comes from the line of Yaron Kinar with Mizuho.

Yaron Kinar

First one, hopefully, a quick one. Just with the rides that we've seen in France and across Europe, I just want to confirm that, that should not really drive any significant losses for the industry and effort?

François Morin

Yes. I mean, for us, yes, in the industry as well, I think our understanding is it's -- I mean, it's de minimis. I mean I've seen numbers about, call it, $1 billion, I mean it could be ongoing. It seems like every Saturday, the French get together to protect a bit more, but it's not something we do it in a big way. So it's -- for us, I wouldn't expect anything material in the fourth quarter on that.

Yaron Kinar

Okay. And then my second question, maybe a little unfair to ask or difficult to answer, but I'll try anyway. With the appetite that you guys still have in casualty, particularly in reinsurance, it does stand out a bit relative to what we're hearing from other executives in the. Just trying to figure out why that would be.

I mean, ultimately, it is a fairly -- my assumption is that the terms and conditions and the pricing doesn't really fluctuate a whole lot from when reinsured for the other. So what is it that allows you to see this as a more attractive liability or risk than others? Is it that you have a lower cost of capital? Are there other parameters that I'm missing here?

Nicolas Alain Papadopoulo

No, I think it's a better loss experience than our competitors. I think we did unwrite a lot of casualty back in the 50s, 60s, 70s. We started to write a bit more and in 2021. But ultimately, our loss pick haven't really moved. And so that gives us confidence that we have the right terms and condition on the reinsurance, supporting the book of business that closer to what we do on the insurance side, I think it's good business.

Operator

Your next question comes from the line of David Motemaden with Evercore ICI. Please go ahead.

David Motemaden

Just a quick one on the insurance underlying loss ratio. If I just sort of assume that, I guess, all of the improvement year-on-year is coming from Iron incremental premiums, it was basically flat year-on-year at 57.5%, which is up quite a bit versus the first couple of quarters, which I know there's seasonality, but you had also improved the loss ratio year-on-year in the first half versus roughly flat in 3Q. So I'm wondering if there's anything else underneath that? Or if it's just purely a mix dynamic?

François Morin

Yes. I mean, we -- again, I mean, we would steer you to look at trailing 12 months. I think that's certainly how we look at it. There's always going to be some noise on quarter good or bad, and that influences the latest. So yes, this quarter might be a little bit elevated. There's a couple of claims here and there. But I mean our view is like what we've done last 12 months, even if you adjust for the Iran conflict is, call it, it's been flattish in terms of like compared to a year ago and given that we'll have some of the underwriting actions we've taken with programs as we look forward, we'd like to think range that we're talking about in terms of ex cat accident unit loss ratio is kind of generally in the right direction for '27.

Operator

I'm not showing any further questions. I would now like to turn the conference over to Mr. Nicolas Papadopoulo, for closing remarks.

Nicolas Alain Papadopoulo

So thank you for your time today. And I want to remind you that you're all invited to our 25th anniversary we are ringing the bell at the NASDAQ in a few weeks. So we hope to see you there. Thank you.

Operator

Ladies and gentlemen, thank you for participating in today's conference.