Arch Capital (ACGL) 2026 年第 3 季法說會：營業利益 9.1 億美元，股票回購 14 億美元

重點速覽

• Arch Capital Group (NASDAQ: ACGL) 公布 2026 年第三季稅後營運收益為 9.1 億美元，即每股 2.67 美元。年化平均普通股權益營運報酬率為 16.0%，年化淨收益 ROE 則達 18.1%。
• 三大業務部門的承保業務均保持獲利。保險、再保險與抵押貸款業務分別產生 1.08 億美元、3.93 億美元與 2.01 億美元的承保收益。
• 扣除再保險與加保保費後，當期巨災損失為 2.34 億美元。前期準備金有利發展總計 1.79 億美元，使整體綜合成本率降低 4.5 個百分點。
• Arch 在本季度以 14 億美元回購了 1,480 萬股股票。在法說會前一夜，該公司又回購了約 1 億美元股票，並表示若有機部署機會持續有限，可能會進一步進行資本回報。
• 由於財產險及短尾險定價軟化，再保險保費規模有所下滑。管理層預期 1 月 1 日續保時將繼續面臨壓力，並表示基礎再保險損失率隨時間推移可能會上升數百個基點。
• 與伊朗衝突相關的水險戰爭風險業務支撐了保險保費成長與損失率改善。管理層預期，視地緣政治發展而定，2026 年第四季相關保費規模將維持在類似水準。

關鍵財務數據

業務與營運表現

保險

保險承保收益為 1.08 億美元，綜合成本率為 94.4%，不含巨災的當前事故年綜合成本率為 89.2%。

簽單毛保費年增 7.8%，簽單淨保費年增 2.7%。成長得益於替代市場中的新專屬自營保險計畫（captive program），以及與伊朗衝突相關的額外全球水險承保。

在扣除計畫中縮減的中型市場商業專案業務後，2026 年前九個月的簽單毛保費成長 4.2%，簽單淨保費成長 1.6%。

不含巨災的事故年損失率改善 170 個基點至 55.8%。管理層將大部分改善歸因於水險戰爭風險承保帶來的增量已實現保費。

Arch 繼續在北美超額及剩餘（E&S）責任險、建築險與大型客戶責任險中尋找機會。在國際市場方面，其勞合社（Lloyd's）平台支撐了特種險的成長。財產險與短尾險市場競爭更加激烈，而責任險的費率漲幅則持續放緩。

再保險

再保險業務產生 3.93 億美元的承保收益，綜合成本率為 78.3%。簽單毛保費年減約 8%，簽單淨保費則年減 9.3%。

此業務縮減反映了財產險及其他短尾險種的費率下降與參額減少。由於長尾業務比重提高以及定價競爭加劇，不含巨災的事故年綜合成本率上升 160 個基點至 78.4%。

Arch 正在更廣泛地利用第三方資本來管理淨風險敞口並維持客戶關係，同時限制投入低報酬業務的自有資金。管理層表示，責任再保險機會依然存在，但條款與條件總體上不如直保（原生保險）具吸引力。

抵押貸款

抵押貸款承保收益為 2.01 億美元。截至 9 月 30 日，美國抵押貸款保險違約率維持在 2.2% 的低水準，投資組合續保率（persistency）約為 80%。

前期準備金的有利發展較前幾年有所放緩，但治癒（cure）活動依然強勁。較高的抵押貸款利率限制了自願性轉貸活動，從而繼續支撐續保率。

在美國主要房貸保險之外的業務本季產生了 6,600 萬美元的淨保費。管理層表示，近期宣布的房貸保險取消試點計畫不會對近期產生影響，因為該計畫僅適用於未來的新增房貸。

投資與資本

淨投資收益為 4.51 億美元，權益法投資為稅前淨收益貢獻了 2.24 億美元。新資金收益率比固定收益投資組合的帳面收益率高出約 65 至 70 個基點，管理層預期這將對未來的投資收益提供支撐。

Arch 在 2026 年前九個月回購了相當於其淨收益約 109% 的股票。管理層表示，6 月發行的債券提供了約 11 億美元的增量資本，用於一般企業用途（包括股票回購）。一筆 5 億美元的到期債務預計於 12 月償還。

管理層展望

管理層預期保險業務的成長將維持選擇性策略，而非追求規模驅動。管理層看好 2027 年在美國中型市場、E&S 責任險、建築險及精選倫敦特種險種的成長潛力，不過並未提供具體的保費量化指引。

保險費用率可能較目前水準小幅下降。管理層提及百慕達的經常性稅額扣抵、中型市場重覆整合費用的結束，以及持續推進的效率提升措施。

針對 2026 年第四季，管理層預計，在目前狀況持續的前提下，與伊朗衝突相關的水險戰爭風險保費將維持在與第三季相似的水準。

在再保險方面，管理層預期 1 月 1 日續保時，財產巨災險及其他短尾險種將繼續面臨定價壓力。根據續保定價與業務組合的情況，基礎損失率可能會漸進上升數百個基點。

管理層表示，直保責任險定價漲幅已放緩至接近或低於損失成本趨勢。然而，Arch 仍認為其承保的特定責任險業務能帶來可接受的絕對報酬。

風險與關注焦點

• 充沛的再保險產能正對財產險及短尾險的定價、參額水準與保費成長構成壓力。
• 責任險定價放緩，導致部分市場中超過損失成本趨勢的利潤空間收窄或消失。
• 伊朗衝突風險敞口既帶來了額外保費，也帶來了巨災損失。該衝突佔第三季巨災總損失的比重遠低於一半，但未來營運結果仍取決於地緣政治發展。
• 管理層特別提到聚焦於責任險的第三方資本結構存在不確定性，尤其是最終由哪些參與者承擔尾部風險。
• Arch 在單一 250 年一遇事件中的頂峰區域淨天然巨災最大可能損失（PML）微幅上升至 19 億美元，相當於有形股東權益的 8.6%。
• 百慕達遞延所得稅資產的潛在處理方式仍具不確定性。Arch 在評估其資本狀況時，會同時考量包含與不包含該資產的情形。

分析師問答重點

資本回報：管理層表示，在當前股價下，回購仍是回饋資本的首選方式。回購節奏將取決於估值、有機成長機會與交易窗口限制。併購主要被視為戰略決策，而非資本管理工具。

因應軟化週期：在再保險方面，Arch 計劃利用第三方資本來管理淨風險敞口，同時維持與經紀人及分保公司的關係。在保險方面，在細粒度數據與分析的支援下，管理層預計將進行更有針對性的投資組合調整，而非廣泛的不予續保。

責任險機會：最明確的機會存在於直保（原生保險），特別是中型市場 E&S 責任險、建築險及精選特種風險。由於儘管基礎業務具吸引力但分保條款仍具競爭性，再保險責任險的成長相對受限。

房貸保險監管：管理層預計取消試點計畫不會對近期產生影響。約有 25% 的生效房貸保險風險屬於 2023 年之前的年份保單，而當前計畫僅針對未來生效保單。

資料中心：管理層認同經紀人對約 100 億美元新市場保費的估算看起來相當合理。Arch 透過其倫敦建築團隊參與其中，但預計該機會不會成為公司保費成長的主要驅動力。

法說會完整逐字稿

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完整財報電話會議逐字稿

管理層陳述

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.

分析師問答

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.