Arch Capital Group Ltd. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net income available to common shareholders was $1.0 billion ($3.00 per share), a decrease from $1.3 billion ($3.56 per share) in the third quarter of 2025.
• After-tax operating income available to common shareholders was $910 million ($2.67 per share), down from $1.0 billion ($2.77 per share) in the prior year period.
• Annualized net income return on average common equity was 18.1%, compared to 23.8% in the third quarter of 2025.
• Annualized operating return on average common equity was 16.0%, compared to 18.5% in the third quarter of 2025.
• Gross premiums written were $5.4 billion, a 0.4% decrease from $5.4 billion in the prior year period.
• Net premiums written were $3.8 billion, a 3.0% decrease from $4.0 billion in the prior year period.
• Net premiums earned were $4.0 billion, a 6.3% decrease from $4.3 billion in the prior year period.
• Underwriting income was $702 million, a 19.4% decrease from $871 million in the prior year period.
• The combined ratio was 82.5%, an increase of 2.7 percentage points from 79.8% in the prior year period.
• The combined ratio excluding catastrophic activity and prior year development was 81.2%, an increase of 0.7 percentage points from 80.5% in the prior year period.
• Pre-tax current accident year catastrophic losses were $234 million.
• Favorable development in prior year loss reserves was $179 million.
• Net investment income was $451 million, up from $408 million in the prior year period.
• Net realized losses were $99 million, compared to net realized gains of $210 million in the prior year period.
• Equity in net income of investments accounted for using the equity method was $224 million, up from $134 million in the prior year period.
• Corporate expenses were $5 million, down from $28 million in the prior year period.
• Interest expense was $62 million, up from $37 million in the prior year period.
• Net foreign exchange gains were $18 million, compared to net foreign exchange losses of $7 million in the prior year period.
• Book value per common share was $67.90 at September 30, 2026, a 0.2% decrease from June 30, 2026.
• Average common shareholders' equity was $22.7 billion.

Business Segments and Product Lines:

• Insurance Segment: Gross premiums written increased 7.8% to $2.8 billion; net premiums written increased 2.7% to $2.0 billion. Underwriting income was $108 million, down 16.3% from $129 million. The combined ratio was 94.4% (up 1.0 points), while the combined ratio excluding catastrophe and prior year development was 89.2% (down 2.1 points). Catastrophic activity contributed 5.7 percentage points to the loss ratio.
• Reinsurance Segment: Gross premiums written decreased 8.0% to $2.3 billion; net premiums written decreased 9.3% to $1.6 billion. Underwriting income was $393 million, down 18.5% from $482 million. The combined ratio was 78.3% (up 2.2 points), while the combined ratio excluding catastrophe and prior year development was 78.4% (up 1.6 points). Catastrophic activity contributed 6.9 percentage points to the loss ratio, offset by 7.4 percentage points of favorable prior year development.
• Mortgage Segment: Gross premiums written decreased 4.2% to $316 million; net premiums written decreased 4.0% to $263 million. Underwriting income was $201 million, down 22.7% from $260 million. The combined ratio was 25.5% (up 12.0 points), while the combined ratio excluding prior year development was 41.6% (up 8.9 points). Favorable prior year development reduced the loss ratio by 15.4 percentage points.

Other Key Points:

• Share repurchases totaled $1.4 billion during the quarter.
• The Insurance segment completed the acquisition of the U.S. MidCorp and Entertainment insurance businesses from Allianz (MCE Acquisition) on August 1, 2024.
• Amortization of intangible assets was $30 million, down from $49 million in the prior year period, primarily related to lower amortization of assets from the MCE Acquisition.
• The effective tax rate on income before income taxes was 15.1% for the quarter, compared to 13.7% in the prior year period.
• Income from operating affiliates was $33 million, down from $62 million in the prior year period, primarily reflecting investments in Somers Group Holdings Ltd. and Coface SA.
• The Company has approximately $27.3 billion in capital as of September 30, 2026.
• A conference call for investors and analysts is scheduled for October 28, 2026, at 10:00 a.m. Eastern Time.