Arch Capital Group (ACGL) investor relations material

Executive summary

• Achieved record Q3 2025 results with net income available to common shareholders of $1.34 billion, up 37% year-over-year, and after-tax operating income of $1.0 billion, with annualized net income ROE of 23.8% and operating ROE of 18.5%.

• Book value per share increased 5.3% in Q3 to $62.32 and 17.3% year-to-date, reflecting strong underwriting and investment returns.

• All three business segments—insurance, reinsurance, and mortgage—contributed meaningfully to results, with diversification across products and geographies reducing earnings volatility.

• $732 million in share repurchases completed in Q3, with $1.1 billion year-to-date and $1.9 billion remaining authorized.

• Focus on underwriting discipline, conservative balance sheet, and dynamic capital allocation to generate superior risk-adjusted returns and minimize volatility.

Financial highlights

• Net premiums earned were $4.29 billion in Q3 2025, up 8% year-over-year; net investment income reached a quarterly record of $408 million, with total investable assets at $46.7 billion.

• Combined ratio improved to 79.8% for the quarter, with a nine-month combined ratio of 83.6%.

• Book value per common share plus cumulative dividends reached $62.32 as of September 2025, reflecting a 15.9% compound annual growth rate since inception.

• Net realized gains were $210 million in Q3 2025, up from $169 million year-over-year.

• Total capitalization reached $26.4 billion as of September 2025, with debt/preferred to total capitalization at 13.5%.

Outlook and guidance

• Management expects continued profitable growth, especially in middle market and casualty lines, with insurance premium growth anticipated to outpace the market.

• Reinsurance growth outlook tempered by cedents retaining more risk, but margin mix expected to improve.

• Mortgage segment expected to provide steady earnings with high credit quality and low delinquency rates, on pace for ~$1 billion underwriting income for the year.

• Capital return to shareholders, primarily via buybacks, will remain a focus in the near term.

• Management remains optimistic about continued strong financial performance, citing a favorable market environment and a relatively quiet quarter for natural catastrophes.