How did Arch's underwriting profitability change in Q4 2025?

Underwriting income rose 32.3% to $827 million, and the consolidated combined ratio improved 4.4 points to 80.6%. The gain came mainly from lower catastrophe losses, which fell to 3.9 points from 9.5 points, and from a lower loss ratio of 53.6% versus 57.5%.

Why did net premiums written decline even though gross premiums grew?

Gross premiums written rose 1.1%, but net premiums written fell 4.5%. The release attributes the gap to changes in net-to-gross retention, a timing effect from ceded premium accruals tied to the 2024 MCE acquisition, and a higher level of ceded premium in the Reinsurance segment, including a retrocession timing shift in property catastrophe.

Which segment is the strongest, and which is the weakest?

The Reinsurance segment is the strongest, with a 77.0% combined ratio and $458 million of underwriting income. The Insurance segment is the weakest, with a 94.0% combined ratio and only $119 million of underwriting income, though it improved from 98.5% a year earlier. Mortgage posted $250 million of underwriting income with a 13.7% combined ratio, which reflects favorable prior-year development.

How much capital did Arch return to shareholders, and what is its balance sheet position?

Arch repurchased $798 million of common shares in Q4 2025 and $1.9 billion for full-year 2025. Book value per share reached $65.11, and total capital available to Arch was $26.9 billion. The debt-to-total-capital ratio fell to 10.1% from 11.6% a year earlier, and roughly $1.1 billion remained on the repurchase authorization at year-end.

Are the Q4 earnings benefits likely to recur?

Some of the benefit is non-recurring or variable. Current-year catastrophe losses were low, with about $164 million in Q4 compared with $393 million a year earlier, and the favorable reserve development and reinsurance tax credit benefits may not repeat at the same level. The after-tax operating result of $2.98 per share is a better gauge of underlying performance because it excludes realized gains, equity-method income, and FX effects.

ARCH CAPITAL GROUP LTD. 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed February 9, 2026. Cited figures are marked; the original filing is the authoritative source.

Arch Capital Group (ACGL) reported strong 2025 fourth-quarter results on February 9, 2026.

Net income available to common shareholders was $1.2 billion^a, or $3.35 per diluted share, producing a 21.2% annualized return on average common equity. After-tax operating income was $1.1 billion, or $2.98 per share, a 18.9% annualized operating return. Book value per common share rose 4.5% sequentially to $65.11, and the company repurchased $798 million of stock during the quarter.

Underwriting income reached $827 million^b, up 32.3% year over year, with a consolidated combined ratio of 80.6%, improved from 85.0% a year earlier. The quarter's profitability was supported by low current-year catastrophe losses of $164 million (about 3.9 points of the loss ratio) and $118 million of favorable prior-year reserve development. The Reinsurance segment was the standout, with a 77.0% combined ratio and $458 million of underwriting income, helped by a full-year benefit from Bermuda's qualified refundable tax credits.

The Mortgage segment earned $250 million^c of underwriting income on continued favorable reserve development and a low expense ratio. The Insurance segment was weaker, with a 94.0% combined ratio, though this was an improvement from 98.5% a year earlier. Topline growth was modest.

Gross premiums written rose 1.1% to $4.8 billion^d, but net premiums written fell 4.5%, partly reflecting higher ceded premiums and timing effects tied to the prior-year MCE acquisition. For full-year 2025, net income available to common shareholders was $4.36 billion, or $11.60 per diluted share, and operating return on equity was 17.1%. Investors will likely focus on whether the company can sustain underwriting margins as pricing softens, how much capital is returned through buybacks, and whether the reported net premium decline reflects a deliberate underwriting discipline or a loss of market share.

02—Key points

Key Highlights

Q4 2025 diluted EPS of $3.35 (GAAP) and $2.98 (after-tax operating), versus $2.42 and $2.26 in Q4 2024.
Combined ratio improved to 80.6% from 85.0%, with underwriting income up 32.3% to $827 million.
Current-year catastrophe losses were modest at $164 million, and favorable prior-year development was $118 million.
Reinsurance segment combined ratio was 77.0%, benefiting from a full-year Bermuda QRTC tax credit benefit.
Book value per share grew 4.5% sequentially to $65.11, and the company repurchased $798 million of shares in the quarter.
Net premiums written declined 4.5% to $3.6 billion, even though gross premiums written grew 1.1%.
Full-year 2025 diluted EPS was $11.60, with a 20.1% annualized GAAP return on average common equity.

03—Questions

Frequently Asked Questions

How did Arch's underwriting profitability change in Q4 2025?
Underwriting income rose 32.3% to $827 million, and the consolidated combined ratio improved 4.4 points to 80.6%. The gain came mainly from lower catastrophe losses, which fell to 3.9 points from 9.5 points, and from a lower loss ratio of 53.6% versus 57.5%.
Why did net premiums written decline even though gross premiums grew?
Gross premiums written rose 1.1%, but net premiums written fell 4.5%. The release attributes the gap to changes in net-to-gross retention, a timing effect from ceded premium accruals tied to the 2024 MCE acquisition, and a higher level of ceded premium in the Reinsurance segment, including a retrocession timing shift in property catastrophe.
Which segment is the strongest, and which is the weakest?
The Reinsurance segment is the strongest, with a 77.0% combined ratio and $458 million of underwriting income. The Insurance segment is the weakest, with a 94.0% combined ratio and only $119 million of underwriting income, though it improved from 98.5% a year earlier. Mortgage posted $250 million of underwriting income with a 13.7% combined ratio, which reflects favorable prior-year development.
How much capital did Arch return to shareholders, and what is its balance sheet position?
Arch repurchased $798 million of common shares in Q4 2025 and $1.9 billion for full-year 2025. Book value per share reached $65.11, and total capital available to Arch was $26.9 billion. The debt-to-total-capital ratio fell to 10.1% from 11.6% a year earlier, and roughly $1.1 billion remained on the repurchase authorization at year-end.
Are the Q4 earnings benefits likely to recur?
Some of the benefit is non-recurring or variable. Current-year catastrophe losses were low, with about $164 million in Q4 compared with $393 million a year earlier, and the favorable reserve development and reinsurance tax credit benefits may not repeat at the same level. The after-tax operating result of $2.98 per share is a better gauge of underlying performance because it excludes realized gains, equity-method income, and FX effects.

04—Continue

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