Arch Capital Group (ACGL) Q4 2025 earnings summary

Executive summary

• Achieved $1.1B after-tax operating income in Q4, up 26% year-over-year, and $3.7B for the full year, a record high.

• Net income available to common shareholders was $1.2B ($3.35 per share), up from $925M ($2.42 per share) year-over-year, with a 21.2% annualized net income ROE.

• Specialty insurance, reinsurance, and mortgage insurance lines generated $22.9B in gross premiums written for FY 2025, with insurance and reinsurance each contributing nearly half and mortgage 6%.

• Book value per share rose 22.6% in 2025, with a 17.1% annualized operating ROE.

• Diversified business model and disciplined underwriting support consistent value creation and reduced earnings volatility.

Financial highlights

• Book value per common share plus cumulative dividends reached $65.11 in 2025, with a 15.9% CAGR since inception.

• Q4 after-tax operating income per share was $2.98; annualized net income ROE reached 21.2%.

• Q4 consolidated combined ratio was 80.6%; ex-cat accident year combined ratio was 79.5%, down 100 bps sequentially.

• Net investment income for Q4 was $434M, with an additional $155M from equity method investments; pre-tax investment income yield was 4.22%.

• Investable assets totaled $47.4B at year-end 2025; tangible shareholders' equity increased to $22.98B.

Outlook and guidance

• Expect 2026 effective tax rate to return to 16%-18% range.

• Full-year 2026 catastrophe losses estimated at 7%-8% of net earned premium.

• QRTCs expected to lower reinsurance segment operating expense ratio to 3.9%-4.5% and corporate expenses to $80-$90M in 2026.

• Management expressed optimism for 2026, citing a strong diversified platform and effective cycle management.