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Jun 30
Arch Capital Q2 2025 Earnings Report
Arch Capital reported strong earnings in Q2 2025 with $1.2 billion in net income and solid contributions from its reinsurance and mortgage segments.
Key Takeaways
Arch Capital delivered robust Q2 2025 results, achieving $1.2 billion in net income and $979 million in operating income. The reinsurance and mortgage segments saw strong underwriting income, while overall underwriting and investment income contributed positively despite catastrophe losses.
Net income reached $1.227 billion, or $3.23 per diluted share.
After-tax operating income was $979 million, or $2.58 per share.
Combined ratio excluding catastrophic activity and prior year development was 80.9%.
Total underwriting income reached $818 million, led by reinsurance and mortgage segments.
Arch Capital
Arch Capital
Arch Capital Revenue by Segment
Revenue by Segment
Insurance Revenue
CapyFin.comReinsurance Revenue
CapyFin.comMortgage Revenue
CapyFin.com Forward Guidance
Arch Capital remains optimistic with a focus on disciplined underwriting and growth in core segments, while noting headwinds from foreign exchange volatility and regulatory impacts.
Positive Outlook
- Solid underwriting profitability across all segments
- Reinsurance segment grew premiums and maintained a low combined ratio
- Stable mortgage insurance performance with favorable reserve development
- Strong investment returns driven by market performance
- Continued capital return through share repurchases
Challenges Ahead
- Foreign exchange losses of $88 million impacted results
- Higher underwriting loss ratio in the insurance segment due to MCE acquisition
- Lower premiums in the mortgage segment reflecting market conditions
- Slightly higher expense ratios in reinsurance and mortgage segments
- Impact of Bermuda's new corporate income tax on effective tax rate