Arch Capital .(US:ACGL)2025-10-27 20:06Financial Performance - Gross premiums written for Q3 2025 were $5,410 million, a decrease of 0.6% compared to $5,440 million in Q3 2024[14] - Net premiums earned increased by 7.9% to $4,285 million in Q3 2025 from $3,970 million in Q3 2024[14] - Underwriting income rose by 61.9% to $871 million in Q3 2025, compared to $538 million in Q3 2024[14] - Net income available to Arch common shareholders for Q3 2025 was $1,340 million, a 37.0% increase from $978 million in Q3 2024[14] - After-tax operating income available to Arch common shareholders increased by 36.7% to $1,042 million in Q3 2025 from $762 million in Q3 2024[14] - Total revenues for Q3 2025 reached $5,109 million, up from $4,722 million in Q3 2024, representing an 8.2% year-over-year growth[18] - Net income attributable to Arch for Q3 2025 was $1,350 million, compared to $988 million in Q3 2024, reflecting a 36.7% increase[18] Underwriting Metrics - The loss ratio improved to 51.4% in Q3 2025, down from 60.5% in Q3 2024, reflecting a 9.1 percentage point decrease[14] - The combined ratio decreased to 79.8% in Q3 2025 from 86.6% in Q3 2024, indicating improved underwriting performance[14] - The combined ratio for the insurance segment was 93.4%, indicating a slight improvement in underwriting performance[35] - The loss ratio for the insurance segment was 59.0%, reflecting the proportion of claims paid relative to premiums earned[35] - The loss ratio for Q3 2025 was 59.0%, a decrease from 61.6% in Q3 2024, indicating improved underwriting performance[47] - The combined ratio for Q3 2025 was 93.4%, consistent with Q2 2025, and an improvement from 93.1% in Q3 2024[47] Assets and Liabilities - The company reported total assets of $79,185 million as of September 30, 2025, an increase from $73,656 million a year earlier[21] - Total liabilities were $55,466 million as of September 30, 2025, compared to $51,382 million a year prior, reflecting an 8.1% increase[21] - The reserve for losses and loss adjustment expenses stood at $32,822 million, up from $28,679 million in Q3 2024, indicating a 14.1% increase[21] - Total investable assets reached $46,746 million, indicating a strong asset base for future investments[35] Cash Flow and Investment Income - Net cash provided by operating activities was $2,186 million in Q3 2025, an increase of 8.3% from $2,018 million in Q3 2024[14] - The company’s net investment income for Q3 2025 was $408 million, slightly up from $399 million in Q3 2024[18] - Pre-tax net investment income for the three months ended September 30, 2025, was $408 million, an increase from $405 million in the previous quarter[88] - Total return on investments for the three months ended September 30, 2025, was 1.80%, a decrease from 3.09% in the previous quarter[88] Shareholder Metrics - Book value per common share increased to $62.32 in Q3 2025, compared to $57.00 in Q3 2024, marking a 9.9% rise[21] - Common shareholders' equity increased to $22.889 billion from $22.211 billion in the previous quarter, reflecting a growth of 3.1%[120] - The average common shareholders' equity for Q3 2025 was $22,550 million, an increase from $21,463 million in Q2 2025[114] - The aggregate cost of shares repurchased in the three months ended September 30, 2025, was $732.3 million, with 8.2 million shares repurchased[121] Risk Management - The risk in force (RIF) for U.S. primary mortgage insurance was $74,952 million in Q3 2025, maintaining a stable percentage of 84.9%[61] - The total RIF, net of reinsurance, stands at $60,662 million, demonstrating effective risk management strategies[65] - The risk-to-capital ratio for Arch MI U.S. is 7.9:1 as of September 30, 2025, indicating a strong capital position relative to risk[66] Other Metrics - The company reported a significant increase in asset-backed securities from $2,900 million at December 31, 2024, to $3,149 million at September 30, 2025[102] - The effective tax rate on pre-tax operating income available to Arch for Q3 2025 was 15.8%, compared to 15.2% in Q2 2025[118] - The company emphasizes the use of after-tax operating income as a non-GAAP financial measure to provide a clearer view of its operational performance[105]