Arch Capital (ACGL) Q3 Earnings: Taking a Look at Key Metrics Versus Estimates

Core Insights - Arch Capital Group (ACGL) reported a revenue of $4.72 billion for the quarter ended September 2025, reflecting a year-over-year increase of 7.7% [1] - The earnings per share (EPS) for the quarter was $2.77, up from $1.99 in the same quarter last year, resulting in an EPS surprise of +26.48% compared to the consensus estimate of $2.19 [1] Financial Performance Metrics - The company’s expense ratios showed slight increases, with the Other Operating Expense Ratio at 10% compared to the average estimate of 9.8%, and the Total Acquisition Expense Ratio at 18.4% versus an estimate of 18.1% [4] - The underwriting expense ratio totaled 28.4%, exceeding the average estimate of 27.9% [4] - The loss ratio for the insurance segment was reported at 59%, slightly better than the average estimate of 60.6% [4] Revenue Breakdown - Net premiums earned in the Mortgage Segment were $301 million, slightly above the average estimate of $295.81 million, but showing a year-over-year decline of 3.8% [4] - Other underwriting income reported a significant increase to $50 million, compared to the average estimate of $34.56 million, marking a year-over-year change of +900% [4] - Net investment income was $408 million, slightly below the estimated $413.08 million, but reflecting a year-over-year increase of 2.3% [4] - Net premiums earned in the Reinsurance Segment were $2.02 billion, below the average estimate of $2.08 billion, with a year-over-year increase of 6.5% [4] - Net premiums earned in the Insurance Segment were $1.97 billion, also below the average estimate of $2.02 billion, but showing a year-over-year increase of 11.6% [4] - Total net premiums earned were reported at $4.29 billion, slightly below the average estimate of $4.4 billion, with a year-over-year increase of 7.9% [4] - Equity in net income of investment funds was $134 million, below the average estimate of $148.74 million, representing a year-over-year decline of 21.6% [4] - Other income reported was $22 million, significantly above the average estimate of $8.33 million, with a year-over-year increase of 175% [4] Stock Performance - Over the past month, Arch Capital's shares have returned -4.1%, contrasting with the Zacks S&P 500 composite's increase of +2.5% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]