Why Is Arch Capital (ACGL) Up 10.5% Since Last Earnings Report?

Core Insights - Arch Capital Group Ltd. reported a strong third-quarter 2025 operating income of $2.77 per share, exceeding the Zacks Consensus Estimate by 26.5% and reflecting a year-over-year increase of 39.2% [3][4] - The company's stock has appreciated approximately 10.5% since the last earnings report, outperforming the S&P 500 [1][2] Financial Performance - Gross premiums written decreased by 0.6% year over year to $5.4 billion, while net premiums written fell by 2.1% to $4 billion [4] - Operating revenues rose by 7.8% year over year to $4.7 billion, although this figure missed the Zacks Consensus Estimate by 0.6% [5] - Pre-tax net investment income increased by 2.3% year over year to $408 million, slightly below estimates [4] - Underwriting income surged by 61.9% year over year to $871 million, with the combined ratio improving by 680 basis points to 79.8 [6] Segment Analysis - Insurance Segment: Gross premiums written increased by 9.7% year over year to $2.6 billion, with net premiums written climbing 7.3% to $2 billion [7] - Reinsurance Segment: Gross premiums written declined by 9% year over year to $2.5 billion, while net premiums written fell by 10.7% to $1.7 billion, despite a significant increase in underwriting income by 223.5% to $482 million [8] - Mortgage Segment: Gross premiums written dipped by 2.7% year over year to $330 million, with net premiums written decreasing by 2.8% to $274 million [9] Financial Health - As of September 30, 2025, Arch Capital had cash reserves of $1.1 billion, an increase of 8.6% from the end of 2024, and maintained a debt level of $2.7 billion [10] - The book value per share rose by 17.3% to $62.32, and the annualized operating return on average common equity expanded by 70 basis points to 18.5% [10][11] Market Outlook - Estimates for Arch Capital have been trending upward, indicating a positive outlook, with a Zacks Rank of 2 (Buy) suggesting an expectation of above-average returns in the coming months [12][14] - The stock has an aggregate VGM Score of A, indicating strong performance across various investment strategies [13] Industry Comparison - Arch Capital operates within the Zacks Insurance - Property and Casualty industry, where peer W.R. Berkley has seen a 7.3% gain over the past month, reporting revenues of $3.69 billion, a year-over-year increase of 8.2% [15]