Arch Capital Group Ltd., the Bermuda-based insurer and reinsurer, has reported a 74.6% year-on-year rise in underwriting income to $728 million for the first quarter of 2026, as compared to $417 million in Q1’25.
This was driven by strong growth in the underwriting performance of both the insurance and reinsurance business units. The re/insurer’s group-wide Q1’26 combined ratio improved by 8.4 percentage points to 81.7% in Q1’26, compared to 90.1% in the comparative prior year quarter.
This was driven by a 9.4 percentage points improvement in the loss ratio for the quarter reported at 52.4%, compared to 61.8% in Q1’25.
For this quarter, Arch’s pre-tax current accident year catastrophic losses in the insurance and reinsurance segments, net of reinsurance and reinstatement premiums, were $174 million. Meanwhile, Q1’26 benefited from favourable development in prior year loss reserves, net of related adjustments, of $200 million.
Arch’s combined ratio excluding catastrophic activity and prior year development for Q1’26 is 82.3%, compared to 81% in Q1’25.
Across the business, gross premiums written (GPW) dipped by 0.6% to $6.4 billion, while net premiums written (NPW) fell 3.7% to $4.4 billion, and net premiums earned were also down by 4.8% to $4 billion.
Group-wide, net income available to Arch common shareholders totalled $1 billion in Q1’26, up significantly on the prior year’s $564 million.
Within Arch’s reinsurance segment, underwriting income increased by 164% year-on-year to $441 million from $167 million, as the combined ratio strengthened by 15.9 percentage points to 75.9%, with a 15.2 percentage point improvement in the loss ratio to 51.7%, and a flat expense ratio of 24.2%.
Arch explains that the 2026 first quarter loss ratio reflected 5.4 points of current year catastrophic activity, compared to 21.7 points in Q1’25, primarily related to California wildfires.
The estimated net favourable development of prior year loss reserves, before related adjustments, reduced the loss ratio by 8.3 points in Q1’26, compared to 5.9 points in Q1’25.
The reinsurance arm’s GPW fell by 2.3% year-on-year to $3.4 billion, while NPW declined by 6% to $2.2 billion, and net earned premiums dipped by 9.7% to $1.8 billion in Q1’25.
The lower level of NPW in this quarter was primarily due to a reduction in property catastrophe business written at January 1, amplified by a lower level of reinstatement premiums relative to Q1’25, which included reinstatement premiums related to the California wildfires.
Arch’s insurance segment saw an underwriting income hike of 3400% year-on-year to $66 million, as the combined ratio improved to 96.5% for Q1’26. The loss ratio came down by 5.8 percentage points to 60.2%, and the expense ratio increased by 2.2 percentage points to 36.3%.
The insurance arm generated GPW of $2.7 billion in Q1’26, an increase of 2% year-on-year, as NPW dipped by 1.4% to $1.9 billion, and net premiums earned remained flat at $1.9 billion.
Arch notes that the decrease in NPW in the quarter primarily reflected an adjustment of the non-renewal of certain programs related to the MCE Acquisition in August 2024.
Turning to Arch’s mortgage business, underwriting income fell by 12% to $221 million in Q1’26, although the combined ratio rose by 6.2 percentage points to 22.3% on a higher loss ratio of 5.3%, and higher expense ratio of 17%.
GPW in the mortgage business fell by 3.1% year on year to $316 million in Q1’26, while NPW remained flat at $266 million, and net earned premiums fell by 5.3% to $284 million.
The reduction in net premiums written in the third quarter of 2025 primarily reflected lower US monthly and single premium volume, states the firm.
On the asset side of the balance sheet, Arch has reported pre-tax net investment income of $408 million, which primarily reflected growth in average invested assets, due in part to strong operating cash flows.
Nicolas Papadopoulo, Chief Executive Officer, Arch, commented, “We started the year on an excellent note, delivering an annualised operating return on average common equity of 15.4%, which reflects our disciplined approach to underwriting and capital allocation. Our underwriting and cycle management expertise, supported by a strong balance sheet, continue to differentiate Arch and position us to generate best-in-class returns through the cycle.”
