Arch Capital Group Ltd., the Bermuda-based insurer and reinsurer, delivered net income of $1.2 billion for the second quarter of 2025, down slightly on the comparable prior year quarter’s $1.3 billion, as the firm reports solid growth in both its insurance and reinsurance operations in the period.
Group-wide, in the second quarter of 2025, Arch Capital recorded gross premiums written (GPW) growth of more than 15% to $6.2 billion, as net premiums written (NPW) swelled 15% to $4.3 billion, and net premiums earned (NPE) rose almost 22% to $4.3 billion, when compared with the second quarter of 2024.
Underwriting income across the business rose by more than 7% year-on-year to $818 million in Q2 2025, although the combined ratio did increase by 2.5 percentage points to 81.2%, as the loss ratio rose by 1.9 percentage points to 53.1%, and the underwriting expense ratio increased by 0.6 percentage points to 28.1%.
The combined ratio excluding catastrophic activity and prior year development was 80.9% in Q2 2025, up from 76.7% in Q2 2024.
Pre-tax current accident year catastrophic losses for Arch’s insurance and reinsurance segments, net of reinsurance and reinstatement premiums, totalled $154 million in Q2 2025, almost entirely offset by favorable development in prior year loss reserves, net of related adjustments, of $139 million.
After-tax operating income available to Arch common shareholders totalled $979 million in Q2 2025, down slightly on Q2 2024’s figure of $981 million.
By segment, starting with Arch’s reinsurance business, GPW increased 9% year-on-year to $3.2 billion, NPW rose 6% to $2.1 billion, and NPE increased by over 17% to $2.1 billion.
“The growth in net premiums written primarily reflected increases in most lines of business, due in part to rate increases, new business opportunities and growth in existing accounts. Net premiums earned in the 2025 second quarter were 17.2% higher than in the 2024 second quarter, and reflect changes in net premiums written over the previous five quarters,” said the firm.
The reinsurance segment’s underwriting income jumped to $451 million in Q2 2025 from $366 million in Q2 2024, with the division’s combined ratio improving by 1 percentage point to 78.5%, as the loss ratio improved to 54.1% and the expense ratio increased to 24.4%.
In the carrier’s insurance segment, GPW rose by a significant 28% year-on-year to $2.7 billion, while NPW grew by 31% to $2 billion, and NPE increased 33% to $2 billion.
Arch explains that the insurance segment’s Q2 2025 results include a full quarter of activity related to the acquired US MidCorp and Entertainment insurance businesses from Allianz.
The insurance unit’s underwriting income increased to $129 million in Q2 2025 from $109 million in Q2 2024, although the combined ratio increased by 0.8 percentage points to 93.4%, driven by a 2.5 percentage point increase in the loss ratio to 59.8%, partially offset by a 1.7 percentage point decrease in the expense ratio to 33.6%.
In Arch’s mortgage business, GPW fell 5% to $323 million, NPW fell 8.3% to $253 million, and NPE declined by 9% to $281 million. The division’s underwriting income declined to $238 million in Q2 2025 from $287 million a year earlier, as the combined ratio increased to 15.2% from 7.4%.
“The reduction in net premiums written in the 2025 second quarter primarily reflected a one-time expense related to the tender offer of certain Bellemeade Re mortgage insurance linked notes and a lower level of mortgage originations, mostly in our international businesses,” explained Arch.
On the asset side of the balance sheet, Arch has reported pre-tax net investment income of $378 million for Q2 2025, a slight increase on the prior year’s $364 million.
Arch’s CEO, Nicolas Papadopoulo, commented: “We achieved these results by staying true to our core principle of cycle management. This disciplined underwriting approach, paired with dynamic capital management, positions us to consistently generate superior returns across market cycles.”
