ARCH CAPITAL GROUP LTD.
For the period ended Sep 30, 2025. Filed Nov 6, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 6, 2025
ACGL$107.28-3.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-05.
0000947484-25-000066
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations“Comment on Non-GAAP Financial Measures.”Current report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0000947484-25-000085
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations“Comment on Non-GAAP Financial Measures.”The baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 35 previous paragraphs and 34 current paragraphs.
18 unchanged; 13 reworded; 3 added; 3 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
As we near the end of 2025 and look ahead to 2026, our core objective to deliver long term value for our shareholders remains unchanged. We reported solid results for the 2025 third quarter, with an annualized net income return on average common equity and operating return on average common equity of 23.8% and 18.5%, respectively. See “Comment on Non-GAAP Financial Measures.” Meaningful contributions from all three segments along with solid investment returns pushed our year to date book value growth to 17.3%.
Current report
As competition in the overall property and casualty market is increasing, some sectors are seeing increased pressure while others continue to experience rate improvements. We continue to believe the property and casualty market presents meaningful opportunities, as we lean into the strength of our brand, including underwriting discipline, a longer term view of risk, and use risk-based pricing tools to generate profitable business.
Current report
Our reinsurance segment contributed $482 million of underwriting income in the 2025 third quarter. Net premiums written were $1.7 billion, down roughly 11% when compared to 2024 third quarter, reflecting current pricing conditions in short-tail and property catastrophe lines and increased retentions by cedants. We are growing selectively and focusing on areas where margins are attractive. We continue to like our prospects in most lines of business and, with improving conditions in casualty lines, our agility and ability to create opportunities is an advantage for us in this market. Our diversified reinsurance platform, supported by strong partnerships with our brokers and ceding companies across multiple lines and geographies, further enhances our ability to navigate a competitive environment.
Removed paragraphs (3)
Previous report
Our core objective to deliver long-term value for our shareholders remains unchanged. We will continue to execute on the key pillars of our strategy which are: to build a diversified mix of businesses; to actively manage the underwriting cycle; to remain prudent stewards of the capital entrusted to us by our shareholders; and to be dynamic managers of a data-driven enterprise with a culture that attracts best-in-class talent.
Previous report
Overall, property and casualty market conditions remain largely consistent with the 2025 first quarter. Some sectors are seeing increased price competition while others continue to experience rate improvements. We believe the property and casualty market still presents meaningful opportunities for disciplined underwriters to generate attractive risk-adjusted returns on capital.
Previous report
Our reinsurance segment contributed $451 million of underwriting income in the 2025 second quarter, with over $2 billion of net premiums written. We are growing selectively and focusing on areas where margins are attractive. We anticipate continued selective growth in quota share arrangements in casualty lines and are willing to lean in—partnering with underwriting teams with strong expertise in complex liability risks. We also expanded our property catastrophe writings, primarily in Florida, where we saw attractive risk-adjusted returns and increased demand from clients for additional limits. Specialty lines remained a strategic focus, and our teams found several new opportunities this quarter. That said, our property other than property catastrophe excess of loss portfolio contracted, as cedants retained more risk and margins on certain portions of the portfolio fell below our target. We were generally pleased with the state of the mid-year catastrophe excess of loss renewals. While pricing was slightly down, margins remain attractive with primary insurers maintaining high retentions.
Reworded paragraphs (13)
Previous wording
Arch Capital Group Ltd. (“Arch Capital” and, together with its subsidiaries, “Arch”, “the Company”, “we”, “our” or “us”) is a publicly listed Bermuda exempted company with approximately $25.8 billion in capital at June 30, 2025 and, through operations in Bermuda, the United States, Europe, Canada and Australia, writes insurance, reinsurance and mortgage insurance on a worldwide basis.
Current wording
Arch Capital Group Ltd. (“Arch Capital” and, together with its subsidiaries, “Arch”, “the Company”, “we”, “our” or “us”) is a publicly listed Bermuda exempted company with approximately $26.4 billion in capital at September 30, 2025 and, through operations in Bermuda, the United States, Europe, Canada and Australia, writes insurance, reinsurance and mortgage insurance on a worldwide basis.
Previous wording
We reported solid results for the 2025 second quarter, with an annualized net income return on average common equity and operating return on average common equity of 22.9% and 18.2%, respectively. See “Comment on Non-GAAP Financial Measures.” Book value per share grew 7.3% in the 2025 the second quarter, reflecting our disciplined underwriting and capital management. We continue to execute our cycle management strategy by actively allocating capital to the segments with the best risk-adjusted returns, while retaining the flexibility to invest in our platform when we find attractive opportunities. This approach, combined with a diversified global platform and strong distribution relationships, allows us to adapt dynamically to shifting market conditions. We focus on practicing disciplined underwriting that builds a meaningful margin of safety into pricing, take a long-term view of risk and a prudent approach to reserving.
Current wording
We continue to execute our cycle management strategy by actively allocating capital to the segments with the best risk-adjusted returns, while retaining the flexibility to invest in our platform when we find attractive opportunities. This approach, combined with a diversified global platform and strong distribution relationships, allows us to adapt dynamically to shifting market conditions. Our strong balance sheet and capital-generating capabilities, permit us to both invest in our business, and return capital to investors. During the 2025 third quarter, we repurchased $732 million of Arch shares in the quarter.
Previous wording
Our insurance segment reported $129 million of underwriting income for the 2025 second quarter, with net premium written surpassing $2 billion, which is an increase of 30.7% from the 2024 second quarter. Growth in net premiums written primarily resulted from the U.S MidCorp and Entertainment Insurance businesses acquired from Allianz on August 1, 2024 (“MCE Acquisition”). The integration of the MCE Acquisition is progressing well, and we remain excited about the increased capabilities this team brings to our insurance platform. Organic growth outside of the MCE Acquisition was modest, and growing our presence in middle market remains central to our strategy in North America. We saw selective growth in casualty lines, particularly in alternative market, E&S casualty and large account casualty, where pricing continued to outpace loss trends. However, competitive pressure persists in E&S property, excess D&O and cyber. While pricing in excess D&O and cyber appears to be stabilizing, we are maintaining a cautious stance, and prioritizing margin over volume in
Current wording
Our insurance segment reported $129 million of underwriting income for the 2025 third quarter, with net premium written nearly $2 billion, which is an increase of 7.3% from the 2024 third quarter. Growth in net premiums written primarily resulted from the U.S MidCorp and Entertainment Insurance businesses acquired from Allianz on August 1, 2024 (“MCE Acquisition”). The acquired business provides a significant platform from which we intend to build further scale in the middle market sector. We saw selective growth in our North American other liability occurrence business of 17%, supported by middle market and double-digit rate increases in E&S casualty.
Previous wording
these lines. Internationally, our Lloyd’s and London market businesses are experiencing increased, but rational, competition. Our long-term investment in establishing a leadership position at Lloyd’s continues to yield strong results reflected in favorable signings and our ability to attract top-tier underwriting talent.
Current wording
Net premiums written in our North American property and short-tail book increased 15%, where growth in middle market admitted property more than offset declines in E&S property. International premium volume remained stable, as the Lloyd’s and London market businesses are experiencing increased, but rational, competition. Our long-term investment in establishing a leadership position at Lloyd’s continues to yield strong results reflected in favorable signings and our ability to attract top-tier underwriting talent.
Previous wording
Our mortgage segment continued to deliver a steady level of earnings for our shareholders, generating $238 million of underwriting income in the 2025 second quarter, due to the strength of our in-force portfolio. While new originations were tempered by relatively high mortgage interest rates, underlying fundamentals remained strong and our U.S. market share was stable as industry pricing discipline held. The persistency of our in force U.S. primary mortgage insurance portfolio remained a healthy 81.9% and our delinquency rate remained low. While economic uncertainty could create headwinds, we still expect the mortgage segment to continue generating attractive underwriting income given the high credit quality and embedded equity of our in-force portfolio.
Current wording
Our mortgage segment continued to deliver a steady level of earnings, generating $260 million of underwriting income in the 2025 third quarter. While new originations remained modest due to affordability challenges, underlying fundamentals remained strong and our U.S. market share was stable as industry pricing discipline held. The persistency of our in force U.S. primary mortgage insurance portfolio remained a healthy 82.3% and our delinquency rate remained low. We continue to expect the mortgage segment to serve as a steady diversifying contributor to our overall earnings and generate attractive underwriting income given the high credit quality and embedded equity of our in-force portfolio.
Previous wording
Book value per share represents total common shareholders’ equity available to Arch divided by the number of common shares outstanding. Management uses growth in book value per share as a key measure of the value generated for our common shareholders each period and believes that book value per share is the key driver of Arch Capital’s share price over time. Book value per share is impacted by, among other factors, our underwriting results, investment returns and share repurchase activity, which has an accretive or dilutive impact on book value per share depending on the purchase price. Book value per share was $59.17 at June 30, 2025, compared to $55.15 at March 31, 2025, and $52.75 at June 30, 2024. The 7.3% increase in book value per share for the 2025 second quarter primarily reflected strong underwriting and investment returns.
Current wording
Book value per share represents total common shareholders’ equity available to Arch divided by the number of common shares outstanding. Management uses growth in book value per share as a key measure of the value generated for our common shareholders each period and believes that book value per share is the key driver of Arch Capital’s share price over time. Book value per share is impacted by, among other factors, our underwriting results, investment returns and share repurchase activity, which has an accretive or dilutive impact on book value per share depending on the purchase price. Book value per share was $62.32 at September 30, 2025, compared to $59.17 at June 30, 2025, and $57.00 at September 30, 2024. The 5.3% increase in book value per share for the 2025 third quarter primarily reflected strong underwriting and investment returns.
Previous wording
Our annualized net income return on average common equity was 22.9% for the 2025 second quarter, compared to 26.3% for the 2024 second quarter, and 17.0% for the six months ended June 30, 2025, compared to 25.4% for the 2024 period. Our Operating ROAE was 18.2% for the 2025 second quarter, compared to 20.5% for the 2024 second quarter and 14.8% for the six months ended June 30, 2025, compared to 20.5% for the 2024 period. Returns for 2025 reflected strong underwriting and investment returns.
Current wording
Our annualized net income return on average common equity was 23.8% for the 2025 third quarter, compared to 19.0% for the 2024 third quarter, and 19.5% for the nine months ended September 30, 2025, compared to 22.9% for the 2024 period. Our Operating ROAE was 18.5% for the 2025 third quarter, compared to 14.8% for the 2024 third quarter and 16.2% for the nine months ended September 30, 2025, compared to 18.3% for the 2024 period. Returns for the 2025 periods reflected strong underwriting and investment returns.
Previous wording
Total return for the 2025 periods reflected the effects of lower yields on U.S. Government bonds and slightly underperformed their benchmark returns, primarily due to the anticipated sale of certain alternative investments accounted for using the equity method. We continue to maintain a relatively short duration on our fixed income portfolio of 3.48 years at June 30, 2025, compared to 3.31 years at December 31, 2024.
Current wording
Total return for the 2025 periods reflected the effects of lower bond yields, a weaker U.S. dollar and equity market returns. The portfolio slightly underperformed their benchmark returns, primarily due to the sale of certain alternative investments accounted for using the equity method. The allocation of our portfolio remained neutral relative to our targeted benchmark. We continue to maintain a relatively short duration on our fixed income portfolio of 3.24 years at September 30, 2025, compared to 3.31 years at December 31, 2024.
Previous wording
The benchmark return index is a customized combination of indices intended to approximate a target portfolio by asset mix and average credit quality with a fixed income component matching the approximate estimated duration and currency mix of our insurance and reinsurance liabilities. It is recalibrated annually. Although the estimated fixed income duration and average credit quality of this index will move as the duration and rating of its constituent securities change, generally we do not adjust the composition of the benchmark return index during the year except to incorporate changes to the mix of liability currencies and
Current wording
The benchmark return index is a customized combination of indices intended to approximate a target portfolio by asset mix and average credit quality with a fixed income component matching the approximate estimated duration and currency mix of our insurance and reinsurance liabilities. It is recalibrated annually. Although the estimated fixed income duration and average credit quality of this index will move as the duration and rating of its constituent securities
Previous wording
durations noted above. The benchmark return index should not be interpreted as expressing a preference for or aversion to any particular sector or sector weight. At June 30, 2025, the fixed income portion of the benchmark had an average credit quality of “A1” by Moody’s and an estimated fixed income duration of 3.24 years.
Current wording
change, generally we do not adjust the composition of the benchmark return index during the year except to incorporate changes to the mix of liability currencies and durations noted above. The benchmark return index should not be interpreted as expressing a preference for or aversion to any particular sector or sector weight. At September 30, 2025, the fixed income portion of the benchmark had an average credit quality of “A1” by Moody’s and an estimated fixed income duration of 3.18 years.
Previous wording
Throughout this filing, we present our operations in the way we believe will be the most meaningful and useful to investors, analysts, rating agencies and others who use our financial information in evaluating the performance of our company. This presentation includes the use of after-tax operating income available to Arch common shareholders, which is defined as net income available to Arch common shareholders, excluding net realized gains or losses (which includes realized and unrealized changes in the fair value of equity securities and assets accounted for using the fair value option, realized and unrealized gains or losses on derivative instruments, changes in the allowance for credit losses on financial assets and gains or losses realized from the acquisition or disposition of subsidiaries), equity in net income or loss of investments accounted for using the equity method, net foreign exchange gains or losses, transaction costs and other, income taxes, and the use of annualized operating return on average common equity. The presentation of after-tax operating income available to Arch common shareholders and annualized operating return on average common equity are non-GAAP financial measures as defined in Regulation G. The reconciliation of such measures
Current wording
Throughout this filing, we present our operations in the way we believe will be the most meaningful and useful to investors, analysts, rating agencies and others who use our financial information in evaluating the performance of our company. This presentation includes the use of after-tax operating income available to Arch common shareholders, which is defined as net income available to Arch common shareholders, excluding net realized gains or losses (which includes realized and unrealized changes in the fair value of equity securities and assets accounted for using the fair value option, realized and unrealized gains or losses on derivative instruments, changes in the allowance for credit losses on financial assets and gains or losses realized from the acquisition or disposition of subsidiaries), equity in net income or loss of investments accounted for using the equity method, net foreign exchange gains or losses, transaction costs and other, income taxes, and the use of annualized operating return on average common equity. The presentation of after-tax operating income available to Arch
Previous wording
to net income available to Arch common shareholders and annualized net income return on average common equity (the most directly comparable GAAP financial measures) in accordance with Regulation G is included under “Results of Operations” below.
Current wording
common shareholders and annualized operating return on average common equity are non-GAAP financial measures as defined in Regulation G. The reconciliation of such measures to net income available to Arch common shareholders and annualized net income return on average common equity (the most directly comparable GAAP financial measures) in accordance with Regulation G is included under “Results of Operations” below.
Previous wording
presenting the net income available to Arch common shareholders, we believe that this presentation enables investors and other users of our financial information to analyze our performance in a manner similar to how management analyzes performance. We also believe that this measure follows industry practice and, therefore, allows the users of financial information to compare our performance with our industry peer group. We believe that the equity analysts and certain rating agencies that follow us and the insurance industry as a whole generally exclude these items from their analyses for the same reasons.
Current wording
We believe that showing net income available to Arch common shareholders exclusive of the items referred to above reflects the underlying fundamentals of our business since we evaluate the performance of and manage our business to produce an underwriting profit. In addition to presenting the net income available to Arch common shareholders, we believe that this presentation enables investors and other users of our financial information to analyze our performance in a manner similar to how management analyzes performance. We also believe that this measure follows industry practice and, therefore, allows the users of financial information to compare our performance with our industry peer group. We believe that the equity analysts and certain rating agencies that follow us and the insurance industry as a whole generally exclude these items from their analyses for the same reasons.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
We believe that showing net income available to Arch common shareholders exclusive of the items referred to above reflects the underlying fundamentals of our business since we evaluate the performance of and manage our business to produce an underwriting profit. In addition to