Arch Capital Group Reports Mixed Q1 Results, Beats Estimates

Arch Capital Group reported Q1 2026 results on April 29 that beat analyst estimates despite a year-over-year decline in premiums. GAAP diluted EPS came in at $2.88, up 94.6% from $1.54 a year ago, driven primarily by a surge in reinsurance underwriting income to $441 million versus $167 million in Q1 2025. Operating EPS of $2.50 edged above the $2.49 consensus estimate.

Net premiums earned fell 4.8% year-over-year to $3.986 billion, with reinsurance premiums written down 6% and insurance premiums written down 1.4% — a mixed outcome that reflects the company's disciplined underwriting approach in a market where some lines face softening conditions. Hubbell is also reporting Q1 earnings on the same day, adding to a busy reporting session for financial and specialty insurance names.

Despite the premium headwinds, ACGL's annualized ROE reached 17.8% on a net income basis and 15.4% on an operating basis, underscoring the company's ability to generate attractive returns through the cycle. GuruFocus estimates the stock is approximately 21.7% undervalued relative to its intrinsic value, with a GF Score of 92 out of 100. Investors will be watching whether management provides guidance on premium growth recovery in the back half of 2026.

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