Arch Capital Group recently released its 10-Q report for the quarter ended March 31, 2026. Arch Capital Group Ltd. is a Bermuda-based specialty insurer, reinsurer and mortgage insurer operating in the United States, Canada, Bermuda, the United Kingdom, Europe and Australia. It writes business through three segments: Insurance, Reinsurance and Mortgage, and distributes products through licensed independent retail and wholesale brokers.
In Item 2, management said Arch had about $26.9 billion in capital at March 31, 2026 and reported a strong first quarter, with an annualized net income return on average common equity of 17.8% and an annualized operating return on average common equity of 15.4%. Book value per share rose to $66.19 from $65.11 at Dec. 31, 2025 and $55.15 a year earlier, a 1.7% quarterly increase. The company repurchased $783 million of common shares during the quarter.
The insurance segment produced $66 million of underwriting income in the first quarter. Management said topline growth was essentially flat as the company prioritized profitability over volume, with growth opportunities in E&S casualty, construction, alternative markets in the U.S. and select London market lines, partly offset by rate pressure in some property and short-tail lines and the decision not to renew certain middle-market commercial program business acquired from Allianz in 2024. Operating expenses were elevated because of transition costs tied to that acquisition, and some of those costs are expected to continue into mid-year.
The reinsurance segment generated $441 million of underwriting income. Net premiums written were $2.2 billion, down about 6% from the first quarter of 2025, reflecting pricing pressure and higher retentions by cedants in some property and short-tail lines. Management said it is reducing participation where pricing does not meet minimum return thresholds and focusing on business with better risk-adjusted returns.
The mortgage segment contributed $221 million of underwriting income. New originations remained modest because mortgage rates and home prices continued to limit demand, but management said the portfolio remained strong, U.S. market share was stable, the persistency rate on the in-force U.S. primary mortgage insurance portfolio was 80.7%, and delinquency remained low.
On investments, Arch reported a pre-tax total return of 0.10% for the quarter, compared with 2.02% in the first quarter of 2025. The company said the result reflected higher interest rates on its fixed income portfolio and noted that fixed income duration was 3.43 years at March 31, 2026. As a result of these announcements, the company's shares have moved 1.05% on the market, and are now trading at a price of $94.63. For the full picture, make sure to review ARCH CAPITAL GROUP's 10-Q report.
