Bermuda-based insurance and reinsurer Arch Capital Group Ltd. reported second-quarter 2026 net income of $1 billion, down about $200 million year-over-year as catastrophe losses across the business increased to $201 million.
Despite the year-over-year decline in net income, Arch’s second-quarter results were strong, with after-tax operating income of $893 million, compared with $979 million in the second quarter of 2025.
The company’s insurance and reinsurance segment’s current casualty year pre-tax catastrophic losses, net of reinsurance and recovery premiums, reached $201 million in the second quarter of 2026, up from $154 million in the prior year.
However, the increase in catastrophe losses in the current quarter was partially offset by good development in loss reserves in the prior year, net of related adjustments, of $165 million, an increase from $139 million in the second quarter of 2025.
Group-wide gross written premiums (GPW) fell 1.1% to $6.1 billion, net written premiums (NPW) fell nearly 7% to $4.1 billion and net premiums written (NPE) fell more than 8% to $4.0 billion.
In the second quarter of 2026, underwriting revenue for the entire business fell nearly 20% year-on-year to $657 million, and the combined ratio dropped 2.3 percentage points to 83.5%. The loss rate was 55.1% and the expense rate was 28.4%.
Within the airline’s reinsurance arm, GPW increased slightly to $3.2 billion, while NPW fell 10.4% to $1.8 billion and NPE fell 12.8% to $1.8 billion. Arch explained that the decrease in NPW during the quarter was due in part to non-renewals, stake reductions and a targeted increase in retrocession.
In the second quarter of 2026, the reinsurance division’s underwriting income fell 9.1% year-on-year to US$410 million, but the reinsurance combined ratio increased 1 percentage point to 77.5%, of which the loss rate reached 54.6% and the expense ratio reached 22.9%.
Arch’s insurance division delivered GPW of $2.6 billion in Q2 2026, down 2.9% year-on-year, while NPW fell 5.1% to $1.9 billion and NPE fell 4.5% to $1.9. Billion. Other underwriting revenue increased $2 million to $15 million, while insurance segment underwriting revenue fell nearly 80% to $27 million.
The comprehensive ratio of the insurance sector fell by 5.1 percentage points to 98.5%, of which the loss rate was 63% and the expense rate was 35.5%.
In stark contrast to declines in its insurance and reinsurance business, Arch’s mortgage business grew slightly in GPW to $324 million in Q2 2026, while NPW increased 7.5% to $272 million and NPE increased 1.4% to $285 million.
Underwriting revenue for the segment fell 7.6% year over year to $220 million in the second quarter of 2026. The combined ratio increased from 15.2% in 2Q25 to 22.8% in 2Q26, with a loss rate of 6.5% and an expense ratio of 16.3%.
On the asset side of the balance sheet, net investment income before tax totaled $417 million at the end of June 2026, compared to $408 million at the end of the first quarter of 2026 and $405 million at the end of the second quarter of 2025.
Arch CEO Nicolas Papadopoulou Papadopoulo commented, “We delivered strong quarterly results driven by solid underwriting results across all three segments, reflecting the continued strength of our diverse platform and disciplined execution across the business. Our leadership in specialty insurance, including mortgage and reinsurance businesses, provides us with a meaningful competitive advantage. Clients come to us not just for capabilities, but for our underwriting expertise, claims capabilities, creative solutions and valuable perspective that helps them better manage risk.”
