Arch Capital (ACGL)
Market Price (6/3/2026): $87.91 | Market Cap: $31.0 BilSector: Financials | Industry: Property & Casualty Insurance
Arch Capital (ACGL)
Market Price (6/3/2026): $87.91Market Cap: $31.0 BilSector: FinancialsIndustry: Property & Casualty Insurance
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 16%, ERPEquity Risk Premium (ERP) = Total Yield - Risk Free Rate, Reflects the premium above risk free assets offered by the investment. is 11%, FCF Yield is 19% Cash is significant % of market capNet D/ENet Debt/Equity. Debt net of cash. Negative indicates net cash. Equity is taken as the Market Capitalization is -30% Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 31%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 31%, CFO LTM is 5.9 Bil, FCF LTM is 5.9 Bil Stock buyback supportStock Buyback 3Y Total is 2.7 Bil Low stock price volatilityVol 12M is 21% Megatrend and thematic driversMegatrends include AI in Financial Services, and Cybersecurity. Themes include AI for Fraud Detection, and Cloud Security. | Weak multi-year price returns2Y Excs Rtn is -52%, 3Y Excs Rtn is -49% | Weak revenue growthRev Chg QQuarterly Revenue Change % is -4.7% Key risksACGL key risks include [1] increased defaults in its mortgage insurance segment from economic stress and [2] slowing premium growth from cooling demand in its key mortgage and reinsurance markets. |
| Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 16%, ERPEquity Risk Premium (ERP) = Total Yield - Risk Free Rate, Reflects the premium above risk free assets offered by the investment. is 11%, FCF Yield is 19% |
| Cash is significant % of market capNet D/ENet Debt/Equity. Debt net of cash. Negative indicates net cash. Equity is taken as the Market Capitalization is -30% |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 31%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 31%, CFO LTM is 5.9 Bil, FCF LTM is 5.9 Bil |
| Stock buyback supportStock Buyback 3Y Total is 2.7 Bil |
| Low stock price volatilityVol 12M is 21% |
| Megatrend and thematic driversMegatrends include AI in Financial Services, and Cybersecurity. Themes include AI for Fraud Detection, and Cloud Security. |
| Weak multi-year price returns2Y Excs Rtn is -52%, 3Y Excs Rtn is -49% |
| Weak revenue growthRev Chg QQuarterly Revenue Change % is -4.7% |
| Key risksACGL key risks include [1] increased defaults in its mortgage insurance segment from economic stress and [2] slowing premium growth from cooling demand in its key mortgage and reinsurance markets. |
Qualitative Assessment
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Arch Capital (ACGL) stock has lost about 10% since 2/28/2026 because of the following key factors:
1. Mixed Q1 2026 Financial Results with Reinsurance Premium Decline.
Arch Capital Group Ltd. reported first-quarter 2026 earnings per share (EPS) of $2.50, which surpassed consensus estimates, but quarterly revenue of $4.52 billion fell short of analysts' expectations. Specifically, the reinsurance segment experienced a 6.0% year-over-year decrease in net premiums written, largely attributable to a reduction in property catastrophe business. Additionally, the company reported net realized losses of $87 million for the quarter, primarily driven by financial market fluctuations.
2. Deteriorating Outlook for the Global Reinsurance Market.
The broader global reinsurance market faces a "deteriorating" outlook for 2026, according to Fitch Ratings, due to factors such as abundant capacity, heightened competition, and rising claims costs stemming from natural disasters and social inflation. This market dynamic is expected to lead to moderating returns, with Gallagher Re projecting a composite return on equity (ROE) for the sector to be 14-15% in 2026, a decrease from 19.3% in 2025. This softening market directly impacts Arch Capital's significant reinsurance operations.
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Stock Movement Drivers
Fundamental Drivers
The -12.2% change in ACGL stock from 2/28/2026 to 6/3/2026 was primarily driven by a -22.1% change in the company's P/E Multiple.| (LTM values as of) | 2282026 | 6032026 | Change |
|---|---|---|---|
| Stock Price ($) | 100.15 | 87.91 | -12.2% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 19,294 | 19,078 | -1.1% |
| Net Income Margin (%) | 22.8% | 25.5% | 12.0% |
| P/E Multiple | 8.2 | 6.4 | -22.1% |
| Shares Outstanding (Mil) | 359 | 353 | 1.8% |
| Cumulative Contribution | -12.2% |
Market Drivers
2/28/2026 to 6/3/2026| Return | Correlation | |
|---|---|---|
| ACGL | -12.2% | |
| Market (SPY) | 10.2% | 7.9% |
| Sector (XLF) | -0.6% | 41.4% |
Fundamental Drivers
The -6.4% change in ACGL stock from 11/30/2025 to 6/3/2026 was primarily driven by a -24.7% change in the company's P/E Multiple.| (LTM values as of) | 11302025 | 6032026 | Change |
|---|---|---|---|
| Stock Price ($) | 93.92 | 87.91 | -6.4% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 19,040 | 19,078 | 0.2% |
| Net Income Margin (%) | 21.5% | 25.5% | 18.7% |
| P/E Multiple | 8.5 | 6.4 | -24.7% |
| Shares Outstanding (Mil) | 369 | 353 | 4.5% |
| Cumulative Contribution | -6.4% |
Market Drivers
11/30/2025 to 6/3/2026| Return | Correlation | |
|---|---|---|
| ACGL | -6.4% | |
| Market (SPY) | 11.0% | -8.0% |
| Sector (XLF) | -3.8% | 23.1% |
Fundamental Drivers
The -7.5% change in ACGL stock from 5/31/2025 to 6/3/2026 was primarily driven by a -32.3% change in the company's P/E Multiple.| (LTM values as of) | 5312025 | 6032026 | Change |
|---|---|---|---|
| Stock Price ($) | 95.04 | 87.91 | -7.5% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 17,650 | 19,078 | 8.1% |
| Net Income Margin (%) | 21.3% | 25.5% | 19.7% |
| P/E Multiple | 9.4 | 6.4 | -32.3% |
| Shares Outstanding (Mil) | 373 | 353 | 5.6% |
| Cumulative Contribution | -7.5% |
Market Drivers
5/31/2025 to 6/3/2026| Return | Correlation | |
|---|---|---|
| ACGL | -7.5% | |
| Market (SPY) | 29.4% | -6.7% |
| Sector (XLF) | 1.4% | 25.3% |
Fundamental Drivers
The 32.6% change in ACGL stock from 5/31/2023 to 6/3/2026 was primarily driven by a 76.6% change in the company's Total Revenues ($ Mil).| (LTM values as of) | 5312023 | 6032026 | Change |
|---|---|---|---|
| Stock Price ($) | 66.28 | 87.91 | 32.6% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 10,801 | 19,078 | 76.6% |
| Net Income Margin (%) | 18.5% | 25.5% | 38.3% |
| P/E Multiple | 12.2 | 6.4 | -47.8% |
| Shares Outstanding (Mil) | 367 | 353 | 4.0% |
| Cumulative Contribution | 32.6% |
Market Drivers
5/31/2023 to 6/3/2026| Return | Correlation | |
|---|---|---|
| ACGL | 32.6% | |
| Market (SPY) | 87.6% | 23.3% |
| Sector (XLF) | 68.1% | 44.6% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| ACGL Return | 23% | 41% | 18% | 31% | 4% | -9% | 155% |
| Peers Return | 16% | 15% | 6% | 29% | 16% | -8% | 96% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | 11% | 103% |
Monthly Win Rates [3] | |||||||
| ACGL Win Rate | 67% | 67% | 58% | 58% | 50% | 33% | |
| Peers Win Rate | 57% | 55% | 55% | 57% | 65% | 40% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 67% | |
Max Drawdowns [4] | |||||||
| ACGL Max Drawdown | -14% | -17% | -18% | -19% | -13% | -14% | |
| Peers Max Drawdown | -16% | -22% | -19% | -12% | -17% | -13% | |
| S&P 500 Max Drawdown | -5% | -25% | -10% | -8% | -19% | -9% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: EG, RNR, AXS, MKL, WRB. See ACGL Returns vs. Peers.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 6/3/2026 (YTD)
How Low Can It Go
| Event | ACGL | S&P 500 |
|---|---|---|
| 2020 COVID-19 Crash | ||
| % Loss | -51.7% | -33.7% |
| % Gain to Breakeven | 107.1% | 50.9% |
| Time to Breakeven | 687 days | 140 days |
| Q4 2018 Fed Policy Error / Growth Scare | ||
| % Loss | -15.3% | -19.2% |
| % Gain to Breakeven | 18.1% | 23.8% |
| Time to Breakeven | 38 days | 105 days |
| 2015-2016 China Devaluation / Global Growth Scare | ||
| % Loss | -12.1% | -12.2% |
| % Gain to Breakeven | 13.8% | 13.9% |
| Time to Breakeven | 196 days | 62 days |
| 2008-2009 Global Financial Crisis | ||
| % Loss | -35.5% | -53.4% |
| % Gain to Breakeven | 55.0% | 114.4% |
| Time to Breakeven | 212 days | 1085 days |
| Summer 2007 Credit Crunch | ||
| % Loss | -13.0% | -8.6% |
| % Gain to Breakeven | 14.9% | 9.5% |
| Time to Breakeven | 53 days | 47 days |
In The Past
Arch Capital's stock fell -4.2% during the 2025 US Tariff Shock. Such a loss loss requires a 4.4% gain to breakeven.
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| Event | ACGL | S&P 500 |
|---|---|---|
| 2020 COVID-19 Crash | ||
| % Loss | -51.7% | -33.7% |
| % Gain to Breakeven | 107.1% | 50.9% |
| Time to Breakeven | 687 days | 140 days |
| 2008-2009 Global Financial Crisis | ||
| % Loss | -35.5% | -53.4% |
| % Gain to Breakeven | 55.0% | 114.4% |
| Time to Breakeven | 212 days | 1085 days |
In The Past
Arch Capital's stock fell -4.2% during the 2025 US Tariff Shock. Such a loss loss requires a 4.4% gain to breakeven.
Preserve Wealth
Limiting losses and compounding gains is essential to preserving wealth.
Asset Allocation
Actively managed asset allocation strategies protect wealth. Learn more.
About Arch Capital (ACGL)
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Here are 1-3 brief analogies for Arch Capital (ACGL):
- It's like a combination of a major diversified insurer such as Travelers or Chubb, and a specialized provider of mortgage insurance.
- Think of it as a broad insurance and reinsurance holding company, similar in diversified scope to a smaller Berkshire Hathaway, but with a significant focus on mortgage insurance.
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- Insurance Products: Provides a broad spectrum of primary and excess coverages including casualty, property, specialty lines like D&O and E&O, medical professional liability, workers' compensation, and accident & health.
- Reinsurance Products: Offers casualty, property, catastrophe, marine, aviation, surety, agriculture, and life reinsurance to other insurance companies globally.
- Mortgage Insurance Products: Supplies both direct mortgage insurance, protecting lenders from borrower defaults, and mortgage reinsurance to other mortgage insurers.
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Arch Capital (ACGL) sells primarily to other companies, rather than individuals. However, due to the nature of its business as a diversified global insurer and reinsurer, operating through a vast network of independent brokers, it does not publicly disclose or have a limited number of identifiable "major customers" by name. Its customer base is highly fragmented and diversified across various types of corporate entities worldwide. Therefore, instead of specific named companies, Arch Capital's major customers can be described by the following categories:- Other Insurance and Reinsurance Companies: These companies purchase reinsurance protection from Arch Capital's Reinsurance segment and mortgage reinsurance from its Mortgage segment to manage their own risk exposures and capital requirements.
- Financial Institutions and Mortgage Lenders: Banks, credit unions, and other mortgage originators are direct customers of Arch Capital's direct mortgage insurance products, which protect them against borrower defaults.
- Businesses and Corporations across Diverse Industries: Arch Capital's Insurance segment provides a wide array of commercial insurance coverages (e.g., casualty, property, professional liability, workers' compensation, commercial auto, marine, aviation, surety) to a broad spectrum of businesses of various sizes and industries globally.
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```htmlNicolas Papadopoulo Chief Executive Officer
Mr. Papadopoulo was appointed Chief Executive Officer of Arch Capital Group Ltd. in October 2024 and has been a member of the board since then. He joined Arch Reinsurance Ltd. in December 2001 and has held various leadership and underwriting roles within the company. His prior positions at Arch include President and Chief Underwriting Officer of Arch Capital Group and CEO of Arch Worldwide Insurance Group from January 2021 to October 2024, Chairman and CEO of Arch Worldwide Insurance Group and CUO for Property and Casualty Operations from September 2017 to December 2020, and Chairman and CEO of Arch Reinsurance Group from July 2014 to September 2017. Before joining Arch, he held various positions at Sorema N.A. Reinsurance Group and served as an insurance examiner with the Ministry of Finance, Insurance Department, in France. Mr. Papadopoulo previously served on the board of directors of Coface SA and Premia Holdings Ltd. In 2017, Arch sponsored Premia with Kelso & Company, a private equity firm, and Mr. Papadopoulo invested in Premia.
François Morin Executive Vice President and Chief Financial Officer
Mr. Morin assumed the role of Executive Vice President and Chief Financial Officer of Arch Capital Group Ltd. effective May 25, 2018. He joined Arch in 2011, having previously served as Senior Vice President, Chief Risk Officer, and Chief Actuary of ACGL. Prior to his tenure at Arch, Mr. Morin held various roles for Towers Watson & Co. and its predecessor firm Towers, Perrin, Forster & Crosby, including its actuarial division, Tillinghast, where he led the firm's engagement with ACGL. He has nearly 30 years of experience in the insurance industry. Mr. Morin holds a bachelor's degree in Actuarial Science from Université Laval in Canada and is a Fellow of the Casualty Actuarial Society, a Chartered Financial Analyst, and a member of the American Academy of Actuaries.
Maamoun Rajeh President
Mr. Rajeh was named President of Arch Capital Group Ltd. in November 2024, with primary responsibility for Arch's Global Reinsurance Group and Global Mortgage Group. He joined Arch Re Bermuda in 2001 as an underwriter. His previous roles at Arch include Chairman and Chief Executive Officer of Arch Worldwide Reinsurance from October 2017 to November 2024, Chairman and CEO of Arch Reinsurance Ltd. from July 2014 to September 2017, and CEO and President at Arch Reinsurance Europe Underwriting Ltd from July 2012 to July 2014. Before joining Arch, Mr. Rajeh served in various business analysis positions at the United States Fidelity and Guarantee Company and as an underwriter at F&G Re, and later as Assistant Vice President at HartRe, a subsidiary of The Hartford Financial Services Group, Inc. He serves on the Board of Directors at Premia Holdings Ltd., which was sponsored by Arch and private equity firm Kelso & Company.
David Gansberg President
Mr. Gansberg was promoted to President of Arch Capital Group Ltd. in November 2024, with primary accountability for Arch's Insurance Group. He joined Arch in 2001. Prior to his current role, he served as CEO of Arch's Mortgage Group since 2019 and as President and CEO of Arch Mortgage Insurance Company (Arch MI). Before his work with the Mortgage Group, Mr. Gansberg was Executive Vice President and a director at Arch Re (U.S.). He holds a bachelor's degree in actuarial mathematics from the University of Michigan and an MBA from the Duke University Fuqua School of Business.
W. Preston Hutchings Senior Adviser
Mr. Hutchings currently serves as a Senior Adviser to Arch Capital Group, having previously held the positions of Senior Vice President and Chief Investment Officer at Arch Capital Group Ltd. from June 2005 to June 2021, and President of its investment management subsidiary. Before joining Arch, he served as Senior Vice President and Chief Investment Officer at Mid Ocean Reinsurance Ltd. from January 1995 until its acquisition by XL Capital in August 1998, and then as Senior Vice President and Chief Investment Officer of Renaissance Reinsurance Ltd. from August 1998 to June 2005. He began his career in 1981 as a municipal bond trader at J.P. Morgan & Company. Mr. Hutchings is also an adviser to a Hong Kong-based private equity firm (LimeTree Capital) and to a Mumbai-based equity manager. He also serves as chairman of China Car Park Ltd., which is managed by LimeTree Capital, and is a Senior Advisor to VSS Capital Partners, a private investment firm.
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Key Risks for Arch Capital (ACGL)
- Catastrophic Events and Underwriting Risk: Arch Capital, through its insurance and reinsurance segments, is significantly exposed to the financial impact of catastrophic events, including natural disasters (such as hurricanes, earthquakes, and wildfires), man-made catastrophes, and other large-scale loss events. Inaccurate pricing of these risks or the occurrence of events exceeding modeled expectations can lead to substantial claims and significant underwriting losses.
- Adverse Developments in the Housing Market and Economic Downturns: The company's mortgage segment, which provides direct mortgage insurance and mortgage reinsurance, is highly sensitive to conditions in the housing market and the broader economy. A significant downturn in housing prices, an increase in mortgage defaults, or a severe economic recession could lead to a substantial increase in claims for its mortgage insurance products.
- Investment Market Volatility and Interest Rate Risk: Like other insurance and reinsurance companies, Arch Capital maintains substantial investment portfolios to support its liabilities. Fluctuations in interest rates, credit markets, or general investment market conditions can adversely affect the value of these investments and reduce investment income, thereby impacting the company's overall profitability and financial strength.
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Arch Capital Group Ltd. (ACGL) operates in the insurance, reinsurance, and mortgage insurance markets. The addressable market sizes for these main products and services vary by region and reporting. The global commercial insurance market, which encompasses many of Arch Capital's insurance offerings, was valued at approximately USD 933.91 billion in 2024 and is projected to reach USD 2366.53 billion by 2035. Other estimates place the global commercial insurance market size at USD 1030.91 billion in 2025, with a projection to reach USD 2166.15 billion by 2034. The U.S. commercial insurance market alone was estimated at USD 294.6 billion in 2024 and is expected to grow to USD 489.1 billion by 2033. For reinsurance, Arch Capital's reinsurance segment addresses a substantial global market. The global reinsurance market was valued at USD 711.75 billion in 2024 and is projected to reach USD 2000.08 billion by 2034. Another report estimated the global reinsurance market size at USD 621.39 billion in 2025, expected to grow to USD 1403.7 billion by 2034. In the United States, the reinsurance market was valued at USD 220.05 billion in 2024 and is expected to reach USD 630.10 billion by 2034. Arch Capital also operates in the specialty insurance market. The global specialty insurance market was valued at USD 118.35 billion in 2024 and is projected to grow to USD 285.99 billion by 2033. Other analyses suggest the global specialty insurance market was valued at USD 112.77 billion in 2025 and is projected to reach USD 337.89 billion by 2034. North America held a significant share of the specialty insurance market, valued at USD 43.99 billion in 2025. In the mortgage segment, Arch Capital provides mortgage insurance. The global mortgage insurance market was valued at approximately USD 20.8 billion in 2023 and is projected to reach USD 38.5 billion by 2033. However, another report indicates a significantly larger global mortgage insurance market size, recorded at USD 895.81 billion in 2021 and projected to reach USD 1284.3 billion by the end of 2025, further growing to USD 2639.78 billion by 2033. North America is identified as the largest regional market for mortgage insurance.AI Analysis | Feedback
For Arch Capital (ACGL), several key drivers are expected to contribute to future revenue growth over the next two to three years:
- Growth in the Insurance Segment fueled by Favorable Market Conditions: Arch Capital's Insurance segment has demonstrated robust growth, with increased gross and net premiums written. This expansion is supported by strategic initiatives, including past acquisitions like Allianz's US MidCorp and Entertainment businesses, and is further bolstered by favorable dynamics in the property and casualty (P&C) market. A hardening P&C environment, characterized by firm market rates and inflation-led demand, is expected to continue supporting higher premiums and stronger demand for coverage across its insurance lines.
- Strategic Focus and Expansion within Reinsurance Specialty Lines and Geographies: While some areas of the reinsurance market face competitive pressures, Arch Capital is strategically focusing on growth opportunities in specialty lines and specific geographies within its Reinsurance segment. The Reinsurance unit has significantly grown its net written premiums, and this targeted approach is anticipated to drive continued revenue despite broader market challenges in areas like property catastrophe reinsurance.
- Increased Net Investment Income: A significant contributor to Arch Capital's overall financial performance is its net investment income. The company has consistently generated strong operating cash flows, which in turn leads to an increase in its investable asset base. This growth in invested assets is expected to continue fueling higher net investment income, providing a stable and growing source of revenue.
- Sustained Performance and New Business Generation in the Mortgage Segment: Arch Capital's Mortgage segment is expected to contribute to future revenue growth through its continued strong underwriting performance and the generation of new business. Recent periods have shown new insurance written in the US mortgage insurance (USMI) business at high levels, coupled with high persistency rates, which helps maintain a stable to growing insurance in force.
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Share Repurchases
- Arch Capital's board approved a $2.0 billion increase to its share repurchase program in September 2025, bringing the total authorization to approximately $2.3 billion as of September 4, 2025.
- The company repurchased $1.9 billion of common stock during 2025, which accounted for 5.6% of its outstanding shares.
- In December 2024, a $1 billion share repurchase authorization was renewed, replacing the prior program, with approximately $1 billion available as of September 30, 2024.
Outbound Investments
- In August 2024, Arch Insurance North America completed the acquisition of Allianz's U.S. MidCorp and Entertainment insurance businesses for $450 million in cash, an acquisition estimated to require approximately $1.4 billion in capital support.
- Arch Capital acquired Fireman's Fund Insurance Company in April 2024.
- In 2021, Arch Capital completed several acquisitions, including Westpac, Somerset Bridge Insurance Services, Somerset Bridge Group, and Coface.
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Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 187.59 |
| Mkt Cap | 17.6 |
| Rev LTM | 15,352 |
| Op Inc LTM | - |
| FCF LTM | 3,071 |
| FCF 3Y Avg | 3,353 |
| CFO LTM | 3,148 |
| CFO 3Y Avg | 3,406 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 4.2% |
| Rev Chg 3Y Avg | 10.5% |
| Rev Chg Q | -5.7% |
| QoQ Delta Rev Chg LTM | -1.4% |
| Op Inc Chg LTM | - |
| Op Inc Chg 3Y Avg | - |
| Op Mgn LTM | - |
| Op Mgn 3Y Avg | - |
| QoQ Delta Op Mgn LTM | - |
| CFO/Rev LTM | 20.1% |
| CFO/Rev 3Y Avg | 25.0% |
| FCF/Rev LTM | 19.5% |
| FCF/Rev 3Y Avg | 24.7% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 17.6 |
| P/S | 1.2 |
| P/Op Inc | - |
| P/EBIT | 5.4 |
| P/E | 6.5 |
| P/CFO | 6.3 |
| Total Yield | 16.5% |
| Dividend Yield | 1.3% |
| FCF Yield 3Y Avg | 17.2% |
| D/E | 0.2 |
| Net D/E | -0.8 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | -5.2% |
| 3M Rtn | -7.6% |
| 6M Rtn | -4.7% |
| 12M Rtn | -8.3% |
| 3Y Rtn | 40.6% |
| 1M Excs Rtn | -10.1% |
| 3M Excs Rtn | -17.6% |
| 6M Excs Rtn | -17.1% |
| 12M Excs Rtn | -35.7% |
| 3Y Excs Rtn | -37.0% |
Price Behavior
| Market Price | $87.89 | |
| Market Cap ($ Bil) | 31.0 | |
| First Trading Date | 09/14/1995 | |
| Distance from 52W High | -13.8% | |
| 50 Days | 200 Days | |
| DMA Price | $94.90 | $93.43 |
| DMA Trend | indeterminate | down |
| Distance from DMA | -7.4% | -5.9% |
| 3M | 1YR | |
| Volatility | 20.6% | 21.0% |
| Downside Capture | 49.17 | -6.35 |
| Upside Capture | -11.31 | -14.80 |
| Correlation (SPY) | 7.0% | -6.6% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | -0.10 | 0.16 | 0.12 | -0.12 | -0.11 | 0.36 |
| Up Beta | 1.12 | 0.61 | 0.37 | 0.38 | 0.18 | 0.55 |
| Down Beta | -1.36 | -3.10 | -0.52 | -0.33 | -0.41 | 0.39 |
| Up Capture | -54% | -9% | -7% | -21% | -8% | 7% |
| Bmk +ve Days | 13 | 28 | 36 | 67 | 141 | 432 |
| Stock +ve Days | 10 | 23 | 33 | 70 | 131 | 399 |
| Down Capture | 37% | 112% | 56% | -25% | -11% | 37% |
| Bmk -ve Days | 7 | 13 | 27 | 57 | 109 | 318 |
| Stock -ve Days | 10 | 18 | 30 | 54 | 118 | 350 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with ACGL | |
|---|---|---|---|---|
| ACGL | -9.8% | 21.0% | -0.59 | - |
| Sector ETF (XLF) | 1.3% | 14.4% | -0.13 | 25.8% |
| Equity (SPY) | 28.8% | 11.8% | 1.84 | -6.3% |
| Gold (GLD) | 31.0% | 26.6% | 0.99 | -6.5% |
| Commodities (DBC) | 42.3% | 18.8% | 1.74 | -12.7% |
| Real Estate (VNQ) | 9.8% | 13.2% | 0.45 | 22.3% |
| Bitcoin (BTCUSD) | -37.1% | 42.1% | -0.98 | -14.2% |
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Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with ACGL | |
|---|---|---|---|---|
| ACGL | 18.6% | 24.5% | 0.67 | - |
| Sector ETF (XLF) | 8.2% | 18.6% | 0.32 | 53.9% |
| Equity (SPY) | 14.0% | 17.0% | 0.65 | 36.4% |
| Gold (GLD) | 18.1% | 18.0% | 0.82 | -0.5% |
| Commodities (DBC) | 10.5% | 19.4% | 0.43 | 5.8% |
| Real Estate (VNQ) | 2.8% | 18.8% | 0.05 | 32.4% |
| Bitcoin (BTCUSD) | 11.2% | 54.7% | 0.40 | 9.4% |
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Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with ACGL | |
|---|---|---|---|---|
| ACGL | 14.3% | 27.5% | 0.52 | - |
| Sector ETF (XLF) | 12.4% | 22.1% | 0.51 | 67.1% |
| Equity (SPY) | 15.6% | 17.9% | 0.75 | 55.3% |
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Returns Analyses
Earnings Returns History
Updated 6/2/2026| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 4/28/2026 | -4.5% | -3.0% | -6.6% |
| 2/9/2026 | 1.9% | 2.9% | -1.3% |
| 10/27/2025 | -1.4% | 0.1% | 8.9% |
| 7/29/2025 | -0.6% | 2.9% | 6.5% |
| 4/29/2025 | -1.9% | 0.7% | 2.0% |
| 2/10/2025 | -2.0% | -3.4% | -2.5% |
| 10/30/2024 | -6.3% | -3.3% | 0.7% |
| 7/30/2024 | -2.5% | -1.6% | 13.0% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 9 | 14 | 14 |
| # Negative | 15 | 10 | 10 |
| Median Positive | 2.2% | 2.9% | 6.6% |
| Median Negative | -2.0% | -1.7% | -3.1% |
| Max Positive | 5.9% | 15.2% | 20.4% |
| Max Negative | -6.3% | -5.8% | -8.1% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 03/31/2026 | 05/05/2026 | 10-Q |
| 12/31/2025 | 02/26/2026 | 10-K |
| 09/30/2025 | 11/06/2025 | 10-Q |
| 06/30/2025 | 08/05/2025 | 10-Q |
| 03/31/2025 | 05/07/2025 | 10-Q |
| 12/31/2024 | 02/27/2025 | 10-K |
| 09/30/2024 | 11/07/2024 | 10-Q |
| 06/30/2024 | 08/06/2024 | 10-Q |
| 03/31/2024 | 05/09/2024 | 10-Q |
| 12/31/2023 | 02/23/2024 | 10-K |
| 09/30/2023 | 11/09/2023 | 10-Q |
| 06/30/2023 | 08/02/2023 | 10-Q |
| 03/31/2023 | 05/04/2023 | 10-Q |
| 12/31/2022 | 02/24/2023 | 10-K |
| 09/30/2022 | 11/03/2022 | 10-Q |
| 06/30/2022 | 08/03/2022 | 10-Q |
Insider Activity
Updated 5/12/2026| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Posner, Brian S | Direct | Sell | 5122026 | 17.14 | 2,000 | Form | |||
| 2 | Houston, Daniel Joseph | Direct | Buy | 5042026 | 94.08 | 5,300 | 498,650 | 932,853 | Form | |
| 3 | Posner, Brian S | Direct | Sell | 3122026 | 17.11 | 3,000 | 51,345 | 34,230 | Form | |
| 4 | Gansberg, David | President, Arch Capital Group | Direct | Sell | 3122026 | 96.37 | 5,907 | 569,266 | 32,434,696 | Form |
| 5 | Papadopoulo, Nicolas | CEO | Direct | Sell | 3122026 | 96.31 | 21,930 | 2,112,063 | 83,942,608 | Form |
ACGL Trade Sentinel
UNDERWEIGHT (Score 3-4)
CONVICTION RATIONALE
The company's elite underwriting profitability is being overshadowed by a cyclical downturn in the reinsurance market, causing a near-complete stall in top-line growth. With the moat being contested and growth below 5%, the stock fits our 'Decay' penalty framework. The risk-reward skew is unattractive, with more downside risk from margin normalization than upside from a re-rating. While the business quality is high, the current market dynamics make it 'dead money' at best and a value trap at worst. The position is designated UNDERWEIGHT.
STOCK ARCHETYPE
Type B: 'Quality Compounder / Stalwart'ACGL fits the 'Quality Compounder' archetype due to its focus on capital efficiency (18.9% annualized operating ROE), earnings consistency through disciplined underwriting (FY2025 combined ratio of 80.8%), and its primary value creation metric of compounding book value per share (up 22.6% in FY2025). It is a mature, profitable leader, not a high-growth or turnaround story.
INVESTMENT THESIS
The primary reason to own ACGL is its proven ability to generate superior returns on equity through disciplined cycle management. By dynamically allocating capital to the most profitable risk segments (Insurance, Reinsurance, Mortgage) and maintaining a best-in-class combined ratio, the company consistently compounds its book value at a rate exceeding peers, creating durable long-term shareholder value irrespective of market hardness or softness.
- The consolidated combined ratio for full-year 2025 was 80.8%, the lowest level recorded since 2016, indicating elite underwriting profitability.
- Annualized operating return on average common equity was a robust 18.9% in Q4 2025, demonstrating highly efficient use of capital.
- Book value per share grew 22.6% year-over-year in FY2025, which is the company's preferred metric for value creation.
PRIMARY RISK
The primary friction on the stock is the significant deceleration in top-line growth, which has stalled to just 1.1% in the most recent quarter. This is driven by a softening reinsurance market where increased capital and competition are pressuring rates, making it difficult for even a disciplined underwriter like Arch to grow its premium base without sacrificing profitability. The market has already reacted negatively to this trend, prioritizing growth over the company's strong but expected profitability.
- Gross Premiums Written (GPW) growth decelerated sharply from +15% in Q2 2025 to just +1.1% in Q4 2025.
- The market reacted negatively to the Q4 2025 earnings, focusing on the revenue miss despite a significant EPS beat, signaling growth is the primary investor concern.
- Industry reports from early 2026 confirm property catastrophe reinsurance rates declined 10-20% at the January 1 renewals, indicating a structural headwind for 48% of ACGL's premium base.
| KPI | Threshold | Rationale |
|---|---|---|
| Gross Premiums Written (GPW) Growth YoY | > 3% | A return to positive, albeit modest, growth would signal that the company has found a floor and can still expand its book in a tough market, alleviating the market's primary concern. |
| Consolidated Combined Ratio | < 85% | This is the core indicator of the Alpha thesis. As long as underwriting profitability remains elite, the long-term compounding thesis is intact, even if growth is slow. |
| Share Repurchase Activity | > $500M per quarter | In a low-growth environment, aggressive and accretive buybacks are a critical driver of EPS and book value per share growth. Continued strong capital return signals management's confidence. |
Growth vs. Profitability: The Great Stall
BULL VIEW
The market will reward ACGL's superior ROE (18.9%) and book value compounding (+22.6% YoY) as durable long-term value drivers, ignoring the temporary cyclical slowdown in reinsurance.
CORE TENSION
Can elite, best-in-class underwriting profitability (80.8% combined ratio) command a premium when top-line premium growth has decelerated to just 1.1%, signaling a potential value trap?
PREVAILING SENTIMENT
The market's negative reaction to Q4 2025 earnings, where a revenue miss overshadowed an EPS beat, confirms investors are solely focused on the sharp deceleration in Gross Premiums Written.
BEAR VIEW
Stalled growth in a softening reinsurance market is a structural headwind. The stock is 'dead money' as the market prioritizes growth, leading to further multiple compression.
| Timeline | Event & Metric To Watch |
|---|---|
April 28, 2026 | Q1 2026 Earnings & Guidance Watch: Gross Premiums Written (GPW) Growth YoY. Watch for a rebound from the 1.1% baseline established in Q4 2025. A result below 1% would be a major negative. |
June - July 2026 | Mid-Year Reinsurance Renewals Commentary Watch: Reports from reinsurance brokers (Aon, Guy Carpenter) on pricing trends. Watch for commentary on further rate softening beyond the -10-20% seen at Jan 1 renewals. |
Late July 2026 | Q2 2026 Earnings Report Watch: Mortgage Insurance segment's provision for losses and commentary on U.S. delinquency trends. An increase above expectations would signal credit normalization. |
June - October 2026 | Start of Atlantic Hurricane Season Watch: National Hurricane Center (NHC) issuing a watch/warning for a Category 3+ hurricane targeting a high-value coastal area (e.g., Florida, Gulf Coast). |
| Date | Event | Stock Impact |
|---|---|---|
2025-10-22 | Hurricane Season Loss Update Details: The market digested Q3 hurricane season activity. While specific losses weren't pre-announced on this date, the lack of a major market-moving event provided stability for reinsurers. | Flat (0.2%) $87.70 -> $87.88 |
2025-10-28 | Q3 2025 Earnings Report Details: The company reported strong Q3 results, beating analyst expectations. This continued a pattern of management setting conservative expectations and delivering strong bottom-line results. | Slight -1.4% pullback $85.94 -> $84.72 |
2025-12-31 | Full-Year 2025 Results Summary Details: ACGL closed FY2025 with a record-low consolidated combined ratio of 80.8% and grew book value per share by 22.6%, demonstrating elite profitability and capital compounding. | Muted (-0.8%) $96.66 -> $95.92 |
2026-01-01 | Reinsurance Renewal Season Update Details: Industry reports confirmed a softening market, with property catastrophe reinsurance rates declining 10-20% at the key Jan 1 renewals, a structural headwind for ACGL's reinsurance segment. | Slight -2.1% pullback $95.92 -> $93.86 |
2026-02-09 | Q4 2025 Earnings Report Details: Reported strong EPS of $2.98, beating estimates. However, Gross Premiums Written growth decelerated sharply to +1.1%, concerning investors. The stock fell despite the earnings beat. | Fell notably by -4.8% $100.95 -> $96.06 |
2026-03-10 | Clustered Insider Selling Details: Reports surfaced of multiple insider sales during Q1 2026, including the CEO of Arch Capital Group, totaling approximately $39.5M over the prior twelve months. Stock reaction was muted. | Flat (0.6%) $95.62 -> $96.19 |
Position Sizing
1% - 3%
CONSERVATIVE
Volatility is stable, but fundamentals are weak. The Bearish sentiment, Contested moat, and Medium visibility override the fair valuation, demanding a conservative watchlist position until growth returns.
Diversification Alternatives
RNR
INDUSTRYUnlike ACGL, RNR has a superior underwriting record (lower combined ratio) and is the recognized leader in sophisticated property catastrophe modeling, offering a higher quality profile.
CB
SECTORCB offers greater scale and diversification than ACGL, with a leading position in specialty commercial lines that are less exposed to the current reinsurance cycle headwinds.
Arch Capital is a disciplined, multi-engine specialty underwriter transforming from a pure risk-taker into a cycle-management leader that generates superior returns by dynamically allocating capital across Insurance, Reinsurance, and Mortgage segments.
Filter all news through the lens of underwriting discipline and capital allocation efficiency across its three non-correlated segments.
Consolidated combined ratios remaining below 85%; growth in book value per share exceeding 15% annually; specialty insurance premium growth outpacing the broader P&C market; successful risk transfer in Mortgage segment via insurance-linked securities (ILS).
A major catastrophe event causing losses significantly above budget; a severe housing downturn leading to widespread mortgage defaults; evidence of abandoning underwriting discipline for market share, reflected in a rising combined ratio.
Minor quarterly fluctuations in gross premiums written in any single segment; short-term interest rate movements (portfolio is high-quality and short-duration); single-analyst rating changes.
Repricing Catalyst
Sustained high-return environment in specialty insurance and reinsurance, allowing Arch to compound book value at a superior rate. The company's ability to generate a 17.1% annualized operating return on equity in FY225 in a hard market demonstrates the earnings power of its diversified, specialty-focused model.
Reinsurance
$11.1B TTM (48% of Total) · 19.2% MarginWhat It Is
Property-catastrophe treaties, Specialty and Casualty treaty reinsurance for other insurance companies.
Who Pays & How
Other insurance companies (cedents) pay Arch to take on a portion of their risk, allowing them to manage their own capital exposure to large events like hurricanes or to specific, complex lines of business.
Competition
Insurance (Specialty P&C)
$10.4B TTM (46% of Total) · 9.2% MarginWhat It Is
Specialty lines including Directors & Officers liability, Errors & Omissions, Cyber, Commercial Auto, and Excess & Surplus (E&S) coverage for hard-to-place risks.
Who Pays & How
Corporations and businesses pay premiums to protect against specific, complex operational and financial risks that standard insurers often avoid.
Competition
Mortgage Insurance & Reinsurance
$1.3B TTM (6% of Total) · 66% MarginWhat It Is
U.S. Primary Mortgage Insurance (MI) for lenders; Credit Risk Transfer (CRT) securities for government-sponsored enterprises (GSEs).
Who Pays & How
Mortgage lenders pay premiums to insure against borrower defaults on high loan-to-value loans. Capital markets investors pay for CRT securities to take on mortgage credit risk.
Competition
Industry Resources
| Financials Resources |
| Federal Reserve Economic Data |
| Federal Reserve |
| FDIC Data |
| American Banker |
| The Banker |
| Banking Technology |
| Property & Casualty Insurance Resources |
| Insurance Journal |
| Business Insurance |
| PropertyCasualty360 |
External Quote Links
| Y Finance | Barrons |
| TradingView | Morningstar |
| SeekingAlpha | ValueLine |
| Motley Fool | Robinhood |
| CNBC | Etrade |
| MarketWatch | Unusual Whales |
| YCharts | Perplexity Finance |
| FinViz |
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