Q1 2025 Arch Capital Group Ltd Earnings Call Transcript
Key Points
- Arch Capital Group Ltd (ACGL) reported solid first-quarter results with $587 million of after-tax operating income and an annualized operating return on equity of 11.5%.
- The company achieved a 91.8 combined ratio in its Reinsurance segment, demonstrating strong underlying profitability despite substantial catastrophe losses.
- The Insurance segment saw a 25% increase in net premium written, driven by the integration of the Middle Market Commercial and Entertainment businesses.
- The Mortgage segment contributed $252 million of underwriting income, maintaining a low delinquency rate below 2%.
- Invested assets increased by 4% to $43.1 billion, providing a sustainable contributor to group earnings.
- Arch Capital Group Ltd (ACGL) faced $547 million in catastrophe losses, primarily from California wildfires, impacting the property and casualty segment.
- The PNC market has become increasingly competitive, posing challenges for premium growth.
- Specialty premium writings declined due to non-renewing a large structural transaction and weaker margins in Cyber and parts of the International treaty business.
- Economic uncertainty, including potential impacts of tariffs and inflationary risks, poses challenges for some business segments.
- The company experienced modest growth in net premium written in the Reinsurance segment due to increased competition and more risk retention by ceding companies.
Good day, ladies and gentlemen, and welcome to the first quarter 2025 Arch Capital earnings conference call. (Operator Instructions) As a reminder, this conference call is being recorded.
Before the company gets started with its update, management wants to first remind everyone that certain statements in yesterday's press release and discussed on this call may constitute forward-looking statements under the federal securities laws. These statements are based upon management's current assessments and assumptions and are subject to a number of risks and uncertainties.
Consequently, actual results may materially from those expressed or implied. For more information on the risks and other factors that may affect future performance, investors should review periodic reports that are filed by the company with the SEC from time to time, including our annual report on Form 10-K for the 2024 fiscal year.
Additionally, certain statements contained in the call that are not based on historical facts are forward-looking statements within the meaning of the Private Securities Litigation
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