Arch Capital has released its financial results for the third quarter of 2025, reporting net income available to common shareholders of $1.3 billion.
This compares to $1.0 billion in the same period last year. After-tax operating income available to common shareholders reached $1.0 billion, up from $762 million in the third quarter of 2024.
The company’s insurance segment saw gross premiums written rise by 9.7% and net premiums written increase by 7.3% compared to the prior year. Growth in net premiums written was primarily attributed to business related to the MCE Acquisition. Net premiums earned in the insurance segment were 11.6% higher than in the 2024 third quarter, reflecting changes in net premiums written over recent quarters.
The third quarter results follow a second quarter in which Arch Capital posted a profit of $1.2 billion. While this figure represented a decrease from the same period in the previous year, the company reported a combined ratio of 81.9% and a 13.9% year-on-year increase in gross premiums written.
Arch attributed its Q2 performance to lower catastrophe losses and continued growth in both its insurance and reinsurance segments, indicating ongoing momentum leading into the third quarter.
Chief executive officer Nicolas Papadopoulo (pictured above) said, “We are extremely pleased with our financial performance this quarter, which resulted in us delivering record-level results of operating income.”
Papadopoulo said that that the company benefitted from a relatively quiet quarter for natural catastrophes and remains positive about its ability to perform in the current market, which he said “should lead to strong financial results on behalf of our shareholders.”
For the insurance segment, the third quarter loss ratio included 2.2 points of current year catastrophic activity, a reduction from 4.9 points in the same period last year. Net favorable development of prior year loss reserves reduced the loss ratio by 0.7 points, compared to 0.9 points in the 2024 third quarter.
The underwriting expense ratio for the insurance segment was 34.4%, up from 31.5% in the prior year. The previous year’s ratio was lowered by the MCE Acquisition, which affected the fair value estimation of acquired assets and the recognition of deferred acquisition costs.
In the reinsurance segment, gross premiums written declined by 9.0% and net premiums written were down 10.7% from the third quarter of 2024. The decrease was mainly due to the impact of two transactions in the prior year’s specialty line of business and a lower level of reinstatement premiums in the current quarter. Net premiums earned in the reinsurance segment increased by 6.5% year-on-year.
The reinsurance segment’s loss ratio reflected 1.3 points of current year catastrophic activity, down from 21.3 points in the third quarter of 2024. Net favorable development of prior year loss reserves reduced the loss ratio by 2.6 points, compared to 2.2 points in the prior year.
The underwriting expense ratio in the reinsurance segment was 24.5%, compared to 22.7% in the third quarter of 2024, with the increase mainly due to higher incentive compensation expenses.
Book value per common share stood at $62.32 as of September 30, representing a 5.3% increase from the end of June 2025. The company also reported share repurchases of approximately $732 million during the quarter.
What are your thoughts on this story? Please feel free to share your comments below.
