Arch Capital Group Ltd. (ACGL - Free Report) reported first-quarter 2017 earnings per share of $1.42 that beat the Zacks Consensus Estimate of $1.33 by 6.8%. Moreover, earnings improved 21.4% from the year-ago quarter.
Arch Capital Group’s net income jumped 45% year over year to $1.74 per share.
Behind the Headlines
Gross premiums written climbed 15.3% year over year to $1.7 billion on higher premiums written at the Mortgage segment.
Net investment income jumped 36.1% to $95.8 million. The upside was supported by income on the acquired United Guaranty portfolio and higher returns on fund investments.
Arch Capital Group’s underwriting income soared 83.3% year over year to $212.1 million. Combined ratio improved 700 basis points (bps) to 81.4%.
Segment Result
Insurance Segment: Gross premiums written declined 2% year over year to $782.3 million.
Underwriting income of $10 million plummeted 66.7% from the year-ago quarter. Combined ratio deteriorated 380 bps to 99.4%.
Reinsurance Segment: Gross premiums written in the quarter dipped 1.2% year over year to $475.8 million.
Underwriting income decreased about 6% year over year to $55.4 million. Combined ratio improved 40 bps year over year to 77.2%.
Mortgage Segment: Gross premiums written in the quarter skyrocketed 213.3% year over year to $348.6 million, largely driven by growth in U.S. primary business.
Underwriting income skyrocketed 438.8% year over year to $148.9 million. Combined ratio improved 2060 bps year over year to 40.8%.
Financial Update
Arch Capital Group exited the first quarter with total capital of $10.84 billion compared with $10.49 at year-end 2016.
As of Mar 31, 2017, diluted book value per share was $55.69, up 4.5% year over year.
Operating return on equity was 10.3% as of Mar 31, 2017 compared with 9.8% as of Mar 31, 2016.
Zacks Rank
Arch Capital Group presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other P&C Insurers
Among other players from the same space that have reported their first-quarter earnings so far, the bottom line at The Progressive Corporation (PGR - Free Report) , The Travelers Companies, Inc. (TRV - Free Report) and RLI Corp. (RLI - Free Report) missed their respective Zacks Consensus Estimate.
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Arch Capital Group Ltd. (ACGL - Free Report) reported first-quarter 2017 earnings per share of $1.42 that beat the Zacks Consensus Estimate of $1.33 by 6.8%. Moreover, earnings improved 21.4% from the year-ago quarter.
Arch Capital Group’s net income jumped 45% year over year to $1.74 per share.
Behind the Headlines
Gross premiums written climbed 15.3% year over year to $1.7 billion on higher premiums written at the Mortgage segment.
Net investment income jumped 36.1% to $95.8 million. The upside was supported by income on the acquired United Guaranty portfolio and higher returns on fund investments.
Arch Capital Group’s underwriting income soared 83.3% year over year to $212.1 million. Combined ratio improved 700 basis points (bps) to 81.4%.
Segment Result
Insurance Segment: Gross premiums written declined 2% year over year to $782.3 million.
Underwriting income of $10 million plummeted 66.7% from the year-ago quarter. Combined ratio deteriorated 380 bps to 99.4%.
Reinsurance Segment: Gross premiums written in the quarter dipped 1.2% year over year to $475.8 million.
Underwriting income decreased about 6% year over year to $55.4 million. Combined ratio improved 40 bps year over year to 77.2%.
Mortgage Segment: Gross premiums written in the quarter skyrocketed 213.3% year over year to $348.6 million, largely driven by growth in U.S. primary business.
Underwriting income skyrocketed 438.8% year over year to $148.9 million. Combined ratio improved 2060 bps year over year to 40.8%.
Financial Update
Arch Capital Group exited the first quarter with total capital of $10.84 billion compared with $10.49 at year-end 2016.
As of Mar 31, 2017, diluted book value per share was $55.69, up 4.5% year over year.
Operating return on equity was 10.3% as of Mar 31, 2017 compared with 9.8% as of Mar 31, 2016.
Zacks Rank
Arch Capital Group presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other P&C Insurers
Among other players from the same space that have reported their first-quarter earnings so far, the bottom line at The Progressive Corporation (PGR - Free Report) , The Travelers Companies, Inc. (TRV - Free Report) and RLI Corp. (RLI - Free Report) missed their respective Zacks Consensus Estimate.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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