It has been about a month since the last earnings report for Arch Capital Group (ACGL Quick QuoteACGL - Free Report) . Shares have added about 7.1% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Arch Capital due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.

Arch Capital Q2 Earnings Beat Estimates on Higher Premiums

Arch Capital Group Ltd. reported second-quarter 2025 operating income of $2.58 per share, beating the Zacks Consensus Estimate by 11.7%. The bottom line increased 0.49% year over year. The quarterly results of ACGL benefited from higher premiums across its Insurance and Reinsurance segments and improved net investment income.

Behind the Headlines

Gross premiums written improved 15.1% year over year to $6.2 billion.
Net premiums written climbed 15% year over year to $4.3 billion on higher premiums written across its Insurance and Reinsurance segments. Pre-tax net investment income increased 11.3% year over year to $405 million. The uptick was driven by growth in average invested assets, due in part to strong operating cash flows.  The Zacks Consensus Estimate was pegged at $401 million. Our estimate was $411.5 million.

Operating revenues of $4.8 billion rose 20.9% year over year, driven by higher net premiums earned, net investment income and other income. It beat the Zacks Consensus Estimate by 2.62%. Pre-tax current accident year catastrophic losses for the company’s insurance and reinsurance segments, net of reinsurance and reinstatement premiums, were $154 million, narrower than the year-ago period’s loss of $196 million.

Arch Capital’s underwriting income increased 7.3% year over year to $818 million. The combined ratio, the percentage of premiums paid out as claims and expenses, deteriorated 250 basis points (bps) to 81.2. The Zacks Consensus Estimate was pegged at 82.

Segmental Results

Insurance: Gross premiums written increased 27.5% year over year to $2.7 billion. Net premiums written climbed 30.7% year over year to $2 billion, driven by increases in most lines of business (1.7% excluding the MCE Acquisition).

Underwriting income of $129 million was 18.3% higher than the year-ago number. The combined ratio deteriorated 80 bps to 93.4. The Zacks Consensus Estimate was pegged at 95.

Reinsurance: Gross premiums written improved 8.7% year over year to $3.2 billion. Net premiums written rose 5.8% year over year to $2.1 billion. The growth in net premiums written reflected increases in all lines of business, due in part to rate increases, new business opportunities and growth in existing accounts.

Underwriting income was $451 million, up 23.2% year over year. The combined ratio improved 100 bps year over year to 78.5. The Zacks Consensus Estimate was pegged at 80.

Mortgage: Gross premiums written dipped 5% year over year to $323 million. Net premiums written decreased 8.3% year over year to $253 million on account of a one-time expense related to the tender offer of certain Bellemeade Re mortgage insurance linked notes and a lower level of mortgage originations.

Underwriting income decreased 17.1% year over year to $238 million. The combined ratio deteriorated 780 bps to 15.2. The Zacks Consensus Estimate was pegged at 22.8.

Financial Update

Arch Capital exited the quarter with cash of $983 million, which increased 0.4% from 2024-end. Debt was $2.7 billion as of June 30, 2025, which remained unchanged from the end of 2024. As of June 30, 2025, the book value per share was $59.17, up 11.4% from the 2024-end level.

Annualized operating return on average common equity contracted 230 bps year over year to 18.2%. Cash from operations of $1.1 billion declined 26% year over year. ACGL repurchased $163 million worth of shares in the second quarter of 2025.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates review.

VGM Scores

At this time, Arch Capital has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock has a score of B on the value side, putting it in the second quintile for value investors.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Arch Capital has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Arch Capital belongs to the Zacks Insurance - Property and Casualty industry. Another stock from the same industry, Cincinnati Financial (CINF Quick QuoteCINF - Free Report) , has gained 3% over the past month. More than a month has passed since the company reported results for the quarter ended June 2025.

Cincinnati Financial reported revenues of $2.78 billion in the last reported quarter, representing a year-over-year change of +15.3%. EPS of $1.97 for the same period compares with $1.29 a year ago.

Cincinnati Financial is expected to post earnings of $1.68 per share for the current quarter, representing a year-over-year change of +18.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +2.2%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Cincinnati Financial. Also, the stock has a VGM Score of D.