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Is a Beat in the Cards for Arch Capital This Earnings Season?
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Key Takeaways
ACGL net premiums earned may rise 2.3% on rate increases, new business growth and stronger underwriting.
Underwriting profitability may improve with better pricing, exposure growth & favorable catastrophe backdrop.
Mortgage segment weakness and higher expenses may weigh, while share buybacks could support the bottom line.
Arch Capital Group Ltd. (ACGL - Free Report) is expected to register an improvement in both top and bottom lines when it reports first-quarter 2026 results on April 28, after the closing bell.
The Zacks Consensus Estimate for ACGL’s first-quarter revenues is pegged at $4.67 billion, indicating 2.4% growth from the year-ago reported figure.
The consensus estimate for earnings is pegged at $2.45 per share. The Zacks Consensus Estimate for ACGL’s first-quarter earnings has moved south 1.2% in the past 30 days. The estimate suggests a year-over-year rise of 59.1%.
What the Zacks Model Unveils for ACGL
Our proven model predicts an earnings beat for Arch Capital this time around. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), which increases the chances of an earnings beat.
Earnings ESP: Arch Capital has an Earnings ESP of +0.63% at present. This is because the Most Accurate Estimate of $2.46 is pegged higher than the Zacks Consensus Estimate of $2.45. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Arch Capital currently carries a Zacks Rank #3.
Factors Likely to Shape Q1 Results of ACGL
Rate increases, new business opportunities and growth in existing accounts, product innovation, market expansion and strong underwriting performance, combined with strategic investments, are likely to have favored net premiums earned.
The Zacks Consensus Estimate for net premiums earned is pegged at $4.2 billion. We expect net premiums earned to increase 2.3% to $4.3 billion.
The Mortgage segment is likely to have declined due to the lower gross premiums written and expenses related to tender offers of certain Bellemeade Re mortgage insurance-linked notes.
Net investment income is likely to have benefited from solid net cash flow from operating activities, which is expected to have increased the invested asset base. We expect net investment income to be $378.2 million. The Zacks Consensus Estimate for investment income is pegged at $418 million.
The top line is likely to have gained from improved earned premiums and higher net investment income.
Expenses are expected to have increased in the to-be-reported quarter due to higher losses and loss adjustment expenses, acquisition costs, other operating expenses, amortization of intangible assets, corporate expenses and interest expenses. We expect total expenses to be $3.7 billion.
Prudent underwriting, combined with better pricing and increased exposure, is likely to have improved underwriting profitability. A not-so-active catastrophe environment is expected to have added to the upside, leading to an improvement in the combined ratio. The Zacks Consensus Estimate for the combined ratio is pegged at 83, and our estimate is pinned at 83.2.
Share buybacks are likely to have added upside to the bottom line.
Other Stocks to Consider
Here are three other P&C insurance stocks that you may want to consider, as our model shows that these, too, have the right combination of elements to post an earnings beat:
The Zacks Consensus Estimate for first-quarter 2026 earnings is pegged at $3.23 per share, indicating a year-over-year increase of 1.8%.
AXS’ earnings beat estimates in each of the last four quarters.
RenaissanceRe Holdings Ltd. (RNR - Free Report) has an Earnings ESP of +2.97% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for first-quarter 2026 earnings is pegged at $11.07, indicating a year-over-year increase of 842.95%.
RNR’s earnings beat estimates in three of the last four reported quarters and missed in one.
The Allstate Corporation (ALL - Free Report) has an Earnings ESP of +0.04% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for first-quarter 2026 earnings is pegged at $7.43, indicating a year-over-year increase of 110.4%.
ALL’s earnings beat estimates in each of the last four reported quarters.
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Is a Beat in the Cards for Arch Capital This Earnings Season?
Key Takeaways
Arch Capital Group Ltd. (ACGL - Free Report) is expected to register an improvement in both top and bottom lines when it reports first-quarter 2026 results on April 28, after the closing bell.
The Zacks Consensus Estimate for ACGL’s first-quarter revenues is pegged at $4.67 billion, indicating 2.4% growth from the year-ago reported figure.
The consensus estimate for earnings is pegged at $2.45 per share. The Zacks Consensus Estimate for ACGL’s first-quarter earnings has moved south 1.2% in the past 30 days. The estimate suggests a year-over-year rise of 59.1%.
What the Zacks Model Unveils for ACGL
Our proven model predicts an earnings beat for Arch Capital this time around. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), which increases the chances of an earnings beat.
Earnings ESP: Arch Capital has an Earnings ESP of +0.63% at present. This is because the Most Accurate Estimate of $2.46 is pegged higher than the Zacks Consensus Estimate of $2.45. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Arch Capital Group Ltd. Price and EPS Surprise
Arch Capital Group Ltd. price-eps-surprise | Arch Capital Group Ltd. Quote
Zacks Rank: Arch Capital currently carries a Zacks Rank #3.
Factors Likely to Shape Q1 Results of ACGL
Rate increases, new business opportunities and growth in existing accounts, product innovation, market expansion and strong underwriting performance, combined with strategic investments, are likely to have favored net premiums earned.
The Zacks Consensus Estimate for net premiums earned is pegged at $4.2 billion. We expect net premiums earned to increase 2.3% to $4.3 billion.
The Mortgage segment is likely to have declined due to the lower gross premiums written and expenses related to tender offers of certain Bellemeade Re mortgage insurance-linked notes.
Net investment income is likely to have benefited from solid net cash flow from operating activities, which is expected to have increased the invested asset base. We expect net investment income to be $378.2 million. The Zacks Consensus Estimate for investment income is pegged at $418 million.
The top line is likely to have gained from improved earned premiums and higher net investment income.
Expenses are expected to have increased in the to-be-reported quarter due to higher losses and loss adjustment expenses, acquisition costs, other operating expenses, amortization of intangible assets, corporate expenses and interest expenses. We expect total expenses to be $3.7 billion.
Prudent underwriting, combined with better pricing and increased exposure, is likely to have improved underwriting profitability. A not-so-active catastrophe environment is expected to have added to the upside, leading to an improvement in the combined ratio. The Zacks Consensus Estimate for the combined ratio is pegged at 83, and our estimate is pinned at 83.2.
Share buybacks are likely to have added upside to the bottom line.
Other Stocks to Consider
Here are three other P&C insurance stocks that you may want to consider, as our model shows that these, too, have the right combination of elements to post an earnings beat:
Axis Capital Holdings Limited (AXS - Free Report) has an Earnings ESP of +1.34% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for first-quarter 2026 earnings is pegged at $3.23 per share, indicating a year-over-year increase of 1.8%.
AXS’ earnings beat estimates in each of the last four quarters.
RenaissanceRe Holdings Ltd. (RNR - Free Report) has an Earnings ESP of +2.97% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for first-quarter 2026 earnings is pegged at $11.07, indicating a year-over-year increase of 842.95%.
RNR’s earnings beat estimates in three of the last four reported quarters and missed in one.
The Allstate Corporation (ALL - Free Report) has an Earnings ESP of +0.04% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for first-quarter 2026 earnings is pegged at $7.43, indicating a year-over-year increase of 110.4%.
ALL’s earnings beat estimates in each of the last four reported quarters.