A Business at a Glance
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ARCH CAPITAL GROUP LTD.
ACGL
$38.8B
Mkt Cap
$103.36
+3.26%
ARCH CAPITAL GROUP LTD. (ACGL) has a current P/E ratio of 8.9, compared to its historical median P/E of 10.3. The stock is currently considered Fair based on its historical valuation range.
ARCH CAPITAL GROUP LTD. (ACGL) has a 5-year average return on invested capital (ROIC) of 16.5%. This indicates strong capital allocation and a potential competitive advantage.
ARCH CAPITAL GROUP LTD. (ACGL) has a market capitalization of $62.3B. It is classified as a large-cap stock.
Yes, ARCH CAPITAL GROUP LTD. (ACGL) pays a dividend with a trailing twelve-month yield of 0.06%. The company also returns capital through share buybacks, with a buyback yield of 3.98%.
Based on historical P/E analysis, ARCH CAPITAL GROUP LTD. (ACGL) appears fair. The current P/E of 8.9 is 13% below its historical median of 10.3. The estimated fair value CAGR (P/E method) is 29.3%.
ARCH CAPITAL GROUP LTD. (ACGL) operates in the Fire, Marine & Casualty Insurance industry, within the Financials sector.
ARCH CAPITAL GROUP LTD. (ACGL) reported annual revenue of $19.9 billion in its most recent fiscal year, based on SEC EDGAR filings.
Arch Capital is a Bermuda-domiciled insurance, reinsurance, and mortgage insurance company with approximately $26.9 billion in capital, operating a diversified specialty-focused underwriting platform across three segments: insurance, reinsurance, and mortgage. The insurance segment writes specialty lines on both admitted and non-admitted bases across Bermuda, the U.S., the U.K., Europe, Canada, and Australia through multiple subsidiaries and Lloyd's syndicates, with a strategic focus on talent-intensive rather than labor-intensive business and disciplined underwriting in lines where expertise drives profitability; in August 2024, the company acquired Allianz's U.S. Middle Market Property and Casualty and Entertainment insurance businesses to expand its U.S. middle market presence. The reinsurance segment operates through Bermuda, U.S., and European platforms, writing multi-line reinsurance and property facultative business, with a 2021 acquisition of Somerset Group adding motor insurance managing general agent and distribution capabilities. The mortgage segment provides U.S. and international mortgage insurance and reinsurance, including participation in government-sponsored enterprise credit risk-sharing transactions, with operations in the U.S., Europe, and Australia. The company's business model emphasizes cycle management—actively growing writings in attractive-return lines while selectively reducing exposure where risk-adjusted returns fall short of targets—paired with proactive capital management and a strong capital base to generate consistent returns across market cycles. Arch maintains a diversified geographic footprint and operates through wholly owned subsidiaries as well as strategic investments in affiliated entities including a 30% stake in Greysbridge Holdings (parent of Somers Re), 25% of Premia Reinsurance, and 29.5% of Coface SA.
【Capital deployment and market positioning】 Management expects to remain active on share buybacks throughout 2026 given the current market environment, with no specific targets set but opportunistic repurchases anticipated. The company anticipates its operating expense ratio in the reinsurance segment to benefit from the full-year effect of 2025 Bermuda tax credits, with expectations for a 2026 operating expense ratio between 3.9%-4.5%, while corporate expenses are expected to be approximately $80-$90 million. For 2026, the annualized effective tax rate is expected to return to the 16%-18% range, and catastrophe losses are estimated at 7%-8% of overall net earned premium, similar to prior-year estimates. Management expects the mid-year renewals to remain competitive with market adjustments to underwriting standards, and while property rate pressure is anticipated, casualty lines are expected to provide rate increase opportunities; the company remains disciplined in allocating capital to opportunities meeting risk-adjusted return targets and expects to grow better than the market in its insurance operations.
| Metric | Target | Period |
|---|---|---|
| Operating expense ratio (reinsurance segment) | 3.9%-4.5% | FY2026 |
| Corporate expenses | $80-$90 million | FY2026 |
| Effective tax rate | 16%-18% | FY2026 |
| Catastrophe losses | 7%-8% of overall net earned premium | FY2026 |
| Net premium reduction from non-renewals | approximately $250 million | 2026 |
Operating expense ratio (reinsurance segment) (FY2026): “for the reinsurance segment, we would expect our operating expense ratio to benefit, resulting in a full-year 2026 operating expense ratio between 3.9%-4.5%”
Corporate expenses (FY2026): “our corporate expenses should also be reduced from their run-rate levels and be approximately between $80-$90 million in 2026”
Effective tax rate (FY2026): “As we look ahead to 2026, we would expect our annualized effective tax rate to return to the 16%-18% range for the full year”
Catastrophe losses (FY2026): “For 2026, our current estimate of the full-year catastrophe losses stands within a range of 7%-8% of overall net earned premium, similar to the estimate we disclosed last year”
Net premium reduction from non-renewals (2026): “These non-renewals are expected to reduce net premium return by approximately $250 million throughout 2026”
Generated solely from the company's own reports listed below — not from third-party data. Hallucination risk is low. · Sources: 10-K, Q4 FY2025 Earnings Call, Q3 FY2025 Earnings Call, Q2 FY2025 Earnings Call, Q1 FY2025 Earnings Call
| Metric | TTM | FY2025 | FY2024 | FY2023 | FY2022 | FY2021 |
|---|---|---|---|---|---|---|
| Revenue | 19.8B | 19.9B | 17.4B | 13.6B | 9.6B | 9.2B |
| Net Income | 4.8B | 4.4B | 4.3B | 4.4B | 1.4B | 2.1B |
| EPS | $9.43 | $11.60 | $11.19 | $11.62 | $3.80 | $5.23 |
| Free Cash Flow | 5.9B | 6.1B | 6.6B | 5.7B | 3.8B | 3.4B |
| ROIC | 18.2% | 17.3% | 19.1% | 24.0% | 9.0% | 13.0% |
| Gross Margin | - | 25.0% | 25.7% | 24.8% | 15.5% | 22.7% |
| Debt/Equity | 0.10 | 0.11 | 0.13 | 0.15 | 0.21 | 0.20 |
| Dividends/Share | $0.07 | $0.11 | $0.10 | $0.11 | $0.11 | $0.12 |
| Operating Income | 51M | 5.2B | 4.7B | 3.6B | 1.6B | 2.4B |
| Operating Margin | 0.3% | 25.9% | 26.8% | 26.2% | 16.2% | 25.6% |
| ROE | 20.0% | 19.4% | 21.8% | 28.2% | 10.9% | 15.7% |
| Shares Outstanding | 602M | 376M | 382M | 379M | 378M | 400M |
| Metric | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Income Statement | |||||||||||||
| Revenue | 4.0B | 3.9B | 4.5B | 5.6B | 5.5B | 6.9B | 8.5B | 9.2B | 9.6B | 13.6B | 17.4B | 19.9B | 19.8B |
| Gross Margin | 21.2% | 14.4% | 19.2% | 13.5% | 15.4% | 26.7% | 18.3% | 22.7% | 15.5% | 24.8% | 25.7% | 25.0% | N/A |
| R&D | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| SG&A | 50M | 50M | 82M | 84M | 79M | 80M | 82M | 78M | 95M | 102M | 200M | 132M | 121M |
| EBIT | 844M | 567M | 856M | 757M | 842M | 1.8B | 1.6B | 2.4B | 1.6B | 3.6B | 4.7B | 5.2B | 51M |
| Op. Margin | 21.2% | 14.4% | 19.2% | 13.5% | 15.4% | 26.7% | 18.5% | 25.6% | 16.2% | 26.2% | 26.8% | 25.9% | 0.3% |
| Net Income | 812M | 516M | 665M | 567M | 714M | 1.6B | 1.4B | 2.1B | 1.4B | 4.4B | 4.3B | 4.4B | 4.8B |
| Net Margin | 20.4% | 13.1% | 14.9% | 10.1% | 13.1% | 23.0% | 16.0% | 22.6% | 14.9% | 32.3% | 24.5% | 21.9% | 24.4% |
| Non-Recurring | 0 | 0 | 31M | 7.1M | 0 | 0 | 0 | 0 | 0 | 2.0M | 0 | 0 | 0 |
| Returns on Capital | |||||||||||||
| ROIC | 12.2% | 7.5% | 7.8% | 5.4% | 6.5% | 13.0% | 9.3% | 13.0% | 9.0% | 24.0% | 19.1% | 17.3% | 18.2% |
| ROE | 13.8% | 8.4% | 9.2% | 6.5% | 7.7% | 15.2% | 11.1% | 15.7% | 10.9% | 28.2% | 21.8% | 19.4% | 20.0% |
| ROA | 3.9% | 2.3% | 2.5% | 1.8% | 2.2% | 4.5% | 3.4% | 4.7% | 3.1% | 8.2% | 6.6% | 5.8% | 5.9% |
| Cash Flow | |||||||||||||
| Op. Cash Flow | 1.0B | 998M | 1.4B | 1.1B | 1.6B | 2.0B | 2.9B | 3.4B | 3.8B | 5.7B | 6.7B | 6.2B | 5.9B |
| Free Cash Flow | 1.0B | 982M | 1.4B | 1.1B | 1.5B | 2.0B | 2.8B | 3.4B | 3.8B | 5.7B | 6.6B | 6.1B | 5.9B |
| Owner Earnings | 957M | 919M | 1.3B | 901M | 1.4B | 1.9B | 2.7B | 3.3B | 3.6B | 5.6B | 6.3B | 5.8B | 5.6B |
| CapEx | 20M | 16M | 15M | 23M | 30M | 38M | 40M | 41M | 50M | 52M | 51M | 44M | 43M |
| Maint. CapEx | 26M | 23M | 19M | 126M | 106M | 82M | 69M | 82M | 106M | 95M | 235M | 193M | 174M |
| Growth CapEx | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| D&A | 26M | 23M | 19M | 126M | 106M | 82M | 69M | 82M | 106M | 95M | 235M | 193M | 174M |
| CapEx/OCF | 1.9% | 1.6% | 1.1% | 2.1% | 1.9% | 1.8% | 1.4% | 1.2% | 1.3% | 0.9% | 0.8% | 0.7% | 0.7% |
| Capital Allocation | |||||||||||||
| Dividends Paid | 22M | 22M | 28M | 46M | 42M | 42M | 42M | 47M | 40M | 40M | 40M | 40M | 40M |
| Dividend Yield | 0.3% | 0.3% | 0.1% | 0.1% | 0.4% | 0.3% | 0.3% | 0.3% | 0.2% | 0.1% | 0.1% | 0.1% | 0.1% |
| Share Buybacks | 454M | 365M | 75M | 0 | 283M | 2.9M | 83M | 1.2B | 586M | 0 | 24M | 1.9B | 2.5B |
| Buyback Yield | 6.0% | 4.3% | 0.7% | N/A | 2.7% | 0.0% | 0.6% | 7.3% | 2.6% | N/A | 0.1% | 5.2% | 4.0% |
| Stock-Based Comp | 55M | 56M | 57M | 68M | 56M | 66M | 71M | 88M | 88M | 93M | 133M | 148M | 156M |
| Debt Repayment | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Balance Sheet | |||||||||||||
| Net Debt | -10.3B | -9.7B | -11.8B | -11.9B | -13.2B | -15.3B | -16.6B | -17.9B | -19.1B | -23.8B | -28.1B | -33.3B | 1.5B |
| Cash & Equiv. | 486M | 553M | 843M | 606M | 647M | 726M | 906M | 859M | 855M | 917M | 979M | 993M | 925M |
| Long-Term Debt | 791M | 791M | 1.7B | 1.7B | 1.7B | 1.9B | 2.9B | 2.7B | 2.7B | 2.7B | 2.7B | 2.7B | 2.4B |
| Debt/Equity | 0.15 | 0.21 | 0.30 | 0.28 | 0.23 | 0.20 | 0.23 | 0.20 | 0.21 | 0.15 | 0.13 | 0.11 | 0.10 |
| Interest Coverage | 18.5 | 12.4 | 12.9 | 6.4 | 7.0 | 15.3 | 11.0 | 17.0 | 11.9 | 26.8 | 33.1 | 34.9 | 0.3 |
| Equity | 6.1B | 6.2B | 8.3B | 9.2B | 9.4B | 11.5B | 13.1B | 13.5B | 12.9B | 18.4B | 20.8B | 24.2B | 24.2B |
| Total Assets | 22.0B | 23.1B | 29.4B | 32.1B | 32.2B | 37.9B | 43.3B | 45.1B | 48.0B | 58.9B | 70.9B | 79.2B | 81.4B |
| Total Liabilities | 14.9B | 16.0B | 20.1B | 21.8B | 21.8B | 25.6B | 29.3B | 31.5B | 35.1B | 40.6B | 50.1B | 55.0B | 57.3B |
| Intangibles | 61M | 48M | 509M | 386M | 323M | 326M | 299M | 529M | 393M | 316M | 701M | 534M | 0 |
| Retained Earnings | 6.9B | 7.3B | 8.0B | 8.6B | 9.4B | 11.0B | 12.4B | 14.5B | 15.9B | 20.3B | 22.7B | 27.0B | 28.1B |
| Working Capital | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Current Assets | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Current Liabilities | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Per Share Data | |||||||||||||
| EPS | 2.01 | 1.36 | 0.59 | 0.45 | 1.73 | 3.87 | 3.32 | 5.23 | 3.80 | 11.62 | 11.19 | 11.60 | 9.43 |
| Owner EPS | 2.36 | 2.43 | 1.16 | 0.72 | 3.39 | 4.61 | 6.68 | 8.13 | 9.58 | 14.68 | 16.52 | 15.52 | 9.25 |
| Book Value | 15.05 | 16.30 | 7.37 | 7.36 | 22.88 | 27.90 | 31.90 | 33.83 | 34.16 | 48.44 | 54.54 | 64.42 | 40.16 |
| Cash Flow/Share | 2.56 | 2.64 | 1.23 | 0.88 | 3.78 | 4.97 | 7.03 | 8.55 | 10.10 | 15.17 | 17.48 | 16.42 | 8.31 |
| Dividends/Share | 0.05 | 0.06 | 0.03 | 0.04 | 0.10 | 0.10 | 0.10 | 0.12 | 0.11 | 0.11 | 0.10 | 0.11 | 0.07 |
| Shares Out. | 404.9M | 378.3M | 1.1B | 1.2B | 412.5M | 412.1M | 410.8M | 400.4M | 377.9M | 378.9M | 381.8M | 375.8M | 602.3M |
| Valuation | |||||||||||||
| P/E Ratio | 9.4 | 16.5 | 15.3 | 21.2 | 14.5 | 10.5 | 10.1 | 8.0 | 15.7 | 6.1 | 8.3 | 8.3 | 11.0 |
| P/FCF | 7.5 | 8.7 | 22.4 | 33.6 | 6.8 | 8.3 | 4.8 | 5.0 | 6.0 | 4.7 | 5.3 | 5.9 | 10.6 |
| EV/EBIT | N/A | N/A | N/A | 0.1 | N/A | 0.8 | N/A | N/A | 2.1 | 0.8 | 1.5 | 0.5 | N/A |
| Price/Book | 1.2 | 1.4 | 1.2 | 1.3 | 1.1 | 1.5 | 1.1 | 1.2 | 1.7 | 1.5 | 1.7 | 1.5 | 2.6 |
| Price/Sales | 1.8 | 2.0 | 2.0 | 2.2 | 2.0 | 2.1 | 1.5 | 1.6 | 1.8 | 2.0 | 2.0 | 1.7 | 3.1 |
| FCF Yield | 13.4% | 11.5% | 13.4% | 8.9% | 14.8% | 12.1% | 20.6% | 20.1% | 16.7% | 21.3% | 18.8% | 17.0% | 9.4% |
| Market Cap | 7.6B | 8.5B | 10.2B | 12.0B | 10.4B | 16.7B | 13.8B | 16.9B | 22.5B | 26.7B | 35.3B | 36.0B | 62.3B |
| Avg. Price | 17.82 | 21.21 | 23.51 | 30.05 | 27.03 | 34.53 | 31.26 | 37.30 | 45.92 | 70.65 | 92.54 | 91.36 | 103.36 |
| Year-End Price | 18.79 | 22.49 | 27.26 | 28.80 | 25.09 | 40.47 | 33.60 | 42.10 | 59.53 | 70.42 | 92.34 | 95.87 | 103.36 |
ARCH CAPITAL GROUP LTD. passes 6 of 9 quality checks, suggesting mixed fundamentals.
ARCH CAPITAL GROUP LTD. trades at 8.9x trailing earnings, compared to its 15-year median P/E of 10.3x, suggesting it is currently Fair relative to its historical range. On a free-cash-flow basis, the stock trades at 6.3x vs a median of 5.9x. The company's 5-year average ROIC is 16.5% with a gross margin of 22.7%. Total shareholder yield (buybacks) is 4.0%. At current prices, the estimated annualized return to fair value is +25.0%.
ARCH CAPITAL GROUP LTD. (ACGL) has a net profit margin of 21.9%. This is a strong margin indicating high profitability.
ARCH CAPITAL GROUP LTD. (ACGL) generated $6.1 billion in free cash flow in its most recent fiscal year. Positive free cash flow supports dividends, buybacks, and debt reduction.
ARCH CAPITAL GROUP LTD. (ACGL) has a debt-to-equity ratio of 0.11. This indicates a conservatively financed balance sheet.
ARCH CAPITAL GROUP LTD. (ACGL) reported earnings per share (EPS) of $11.60 in its most recent fiscal year.
ARCH CAPITAL GROUP LTD. (ACGL) has a return on equity (ROE) of 19.4%. This indicates the company generates strong returns for shareholders.
ARCH CAPITAL GROUP LTD. (ACGL) has a 5-year average gross margin of 22.7%. This lower margin is typical of capital-intensive or commodity businesses.
The Ledger Terminal provides 18 years of financial data for ARCH CAPITAL GROUP LTD. (ACGL), sourced directly from SEC EDGAR filings. This includes income statements, balance sheets, cash flow statements, and key financial ratios.
ARCH CAPITAL GROUP LTD. (ACGL) has a book value per share of $64.42, based on its most recent annual SEC filing.
Based on recent SEC filings and earnings disclosures, Management expects to remain active on share buybacks throughout 2026 given the current market environment, with no specific targets set but opportunistic repurchases anticipated. The company anticipates its operating expense ratio in the reinsurance segment to benefit from the full-year effect of 2025 Bermuda tax credits, with expectations for a 2026 operating expense ratio between 3.9%-4.5%, while corporate expenses are expected to be approximately $80-$90 million. For 2026, the annualized effective tax rate is expected to return to the 16%-18% range, and catastrophe losses are estimated at 7%-8% of overall net earned premium, similar to prior-year estimates. Management expects the mid-year renewals to remain competitive with market adjustments to underwriting standards, and while property rate pressure is anticipated, casualty lines are expected to provide rate increase opportunities; the company remains disciplined in allocating capital to opportunities meeting risk-adjusted return targets and expects to grow better than the market in its insurance operations.
Based on recent SEC filings and earnings calls, ARCH CAPITAL GROUP LTD. (ACGL) has provided the following forward guidance: Operating expense ratio (reinsurance segment): 3.9%-4.5% (FY2026); Corporate expenses: $80-$90 million (FY2026); Effective tax rate: 16%-18% (FY2026); Catastrophe losses: 7%-8% of overall net earned premium (FY2026); Net premium reduction from non-renewals: approximately $250 million (2026).