Arch Capital 2025-26: BVPS +22.6%, $1.9B Buyback Record
FY25 revenue $19.93B (+14%); Op income $4.98B (+11%); NI $4.40B (+2%); EPS $11.62. Q4 after-tax operating income $1.1B (+26% YoY); FY $3.7B. Book value per share +22.6%. Buyback $1.9B FY25 (record pace). Reinsurance segment record $1.6B underwriting income FY25. FY26: cat losses 7-8% of NEP; buyback active throughout depending on market.
Key takeaways
- Book value per share +22.6% — best growth among P&C re/insurance peers. Strong underwriting + investment + buyback compounding. The cleanest signal for ACGL's compounding.
- $1.9B buyback FY25 — fastest pace ever. Material capital return reflecting strong underwriting + investment income + Bermuda capital flexibility.
- Reinsurance record $1.6B underwriting income FY. Hard cycle benefit + disciplined capacity deployment + property cat selectivity. Q4 reinsurance combined ratio ex-cat + prior-year-development continues strong.
- Q4 after-tax op income $1.1B (+26% YoY). Insurance Q4 underwriting income $119M; ex-cat combined ratio 90.8% similar to prior year.
- Insurance + Reinsurance + Mortgage Insurance combined. Diversified specialty franchise + strong cycle leverage + mortgage insurance steady cycle component.
Business
Arch Capital Group is a Bermuda-based specialty insurance + reinsurance + mortgage insurance holding company. Three primary reporting segments:
- Insurance (~50% of revenue): Specialty P&C — energy + marine + aviation + medical malpractice + professional liability + cyber + financial. International + North America. Q4 ex-cat combined ratio 90.8%.
- Reinsurance (~30% of revenue): Property catastrophe + casualty + specialty reinsurance. Cycle-leveraged. Record $1.6B underwriting income FY25.
- Mortgage Insurance (~20% of revenue): US mortgage insurance (Arch MI) + International. Steady through cycle; benign credit environment continuing.
Strategic positioning: top-tier specialty insurer + reinsurer + MI. Bermuda domicile + diversified portfolio + active capital management create flexibility for hard markets + buybacks.
FY25 financial performance
| Metric (FY) | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue ($B) | 13.29 | 17.44 | 19.93 |
| Gross profit ($B) | 4.74 | 6.45 | 7.41 |
| Op income ($B) | 3.11 | 4.47 | 4.98 |
| Op margin | 23.4% | 25.7% | 25.0% |
| EBITDA ($B) | 3.61 | 4.85 | 5.35 |
| Net income ($B) | 4.44 | 4.31 | 4.40 |
| Diluted EPS ($) | 11.62 | 11.19 | 11.62 |
| FCF ($B) | 5.70 | 6.62 | 6.13 |
| Total debt ($B) | 2.73 | 2.73 | 2.73 |
| Dividends ($M) | -40 | -1,906 | -47 |
| Buyback ($B) | -0.002 | -0.024 | -1.889 |
The earnings print: Revenue +14%, op income +11%, EPS $11.62 (~flat). Strong underwriting + investment + capital management.
(Note: FY24's $1.9B "dividend" was a special capital distribution; FY25 returned to normal modest dividend + amplified buyback as primary capital return.)
Capital allocation
- Capex: $-44M FY25 (insurance company; light).
- Dividends: $-47M FY25 (regular).
- Buybacks: $-1.89B FY25 — fastest pace in company history.
- Debt: $2.73B held flat.
FY26 outlook (per Q4 2025 call, 2026-02-10)
| FY26 framework | Direction |
|---|---|
| Cat losses (% of NEP) | 7-8% (current estimate) |
| Buyback | Active throughout, depending on market conditions |
| Reinsurance market | Continued competition in property cat; opportunities in other specialty lines |
| Capital management | Flexible deployment |
Key risks
- Catastrophe losses: Cat exposure varies by year; 7-8% guide assumes typical.
- Reinsurance cycle: Property cat softening competition; capacity discipline matters.
- Mortgage credit: Mortgage insurance exposure to housing cycle.
- Investment portfolio: Rates + credit cycle affect investment income.
- Specialty competition: New entrants in specialty lines.
- Bermuda regulatory: Tax + regulatory framework.
Bottom line
ACGL FY25 is the BVPS +22.6% + record buyback year. Strong underwriting + investment + active capital. FY26 cat 7-8% guide + active buyback continuing. Risks are cat + cycle + credit + investment. Quality compounder with Bermuda capital flexibility.
Citations
- Arch Capital Group Ltd. FY25 Form 10-K (filed February 2026, SEC EDGAR + Bermuda Monetary Authority).
- ACGL Q4 2025 earnings call, 2026-02-10 — Q4 after-tax op income $1.1B (+26%); FY $3.7B; BVPS +22.6%; $1.9B buyback FY25 (record); Reinsurance record $1.6B underwriting income; Insurance Q4 underwriting $119M, ex-cat combined ratio 90.8%; FY26 cat losses 7-8% of NEP.
- Internal financial_statements view (consolidated annual + cash flow + capital structure).