Arch Capital Group Ltd. (ACGL)
POSITIVEFundamental
85
Price
$100.52
Market Cap
$34.51B
Part 1 · What the company is worth
Overview
Arch Capital is a Bermuda-based insurer that writes three different kinds of risk-bearing contracts: property and casualty insurance sold directly to businesses, reinsurance sold to other insurance companies, and mortgage insurance that protects lenders against homebuyer default. It does not manufacture anything; its product is a promise to pay a claim, priced using decades of loss data across many uncorrelated lines so that a bad year in one business can be offset by a good year in another.
How it makes money
Arch collects premiums upfront in exchange for agreeing to pay covered claims later, and invests the premiums it holds until claims come due. Profit comes from underwriting more premium than it eventually pays out in claims and expenses, plus the investment income earned on its reserves in the meantime. Because pricing power in insurance and reinsurance moves in cycles, Arch shifts capital toward whichever of its three segments offers the best pricing in a given year.
Revenue by segment
Insurance sold to other insurance companies to help them absorb large or catastrophic losses, measured here by gross premiums written.
Property, casualty and specialty insurance policies sold directly to businesses, measured by gross premiums written.
Insurance that reimburses mortgage lenders when a homeowner defaults and the property sale does not cover the loan.
Competitive moat
Scale · NarrowWriting three complementary lines of risk from one large, well-capitalized balance sheet lets Arch smooth out the cycles that hit any single line, and its financial strength ratings let it write business smaller or thinner-capitalized rivals cannot. That advantage is real but not unique: several other diversified specialty insurers compete for the same underwriting talent and the same book of business.
What drives demand
CyclicalInsurance and reinsurance pricing runs in multi-year cycles: after large catastrophe losses, capacity leaves the market and prices rise, then new capital enters, competition increases and prices soften again. Arch has recently flagged softening property rates as reinsurance clients retain more risk themselves, and the mortgage segment is separately tied to the health of the housing market and broader employment.
Key risks
- Catastrophe losses — Large natural or man-made catastrophic events can generate claims that cause substantial volatility in results and, in a severe year, a material hit to Arch's financial position.
- Cyclical, softening pricing — The company describes entering a softer, more competitive phase in property and other short-tail lines, with reinsurance premiums written already declining as clients retain more risk.
- Reserve adequacy — Arch sets aside reserves based on estimates of future claims, and if those estimates prove too low, it must add to reserves later, reducing reported profit after the fact.
- Mortgage segment housing exposure — The mortgage insurance business is directly exposed to a downturn in home prices or employment, which would raise defaults and claims at the same time.
The case for
Buyers argue that spreading capital across insurance, reinsurance and mortgage lets Arch pick the best-priced opportunities each year, that disciplined underwriting through past hard and soft markets has protected its reserves, and that record operating income shows the model working even as property pricing softens.
The case against
Sellers worry that softening reinsurance and property pricing marks the start of a longer down-cycle that will compress margins across the group, that a single severe catastrophe year could force reserve additions that erase several quarters of profit, and that the mortgage segment leaves Arch more exposed to a housing downturn than a pure specialty insurer would be.
Written by the editors, published on August 18, 2026
Direct competitors
Who this company fights with for the same customers
Generated on August 23, 2026 with claude-opus-5 — shared with all users
Direct rival of Arch's insurance segment in US excess and surplus lines and programs, chasing the same mid-market commercial accounts placed by the same wholesale brokers.
Bermuda-based peer with the same two-engine model of global property and casualty reinsurance plus specialty insurance, bidding for the same treaties from the same cedants and brokers.
Competes head-on with Arch's reinsurance segment on property catastrophe and specialty treaty capacity, and for the same third-party capital that backs those books.
Bermuda specialty insurer and reinsurer writing the same professional lines, marine, energy and credit business through the same wholesale broker network in the US, London and Europe.
Competes in the same specialty and E&S niches on both sides of the Atlantic, including the Lloyd's market where both groups underwrite hard-to-place risks.
Rival of Arch's mortgage segment: one of the six US private mortgage insurers selling credit protection to the same lenders and GSE-eligible loan flow.
Balance Sheet & Liquidity
Revenue
$19.23B
Trailing 12 months (through 6/30/2026)
Net Income
$4.69B
Trailing 12 months (through 6/30/2026)
Free Cash Flow
$6.13B
Total Equity
$24.21B
Total Liabilities
$55.03B
Current Ratio
1.36
Interest Coverage
-
Debt/EBITDA
0.77
Earnings Per Share
Revenue & Net Income
Free Cash Flow
Income Breakdown
Historical statement
Margins over time
Debt over time
How heavy the debt is
Growth grid
Growth — Revenue
Fair Value Estimation
Fair Value
$353.73
Current Price
$100.52
Margin of Safety
+71.6%
Fair Value Range
$229.92 - $477.53
Estimation Methods
Valuation Metrics
P/E Ratio
7.92
ROE
18.2%
P/B Ratio
1.44
P/FCF
5.70
Gross Margin
-
ROIC
-
Profitability Radar
Value Creation (Economic Moat)
ROIC
-
WACC
7.4%
ROIC − WACC
-
Fundamental Analysis Criteria
Passed (21)
- EPS shows upward trend
- EPS CAGR 6.32%
- Price CAGR 13.20%
- P/FCF 5.70
- P/B Ratio 1.44
- Debt/Equity ratio
- Positive Free Cash Flow
- CapEx intensity
- Debt/EBITDA
- Return on Tangible Assets
- Low reliance on intangibles
- Price below Graham Number
- ROE 19.5%
- Revenue Growth 5Y 18.4%
- Analyst Consensus 61% Buy
- Earnings Surprise avg 8.8%
- PEG Ratio 0.25
- Earnings Quality (OCF/NI) 1.30
- Share Dilution -1.6%
- Net Margin Trend 24.4% vs 19.5%
- Piotroski F-Score 6/9
Failed (1)
- DCF valuation (Fairly valued)
Unavailable (6)
- ROIC NaN%
- Gross Margin NaN%
- Dividend Payout NaN%
- Operating Margin NaN%
- Current Ratio
- Interest Coverage
Piotroski F-Score
Mixed signals: some areas need attention
Earnings Quality
High quality: earnings backed by cash
Share Dilution
Buying back shares. Shareholder friendly
Governance
Executive Team
| Name | Title | Age |
|---|---|---|
| Mr. Nicolas Alain Emmanuel Papadopoulo | CEO & Director | 63 |
| Mr. Maamoun Jamil Rajeh | President | 55 |
| Mr. Francois Morin | Executive VP, CFO & Treasurer | 58 |
| Ms. Christine Lee Todd CFA | Executive VP & Chief Investment Officer | 58 |
| Mr. Greg Hare | Chief Communications Officer | - |
| Mr. Patrick Kenneth Nails J.D. | Chief Claims Officer of Arch Insurance Group Inc | - |
| Mr. Donald S. Watson | Executive Vice President of Financial Services | - |
| Ms. Janice C. Englesbe B.Ec, CFA | Executive VP & Chief Risk Officer | 56 |
| Ms. Joy A. Huibonhoa | Executive VP & Deputy General Counsel | - |
| Mr. Christopher Andrew Hovey | Chief Operations Officer of Arch Capital Services LLC | 58 |
Audit Risk
6
Board Risk
4
Compensation Risk
2
Shareholder Rights Risk
8
Part 2 · The price and when to enter
This part won't tell you whether the company is worth owning: it helps you choose when to buy it, once the fundamentals have convinced you. Inside: technical analysis, potential, historical drawdowns, gamma exposure.
Latest News
Recent headlines for ACGL, sourced from Markets Gazette.
- 5/11/2026POSITIVE$1000 Invested In Arch Capital Group 10 Years Ago Would Be Worth This Much Today
An investment of $1,000 in Arch Capital Group (ACGL) ten years ago would have yielded a significant return, demonstrating the company's strong long-term performance. While specific figures are not provided in the summary, the implication of substantial growth suggests robust financial health and effective business strategy. Investors looking at this historical data may find ACGL an attractive prospect for sustained capital appreciation, reflecting its resilience and ability to generate value over extended periods.
- 3/17/2026POSITIVEIf You Invested $1000 In Arch Capital Group Stock 15 Years Ago, You Would Have This Much Today
An investment of $1000 in Arch Capital Group stock 15 years ago would have yielded a substantial return, illustrating the company's strong long-term performance. While specific figures are not provided in the title, the implication of significant growth suggests robust business expansion and effective capital management. This historical performance indicates a potentially favorable outlook for investors, highlighting Arch Capital's ability to generate value through its insurance and reinsurance operations, potentially driven by favorable underwriting cycles and strategic acquisitions.
- 2/23/2026NEUTRALIf You Invested $100 In Arch Capital Group Stock 15 Years Ago, You Would Have This Much Today
A retrospective analysis highlights the remarkable performance of Arch Capital Group (ACGL) over the past 15 years, illustrating how a hypothetical $100 investment would have grown into a considerably larger sum. This type of content, while showcasing the company's historical ability to generate shareholder value, provides no new operational or strategic information. It is a calculation exercise based on past data, useful for illustrating the concept of long-term growth but lacking any forward-looking elements. For investors, the news is purely informational and does not act as a catalyst for the stock price in the short term, as it does not reflect changes in company fundamentals, analyst estimates, or current market conditions. The impact on today's valuation is therefore null.
via Markets Gazette