First Take 2Q26 Earnings: Focus on Maintaining Profitable Growth

Research evidence excerpt

First Take 2Q26 Earnings: Focus on Maintaining Profitable Growth

Update

July 28, 2026 09:44 PM GMT

Morgan Stanley & Co. LLCMArch Capital Group Ltd. | North America Bob Jian Huang

Equity Analyst

First Take 2Q26 Earnings: Focus Bob.Huang@morganstanley.comSiddhant Shah +1 212 761-6136

Research Associate

Sid.Shah@morganstanley.com +1 212 761-2603

on Maintaining Profitable Daniel Lee, ACAS

Daniel.Lee4@morganstanley.com +1 212 761-0219

Growth

Arch Capital Group Ltd. (ACGL.O, ACGL US)

Insurance - Property & Casualty | Bermuda

AlphaSignals Earnings Reaction

Stock Rating Overweight

Unchanged In-line Largely unchanged Industry View Attractive

Impact to our thesis Financial results versus consensus Direction of next 12-month Price target $110.00

consensus EPS Shr price, close (Jul 28, 2026) $106.48

Mkt cap, curr (mm) $38,268

Source: Company data, Morgan Stanley Research 52-Week Range $106.48-82.45

Balancing Insurance and Reinsurance segments: Arch's thesis centers on prudent

capital allocation and taking advantage of a dislocated market to generate above-

normal underwriting income. In the current soft market, maintaining earnings

strength is key. This quarter was mixed. Reinsurance and Mortgage were surprisingly

strong, delivering better-than-expected premium growth and solid underwriting. In

reinsurance, lower CAT losses and disciplined expenses supported underwriting,

while the core loss ratio was elevated. In Insurance, both premiums and

underwriting missed expectations. That said, underwriting was pressured by

catastrophe losses and somewhat elevated expenses, while the core loss ratio

remained solid. Overall, multiple moving pieces obscured the EPS beat. Looking

ahead, how the company manages Insurance underwriting, firmwide expenses, and

growth will be key.

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