2Q26: Buybacks Drive EPS Beat, But Growth Headwinds Persist.: Favorable PYD in Reinsurance and Mortgage, Higher Cats in Insurance.

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2Q26: Buybacks Drive EPS Beat, But Growth Headwinds Persist.: Favorable PYD in Reinsurance and Mortgage, Higher Cats in Insurance.

Equity Research

North America Insurance/Non-Life

29 July 2026

Arch Capital Group Ltd.

2Q26: Buybacks Drive EPS Beat,

But Growth Headwinds Persist.

ACGL EQUAL WEIGHTFavorable PYD in Reinsurance and

Unchanged

North America Insurance/ NEUTRALMortgage, Higher Cats in Non-Life

Price Target USD 106.00Insurance.

While aggressive capital return and favorable reserve Price (28-Jul-26) USD 106.48

development drove an earnings beat, underlying P&C growth Potential Upside/Downside -0.5% Source: Bloomberg, Barclays Research

was pressured.

Market Cap (USD mn) 37203

2Q26 Operating EPS $2.56 vs $2.46 Barc and $2.47 Street. The beat was primarily driven by: Shares Outstanding (mn) 349.39

(1) higher buybacks, (2) more favorable PYD and cats in Reinsurance, and (3) better year-over- Free Float (%) 96.28

year growth and PYD in Mortgage. These factors were partially offset by an attritional loss ratio 52 Wk Avg Daily Volume (mn) 2.2

miss in Reinsurance, due, in part, to non-renewals, share reductions as well as targeted Dividend Yield (%) N/A

increased retrocessions. Higher than expected catastrophe losses in Insurance were also an Return on Equity TTM (%) 21.93

offset as well as lower than expected growth in both Reinsurance (due primarily to continued Current BVPS (USD) 66.19

material contraction in property cat during July-1 renewal) and Insurance. Despite the mixed Source: Bloomberg

underlying results across Reinsurance and Insurance, Mortgage came in-line with expectations

thanks to stable margins and strong PYD, beating NPW growth estimates due to reflecting the Price Performance Exchange-Nasdaq