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Key Takeaways ACGL's Q2 premiums are likely to reflect underwriting discipline despite softer property reinsurance pricing. Higher investment income and share buybacks are expected to support second-quarter earnings.Elevated catastrophe losses and higher expenses may pressure underwriting profitability.
Arch Capital Group Ltd. (ACGL - Free Report) is expected to register a decrease in both top and bottom lines when it reports second-quarter 2026 results on July 28, after the closing bell.

The Zacks Consensus Estimate for ACGL’s second-quarter revenues is pegged at $4.59 billion, indicating a 3.5% decline from the year-ago quarter’s reported figure.

The consensus estimate for earnings is pegged at $2.46 per share. The Zacks Consensus Estimate for ACGL’s second-quarter earnings has moved north 1 cent in the last seven days. The estimate suggests a year-over-year decrease of 4.6%.

What the Zacks Model Unveils for ACGLOur proven model does not predict an earnings beat for Arch Capital this time around. A stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). This is not the case, as you can see below:

Earnings ESP: Arch Capital has an Earnings ESP of -1.56% at present. This is because the Most Accurate Estimate of $2.43 per share is pegged lower than the Zacks Consensus Estimate of $2.46. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Arch Capital currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Likely to Shape ACGL’s Q2 ResultsRate increases, new business opportunities, growth in existing accounts, strong underwriting performance, portfolio optimization and continued contributions from the Allianz MidCorp acquisition are expected to have supported net premiums earned. However, softer property catastrophe reinsurance pricing and lower premiums resulting from the non-renewal of underperforming business are likely to have limited premium growth.  The Zacks Consensus Estimate for net premiums earned is pegged at $4.14 billion. We expect net premiums earned to have decreased 3.6% to $4.18 billion.

The Mortgage segment is expected to have faced pressure from lower gross premiums written and Bellemeade Re tender offer expenses, although strong credit performance, low delinquencies and growth in non-GSE transactions are likely to have provided support.

Net investment income is likely to have benefited from a larger invested asset base, driven by solid operating cash flows and elevated reinvestment yields. We expect the metric to be $420.9 million. The Zacks Consensus Estimate is pegged at $423.2 million.

Expenses are expected to have increased in the to-be-reported quarter due to higher losses and loss adjustment expenses, acquisition costs, other operating expenses, amortization of intangible assets, corporate expenses and interest expenses. We expect total expenses to decrease 4.2% to $3.6 billion.

Prudent pricing in casualty and specialty lines, disciplined underwriting and favorable prior-year reserve development are expected to have supported underwriting profitability and the combined ratio. However, elevated catastrophe losses from severe weather events are likely to have partially offset these benefits. The Zacks Consensus Estimate for the combined ratio is pegged at 84, and our estimate is pinned at 84.8.

Share buybacks are likely to have added upside to the bottom line.

Stocks to ConsiderHere are three other P&C insurance stocks that you may want to consider, as our model shows that have the right combination of elements to post an earnings beat:

Cincinnati Financial Corporation (CINF - Free Report) has an Earnings ESP of +8.84% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for second-quarter 2026 earnings is pegged at $1.77 per share, indicating a year-over-year decrease of 7.6%.

CINF’s earnings beat estimates in each of the last four reported quarters.

The Allstate Corporation (ALL - Free Report) has an Earnings ESP of +23.32% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2026 earnings is pegged at $4.92 per share, indicating a year-over-year decrease of 17.1%.

ALL’s earnings beat estimates in each of the last four reported quarters.

Axis Capital Holding Limited (AXS - Free Report) has an Earnings ESP of +3.82% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2026 earnings is pegged at $3.23 per share, indicating a year-over-year decrease of 1.8%.

AXS’s earnings beat estimates in each of the last four reported quarters.

In the latest trading session, Arch Capital Group (ACGL - Free Report) closed at $97.06, marking a -1.02% move from the previous day. This change lagged the S&P 500's 0.79% gain on the day. Meanwhile, the Dow gained 0.26%, and the Nasdaq, a tech-heavy index, added 1.52%.

Prior to today's trading, shares of the property and casualty insurer had gained 10.5% outpaced the Finance sector's gain of 2.74% and the S&P 500's loss of 1.82%.

Analysts and investors alike will be keeping a close eye on the performance of Arch Capital Group in its upcoming earnings disclosure. The company's earnings report is set to go public on July 28, 2026. It is anticipated that the company will report an EPS of $2.46, marking a 4.65% fall compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $4.6 billion, down 3.39% from the prior-year quarter.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $9.3 per share and a revenue of $18.2 billion, indicating changes of -5.49% and -3.12%, respectively, from the former year.

Any recent changes to analyst estimates for Arch Capital Group should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.12% higher. Right now, Arch Capital Group possesses a Zacks Rank of #3 (Hold).

Investors should also note Arch Capital Group's current valuation metrics, including its Forward P/E ratio of 10.54. This represents a discount compared to its industry average Forward P/E of 11.68.

Investors should also note that ACGL has a PEG ratio of 4.9 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Insurance - Property and Casualty stocks are, on average, holding a PEG ratio of 2.45 based on yesterday's closing prices.

The Insurance - Property and Casualty industry is part of the Finance sector. This industry, currently bearing a Zacks Industry Rank of 94, finds itself in the top 39% echelons of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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