Net investment income is expected at $432.2 million, aided by operating cash flow and invested asset base.
The combined ratio is estimated at 92.1%, as modest catastrophe losses support margins.
Arch Capital Group Ltd. (ACGL - Free Report) is expected to register a decline in both top and bottom lines when it reports third-quarter 2026 results on Oct. 27, after the closing bell.
The Zacks Consensus Estimate for ACGL’s third-quarter revenues is pegged at $4.46 billion, indicating a 5.5% decline from the year-ago reported figure.
The consensus estimate for earnings is pegged at $2.05 per share. The Zacks Consensus Estimate for ACGL’s third-quarter earnings has moved north 9% in the past 30 days. The estimate suggests a year-over-year decline of 25.9%.
What the Zacks Model Unveils for ACGLOur proven model predicts an earnings beat for Arch Capital this time around. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), which increases the chances of an earnings beat.
Earnings ESP: Arch Capital has an Earnings ESP of +11.70% at present. This is because the Most Accurate Estimate of $2.29 is pegged higher than the Zacks Consensus Estimate of $2.05. 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.
Factors Likely to Shape Q3 Results of ACGLRate increases, new business opportunities and growth in existing accounts, product innovation, market expansion and strong underwriting performance, combined with strategic investments, are likely to have favored net premiums earned.
The Zacks Consensus Estimate for net premiums earned is pegged at $4 billion. We expect net premiums earned to be $3.9 billion.
The Mortgage segment is likely to have benefited from growth in international business offset by a reduction in U.S. monthly premium volume.
Net investment income is likely to have benefited from solid net cash flow from operating activities, which is expected to have increased the invested asset base. We expect net investment income to be $432.2 million. The Zacks Consensus Estimate for investment income is pegged at $430 million.
The top line is likely to have gained from improved earned premiums and higher net investment income.
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 be $3.8 billion.
Disciplined underwriting practices and relatively modest catastrophe-related losses are expected to have supported underwriting margins. The Zacks Consensus Estimate for the combined ratio is pegged at 89, and our estimate is pinned at 92.1.
Share buybacks are likely to have added upside to the bottom line.
Other Stocks to ConsiderHere are three other P&C insurance stocks that you may want to consider, as our model shows that these, too, have the right combination of elements to post an earnings beat:
RenaissanceRe Holdings Ltd. (RNR - Free Report) has an Earnings ESP of +9.02% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for third-quarter 2026 earnings is pegged at $9.28, indicating a year-over-year decrease of 40.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
RNR’s earnings beat estimates in each of the last four reported quarters.
The Allstate Corporation (ALL - Free Report) has an Earnings ESP of +5.25% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for third-quarter 2026 earnings is pegged at $7.03, indicating a year-over-year decrease of 37.1%.
ALL’s earnings beat estimates in each of the last four reported quarters.
Everest Group, Ltd. (EG - Free Report) has an Earnings ESP of +3.01% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for third-quarter 2026 earnings is pegged at $9.32, indicating a year-over-year decrease of 23.6%.
EG’s earnings beat estimates in two of the last four reported quarters and missed in the other two.