Arch Capital Q2 net income falls as premiums decline

Overview

• Insurance and reinsurance provider's Q2 net income fell yr/yr as premiums declined

• Q2 after-tax operating income and combined ratio worsened from prior year

• Company repurchased $1.2 bln in shares during the quarter

Outlook

• Company did not provide specific guidance for future quarters or the full year

Result Drivers

• INSURANCE SEGMENT PRESSURE - Lower premiums, higher loss and expense ratios, and increased catastrophic losses weighed on insurance segment results; transitional expenses from the MCE Acquisition also contributed

• REINSURANCE SEGMENT DECLINE - Net premiums written fell due to non-renewals, share reductions and increased retrocessions, though profit commissions on retrocessions improved the expense ratio

• MORTGAGE SEGMENT MIXED - Net premiums written rose after termination of certain agreements, but underwriting income fell as favorable reserve development was less pronounced

Company press release: ID:nBw4W98jGa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 12 "strong buy" or "buy", 9 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the property casualty insurance peer group is "hold."

• Wall Street's median 12-month price target for Arch Capital Group Ltd is $110.00, about 5.9% above its July 27 closing price of $103.88

• The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 10 three months ago

Reuters Recommended Reads

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)