Arch Capital Group Ltd

Strong Financial Results: Arch Capital reported a first-quarter after-tax operating income of $587 million and operating earnings per share of $1.54, reflecting an annualized operating return on equity of 11.5%. This demonstrates solid profitability despite facing $547 million in catastrophe losses from events like the California wildfires.

Challenges in Competitive Market: The Property and Casualty (P&C) market is becoming increasingly competitive. Arch is prioritizing profitability over market share, leading to a modest growth in net premiums written (2.2% in Reinsurance) due to selective underwriting and increased risk retention by primary companies.

Mixed Performance Across Segments: While the Reinsurance segment demonstrated strong basic profitability with a 91.8 combined ratio, the Insurance segment faced a small underwriting loss primarily due to recent wildfire impacts. The Mortgage segment provided stable earnings, with $252 million in underwriting income, supported by a low delinquency rate in the portfolio.