Arch Capital Group Ltd. ACGL 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 ACGL
Our 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.
Arch Capital Group Ltd. Price and EPS Surprise
Arch Capital Group Ltd. price-eps-surprise | Arch Capital Group Ltd. Quote
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 Results
Rate 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 Consider
Here 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 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 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 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.
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Arch Capital Group Ltd. (ACGL): Free Stock Analysis Report
Cincinnati Financial Corporation (CINF): Free Stock Analysis Report
The Allstate Corporation (ALL): Free Stock Analysis Report
Axis Capital Holdings Limited (AXS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).