By Chris Munro

April 30 - (The Insurer) – Arch Capital Group’s share price was down almost 4% late Wednesday morning as investors reacted to its Q1 2025 earnings.

The company’s stock was trading hands at $89.05 as of 11:50 a.m. in New York on Wednesday, down 3.6% from Tuesday’s close.

Shortly after the markets opened on Wednesday morning, Arch’s share price fell to $86.37, a decrease of more than 6.5% from the end of trading on Tuesday.

The decreases came as investors digested Arch’s Q1 earnings report, which included the company’s combined ratio deteriorating by 11.3 points year on year to 90.1% for the period.

That combined ratio rise reflected a significant increase in California wildfire-driven catastrophe losses, which more than offset greater year on year favorable prior year reserve releases.

The dip in its share price comes despite Arch posting after-tax operating income per diluted common share of $1.54 for Q1 2025, a result that was well ahead of the $1.31 that was the consensus forecast of 13 analysts as per S&P Capital IQ.

In an analyst note, TD Cowen said Arch posted “strong” earnings per share in 2025’s first quarter, even though it was hit with high catastrophe losses.

“Underwriting results were stronger than we modeled,” TD Cowen noted, although it said “cycle manager” Arch’s net premiums written growth of 10.5% to $4.52 billion was “slower-than-expected” with the bank having forecast a 20% increase.