Form 8-K - Current report

Name	Symbol	Market	Type
Arch Capital Group Ltd	NASDAQ:ACGLO	NASDAQ	Preference Share

	Price Change	% Change	Price	Bid Price	Offer Price	High Price	Low Price	Open Price	Traded	Last Trade
	0.21	0.93%	22.77	15.26	27.87	22.77	22.56	22.60	20,333	21:07:49

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

October 30, 2024

Date of Report (Date of earliest event reported)

Arch Capital Group Ltd.

(Exact name of registrant as specified in its charter)

Bermuda

001-16209

98-0374481

(State or other
jurisdiction of
incorporation or
organization)

(Commission File Number)

(I.R.S. Employer
Identification No.)

Waterloo House, Ground Floor, 100 Pitts Bay Road, Pembroke HM 08, Bermuda

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code:

(441) 278-9250

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class

Trading Symbol (s)

Name of each exchange on which registered

Common shares, $0.0011 par value per share

ACGL

NASDAQ

Stock Market

Depositary shares, each representing a 1/1,000th interest in a 5.45% Series F preferred share

ACGLO

NASDAQ

Stock Market

Depositary shares, each representing a 1/1,000th interest in a 4.55% Series G preferred share

ACGLN

NASDAQ

Stock Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

ITEM 2.02 Results of Operations and Financial Condition.

On October 30, 2024 Arch Capital Group Ltd. issued a press release reporting its earnings and the availability of its financial supplement for the quarter ended September 30, 2024. The press release and financial supplement are attached to this Current Report on Form 8-K as Exhibit 99.1 and Exhibit 99.2, respectively, and are incorporated herein by reference.

The information in this Current Report on Form 8-K, including the information set forth in Exhibit 99.1 and Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

ITEM 9.01 Financial Statements and Exhibits.

(d): The following exhibits are being filed herewith.


EXHIBIT NO.						DESCRIPTION
99.1						Press Release dated October 30, 2024 announcing the earnings of Arch Capital Group Ltd. for the quarter ended September 30, 2024
99.2						2024 Third Quarter Financial Supplement
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	ARCH CAPITAL GROUP LTD.


Date: October 30, 2024	By:	/s/ François Morin
		Name:	François Morin
		Title:	Executive Vice President, Chief Financial Officer and Treasurer


						EXHIBIT 99.1
			PRESS RELEASE			Arch Capital Group Ltd.
			NASDAQ Symbol: ACGL			Waterloo House, Ground Floor
			For Immediate Release			100 Pitts Bay Road
			October 30, 2024			Pembroke HM 08 Bermuda

ARCH CAPITAL GROUP LTD. REPORTS 2024 THIRD QUARTER RESULTS

PEMBROKE, BERMUDA--(BUSINESS WIRE)--Arch Capital Group Ltd. (NASDAQ: ACGL; “Arch,” “our” or “the Company”) announces its 2024 third quarter results. The results included:

•Net income available to Arch common shareholders of $978 million, or $2.56 per share, representing a 19.0% annualized net income return on average common equity, compared to net income available to Arch common shareholders of $713 million, or $1.88 per share, for the 2023 third quarter.

•After-tax operating income available to Arch common shareholders(1) of $762 million, or $1.99 per share, representing a 14.8% annualized operating return on average common equity(1), compared to $876 million, or $2.31 per share, for the 2023 third quarter.

•Pre-tax current accident year catastrophic losses for the Company’s insurance and reinsurance segments, net of reinsurance and reinstatement premiums, of $450 million, due in part to Hurricane Helene and a series of other global events.

•Favorable development in prior year loss reserves, net of related adjustments, of $119 million.

•Combined ratio excluding catastrophic activity and prior year development(1) of 78.3%, compared to 77.0% for the 2023 third quarter.

•Book value per common share of $57.00 at September 30, 2024, an 8.1% increase from June 30, 2024.

Nicolas Papadopoulo, Chief Executive Officer of ACGL commented: “Our third quarter results demonstrate the value of our diversified platform with excellent bottom-line contributions from all our units. Arch’s culture of adapting to evolving market conditions while maintaining underwriting discipline remains a key element of our long-term success.”

All earnings per share amounts discussed in this release are on a diluted basis. The following table summarizes the Company’s underwriting results:



(U.S. Dollars in millions)	Three Months Ended September 30,
		2024			2023			% Change
Gross premiums written		$	5,440		$	4,527		20.2
Net premiums written		4,047			3,355			20.6
Net premiums earned		3,970			3,248			22.2
Underwriting income		538			721			(25.4)
Underwriting Ratios								% Point Change
Loss ratio		60.5		%	50.7		%	9.8
Underwriting expense ratio		26.1		%	27.2		%	(1.1)
Combined ratio		86.6		%	77.9		%	8.7

Combined ratio excluding catastrophic activity and prior year development (1)		78.3		%	77.0		%	1.3

(1) See ‘Comments on Non-GAAP Financial Measures’ for further details.

The following table summarizes the Company’s consolidated financial data, including a reconciliation of net income or loss available to Arch common shareholders to after-tax operating income or loss available to Arch common shareholders and related diluted per share results (see ‘Comments on Non-GAAP Financial Measures’ for further details):


(U.S. Dollars in millions, except per share data)	Three Months Ended
	September 30,
	2024			2023
Net income available to Arch common shareholders	$	978		$	713
Net realized (gains) losses (1)	(169)			248

Equity in net (income) loss of investment funds accounted for using the equity method	(171)			(59)
Net foreign exchange (gains) losses	63			(22)
Transaction costs and other	30			1

Income tax expense (benefit) (2)	31			(5)
After-tax operating income available to Arch common shareholders	$	762		$	876

Diluted per common share results:
Net income available to Arch common shareholders	$	2.56		$	1.88
Net realized (gains) losses (1)	(0.44)			0.65

Equity in net (income) loss of investment funds accounted for using the equity method	(0.45)			(0.16)
Net foreign exchange (gains) losses	0.16			(0.05)
Transaction costs and other	0.08			0.00

Income tax expense (benefit) (2)	0.08			(0.01)
After-tax operating income available to Arch common shareholders	$	1.99		$	2.31

Weighted average common shares and common share equivalents outstanding — diluted	382.3			379.4

Beginning common shareholders’ equity	$	19,835		$	13,811
Ending common shareholders’ equity	21,444			14,409
Average common shareholders’ equity	$	20,640		$	14,110

Annualized net income return on average common equity	19.0		%	20.2		%
Annualized operating return on average common equity	14.8		%	24.8		%

(1) Net realized gains or losses include realized and unrealized changes in the fair value of equity securities and assets accounted for using the fair value option, realized and unrealized gains and losses on derivative instruments, changes in the allowance for credit losses on financial assets and gains and losses realized from the acquisition or disposition of subsidiaries.

Segment Information

The following section provides analysis on the Company’s 2024 third quarter performance by reportable segments. For additional details regarding the Company’s reportable segments, please refer to the Company’s Financial Supplement dated September 30, 2024. The Company’s segment information includes the use of underwriting income (loss) and a combined ratio excluding catastrophic activity and prior year development (see ‘Comments on Non-GAAP Financial Measures’ for further details).

Insurance Segment


	Three Months Ended September 30,
(U.S. Dollars in millions)	2024			2023			% Change

Gross premiums written	$	2,341		$	2,043		14.6
Net premiums written	1,820			1,522			19.6
Net premiums earned	1,765			1,412			25.0

Underwriting income	$	120		$	129		(7.0)

Underwriting Ratios							% Point Change
Loss ratio	61.6		%	57.5		%	4.1
Underwriting expense ratio	31.5		%	33.4		%	(1.9)
Combined ratio	93.1		%	90.9		%	2.2

Catastrophic activity and prior year development:
Current accident year catastrophic events, net of reinsurance and reinstatement premiums	4.9		%	2.6		%	2.3
Net (favorable) adverse development in prior year loss reserves, net of related adjustments	(0.7)		%	(0.8)		%	0.1
Combined ratio excluding catastrophic activity and prior year development	88.9		%	89.1		%	(0.2)

On August 1, 2024, the insurance segment completed the acquisition of the U.S. MidCorp and Entertainment insurance businesses from Allianz (“MCE Acquisition”). As such, the insurance segment’s 2024 third quarter results include two months of activity related to the acquired business.

Gross premiums written by the insurance segment in the 2024 third quarter were 14.6% higher than in the 2023 third quarter (4.4% excluding the MCE Acquisition), while net premiums written were 19.6% higher than in the 2023 third quarter (5.8% excluding the MCE Acquisition). Growth in net premiums written included the impact of the MCE Acquisition and also reflected an increase in other liability—occurrence due, in part, to new business opportunities and rate changes. Net premiums earned in the 2024 third quarter were 25.0% higher than in the 2023 third quarter (8.8% excluding the MCE Acquisition), and reflect changes in net premiums written over the previous five quarters.

The 2024 third quarter loss ratio reflected 4.9 points of current year catastrophic activity, primarily related to Hurricane Helene, compared to 2.6 points of catastrophic activity in the 2023 third quarter. Estimated net favorable development of prior year loss reserves, before related adjustments, reduced the loss ratio by 0.9 points in the 2024 third quarter, compared to 0.7 points in the 2023 third quarter.

The underwriting expense ratio was 31.5% in the 2024 third quarter, compared to 33.4% in the 2023 third quarter. The impact of the MCE Acquisition lowered the underwriting expense ratio by approximately 2.5 points, primarily due to the effects of the fair value estimation of the assets acquired at closing, including the non-recognition of deferred acquisition costs. The value of policies in force at closing are considered within the value of business acquired which is amortized through amortization of intangibles. The underwriting expense ratio also benefited from an initial lower level of operating expenses in the acquired business.

Reinsurance Segment


	Three Months Ended September 30,
(U.S. Dollars in millions)	2024			2023			% Change

Gross premiums written	$	2,763		$	2,138		29.2
Net premiums written	1,945			1,562			24.5
Net premiums earned	1,892			1,543			22.6
Other underwriting income	2			2			—

Underwriting income	$	149		$	310		(51.9)

Underwriting Ratios							% Point Change
Loss ratio	69.6		%	56.4		%	13.2
Underwriting expense ratio	22.7		%	23.6		%	(0.9)
Combined ratio	92.3		%	80.0		%	12.3

Catastrophic activity and prior year development:
Current accident year catastrophic events, net of reinsurance and reinstatement premiums	19.3		%	9.3		%	10.0
Net (favorable) adverse development in prior year loss reserves, net of related adjustments	(1.9)		%	(2.8)		%	0.9
Combined ratio excluding catastrophic activity and prior year development	74.9		%	73.5		%	1.4

Gross premiums written by the reinsurance segment in the 2024 third quarter were 29.2% higher than in the 2023 third quarter, while net premiums written were 24.5% higher than in the 2023 third quarter. The growth in net premiums written reflected increases in most lines of business, due in part to rate increases, new business opportunities and growth in existing accounts. Net premiums earned in the 2024 third quarter were 22.6% higher than in the 2023 third quarter, and reflect changes in net premiums written over the previous five quarters.

The 2024 third quarter loss ratio reflected 21.3 points of current year catastrophic activity, related to Hurricane Helene and a series of other global events, compared to 9.7 points of catastrophic activity in the 2023 third quarter. Estimated net favorable development of prior year loss reserves, before related adjustments, reduced the loss ratio by 2.2 points in the 2024 third quarter, compared to 2.8 points in the 2023 third quarter. The balance of the change in the loss ratio resulted, in part, from the impact of rate increases, higher level of attritional losses and changes in the mix of business.

The underwriting expense ratio was 22.7% in the 2024 third quarter, compared to 23.6% in the 2023 third quarter. The decrease primarily reflected growth in net premiums earned.

Mortgage Segment


	Three Months Ended September 30,
(U.S. Dollars in millions)	2024			2023			% Change

Gross premiums written	$	339		$	347		(2.3)
Net premiums written	282			271			4.1
Net premiums earned	313			293			6.8
Other underwriting income	3			3			—

Underwriting income	$	269		$	282		(4.6)

Underwriting Ratios							% Point Change
Loss ratio	(0.4)		%	(12.1)		%	11.7
Underwriting expense ratio	15.2		%	16.8		%	(1.6)
Combined ratio	14.8		%	4.7		%	10.1

Prior year development:
Net (favorable) adverse development in prior year loss reserves, net of related adjustments	(22.8)		%	(33.5)		%	10.7
Combined ratio excluding prior year development	37.6		%	38.2		%	(0.6)

Gross premiums written by the mortgage segment in the 2024 third quarter were 2.3% lower than in the 2023 third quarter, while net premiums written were 4.1% higher. The increase in net premiums written and earned in the 2024 third quarter primarily reflected a lower level of Bellemeade premiums ceded, due in part to the termination of certain Bellemeade agreements in the 2023 fourth quarter.

Estimated net favorable development of prior year loss reserves, before related adjustments, decreased the loss ratio by 20.5 points, compared to 31.4 points in the 2023 third quarter. Such amounts were primarily related to better than expected cure rates. The 2024 third quarter loss ratio, excluding net favorable development, was slightly higher than in the 2023 third quarter, primarily due to higher new delinquencies in the period.

The underwriting expense ratio was 15.2% in the 2024 third quarter, compared to 16.8% in the 2023 third quarter. The decrease was primarily due to higher level of ceding and profit commissions on U.S. primary business, along with a higher level of net premiums earned.

Corporate

The Company’s results include net investment income, net realized gains or losses (which includes realized and unrealized changes in the fair value of equity securities and assets accounted for using the fair value option, realized and unrealized gains and losses on derivative instruments, changes in the allowance for credit losses on financial assets and gains and losses realized from the acquisition or disposition of subsidiaries), equity in net income or loss of investment funds accounted for using the equity method, other income (loss), corporate expenses, transaction costs and other, amortization of intangible assets, interest expense, net foreign exchange gains or losses, income tax items, income or loss from operating affiliates and items related to the Company’s non-cumulative preferred shares.

Investment returns were as follows:


(U.S. Dollars in millions, except per share data)	Three Months Ended
		September 30,			June 30,			September 30,
		2024			2024			2023
Pre-tax net investment income		$	399		$	364		$	269
Per share		$	1.04		$	0.95		$	0.71

Equity in net income (loss) of investment funds accounted for using the equity method		$	171		$	167		$	59
Per share		$	0.45		$	0.44		$	0.16

Pre-tax investment income yield, at amortized cost (1)		4.40		%	4.39		%	3.68		%

Total return on investments (2)		3.97		%	1.33		%	(0.40)		%

(1) Presented on an annualized basis and excluding the impact of investments for which returns are not included within investment income, such as investments accounted for using the equity method and certain equities.

(2) See ‘Comments on Non-GAAP Financial Measures’ for further details.

The growth in net investment income in the 2024 third quarter primarily reflected the effects of sustained higher interest rates available in the market, along with growth in invested assets due in part to strong operating cash flows and inflows related to the MCE Acquisition. Net realized gains were $169 million for the 2024 third quarter, compared to net realized losses of $248 million in the 2023 third quarter, and reflected sales of investments as well as the impact of financial market movements on the Company’s derivatives, equity securities and investments accounted for under the fair value option method.

Amortization of intangible assets for the 2024 third quarter was $88 million, compared to $24 million for the 2023 third quarter. The higher level of expense for the 2024 third quarter reflects the amortization of intangible assets included in the MCE Acquisition, including intangible assets related to value of business acquired and distribution relationships.

Transaction costs and other were $30 million for the 2024 third quarter. Transaction costs and other primarily included integration, advisory, financing, legal and other transaction costs related to the MCE Acquisition.

On a pre-tax basis, net foreign exchange losses for the 2024 third quarter were $63 million, compared to net foreign exchange gains of $22 million for the 2023 third quarter. For both periods, such amounts were primarily unrealized and resulted from the effects of revaluing the Company’s net insurance liabilities required to be settled in foreign currencies at each balance sheet date. Changes in the value of available-for-sale investments held in foreign currencies due to foreign currency rate movements are reflected as a direct increase or decrease to shareholders’ equity and are not included in the consolidated statements of income.

The Company’s effective tax rate on income before income taxes (based on the Company’s estimated annual effective tax rate) was 9.0% for the 2024 third quarter, compared to 9.1% for the 2023 third quarter. The Company’s effective tax rate on pre-tax operating income available to Arch common shareholders was 8.0% for the 2024 third quarter, consistent with 8.0% for the 2023 third quarter. The effective tax rate may fluctuate from period to period based upon the relative mix of income or loss reported by jurisdiction, the level of catastrophic loss activity incurred, and the varying tax rates in each jurisdiction.

Income from operating affiliates for the 2024 third quarter was $36 million, or $0.09 per share, compared to $54 million, or $0.14 per share, for the 2023 third quarter, and primarily reflects amounts related to the Company’s investment in Somers Group Holdings Ltd. and Coface SA.

Conference Call

The Company will hold a conference call for investors and analysts at 11:00 a.m. Eastern Time on October 31, 2024. A live webcast of this call will be available via the Investors section of the Company’s website at http://www.archgroup.com/investors. A recording of the webcast will be available in the Investors section of the Company’s website approximately two hours after the event concludes and will be archived on the site for one year.

Please refer to the Company’s Financial Supplement dated September 30, 2024, which is available via the Investors section of the Company’s website at http://www.archgroup.com/investors. The Financial Supplement provides additional detail regarding the financial performance of the Company. From time to time, the Company posts additional financial information and presentations to its website, including information with respect to its subsidiaries. Investors and other recipients of this information are encouraged to check the Company’s website regularly for additional information regarding the Company.

Arch Capital Group Ltd., is a publicly listed Bermuda exempted company with approximately $25.0 billion in capital at September 30, 2024. Arch, which is part of the S&P 500 index, provides insurance, reinsurance and mortgage insurance on a worldwide basis through its wholly owned subsidiaries.

Comments on Non-GAAP Financial Measures

Throughout this release, the Company presents its operations in the way it believes will be the most meaningful and useful to investors, analysts, rating agencies and others who use the Company’s financial information in evaluating the performance of the Company and that investors and such other persons benefit from having a consistent basis for comparison between quarters and for comparison with other companies within the industry. These measures may not, however, be comparable to similarly titled measures used by companies outside of the insurance industry. Investors are cautioned not to place undue reliance on these non-GAAP financial measures in assessing the Company’s overall financial performance.

This presentation includes the use of “after-tax operating income or loss available to Arch common shareholders,” which is defined as net income available to Arch common shareholders, excluding net realized gains or losses (which includes realized and unrealized changes in the fair value of equity securities and assets accounted for using the fair value option, realized and unrealized gains and losses on derivative instruments, changes in the allowance for credit losses on financial assets and gains and losses realized from the acquisition or disposition of subsidiaries), equity in net income or loss of investment funds accounted for using the equity method, net foreign exchange gains or losses, transaction costs and other, net of income taxes and the use of annualized operating return on average common equity. The presentation of after-tax operating income available to Arch common shareholders and annualized operating return on average common equity are non-GAAP financial measures as defined in Regulation G. The reconciliation of such measures to net income available to Arch common shareholders and annualized net income return on average common equity (the most directly comparable GAAP financial measures) in accordance with Regulation G is included on page 2 of this release.

The Company believes that net realized gains or losses, equity in net income or loss of investment funds accounted for using the equity method, net foreign exchange gains or losses and transaction costs and other, in any particular period are not indicative of the performance of, or trends in, the Company’s business performance. Although net realized gains or losses, equity in net income or loss of investment funds accounted for using the equity method and net foreign exchange gains or losses are an integral part of the Company’s operations, the decision to realize these items are independent of the insurance underwriting process and result, in large part, from general economic and financial market conditions. Furthermore, certain users of the Company’s financial information believe that, for many companies, the timing of the realization of investment gains or losses is largely opportunistic. In addition, changes in the allowance for credit losses and net impairment losses recognized in earnings on the Company’s investments represent other-than-temporary declines in expected recovery values on securities without actual realization.

The use of the equity method on certain of the Company’s investments in certain funds that invest in fixed maturity securities is driven by the ownership structure of such funds (either limited partnerships or limited liability companies). In applying the equity method, these investments are initially recorded at cost and are subsequently adjusted based on the Company’s proportionate share of the net income or loss of the funds (which include changes in the fair value of the underlying securities in the funds). This method of accounting is different from the way the Company accounts for its other fixed maturity securities and the timing of the recognition of equity in net income or loss of investment funds accounted for using the equity method may differ from gains or losses in the future upon sale or maturity of such investments.

Transaction costs and other include integration, advisory, financing, legal, severance, incentive compensation and all other costs directly related to acquisitions. The Company believes that transaction costs and other, due to their non-recurring nature, are not indicative of the performance of, or trends in, the Company’s business performance.

In the 2023 fourth quarter, the Company established a net deferred tax benefit of $1.18 billion consistent with the transition provisions specified in the Bermuda Corporate Income Tax Act of 2023. Due to the non-recurring nature of this one-time item, the Company believes that excluding this item from after-tax operating income or loss available to common shareholders provides the user with a better evaluation of the Company’s ongoing business performance.

The Company believes that showing net income available to Arch common shareholders exclusive of the items referred to above reflects the underlying fundamentals of the Company’s business since the Company evaluates the performance of and manages its business to produce an underwriting profit. In addition to presenting net income available to Arch common shareholders, the Company believes that this presentation enables investors and other users of the Company’s financial information to analyze the Company’s performance in a manner similar to how the Company’s management analyzes performance. The Company also believes that this measure follows industry practice and, therefore, allows the users of the Company’s financial information to compare the Company’s performance with its industry peer group. The Company believes that the equity analysts and certain rating agencies that follow the Company and the insurance industry as a whole generally exclude these items from their analyses for the same reasons.

The Company’s segment information includes the presentation of consolidated underwriting income or loss and a subtotal of underwriting income or loss. Such measures represent the pre-tax profitability of its underwriting operations and include net premiums earned plus other underwriting income, less losses and loss adjustment expenses, acquisition expenses and other operating expenses. Other operating expenses include those operating expenses that are incremental and/or directly attributable to the Company’s individual underwriting operations. Underwriting income or loss does not include certain income and expense items which are included in corporate. While these measures are presented in the Segment Information footnote to the Company’s Consolidated Financial Statements, they are considered non-GAAP financial measures when presented elsewhere on a consolidated basis. The reconciliations of underwriting income or loss to income before income taxes (the most directly comparable GAAP financial measure) on a consolidated basis, in accordance with Regulation G, is shown on the following pages.

Management measures segment performance for its three underwriting segments based on underwriting income or loss. The Company does not manage its assets by underwriting segment and, accordingly, investment income, income from operating affiliates and other items are not allocated to each underwriting segment.

In addition, the Company’s segment information includes the use of a combined ratio excluding catastrophic activity and prior year development, for the insurance and reinsurance segments, and a combined ratio excluding prior year development, for the mortgage segment. These ratios are non-GAAP financial measures as defined in Regulation G. The reconciliation of such measures to the combined ratio (the most directly comparable GAAP financial measure) in accordance with Regulation G are shown on the individual segment pages. The Company’s management utilizes the adjusted combined ratios excluding current accident year catastrophic events and favorable or adverse development in prior year loss reserves in its analysis of the underwriting performance of each of its underwriting segments.

Total return on investments includes investment income, equity in net income or loss of investment funds accounted for using the equity method, net realized gains and losses (excluding changes in the allowance for credit losses on non-investment related financial assets) and the change in unrealized gains and losses generated by Arch’s investment portfolio. Total return is calculated on a pre-tax basis and before investment expenses and reflects the effect of financial market conditions along with foreign currency fluctuations. Management uses total return on investments as a key measure of the return generated to Arch common shareholders, and compares the return generated by the Company’s investment portfolio against benchmark returns during the periods presented.

The following tables summarize the Company’s results by segment for the 2024 third quarter and 2023 third quarter and a reconciliation of underwriting income or loss to income or loss before income taxes and net income or loss available to Arch common shareholders:


(U.S. Dollars in millions)	Three Months Ended
	September 30, 2024
	Insurance			Reinsurance			Mortgage			Total
Gross premiums written (1)	$	2,341		$	2,763		$	339		$	5,440
Premiums ceded (1)	(521)			(818)			(57)			(1,393)
Net premiums written	1,820			1,945			282			4,047
Change in unearned premiums	(55)			(53)			31			(77)
Net premiums earned	1,765			1,892			313			3,970
Other underwriting income (loss)	—			2			3			5
Losses and loss adjustment expenses	(1,087)			(1,317)			1			(2,403)
Acquisition expenses	(308)			(374)			1			(681)
Other operating expenses	(250)			(54)			(49)			(353)
Underwriting income (loss)	$	120		$	149		$	269		538

Net investment income										399
Net realized gains (losses)										169

Equity in net income (loss) of investment funds accounted for using the equity method										171
Other income (loss)										8
Corporate expenses (2)										(19)
Transaction costs and other (2)										(30)
Amortization of intangible assets										(88)
Interest expense										(35)
Net foreign exchange gains (losses)										(63)
Income (loss) before income taxes and income (loss) from operating affiliates										1,050
Income tax benefit (expense)										(98)
Income (loss) from operating affiliates										36



Net income (loss) available to Arch										988
Preferred dividends										(10)

Net income (loss) available to Arch common shareholders										$	978

Underwriting Ratios
Loss ratio	61.6		%	69.6		%	(0.4)		%	60.5		%
Acquisition expense ratio	17.4		%	19.8		%	(0.4)		%	17.2		%
Other operating expense ratio	14.1		%	2.9		%	15.6		%	8.9		%
Combined ratio	93.1		%	92.3		%	14.8		%	86.6		%

Net premiums written to gross premiums written	77.7		%	70.4		%	83.2		%	74.4		%

(1) Certain assumed and ceded amounts related to intersegment transactions are included in individual segment results. Accordingly, the sum of such transactions for each segment does not agree to the total due to eliminations.

(2) Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘Transaction costs and other.’ See ‘Comments on Non-GAAP Financial Measures’ for a further discussion of such items.


(U.S. Dollars in millions)	Three Months Ended
	September 30, 2023
	Insurance			Reinsurance			Mortgage			Total
Gross premiums written (1)	$	2,043		$	2,138		$	347		$	4,527
Premiums ceded (1)	(521)			(576)			(76)			(1,172)
Net premiums written	1,522			1,562			271			3,355
Change in unearned premiums	(110)			(19)			22			(107)
Net premiums earned	1,412			1,543			293			3,248
Other underwriting income (loss)	—			2			3			5
Losses and loss adjustment expenses	(812)			(870)			35			(1,647)
Acquisition expenses	(269)			(304)			(2)			(575)
Other operating expenses	(202)			(61)			(47)			(310)
Underwriting income (loss)	$	129		$	310		$	282		721

Net investment income										269
Net realized gains (losses)										(248)

Equity in net income (loss) of investment funds accounted for using the equity method										59
Other income (loss)										(4)
Corporate expenses (2)										(20)
Transaction costs and other (2)										—
Amortization of intangible assets										(24)
Interest expense										(34)
Net foreign exchange gains (losses)										22
Income (loss) before income taxes and income (loss) from operating affiliates										741
Income tax benefit (expense)										(72)
Income (loss) from operating affiliates										54



Net income (loss) available to Arch										723
Preferred dividends										(10)

Net income (loss) available to Arch common shareholders										$	713

Underwriting Ratios
Loss ratio	57.5		%	56.4		%	(12.1)		%	50.7		%
Acquisition expense ratio	19.1		%	19.7		%	0.6		%	17.7		%
Other operating expense ratio	14.3		%	3.9		%	16.2		%	9.5		%
Combined ratio	90.9		%	80.0		%	4.7		%	77.9		%

Net premiums written to gross premiums written	74.5		%	73.1		%	78.1		%	74.1		%

Cautionary Note Regarding Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 (“PSLRA”) provides a “safe harbor” for forward-looking statements. This release or any other written or oral statements made by or on behalf of the Company may include forward-looking statements, which reflect the Company’s current views with respect to future events and financial performance. All statements other than statements of historical fact included in or incorporated by reference in this release are forward-looking statements. Forward-looking statements, for purposes of the PSLRA or otherwise, can generally be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” and similar statements of a future or forward-looking nature or their negative or variations or similar terminology.

Forward-looking statements involve the Company’s current assessment of risks and uncertainties. Actual events and results may differ materially from those expressed or implied in these statements. Important factors that could cause actual events or results to differ materially from those indicated in such statements are discussed below and elsewhere in this release and in the Company’s periodic reports filed with the Securities and Exchange Commission (the “SEC”), and include:

•the Company’s ability to successfully implement its business strategy during “soft” as well as “hard” markets;

•acceptance of the Company’s business strategy, security and financial condition by rating agencies and regulators, as well as by brokers and its insureds and reinsureds;

•the Company’s ability to consummate acquisitions and integrate any businesses it has acquired or may acquire into its existing operations;

•the Company’s ability to maintain or improve its ratings, which may be affected by its ability to raise additional equity or debt financings, by ratings agencies’ existing or new policies and practices, as well as other factors described herein;

•general economic and market conditions (including inflation, interest rates, unemployment, housing prices, foreign currency exchange rates, prevailing credit terms and the depth and duration of a recession, including those resulting from COVID-19) and conditions specific to the reinsurance and insurance markets in which the Company operates;

•competition, including increased competition, on the basis of pricing, capacity (including alternative sources of capital), coverage terms or other factors;

•developments in the world’s financial and capital markets and the Company’s access to such markets;

•the Company’s ability to successfully enhance, integrate and maintain operating procedures (including information technology) to effectively support its current and new business;

•the loss and addition of key personnel;

•material differences between actual and expected assessments for guaranty funds and mandatory pooling arrangements;

•accuracy of those estimates and judgments utilized in the preparation of the Company’s financial statements, including those related to revenue recognition, insurance and other reserves, reinsurance recoverables, investment valuations, intangible assets, bad debts, income taxes, deferred tax assets, contingencies and litigation, and any determination to use the deposit method of accounting;

•greater than expected loss ratios on business written by the Company and adverse development on claim and/or claim expense liabilities related to business written by its insurance and reinsurance subsidiaries;

•the adequacy of the Company’s loss reserves;

•severity and/or frequency of losses;

•greater frequency or severity of unpredictable natural and man-made catastrophic events;

•claims resulting from natural or man-made catastrophic events or severe economic events in the Company’s insurance, reinsurance and mortgage businesses could cause large losses and substantial volatility in the Company’s results of operations;

•the effect of climate change on the Company’s business;

•the effect of contagious diseases (including COVID-19) on the Company’s business;

•acts of terrorism, geopolitical political unrest and other regional and global hostilities or other unforecasted and unpredictable events;

•availability to the Company of reinsurance to manage its gross and net exposures and the cost of such reinsurance;

•the failure of reinsurers, managing general agents, third party administrators or others to meet their obligations to the Company;

•the timing of loss payments being faster or the receipt of reinsurance recoverables being slower than anticipated by the Company;

•the Company’s investment performance, including legislative or regulatory developments that may adversely affect the fair value of the Company’s investments;

•changes in general economic conditions, including new or continued sovereign debt concerns or downgrades of U.S. securities by credit rating agencies, which could affect the Company’s business, financial condition and results of operations;

•the volatility of the Company’s shareholders’ equity from foreign currency fluctuations, which could increase due to us not matching portions of the Company’s projected liabilities in foreign currencies with investments in the same currencies;

•changes in accounting principles or policies or in the Company’s application of such accounting principles or policies;

•changes in the political environment of certain countries in which the Company operates, underwrites business or invests;

•an incident, disruption in operations or other cyber event caused by cyber attacks, the use of artificial intelligence technologies or other technology on the Company’s systems or those of the Company’s business partners and service providers, which could negatively impact the Company’s business and/or expose the Company to litigation;

•statutory or regulatory developments, including as to tax matters and insurance and other regulatory matters such as the adoption of legislation that affects Bermuda-headquartered companies and/or Bermuda-based insurers or reinsurers and/or changes in regulations or tax laws applicable to the Company, its subsidiaries, brokers or customers, including the implementation of the Organization for Economic Cooperation and Development (“OECD”) Pillar I and Pillar II initiative and the enactment of the Bermuda corporate income tax; and

•the other matters set forth under Item 1A “Risk Factors”, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other sections of the Company’s Annual Report on Form 10-K, as well as the other factors set forth in the Company’s other documents on file with the SEC, and management’s response to any of the aforementioned factors.

All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included herein or elsewhere. The Company's forward-looking statements speak only as of the date of this press release or as of the date they are made, and the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.


Contacts
Arch Capital Group Ltd.			Investor Relations
François Morin: (441) 278-9250			Donald Watson: (914) 872-3616; dwatson@archgroup.com


Source - Arch Capital Group Ltd.
arch-corporate

EXHIBIT 99.2




			Arch Capital Group Ltd.
			Waterloo House, Ground Floor
			100 Pitts Bay Road
			Pembroke HM 08 Bermuda

Financial Supplement

September 30, 2024

The following financial supplement is provided to assist in your understanding of Arch Capital Group Ltd. (“Arch”) and its subsidiaries (collectively, the “Company”).

This report is for informational purposes only. It should be read in conjunction with documents filed by Arch with the U.S. Securities and Exchange Commission, including the most recent Annual Report on Form 10-K and the Quarterly Reports on Form 10-Q. Please refer to the Company’s website at www.archgroup.com for further information describing Arch.




Arch Capital Group Ltd.			Investor Relations
François Morin: (441) 278-9250			Donald Watson: (914) 872-3616; dwatson@archgroup.com

Arch Capital Group Ltd. and Subsidiaries

Table of Contents


			Page

I.	Financial Highlights		3

II.	Consolidated Financial Statements
	a.	Consolidated Statements of Income	4

	b.	Consolidated Balance Sheets	5
	c.	Consolidated Statements of Changes in Shareholders’ Equity	6
	d.	Consolidated Statements of Cash Flows	7

III.	Segment Information
	a.	Overview	8
	b.	Consolidated Results	9
	c.	Insurance Segment Results	13
	d.	Reinsurance Segment Results	15
	e.	Mortgage Segment Results	17
	f.	Segment Consolidated Results	22
	g.	Selected Information on Losses and Loss Adjustment Expenses	23

IV.	Investment Information
	a.	Investable Asset Summary and Investment Portfolio Metrics	24
	b.	Composition of Net Investment Income, Yield and Total Return	25
	c.	Composition of Fixed Maturities	26
	d.	Credit Quality Distribution and Maturity Profile	27
	e.	Analysis of Corporate Exposures	28
	f.	Structured Securities	29

V.	Other
	a.	Comments on Non-GAAP Financial Measures	30
	b.	Operating Income Reconciliation and Annualized Operating Return on Average Common Equity	31
	c.	Operating Income and Effective Tax Rate Calculations	32
	d.	Capital Structure and Share Repurchase Activity	33


			1

Arch Capital Group Ltd. and Subsidiaries

Basis of Presentation

All financial information contained herein is unaudited, however, certain information relating to the consolidated balance sheet at December 31, 2023 is derived from or agrees to audited financial information. Unless otherwise noted, all amounts are in millions, except for per share amounts and ratio information. Amounts presented have been rounded for presentation purposes and may not reconcile due to rounding differences.

Cautionary Note Regarding Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. This release or any other written or oral statements made by or on behalf of Arch and its subsidiaries may include forward-looking statements, which reflect the Company’s current views with respect to future events and financial performance. All statements other than statements of historical fact included in or incorporated by reference in this release are forward-looking statements.

Forward-looking statements can generally be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or their negative or variations or similar terminology. Forward-looking statements involve the Company’s current assessment of risks and uncertainties. Actual events and results may differ materially from those expressed or implied in these statements. A non-exclusive list of the important factors that could cause actual results to differ materially from those in such forward-looking statements includes the following: adverse general economic and market conditions; increased competition; pricing and policy term trends; fluctuations in the actions of rating agencies and the Company’s ability to maintain and improve the Company’s ratings; investment performance; the loss and addition of key personnel; the adequacy of the Company’s loss reserves, severity and/or frequency of losses, greater than expected loss ratios and adverse development on claim and/or claim expense liabilities; greater frequency or severity of unpredictable natural and man-made catastrophic events, including pandemics such as COVID-19; the impact of acts of terrorism and acts of war; changes in regulations and/or tax laws in the United States or elsewhere; the Company’s ability to successfully integrate, establish and maintain operating procedures as well as integrate the businesses we have acquired or may acquire into the existing operations; changes in accounting principles or policies; material differences between actual and expected assessments for guaranty funds and mandatory pooling arrangements; availability and cost to the Company of reinsurance to manage gross and net exposures; the failure of others to meet their obligations to the Company; an incident, disruption in operations or other cyber event caused by cyber attacks, the use of artificial intelligence technologies or other technology on the Company’s systems or those of the Company’s business partners and service providers, which could negatively impact the Company’s business and/or expose the Company to litigation; and other factors identified in the Company’s filings with the U.S. Securities and Exchange Commission.


			2

Arch Capital Group Ltd. and Subsidiaries

Financial Highlights

The following table presents financial highlights:


(U.S. Dollars and shares in millions, except per share data)	Three Months Ended								Nine Months Ended
	September 30,								September 30,
	2024			2023			Change		2024			2023			Change
Underwriting results:
Gross premiums written	$	5,440		$	4,527		20.2	%	$	16,755		$	14,152		18.4	%
Net premiums written	4,047			3,355			20.6	%	11,913			10,207			16.7	%
Net premiums earned	3,970			3,248			22.2	%	10,957			9,096			20.5	%
Underwriting income (loss) (1)	538			721			(25.4)	%	2,036			1,897			7.3	%

Loss ratio	60.5		%	50.7		%	9.8		54.4		%	50.7		%	3.7
Acquisition expense ratio	17.2		%	17.7		%	(0.5)		17.5		%	18.3		%	(0.8)
Other operating expense ratio	8.9		%	9.5		%	(0.6)		9.7		%	10.4		%	(0.7)
Combined ratio	86.6		%	77.9		%	8.7		81.6		%	79.4		%	2.2

Net investment income	$	399		$	269		48.3	%	$	1,090		$	710		53.5	%
Per diluted share	$	1.04		$	0.71		46.5	%	$	2.86		$	1.88		52.1	%

Net income available to Arch common shareholders	$	978		$	713		37.2	%	$	3,347		$	2,079		61.0	%
Per diluted share	$	2.56		$	1.88		36.2	%	$	8.78		$	5.50		59.6	%

After-tax operating income available to Arch common shareholders (1)	$	762		$	876		(13.0)	%	$	2,676		$	2,256		18.6	%
Per diluted share	$	1.99		$	2.31		(13.9)	%	$	7.02		$	5.96		17.8	%

Comprehensive income (loss) available to Arch	$	1,598		$	589		171.3	%	$	3,853		$	2,302		67.4	%

Net cash provided by operating activities	$	2,018		$	1,970		2.4	%	$	5,100		$	4,084		24.9	%

Weighted average common shares and common share equivalents outstanding — diluted	382.3			379.4			0.8	%	381.3			378.3			0.8	%

Financial measures:
Change in book value per common share during period	8.1		%	4.3		%	3.8		21.4		%	18.4		%	3.0

Annualized net income return on average common equity	19.0		%	20.2		%	(1.2)		22.9		%	20.9		%	2.0
Annualized operating return on average common equity (1)	14.8		%	24.8		%	(10.0)		18.3		%	22.7		%	(4.4)

Total return on investments (2)	3.97		%	(0.40)		%	437 bps		6.20		%	2.68		%	352 bps

(1)See ‘Comments on Non-GAAP Financial Measures’ for a further discussion of consolidated underwriting income or loss, after-tax operating income or loss available to Arch common shareholders and annualized operating return on average common equity.

(2)Total return on investments includes investment income, equity in net income (loss) of investment funds accounted for using the equity method, net realized gains and losses and the change in unrealized gains and losses and is calculated on a pre-tax basis and before investment expenses. See ‘Comments on Non-GAAP Financial Measures’ for a further discussion of the presentation of total return on investments.


			3

Arch Capital Group Ltd. and Subsidiaries

Consolidated Statements of Income


(U.S. Dollars and shares in millions, except per share data)	Three Months Ended										Nine Months Ended
	September 30,		June 30,		March 31,		December 31,		September 30,		September 30,		September 30,
	2024		2024		2024		2023		2023		2024		2023
Revenues


Net premiums earned	$	3,970	$	3,565	$	3,422	$	3,344	$	3,248	$	10,957	$	9,096
Net investment income	399		364		327		313		269		1,090		710
Net realized gains (losses)	169		122		67		189		(248)		358		(354)

Other underwriting income	5		3		12		10		5		20		21
Equity in net income (loss) of investment funds accounted for using the equity method	171		167		99		102		59		437		176
Other income (loss)	8		8		14		17		(4)		30		10
Total revenues	4,722		4,229		3,941		3,975		3,329		12,892		9,659

Expenses
Losses and loss adjustment expenses	(2,403)		(1,827)		(1,728)		(1,637)		(1,647)		(5,958)		(4,609)
Acquisition expenses	(681)		(633)		(607)		(643)		(575)		(1,921)		(1,669)
Other operating expenses	(353)		(346)		(363)		(359)		(310)		(1,062)		(942)
Corporate expenses	(49)		(41)		(53)		(31)		(20)		(143)		(71)
Amortization of intangible assets	(88)		(27)		(21)		(24)		(24)		(136)		(71)
Interest expense	(35)		(35)		(34)		(34)		(34)		(104)		(99)
Net foreign exchange gains (losses)	(63)		1		31		(59)		22		(31)		(1)
Total expenses	(3,672)		(2,908)		(2,775)		(2,787)		(2,588)		(9,355)		(7,462)

Income (loss) before income taxes and income (loss) from operating affiliates	1,050		1,321		1,166		1,188		741		3,537		2,197
Income tax (expense) benefit	(98)		(97)		(101)		1,076		(72)		(296)		(203)
Income (loss) from operating affiliates	36		45		55		69		54		136		115
Net income (loss)	988		1,269		1,120		2,333		723		3,377		2,109
Net (income) loss attributable to noncontrolling interests	—		—		—		1		—		—		—
Net income (loss) attributable to Arch	988		1,269		1,120		2,334		723		3,377		2,109
Preferred dividends	(10)		(10)		(10)		(10)		(10)		(30)		(30)

Net income (loss) available to Arch common shareholders	$	978	$	1,259	$	1,110	$	2,324	$	713	$	3,347	$	2,079

Comprehensive income (loss) available to Arch	$	1,598	$	1,280	$	975	$	3,111	$	589	$	3,853	$	2,302

Net income (loss) per common share and common share equivalent
Basic	$	2.62	$	3.38	$	2.99	$	6.29	$	1.93	$	8.99	$	5.64
Diluted	$	2.56	$	3.30	$	2.92	$	6.12	$	1.88	$	8.78	$	5.50

Weighted average common shares and common share equivalents outstanding
Basic	373.2		372.7		370.9		369.6		369.2		372.3		368.4
Diluted	382.3		381.6		380.5		379.8		379.4		381.3		378.3


			4

Arch Capital Group Ltd. and Subsidiaries

Consolidated Balance Sheets


(U.S. Dollars and shares in millions, except per share data)	September 30,		June 30,		March 31,		December 31,		September 30,
	2024		2024		2024		2023		2023
Assets
Investments:
Fixed maturities available for sale, at fair value	$	28,434	$	25,202	$	23,628	$	23,553	$	22,485
Short-term investments available for sale, at fair value	3,341		2,297		2,142		2,063		1,682

Equity securities, at fair value	1,623		1,397		1,720		1,186		894

Other investments	3,261		3,206		2,886		2,488		2,068
Investments accounted for using the equity method	5,244		4,983		4,842		4,566		4,251
Total investments	41,903		37,085		35,218		33,856		31,380
Cash	1,025		1,020		993		917		859
Accrued investment income	292		287		236		236		217


Investment in operating affiliates	1,236		1,143		1,174		1,119		1,000
Premiums receivable	6,364		6,268		5,765		4,644		4,937
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses	7,948		7,473		7,509		7,064		6,821
Contractholder receivables	2,078		2,016		1,907		1,814		1,805
Ceded unearned premiums	2,935		2,981		2,717		2,170		2,444
Deferred acquisition costs	1,744		1,635		1,625		1,531		1,483
Receivable for securities sold	790		116		166		63		59
Goodwill and intangible assets	1,486		725		778		731		739

Other assets	5,855		4,716		4,680		4,761		3,483
Total assets	$	73,656	$	65,465	$	62,768	$	58,906	$	55,227

Liabilities
Reserve for losses and loss adjustment expenses	$	28,679	$	24,466	$	23,705	$	22,752	$	21,836
Unearned premiums	11,238		10,452		9,971		8,808		9,074
Reinsurance balances payable	2,586		2,591		2,497		2,000		2,215
Contractholder payables	2,082		2,020		1,910		1,817		1,807
Collateral held for insured obligations	268		263		263		259		274
Senior notes	2,727		2,727		2,727		2,726		2,726


Payable for securities purchased	967		410		433		247		417
Other liabilities	2,835		1,871		1,905		1,942		1,637
Total liabilities	51,382		44,800		43,411		40,551		39,986

Redeemable noncontrolling interests	—		—		2		2		2

Shareholders’ equity
Non-cumulative preferred shares	830		830		830		830		830

Common shares	1		1		1		1		1
Additional paid-in capital	2,465		2,443		2,401		2,327		2,297
Retained earnings	23,642		22,664		21,405		20,295		17,971
Accumulated other comprehensive income (loss), net of deferred income tax	(200)		(810)		(821)		(676)		(1,453)
Common shares held in treasury, at cost	(4,464)		(4,463)		(4,461)		(4,424)		(4,407)


Total shareholders’ equity	22,274		20,665		19,355		18,353		15,239
Total liabilities, noncontrolling interests and shareholders’ equity	$	73,656	$	65,465	$	62,768	$	58,906	$	55,227

Common shares and common share equivalents outstanding, net of treasury shares	376.2		376.0		375.3		373.3		373.1
Book value per common share (1)	$	57.00	$	52.75	$	49.36	$	46.94	$	38.62

(1) Excludes the effects of stock options and restricted stock units outstanding.


			5

Arch Capital Group Ltd. and Subsidiaries

Consolidated Statements of Changes in Shareholders’ Equity


(U.S. Dollars in millions)	Three Months Ended										Nine Months Ended
	September 30,		June 30,		March 31,		December 31,		September 30,		September 30,		September 30,
	2024		2024		2024		2023		2023		2024		2023
Non-cumulative preferred shares



Balance at beginning and end of period	$	830	$	830	$	830	$	830	$	830	$	830	$	830







Common shares


Balance at beginning and end of period	1		1		1		1		1		1		1

Additional paid-in capital
Balance at beginning of period	2,443		2,401		2,327		2,297		2,278		2,327		2,211





Amortization of share-based compensation	16		16		68		20		15		100		73



All other	6		26		6		10		4		38		13
Balance at end of period	2,465		2,443		2,401		2,327		2,297		2,465		2,297

Retained earnings
Balance at beginning of period	22,664		21,405		20,295		17,971		17,258		20,295		15,892


Net income	988		1,269		1,120		2,333		723		3,377		2,109
Amounts attributable to noncontrolling interests	—		—		—		1		—		—		—
Preferred share dividends	(10)		(10)		(10)		(10)		(10)		(30)		(30)

Balance at end of period	23,642		22,664		21,405		20,295		17,971		23,642		17,971

Accumulated other comprehensive income (loss), net of deferred income tax
Balance at beginning of period	(810)		(821)		(676)		(1,453)		(1,319)		(676)		(1,646)

Change in unrealized appreciation (decline) in value of available-for-sale investments	585		27		(112)		721		(94)		500		226
Change in foreign currency translation adjustments	25		(16)		(33)		56		(40)		(24)		(33)
Balance at end of period	(200)		(810)		(821)		(676)		(1,453)		(200)		(1,453)

Common shares held in treasury, at cost
Balance at beginning of period	(4,463)		(4,461)		(4,424)		(4,407)		(4,407)		(4,424)		(4,378)
Shares repurchased for treasury	(1)		(2)		(37)		(17)		—		(40)		(29)
Balance at end of period	(4,464)		(4,463)		(4,461)		(4,424)		(4,407)		(4,464)		(4,407)



Total shareholders’ equity	$	22,274	$	20,665	$	19,355	$	18,353	$	15,239	$	22,274	$	15,239


			6

Arch Capital Group Ltd. and Subsidiaries

Consolidated Statements of Cash Flows


(U.S. Dollars in millions)	Three Months Ended										Nine Months Ended
	September 30,		June 30,		March 31,		December 31,		September 30,		September 30,		September 30,
	2024		2024		2024		2023		2023		2024		2023
Operating Activities
Net income (loss)	$	988	$	1,269	$	1,120	$	2,333	$	723	$	3,377	$	2,109
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized (gains) losses	(165)		(144)		(52)		(185)		257		(361)		367

Equity in net (income) or loss of investment funds accounted for using the equity method and other income or loss	(162)		(62)		(112)		(111)		(55)		(336)		(104)
Amortization of intangible assets	88		27		21		24		24		136		71
Share-based compensation	16		16		68		20		15		100		73
Changes in:
Reserve for losses and loss adjustment expenses, net	1,078		709		660		534		584		2,447		1,604
Unearned premiums, net	77		216		663		(83)		107		956		1,111
Premiums receivable	178		(523)		(1,159)		352		315		(1,504)		(1,333)
Deferred acquisition costs	(86)		2		(82)		(45)		(38)		(166)		(190)
Reinsurance balances payable	(27)		95		521		(237)		40		589		692
Deferred income tax assets, net	16		21		24		(1,201)		(18)		61		40
Other items, net	17		(108)		(108)		264		16		(199)		(356)
Net cash provided by operating activities	2,018		1,518		1,564		1,665		1,970		5,100		4,084
Investing Activities
Purchases of fixed maturity investments	(7,436)		(5,798)		(8,325)		(5,038)		(4,184)		(21,559)		(13,024)
Purchases of equity securities	(278)		(145)		(509)		(280)		(72)		(932)		(176)
Purchases of other investments	(529)		(875)		(494)		(1,059)		(555)		(1,898)		(1,112)
Proceeds from sales of fixed maturity investments	5,227		3,691		7,529		4,450		2,576		16,447		9,655
Proceeds from sales of equity securities	126		482		65		72		55		673		216
Proceeds from sales, redemptions and maturities of other investments	405		503		116		423		144		1,024		345
Proceeds from redemptions and maturities of fixed maturity investments	392		515		363		192		221		1,270		589
Net settlements of derivative instruments	115		7		5		119		(115)		127		(69)

Net (purchases) sales of short-term investments	(793)		65		(90)		(373)		10		(818)		(323)

Acquisitions, net of cash	852		—		—		—		—		852		—


Purchases of fixed assets	(12)		(11)		(15)		(15)		(11)		(38)		(37)
Other	(32)		57		(54)		(23)		(4)		(29)		—
Net cash provided by (used for) investing activities	(1,963)		(1,509)		(1,409)		(1,532)		(1,935)		(4,881)		(3,936)
Financing Activities



Proceeds from common shares issued, net	6		24		(32)		(7)		5		(2)		5




Change in third party investment in redeemable noncontrolling interests	—		—		—		—		—		—		(22)

Other	(3)		—		—		—		(2)		(3)		(5)
Preferred dividends paid	(10)		(10)		(10)		(10)		(10)		(30)		(30)
Net cash provided by (used for) financing activities	(7)		14		(42)		(17)		(7)		(35)		(52)
Effects of exchange rate changes on foreign currency cash and restricted cash	37		4		(11)		27		(26)		30		(14)
Increase (decrease) in cash and restricted cash	85		27		102		143		2		214		82
Cash and restricted cash, beginning of period	1,627		1,600		1,498		1,355		1,353		1,498		1,273
Cash and restricted cash, end of period	$	1,712	$	1,627	$	1,600	$	1,498	$	1,355	$	1,712	$	1,355
Income taxes paid (received)	$	76	$	151	$	(6)	$	140	$	54	$	221	$	127
Interest paid	$	—	$	63	$	—	$	64	$	—	$	63	$	63


			7

Arch Capital Group Ltd. and Subsidiaries

Segment Information — Overview

The Company’s Insurance, Reinsurance and Mortgage segments each have managers who are responsible for the overall profitability of their respective segments and who are directly accountable to the Company’s chief operating decision makers, the Chief Executive Officer and the Chief Financial Officer and Treasurer. The chief operating decision makers do not assess performance, measure return on equity or make resource allocation decisions on a line of business basis. Management measures segment performance for its three underwriting segments based on underwriting income or loss. The Company does not manage its assets by underwriting segment and, accordingly, investment income is not allocated to each underwriting segment.

The Company determined its reportable operating segments using the management approach described in accounting guidance regarding disclosures about segments of an enterprise and related information. The accounting policies of the segments are the same as those used for the preparation of the Company’s consolidated financial statements. Intersegment business is allocated to the segment accountable for the underwriting results.

Insurance Segment

The Company’s insurance segment primarily consists of commercial insurance lines of business, with a focus on specialty insurance products. These products are mainly offered in North America, Bermuda, the United Kingdom, continental Europe and Australia. Products offered in North America include: commercial automobile; commercial multi‐peril; other liability—claims made, which includes financial and professional lines; other liability—occurrence, which includes admitted and excess and surplus casualty lines; property and short-tail specialty; workers compensation; and other. Products offered across the Company’s International units include: property and short-tail specialty; and casualty and other.

Reinsurance Segment

The Company’s reinsurance segment offers reinsurance products on a worldwide basis. Lines of business include: casualty; marine and aviation; other specialty; property catastrophe; property excluding property catastrophe; and other.

Mortgage Segment

The Company’s mortgage segment includes: U.S. primary mortgage insurance business written predominantly through its eligible mortgage insurers by the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”), each a government sponsored entity ("GSE"), and also through non GSE-approved entities (combined “Arch MI U.S.”); U.S. credit-risk transfer (“CRT”) business and other U.S. mortgage reinsurance transactions; and international mortgage insurance and reinsurance operations.

The Company’s results also include net investment income, net realized gains or losses (which includes realized and unrealized changes in the fair value of equity securities and assets accounted for using the fair value option, realized and unrealized gains and losses on derivative instruments, changes in the allowance for credit losses on financial assets and gains and losses realized from acquisition or disposition of subsidiaries), equity in net income or loss of investment funds accounted for using the equity method, other income (loss), corporate expenses, transaction costs and other, amortization of intangible assets, interest expense, net foreign exchange gains or losses, income taxes items (which for the 2023 fourth quarter reflects the establishment of a net deferred tax asset related to the enactment of Bermuda’s new corporate income tax), income or loss from operating affiliates and items related to the Company’s non cumulative preferred shares.


			8

Arch Capital Group Ltd. and Subsidiaries

Segment Information


(U.S. Dollars in millions)	Three Months Ended
	September 30, 2024
	Insurance			Reinsurance			Mortgage			Total
Gross premiums written (1)	$	2,341		$	2,763		$	339		$	5,440
Premiums ceded (1)	(521)			(818)			(57)			(1,393)
Net premiums written	1,820			1,945			282			4,047
Change in unearned premiums	(55)			(53)			31			(77)
Net premiums earned	1,765			1,892			313			3,970
Other underwriting income (loss)	—			2			3			5
Losses and loss adjustment expenses	(1,087)			(1,317)			1			(2,403)
Acquisition expenses	(308)			(374)			1			(681)
Other operating expenses	(250)			(54)			(49)			(353)
Underwriting income (loss)	$	120		$	149		$	269		538

Net investment income										399
Net realized gains (losses)										169

Equity in net income (loss) of investment funds accounted for using the equity method										171
Other income (loss)										8
Corporate expenses (2)										(19)
Transaction costs and other (2)										(30)
Amortization of intangible assets										(88)
Interest expense										(35)
Net foreign exchange gains (losses)										(63)
Income (loss) before income taxes and income (loss) from operating affiliates										1,050
Income tax (expense) benefit										(98)
Income (loss) from operating affiliates										36



Net income (loss) available to Arch										988
Preferred dividends										(10)

Net income (loss) available to Arch common shareholders										$	978

Underwriting Ratios
Loss ratio	61.6		%	69.6		%	(0.4)		%	60.5		%
Acquisition expense ratio	17.4		%	19.8		%	(0.4)		%	17.2		%
Other operating expense ratio	14.1		%	2.9		%	15.6		%	8.9		%
Combined ratio	93.1		%	92.3		%	14.8		%	86.6		%

Net premiums written to gross premiums written	77.7		%	70.4		%	83.2		%	74.4		%

Total investable assets										$	42,751
Total assets										73,656
Total liabilities										51,382


			9

Arch Capital Group Ltd. and Subsidiaries

Segment Information


(U.S. Dollars in millions)	Three Months Ended
	September 30, 2023
	Insurance			Reinsurance			Mortgage			Total
Gross premiums written (1)	$	2,043		$	2,138		$	347		$	4,527
Premiums ceded (1)	(521)			(576)			(76)			(1,172)
Net premiums written	1,522			1,562			271			3,355
Change in unearned premiums	(110)			(19)			22			(107)
Net premiums earned	1,412			1,543			293			3,248
Other underwriting income (loss)	—			2			3			5
Losses and loss adjustment expenses	(812)			(870)			35			(1,647)
Acquisition expenses	(269)			(304)			(2)			(575)
Other operating expenses	(202)			(61)			(47)			(310)
Underwriting income (loss)	$	129		$	310		$	282		721

Net investment income										269
Net realized gains (losses)										(248)

Equity in net income (loss) of investment funds accounted for using the equity method										59
Other income (loss)										(4)
Corporate expenses (2)										(20)
Transaction costs and other (2)										—
Amortization of intangible assets										(24)
Interest expense										(34)
Net foreign exchange gains (losses)										22
Income (loss) before income taxes and income (loss) from operating affiliates										741
Income tax (expense) benefit										(72)
Income (loss) from operating affiliates										54



Net income (loss) available to Arch										723
Preferred dividends										(10)

Net income (loss) available to Arch common shareholders										$	713

Underwriting Ratios
Loss ratio	57.5		%	56.4		%	(12.1)		%	50.7		%
Acquisition expense ratio	19.1		%	19.7		%	0.6		%	17.7		%
Other operating expense ratio	14.3		%	3.9		%	16.2		%	9.5		%
Combined ratio	90.9		%	80.0		%	4.7		%	77.9		%

Net premiums written to gross premiums written	74.5		%	73.1		%	78.1		%	74.1		%

Total investable assets										$	31,881
Total assets										55,227
Total liabilities										39,986


			10

Arch Capital Group Ltd. and Subsidiaries

Segment Information


(U.S. Dollars in millions)	Nine Months Ended
	September 30, 2024
	Insurance			Reinsurance			Mortgage			Total
Gross premiums written (1)	$	6,569		$	9,171		$	1,020		$	16,755
Premiums ceded (1)	(1,649)			(3,013)			(185)			(4,842)
Net premiums written	4,920			6,158			835			11,913
Change in unearned premiums	(226)			(820)			90			(956)
Net premiums earned	4,694			5,338			925			10,957
Other underwriting income (loss)	—			5			15			20
Losses and loss adjustment expenses	(2,789)			(3,206)			37			(5,958)
Acquisition expenses	(872)			(1,050)			1			(1,921)
Other operating expenses	(718)			(193)			(151)			(1,062)
Underwriting income (loss)	$	315		$	894		$	827		2,036

Net investment income										1,090
Net realized gains (losses)										358

Equity in net income (loss) of investment funds accounted for using the equity method										437
Other income (loss)										30
Corporate expenses (2)										(88)
Transaction costs and other (2)										(55)
Amortization of intangible assets										(136)
Interest expense										(104)
Net foreign exchange gains (losses)										(31)
Income (loss) before income taxes and income (loss) from operating affiliates										3,537
Income tax (expense) benefit										(296)
Income (loss) from operating affiliates										136



Net income (loss) available to Arch										3,377
Preferred dividends										(30)

Net income (loss) available to Arch common shareholders										$	3,347

Underwriting Ratios
Loss ratio	59.4		%	60.1		%	(4.0)		%	54.4		%
Acquisition expense ratio	18.6		%	19.7		%	(0.1)		%	17.5		%
Other operating expense ratio	15.3		%	3.6		%	16.3		%	9.7		%
Combined ratio	93.3		%	83.4		%	12.2		%	81.6		%

Net premiums written to gross premiums written	74.9		%	67.1		%	81.9		%	71.1		%


			11

Arch Capital Group Ltd. and Subsidiaries

Segment Information


(U.S. Dollars in millions)	Nine Months Ended
	September 30, 2023
	Insurance			Reinsurance			Mortgage			Total
Gross premiums written (1)	$	5,977		$	7,142		$	1,037		$	14,152
Premiums ceded (1)	(1,564)			(2,145)			(240)			(3,945)
Net premiums written	4,413			4,997			797			10,207
Change in unearned premiums	(416)			(781)			86			(1,111)
Net premiums earned	3,997			4,216			883			9,096
Other underwriting income (loss)	—			9			12			21
Losses and loss adjustment expenses	(2,276)			(2,379)			46			(4,609)
Acquisition expenses	(778)			(875)			(16)			(1,669)
Other operating expenses	(592)			(203)			(147)			(942)
Underwriting income (loss)	$	351		$	768		$	778		1,897

Net investment income										710
Net realized gains (losses)										(354)

Equity in net income (loss) of investment funds accounted for using the equity method										176
Other income (loss)										10
Corporate expenses (2)										(69)
Transaction costs and other (2)										(2)
Amortization of intangible assets										(71)
Interest expense										(99)
Net foreign exchange gains (losses)										(1)
Income (loss) before income taxes and income (loss) from operating affiliates										2,197
Income tax (expense) benefit										(203)
Income (loss) from operating affiliates										115



Net income (loss) available to Arch										2,109
Preferred dividends										(30)

Net income (loss) available to Arch common shareholders										$	2,079

Underwriting Ratios
Loss ratio	57.0		%	56.4		%	(5.3)		%	50.7		%
Acquisition expense ratio	19.5		%	20.7		%	1.8		%	18.3		%
Other operating expense ratio	14.8		%	4.8		%	16.7		%	10.4		%
Combined ratio	91.3		%	81.9		%	13.2		%	79.4		%

Net premiums written to gross premiums written	73.8		%	70.0		%	76.9		%	72.1		%


			12

Arch Capital Group Ltd. and Subsidiaries

Segment Information — Insurance Segment


(U.S. Dollars in millions)	Three Months Ended															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
	2024			2024			2024			2023			2023			2024			2023
Gross premiums written	$	2,341		$	2,102		$	2,126		$	1,934		$	2,043		$	6,569		$	5,977
Premiums ceded	(521)			(544)			(584)			(485)			(521)			(1,649)			(1,564)
Net premiums written	1,820			1,558			1,542			1,449			1,522			4,920			4,413
Change in unearned premiums	(55)			(80)			(91)			—			(110)			(226)			(416)
Net premiums earned	1,765			1,478			1,451			1,449			1,412			4,694			3,997

Losses and loss adjustment expenses	(1,087)			(848)			(854)			(846)			(812)			(2,789)			(2,276)
Acquisition expenses	(308)			(288)			(276)			(277)			(269)			(872)			(778)
Other operating expenses	(250)			(233)			(235)			(227)			(202)			(718)			(592)
Underwriting income (loss)	$	120		$	109		$	86		$	99		$	129		$	315		$	351

Underwriting Ratios
Loss ratio	61.6		%	57.3		%	58.9		%	58.4		%	57.5		%	59.4		%	57.0		%
Acquisition expense ratio	17.4		%	19.5		%	19.0		%	19.1		%	19.1		%	18.6		%	19.5		%
Other operating expense ratio	14.1		%	15.8		%	16.2		%	15.6		%	14.3		%	15.3		%	14.8		%
Combined ratio	93.1		%	92.6		%	94.1		%	93.1		%	90.9		%	93.3		%	91.3		%

Catastrophic activity and prior year development:
Current accident year catastrophic events, net of reinsurance and reinstatement premiums	4.9		%	2.0		%	1.9		%	3.8		%	2.6		%	3.0		%	2.3		%
Net (favorable) adverse development in prior year loss reserves, net of related adjustments	(0.7)		%	(0.2)		%	(0.5)		%	(0.5)		%	(0.8)		%	(0.5)		%	(0.6)		%
Combined ratio excluding catastrophic activity and prior year development (1)	88.9		%	90.8		%	92.7		%	89.8		%	89.1		%	90.8		%	89.6		%





Net premiums written to gross premiums written	77.7		%	74.1		%	72.5		%	74.9		%	74.5		%	74.9		%	73.8		%

(1)See ‘Comments on Non-GAAP Financial Measures’ for further discussion.


			13

Arch Capital Group Ltd. and Subsidiaries

Segment Information — Insurance Segment


(U.S. Dollars in millions)	Three Months Ended																				Nine Months Ended
	September 30,				June 30,				March 31,				December 31,				September 30,				September 30,				September 30,
	2024				2024				2024				2023				2023				2024				2023
Net Premiums Written by Line of Business
North America
Property and short-tail specialty	$	296	16.3	%	$	276	17.7	%	$	284	18.4	%	$	227	15.7	%	$	272	17.9	%	$	856	17.4	%	$	831	18.8	%
Other liability - occurrence	253		13.9	%	224		14.4	%	183		11.9	%	189		13.0	%	141		9.3	%	660		13.4	%	487		11.0	%
Other liability - claims made	228		12.5	%	215		13.8	%	200		13.0	%	228		15.7	%	240		15.8	%	643		13.1	%	623		14.1	%
Commercial multi-peril	163		9.0	%	62		4.0	%	41		2.7	%	49		3.4	%	67		4.4	%	266		5.4	%	150		3.4	%
Workers compensation	147		8.1	%	112		7.2	%	143		9.3	%	139		9.6	%	134		8.8	%	402		8.2	%	386		8.7	%
Commercial automobile	134		7.4	%	123		7.9	%	112		7.3	%	95		6.6	%	111		7.3	%	369		7.5	%	296		6.7	%
Other	81		4.5	%	75		4.8	%	69		4.5	%	69		4.8	%	81		5.3	%	225		4.6	%	226		5.1	%
Total North America	$	1,302	71.5	%	$	1,087	69.8	%	$	1,032	66.9	%	$	996	68.7	%	$	1,046	68.7	%	$	3,421	69.5	%	$	2,999	68.0	%

International
Property and short-tail specialty	$	277	15.2	%	$	260	16.7	%	$	268	17.4	%	$	245	16.9	%	$	263	17.3	%	$	805	16.4	%	$	797	18.1	%
Casualty and other	241		13.2	%	211		13.5	%	242		15.7	%	208		14.4	%	213		14.0	%	694		14.1	%	617		14.0	%
Total International	$	518	28.5	%	$	471	30.2	%	$	510	33.1	%	$	453	31.3	%	$	476	31.3	%	$	1,499	30.5	%	$	1,414	32.0	%
Total	$	1,820	100.0	%	$	1,558	100.0	%	$	1,542	100.0	%	$	1,449	100.0	%	$	1,522	100.0	%	$	4,920	100.0	%	$	4,413	100.0	%







Net Premiums Earned by Line of Business
North America
Property and short-tail specialty	$	306	17.3	%	$	264	17.9	%	$	263	18.1	%	$	255	17.6	%	$	247	17.5	%	$	833	17.7	%	$	721	18.0	%
Other liability - occurrence	265		15.0	%	175		11.8	%	175		12.1	%	171		11.8	%	152		10.8	%	615		13.1	%	447		11.2	%
Other liability - claims made	213		12.1	%	208		14.1	%	212		14.6	%	221		15.3	%	225		15.9	%	633		13.5	%	645		16.1	%
Commercial multi-peril	146		8.3	%	57		3.9	%	43		3.0	%	49		3.4	%	51		3.6	%	246		5.2	%	144		3.6	%
Workers compensation	135		7.6	%	132		8.9	%	127		8.8	%	132		9.1	%	127		9.0	%	394		8.4	%	363		9.1	%
Commercial automobile	122		6.9	%	106		7.2	%	101		7.0	%	96		6.6	%	97		6.9	%	329		7.0	%	247		6.2	%
Other	79		4.5	%	75		5.1	%	81		5.6	%	76		5.2	%	71		5.0	%	235		5.0	%	214		5.4	%
Total North America	$	1,266	71.7	%	$	1,017	68.8	%	$	1,002	69.1	%	$	1,000	69.0	%	$	970	68.7	%	$	3,285	70.0	%	$	2,781	69.6	%

International
Property and short-tail specialty	$	276	15.6	%	$	248	16.8	%	$	238	16.4	%	$	245	16.9	%	$	237	16.8	%	$	762	16.2	%	$	640	16.0	%
Casualty and other	223		12.6	%	213		14.4	%	211		14.5	%	204		14.1	%	205		14.5	%	647		13.8	%	576		14.4	%
Total International	$	499	28.3	%	$	461	31.2	%	$	449	30.9	%	$	449	31.0	%	$	442	31.3	%	$	1,409	30.0	%	$	1,216	30.4	%
Total	$	1,765	100.0	%	$	1,478	100.0	%	$	1,451	100.0	%	$	1,449	100.0	%	$	1,412	100.0	%	$	4,694	100.0	%	$	3,997	100.0	%


			14

Arch Capital Group Ltd. and Subsidiaries

Segment Information — Reinsurance Segment


(U.S. Dollars in millions)	Three Months Ended															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
	2024			2024			2024			2023			2023			2024			2023
Gross premiums written	$	2,763		$	2,941		$	3,467		$	1,971		$	2,138		$	9,171		$	7,142
Premiums ceded	(818)			(994)			(1,201)			(414)			(576)			(3,013)			(2,145)
Net premiums written	1,945			1,947			2,266			1,557			1,562			6,158			4,997
Change in unearned premiums	(53)			(167)			(600)			63			(19)			(820)			(781)
Net premiums earned	1,892			1,780			1,666			1,620			1,543			5,338			4,216
Other underwriting income (loss)	2			1			2			8			2			5			9
Losses and loss adjustment expenses	(1,317)			(1,006)			(883)			(848)			(870)			(3,206)			(2,379)
Acquisition expenses	(374)			(345)			(331)			(365)			(304)			(1,050)			(875)
Other operating expenses	(54)			(64)			(75)			(85)			(61)			(193)			(203)
Underwriting income (loss)	$	149		$	366		$	379		$	330		$	310		$	894		$	768

Underwriting Ratios
Loss ratio	69.6		%	56.5		%	53.0		%	52.3		%	56.4		%	60.1		%	56.4		%
Acquisition expense ratio	19.8		%	19.4		%	19.9		%	22.5		%	19.7		%	19.7		%	20.7		%
Other operating expense ratio	2.9		%	3.6		%	4.5		%	5.2		%	3.9		%	3.6		%	4.8		%
Combined ratio	92.3		%	79.5		%	77.4		%	80.0		%	80.0		%	83.4		%	81.9		%

Catastrophic activity and prior year development:
Current accident year catastrophic events, net of reinsurance and reinstatement premiums	19.3		%	9.4		%	1.8		%	5.1		%	9.3		%	10.5		%	6.8		%
Net (favorable) adverse development in prior year loss reserves, net of related adjustments	(1.9)		%	(1.8)		%	(2.5)		%	(1.3)		%	(2.8)		%	(2.0)		%	(2.7)		%
Combined ratio excluding catastrophic activity and prior year development (1)	74.9		%	71.9		%	78.1		%	76.2		%	73.5		%	74.9		%	77.8		%





Net premiums written to gross premiums written	70.4		%	66.2		%	65.4		%	79.0		%	73.1		%	67.1		%	70.0		%

(1)See ‘Comments on Non-GAAP Financial Measures’ for further discussion.


			15

Arch Capital Group Ltd. and Subsidiaries

Segment Information — Reinsurance Segment


(U.S. Dollars in millions)	Three Months Ended																				Nine Months Ended
	September 30,				June 30,				March 31,				December 31,				September 30,				September 30,				September 30,
	2024				2024				2024				2023				2023				2024				2023
Net Premiums Written by Line of Business
Other specialty	$	769	39.5	%	$	539	27.7	%	$	840	37.1	%	$	787	50.5	%	$	527	33.7	%	$	2,148	34.9	%	$	1,625	32.5	%
Property excluding property catastrophe	671		34.5	%	585		30.0	%	567		25.0	%	414		26.6	%	593		38.0	%	1,823		29.6	%	1,496		29.9	%
Casualty	339		17.4	%	261		13.4	%	343		15.1	%	215		13.8	%	273		17.5	%	943		15.3	%	787		15.7	%
Marine and aviation	69		3.5	%	59		3.0	%	129		5.7	%	42		2.7	%	54		3.5	%	257		4.2	%	208		4.2	%
Property catastrophe	52		2.7	%	472		24.2	%	350		15.4	%	63		4.0	%	76		4.9	%	874		14.2	%	802		16.0	%
Other	45		2.3	%	31		1.6	%	37		1.6	%	36		2.3	%	39		2.5	%	113		1.8	%	79		1.6	%
Total	$	1,945	100.0	%	$	1,947	100.0	%	$	2,266	100.0	%	$	1,557	100.0	%	$	1,562	100.0	%	$	6,158	100.0	%	$	4,997	100.0	%













Net Premiums Written by Underwriting Location
Bermuda	$	671	34.5	%	$	1,043	53.6	%	$	1,039	45.9	%	$	723	46.4	%	$	708	45.3	%	$	2,753	44.7	%	$	2,565	51.3	%
United States	744		38.3	%	429		22.0	%	484		21.4	%	466		29.9	%	461		29.5	%	1,657		26.9	%	1,290		25.8	%
Europe and other	530		27.2	%	475		24.4	%	743		32.8	%	368		23.6	%	393		25.2	%	1,748		28.4	%	1,142		22.9	%
Total	$	1,945	100.0	%	$	1,947	100.0	%	$	2,266	100.0	%	$	1,557	100.0	%	$	1,562	100.0	%	$	6,158	100.0	%	$	4,997	100.0	%

Net Premiums Earned by Line of Business
Other specialty	$	688	36.4	%	$	659	37.0	%	$	587	35.2	%	$	598	36.9	%	$	505	32.7	%	$	1,934	36.2	%	$	1,499	35.6	%
Property excluding property catastrophe	540		28.5	%	520		29.2	%	486		29.2	%	484		29.9	%	449		29.1	%	1,546		29.0	%	1,161		27.5	%
Casualty	282		14.9	%	269		15.1	%	247		14.8	%	230		14.2	%	264		17.1	%	798		14.9	%	775		18.4	%
Marine and aviation	80		4.2	%	60		3.4	%	74		4.4	%	56		3.5	%	66		4.3	%	214		4.0	%	173		4.1	%
Property catastrophe	256		13.5	%	246		13.8	%	234		14.0	%	215		13.3	%	219		14.2	%	736		13.8	%	527		12.5	%
Other	46		2.4	%	26		1.5	%	38		2.3	%	37		2.3	%	40		2.6	%	110		2.1	%	81		1.9	%
Total	$	1,892	100.0	%	$	1,780	100.0	%	$	1,666	100.0	%	$	1,620	100.0	%	$	1,543	100.0	%	$	5,338	100.0	%	$	4,216	100.0	%


			16

Arch Capital Group Ltd. and Subsidiaries

Segment Information — Mortgage Segment


(U.S. Dollars in millions)	Three Months Ended															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
	2024			2024			2024			2023			2023			2024			2023
Gross premiums written	$	339		$	340		$	341		$	350		$	347		$	1,020		$	1,037
Premiums ceded	(57)			(64)			(64)			(95)			(76)			(185)			(240)
Net premiums written	282			276			277			255			271			835			797
Change in unearned premiums	31			31			28			20			22			90			86
Net premiums earned	313			307			305			275			293			925			883
Other underwriting income	3			2			10			2			3			15			12
Losses and loss adjustment expenses	1			27			9			57			35			37			46
Acquisition expenses	1			—			—			(1)			(2)			1			(16)
Other operating expenses	(49)			(49)			(53)			(47)			(47)			(151)			(147)
Underwriting income	$	269		$	287		$	271		$	286		$	282		$	827		$	778

Underwriting Ratios
Loss ratio	(0.4)		%	(8.6)		%	(3.0)		%	(20.6)		%	(12.1)		%	(4.0)		%	(5.3)		%
Acquisition expense ratio	(0.4)		%	0.1		%	—		%	0.2		%	0.6		%	(0.1)		%	1.8		%
Other operating expense ratio	15.6		%	15.9		%	17.5		%	17.1		%	16.2		%	16.3		%	16.7		%
Combined ratio	14.8		%	7.4		%	14.5		%	(3.3)		%	4.7		%	12.2		%	13.2		%

Net (favorable) adverse development in prior year loss reserves, net of related adjustments	(22.8)		%	(29.0)		%	(25.7)		%	(39.0)		%	(33.5)		%	(25.8)		%	(28.9)		%
Combined ratio excluding prior year development (1)	37.6		%	36.4		%	40.2		%	35.7		%	38.2		%	38.0		%	42.1		%

Net premiums written to gross premiums written	83.2		%	81.2		%	81.2		%	72.9		%	78.1		%	81.9		%	76.9		%

(1) See ‘Comments on Non-GAAP Financial Measures’ for further discussion.


			17

Arch Capital Group Ltd. and Subsidiaries

Segment Information — Mortgage Segment


(U.S. Dollars in millions)	Three Months Ended																				Nine Months Ended
	September 30,				June 30,				March 31,				December 31,				September 30,				September 30,				September 30,
	2024				2024				2024				2023				2023				2024				2023
Net Premiums Written by Underwriting Unit
U.S. primary mortgage insurance	$	209	74.1	%	$	201	72.8	%	$	202	72.9	%	$	175	68.6	%	$	190	70.1	%	$	612	73.3	%	$	562	70.5	%
U.S. credit risk transfer (CRT) and other	54		19.1	%	51		18.5	%	56		20.2	%	56		22.0	%	57		21.0	%	161		19.3	%	164		20.6	%
International mortgage insurance/reinsurance	19		6.7	%	24		8.7	%	19		6.9	%	24		9.4	%	24		8.9	%	62		7.4	%	71		8.9	%
Total	$	282	100.0	%	$	276	100.0	%	$	277	100.0	%	$	255	100.0	%	$	271	100.0	%	$	835	100.0	%	$	797	100.0	%

Net Premiums Written by Underwriting Location
United States	$	210	74.5	%	$	202	73.2	%	$	203	73.3	%	$	176	69.0	%	$	192	70.8	%	$	615	73.7	%	$	567	71.1	%
Other	72		25.5	%	74		26.8	%	74		26.7	%	79		31.0	%	79		29.2	%	220		26.3	%	230		28.9	%
Total	$	282	100.0	%	$	276	100.0	%	$	277	100.0	%	$	255	100.0	%	$	271	100.0	%	$	835	100.0	%	$	797	100.0	%

Net Premiums Earned by Underwriting Unit
U.S. primary mortgage insurance	$	215	68.7	%	$	209	68.1	%	$	206	67.5	%	$	177	64.4	%	$	192	65.5	%	$	630	68.1	%	$	582	65.9	%
U.S. credit risk transfer (CRT) and other	55		17.6	%	51		16.6	%	56		18.4	%	55		20.0	%	58		19.8	%	162		17.5	%	165		18.7	%
International mortgage insurance/reinsurance	43		13.7	%	47		15.3	%	43		14.1	%	43		15.6	%	43		14.7	%	133		14.4	%	136		15.4	%
Total	$	313	100.0	%	$	307	100.0	%	$	305	100.0	%	$	275	100.0	%	$	293	100.0	%	$	925	100.0	%	$	883	100.0	%


(U.S. Dollars in millions)
	September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023
Insurance In Force (IIF) (1)
U.S. primary mortgage insurance	$	292,313	57.2	%	$	292,512	57.0	%	$	288,385	56.9	%	$	290,764	57.1	%	$	292,903	57.4	%
U.S. credit risk transfer (CRT) and other	148,417		29.0	%	151,437		29.5	%	148,623		29.3	%	149,098		29.3	%	152,453		29.9	%
International mortgage insurance/reinsurance	70,380		13.8	%	68,986		13.4	%	69,811		13.8	%	69,473		13.6	%	65,107		12.8	%
Total	$	511,110	100.0	%	$	512,935	100.0	%	$	506,819	100.0	%	$	509,335	100.0	%	$	510,463	100.0	%

Risk In Force (RIF) (2)
U.S. primary mortgage insurance	$	76,448	84.6	%	$	76,351	84.6	%	$	75,194	84.7	%	$	75,527	84.6	%	$	75,850	84.9	%
U.S. credit risk transfer and other	6,011		6.7	%	6,206		6.9	%	6,112		6.9	%	6,156		6.9	%	6,478		7.2	%
International mortgage insurance/reinsurance	7,887		8.7	%	7,666		8.5	%	7,430		8.4	%	7,562		8.5	%	7,034		7.9	%
Total	$	90,346	100.0	%	$	90,223	100.0	%	$	88,736	100.0	%	$	89,245	100.0	%	$	89,362	100.0	%




(1) The aggregate dollar amount of each insured mortgage loan’s current principal balance. Such amounts are shown before external reinsurance.
(2) The aggregate dollar amount of each insured mortgage loan’s current principal balance multiplied by the insurance coverage percentage specified in the policy for insurance policies issued and after contract limits and/or loss ratio caps for risk-sharing or reinsurance transactions. Such amounts are shown before external reinsurance.


			18

Arch Capital Group Ltd. and Subsidiaries

Segment Information — Mortgage Segment

The following table provides supplemental disclosures for the Company’s U.S. primary mortgage insurance operations:


(U.S. Dollars in millions)
	September 30, 2024					June 30, 2024					March 31, 2024					December 31, 2023					September 30, 2023












Total RIF by credit quality (FICO score):
>=740	$	47,414		62.0	%	$	47,190		61.8	%	$	46,693		62.1	%	$	46,796		62.0	%	$	46,990		62.0	%
680-739	24,974			32.7	%	25,053			32.8	%	24,827			33.0	%	24,990			33.1	%	25,055			33.0	%
620-679	3,701			4.8	%	3,735			4.9	%	3,439			4.6	%	3,497			4.6	%	3,554			4.7	%
<620	359			0.5	%	373			0.5	%	235			0.3	%	244			0.3	%	251			0.3	%
Total	$	76,448		100.0	%	$	76,351		100.0	%	$	75,194		100.0	%	$	75,527		100.0	%	$	75,850		100.0	%
Weighted average FICO score	748					747					748					748					748
Total RIF by Loan-To-Value (LTV):
95.01% and above	$	7,415		9.7	%	$	7,384		9.7	%	$	7,005		9.3	%	$	7,067		9.4	%	$	7,113		9.4	%
90.01% to 95.00%	45,509			59.5	%	45,331			59.4	%	44,742			59.5	%	44,669			59.1	%	44,675			58.9	%
85.01% to 90.00%	20,746			27.1	%	20,668			27.1	%	20,352			27.1	%	20,490			27.1	%	20,565			27.1	%
85.00% and below	2,778			3.6	%	2,968			3.9	%	3,095			4.1	%	3,301			4.4	%	3,497			4.6	%
Total	$	76,448		100.0	%	$	76,351		100.0	%	$	75,194		100.0	%	$	75,527		100.0	%	$	75,850		100.0	%
Weighted average LTV	93.1		%			93.1		%			93.1		%			93.0		%			93.0		%
Total RIF by State:
California	$	6,052		7.9	%	$	6,110		8.0	%	$	6,105		8.1	%	$	6,162		8.2	%	$	6,235		8.2	%
Texas	5,699			7.5	%	5,803			7.6	%	5,859			7.8	%	5,972			7.9	%	6,081			8.0	%
North Carolina	3,353			4.4	%	3,320			4.3	%	3,245			4.3	%	3,248			4.3	%	3,258			4.3	%
Georgia	3,145			4.1	%	3,099			4.1	%	3,043			4.0	%	3,081			4.1	%	3,116			4.1	%
Minnesota	3,111			4.1	%	3,110			4.1	%	3,056			4.1	%	3,069			4.1	%	3,060			4.0	%
Illinois	3,085			4.0	%	3,086			4.0	%	2,979			4.0	%	2,986			4.0	%	2,994			3.9	%
Massachusetts	2,896			3.8	%	2,891			3.8	%	2,852			3.8	%	2,858			3.8	%	2,841			3.7	%
Florida	2,880			3.8	%	2,943			3.9	%	2,929			3.9	%	3,007			4.0	%	3,086			4.1	%
Michigan	2,876			3.8	%	2,852			3.7	%	2,796			3.7	%	2,773			3.7	%	2,722			3.6	%
Virginia	2,581			3.4	%	2,596			3.4	%	2,562			3.4	%	2,578			3.4	%	2,605			3.4	%
Other	40,770			53.3	%	40,541			53.1	%	39,768			52.9	%	39,793			52.7	%	39,852			52.5	%
Total	$	76,448		100.0	%	$	76,351		100.0	%	$	75,194		100.0	%	$	75,527		100.0	%	$	75,850		100.0	%
Weighted average coverage (end of period RIF divided by IIF)	26.2		%			26.1		%			26.1		%			26.0		%			25.9		%
U.S. mortgage insurance total RIF, net of reinsurance (1)	$	60,421				$	58,920				$	57,882				$	58,146				$	56,946
Analysts’ persistency (2)	82.9		%			83.3		%			83.6		%			83.6		%			83.9		%
Risk-to-capital ratio -- Arch MI U.S. (3)	7.3:1					7.4:1					7.0:1					7.3:1					6.6:1
PMIER sufficiency ratio -- Arch MI U.S. (4)	205		%			196		%			223		%			213		%			245		%


(1) Total RIF for the U.S. mortgage insurance operations after external reinsurance.
(2) Represents the % of IIF at the beginning of a 12-mo. period that remained in force at the end of the period.
(3) Represents current (non-delinquent) RIF, net of reinsurance, divided by statutory capital (estimate for September 30, 2024).
(4) On August 21, 2024, Fannie Mae and Freddie Mac (collectively the GSEs) each updated their Private Mortgage Insurer Eligibility Requirements (PMIERs) to incorporate new deductions to Available Assets for investment risk. This update will become effective March 31, 2025; but the impact will be phased in through September 30, 2026. If the GSEs had fully implemented this update to PMIERs as of September 30, 2024, the changes would have reduced Available Assets by 16% and resulted in a Pro-forma PMIERs Sufficiency Ratio of 173% compared with a reported PMIERs Sufficiency Ratio of 205%.


			19

Arch Capital Group Ltd. and Subsidiaries

Segment Information — Mortgage Segment

The following table provides supplemental disclosures for the Company’s U.S. primary mortgage insurance operations:


(U.S. Dollars in millions, except policy/loan/claim count)	Three Months Ended
	September 30, 2024					June 30, 2024					March 31, 2024					December 31, 2023					September 30, 2023
Total new insurance written (NIW) (1)	$	13,526				$	13,799				$	9,336				$	9,351				$	11,494

Total NIW by credit quality (FICO score):
>=740	$	9,438		69.8	%	$	9,726		70.5	%	$	6,364		68.2	%	$	6,058		64.8	%	$	7,646		66.5	%
680-739	3,584			26.5	%	3,641			26.4	%	2,660			28.5	%	2,990			32.0	%	3,520			30.6	%
620-679	502			3.7	%	430			3.1	%	311			3.3	%	301			3.2	%	326			2.8	%
<620	2			0.0	%	2			0.0	%	1			0.0	%	2			0.0	%	2			0.0	%
Total	$	13,526		100.0	%	$	13,799		100.0	%	$	9,336		100.0	%	$	9,351		100.0	%	$	11,494		100.0	%

Total NIW by LTV:
95.01% and above	$	1,089		8.1	%	$	1,014		7.3	%	$	542		5.8	%	$	548		5.9	%	$	880		7.7	%
90.01% to 95.00%	6,620			48.9	%	7,234			52.4	%	5,240			56.1	%	5,095			54.5	%	6,306			54.9	%
85.01% to 90.00%	4,293			31.7	%	4,047			29.3	%	2,624			28.1	%	2,746			29.4	%	3,126			27.2	%
85.00% and below	1,524			11.3	%	1,504			10.9	%	930			10.0	%	962			10.3	%	1,182			10.3	%
Total	$	13,526		100.0	%	$	13,799		100.0	%	$	9,336		100.0	%	$	9,351		100.0	%	$	11,494		100.0	%

Total NIW monthly vs. single:
Monthly	$	12,581		93.0	%	$	12,764		92.5	%	$	8,916		95.5	%	$	8,827		94.4	%	$	10,712		93.2	%
Single	945			7.0	%	1,035			7.5	%	420			4.5	%	524			5.6	%	782			6.8	%
Total	$	13,526		100.0	%	$	13,799		100.0	%	$	9,336		100.0	%	$	9,351		100.0	%	$	11,494		100.0	%

Total NIW purchase vs. refinance:
Purchase	$	13,177		97.4	%	$	13,588		98.5	%	$	9,167		98.2	%	$	9,224		98.6	%	$	11,334		98.6	%
Refinance	349			2.6	%	211			1.5	%	169			1.8	%	127			1.4	%	160			1.4	%
Total	$	13,526		100.0	%	$	13,799		100.0	%	$	9,336		100.0	%	$	9,351		100.0	%	$	11,494		100.0	%

Ending number of policies in force (PIF) (2)	1,114,251					1,123,698					1,104,746					1,117,480					1,129,351

Rollforward of insured loans in default:
Beginning delinquent number of loans	20,422					18,269					19,457					18,644					18,286
Plus: new notices	12,613					10,063					10,371					10,854					10,138
Less: cures	(10,819)					(10,170)					(11,253)					(9,801)					(9,545)
Less: paid claims	(338)					(265)					(306)					(240)					(235)

Plus: acquired delinquent loans	—					2,525					—					—					—
Ending delinquent number of loans (2)	21,878					20,422					18,269					19,457					18,644

Ending percentage of loans in default (2)	1.96		%			1.82		%			1.65		%			1.74		%			1.65		%

Losses:
Number of claims paid	338					265					306					240					235
Total paid claims (in thousands)	$	12,874				$	7,557				$	10,785				$	7,401				$	6,602
Average paid per claim (in thousands)	$	38.1				$	28.5				$	35.2				$	30.8				$	28.1
Severity (3)	71.9		%			56.6		%			78.6		%			77.8		%			64.0		%

Average case reserve per default (in thousands)	$	15.9				$	17.1				$	18.2				$	17.7				$	21.2

(1) The original principal balance of all loans that received coverage during the period.

(2) Includes first lien primary and pool policies.

(3) Represents total paid claims divided by RIF of loans for which claims were paid.


			20

Arch Capital Group Ltd. and Subsidiaries

Segment Information — Mortgage Segment

The following table provides supplemental disclosures for the Company’s U.S. primary mortgage insurance operations:


(U.S. Dollars in millions)

	September 30, 2024												December 31, 2023
	Loss Reserves, Net (1)		Primary IIF (2)				Primary RIF (3)				Delinquency Rate		Loss Reserves, Net (1)		Primary IIF (2)				Primary RIF (3)				Delinquency Rate
	% of Total		Total		% of Total		Total		% of Total				% of Total		Total		% of Total		Total		% of Total
Policy year:
2014 and prior	37.1	%	$	15,482	5.3	%	$	3,938	5.2	%	6.69	%	31.0	%	$	13,301	4.6	%	$	3,387	4.5	%	6.01	%
2015	1.2	%	3,544		1.2	%	913		1.2	%	2.20	%	2.0	%	4,691		1.6	%	1,244		1.6	%	1.98	%
2016	3.5	%	6,075		2.1	%	1,614		2.1	%	2.73	%	4.8	%	7,525		2.6	%	2,025		2.7	%	2.50	%
2017	4.9	%	5,969		2.0	%	1,599		2.1	%	3.19	%	7.0	%	7,600		2.6	%	2,023		2.7	%	3.13	%
2018	7.2	%	7,457		2.6	%	1,939		2.5	%	4.09	%	9.0	%	8,512		2.9	%	2,207		2.9	%	4.04	%
2019	7.9	%	13,560		4.6	%	3,552		4.6	%	2.65	%	9.1	%	15,767		5.4	%	4,074		5.4	%	2.40	%
2020	10.7	%	41,836		14.3	%	11,307		14.8	%	1.33	%	12.1	%	51,349		17.7	%	13,357		17.7	%	1.17	%
2021	14.0	%	65,789		22.5	%	17,379		22.7	%	1.33	%	14.8	%	76,667		26.4	%	19,812		26.2	%	1.12	%
2022	9.5	%	59,085		20.2	%	15,577		20.4	%	1.27	%	8.8	%	63,899		22.0	%	16,755		22.2	%	0.89	%
2023	3.5	%	38,380		13.1	%	9,875		12.9	%	0.81	%	1.3	%	41,453		14.3	%	10,643		14.1	%	0.26	%
2024	0.4	%	35,136		12.0	%	8,755		11.5	%	0.16	%
Total	100.0	%	$	292,313	100.0	%	$	76,448	100.0	%	1.96	%	100.0	%	$	290,764	100.0	%	$	75,527	100.0	%	1.74	%

(1) Total reserves for losses and loss adjustment expenses, net of recoverables, was $331.3 million at September 30, 2024, compared to $323.6 million at December 31, 2023.

(2) The aggregate dollar amount of each insured mortgage loan’s current principal balance.

(3) The aggregate dollar amount of each insured mortgage loan’s current principal balance multiplied by the insurance coverage percentage specified in the policy for insurance policies issued and after contract limits and/or loss ratio caps for risk-sharing transactions.


			21

Arch Capital Group Ltd. and Subsidiaries

Segment Information - Consolidated


(U.S. Dollars in millions)	Three Months Ended															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
	2024			2024			2024			2023			2023			2024			2023
Gross premiums written	$	5,440		$	5,382		$	5,933		$	4,251		$	4,527		$	16,755		$	14,152
Premiums ceded	(1,393)			(1,601)			(1,848)			(990)			(1,172)			(4,842)			(3,945)
Net premiums written	4,047			3,781			4,085			3,261			3,355			11,913			10,207
Change in unearned premiums	(77)			(216)			(663)			83			(107)			(956)			(1,111)
Net premiums earned	3,970			3,565			3,422			3,344			3,248			10,957			9,096
Other underwriting income (loss)	5			3			12			10			5			20			21
Losses and loss adjustment expenses	(2,403)			(1,827)			(1,728)			(1,637)			(1,647)			(5,958)			(4,609)
Acquisition expenses	(681)			(633)			(607)			(643)			(575)			(1,921)			(1,669)
Other operating expenses	(353)			(346)			(363)			(359)			(310)			(1,062)			(942)
Underwriting income (loss) (1)	$	538		$	762		$	736		$	715		$	721		$	2,036		$	1,897

Underwriting Ratios
Loss ratio	60.5		%	51.2		%	50.5		%	49.0		%	50.7		%	54.4		%	50.7		%
Acquisition expense ratio	17.2		%	17.8		%	17.7		%	19.2		%	17.7		%	17.5		%	18.3		%
Other operating expense ratio	8.9		%	9.7		%	10.6		%	10.7		%	9.5		%	9.7		%	10.4		%
Combined ratio	86.6		%	78.7		%	78.8		%	78.9		%	77.9		%	81.6		%	79.4		%

Catastrophic activity and prior year development:
Current accident year catastrophic events, net of reinsurance and reinstatement premiums	11.3		%	5.5		%	1.7		%	4.1		%	5.6		%	6.4		%	4.2		%
Net (favorable) adverse development in prior year loss reserves, net of related adjustments	(3.0)		%	(3.5)		%	(3.7)		%	(4.1)		%	(4.7)		%	(3.4)		%	(4.3)		%
Combined ratio excluding catastrophic activity and prior year development (1)	78.3		%	76.7		%	80.8		%	78.9		%	77.0		%	78.6		%	79.5		%





Components of losses and loss adjustment expenses incurred
Paid losses and loss adjustment expenses	$	1,329		$	1,120		$	1,070		$	1,096		$	1,058		$	3,519		$	2,997
Change in unpaid losses and loss adjustment expenses	1,074			707			658			541			589			2,439			1,612
Total losses and loss adjustment expenses	$	2,403		$	1,827		$	1,728		$	1,637		$	1,647		$	5,958		$	4,609

Net premiums written to gross premiums written	74.4		%	70.3		%	68.9		%	76.7		%	74.1		%	71.1		%	72.1		%

(1)See ‘Comments on Non-GAAP Financial Measures’ for further discussion.


			22

Arch Capital Group Ltd. and Subsidiaries

Segment Information — Selected Information on Losses and Loss Adjustment Expenses


(U.S. Dollars in millions)	Three Months Ended															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
	2024			2024			2024			2023			2023			2024			2023





Estimated net (favorable) adverse development in prior year loss reserves, net of related adjustments
Net impact on underwriting results:
Insurance	$	(12)		$	(4)		$	(7)		$	(7)		$	(11)		$	(23)		$	(25)
Reinsurance	(36)			(31)			(41)			(21)			(43)			(108)			(114)
Mortgage	(71)			(89)			(78)			(107)			(98)			(238)			(255)
Total	$	(119)		$	(124)		$	(126)		$	(135)		$	(152)		$	(369)		$	(394)
Impact on losses and loss adjustment expenses:
Insurance	$	(16)		$	(5)		$	(10)		$	(8)		$	(10)		$	(31)		$	(34)
Reinsurance	(41)			(34)			(40)			(26)			(44)			(115)			(126)
Mortgage	(64)			(82)			(74)			(101)			(92)			(220)			(243)
Total	$	(121)		$	(121)		$	(124)		$	(135)		$	(146)		$	(366)		$	(403)
Impact on acquisition expenses:
Insurance	$	4		$	1		$	3		$	1		$	(1)		$	8		$	9
Reinsurance	5			3			(1)			5			1			7			12
Mortgage	(7)			(7)			(4)			(6)			(6)			(18)			(12)
Total	$	2		$	(3)		$	(2)		$	—		$	(6)		$	(3)		$	9
Impact on combined ratio:
Insurance	(0.7)		%	(0.2)		%	(0.5)		%	(0.5)		%	(0.8)		%	(0.5)		%	(0.6)		%
Reinsurance	(1.9)		%	(1.8)		%	(2.5)		%	(1.3)		%	(2.8)		%	(2.0)		%	(2.7)		%
Mortgage	(22.8)		%	(29.0)		%	(25.7)		%	(39.0)		%	(33.5)		%	(25.8)		%	(28.9)		%
Total	(3.0)		%	(3.5)		%	(3.7)		%	(4.1)		%	(4.7)		%	(3.4)		%	(4.3)		%
Impact on loss ratio:
Insurance	(0.9)		%	(0.3)		%	(0.7)		%	(0.6)		%	(0.7)		%	(0.6)		%	(0.8)		%
Reinsurance	(2.2)		%	(1.9)		%	(2.4)		%	(1.6)		%	(2.8)		%	(2.2)		%	(3.0)		%
Mortgage	(20.5)		%	(26.9)		%	(24.4)		%	(36.6)		%	(31.4)		%	(23.9)		%	(27.5)		%
Total	(3.1)		%	(3.4)		%	(3.6)		%	(4.0)		%	(4.5)		%	(3.3)		%	(4.4)		%
Impact on acquisition expense ratio:
Insurance	0.2		%	0.1		%	0.2		%	0.1		%	(0.1)		%	0.1		%	0.2		%
Reinsurance	0.3		%	0.1		%	(0.1)		%	0.3		%	0.0		%	0.2		%	0.3		%
Mortgage	(2.3)		%	(2.1)		%	(1.3)		%	(2.4)		%	(2.1)		%	(1.9)		%	(1.4)		%
Total	0.1		%	(0.1)		%	(0.1)		%	(0.1)		%	(0.2)		%	(0.1)		%	0.1		%
Estimated net losses incurred from current accident year catastrophic events (1)
Insurance	$	86		$	30		$	27		$	55		$	37		$	143		$	92
Reinsurance	364			166			31			82			143			561			286
Total	$	450		$	196		$	58		$	137		$	180		$	704		$	378
Impact on combined ratio:
Insurance	4.9		%	2.0		%	1.9		%	3.8		%	2.6		%	3.0		%	2.3		%
Reinsurance	19.3		%	9.4		%	1.8		%	5.1		%	9.3		%	10.5		%	6.8		%
Total	11.3		%	5.5		%	1.7		%	4.1		%	5.6		%	6.4		%	4.2		%

(1)Equals estimated losses from catastrophic events occurring in the current accident year (e.g. natural catastrophes, man-made events, pandemic events), net of reinsurance and reinstatement premiums. As regards the natural catastrophe estimates included within, amounts shown for the insurance segment are for named catastrophic events only, while amounts shown for the reinsurance segment include (i) named events with over $5 million of losses incurred by its Bermuda and Europe operations and (ii) all catastrophe losses incurred by its U.S. operations. Amounts not applicable for the mortgage segment.


			23

Arch Capital Group Ltd. and Subsidiaries

Investment Information — Investable Asset Summary and Investment Portfolio Metrics

The following table summarizes the Company’s investable assets and portfolio metrics:


(U.S. Dollars in millions)	September 30,				June 30,				March 31,				December 31,				September 30,
	2024				2024				2024				2023				2023
Investable assets:
Fixed maturities available for sale, at fair value	$	28,434	66.5	%	$	25,202	66.7	%	$	23,628	65.7	%	$	23,553	68.1	%	$	22,485	70.5	%
Fixed maturities—fair value option (1)	1,097		2.6	%	973		2.6	%	930		2.6	%	683		2.0	%	644		2.0	%

Total fixed maturities	29,531		69.1	%	26,175		69.2	%	24,558		68.3	%	24,236		70.1	%	23,129		72.5	%

Equity securities, at fair value	1,623		3.8	%	1,397		3.7	%	1,720		4.8	%	1,186		3.4	%	894		2.8	%
Equity securities—fair value option (1)	7		0.0	%	7		0.0	%	7		0.0	%	7		0.0	%	7		0.0	%

Total equity securities	1,630		3.8	%	1,404		3.7	%	1,727		4.8	%	1,193		3.4	%	901		2.8	%

Other investments—fair value option (1)	2,096		4.9	%	2,189		5.8	%	1,914		5.3	%	1,777		5.1	%	1,404		4.4	%



Investments accounted for using the equity method (2)	5,244		12.3	%	4,983		13.2	%	4,842		13.5	%	4,566		13.2	%	4,251		13.3	%

Short-term investments available for sale, at fair value	3,341		7.8	%	2,297		6.1	%	2,142		6.0	%	2,063		6.0	%	1,682		5.3	%
Short-term investments—fair value option (1)	61		0.1	%	37		0.1	%	35		0.1	%	21		0.1	%	13		0.0	%

Total short-term investments	3,402		8.0	%	2,334		6.2	%	2,177		6.1	%	2,084		6.0	%	1,695		5.3	%

Cash	1,025		2.4	%	1,020		2.7	%	993		2.8	%	917		2.7	%	859		2.7	%


Securities transactions entered into but not settled at the balance sheet date	(177)		(0.4)	%	(294)		(0.8)	%	(267)		(0.7)	%	(184)		(0.5)	%	(358)		(1.1)	%
Total investable assets held by the Company	$	42,751	100.0	%	$	37,811	100.0	%	$	35,944	100.0	%	$	34,589	100.0	%	$	31,881	100.0	%

Average effective duration (in years)	2.68				2.83				2.70				2.91				2.97

Average S&P/Moody’s credit ratings (3)	AA-/Aa3				AA-/Aa3				AA-/Aa3				AA-/Aa3				AA-/Aa3

(1) Included in “other investments” on the balance sheet.

(2) Changes in the carrying value of investment funds accounted for using the equity method are recorded as “equity in net income (loss) of investment funds accounted for using the equity method” rather than as an unrealized gain or loss component of accumulated other comprehensive income.

(3) Average credit ratings on the Company’s investment portfolio on securities with ratings assigned by Standard & Poor’s (“S&P”) and Moody’s Investors Service (“Moody’s”).


			24

Arch Capital Group Ltd. and Subsidiaries

Investment Information — Composition of Net Investment Income, Yield and Total Return

The following table summarizes the Company’s net investment income, yield and total return:


(U.S. Dollars in millions, except per share data)	Three Months Ended															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
	2024			2024			2024			2023			2023			2024			2023
Composition of net investment income:
Fixed maturities	$	340		$	306		$	280		$	272		$	243		$	926		$	645
Short-term investments	38			35			29			20			19			102			48
Equity securities (dividends)	9			10			8			7			5			27			15
Other (1)	35			35			33			33			22			103			60
Gross investment income	422			386			350			332			289			1,158			768
Investment expenses	(23)			(22)			(23)			(19)			(20)			(68)			(58)
Net investment income	$	399		$	364		$	327		$	313		$	269		$	1,090		$	710
Per share	$	1.04		$	0.95		$	0.86		$	0.82		$	0.71		$	2.86		$	1.88

Equity in net income (loss) of investment funds accounted for using the equity method	171			167			99			102			59			437			176
Per share	$	0.45		$	0.44		$	0.26		$	0.27		$	0.16		$	1.15		$	0.47


Investment income yield, at amortized cost (2):
Pre-tax	4.40		%	4.39		%	4.14		%	4.11		%	3.68		%	4.29		%	3.41		%
After-tax	3.88		%	3.87		%	3.61		%	3.59		%	3.18		%	3.77		%	2.95		%

Total return on investments (3)	3.97		%	1.33		%	0.80		%	4.76		%	(0.40)		%	6.20		%	2.68		%

(1)Amounts include dividends and other distributions on investment funds, term loan investments, funds held balances, cash balances and other.

(2)Presented on an annualized basis and excluding the impact of investments for which returns are not included within investment income, such as investments accounted for using the equity method and certain equities.

(3)Total return on investments includes investment income, equity in net income or loss of investment funds accounted for using the equity method, net realized gains and losses (excluding changes in allowance for credit losses on non-investment related financial assets) and the change in unrealized gains or losses and is calculated on a pre-tax basis and before investment expenses. See ‘Comments on Non-GAAP Financial Measures’ for a further discussion of the presentation of total return on investments.


			25

Arch Capital Group Ltd. and Subsidiaries

Investment Information — Composition of Fixed Maturities

The following table summarizes the Company’s fixed maturities:


(U.S. Dollars in millions)	Fair Value		Gross Unrealized Gains		Gross Unrealized Losses		Net Unrealized Gains (Losses)		Allowance for Credit Losses		Amortized Cost		Fair Value / Amortized Cost		Fair Value % of Total
At September 30, 2024
Corporates	$	15,081	$	339	$	(294)	$	45	$	(12)	$	15,048	100.2	%	51.1	%
U.S. government and government agencies	5,867		53		(48)		5		—		5,862		100.1	%	19.9	%
Asset-backed securities	2,989		27		(27)		—		(5)		2,994		99.8	%	10.1	%
Non-U.S. government securities	2,861		75		(84)		(9)		(1)		2,871		99.7	%	9.7	%
Commercial mortgage-backed securities	1,146		8		(17)		(9)		(1)		1,156		99.1	%	3.9	%
Residential mortgage-backed securities	1,313		14		(50)		(36)		—		1,349		97.3	%	4.4	%
Municipal bonds	274		2		(11)		(9)		—		283		96.8	%	0.9	%
Total	$	29,531	$	518	$	(531)	$	(13)	$	(19)	$	29,563	99.9	%	100.0	%

At December 31, 2023
Corporates	$	11,517	$	157	$	(464)	$	(307)	$	(20)	$	11,844	97.2	%	47.5	%
U.S. government and government agencies	5,827		63		(86)		(23)		—		5,850		99.6	%	24.0	%
Asset-backed securities	2,252		11		(55)		(44)		(5)		2,301		97.9	%	9.3	%
Non-U.S. government securities	2,068		33		(100)		(67)		(1)		2,136		96.8	%	8.5	%
Commercial mortgage-backed securities	1,213		3		(34)		(31)		(2)		1,246		97.4	%	5.0	%
Residential mortgage-backed securities	1,103		7		(66)		(59)		—		1,162		94.9	%	4.6	%
Municipal bonds	256		1		(20)		(19)		—		275		93.1	%	1.1	%
Total	$	24,236	$	275	$	(825)	$	(550)	$	(28)	$	24,814	97.7	%	100.0	%


			26

Arch Capital Group Ltd. and Subsidiaries

Investment Information — Credit Quality Distribution and Maturity Profile

The following table summarizes the credit quality distribution and maturity profile of the Company’s fixed maturities:


(U.S. Dollars in millions)	September 30,				June 30,				March 31,				December 31,				September 30,
	2024				2024				2024				2023				2023
Credit quality distribution of total fixed maturities (1):
U.S. government and government agencies (2)	$	6,725	22.8	%	$	6,041	23.1	%	$	5,106	20.8	%	$	6,493	26.8	%	$	6,359	27.5	%
AAA	4,876		16.5	%	4,599		17.6	%	4,495		18.3	%	4,305		17.8	%	4,164		18.0	%
AA	2,552		8.6	%	2,507		9.6	%	2,405		9.8	%	2,165		8.9	%	2,061		8.9	%
A	5,664		19.2	%	4,854		18.5	%	4,912		20.0	%	4,629		19.1	%	4,523		19.6	%
BBB	7,361		24.9	%	6,144		23.5	%	5,672		23.1	%	5,058		20.9	%	4,390		19.0	%
BB	1,097		3.7	%	979		3.7	%	920		3.7	%	698		2.9	%	773		3.3	%
B	534		1.8	%	521		2.0	%	484		2.0	%	389		1.6	%	352		1.5	%
Lower than B	37		0.1	%	29		0.1	%	30		0.1	%	15		0.1	%	16		0.1	%
Not rated	685		2.3	%	501		1.9	%	534		2.2	%	484		2.0	%	491		2.1	%
Total fixed maturities, at fair value	$	29,531	100.0	%	$	26,175	100.0	%	$	24,558	100.0	%	$	24,236	100.0	%	$	23,129	100.0	%

Maturity profile of total fixed maturities:
Due in one year or less	$	506	1.7	%	$	672	2.6	%	$	580	2.4	%	$	516	2.1	%	$	706	3.1	%
Due after one year through five years	16,255		55.0	%	14,036		53.6	%	13,582		55.3	%	13,279		54.8	%	13,272		57.4	%
Due after five years through ten years	6,760		22.9	%	5,852		22.4	%	4,816		19.6	%	5,420		22.4	%	4,679		20.2	%
Due after 10 years	562		1.9	%	469		1.8	%	440		1.8	%	453		1.9	%	61		0.3	%
	24,083		81.6	%	21,029		80.3	%	19,418		79.1	%	19,668		81.2	%	18,718		80.9	%
Residential mortgage-backed securities	1,313		4.4	%	1,186		4.5	%	1,179		4.8	%	1,103		4.6	%	965		4.2	%
Commercial mortgage-backed securities	1,146		3.9	%	1,160		4.4	%	1,197		4.9	%	1,213		5.0	%	1,102		4.8	%
Asset-backed securities	2,989		10.1	%	2,800		10.7	%	2,764		11.3	%	2,252		9.3	%	2,344		10.1	%
Total fixed maturities, at fair value	$	29,531	100.0	%	$	26,175	100.0	%	$	24,558	100.0	%	$	24,236	100.0	%	$	23,129	100.0	%

(1) For individual fixed maturities, S&P ratings are used. In the absence of an S&P rating, ratings from Moody’s are used, followed by ratings from Fitch Ratings.

(2) Includes U.S. government-sponsored agency mortgage backed securities and agency commercial mortgage backed securities.


			27

Arch Capital Group Ltd. and Subsidiaries

Investment Information — Analysis of Corporate Exposures

The following table summarizes the Company’s corporate bonds by sector:


(U.S. Dollars in millions)	September 30,				June 30,				March 31,				December 31,				September 30,
	2024				2024				2024				2023				2023
Sector:
Industrials	$	8,145	54.0	%	$	6,886	53.0	%	$	6,691	53.1	%	$	5,525	48.0	%	$	4,918	46.0	%
Financials	5,208		34.5	%	4,573		35.2	%	4,477		35.5	%	4,523		39.3	%	4,326		40.5	%
Utilities	1,237		8.2	%	1,135		8.7	%	1,065		8.4	%	1,039		9.0	%	962		9.0	%

All other (1)	491		3.3	%	401		3.1	%	375		3.0	%	430		3.7	%	478		4.5	%
Total	$	15,081	100.0	%	$	12,995	100.0	%	$	12,608	100.0	%	$	11,517	100.0	%	$	10,684	100.0	%

Credit quality distribution (2):
AAA	$	241	1.6	%	$	213	1.6	%	$	229	1.8	%	$	295	2.6	%	$	297	2.8	%
AA	1,002		6.6	%	1,061		8.2	%	1,067		8.5	%	1,038		9.0	%	938		8.8	%
A	4,771		31.6	%	4,092		31.5	%	4,217		33.4	%	4,043		35.1	%	3,936		36.8	%
BBB	7,022		46.6	%	5,819		44.8	%	5,362		42.5	%	4,744		41.2	%	4,118		38.5	%
BB	1,019		6.8	%	909		7.0	%	856		6.8	%	634		5.5	%	715		6.7	%
B	529		3.5	%	516		4.0	%	481		3.8	%	389		3.4	%	351		3.3	%
Lower than B	37		0.2	%	29		0.2	%	30		0.2	%	15		0.1	%	16		0.1	%
Not rated	460		3.1	%	356		2.7	%	366		2.9	%	359		3.1	%	313		2.9	%
Total	$	15,081	100.0	%	$	12,995	100.0	%	$	12,608	100.0	%	$	11,517	100.0	%	$	10,684	100.0	%

(1) Includes sovereign securities, supranational securities and other.

(2) For individual fixed maturities, S&P ratings are used. In the absence of an S&P rating, ratings from Moody’s are used, followed by ratings from Fitch Ratings.

The following table summarizes the Company’s top ten exposures to fixed income corporate issuers by fair value at September 30, 2024:


(U.S. Dollars in millions)	Fair Value		% of Asset Class		% of Investable Assets		Credit Quality (1)
Issuer:
JPMorgan Chase & Co.	$	412	2.7	%	1.0	%	A-/A1
Morgan Stanley	359		2.4	%	0.8	%	A-/A1
Bank of America Corporation	332		2.2	%	0.8	%	A-/A1
The Goldman Sachs Group, Inc.	263		1.7	%	0.6	%	A-/A2
Citigroup Inc.	257		1.7	%	0.6	%	BBB+/A3
Blue Owl Capital Inc.	246		1.6	%	0.6	%	BBB-/Baa3
Hyundai Motor Company	211		1.4	%	0.5	%	A-/A3
Ford Motor Company	210		1.4	%	0.5	%	BBB-/Ba1
Blackstone Inc.	176		1.2	%	0.4	%	BBB-/Baa2
UBS Group AG	157		1.0	%	0.4	%	A-/A3
Total	$	2,623	17.4	%	6.1	%

(1) Average credit ratings assigned by S&P and Moody’s, respectively.


			28

Arch Capital Group Ltd. and Subsidiaries

Investment Information — Structured Securities

The following table provides the composition of the Company’s structured securities:


(U.S. Dollars in millions)	Agencies		AAA		AA		A		BBB		Non-Investment Grade		Total
At September 30, 2024
Residential mortgage-backed securities	$	852	$	399	$	21	$	1	$	—	$	40	$	1,313
Commercial mortgage-backed securities	7		640		190		75		141		93		1,146
Asset-backed securities	—		1,604		340		695		185		165		2,989
Total	$	859	$	2,643	$	551	$	771	$	326	$	298	$	5,448

At December 31, 2023
Residential mortgage-backed securities	$	658	$	416	$	29	$	—	$	—	$	—	$	1,103
Commercial mortgage-backed securities	7		757		198		45		126		80		1,213
Asset-backed securities	—		1,302		231		440		170		109		2,252
Total	$	665	$	2,475	$	458	$	485	$	296	$	189	$	4,568


			29

Arch Capital Group Ltd. and Subsidiaries

Comments on Non-GAAP Financial Measures

Throughout this financial supplement, the Company presents its operations in the way it believes will be the most meaningful and useful to investors, analysts, rating agencies and others who use the Company’s financial information in evaluating the performance of the Company. This presentation includes the use of after-tax operating income available to Arch common shareholders, which is defined as net income available to Arch common shareholders, excluding net realized gains or losses (which includes realized and unrealized changes in the fair value of equity securities and assets accounted for using the fair value option, realized and unrealized gains and losses on derivative instruments, changes in the allowance for credit losses on financial assets and gains and losses realized from the acquisition or disposition of subsidiaries), equity in net income or loss of investment funds accounted for using the equity method, net foreign exchange gains or losses, transaction costs and other, net of income taxes and the use of annualized operating return on average common equity. The presentation of after-tax operating income available to Arch common shareholders and annualized operating return on average common equity are non-GAAP financial measures as defined in Regulation G. The reconciliation of such measures to net income available to Arch common shareholders and annualized net income return on average common equity (the most directly comparable GAAP financial measures) in accordance with Regulation G is included on the following page.

The Company believes that net realized gains or losses, equity in net income or loss of investment funds accounted for using the equity method, net foreign exchange gains or losses and transaction costs and other, in any particular period are not indicative of the performance of, or trends in, the Company’s business. Although net realized gains or losses, equity in net income or loss of investment funds accounted for using the equity method and net foreign exchange gains or losses are an integral part of the Company’s operations, the decision to realize these items are independent of the insurance underwriting process and result, in large part, from general economic and financial market conditions. Furthermore, certain users of the Company’s financial information believe that, for many companies, the timing of the realization of investment gains or losses is largely opportunistic. In addition, changes in the allowance for credit losses and net impairment losses recognized in earnings on the Company’s investments represent other-than-temporary declines in expected recovery values on securities without actual realization.

Transaction costs and other include advisory, financing, legal, severance, incentive compensation and other transaction costs related to acquisitions. The Company believes that transaction costs and other, due to their non-recurring nature, are not indicative of the performance of, or trends in, the Company’s business performance.

The Company’s segment information includes the presentation of consolidated underwriting income or loss and a subtotal of underwriting income or loss. Such measures represent the pre-tax profitability of the Company’s underwriting operations and include net premiums earned plus other underwriting income, less losses and loss adjustment expenses, acquisition expenses and other operating expenses. Other operating expenses include those operating expenses that are incremental and/or directly attributable to the Company’s individual underwriting operations. Underwriting income or loss does not include certain income and expense items which are included in corporate. While these measures are presented in the Segment Information footnote to the Company’s Consolidated Financial Statements, they are considered non-GAAP financial measures when presented elsewhere on a consolidated basis. The reconciliations of underwriting income or loss to income before income taxes (the most directly comparable GAAP financial measure) on a consolidated basis, in accordance with Regulation G, is shown on pages 9 to 12.

Total return on investments includes investment income, equity in net income or loss of investment funds accounted for using the equity method, net realized gains and losses (excluding changes in the allowance for credit losses on non-investment related financial assets) and the change in unrealized gains and losses generated by the Company’s investment portfolio. Total return is calculated on a pre-tax basis and before investment expenses, and reflects the effect of financial market conditions along with foreign currency fluctuations. Management uses total return on investments as a key measure of the return generated to Arch common shareholders, and compares the return generated by the Company’s investment portfolio against benchmark returns during the periods presented.


			30

Arch Capital Group Ltd. and Subsidiaries

Operating Income Reconciliation and Annualized Operating Return on Average Common Equity

The following table summarizes the Company’s consolidated financial data, including a reconciliation of net income (loss) available to Arch common shareholders to after-tax operating income (loss) available to Arch common shareholders and related diluted per share results:


(U.S. Dollars and shares in millions, except per share data)	Three Months Ended															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
	2024			2024			2024			2023			2023			2024			2023
Net income available to Arch common shareholders	$	978		$	1,259		$	1,110		$	2,324		$	713		$	3,347		$	2,079
Net realized (gains) losses (1)	(169)			(122)			(67)			(189)			248			(358)			354

Equity in net (income) loss of investment funds accounted for using the equity method	(171)			(167)			(99)			(102)			(59)			(437)			(176)
Net foreign exchange (gains) losses	63			(1)			(31)			60			(22)			31			2
Transaction costs and other	30			18			7			4			1			55			2

Income tax expense (benefit) (2)	31			(6)			13			(1,152)			(5)			38			(5)
After-tax operating income available to Arch common shareholders	$	762		$	981		$	933		$	945		$	876		$	2,676		$	2,256

Diluted per common share results:
Net income available to Arch common shareholders	$	2.56		$	3.30		$	2.92		$	6.12		$	1.88		$	8.78		$	5.50
Net realized (gains) losses (1)	(0.44)			(0.32)			(0.18)			(0.50)			0.65			(0.94)			0.93

Equity in net (income) loss of investment funds accounted for using the equity method	(0.45)			(0.44)			(0.26)			(0.27)			(0.16)			(1.15)			(0.47)
Net foreign exchange (gains) losses	0.16			0.00			(0.08)			0.16			(0.05)			0.09			0.01
Transaction costs and other	0.08			0.05			0.02			0.01			0.00			0.15			0.00

Income tax expense (benefit) (2)	0.08			(0.02)			0.03			(3.03)			(0.01)			0.09			(0.01)
After-tax operating income available to Arch common shareholders	$	1.99		$	2.57		$	2.45		$	2.49		$	2.31		$	7.02		$	5.96

Weighted average common shares and common share equivalents outstanding - diluted	382.3			381.6			380.5			379.8			379.4			381.3			378.3

Beginning common shareholders’ equity	$	19,835		$	18,525		$	17,523		$	14,409		$	13,811		$	17,523		$	12,080
Ending common shareholders’ equity	21,444			19,835			18,525			17,523			14,409			21,444			14,409
Average common shareholders’ equity	$	20,640		$	19,180		$	18,024		$	15,966		$	14,110		$	19,484		$	13,245

Annualized net income return on average common equity	19.0		%	26.3		%	24.6		%	58.2		%	20.2		%	22.9		%	20.9		%
Annualized operating return on average common equity	14.8		%	20.5		%	20.7		%	23.7		%	24.8		%	18.3		%	22.7		%

(2) Income tax expense (benefit) on net realized gains or losses, equity in net income (loss) of investment funds accounted for using the equity method, net foreign exchange gains or losses and transaction costs and other reflects the relative mix reported by jurisdiction and the varying tax rates in each jurisdiction. The 2023 fourth quarter results were impacted by the establishment of a net deferred tax asset of $1.18 billion, or $3.10 per share, related to the enactment of Bermuda’s new corporate income tax.


			31

Arch Capital Group Ltd. and Subsidiaries

Operating Income and Effective Tax Rate Calculations

The following table provides a reconciliation of income (loss) before income taxes to after-tax operating income (loss) available to Arch common shareholders and an analysis of the effective tax rate on pre-tax operating income (loss) available to Arch common shareholders:


(U.S. Dollars in millions)	Three Months Ended															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
	2024			2024			2024			2023			2023			2024			2023
Arch Operating Income Components:
Income (loss) before income taxes and income (loss) from operating affiliates	$	1,050		$	1,321		$	1,166		$	1,188		$	741		$	3,537		$	2,197
Net realized (gains) losses	(169)			(122)			(67)			(189)			248			(358)			354

Equity in net (income) loss of investment funds accounted for using the equity method	(171)			(167)			(99)			(102)			(59)			(437)			(176)
Net foreign exchange (gains) losses	63			—			(31)			60			(22)			32			2
Transaction costs and other	30			18			7			4			1			55			2
Income (loss) from operating affiliates	36			45			55			69			54			136			115


Pre-tax operating income available to Arch (b)	839			1,095			1,031			1,030			963			2,965			2,494
Income tax (expense) benefit (a)	(67)			(104)			(88)			(75)			(77)			(259)			(208)
After-tax operating income available to Arch	772			991			943			955			886			2,706			2,286
Preferred dividends	(10)			(10)			(10)			(10)			(10)			(30)			(30)
After-tax operating income available to Arch common shareholders	$	762		$	981		$	933		$	945		$	876		$	2,676		$	2,256

Effective tax rate on pre-tax operating income (loss) available to Arch (a)/(b)	8.0		%	9.5		%	8.5		%	7.3		%	8.0		%	8.7		%	8.3		%


			32

Arch Capital Group Ltd. and Subsidiaries

Capital Structure and Share Repurchase Activity

The following table provides an analysis of the Company’s capital structure:


(U.S. Dollars and shares in millions, except per share data)	September 30,			June 30,			March 31,			December 31,			September 30,
	2024			2024			2024			2023			2023
Debt:
Arch senior notes, due May 1, 2034 ($300 principal, 7.35%)	$	300		$	300		$	300		$	300		$	300
Arch-U.S. senior notes, due Nov. 1, 2043 ($500 principal, 5.144%) (1)	500			500			500			500			500
Arch Finance senior notes, due December 15, 2026 ($500 principal, 4.011%) (2)	500			500			500			500			500
Arch Finance senior notes, due December 15, 2046 ($450 principal, 5.031%) (2)	450			450			450			450			450
Arch senior notes, due June 30, 2050 ($1,000 principal, 3.635%)	1,000			1,000			1,000			1,000			1,000
Deferred debt costs on senior notes	(23)			(23)			(23)			(24)			(24)
Revolving credit agreement borrowings, due August 23, 2028	—			—			—			—			—
Total debt	$	2,727		$	2,727		$	2,727		$	2,726		$	2,726

Shareholders’ equity available to Arch:


Series F non-cumulative preferred shares (5.45%)	330			330			330			330			330
Series G non-cumulative preferred shares (4.55%)	500			500			500			500			500
Common shareholders’ equity (a)	21,444			19,835			18,525			17,523			14,409
Total shareholders’ equity available to Arch	$	22,274		$	20,665		$	19,355		$	18,353		$	15,239

Total capital available to Arch	$	25,001		$	23,392		$	22,082		$	21,079		$	17,965

Common shares outstanding, net of treasury shares (b)	376.2			376.0			375.3			373.3			373.1

Book value per common share (3) (a)/(b)	$	57.00		$	52.75		$	49.36		$	46.94		$	38.62

Leverage ratios:
Senior notes/total capital available to Arch	10.9		%	11.7		%	12.3		%	12.9		%	15.2		%
Revolving credit agreement borrowings/total capital available to Arch	—		%	—		%	—		%	—		%	—		%
Debt/total capital available to Arch	10.9		%	11.7		%	12.3		%	12.9		%	15.2		%
Preferred/total capital available to Arch	3.3		%	3.5		%	3.8		%	3.9		%	4.6		%
Debt and preferred/total capital available to Arch	14.2		%	15.2		%	16.1		%	16.9		%	19.8		%

(1) Issued by Arch Capital Group (U.S.) Inc. (“Arch-U.S.”), a wholly owned subsidiary of Arch, and fully and unconditionally guaranteed by Arch.

(2) Issued by Arch Capital Finance LLC (“Arch Finance”), a wholly owned subsidiary of Arch U.S. MI Holdings Inc., and fully and unconditionally guaranteed by Arch.

(3) Excludes the effects of stock options, restricted and performance stock units outstanding.

The following table provides the impact of share repurchases under the Company’s share repurchase program:


(U.S. Dollars and shares in millions, except per share data)	Three Months Ended										Cumulative
	September 30,		June 30,		March 31,		December 31,		September 30,		September 30,
	2024		2024		2024		2023		2023		2024
Effect of share repurchases:
Aggregate cost of shares repurchased	$	—	$	—	$	—	$	—	$	—	$	5,872
Shares repurchased	—		—		—		—		—		433.6
Average price per share repurchased	$	—	$	—	$	—	$	—	$	—	$	13.54




Remaining share repurchase authorization (1)											$	1,000

(1) Repurchases under the share repurchase authorization may be effected from time to time in open market or privately negotiated transactions through December 31, 2024.


			33

Document and Entity Information Cover	Oct. 30, 2024
Document and Entity Information [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Oct. 30, 2024
Entity Registrant Name	Arch Capital Group Ltd.
Entity Central Index Key	0000947484
Entity Incorporation, State or Country Code	D0
Entity File Number	001-16209
Entity Tax Identification Number	98-0374481
Entity Address, Address Line One	Waterloo House, Ground Floor
Entity Address, Address Line Two	100 Pitts Bay Road
Entity Address, City or Town	Pembroke
Entity Address, Postal Zip Code	HM 08
Entity Address, Country	BM
City Area Code	441
Local Phone Number	278-9250
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Common shares
Entity Listings [Line Items]
Title of 12(b) Security	Common shares, $0.0011 par value per share
Trading Symbol	ACGL
Security Exchange Name	NASDAQ
Series F Depositary Share Equivalent
Entity Listings [Line Items]
Title of 12(b) Security	Depositary shares, each representing a 1/1,000th interest in a 5.45% Series F preferred share
Trading Symbol	ACGLO
Security Exchange Name	NASDAQ
Series G Depositary Share Equivalent
Entity Listings [Line Items]
Title of 12(b) Security	Depositary shares, each representing a 1/1,000th interest in a 4.55% Series G preferred share
Trading Symbol	ACGLN
Security Exchange Name	NASDAQ

	Real-time Prices	Level 2
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ACGLO Arch Capital Group Ltd