EX-99.23ex-992supplement33126.htmEX-99.2 Document
EXHIBIT 99.2
Arch Capital Group Ltd.
Waterloo House, Ground Floor
100 Pitts Bay Road
Pembroke HM 08 Bermuda
Financial Supplement
March 31, 2026
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
11
d.
Reinsurance Segment Results
13
e.
Mortgage Segment Results
15
f.
Segment Consolidated Results
20
g.
Selected Information on Losses and Loss Adjustment Expenses
21
IV.
Investment Information
a.
Investable Asset Summary and Investment Portfolio Metrics
22
b.
Composition of Net Investment Income, Yield and Total Return
23
c.
Composition of Fixed Maturities
24
d.
Credit Quality Distribution and Maturity Profile
25
e.
Analysis of Corporate Exposures
26
f.
Structured Securities
27
V.
Other
a.
Comments on Non-GAAP Financial Measures
28
b.
Operating Income Reconciliation and Annualized Operating Return on Average Common Equity
29
c.
Operating Income and Effective Tax Rate Calculations
30
d.
Capital Structure and Share Repurchase Activity
31
1
Arch Capital Group Ltd. and Subsidiaries
Basis of Presentation
Basis of Presentation
All financial information contained herein is unaudited, however, certain information relating to the consolidated balance sheet at December 31, 2025 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; 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 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 for the year ended December 31, 2025, filed with the SEC on February 26, 2026 and of the Company’s latest Quarterly Reports on Form 10-Q, 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.
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
March 31,
2026
2025
Change
Underwriting results:
Gross premiums written
$
6,425
$
6,463
(0.6)
%
Net premiums written
4,348
4,515
(3.7)
%
Net premiums earned
3,986
4,188
(4.8)
%
Underwriting income (loss) (1)
728
417
74.6
%
Loss ratio
52.4
%
61.8
%
(9.4)
Acquisition expense ratio
18.3
%
18.3
%
—
Other operating expense ratio (2)
11.0
%
10.0
%
1.0
Combined ratio
81.7
%
90.1
%
(8.4)
Pre-tax net investment income
$
408
$
378
7.9
%
Per diluted share
$
1.13
$
0.99
14.1
%
Net income available to Arch common shareholders
$
1,037
$
564
83.9
%
Per diluted share
$
2.88
$
1.48
94.6
%
After-tax operating income available to Arch common shareholders (1)
$
901
$
587
53.5
%
Per diluted share
$
2.50
$
1.54
62.3
%
Comprehensive income (loss) available to Arch
$
709
$
886
(20.0)
%
Net cash provided by operating activities
$
1,188
$
1,458
(18.5)
%
Weighted average common shares and common share equivalents outstanding — diluted
359.7
381.9
(5.8)
%
Financial measures:
Change in book value per common share during period
1.7
%
3.8
%
(2.1)
Annualized net income return on average common equity
17.8
%
11.1
%
6.7
Annualized operating return on average common equity (1)
15.4
%
11.5
%
3.9
Total return on investments (3)
0.10
%
2.02
%
-192 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)The ‘Other operating expense ratio’ includes ‘Other underwriting income.’
(3)Total return on investments includes investment income, equity in net income of investments 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
March 31,
December 31,
September 30,
June 30,
March 31,
2026
2025
2025
2025
2025
Revenues
Net premiums earned
$
3,986
$
4,255
$
4,285
$
4,337
$
4,188
Net investment income
408
434
408
405
378
Net realized gains (losses)
(87)
22
210
229
3
Other underwriting income (1)
59
52
50
62
53
Equity in net income of investments accounted for using the equity method
160
155
134
162
53
Other income (loss)
(5)
16
22
18
(2)
Total revenues
4,521
4,934
5,109
5,213
4,673
Expenses
Losses and loss adjustment expenses
(2,089)
(2,280)
(2,200)
(2,303)
(2,587)
Acquisition expenses
(730)
(779)
(786)
(824)
(764)
Other operating expenses
(498)
(421)
(478)
(454)
(473)
Corporate benefit (expenses)
(49)
24
(49)
(47)
(60)
Amortization of intangible assets
(30)
(47)
(49)
(48)
(49)
Interest expense
(37)
(38)
(37)
(38)
(35)
Net foreign exchange gains (losses)
21
(6)
(7)
(88)
(27)
Total expenses
(3,412)
(3,547)
(3,606)
(3,802)
(3,995)
Income (loss) before income taxes and income (loss) from operating affiliates
1,109
1,387
1,503
1,411
678
Income tax (expense) benefit
(98)
(210)
(215)
(214)
(121)
Income (loss) from operating affiliates
36
61
62
40
17
Net income (loss) attributable to Arch
1,047
1,238
1,350
1,237
574
Preferred dividends
(10)
(10)
(10)
(10)
(10)
Net income (loss) available to Arch common shareholders
$
1,037
$
1,228
$
1,340
$
1,227
$
564
Comprehensive income (loss) available to Arch
$
709
$
1,243
$
1,398
$
1,597
$
886
Net income (loss) per common share and common share equivalent
Basic
$
2.94
$
3.42
$
3.63
$
3.30
$
1.51
Diluted
$
2.88
$
3.35
$
3.56
$
3.23
$
1.48
Weighted average common shares and common share equivalents outstanding
Basic
353.2
359.4
369.0
372.2
372.9
Diluted
359.7
366.6
376.1
379.9
381.9
(1) ‘Other underwriting income’ includes revenue earned from underwriting-related activities covered under existing service contracts.
4
Arch Capital Group Ltd. and Subsidiaries
Consolidated Balance Sheets
(U.S. Dollars and shares in millions, except per share data)
March 31,
December 31,
September 30,
June 30,
March 31,
2026
2025
2025
2025
2025
Assets
Investments:
Fixed maturities available for sale, at fair value
$
32,399
$
32,426
$
31,908
$
30,332
$
28,798
Short-term investments available for sale, at fair value
2,638
2,625
2,351
2,788
2,477
Equity securities, at fair value
1,766
1,864
1,805
1,715
1,618
Other investments
3,331
3,136
3,027
2,892
2,888
Investments accounted for using the equity method
6,652
6,453
6,232
6,566
6,340
Total investments
46,786
46,504
45,323
44,293
42,121
Cash
914
993
1,063
983
1,187
Accrued investment income
302
338
307
329
267
Investment in operating affiliates
1,330
1,313
1,417
1,356
1,305
Premiums receivable
6,526
5,723
6,450
7,067
6,607
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses
9,732
9,526
9,070
9,044
8,969
Contractholder receivables
2,253
2,270
2,287
2,280
2,212
Ceded unearned premiums
3,183
2,659
3,079
3,229
2,895
Deferred acquisition costs
1,774
1,717
1,786
1,814
1,785
Receivable for securities sold
643
180
695
390
324
Goodwill and intangible assets
1,190
1,222
1,268
1,319
1,308
Other assets
6,813
6,796
6,440
6,684
6,196
Total assets
$
81,446
$
79,241
$
79,185
$
78,788
$
75,176
Liabilities
Reserve for losses and loss adjustment expenses
$
34,105
$
33,547
$
32,822
$
32,089
$
30,946
Unearned premiums
10,939
10,100
11,124
11,625
11,090
Reinsurance balances payable
2,737
2,320
2,638
2,841
2,661
Contractholder payables
2,260
2,277
2,293
2,286
2,218
Collateral held for insured obligations
260
237
239
225
245
Senior notes
2,729
2,729
2,728
2,728
2,728
Payable for securities purchased
798
308
335
728
578
Other liabilities
3,430
3,517
3,287
3,225
3,165
Total liabilities
57,258
55,035
55,466
55,747
53,631
Shareholders’ equity
Non-cumulative preferred shares
830
830
830
830
830
Common shares
1
1
1
1
1
Additional paid-in capital
2,831
2,735
2,682
2,660
2,588
Retained earnings
28,082
27,045
25,817
24,477
23,250
Accumulated other comprehensive income (loss), net of deferred income tax
(333)
5
—
(48)
(408)
Common shares held in treasury, at cost
(7,223)
(6,410)
(5,611)
(4,879)
(4,716)
Total shareholders’ equity
24,188
24,206
23,719
23,041
21,545
Total liabilities and shareholders’ equity
$
81,446
$
79,241
$
79,185
$
78,788
$
75,176
Common shares and common share equivalents outstanding, net of treasury shares
352.9
359.0
367.3
375.4
375.6
Book value per common share (1)
$
66.19
$
65.11
$
62.32
$
59.17
$
55.15
(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
March 31,
December 31,
September 30,
June 30,
March 31,
2026
2025
2025
2025
2025
Non-cumulative preferred shares
Balance at beginning and end of period
$
830
$
830
$
830
$
830
$
830
Common shares
Balance at beginning and end of period
1
1
1
1
1
Additional paid-in capital
Balance at beginning of period
2,735
2,682
2,660
2,588
2,510
Amortization of share-based compensation
82
24
25
25
74
All other
14
29
(3)
47
4
Balance at end of period
2,831
2,735
2,682
2,660
2,588
Retained earnings
Balance at beginning of period
27,045
25,817
24,477
23,250
22,686
Net income
1,047
1,238
1,350
1,237
574
Preferred share dividends
(10)
(10)
(10)
(10)
(10)
Balance at end of period
28,082
27,045
25,817
24,477
23,250
Accumulated other comprehensive income (loss), net of deferred income tax
Balance at beginning of period
5
—
(48)
(408)
(720)
Change in unrealized appreciation (decline) in value of available-for-sale investments
(338)
12
47
296
286
Change in foreign currency translation adjustments
—
(7)
1
64
26
Balance at end of period
(333)
5
—
(48)
(408)
Common shares held in treasury, at cost
Balance at beginning of period
(6,410)
(5,611)
(4,879)
(4,716)
(4,487)
Shares repurchased for treasury
(813)
(799)
(732)
(163)
(229)
Balance at end of period
(7,223)
(6,410)
(5,611)
(4,879)
(4,716)
Total shareholders’ equity
$
24,188
$
24,206
$
23,719
$
23,041
$
21,545
6
Arch Capital Group Ltd. and Subsidiaries
Consolidated Statements of Cash Flows
(U.S. Dollars in millions)
Three Months Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2026
2025
2025
2025
2025
Operating Activities
Net income (loss)
$
1,047
$
1,238
$
1,350
$
1,237
$
574
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized (gains) losses
91
(7)
(202)
(225)
(6)
Equity in net (income) of investments accounted for using the equity method and other income or loss
(137)
(194)
(158)
(95)
(12)
Amortization of intangible assets
30
47
49
48
49
Share-based compensation
82
24
25
25
74
Changes in:
Reserve for losses and loss adjustment expenses, net
540
330
634
560
826
Unearned premiums, net
362
(606)
(321)
11
327
Premiums receivable
(820)
731
601
(352)
(942)
Deferred acquisition costs
(48)
53
14
33
(14)
Reinsurance balances payable
419
(319)
(207)
159
504
Deferred income tax assets, net
20
19
46
80
29
Other items, net
(398)
88
355
(357)
49
Net cash provided by operating activities
1,188
1,404
2,186
1,124
1,458
Investing Activities
Purchases of fixed maturity investments
(9,288)
(8,293)
(10,619)
(8,150)
(9,418)
Purchases of equity securities
(185)
(184)
(277)
(179)
(808)
Purchases of other investments
(499)
(493)
(513)
(535)
(697)
Proceeds from sales of fixed maturity investments
7,984
7,055
8,435
6,522
7,301
Proceeds from sales of equity securities
202
183
281
223
820
Proceeds from sales, redemptions and maturities of other investments
240
759
336
431
660
Proceeds from redemptions and maturities of fixed maturity investments
957
693
475
568
758
Net settlements of derivative instruments
(26)
35
35
147
93
Net (purchases) sales of short-term investments
(11)
(272)
478
(242)
294
Purchases of fixed assets
(8)
(11)
(12)
(12)
(9)
Other
(5)
111
(2)
(1)
(2)
Net cash provided by (used for) investing activities
(639)
(417)
(1,383)
(1,228)
(1,008)
Financing Activities
T1Purchases of common shares under share repurchase program
(783)
(798)
(732)
(163)
(196)
Proceeds from common shares issued, net
(17)
30
1
47
(28)
Common dividends paid
(5)
—
—
(2)
(5)
Preferred dividends paid
(10)
(10)
(10)
(10)
(10)
Other
(12)
—
(2)
—
(2)
Net cash provided by (used for) financing activities
(827)
(778)
(743)
(128)
(241)
Effects of exchange rate changes on foreign currency cash and restricted cash
(8)
4
(14)
55
16
Increase (decrease) in cash and restricted cash
(286)
213
46
(177)
225
Cash and restricted cash, beginning of period
2,067
1,854
1,808
1,985
1,760
Cash and restricted cash, end of period
$
1,781
$
2,067
$
1,854
$
1,808
$
1,985
Income taxes paid (received)
$
22
$
143
$
166
$
131
$
18
Interest paid
$
—
$
63
$
—
$
64
$
—
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; specialty; property catastrophe; property excluding property catastrophe; and other.
Mortgage Segment
The Company’s mortgage segment consists of U.S. primary mortgage insurance business written predominantly on loans sold to 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.”); reinsurance and underwriting services related to U.S. credit-risk transfer (“CRT”) business which are predominately with the GSEs and other U.S. mortgage reinsurance transactions; and international mortgage insurance and reinsurance business covering loans primarily in Australia and Europe.
The Company’s results also include net investment income, net realized gains or losses (which include, but are not limited to, 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 investments accounted for using the equity method, other income (loss), corporate benefit (expenses), transaction costs and other, amortization of intangible assets, interest expense, net foreign exchange gains or losses, income taxes items, 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
March 31, 2026
Insurance
Reinsurance
Mortgage
Total
Gross premiums written (1)
$
2,697
$
3,414
$
316
$
6,425
Premiums ceded (1)
(791)
(1,238)
(50)
(2,077)
Net premiums written
1,906
2,176
266
4,348
Change in unearned premiums
(35)
(345)
18
(362)
Net premiums earned
1,871
1,831
284
3,986
Other underwriting income (2)
11
37
11
59
Losses and loss adjustment expenses
(1,126)
(948)
(15)
(2,089)
Acquisition expenses
(375)
(347)
(8)
(730)
Other operating expenses
(315)
(132)
(51)
(498)
Underwriting income (loss)
$
66
$
441
$
221
728
Net investment income
408
Net realized gains (losses)
(87)
Equity in net income of investments accounted for using the equity method
160
Other income (loss)
(5)
Corporate benefit (expenses) (3)
(31)
Transaction costs and other (3)
(18)
Amortization of intangible assets
(30)
Interest expense
(37)
Net foreign exchange gains (losses)
21
Income (loss) before income taxes and income (loss) from operating affiliates
1,109
Income tax (expense) benefit
(98)
Income (loss) from operating affiliates
36
Net income (loss) available to Arch
1,047
Preferred dividends
(10)
Net income (loss) available to Arch common shareholders
$
1,037
Underwriting Ratios
Loss ratio
60.2
%
51.7
%
5.3
%
52.4
%
Acquisition expense ratio
20.0
%
19.0
%
2.9
%
18.3
%
Other operating expense ratio (4)
16.3
%
5.2
%
14.1
%
11.0
%
Combined ratio
96.5
%
75.9
%
22.3
%
81.7
%
Net premiums written to gross premiums written
70.7
%
63.7
%
84.2
%
67.7
%
Total investable assets
$
47,545
Total assets
81,446
Total liabilities
57,258
(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) ‘Other underwriting income’ includes revenue earned from underwriting-related activities covered under existing service contracts.
(3) Certain expenses have been excluded from ‘Corporate benefit (expenses)’ and reflected in ‘Transaction costs and other.’ See ‘Comments on Non-GAAP Financial Measures’ for a further discussion of such items.
(4) The ‘Other operating expense ratio’ includes ‘Other underwriting income.’
9
Arch Capital Group Ltd. and Subsidiaries
Segment Information
(U.S. Dollars in millions)
Three Months Ended
March 31, 2025
Insurance
Reinsurance
Mortgage
Total
Gross premiums written (1)
$
2,645
$
3,494
$
326
$
6,463
Premiums ceded (1)
(712)
(1,178)
(60)
(1,948)
Net premiums written
1,933
2,316
266
4,515
Change in unearned premiums
(73)
(288)
34
(327)
Net premiums earned
1,860
2,028
300
4,188
Other underwriting income (2)
3
39
11
53
Losses and loss adjustment expenses
(1,228)
(1,356)
(3)
(2,587)
Acquisition expenses
(343)
(417)
(4)
(764)
Other operating expenses
(294)
(127)
(52)
(473)
Underwriting income (loss)
$
(2)
$
167
$
252
417
Net investment income
378
Net realized gains (losses)
3
Equity in net income of investments accounted for using the equity method
53
Other income (loss)
(2)
Corporate benefit (expenses) (3)
(50)
Transaction costs and other (3)
(10)
Amortization of intangible assets
(49)
Interest expense
(35)
Net foreign exchange gains (losses)
(27)
Income (loss) before income taxes and income (loss) from operating affiliates
678
Income tax (expense) benefit
(121)
Income (loss) from operating affiliates
17
Net income (loss) available to Arch
574
Preferred dividends
(10)
Net income (loss) available to Arch common shareholders
$
564
Underwriting Ratios
Loss ratio
66.0
%
66.9
%
1.1
%
61.8
%
Acquisition expense ratio
18.5
%
20.6
%
1.3
%
18.3
%
Other operating expense ratio (4)
15.6
%
4.3
%
13.7
%
10.0
%
Combined ratio
100.1
%
91.8
%
16.1
%
90.1
%
Net premiums written to gross premiums written
73.1
%
66.3
%
81.6
%
69.9
%
Total investable assets
$
43,054
Total assets
75,176
Total liabilities
53,631
(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) ‘Other underwriting income’ includes revenue earned from underwriting-related activities covered under existing service contracts.
(3) Certain expenses have been excluded from ‘Corporate benefit (expenses)’ and reflected in ‘Transaction costs and other.’ See ‘Comments on Non-GAAP Financial Measures’ for a further discussion of such items.
(4) The ‘Other operating expense ratio’ includes ‘Other underwriting income.’
10
Arch Capital Group Ltd. and Subsidiaries
Segment Information — Insurance Segment
(U.S. Dollars in millions)
Three Months Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2026
2025
2025
2025
2025
Gross premiums written
$
2,697
$
2,542
$
2,567
$
2,681
$
2,645
Premiums ceded
(791)
(666)
(614)
(645)
(712)
Net premiums written
1,906
1,876
1,953
2,036
1,933
Change in unearned premiums
(35)
97
16
(67)
(73)
Net premiums earned
1,871
1,973
1,969
1,969
1,860
Other underwriting income (1)
11
11
9
13
3
Losses and loss adjustment expenses
(1,126)
(1,196)
(1,162)
(1,178)
(1,228)
Acquisition expenses
(375)
(380)
(386)
(387)
(343)
Other operating expenses
(315)
(289)
(301)
(288)
(294)
Underwriting income (loss)
$
66
$
119
$
129
$
129
$
(2)
Underwriting Ratios
Loss ratio
60.2
%
60.6
%
59.0
%
59.8
%
66.0
%
Acquisition expense ratio
20.0
%
19.3
%
19.6
%
19.6
%
18.5
%
Other operating expense ratio (2)
16.3
%
14.1
%
14.8
%
14.0
%
15.6
%
Combined ratio
96.5
%
94.0
%
93.4
%
93.4
%
100.1
%
Catastrophic activity and prior year development:
Current accident year catastrophic events, net of reinsurance and reinstatement premiums
4.2
%
3.3
%
2.2
%
2.9
%
9.5
%
Net (favorable) adverse development in prior year loss reserves, net of related adjustments:
Loss ratio impact
(0.7)
%
(0.2)
%
(0.7)
%
(0.4)
%
(0.9)
%
Acquisition expense ratio impact
0.3
%
0.1
%
0.6
%
0.3
%
0.4
%
Total impact
(0.4)
%
(0.1)
%
(0.1)
%
(0.1)
%
(0.5)
%
Combined ratio excluding catastrophic activity and prior year development (3)
92.7
%
90.8
%
91.3
%
90.6
%
91.1
%
Net premiums written to gross premiums written
70.7
%
73.8
%
76.1
%
75.9
%
73.1
%
(1)‘Other underwriting income’ includes revenue earned from underwriting-related activities covered under existing service contracts.
(2)The ‘Other operating expense ratio’ includes ‘Other underwriting income.’
(3)See ‘Comments on Non-GAAP Financial Measures’ for further discussion.
11
Arch Capital Group Ltd. and Subsidiaries
Segment Information — Insurance Segment
(U.S. Dollars in millions)
Three Months Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2026
2025
2025
2025
2025
Net Premiums Written by Line of Business
North America
Property and short-tail specialty
$
322
16.9
%
$
273
14.6
%
$
339
17.4
%
$
369
18.1
%
$
348
18.0
%
Other liability - occurrence
315
16.5
%
309
16.5
%
297
15.2
%
366
18.0
%
330
17.1
%
Other liability - claims made
175
9.2
%
229
12.2
%
209
10.7
%
206
10.1
%
149
7.7
%
Commercial multi-peril
173
9.1
%
184
9.8
%
194
9.9
%
205
10.1
%
198
10.2
%
Workers compensation
157
8.2
%
142
7.6
%
151
7.7
%
130
6.4
%
153
7.9
%
Commercial automobile
149
7.8
%
126
6.7
%
150
7.7
%
165
8.1
%
161
8.3
%
Other
74
3.9
%
90
4.8
%
86
4.4
%
89
4.4
%
76
3.9
%
Total North America
$
1,365
71.6
%
$
1,353
72.1
%
$
1,426
73.0
%
$
1,530
75.1
%
$
1,415
73.2
%
International
Property and short-tail specialty
$
282
14.8
%
$
251
13.4
%
$
284
14.5
%
$
296
14.5
%
$
271
14.0
%
Casualty and other
259
13.6
%
272
14.5
%
243
12.4
%
210
10.3
%
247
12.8
%
Total International
$
541
28.4
%
$
523
27.9
%
$
527
27.0
%
$
506
24.9
%
$
518
26.8
%
Total
$
1,906
100.0
%
$
1,876
100.0
%
$
1,953
100.0
%
$
2,036
100.0
%
$
1,933
100.0
%
Net Premiums Earned by Line of Business
North America
Property and short-tail specialty
$
315
16.8
%
$
338
17.1
%
$
339
17.2
%
$
363
18.4
%
$
333
17.9
%
Other liability - occurrence
300
16.0
%
325
16.5
%
329
16.7
%
338
17.2
%
329
17.7
%
Other liability - claims made
200
10.7
%
203
10.3
%
205
10.4
%
186
9.4
%
192
10.3
%
Commercial multi-peril
195
10.4
%
193
9.8
%
195
9.9
%
203
10.3
%
201
10.8
%
Workers compensation
135
7.2
%
153
7.8
%
160
8.1
%
147
7.5
%
131
7.0
%
Commercial automobile
146
7.8
%
146
7.4
%
143
7.3
%
147
7.5
%
145
7.8
%
Other
69
3.7
%
78
4.0
%
70
3.6
%
71
3.6
%
72
3.9
%
Total North America
$
1,360
72.7
%
$
1,436
72.8
%
$
1,441
73.2
%
$
1,455
73.9
%
$
1,403
75.4
%
International
Property and short-tail specialty
$
279
14.9
%
$
283
14.3
%
$
292
14.8
%
$
278
14.1
%
$
246
13.2
%
Casualty and other
232
12.4
%
254
12.9
%
236
12.0
%
236
12.0
%
211
11.3
%
Total International
$
511
27.3
%
$
537
27.2
%
$
528
26.8
%
$
514
26.1
%
$
457
24.6
%
Total
$
1,871
100.0
%
$
1,973
100.0
%
$
1,969
100.0
%
$
1,969
100.0
%
$
1,860
100.0
%
12
Arch Capital Group Ltd. and Subsidiaries
Segment Information — Reinsurance Segment
(U.S. Dollars in millions)
Three Months Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2026
2025
2025
2025
2025
Gross premiums written
$
3,414
$
1,944
$
2,515
$
3,196
$
3,494
Premiums ceded
(1,238)
(438)
(778)
(1,137)
(1,178)
Net premiums written
2,176
1,506
1,737
2,059
2,316
Change in unearned premiums
(345)
486
278
28
(288)
Net premiums earned
1,831
1,992
2,015
2,087
2,028
Other underwriting income (1)
37
36
38
46
39
Losses and loss adjustment expenses
(948)
(1,086)
(1,040)
(1,128)
(1,356)
Acquisition expenses
(347)
(393)
(398)
(436)
(417)
Other operating expenses
(132)
(91)
(133)
(118)
(127)
Underwriting income (loss)
$
441
$
458
$
482
$
451
$
167
Underwriting Ratios
Loss ratio
51.7
%
54.5
%
51.6
%
54.1
%
66.9
%
Acquisition expense ratio
19.0
%
19.7
%
19.8
%
20.9
%
20.6
%
Other operating expense ratio (2)
5.2
%
2.8
%
4.7
%
3.5
%
4.3
%
Combined ratio
75.9
%
77.0
%
76.1
%
78.5
%
91.8
%
Catastrophic activity and prior year development:
Current accident year catastrophic events, net of reinsurance and reinstatement premiums
5.2
%
5.0
%
1.5
%
4.6
%
18.3
%
Net (favorable) adverse development in prior year loss reserves, net of related adjustments:
Loss ratio impact
(8.3)
%
(3.5)
%
(2.6)
%
(3.9)
%
(5.9)
%
Acquisition expense ratio impact
0.9
%
0.6
%
0.4
%
0.6
%
1.4
%
Total impact
(7.4)
%
(2.9)
%
(2.2)
%
(3.3)
%
(4.5)
%
Combined ratio excluding catastrophic activity and prior year development (3)
78.1
%
74.9
%
76.8
%
77.2
%
78.0
%
Net premiums written to gross premiums written
63.7
%
77.5
%
69.1
%
64.4
%
66.3
%
(1)‘Other underwriting income’ includes revenue earned from underwriting-related activities covered under existing service contracts.
(2)The ‘Other operating expense ratio’ includes ‘Other underwriting income.’
(3)See ‘Comments on Non-GAAP Financial Measures’ for further discussion.
13
Arch Capital Group Ltd. and Subsidiaries
Segment Information — Reinsurance Segment
(U.S. Dollars in millions)
Three Months Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2026
2025
2025
2025
2025
Net Premiums Written by Line of Business
Specialty
$
687
31.6
%
$
587
39.0
%
$
633
36.4
%
$
729
35.4
%
$
594
25.6
%
Property excluding property catastrophe
548
25.2
%
475
31.5
%
557
32.1
%
430
20.9
%
581
25.1
%
Casualty
478
22.0
%
301
20.0
%
399
23.0
%
308
15.0
%
499
21.5
%
Property catastrophe
307
14.1
%
48
3.2
%
64
3.7
%
484
23.5
%
477
20.6
%
Marine and aviation
78
3.6
%
52
3.5
%
60
3.5
%
68
3.3
%
121
5.2
%
Other
78
3.6
%
43
2.9
%
24
1.4
%
40
1.9
%
44
1.9
%
Total
$
2,176
100.0
%
$
1,506
100.0
%
$
1,737
100.0
%
$
2,059
100.0
%
$
2,316
100.0
%
Net Premiums Earned by Line of Business
Specialty
$
586
32.0
%
$
700
35.1
%
$
719
35.7
%
$
760
36.4
%
$
727
35.8
%
Property excluding property catastrophe
519
28.3
%
536
26.9
%
581
28.8
%
587
28.1
%
548
27.0
%
Casualty
353
19.3
%
392
19.7
%
360
17.9
%
355
17.0
%
325
16.0
%
Property catastrophe
226
12.3
%
246
12.3
%
253
12.6
%
260
12.5
%
306
15.1
%
Marine and aviation
70
3.8
%
78
3.9
%
77
3.8
%
82
3.9
%
80
3.9
%
Other
77
4.2
%
40
2.0
%
25
1.2
%
43
2.1
%
42
2.1
%
Total
$
1,831
100.0
%
$
1,992
100.0
%
$
2,015
100.0
%
$
2,087
100.0
%
$
2,028
100.0
%
Net Premiums Written by Underwriting Location
Bermuda
$
962
44.2
%
$
697
46.3
%
$
761
43.8
%
$
1,060
51.5
%
$
1,154
49.8
%
United States
512
23.5
%
386
25.6
%
488
28.1
%
447
21.7
%
477
20.6
%
Europe and other
702
32.3
%
423
28.1
%
488
28.1
%
552
26.8
%
685
29.6
%
Total
$
2,176
100.0
%
$
1,506
100.0
%
$
1,737
100.0
%
$
2,059
100.0
%
$
2,316
100.0
%
14
Arch Capital Group Ltd. and Subsidiaries
Segment Information — Mortgage Segment
(U.S. Dollars in millions)
Three Months Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2026
2025
2025
2025
2025
Gross premiums written
$
316
$
326
$
330
$
323
$
326
Premiums ceded
(50)
(59)
(56)
(70)
(60)
Net premiums written
266
267
274
253
266
Change in unearned premiums
18
23
27
28
34
Net premiums earned
284
290
301
281
300
Other underwriting income (1)
11
5
3
3
11
Losses and loss adjustment expenses
(15)
2
2
3
(3)
Acquisition expenses
(8)
(6)
(2)
(1)
(4)
Other operating expenses
(51)
(41)
(44)
(48)
(52)
Underwriting income
$
221
$
250
$
260
$
238
$
252
Underwriting Ratios
Loss ratio
5.3
%
(0.8)
%
(0.5)
%
(1.2)
%
1.1
%
Acquisition expense ratio
2.9
%
1.9
%
0.7
%
0.4
%
1.3
%
Other operating expense ratio (2)
14.1
%
12.6
%
13.3
%
16.0
%
13.7
%
Combined ratio
22.3
%
13.7
%
13.5
%
15.2
%
16.1
%
Net (favorable) adverse development in prior year loss reserves, net of related adjustments:
Loss ratio impact
(19.2)
%
(19.4)
%
(18.1)
%
(22.8)
%
(20.4)
%
Acquisition expense ratio impact
(0.7)
%
(0.9)
%
(1.1)
%
(1.3)
%
(1.4)
%
Total impact
(19.9)
%
(20.3)
%
(19.2)
%
(24.1)
%
(21.8)
%
Combined ratio excluding prior year development (3)
42.2
%
34.0
%
32.7
%
39.3
%
37.9
%
Net premiums written to gross premiums written
84.2
%
81.9
%
83.0
%
78.3
%
81.6
%
(1)‘Other underwriting income’ includes revenue earned from underwriting-related activities covered under existing service contracts.
(2)The ‘Other operating expense ratio’ includes ‘Other underwriting income.’
(3) See ‘Comments on Non-GAAP Financial Measures’ for further discussion.
15
Arch Capital Group Ltd. and Subsidiaries
Segment Information — Mortgage Segment
(U.S. Dollars in millions)
Three Months Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2026
2025
2025
2025
2025
Net Premiums Written by Underwriting Unit
U.S. primary mortgage insurance
$
204
76.7
%
$
195
73.0
%
$
197
71.9
%
$
184
72.7
%
$
203
76.3
%
U.S. credit risk transfer (CRT) and other
37
13.9
%
51
19.1
%
55
20.1
%
51
20.2
%
50
18.8
%
International mortgage insurance/reinsurance
25
9.4
%
21
7.9
%
22
8.0
%
18
7.1
%
13
4.9
%
Total
$
266
100.0
%
$
267
100.0
%
$
274
100.0
%
$
253
100.0
%
$
266
100.0
%
Net Premiums Earned by Underwriting Unit
U.S. primary mortgage insurance
$
209
73.6
%
$
201
69.3
%
$
204
67.8
%
$
188
66.9
%
$
209
69.7
%
U.S. credit risk transfer (CRT) and other
37
13.0
%
51
17.6
%
55
18.3
%
51
18.1
%
50
16.7
%
International mortgage insurance/reinsurance
38
13.4
%
38
13.1
%
42
14.0
%
42
14.9
%
41
13.7
%
Total
$
284
100.0
%
$
290
100.0
%
$
301
100.0
%
$
281
100.0
%
$
300
100.0
%
Net Premiums Written by Underwriting Location
United States
$
204
76.7
%
$
196
73.4
%
$
197
71.9
%
$
184
72.7
%
$
203
76.3
%
Other
62
23.3
%
71
26.6
%
77
28.1
%
69
27.3
%
63
23.7
%
Total
$
266
100.0
%
$
267
100.0
%
$
274
100.0
%
$
253
100.0
%
$
266
100.0
%
(U.S. Dollars in millions)
March 31, 2026
December 31, 2025
September 30, 2025
June 30, 2025
March 31, 2025
Insurance In Force (IIF) (1)
U.S. primary mortgage insurance
$
286,523
59.7
%
$
286,318
59.1
%
$
286,785
57.9
%
$
286,410
57.7
%
$
287,768
58.2
%
U.S. credit risk transfer (CRT) and other
128,338
26.7
%
132,205
27.3
%
141,889
28.7
%
145,883
29.4
%
144,517
29.2
%
International mortgage insurance/reinsurance
65,223
13.6
%
66,084
13.6
%
66,277
13.4
%
64,374
13.0
%
62,487
12.6
%
Total
$
480,084
100.0
%
$
484,607
100.0
%
$
494,951
100.0
%
$
496,667
100.0
%
$
494,772
100.0
%
Risk In Force (RIF) (2)
U.S. primary mortgage insurance
$
74,281
84.8
%
$
74,679
85.0
%
$
74,952
84.9
%
$
74,948
85.1
%
$
75,300
85.5
%
U.S. credit risk transfer and other
5,214
6.0
%
5,358
6.1
%
5,688
6.4
%
5,892
6.7
%
5,842
6.6
%
International mortgage insurance/reinsurance
8,120
9.3
%
7,864
8.9
%
7,633
8.6
%
7,221
8.2
%
6,896
7.8
%
Total
$
87,615
100.0
%
$
87,901
100.0
%
$
88,273
100.0
%
$
88,061
100.0
%
$
88,038
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.
16
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)
March 31, 2026
December 31, 2025
September 30, 2025
June 30, 2025
March 31, 2025
Total RIF by credit quality:
>=740
$
47,842
64.4
%
$
47,757
63.9
%
$
47,575
63.5
%
$
47,261
63.1
%
$
47,130
62.6
%
680-739
22,861
30.8
%
23,271
31.2
%
23,638
31.5
%
23,880
31.9
%
24,274
32.2
%
620-679
3,274
4.4
%
3,340
4.5
%
3,419
4.6
%
3,479
4.6
%
3,558
4.7
%
<620
304
0.4
%
311
0.4
%
320
0.4
%
328
0.4
%
338
0.4
%
Total
$
74,281
100.0
%
$
74,679
100.0
%
$
74,952
100.0
%
$
74,948
100.0
%
$
75,300
100.0
%
Weighted average credit score
750
749
749
749
748
Total RIF by Loan-To-Value (LTV):
95.01% and above
$
7,436
10.0
%
$
7,314
9.8
%
$
7,362
9.8
%
$
7,361
9.8
%
$
7,383
9.8
%
90.01% to 95.00%
44,147
59.4
%
44,494
59.6
%
44,720
59.7
%
44,711
59.7
%
44,901
59.6
%
85.01% to 90.00%
19,951
26.9
%
20,195
27.0
%
20,251
27.0
%
20,293
27.1
%
20,420
27.1
%
85.00% and below
2,747
3.7
%
2,676
3.6
%
2,619
3.5
%
2,583
3.4
%
2,596
3.4
%
Total
$
74,281
100.0
%
$
74,679
100.0
%
$
74,952
100.0
%
$
74,948
100.0
%
$
75,300
100.0
%
Weighted average LTV
93.2
%
93.2
%
93.2
%
93.2
%
93.2
%
Total RIF by State:
California
$
5,922
8.0
%
$
5,901
7.9
%
$
5,892
7.9
%
$
5,894
7.9
%
$
5,909
7.8
%
Texas
5,376
7.2
%
5,382
7.2
%
5,393
7.2
%
5,432
7.2
%
5,506
7.3
%
North Carolina
3,285
4.4
%
3,343
4.5
%
3,358
4.5
%
3,347
4.5
%
3,340
4.4
%
Minnesota
3,100
4.2
%
3,129
4.2
%
3,137
4.2
%
3,147
4.2
%
3,085
4.1
%
Illinois
3,037
4.1
%
3,042
4.1
%
3,046
4.1
%
3,033
4.0
%
3,025
4.0
%
Georgia
2,966
4.0
%
3,005
4.0
%
3,043
4.1
%
3,063
4.1
%
3,104
4.1
%
Michigan
2,785
3.7
%
2,816
3.8
%
2,822
3.8
%
2,816
3.8
%
2,838
3.8
%
Massachusetts
2,704
3.6
%
2,780
3.7
%
2,829
3.8
%
2,841
3.8
%
2,853
3.8
%
Ohio
2,670
3.6
%
2,666
3.6
%
2,697
3.6
%
2,702
3.6
%
2,701
3.6
%
Florida
2,659
3.6
%
2,672
3.6
%
2,690
3.6
%
2,714
3.6
%
2,758
3.7
%
Other
39,777
53.5
%
39,943
53.5
%
40,045
53.4
%
39,959
53.3
%
40,181
53.4
%
Total
$
74,281
100.0
%
$
74,679
100.0
%
$
74,952
100.0
%
$
74,948
100.0
%
$
75,300
100.0
%
Weighted average coverage (end of period RIF divided by IIF)
25.9
%
26.1
%
26.1
%
26.2
%
26.2
%
U.S. mortgage insurance total RIF, net of reinsurance (1)
$
62,366
$
60,259
$
60,662
$
60,436
$
60,226
Analysts’ persistency (2)
80.7
%
81.8
%
82.3
%
81.9
%
81.9
%
Risk-to-capital ratio — Arch MI U.S. (3)
8.4:1
8.2:1
7.9:1
8.3:1
7.8:1
PMIER sufficiency ratio — Arch MI U.S. (4)
175
%
179
%
176
%
168
%
186
%
(1) Total RIF for the U.S. mortgage insurance operations after external reinsurance.
(2) Represents the % of IIF at the beginning of a 12 month 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 March 31, 2026).
(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 became effective on 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 March 31, 2026, the changes would have reduced the available assets by 2% and resulted in a pro-forma PMIERs Sufficiency Ratio of 173%.
17
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
March 31, 2026
December 31, 2025
September 30, 2025
June 30, 2025
March 31, 2025
Total new insurance written (NIW) (1)
$
14,812
$
14,296
$
12,965
$
12,254
$
9,190
Total NIW by credit quality:
>=740
$
11,720
79.1
%
$
11,239
78.6
%
$
9,850
76.0
%
$
9,411
76.8
%
$
6,835
74.4
%
680-739
2,698
18.2
%
2,759
19.3
%
2,753
21.2
%
2,527
20.6
%
2,103
22.9
%
620-679
371
2.5
%
293
2.0
%
359
2.8
%
313
2.6
%
249
2.7
%
<620
23
0.2
%
5
0.0
%
3
0.0
%
3
0.0
%
3
0.0
%
Total
$
14,812
100.0
%
$
14,296
100.0
%
$
12,965
100.0
%
$
12,254
100.0
%
$
9,190
100.0
%
Total NIW by LTV:
95.01% and above
$
2,064
13.9
%
$
779
5.4
%
$
1,038
8.0
%
$
814
6.6
%
$
756
8.2
%
90.01% to 95.00%
5,804
39.2
%
5,894
41.2
%
5,668
43.7
%
5,632
46.0
%
4,374
47.6
%
85.01% to 90.00%
4,690
31.7
%
5,337
37.3
%
4,323
33.3
%
3,945
32.2
%
2,920
31.8
%
85.00% and below
2,254
15.2
%
2,286
16.0
%
1,936
14.9
%
1,863
15.2
%
1,140
12.4
%
Total
$
14,812
100.0
%
$
14,296
100.0
%
$
12,965
100.0
%
$
12,254
100.0
%
$
9,190
100.0
%
Total NIW monthly vs. single:
Monthly
$
14,273
96.4
%
$
13,653
95.5
%
$
12,267
94.6
%
$
11,779
96.1
%
$
8,497
92.5
%
Single
539
3.6
%
643
4.5
%
698
5.4
%
475
3.9
%
693
7.5
%
Total
$
14,812
100.0
%
$
14,296
100.0
%
$
12,965
100.0
%
$
12,254
100.0
%
$
9,190
100.0
%
Total NIW purchase vs. refinance:
Purchase
$
11,754
79.4
%
$
11,640
81.4
%
$
12,319
95.0
%
$
11,633
94.9
%
$
8,795
95.7
%
Refinance
3,058
20.6
%
2,656
18.6
%
646
5.0
%
621
5.1
%
395
4.3
%
Total
$
14,812
100.0
%
$
14,296
100.0
%
$
12,965
100.0
%
$
12,254
100.0
%
$
9,190
100.0
%
Ending number of policies in force (PIF) (2)
1,049,661
1,058,907
1,067,147
1,073,477
1,085,927
Rollforward of insured loans in default:
Beginning delinquent number of loans
22,985
21,821
20,762
21,299
22,982
Plus: new notices
11,938
12,825
12,168
10,856
11,529
Less: cures
(12,969)
(11,337)
(10,715)
(11,085)
(12,920)
Less: paid claims
(348)
(324)
(394)
(308)
(292)
Ending delinquent number of loans (2)
21,606
22,985
21,821
20,762
21,299
Ending percentage of loans in default (2)
2.06
%
2.17
%
2.04
%
1.93
%
1.96
%
Losses:
Number of claims paid
348
324
394
308
292
Total paid claims (in thousands)
$
15,557
$
15,917
$
12,934
$
12,703
$
11,950
Average paid per claim (in thousands)
$
44.7
$
49.1
$
32.8
$
41.2
$
40.9
Severity (3)
77.9
%
81.6
%
73.2
%
75.3
%
76.8
%
Average case reserve per default (in thousands)
$
16.6
$
15.3
$
16.1
$
16.8
$
16.7
(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 direct first lien paid claims divided by RIF of loans for which claims were paid, excluding paid claim settlements.
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)
March 31, 2026
December 31, 2025
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:
2016 and prior
20.7
%
$
18,794
6.6
%
$
4,776
6.4
%
4.71
%
24.9
%
$
19,384
6.8
%
$
4,923
6.6
%
5.08
%
2017
3.6
%
3,825
1.3
%
1,008
1.4
%
3.93
%
3.9
%
4,250
1.5
%
1,127
1.5
%
3.87
%
2018
5.8
%
5,306
1.9
%
1,384
1.9
%
4.45
%
6.1
%
5,673
2.0
%
1,479
2.0
%
4.48
%
2019
6.7
%
9,901
3.5
%
2,604
3.5
%
2.89
%
7.3
%
10,553
3.7
%
2,770
3.7
%
3.08
%
2020
11.8
%
29,042
10.1
%
7,980
10.7
%
1.76
%
12.3
%
30,968
10.8
%
8,487
11.4
%
1.85
%
2021
16.9
%
47,723
16.7
%
13,152
17.7
%
1.81
%
17.4
%
50,141
17.5
%
13,767
18.4
%
1.88
%
2022
16.7
%
47,648
16.6
%
12,821
17.3
%
1.87
%
14.5
%
49,492
17.3
%
13,236
17.7
%
1.87
%
2023
10.1
%
29,282
10.2
%
7,573
10.2
%
1.95
%
7.9
%
31,049
10.8
%
8,006
10.7
%
1.93
%
2024
6.3
%
36,987
12.9
%
9,296
12.5
%
1.33
%
5.0
%
39,306
13.7
%
9,840
13.2
%
1.17
%
2025
1.4
%
43,389
15.1
%
10,543
14.2
%
0.33
%
0.7
%
45,502
15.9
%
11,044
14.8
%
0.20
%
2026
0.0
%
14,626
5.1
%
3,144
4.2
%
0.03
%
Total
100.0
%
$
286,523
100.0
%
$
74,281
100.0
%
2.06
%
100.0
%
$
286,318
100.0
%
$
74,679
100.0
%
2.17
%
(1) Total reserves for losses and loss adjustment expenses, net of recoverables, was $335.9 million at March 31, 2026, compared to $320.6 million at December 31, 2025.
(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.
19
Arch Capital Group Ltd. and Subsidiaries
Segment Information — Consolidated
(U.S. Dollars in millions)
Three Months Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2026
2025
2025
2025
2025
Gross premiums written
$
6,425
$
4,809
$
5,410
$
6,196
$
6,463
Premiums ceded
(2,077)
(1,160)
(1,446)
(1,848)
(1,948)
Net premiums written
4,348
3,649
3,964
4,348
4,515
Change in unearned premiums
(362)
606
321
(11)
(327)
Net premiums earned
3,986
4,255
4,285
4,337
4,188
Other underwriting income (1)
59
52
50
62
53
Losses and loss adjustment expenses
(2,089)
(2,280)
(2,200)
(2,303)
(2,587)
Acquisition expenses
(730)
(779)
(786)
(824)
(764)
Other operating expenses
(498)
(421)
(478)
(454)
(473)
Underwriting income (loss) (2)
$
728
$
827
$
871
$
818
$
417
Underwriting Ratios
Loss ratio
52.4
%
53.6
%
51.4
%
53.1
%
61.8
%
Acquisition expense ratio
18.3
%
18.3
%
18.4
%
19.0
%
18.3
%
Other operating expense ratio (3)
11.0
%
8.7
%
10.0
%
9.1
%
10.0
%
Combined ratio
81.7
%
80.6
%
79.8
%
81.2
%
90.1
%
Catastrophic activity and prior year development:
Current accident year catastrophic events, net of reinsurance and reinstatement premiums
4.4
%
3.9
%
1.7
%
3.5
%
13.1
%
Net (favorable) adverse development in prior year loss reserves, net of related adjustments:
Loss ratio impact
(5.5)
%
(3.0)
%
(2.8)
%
(3.5)
%
(4.7)
%
Acquisition expense ratio impact
0.5
%
0.2
%
0.4
%
0.3
%
0.7
%
Total impact
(5.0)
%
(2.8)
%
(2.4)
%
(3.2)
%
(4.0)
%
Combined ratio excluding catastrophic activity and prior year development (2)
82.3
%
79.5
%
80.5
%
80.9
%
81.0
%
Components of losses and loss adjustment expenses incurred
Paid losses and loss adjustment expenses
$
1,549
$
1,951
$
1,569
$
1,744
$
1,761
Change in unpaid losses and loss adjustment expenses
540
329
631
559
826
Total losses and loss adjustment expenses
$
2,089
$
2,280
$
2,200
$
2,303
$
2,587
Net premiums written to gross premiums written
67.7
%
75.9
%
73.3
%
70.2
%
69.9
%
(1)‘Other underwriting income’ includes revenue earned from underwriting-related activities covered under existing service contracts.
(2)See ‘Comments on Non-GAAP Financial Measures’ for further discussion.
(3)The ‘Other operating expense ratio’ includes ‘Other underwriting income.’
20
Arch Capital Group Ltd. and Subsidiaries
Segment Information — Selected Information on Losses and Loss Adjustment Expenses
(U.S. Dollars in millions)
Three Months Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2026
2025
2025
2025
2025
Estimated net (favorable) adverse development in prior year loss reserves, net of related adjustments
Net impact on underwriting results:
Insurance
$
(8)
$
(1)
$
(2)
$
(2)
$
(10)
Reinsurance
(136)
(58)
(44)
(69)
(92)
Mortgage
(56)
(59)
(57)
(68)
(65)
Total
$
(200)
$
(118)
$
(103)
$
(139)
$
(167)
Impact on losses and loss adjustment expenses:
Insurance
$
(14)
$
(4)
$
(14)
$
(8)
$
(17)
Reinsurance
(152)
(69)
(53)
(81)
(119)
Mortgage
(54)
(56)
(54)
(64)
(61)
Total
$
(220)
$
(129)
$
(121)
$
(153)
$
(197)
Impact on acquisition expenses:
Insurance
$
6
$
3
$
12
$
6
$
7
Reinsurance
16
11
9
12
27
Mortgage
(2)
(3)
(3)
(4)
(4)
Total
$
20
$
11
$
18
$
14
$
30
Impact on combined ratio:
Insurance
(0.4)
%
(0.1)
%
(0.1)
%
(0.1)
%
(0.5)
%
Reinsurance
(7.4)
%
(2.9)
%
(2.2)
%
(3.3)
%
(4.5)
%
Mortgage
(19.9)
%
(20.3)
%
(19.2)
%
(24.1)
%
(21.8)
%
Total
(5.0)
%
(2.8)
%
(2.4)
%
(3.2)
%
(4.0)
%
Impact on loss ratio:
Insurance
(0.7)
%
(0.2)
%
(0.7)
%
(0.4)
%
(0.9)
%
Reinsurance
(8.3)
%
(3.5)
%
(2.6)
%
(3.9)
%
(5.9)
%
Mortgage
(19.2)
%
(19.4)
%
(18.1)
%
(22.8)
%
(20.4)
%
Total
(5.5)
%
(3.0)
%
(2.8)
%
(3.5)
%
(4.7)
%
Impact on acquisition expense ratio:
Insurance
0.3
%
0.1
%
0.6
%
0.3
%
0.4
%
Reinsurance
0.9
%
0.6
%
0.4
%
0.6
%
1.4
%
Mortgage
(0.7)
%
(0.9)
%
(1.1)
%
(1.3)
%
(1.4)
%
Total
0.5
%
0.2
%
0.4
%
0.3
%
0.7
%
Estimated net losses incurred from current accident year catastrophic events (1)
Insurance
$
79
$
64
$
43
$
58
$
177
Reinsurance
95
100
29
96
370
Total
$
174
$
164
$
72
$
154
$
547
Impact on combined ratio:
Insurance
4.2
%
3.3
%
2.2
%
2.9
%
9.5
%
Reinsurance
5.2
%
5.0
%
1.5
%
4.6
%
18.3
%
Total
4.4
%
3.9
%
1.7
%
3.5
%
13.1
%
(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 and reinsurance segments generally include (i) North American events with a Property Claim Services ("PCS") code and (ii) named catastrophic events outside of North America. Amounts not applicable for the mortgage segment.
21
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)
March 31,
December 31,
September 30,
June 30,
March 31,
2026
2025
2025
2025
2025
Investable assets:
Fixed maturities available for sale, at fair value
$
32,399
68.1
%
$
32,426
68.5
%
$
31,908
68.3
%
$
30,332
67.5
%
$
28,798
66.9
%
Fixed maturities—fair value option (1)
1,129
2.4
%
1,110
2.3
%
1,050
2.2
%
1,009
2.2
%
913
2.1
%
Total fixed maturities
33,528
70.5
%
33,536
70.8
%
32,958
70.5
%
31,341
69.7
%
29,711
69.0
%
Equity securities, at fair value
1,766
3.7
%
1,864
3.9
%
1,805
3.9
%
1,715
3.8
%
1,618
3.8
%
Equity securities—fair value option (1)
4
0.0
%
5
0.0
%
5
0.0
%
5
0.0
%
5
0.0
%
Total equity securities
1,770
3.7
%
1,869
3.9
%
1,810
3.9
%
1,720
3.8
%
1,623
3.8
%
Other investments—fair value option (1)
2,129
4.5
%
1,957
4.1
%
1,911
4.1
%
1,810
4.0
%
1,866
4.3
%
Investments accounted for using the equity method (2)
6,652
14.0
%
6,453
13.6
%
6,232
13.3
%
6,566
14.6
%
6,340
14.7
%
Short-term investments available for sale, at fair value
2,638
5.5
%
2,625
5.5
%
2,351
5.0
%
2,788
6.2
%
2,477
5.8
%
Short-term investments—fair value option (1)
69
0.1
%
64
0.1
%
61
0.1
%
68
0.2
%
104
0.2
%
Total short-term investments
2,707
5.7
%
2,689
5.7
%
2,412
5.2
%
2,856
6.4
%
2,581
6.0
%
Cash
914
1.9
%
993
2.1
%
1,063
2.3
%
983
2.2
%
1,187
2.8
%
Securities transactions entered into but not settled at the balance sheet date
(155)
(0.3)
%
(128)
(0.3)
%
360
0.8
%
(338)
(0.8)
%
(254)
(0.6)
%
Total investable assets held by the Company
$
47,545
100.0
%
$
47,369
100.0
%
$
46,746
100.0
%
$
44,938
100.0
%
$
43,054
100.0
%
Average effective duration of fixed maturities (in years)
3.43
3.34
3.24
3.48
3.32
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 investments accounted for using the equity method are recorded as “equity in net income of investments 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”).
22
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
March 31,
December 31,
September 30,
June 30,
March 31,
2026
2025
2025
2025
2025
Composition of pre-tax net investment income:
Fixed maturities
$
384
$
384
$
379
$
360
$
342
Short-term investments
24
27
25
24
26
Equity securities (dividends)
8
10
10
10
11
Other (1)
21
27
19
35
28
Gross investment income
437
448
433
429
407
Investment expenses
(29)
(14)
(25)
(24)
(29)
Pre-tax net investment income
$
408
$
434
$
408
$
405
$
378
Per share
$
1.13
$
1.18
$
1.08
$
1.07
$
0.99
Pre-tax equity in net income of investments accounted for using the equity method
160
155
134
162
53
Per share
$
0.44
$
0.42
$
0.36
$
0.43
$
0.14
Investment income yield, at amortized cost (2):
Pre-tax
3.99
%
4.22
%
4.07
%
4.25
%
4.16
%
After-tax
3.26
%
3.45
%
3.32
%
3.43
%
3.35
%
Total return on investments (3)
0.10
%
1.36
%
1.80
%
3.09
%
2.02
%
(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 investments 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.
23
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 March 31, 2026
Corporates
$
14,929
$
122
$
(218)
$
(96)
$
(6)
$
15,031
99.3
%
44.5
%
U.S. government and government agencies
7,427
10
(55)
(45)
—
7,472
99.4
%
22.2
%
Asset-backed securities
3,737
7
(30)
(23)
(5)
3,765
99.3
%
11.1
%
Non-U.S. government securities
2,997
27
(102)
(75)
(1)
3,073
97.5
%
8.9
%
Residential mortgage-backed securities
2,892
19
(31)
(12)
—
2,904
99.6
%
8.6
%
Commercial mortgage-backed securities
1,391
5
(7)
(2)
(1)
1,394
99.8
%
4.1
%
Municipal bonds
155
—
(4)
(4)
—
159
97.5
%
0.5
%
Total
$
33,528
$
190
$
(447)
$
(257)
$
(13)
$
33,798
99.2
%
100.0
%
At December 31, 2025
Corporates
$
15,160
$
265
$
(142)
$
123
$
(10)
$
15,047
100.8
%
45.2
%
U.S. government and government agencies
7,450
23
(21)
2
—
7,448
100.0
%
22.2
%
Asset-backed securities
3,574
20
(15)
5
(8)
3,577
99.9
%
10.7
%
Non-U.S. government securities
3,273
53
(81)
(28)
(1)
3,302
99.1
%
9.8
%
Residential mortgage-backed securities
2,705
34
(21)
13
—
2,692
100.5
%
8.1
%
Commercial mortgage-backed securities
1,212
11
(5)
6
(1)
1,207
100.4
%
3.6
%
Municipal bonds
162
—
(4)
(4)
—
166
97.6
%
0.5
%
Total
$
33,536
$
406
$
(289)
$
117
$
(20)
$
33,439
100.3
%
100.0
%
24
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)
March 31,
December 31,
September 30,
June 30,
March 31,
2026
2025
2025
2025
2025
Credit quality distribution of total fixed maturities (1):
U.S. government and government agencies (2)
$
9,665
28.8
%
$
9,561
28.5
%
$
8,409
25.5
%
$
8,355
26.7
%
$
7,827
26.3
%
AAA
5,769
17.2
%
5,667
16.9
%
5,425
16.5
%
4,745
15.1
%
4,698
15.8
%
AA
2,554
7.6
%
2,564
7.6
%
2,449
7.4
%
2,491
7.9
%
2,287
7.7
%
A
6,405
19.1
%
6,448
19.2
%
6,904
20.9
%
6,645
21.2
%
5,931
20.0
%
BBB
6,526
19.5
%
6,533
19.5
%
7,167
21.7
%
6,673
21.3
%
6,625
22.3
%
BB
1,340
4.0
%
1,330
4.0
%
1,175
3.6
%
1,110
3.5
%
1,051
3.5
%
B
806
2.4
%
734
2.2
%
685
2.1
%
657
2.1
%
605
2.0
%
Lower than B
35
0.1
%
35
0.1
%
29
0.1
%
30
0.1
%
26
0.1
%
Not rated
428
1.3
%
664
2.0
%
715
2.2
%
635
2.0
%
661
2.2
%
Total fixed maturities, at fair value
$
33,528
100.0
%
$
33,536
100.0
%
$
32,958
100.0
%
$
31,341
100.0
%
$
29,711
100.0
%
Maturity profile of total fixed maturities:
Due in one year or less
$
582
1.7
%
$
412
1.2
%
$
570
1.7
%
$
518
1.7
%
$
533
1.8
%
Due after one year through five years
17,540
52.3
%
17,680
52.7
%
17,379
52.7
%
17,632
56.3
%
16,570
55.8
%
Due after five years through ten years
6,659
19.9
%
7,149
21.3
%
7,047
21.4
%
6,350
20.3
%
6,179
20.8
%
Due after 10 years
727
2.2
%
804
2.4
%
798
2.4
%
847
2.7
%
656
2.2
%
25,508
76.1
%
26,045
77.7
%
25,794
78.3
%
25,347
80.9
%
23,938
80.6
%
Residential mortgage-backed securities
2,892
8.6
%
2,705
8.1
%
2,766
8.4
%
2,386
7.6
%
1,755
5.9
%
Commercial mortgage-backed securities
1,391
4.1
%
1,212
3.6
%
1,249
3.8
%
838
2.7
%
931
3.1
%
Asset-backed securities
3,737
11.1
%
3,574
10.7
%
3,149
9.6
%
2,770
8.8
%
3,087
10.4
%
Total fixed maturities, at fair value
$
33,528
100.0
%
$
33,536
100.0
%
$
32,958
100.0
%
$
31,341
100.0
%
$
29,711
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.
25
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)
March 31,
December 31,
September 30,
June 30,
March 31,
2026
2025
2025
2025
2025
Sector:
Industrials
$
8,286
55.5
%
$
7,840
51.7
%
$
8,262
51.5
%
$
7,974
51.7
%
$
7,157
49.1
%
Financials
5,450
36.5
%
6,066
40.0
%
6,251
39.0
%
5,939
38.5
%
5,881
40.3
%
Utilities
942
6.3
%
949
6.3
%
1,225
7.6
%
1,201
7.8
%
1,039
7.1
%
All other (1)
251
1.7
%
305
2.0
%
306
1.9
%
303
2.0
%
512
3.5
%
Total
$
14,929
100.0
%
$
15,160
100.0
%
$
16,044
100.0
%
$
15,417
100.0
%
$
14,589
100.0
%
Credit quality distribution (2):
AAA
$
176
1.2
%
$
195
1.3
%
$
195
1.2
%
$
180
1.2
%
$
194
1.3
%
AA
1,093
7.3
%
968
6.4
%
807
5.0
%
953
6.2
%
915
6.3
%
A
5,173
34.7
%
5,315
35.1
%
5,882
36.7
%
5,712
37.1
%
5,092
34.9
%
BBB
6,111
40.9
%
6,210
41.0
%
6,891
43.0
%
6,392
41.5
%
6,308
43.2
%
BB
1,266
8.5
%
1,262
8.3
%
1,128
7.0
%
1,054
6.8
%
1,001
6.9
%
B
800
5.4
%
728
4.8
%
676
4.2
%
652
4.2
%
604
4.1
%
Lower than B
35
0.2
%
35
0.2
%
29
0.2
%
30
0.2
%
26
0.2
%
Not rated
275
1.8
%
447
2.9
%
436
2.7
%
444
2.9
%
449
3.1
%
Total
$
14,929
100.0
%
$
15,160
100.0
%
$
16,044
100.0
%
$
15,417
100.0
%
$
14,589
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 March 31, 2026:
(U.S. Dollars in millions)
Fair
Value
% of Asset Class
% of Investable Assets
Credit Quality (1)
Issuer:
Morgan Stanley
$
356
2.4
%
0.7
%
A/A1
JPMorgan Chase & Co.
328
2.2
%
0.7
%
A/A1
Bank of America Corporation
322
2.2
%
0.7
%
A-/A1
The Goldman Sachs Group, Inc.
277
1.9
%
0.6
%
BBB+/A2
Amazon.com, Inc.
240
1.6
%
0.5
%
AA/A1
Citigroup Inc.
208
1.4
%
0.4
%
A-/A2
Wells Fargo & Company
192
1.3
%
0.4
%
BBB+/A1
UBS Group AG
181
1.2
%
0.4
%
A-/A1
The Toronto-Dominion Bank
179
1.2
%
0.4
%
A-/A2
Hyundai Motor Company
156
1.0
%
0.3
%
A-/A3
Total
$
2,439
16.3
%
5.1
%
(1) Average credit ratings assigned by S&P and Moody’s, respectively.
26
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 March 31, 2026
Residential mortgage-backed securities
$
2,232
$
656
$
—
$
—
$
—
$
4
$
2,892
Commercial mortgage-backed securities
6
886
139
45
223
92
1,391
Asset-backed securities
—
2,117
295
1,007
190
128
3,737
Total
$
2,238
$
3,659
$
434
$
1,052
$
413
$
224
$
8,020
At December 31, 2025
Residential mortgage-backed securities
$
2,105
$
598
$
2
$
—
$
—
$
—
$
2,705
Commercial mortgage-backed securities
6
730
159
47
193
77
1,212
Asset-backed securities
—
2,026
310
904
128
206
3,574
Total
$
2,111
$
3,354
$
471
$
951
$
321
$
283
$
7,491
27
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 include, but are not limited to, 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 investments 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 investments 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 investments 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 investments 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 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 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 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 10.
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. Effective in the 2025 first quarter, the ‘Other operating expense ratio’ includes ‘Other underwriting income.’
Total return on investments includes investment income, equity in net income or loss of investments 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.
28
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
March 31,
December 31,
September 30,
June 30,
March 31,
2026
2025
2025
2025
2025
Net income available to Arch common shareholders
$
1,037
$
1,228
$
1,340
$
1,227
$
564
Net realized (gains) losses (1)
87
(22)
(210)
(229)
(3)
Equity in net (income) of investments accounted for using the equity method
(160)
(155)
(134)
(162)
(53)
Net foreign exchange (gains) losses
(21)
6
7
88
27
Transaction costs and other
18
26
21
18
10
Income tax expense (benefit) (2)
(60)
9
18
37
42
After-tax operating income available to Arch common shareholders
$
901
$
1,092
$
1,042
$
979
$
587
Diluted per common share results:
Net income available to Arch common shareholders
$
2.88
$
3.35
$
3.56
$
3.23
$
1.48
Net realized (gains) losses (1)
0.24
(0.06)
(0.56)
(0.60)
(0.01)
Equity in net (income) of investments accounted for using the equity method
(0.44)
(0.42)
(0.36)
(0.43)
(0.14)
Net foreign exchange (gains) losses
(0.06)
0.02
0.02
0.23
0.07
Transaction costs and other
0.05
0.07
0.06
0.05
0.03
Income tax expense (benefit) (2)
(0.17)
0.02
0.05
0.10
0.11
After-tax operating income available to Arch common shareholders
$
2.50
$
2.98
$
2.77
$
2.58
$
1.54
Weighted average common shares and common share equivalents outstanding - diluted
359.7
366.6
376.1
379.9
381.9
Beginning common shareholders’ equity
$
23,376
$
22,889
$
22,211
$
20,715
$
19,990
Ending common shareholders’ equity
23,358
23,376
22,889
22,211
20,715
Average common shareholders’ equity
$
23,367
$
23,133
$
22,550
$
21,463
$
20,353
Annualized net income return on average common equity
17.8
%
21.2
%
23.8
%
22.9
%
11.1
%
Annualized operating return on average common equity
15.4
%
18.9
%
18.5
%
18.2
%
11.5
%
(1) Net realized gains or losses include, but are not limited to, 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.
(2) Income tax expense (benefit) on net realized gains or losses, equity in net income of investments 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.
29
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
March 31,
December 31,
September 30,
June 30,
March 31,
2026
2025
2025
2025
2025
Arch Operating Income Components:
Income (loss) before income taxes and income (loss) from operating affiliates
$
1,109
$
1,387
$
1,503
$
1,411
$
678
Net realized (gains) losses
87
(22)
(210)
(229)
(3)
Equity in net (income) of investments accounted for using the equity method
(160)
(155)
(134)
(162)
(53)
Net foreign exchange (gains) losses
(21)
6
7
88
27
Transaction costs and other
18
26
21
18
10
Income (loss) from operating affiliates
36
61
62
40
17
Pre-tax operating income available to Arch (b)
1,069
1,303
1,249
1,166
676
Income tax (expense) benefit (a)
(158)
(201)
(197)
(177)
(79)
After-tax operating income available to Arch
911
1,102
1,052
989
597
Preferred dividends
(10)
(10)
(10)
(10)
(10)
After-tax operating income available to Arch common shareholders
$
901
$
1,092
$
1,042
$
979
$
587
Effective tax rate on pre-tax operating income (loss) available to Arch (a)/(b)
14.8
%
15.4
%
15.8
%
15.2
%
11.7
%
30
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)
March 31,
December 31,
September 30,
June 30,
March 31,
2026
2025
2025
2025
2025
Debt:
Arch senior notes, due May 1, 2034 ($300 principal, 7.35%)
$
300
$
300
$
300
$
300
$
300
Arch-U.S. senior notes, due November 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
(21)
(21)
(22)
(22)
(22)
Revolving credit agreement borrowings, due August 23, 2028
—
—
—
—
—
Total debt
$
2,729
$
2,729
$
2,728
$
2,728
$
2,728
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)
23,358
23,376
22,889
22,211
20,715
Total shareholders’ equity available to Arch
$
24,188
$
24,206
$
23,719
$
23,041
$
21,545
Total capital available to Arch
$
26,917
$
26,935
$
26,447
$
25,769
$
24,273
Common shares outstanding, net of treasury shares (b)
352.9
359.0
367.3
375.4
375.6
Book value per common share (3) (a)/(b)
$
66.19
$
65.11
$
62.32
$
59.17
$
55.15
Leverage ratios:
Senior notes/total capital available to Arch
10.1
%
10.1
%
10.3
%
10.6
%
11.2
%
Revolving credit agreement borrowings/total capital available to Arch
—
%
—
%
—
%
—
%
—
%
Debt/total capital available to Arch
10.1
%
10.1
%
10.3
%
10.6
%
11.2
%
Preferred/total capital available to Arch
3.1
%
3.1
%
3.1
%
3.2
%
3.4
%
Debt and preferred/total capital available to Arch
13.2
%
13.2
%
13.5
%
13.8
%
14.7
%
(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
March 31,
December 31,
September 30,
June 30,
March 31,
March 31,
2026
2025
2025
2025
2025
2026
Effect of share repurchases:
Aggregate cost of shares repurchased
$
783.0
$
797.9
$
732.3
$
163.2
$
196.4
$
8,566.0
Shares repurchased
8.3
8.9
8.2
1.9
2.2
463.3
Average price per share repurchased
$
94.01
$
90.04
$
88.82
$
87.94
$
88.89
$
18.49
Remaining share repurchase authorization (1)
$
324.0
(1) Repurchases under the share repurchase authorization may be effected from time to time in open market or privately negotiated transactions. On April 19, 2026, the Company increased its authorization for its existing share repurchase program by $3.0 billion.
31
Mentions · how they’re counted
| Category | Underlined | Word counter | Model’s count |
|---|---|---|---|
| AI AI, artificial intelligence, generative AI, machine learning, large language model, LLM | 1 | 1 | 0 |
| Layoffs layoffs, RIF, headcount reduction, workforce optimization, restructuring | 11 | — | 0 |
| Recession recession, downturn, contraction, slowdown | 0 | 0 | 0 |
| Tariffs tariff, trade war, trade barriers, trade restrictions, trade policy | 0 | 0 | 0 |
| Buybacks share repurchase, buyback program | 9 | — | 1 |
Underlines use the same word lists the scores use. AI, recession and tariffs follow Palanor’s word counter, so those counts match it exactly on the same text. Layoffs and buybacks use the terms the model was given. The model’s count is an estimate by meaning, not by string, so it can differ from the underlines.
Not placed in the text
These quotes are stored with a score, but no passage here matches them closely enough to highlight. Rather than point at the wrong passage, they are listed as stored.
Theme · Underwriting performance improvement
“Underwriting income (loss) $728 vs $417, Combined ratio 81.7% vs 90.1%”
Theme · Reinsurance segment strength
“Reinsurance: Underwriting income $441, Combined ratio 75.9%”
Theme · Mortgage segment profitability
“Mortgage: Underwriting income $221, Combined ratio 22.3%”
Theme · Investment portfolio composition
“Total investable assets $47,545, Fixed maturities 70.5% of portfolio”
Theme · Reserve development
“Net (favorable) adverse development in prior year loss reserves $(200)”
Theme · Catastrophe exposure
“Current accident year catastrophic events, net of reinsurance 4.4%”
Source: SEC EDGAR · public domain · Highlights by Palanor