AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Evidence
Other factors, such as our proven cycle management skills, our expertise in specialty lines of business and our use of technologies and data analytics are other factors, may differentiate us from our competitors.
Risk factors: claimed competitive differentiation · Filed 26/02/2026
mortgage insurance business, in addition to utilizing reinsurance, we have developed a proprietary risk model that simulates the maximum probable loss resulting from a severe economic event impacting the housing market.
Risk management: proprietary mortgage risk model · Filed 26/02/2026
market. These operations include providers which are approved as eligible mortgage insurers by Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”), each a GSE.
Business: eligible mortgage insurer approvals · Filed 26/02/2026
Year Ended December 31, (in millions) 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 Net income available to Arch common shareholders (a) $4,359 $4,272 $4,403 $1,436 $2,093 $1,364 $1,595 $714 $567 $665 Net realized (gains) losses (464) (197) 165 663 (307) (815) (350) 301 (142) (47) Equity in net (income) of investment funds accounted for using the equity method (504) (580) (278) (115) (366) (147) (124) (46) (142) (48) Net foreign exchange losses (gains) 128 (75) 62 (102) (43) 81 11 (60) 114 (32) Transaction costs and other 75 81 6 — 1 10 14 12 22 42 Loss on redemption of preferred shares — — — — 15 — — 3 7 — Income tax expense (benefit) 106 41 (1,157) (42) 42 64 16 (15) 22 (2) After-tax operating income available to Arch common shareholders (b) $3,700 $3,542 $3,201 $1,840 $1,435 $557 $1,163 $909 $447 $577 Beginning common shareholders’ equity $19,990 $17,523 $12,080 $12,716 $12,326 $10,717 $8,660 $8,324 $7,481 $5,842 Ending common shareholders’ equity 23,376 19,990 17,523 12,080 12,716 12,326 10,717 8,660 8,324 7,481 Average common shareholders’ equity (c) $21,683 $18,757 $14,802 $12,398 $12,521 $11,522 $9,689 $8,492 $7,903 $6,114 Annualized net income return on average common equity (a)/(c) 20.1% 22.8% 29.7% 11.6% 16.7% 11.8% 16.5% 8.4% 7.2% 10.9% Annualized operating return on average common equity (b)/(c) 17.1% 18.9% 21.6% 14.8% 11.5% 4.8% 12.0% 10.7% 5.7% 9.4% B-2 | 2026 PROXY STATEMENT Tangible book value per common share represents common shareholders’ equity available to Arch less goodwill and intangible assets (excluding amounts attributable to non-controlling interests).
Annex B: ten-year earnings and common-equity returns · Filed 24/03/2026
“Our leadership positions in Specialty Insurance, including our Mortgage and Reinsurance operations, provide us with a meaningful competitive advantage.
CEO statement: claimed competitive advantage · Filed 28/07/2026
Net premiums written were $1.8 billion, down roughly 10% when compared to the 2025 second quarter, reflecting pricing pressures and higher retentions by cedants in certain property and short‑tail lines along with targeted increased retrocessions.
Current outlook: reinsurance pricing pressure and premium decline · Filed 04/08/2026
Dollars in millions)
Three Months Ended June 30,
2026
2025
% Change
Gross premiums written
$
6,126
$
6,196
(1.1)
Net premiums written
4,049
4,348
(6.9)
Net premiums earned
3,985
4,337
(8.1)
Underwriting income (1)
657
818
(19.7)
Underwriting Ratios
% Point Change
Loss ratio
55.1
%
53.1
%
2.0
Underwriting expense ratio (2)
28.4
%
28.1
%
0.3
Combined ratio
83.5
%
81.2
%
2.3
Combined ratio excluding catastrophic activity and prior year development (1)
82.5
%
80.9
%
1.6
(1) See ‘Comments on Non-GAAP Financial Measures’ for further details.
Consolidated underwriting results: quarterly margin deterioration · Filed 28/07/2026
Mortgage. Mortgage guaranty insurance policies are contracts that are generally non-cancelable by the insurer, are renewable at a fixed price, and provide for payment of premiums on a monthly, annual or single basis.
Accounting policies: fixed-price mortgage insurance renewals · Filed 26/02/2026
Upon renewal, the Company is not able to re-underwrite or re-price its policies.
Accounting policies: mortgage renewal repricing restriction · Filed 26/02/2026
The insurance and reinsurance industry is highly competitive.
Risk factors: competitive industry · Filed 26/02/2026
As increased capacity has contributed to competitive conditions across portions of the reinsurance market, our underwriting teams are actively managing the cycle by selectively writing new business where returns are attractive and adjusting participation where pricing does not meet our minimum return thresholds.
Current outlook: capacity growth and participation adjustments · Filed 04/08/2026
The persistency rate was 79.9% for the Arch MI U.S.
Mortgage results: persistency rate · Filed 04/08/2026
portfolio of primary mortgage insurance policies at June 30, 2026, compared to 81.9% at June 30, 2025.
Mortgage results: persistency comparison · Filed 04/08/2026
The persistency rate represents the percentage of mortgage insurance in force at the beginning of a 12 month period that remains in force at the end of such period.
Mortgage results: persistency definition · Filed 04/08/2026
A portion of premium payments may be refundable if the insured cancels coverage, which generally occurs when the loan is repaid, the loan amortizes to a sufficiently low amount to trigger a lender permitted or legally required cancellation, or the value of the property has increased sufficiently in accordance with the terms of the contract.
Mortgage accounting: coverage cancellation conditions · Filed 26/02/2026
Underwriting quality remained excellent with a consolidated combined ratio of 82.8% in 2025, a modest 30-basis point increase from 2024.
Compensation discussion: 2025 consolidated combined ratio · Filed 24/03/2026
Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Net income available to Arch common shareholders $ 1,047 $ 1,227 $ 2,084 $ 1,791 Net realized (gains) losses (1) 17 (229) 104 (232) Equity in net (income) loss of investments accounted for using the equity method (196) (162) (356) (215) Net foreign exchange (gains) losses (10) 88 (31) 115 Transaction costs and other 32 18 50 28 Income tax expense (benefit) (2) 3 37 (57) 79 After-tax operating income available to Arch common shareholders $ 893 $ 979 $ 1,794 $ 1,566 Beginning common shareholders’ equity $ 23,358 $ 20,715 $ 23,376 $ 19,990 Ending common shareholders’ equity 23,200 22,211 23,200 22,211 Average common shareholders’ equity $ 23,279 $ 21,463 $ 23,288 $ 21,101 Annualized net income return on average common equity % 18.0 22.9 17.9 17.0 Annualized operating return on average common equity % 15.3 18.2 15.4 14.8 (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 or losses on derivative instruments, changes in the allowance for credit losses on financial assets and gains or losses realized from the acquisition or disposition of subsidiaries.
Results of operations: earnings and common-equity return reconciliation · Filed 04/08/2026
(1,160)
(1,446)
(1,848)
(4,154)
(3,796)
Net premiums written
4,049
4,348
3,649
3,964
4,348
8,397
8,863
Change in unearned premiums
(64)
(362)
606
321
(11)
(426)
(338)
Net premiums earned
3,985
3,986
4,255
4,285
4,337
7,971
8,525
Other underwriting income (1)
57
59
52
50
62
116
115
Losses and loss adjustment expenses
(2,196)
(2,089)
(2,280)
(2,200)
(2,303)
(4,285)
(4,890)
Acquisition expenses
(718)
(730)
(779)
(786)
(824)
(1,448)
(1,588)
Other operating expenses
(471)
(498)
(421)
(478)
(454)
(969)
(927)
Underwriting income (loss) (2)
$
657
$
728
$
827
$
871
$
818
$
1,385
$
1,235
Underwriting Ratios
Loss ratio
55.1
%
52.4
%
53.6
%
51.4
%
53.1
%
53.8
%
57.4
%
Acquisition expense ratio
18.0
%
18.3
%
18.3
%
18.4
%
19.0
%
18.2
%
18.6
%
Other operating expense ratio (3)
10.4
%
11.0
%
8.7
%
10.0
%
9.1
%
10.7
%
9.5
%
Combined ratio
83.5
%
81.7
%
80.6
%
79.8
%
81.2
%
82.7
%
85.5
%
Catastrophic activity and prior year development:
Consolidated underwriting results: first-half earnings and combined ratios · Filed 28/07/2026
Through the first half of the year, we have repurchased approximately 94% of our net income in our own shares.
Current outlook: repurchases relative to net income · Filed 04/08/2026
dollars in millions) Statement of Cash Flows (Parent Company Only) Year Ended December 31, 2025 2024 2023 Operating Activities: Net Cash Provided By Operating Activities $ 1,873 $ 2,398 $ 46 Investing Activities: Net (purchases) sales of short-term investments 3 (26) (8) Acquisitions, net of cash — (450) — Other 10 5 1 Net Cash Used For Investing Activities 13 (471) (7) Financing Activities: Purchases of common shares under share repurchase program (1,889) (24) — Proceeds from common shares issued, net 50 7 (2) Common dividends paid (7) (1,866) — Preferred dividends paid (40) (40) (40) Net Cash Used For Financing Activities (1,886) (1,923) (42) Increase (decrease) in cash and restricted cash — 4 (3) Cash and restricted cash, beginning of year 13 9 12 Cash and restricted cash, end of period $ 13 $ 13 $ 9 The financial information for the parent company (Arch Capital Group Ltd.) should be read in conjunction with the Consolidated Financial Statements and Notes thereto.
Schedule II: parent-only cash flows and distributions · Filed 26/02/2026
The 2.8% increase in book value per share for the 2026 second quarter primarily reflected strong underwriting and investment returns, partially offset by $1.2 billion of shares purchased at an average price higher than the book value per share.
Financial measures: repurchase effect on book value per share · Filed 04/08/2026
Equity incentives in the form of stock options, restricted shares and performance share awards account for approximately 68% of our CEO’s target compensation and 54% of target compensation in the case of our other NEOs.
Compensation discussion: target equity compensation proportions · Filed 24/03/2026
Under the terms of the LTI Plan, the final number of shares ultimately earned by the eligible executives is a function of the absolute growth in the TBVPS of the Company’s common shares over a three-year performance period, supplemented by a TSR modifier.
2023–2025 performance shares: three-year performance terms · Filed 24/03/2026
At the end of 2025, the TBVPS grew to $61.71, a 33.65% annualized increase over the performance period, resulting in a payout percentage of 200%, based on TBVPS growth.
2023–2025 performance shares: completed-period payout calculation · Filed 24/03/2026
Based on Arch Capital’s TSR over the three‐year performance period of 56.3%, which placed it in the 38.9th percentile of our Performance Peer Group, the resulting TSR multiplier was 100.0%.
2023–2025 performance shares: relative TSR multiplier · Filed 24/03/2026
All of our NEOs are in compliance with our share
ownership guidelines.
Executive ownership: guideline compliance · Filed 24/03/2026
These opportunities were partially offset by competitive rate pressure in select property and short‑tail lines, as well as our decision not to renew certain middle market commercial program business we acquired from Allianz in 2024 (the “MCE Acquisition”).
Current outlook: pricing pressure and acquired-program nonrenewals · Filed 05/05/2026
We have substantially completed the data and system migration of the acquired businesses, positioning the platform to pursue scalable growth and enhance client and distribution experience.
Current outlook: acquisition data and system migration · Filed 05/05/2026
The 2026 second quarter ratio reflected transitional expenses associated with the MCE Acquisition, and a lower level of net premiums earned compared to the 2025 second quarter.
Insurance results: continuing acquisition transition expenses · Filed 28/07/2026
It is impracticable to provide historical supplemental pro forma financial information along with revenue and earnings subsequent to the acquisition due to a variety of factors, including access to historical information and the operations of acquirees being integrated within the Company shortly after closing and not operating as discrete operations within the Company’s organizational structure.
Acquisition accounting: unavailable standalone performance information · Filed 04/08/2026
Papadopoulo and Vollaro, are independent as defined under the applicable listing standards of Nasdaq, and the Audit, Compensation and Human Capital and Nominating and Governance Committees of our Board are composed entirely of independent directors.
Governance: director and committee independence · Filed 24/03/2026
In addition to feedback provided during the course of Board meetings, the independent directors regularly meet in executive session without management present and have regular access to our management team.
Governance: independent executive sessions · Filed 24/03/2026
Board Structure Our Board has reviewed its classified board structure and continues to believe that this structure provides stability and continuity in the Board’s membership and in the direction it provides to the Company’s management.
Governance: classified board structure · Filed 24/03/2026
Arch Insurance (U.K.) and AMAL must maintain a margin of solvency at all times under the Solvency II Directive from the European Insurance and Occupational Pensions Authority.
Statutory information: Solvency II regime for Arch Insurance (U.K.) and AMAL · Filed 26/02/2026
The regulations stipulate that insurers are required to maintain the minimum capital requirement and solvency capital requirement at all times.
Statutory information: minimum and solvency capital requirements · Filed 26/02/2026
At December 31, 2025 and 2024, these requirements were met.
Statutory information: capital requirement compliance · Filed 26/02/2026
(“Arch Re Bermuda”), our Bermuda based reinsurer and insurer, which can pay approximately $4.5 billion to Arch Capital during the remainder of 2026 without providing an affidavit to the Bermuda Monetary Authority.
Liquidity: remaining Arch Re Bermuda distribution capacity · Filed 04/08/2026
However, the ability of our regulated insurance and reinsurance subsidiaries to pay dividends or make distributions or other payments to us is limited by the applicable local laws and relevant regulations of the various countries and states in which we operate.
Liquidity: regulatory restrictions on subsidiary distributions · Filed 26/02/2026
After-tax operating income available to Arch common shareholders (1)
$
893
$
979
(8.8)
%
$
1,794
$
1,566
14.6
%
Per diluted share
$
2.56
$
2.58
(0.8)
%
$
5.06
$
4.11
23.1
%
Comprehensive income (loss) available to Arch
$
977
$
1,597
(38.8)
%
$
1,686
$
2,483
(32.1)
%
Net cash provided by operating activities
$
1,322
$
1,124
17.6
%
$
2,510
$
2,582
(2.8)
%
Weighted average common shares and common share equivalents outstanding — diluted
348.8
379.9
(8.2)
%
354.2
380.8
(7.0)
%
Financial measures:
Change in book value per common share during period
2.8
%
7.3
%
(4.5)
4.5
%
11.4
%
(6.9)
Annualized net income return on average common equity
18.0
%
22.9
%
(4.9)
17.9
%
17.0
%
0.9
Annualized operating return on average common equity (1)
15.3
%
18.2
%
(2.9)
15.4
%
14.8
%
0.6
Total return on investments (3)
1.62
%
3.09
%
-148 bps
1.72
%
5.17
%
-345 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.
Financial highlights: operating cash flow and investment returns · Filed 28/07/2026
Repayments of borrowings
(398)
—
—
—
—
(398)
—
Common dividends paid
—
(5)
—
—
(2)
(5)
(7)
Preferred dividends paid
(10)
(10)
(10)
(10)
(10)
(20)
(20)
Other
—
(12)
—
(2)
—
(12)
(2)
Net cash provided by (used for) financing activities
429
(827)
(778)
(743)
(128)
(398)
(369)
Effects of exchange rate changes on foreign currency cash and restricted cash
9
(8)
4
(14)
55
1
71
Increase (decrease) in cash and restricted cash
225
(286)
213
46
(177)
(61)
48
Cash and restricted cash, beginning of period
1,781
2,067
1,854
1,808
1,985
2,067
1,760
Cash and restricted cash, end of period
$
2,006
$
1,781
$
2,067
$
1,854
$
1,808
$
2,006
$
1,808
Income taxes paid (received)
$
169
$
22
$
143
$
166
$
131
$
191
$
149
Interest paid
$
65
$
—
$
63
$
—
$
64
$
65
$
64
7
Arch Capital Group Ltd.
Cash flows: debt repayment, distributions and cash balances · Filed 28/07/2026
(U.S. Dollars and shares in millions, except per share data)
June 30,
March 31,
December 31,
September 30,
June 30,
2026
2026
2025
2025
2025
Debt:
Arch 7.350% senior notes, due May 1, 2034
$
300
$
300
$
300
$
300
$
300
Arch 5.250% senior notes, due June 15, 2036
600
—
—
—
—
Arch 3.635% senior notes, due June 30, 2050
1,000
1,000
1,000
1,000
1,000
Arch 5.950% senior notes, due June 15, 2056
1,400
—
—
—
—
Arch-U.S.
Capital structure: senior note coupons and maturities · Filed 28/07/2026
5.144% senior notes, due November 1, 2043 (1)
281
500
500
500
500
Arch Finance 4.011% senior notes, due December 15, 2026 (2)
500
500
500
500
500
Arch Finance 5.031% senior notes, due December 15, 2046 (2)
251
450
450
450
450
Deferred debt costs on senior notes
(46)
(21)
(21)
(22)
(22)
Revolving credit agreement borrowings, due August 23, 2028
—
—
—
—
—
Total debt
$
4,286
$
2,729
$
2,729
$
2,728
$
2,728
Shareholders’ equity available to Arch:
Capital structure: near-term maturity, revolving borrowings and total debt · Filed 28/07/2026
dollars in millions) Column A Column B Column C Column D Column E Column F Column G Column H Column I Column J Column K Affiliation with Registrant Deferred Acquisition Costs Reserves for Losses and Loss Adjustment Expenses Discount, if any, deducted in Column C Unearned Premiums Net Premiums Earned Net Investment Income Net Losses and Loss Adjustment Expenses Incurred Related to Amortization of Deferred Acquisition Costs Net Paid Losses and Loss Adjustment Expenses Net Premiums Written (a) Current Year (b) Prior Years Consolidated Subsidiaries 2025 $ 1,717 $ 33,547 $ 78 $ 10,100 $ 17,065 $ 1,625 $ 9,970 $ (600) $ 3,153 $ 7,025 $ 16,476 2024 1,734 29,369 68 10,218 15,100 1,495 8,849 (507) 2,651 5,073 15,732 2023 1,531 22,752 66 8,808 12,440 1,023 6,784 (538) 2,312 4,093 13,468 ITEM 16.
Supplementary insurance information: prior-year claims development · Filed 26/02/2026
The 2026 first quarter loss ratio reflected modestly higher level of delinquencies than in the 2025 first quarter.
Mortgage results: modestly higher delinquencies · Filed 05/05/2026
ARCH CAPITAL 60 2026 SECOND QUARTER FORM 10-Q Table of Contents Based on in-force exposure estimated as of July 1, 2026, our modeled peak zone catastrophe exposure was a windstorm affecting the Florida Tri-County regions, with a net probable maximum pre-tax loss of $1.8 billion, or 8.0% of tangible shareholders’ equity available to Arch, followed by windstorms affecting the Northeastern U.S.
Catastrophe risk: modeled peak-zone exposure and tangible-equity denominator · Filed 04/08/2026
dollars in millions) (Unaudited) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Non-cumulative preferred shares Balance at beginning and end of period $ 830 $ 830 $ 830 $ 830 Common shares Balance at beginning and end of period 1 1 1 1 Additional paid-in capital Balance at beginning of period 2,831 2,588 2,735 2,510 Amortization of share-based compensation 15 25 97 99 Other changes 27 47 41 51 Balance at end of period 2,873 2,660 2,873 2,660 Retained earnings Balance at beginning of period 28,082 23,250 27,045 22,686 Net income (loss) 1,057 1,237 2,104 1,811 Preferred share dividends (10) (10) (20) (20) Balance at end of period 29,129 24,477 29,129 24,477 Accumulated other comprehensive income (loss), net of deferred income tax Balance at beginning of period (333) (408) 5 (720) Unrealized appreciation (decline) in value of available-for-sale investments, net of deferred income tax: Balance at beginning of period (204) (221) 134 (507) Unrealized holding gains (losses) during period, net of reclassification adjustment (71) 296 (409) 582 Balance at end of period (275) 75 (275) 75 Foreign currency translation adjustments, net of deferred income tax: Balance at beginning of period (129) (187) (129) (213) Foreign currency translation adjustments (9) 64 (9) 90 Balance at end of period (138) (123) (138) (123) Balance at end of period (413) (48) (413) (48) Common shares held in treasury, at cost Balance at beginning of period (7,223) (4,716) (6,410) (4,487) Shares repurchased for treasury (1,167) (163) (1,980) (392) Balance at end of period (8,390) (4,879) (8,390) (4,879) Total shareholders’ equity $ 24,030 $ 23,041 $ 24,030 $ 23,041 See Notes to Consolidated Financial Statements ARCH CAPITAL 8 2026 SECOND QUARTER FORM 10-Q Table of Contents ARCH CAPITAL GROUP LTD.
Equity statement: investment valuation movements and compensation amortization · Filed 04/08/2026
4. Earnings Per Common Share The following table sets forth the computation of basic and diluted earnings per common share: Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Numerator: Net income (loss) available to Arch $ 1,057 $ 1,237 $ 2,104 $ 1,811 Preferred dividends (10) (10) (20) (20) Net income (loss) available to Arch common shareholders $ 1,047 $ 1,227 $ 2,084 $ 1,791 Denominator: Weighted average common shares and common share equivalents outstanding — basic 343.2 372.2 348.2 372.6 Effect of dilutive common share equivalents: Nonvested restricted shares 1.4 1.6 1.5 1.7 Stock options (1) 4.2 6.1 4.5 6.5 Weighted average common shares and common share equivalents outstanding — diluted 348.8 379.9 354.2 380.8 Earnings per common share: Basic $ 3.05 $ 3.30 $ 5.99 $ 4.81 Diluted $ 3.00 $ 3.23 $ 5.88 $ 4.70 (1) Certain stock options were not included in the computation of diluted earnings per share where the exercise price of the stock options exceeded the average market price and would have been anti-dilutive or where, when applying the treasury stock method to in-the-money options, the sum of the proceeds, including unrecognized compensation, exceeded the average market price and would have been anti-dilutive.
Earnings per share: diluted share-count comparison · Filed 04/08/2026
Dollars in millions)
2026
2025
% Change
Gross premiums written
$
2,603
$
2,681
(2.9)
Net premiums written
1,933
2,036
(5.1)
Net premiums earned
1,880
1,969
(4.5)
Other underwriting income
15
13
15.4
Underwriting income
$
27
$
129
(79.1)
Underwriting Ratios
% Point Change
Loss ratio
63.0
%
59.8
%
3.2
Underwriting expense ratio
35.5
%
33.6
%
1.9
Combined ratio
98.5
%
93.4
%
5.1
Catastrophic activity and prior year development:
Insurance results: underwriting income and combined ratio · Filed 28/07/2026
Current accident year catastrophic events, net of reinsurance and reinstatement premiums
2.8
%
5.2
%
5.0
%
1.5
%
4.6
%
4.0
%
11.3
%
Net (favorable) adverse development in prior year loss reserves, net of related adjustments:
Loss ratio impact
(5.3)
%
(8.3)
%
(3.5)
%
(2.6)
%
(3.9)
%
(6.8)
%
(4.9)
%
Acquisition expense ratio impact
0.1
%
0.9
%
0.6
%
0.4
%
0.6
%
0.5
%
1.0
%
Total impact
(5.2)
%
(7.4)
%
(2.9)
%
(2.2)
%
(3.3)
%
(6.3)
%
(3.9)
%
Combined ratio excluding catastrophic activity and prior year development (3)
79.9
%
78.1
%
74.9
%
76.8
%
77.2
%
78.9
%
77.6
%
Net premiums written to gross premiums written
57.6
%
63.7
%
77.5
%
69.1
%
64.4
%
60.8
%
65.4
%
(1)‘Other underwriting income’ includes revenue earned from underwriting-related activities covered under existing service contracts.
Reinsurance results: combined ratio excluding catastrophes and prior-year development · Filed 28/07/2026
