EX-99.2 3 ex-992supplement33125.htm EX-99.2 Document

EXHIBIT 99.2
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Arch Capital Group Ltd.
Waterloo House, Ground Floor
100 Pitts Bay Road
Pembroke HM 08 Bermuda


Financial Supplement
March 31, 2025
 
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.

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


Arch Capital Group Ltd. and Subsidiaries
Table of Contents

  Page
   
I.Financial Highlights
  
II.Consolidated Financial Statements
 a.Consolidated Statements of Income
 b.Consolidated Balance Sheets
 c.Consolidated Statements of Changes in Shareholders’ Equity
 d.Consolidated Statements of Cash Flows
  
III.Segment Information
 a.Overview
 b.Consolidated Results
 c.Insurance Segment Results
 d.Reinsurance Segment Results
e.Mortgage Segment Results
f.Segment Consolidated Results
g.Selected Information on Losses and Loss Adjustment Expenses
  
IV.Investment Information
 a.Investable Asset Summary and Investment Portfolio Metrics
b.Composition of Net Investment Income, Yield and Total Return
 c.Composition of Fixed Maturities
d.Credit Quality Distribution and Maturity Profile
e.Analysis of Corporate Exposures
 f.Structured Securities
  
V.Other
 a.Comments on Non-GAAP Financial Measures
 b.Operating Income Reconciliation and Annualized Operating Return on Average Common Equity
c.Operating Income and Effective Tax Rate Calculations
 d.Capital Structure and Share Repurchase Activity

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, 2024 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 factors identified in the Company’s filings with the U.S. Securities and Exchange Commission.
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,
20252024Change
Underwriting results:
Gross premiums written$6,463 $5,933 8.9 %
Net premiums written4,515 4,085 10.5 %
Net premiums earned4,188 3,422 22.4 %
Underwriting income (loss) (1)417 736 (43.3)%
Loss ratio61.8 %50.5 %11.3 
Acquisition expense ratio18.3 %17.7 %0.6 
Other operating expense ratio (2)10.0 %10.6 %(0.6)
Combined ratio90.1 %78.8 %11.3 
Pre-tax net investment income$378 $327 15.6 %
Per diluted share$0.99 $0.86 15.1 %
Net income available to Arch common shareholders$564 $1,110 (49.2)%
Per diluted share$1.48 $2.92 (49.3)%
After-tax operating income available to Arch common shareholders (1)$587 $933 (37.1)%
Per diluted share$1.54 $2.45 (37.1)%
Comprehensive income (loss) available to Arch$886 $975 (9.1)%
Net cash provided by operating activities$1,458 $1,564 (6.8)%
Weighted average common shares and common share equivalents outstanding — diluted381.9 380.5 0.4 %
Financial measures:   
Change in book value per common share during period3.8 %5.2 %(1.4)
Annualized net income return on average common equity11.1 %24.6 %(13.5)
Annualized operating return on average common equity (1)11.5 %20.7 %(9.2)
Total return on investments (3)2.02 %0.80 %122 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’ for the 2025 period includes ‘Other underwriting income (loss).’
(3)Total return on investments includes investment income, equity in net income (loss) of investment funds accounted for using the equity method, net realized gains and losses and the change in unrealized gains and losses and is calculated on a pre-tax basis and before investment expenses. See ‘Comments on Non-GAAP Financial Measures’ for a further discussion of the presentation of total return on investments.
3
Arch Capital Group Ltd. and Subsidiaries
Consolidated Statements of Income
(U.S. Dollars and shares in millions, except per share data)Three Months Ended
 March 31,December 31,September 30,June 30,March 31,
 20252024202420242024
Revenues     
Net premiums earned$4,188 $4,143 $3,970 $3,565 $3,422 
Net investment income378 405 399 364 327 
Net realized gains (losses)3 (161)169 122 67 
Other underwriting income (1)53 6 5 3 12 
Equity in net income (loss) of investment funds accounted for using the equity method53 143 171 167 99 
Other income (loss)(2)12 8 8 14 
Total revenues4,673 4,548 4,722 4,229 3,941 
Expenses
Losses and loss adjustment expenses(2,587)(2,384)(2,403)(1,827)(1,728)
Acquisition expenses(764)(730)(681)(633)(607)
Other operating expenses(473)(410)(353)(346)(363)
Corporate expenses(60)(57)(49)(41)(53)
Amortization of intangible assets(49)(99)(88)(27)(21)
Interest expense(35)(37)(35)(35)(34)
Net foreign exchange gains (losses)(27)106 (63)1 31 
Total expenses(3,995)(3,611)(3,672)(2,908)(2,775)
Income (loss) before income taxes and income (loss) from operating affiliates678 937 1,050 1,321 1,166 
Income tax (expense) benefit(121)(66)(98)(97)(101)
Income (loss) from operating affiliates17 64 36 45 55 
Net income (loss) attributable to Arch574 935 988 1,269 1,120 
Preferred dividends(10)(10)(10)(10)(10)
Net income (loss) available to Arch common shareholders$564 $925 $978 $1,259 $1,110 
Comprehensive income (loss) available to Arch$886 $415 $1,598 $1,280 $975 
Net income (loss) per common share and common share equivalent
Basic$1.51 $2.48 $2.62 $3.38 $2.99 
Diluted$1.48 $2.42 $2.56 $3.30 $2.92 
Weighted average common shares and common share equivalents outstanding
Basic372.9 373.3 373.2 372.7 370.9 
Diluted381.9 382.8 382.3 381.6 380.5 

(1)    ‘Other underwriting income (loss)’ 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,
20252024202420242024
Assets     
Investments:     
Fixed maturities available for sale, at fair value$28,798 $27,035 $28,434 $25,202 $23,628 
Short-term investments available for sale, at fair value2,477 2,784 3,341 2,297 2,142 
Equity securities, at fair value1,618 1,675 1,623 1,397 1,720 
Other investments2,888 3,066 3,261 3,206 2,886 
Investments accounted for using the equity method6,340 5,980 5,244 4,983 4,842 
Total investments42,121 40,540 41,903 37,085 35,218 
Cash1,187 979 1,025 1,020 993 
Accrued investment income267 298 292 287 236 
Investment in operating affiliates1,305 1,240 1,236 1,143 1,174 
Premiums receivable6,607 5,634 6,364 6,268 5,765 
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses8,969 8,260 7,948 7,473 7,509 
Contractholder receivables2,212 2,161 2,078 2,016 1,907 
Ceded unearned premiums2,895 2,428 2,935 2,981 2,717 
Deferred acquisition costs1,785 1,734 1,744 1,635 1,625 
Receivable for securities sold324 50 790 116 166 
Goodwill and intangible assets1,308 1,351 1,486 725 778 
Other assets6,196 6,231 5,855 4,716 4,680 
Total assets$75,176 $70,906 $73,656 $65,465 $62,768 
Liabilities     
Reserve for losses and loss adjustment expenses$30,946 $29,369 $28,679 $24,466 $23,705 
Unearned premiums11,090 10,218 11,238 10,452 9,971 
Reinsurance balances payable2,661 2,137 2,586 2,591 2,497 
Contractholder payables2,218 2,165 2,082 2,020 1,910 
Collateral held for insured obligations245 249 268 263 263 
Senior notes2,728 2,728 2,727 2,727 2,727 
Payable for securities purchased578 181 967 410 433 
Other liabilities3,165 3,039 2,835 1,871 1,905 
Total liabilities53,631 50,086 51,382 44,800 43,411 
Redeemable noncontrolling interests— — — — 2 
Shareholders’ equity     
Non-cumulative preferred shares830 830 830 830 830 
Common shares1 1 1 1 1 
Additional paid-in capital2,588 2,510 2,465 2,443 2,401 
Retained earnings23,250 22,686 23,642 22,664 21,405 
Accumulated other comprehensive income (loss), net of deferred income tax(408)(720)(200)(810)(821)
Common shares held in treasury, at cost(4,716)(4,487)(4,464)(4,463)(4,461)
Total shareholders’ equity21,545 20,820 22,274 20,665 19,355 
Total liabilities, noncontrolling interests and shareholders’ equity$75,176 $70,906 $73,656 $65,465 $62,768 
Common shares and common share equivalents outstanding, net of treasury shares375.6 376.4 376.2 376.0 375.3 
Book value per common share (1)$55.15 $53.11 $57.00 $52.75 $49.36 
(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,
20252024202420242024
Non-cumulative preferred shares     
Balance at beginning and end of period$830 $830 $830 $830 $830 
Common shares
Balance at beginning and end of period1 1 1 1 1 
Additional paid-in capital
Balance at beginning of period2,510 2,465 2,443 2,401 2,327 
Amortization of share-based compensation74 33 16 16 68 
All other4 12 6 26 6 
Balance at end of period2,588 2,510 2,465 2,443 2,401 
Retained earnings
Balance at beginning of period22,686 23,642 22,664 21,405 20,295 
Net income574 935 988 1,269 1,120 
Common share dividends— (1,881)— — — 
Preferred share dividends(10)(10)(10)(10)(10)
Balance at end of period23,250 22,686 23,642 22,664 21,405 
Accumulated other comprehensive income (loss), net of deferred income tax
Balance at beginning of period(720)(200)(810)(821)(676)
Change in unrealized appreciation (decline) in value of available-for-sale investments286 (442)585 27 (112)
Change in foreign currency translation adjustments26 (78)25 (16)(33)
Balance at end of period(408)(720)(200)(810)(821)
Common shares held in treasury, at cost
Balance at beginning of period(4,487)(4,464)(4,463)(4,461)(4,424)
Shares repurchased for treasury(229)(23)(1)(2)(37)
Balance at end of period(4,716)(4,487)(4,464)(4,463)(4,461)
Total shareholders’ equity$21,545 $20,820 $22,274 $20,665 $19,355 

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,
20252024202420242024
Operating Activities     
Net income (loss)$574 $935 $988 $1,269 $1,120 
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized (gains) losses(6)176 (165)(144)(52)
Equity in net (income) or loss of investment funds accounted for using the equity method and other income or loss(12)(152)(162)(62)(112)
Amortization of intangible assets49 99 88 27 21 
Share-based compensation74 33 16 16 68 
Changes in:
Reserve for losses and loss adjustment expenses, net951 832 1,078 709 660 
Unearned premiums, net327 (324)77 216 663 
Premiums receivable(942)686 178 (523)(1,159)
Deferred acquisition costs(14)(46)(86)2 (82)
Reinsurance balances payable504 (410)(27)95 521 
Deferred income tax assets, net29 (96)16 21 24 
Other items, net(76)(160)17 (108)(108)
Net cash provided by operating activities1,458 1,573 2,018 1,518 1,564 
Investing Activities     
Purchases of fixed maturity investments(9,418)(9,731)(7,436)(5,798)(8,325)
Purchases of equity securities(808)(491)(278)(145)(509)
Purchases of other investments(697)(1,587)(529)(875)(494)
Proceeds from sales of fixed maturity investments7,301 9,798 5,227 3,691 7,529 
Proceeds from sales of equity securities820 428 126 482 65 
Proceeds from sales, redemptions and maturities of other investments660 834 405 503 116 
Proceeds from redemptions and maturities of fixed maturity investments758 766 392 515 363 
Net settlements of derivative instruments93 (132)115 7 5 
Net (purchases) sales of short-term investments294 549 (793)65 (90)
Acquisitions, net of cash— — 852 — — 
Purchases of fixed assets(9)(13)(12)(11)(15)
Other(2)(1)(32)57 (54)
Net cash provided by (used for) investing activities(1,008)420 (1,963)(1,509)(1,409)
Financing Activities     
Purchases of common shares under share repurchase program(196)(24)— — — 
Proceeds from common shares issued, net(28)9 6 24 (32)
Common dividends paid(5)(1,866)— — — 
Preferred dividends paid(10)(10)(10)(10)(10)
Other(2)1 (3)— — 
Net cash provided by (used for) financing activities(241)(1,890)(7)14 (42)
Effects of exchange rate changes on foreign currency cash and restricted cash16 (55)37 4 (11)
Increase (decrease) in cash and restricted cash225 48 85 27 102 
Cash and restricted cash, beginning of period1,760 1,712 1,627 1,600 1,498 
Cash and restricted cash, end of period$1,985 $1,760 $1,712 $1,627 $1,600 
Income taxes paid (received)$18 $157 $76 $151 $(6)
Interest paid$— $64 $— $63 $— 
7
Arch Capital Group Ltd. and Subsidiaries
Segment Information — Overview

The Company’s Insurance, Reinsurance and Mortgage segments each have managers who are responsible for the overall profitability of their respective segments and who are directly accountable to the Company’s chief operating decision makers, the Chief Executive Officer and the Chief Financial Officer and Treasurer. The chief operating decision makers do not assess performance, measure return on equity or make resource allocation decisions on a line of business basis. Management measures segment performance for its three underwriting segments based on underwriting income or loss. The Company does not manage its assets by underwriting segment and, accordingly, investment income is not allocated to each underwriting segment.
The Company determined its reportable operating segments using the management approach described in accounting guidance regarding disclosures about segments of an enterprise and related information. The accounting policies of the segments are the same as those used for the preparation of the Company’s consolidated financial statements. Intersegment business is allocated to the segment accountable for the underwriting results.
Insurance Segment
The Company’s insurance segment primarily consists of commercial insurance lines of business, with a focus on specialty insurance products. These products are mainly offered in North America, Bermuda, the United Kingdom, continental Europe and Australia. Products offered in North America include: commercial automobile; commercial multi‐peril; other liability—claims made, which includes financial and professional lines; other liability—occurrence, which includes admitted and excess and surplus casualty lines; property and short-tail specialty; workers compensation; and other. Products offered across the Company’s International units include: property and short-tail specialty; and casualty and other.
Reinsurance Segment
The Company’s reinsurance segment offers reinsurance products on a worldwide basis. Lines of business include: casualty; marine and aviation; 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 includes realized and unrealized changes in the fair value of equity securities and assets accounted for using the fair value option, realized and unrealized gains and losses on derivative instruments, changes in the allowance for credit losses on financial assets and gains and losses realized from acquisition or disposition of subsidiaries), equity in net income or loss of investment funds accounted for using the equity method, other income (loss), corporate expenses, transaction costs and other, amortization of intangible assets, interest expense, net foreign exchange gains or losses, income taxes items, 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, 2025
 InsuranceReinsuranceMortgageTotal
Gross premiums written (1)$2,645 $3,494 $326 $6,463 
Premiums ceded (1)(712)(1,178)(60)(1,948)
Net premiums written1,933 2,316 266 4,515 
Change in unearned premiums(73)(288)34 (327)
Net premiums earned1,860 2,028 300 4,188 
Other underwriting income (loss) (2)3 39 11 53 
Losses and loss adjustment expenses(1,228)(1,356)(3)(2,587)
Acquisition expenses(343)(417)(4)(764)
Other operating expenses(294)(127)(52)(473)
Underwriting income (loss)$(2)$167 $252 417 
Net investment income378 
Net realized gains (losses)3 
Equity in net income (loss) of investment funds accounted for using the equity method53 
Other income (loss)(2)
Corporate 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 affiliates678 
Income tax (expense) benefit(121)
Income (loss) from operating affiliates17 
Net income (loss) available to Arch574 
Preferred dividends(10)
Net income (loss) available to Arch common shareholders$564 
Underwriting Ratios
Loss ratio66.0 %66.9 %1.1 %61.8 %
Acquisition expense ratio18.5 %20.6 %1.3 %18.3 %
Other operating expense ratio (4)15.6 %4.3 %13.7 %10.0 %
Combined ratio100.1 %91.8 %16.1 %90.1 %
Net premiums written to gross premiums written73.1 %66.3 %81.6 %69.9 %
Total investable assets$43,054 
Total assets75,176 
Total liabilities53,631 

(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 (loss)’ includes revenue earned from underwriting-related activities covered under existing service contracts.
(3)    Certain expenses have been excluded from ‘Corporate expenses’ and reflected in ‘Transaction costs and other.’ See ‘Comments on Non-GAAP Financial Measures’ for a further discussion of such items.
(4)    The ‘Other operating expense ratio’ for the 2025 period includes ‘Other underwriting income (loss).’
9
Arch Capital Group Ltd. and Subsidiaries
Segment Information
(U.S. Dollars in millions)Three Months Ended
March 31, 2024
 InsuranceReinsuranceMortgageTotal
Gross premiums written (1)$2,126 $3,467 $341 $5,933 
Premiums ceded (1)(584)(1,201)(64)(1,848)
Net premiums written1,542 2,266 277 4,085 
Change in unearned premiums(91)(600)28 (663)
Net premiums earned1,451 1,666 305 3,422 
Other underwriting income (loss)— 2 10 12 
Losses and loss adjustment expenses(854)(883)9 (1,728)
Acquisition expenses(276)(331)— (607)
Other operating expenses(235)(75)(53)(363)
Underwriting income (loss)$86 $379 $271 736 
Net investment income327 
Net realized gains (losses)67 
Equity in net income (loss) of investment funds accounted for using the equity method99 
Other income (loss)14 
Corporate expenses (2)(46)
Transaction costs and other (2)(7)
Amortization of intangible assets(21)
Interest expense(34)
Net foreign exchange gains (losses)31 
Income (loss) before income taxes and income (loss) from operating affiliates1,166 
Income tax (expense) benefit(101)
Income (loss) from operating affiliates55 
Net income (loss) available to Arch1,120 
Preferred dividends(10)
Net income (loss) available to Arch common shareholders$1,110 
Underwriting Ratios
Loss ratio58.9 %53.0 %(3.0)%50.5 %
Acquisition expense ratio19.0 %19.9 %— %17.7 %
Other operating expense ratio16.2 %4.5 %17.5 %10.6 %
Combined ratio94.1 %77.4 %14.5 %78.8 %
Net premiums written to gross premiums written72.5 %65.4 %81.2 %68.9 %
Total investable assets$35,944 
Total assets62,768 
Total liabilities43,411 
(1)    Certain assumed and ceded amounts related to intersegment transactions are included in individual segment results. Accordingly, the sum of such transactions for each segment does not agree to the total due to eliminations.
(2)    Certain expenses have been excluded from ‘Corporate expenses’ and reflected in ‘Transaction costs and other.’ See ‘Comments on Non-GAAP Financial Measures’ for a further discussion of such items.
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,
 20252024202420242024
Gross premiums written$2,645 $2,484 $2,341 $2,102 $2,126 
Premiums ceded(712)(530)(521)(544)(584)
Net premiums written1,933 1,954 1,820 1,558 1,542 
Change in unearned premiums(73)(21)(55)(80)(91)
Net premiums earned1,860 1,933 1,765 1,478 1,451 
Other underwriting income (loss) (1)3 — — — — 
Losses and loss adjustment expenses(1,228)(1,281)(1,087)(848)(854)
Acquisition expenses(343)(345)(308)(288)(276)
Other operating expenses(294)(277)(250)(233)(235)
Underwriting income (loss)$(2)$30 $120 $109 $86 
Underwriting Ratios
Loss ratio66.0 %66.3 %61.6 %57.3 %58.9 %
Acquisition expense ratio18.5 %17.9 %17.4 %19.5 %19.0 %
Other operating expense ratio (2)15.6 %14.3 %14.1 %15.8 %16.2 %
Combined ratio100.1 %98.5 %93.1 %92.6 %94.1 %
Catastrophic activity and prior year development:
Current accident year catastrophic events, net of reinsurance and reinstatement premiums9.5 %8.3 %4.9 %2.0 %1.9 %
Net (favorable) adverse development in prior year loss reserves, net of related adjustments(0.5)%(0.1)%(0.7)%(0.2)%(0.5)%
Combined ratio excluding catastrophic activity and prior year development (3)91.1 %90.3 %88.9 %90.8 %92.7 %
Net premiums written to gross premiums written73.1 %78.7 %77.7 %74.1 %72.5 %
 
(1)‘Other underwriting income (loss)’ includes revenue earned from underwriting-related activities covered under existing service contracts.
(2)The ‘Other operating expense ratio’ for the 2025 period includes ‘Other underwriting income (loss).’
(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,
 20252024202420242024
Net Premiums Written by Line of Business
North America
Property and short-tail specialty$348 18.0 %$364 18.6 %$296 16.3 %$276 17.7 %$284 18.4 %
Other liability - occurrence330 17.1 %342 17.5 %253 13.9 %224 14.4 %183 11.9 %
Commercial multi-peril198 10.2 %195 10.0 %163 9.0 %62 4.0 %41 2.7 %
Commercial automobile161 8.3 %116 5.9 %134 7.4 %123 7.9 %112 7.3 %
Workers compensation153 7.9 %153 7.8 %147 8.1 %112 7.2 %143 9.3 %
Other liability - claims made149 7.7 %215 11.0 %228 12.5 %215 13.8 %200 13.0 %
Other76 3.9 %63 3.2 %81 4.5 %75 4.8 %69 4.5 %
Total North America $1,415 73.2 %$1,448 74.1 %$1,302 71.5 %$1,087 69.8 %$1,032 66.9 %
International
Property and short-tail specialty$267 13.8 %$260 13.3 %$277 15.2 %$260 16.7 %$268 17.4 %
Casualty and other251 13.0 %246 12.6 %241 13.2 %211 13.5 %242 15.7 %
Total International $518 26.8 %$506 25.9 %$518 28.5 %$471 30.2 %$510 33.1 %
Total$1,933 100.0 %$1,954 100.0 %$1,820 100.0 %$1,558 100.0 %$1,542 100.0 %
Net Premiums Earned by Line of Business
North America
Property and short-tail specialty$333 17.9 %$332 17.2 %$306 17.3 %$264 17.9 %$263 18.1 %
Other liability - occurrence329 17.7 %327 16.9 %265 15.0 %175 11.8 %175 12.1 %
Commercial multi-peril201 10.8 %189 9.8 %146 8.3 %57 3.9 %43 3.0 %
Commercial automobile145 7.8 %130 6.7 %122 6.9 %106 7.2 %101 7.0 %
Workers compensation131 7.0 %155 8.0 %135 7.6 %132 8.9 %127 8.8 %
Other liability - claims made192 10.3 %210 10.9 %213 12.1 %208 14.1 %212 14.6 %
Other72 3.9 %74 3.8 %79 4.5 %75 5.1 %81 5.6 %
Total North America$1,403 75.4 %$1,417 73.3 %$1,266 71.7 %$1,017 68.8 %$1,002 69.1 %
International
Property and short-tail specialty$236 12.7 %$288 14.9 %$276 15.6 %$248 16.8 %$238 16.4 %
Casualty and other221 11.9 %228 11.8 %223 12.6 %213 14.4 %211 14.5 %
Total International$457 24.6 %$516 26.7 %$499 28.3 %$461 31.2 %$449 30.9 %
Total$1,860 100.0 %$1,933 100.0 %$1,765 100.0 %$1,478 100.0 %$1,451 100.0 %
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,
 20252024202420242024
Gross premiums written$3,494 $1,941 $2,763 $2,941 $3,467 
Premiums ceded(1,178)(353)(818)(994)(1,201)
Net premiums written2,316 1,588 1,945 1,947 2,266 
Change in unearned premiums(288)316 (53)(167)(600)
Net premiums earned2,028 1,904 1,892 1,780 1,666 
Other underwriting income (loss) (1)39 4 2 1 2 
Losses and loss adjustment expenses(1,356)(1,121)(1,317)(1,006)(883)
Acquisition expenses(417)(382)(374)(345)(331)
Other operating expenses(127)(77)(54)(64)(75)
Underwriting income (loss)$167 $328 $149 $366 $379 
Underwriting Ratios
Loss ratio66.9 %58.9 %69.6 %56.5 %53.0 %
Acquisition expense ratio20.6 %20.0 %19.8 %19.4 %19.9 %
Other operating expense ratio (2)4.3 %4.1 %2.9 %3.6 %4.5 %
Combined ratio91.8 %83.0 %92.3 %79.5 %77.4 %
Catastrophic activity and prior year development:
Current accident year catastrophic events, net of reinsurance and reinstatement premiums18.3 %12.2 %19.3 %9.4 %1.8 %
Net (favorable) adverse development in prior year loss reserves, net of related adjustments(4.5)%(4.0)%(1.9)%(1.8)%(2.5)%
Combined ratio excluding catastrophic activity and prior year development (3)78.0 %74.8 %74.9 %71.9 %78.1 %
Net premiums written to gross premiums written66.3 %81.8 %70.4 %66.2 %65.4 %
 
(1)‘Other underwriting income (loss)’ includes revenue earned from underwriting-related activities covered under existing service contracts.
(2)The ‘Other operating expense ratio’ for the 2025 period includes ‘Other underwriting income (loss).’
(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,
 20252024202420242024
Net Premiums Written by Line of Business
Specialty$594 25.6 %$701 44.1 %$769 39.5 %$539 27.7 %$840 37.1 %
Property excluding property catastrophe581 25.1 %441 27.8 %671 34.5 %585 30.0 %567 25.0 %
Casualty499 21.5 %279 17.6 %339 17.4 %261 13.4 %343 15.1 %
Property catastrophe477 20.6 %84 5.3 %52 2.7 %472 24.2 %350 15.4 %
Marine and aviation121 5.2 %43 2.7 %69 3.5 %59 3.0 %129 5.7 %
Other44 1.9 %40 2.5 %45 2.3 %31 1.6 %37 1.6 %
Total$2,316 100.0 %$1,588 100.0 %$1,945 100.0 %$1,947 100.0 %$2,266 100.0 %
Net Premiums Earned by Line of Business
Specialty$727 35.8 %$685 36.0 %$688 36.4 %$659 37.0 %$587 35.2 %
Property excluding property catastrophe548 27.0 %602 31.6 %540 28.5 %520 29.2 %486 29.2 %
Casualty325 16.0 %290 15.2 %282 14.9 %269 15.1 %247 14.8 %
Property catastrophe306 15.1 %223 11.7 %256 13.5 %246 13.8 %234 14.0 %
Marine and aviation80 3.9 %62 3.3 %80 4.2 %60 3.4 %74 4.4 %
Other42 2.1 %42 2.2 %46 2.4 %26 1.5 %38 2.3 %
Total$2,028 100.0 %$1,904 100.0 %$1,892 100.0 %$1,780 100.0 %$1,666 100.0 %
Net Premiums Written by Underwriting Location
Bermuda$1,154 49.8 %$672 42.3 %$671 34.5 %$1,043 53.6 %$1,039 45.9 %
United States477 20.6 %478 30.1 %744 38.3 %429 22.0 %484 21.4 %
Europe and other685 29.6 %438 27.6 %530 27.2 %475 24.4 %743 32.8 %
Total$2,316 100.0 %$1,588 100.0 %$1,945 100.0 %$1,947 100.0 %$2,266 100.0 %
                    
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,
20252024202420242024
Gross premiums written$326 $331 $339 $340 $341 
Premiums ceded(60)(54)(57)(64)(64)
Net premiums written266 277 282 276 277 
Change in unearned premiums34 29 31 31 28 
Net premiums earned300 306 313 307 305 
Other underwriting income (1)11 2 3 2 10 
Losses and loss adjustment expenses(3)18 1 27 9 
Acquisition expenses(4)(3)1 — — 
Other operating expenses(52)(56)(49)(49)(53)
Underwriting income$252 $267 $269 $287 $271 
Underwriting Ratios
Loss ratio1.1 %(5.9)%(0.4)%(8.6)%(3.0)%
Acquisition expense ratio1.3 %1.0 %(0.4)%0.1 %— %
Other operating expense ratio (2)13.7 %18.3 %15.6 %15.9 %17.5 %
Combined ratio16.1 %13.4 %14.8 %7.4 %14.5 %
Net (favorable) adverse development in prior year loss reserves, net of related adjustments(21.8)%(22.3)%(22.8)%(29.0)%(25.7)%
Combined ratio excluding prior year development (3)37.9 %35.7 %37.6 %36.4 %40.2 %
Net premiums written to gross premiums written81.6 %83.7 %83.2 %81.2 %81.2 %

(1)‘Other underwriting income (loss)’ includes revenue earned from underwriting-related activities covered under existing service contracts.
(2)The ‘Other operating expense ratio’ for the 2025 period includes ‘Other underwriting income (loss).’
(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,
 20252024202420242024
Net Premiums Written by Underwriting Unit
U.S. primary mortgage insurance$203 76.3 %$208 75.1 %$209 74.1 %$201 72.8 %$202 72.9 %
U.S. credit risk transfer (CRT) and other50 18.8 %51 18.4 %54 19.1 %51 18.5 %56 20.2 %
International mortgage insurance/reinsurance13 4.9 %18 6.5 %19 6.7 %24 8.7 %19 6.9 %
Total$266 100.0 %$277 100.0 %$282 100.0 %$276 100.0 %$277 100.0 %
Net Premiums Earned by Underwriting Unit
U.S. primary mortgage insurance$209 69.7 %$215 70.3 %$215 68.7 %$209 68.1 %$206 67.5 %
U.S. credit risk transfer (CRT) and other50 16.7 %51 16.7 %55 17.6 %51 16.6 %56 18.4 %
International mortgage insurance/reinsurance41 13.7 %40 13.1 %43 13.7 %47 15.3 %43 14.1 %
Total$300 100.0 %$306 100.0 %$313 100.0 %$307 100.0 %$305 100.0 %
Net Premiums Written by Underwriting Location
United States$203 76.3 %$208 75.1 %$210 74.5 %$202 73.2 %$203 73.3 %
Other63 23.7 %69 24.9 %72 25.5 %74 26.8 %74 26.7 %
Total$266 100.0 %$277 100.0 %$282 100.0 %$276 100.0 %$277 100.0 %
(U.S. Dollars in millions)
March 31, 2025December 31, 2024September 30, 2024June 30, 2024March 31, 2024
Insurance In Force (IIF) (1)
U.S. primary mortgage insurance$287,768 58.2 %$290,435 58.0 %$292,313 57.2 %$292,512 57.0 %$288,385 56.9 %
U.S. credit risk transfer (CRT) and other144,517 29.2 %145,892 29.1 %148,417 29.0 %151,437 29.5 %148,623 29.3 %
International mortgage insurance/reinsurance62,487 12.6 %64,822 12.9 %70,380 13.8 %68,986 13.4 %69,811 13.8 %
Total$494,772 100.0 %$501,149 100.0 %$511,110 100.0 %$512,935 100.0 %$506,819 100.0 %
Risk In Force (RIF) (2)
U.S. primary mortgage insurance$75,300 85.5 %$76,034 85.3 %$76,448 84.6 %$76,351 84.6 %$75,194 84.7 %
U.S. credit risk transfer and other5,842 6.6 %5,876 6.6 %6,011 6.7 %6,206 6.9 %6,112 6.9 %
International mortgage insurance/reinsurance6,896 7.8 %7,215 8.1 %7,887 8.7 %7,666 8.5 %7,430 8.4 %
Total$88,038 100.0 %$89,125 100.0 %$90,346 100.0 %$90,223 100.0 %$88,736 100.0 %
(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, 2025December 31, 2024September 30, 2024June 30, 2024March 31, 2024
Total RIF by credit quality (FICO score):
>=740$47,130 62.6 %$47,360 62.3 %$47,414 62.0 %$47,190 61.8 %$46,693 62.1 %
680-73924,274 32.2 %24,688 32.5 %24,974 32.7 %25,053 32.8 %24,827 33.0 %
620-6793,558 4.7 %3,638 4.8 %3,701 4.8 %3,735 4.9 %3,439 4.6 %
<620338 0.4 %348 0.5 %359 0.5 %373 0.5 %235 0.3 %
Total$75,300 100.0 %$76,034 100.0 %$76,448 100.0 %$76,351 100.0 %$75,194 100.0 %
Weighted average FICO score748 748 748 747 748 
Total RIF by Loan-To-Value (LTV):
95.01% and above$7,383 9.8 %$7,420 9.8 %$7,415 9.7 %$7,384 9.7 %$7,005 9.3 %
90.01% to 95.00%44,901 59.6 %45,311 59.6 %45,509 59.5 %45,331 59.4 %44,742 59.5 %
85.01% to 90.00%20,420 27.1 %20,637 27.1 %20,746 27.1 %20,668 27.1 %20,352 27.1 %
85.00% and below2,596 3.4 %2,666 3.5 %2,778 3.6 %2,968 3.9 %3,095 4.1 %
Total$75,300 100.0 %$76,034 100.0 %$76,448 100.0 %$76,351 100.0 %$75,194 100.0 %
Weighted average LTV93.2 %93.2 %93.1 %93.1 %93.1 %
Total RIF by State:
California$5,909 7.8 %$5,989 7.9 %$6,052 7.9 %$6,110 8.0 %$6,105 8.1 %
Texas5,506 7.3 %5,613 7.4 %5,699 7.5 %5,803 7.6 %5,859 7.8 %
North Carolina3,340 4.4 %3,355 4.4 %3,353 4.4 %3,320 4.3 %3,245 4.3 %
Georgia3,104 4.1 %3,143 4.1 %3,145 4.1 %3,099 4.1 %3,043 4.0 %
Minnesota3,085 4.1 %3,108 4.1 %3,111 4.1 %3,110 4.1 %3,056 4.1 %
Illinois3,025 4.0 %3,056 4.0 %3,085 4.0 %3,086 4.0 %2,979 4.0 %
Massachusetts2,853 3.8 %2,885 3.8 %2,896 3.8 %2,891 3.8 %2,852 3.8 %
Michigan2,838 3.8 %2,855 3.8 %2,876 3.8 %2,852 3.7 %2,796 3.7 %
Florida2,758 3.7 %2,824 3.7 %2,880 3.8 %2,943 3.9 %2,929 3.9 %
Ohio2,701 3.6 %2,716 3.6 %2,717 3.6 %2,668 3.5 %2,583 3.4 %
Other40,181 53.4 %40,490 53.3 %40,634 53.2 %40,469 53.0 %39,747 52.9 %
Total$75,300 100.0 %$76,034 100.0 %$76,448 100.0 %$76,351 100.0 %$75,194 100.0 %
Weighted average coverage (end of period RIF divided by IIF)26.2 %26.2 %26.2 %26.1 %26.1 %
U.S. mortgage insurance total RIF, net of reinsurance (1)$60,226 $60,085 $60,421 $58,920 $57,882 
Analysts’ persistency (2)81.9 %82.1 %82.9 %83.3 %83.6 %
Risk-to-capital ratio -- Arch MI U.S. (3)7.8:1 7.8:1 7.3:1 7.4:1 7.0:1
PMIER sufficiency ratio -- Arch MI U.S. (4)186 %186 %205 %196 %223 %
(1) Total RIF for the U.S. mortgage insurance operations after external reinsurance.
(2) Represents the % of IIF at the beginning of a 12-mo. period that remained in force at the end of the period.
(3) Represents current (non-delinquent) RIF, net of reinsurance, divided by statutory capital (estimate for March 31, 2025).
(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, 2025, the changes would have reduced available assets by 17% and resulted in a pro-forma PMIERs Sufficiency Ratio of 163% compared with a reported PMIERs Sufficiency Ratio of 186%.
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, 2025December 31, 2024September 30, 2024June 30, 2024March 31, 2024
Total new insurance written (NIW) (1)$9,190 $11,818 $13,526 $13,799 $9,336 
Total NIW by credit quality (FICO score):
>=740$6,835 74.4 %$8,495 71.9 %$9,438 69.8 %$9,726 70.5 %$6,364 68.2 %
680-7392,103 22.9 %2,920 24.7 %3,584 26.5 %3,641 26.4 %2,660 28.5 %
620-679249 2.7 %401 3.4 %502 3.7 %430 3.1 %311 3.3 %
<6203 0.0 %2 0.0 %2 0.0 %2 0.0 %1 0.0 %
  Total$9,190 100.0 %$11,818 100.0 %$13,526 100.0 %$13,799 100.0 %$9,336 100.0 %
Total NIW by LTV:
95.01% and above$756 8.2 %$919 7.8 %$1,089 8.1 %$1,014 7.3 %$542 5.8 %
90.01% to 95.00%4,374 47.6 %5,743 48.6 %6,620 48.9 %7,234 52.4 %5,240 56.1 %
85.01% to 90.00%2,920 31.8 %3,771 31.9 %4,293 31.7 %4,047 29.3 %2,624 28.1 %
85.00% and below1,140 12.4 %1,385 11.7 %1,524 11.3 %1,504 10.9 %930 10.0 %
  Total$9,190 100.0 %$11,818 100.0 %$13,526 100.0 %$13,799 100.0 %$9,336 100.0 %
Total NIW monthly vs. single:
Monthly$8,497 92.5 %$11,328 95.9 %$12,581 93.0 %$12,764 92.5 %$8,916 95.5 %
Single693 7.5 %490 4.1 %945 7.0 %1,035 7.5 %420 4.5 %
  Total$9,190 100.0 %$11,818 100.0 %$13,526 100.0 %$13,799 100.0 %$9,336 100.0 %
Total NIW purchase vs. refinance:
Purchase$8,795 95.7 %$11,020 93.2 %$13,177 97.4 %$13,588 98.5 %$9,167 98.2 %
Refinance395 4.3 %798 6.8 %349 2.6 %211 1.5 %169 1.8 %
  Total$9,190 100.0 %$11,818 100.0 %$13,526 100.0 %$13,799 100.0 %$9,336 100.0 %
Ending number of policies in force (PIF) (2)1,085,927 1,100,653 1,114,251 1,123,698 1,104,746 
Rollforward of insured loans in default:
Beginning delinquent number of loans22,982 21,878 20,422 18,269 19,457 
Plus: new notices11,529 12,738 12,613 10,063 10,371 
Less: cures(12,920)(11,264)(10,819)(10,170)(11,253)
Less: paid claims(292)(370)(338)(265)(306)
Plus: acquired delinquent loans — — — 2,525 — 
Ending delinquent number of loans (2)21,299 22,982 21,878 20,422 18,269 
Ending percentage of loans in default (2)1.96 %2.09 %1.96 %1.82 %1.65 %
Losses:
Number of claims paid292 370 338 265 306 
Total paid claims (in thousands)$11,950 $12,679 $12,874 $7,557 $10,785 
Average paid per claim (in thousands)$40.9 $34.3 $38.1 $28.5 $35.2 
Severity (3)76.8 %77.7 %71.9 %56.6 %78.6 %
Average case reserve per default (in thousands)$16.7 $15.3 $15.9 $17.1 $18.2 
(1)    The original principal balance of all loans that received coverage during the period.
(2)    Includes first lien primary and pool policies.    
(3)    Represents total 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, 2025December 31, 2024
Loss Reserves, Net (1)Primary IIF (2)Primary RIF (3)Delinquency RateLoss Reserves, Net (1)Primary IIF (2)Primary RIF (3)Delinquency Rate
% of TotalTotal% of TotalTotal% of Total% of TotalTotal% of TotalTotal% of Total
Policy year:
2015 and prior34.8 %$17,808 6.2 %$4,537 6.0 %5.48 %36.1 %$18,329 6.3 %$4,670 6.1 %5.85 %
20163.1 %4,364 1.5 %1,117 1.5 %3.38 %3.4 %5,240 1.8 %1,371 1.8 %3.23 %
20174.5 %5,225 1.8 %1,399 1.9 %3.34 %4.7 %5,554 1.9 %1,489 2.0 %3.52 %
20186.5 %6,761 2.3 %1,760 2.3 %3.95 %7.0 %7,081 2.4 %1,843 2.4 %4.31 %
20197.2 %12,323 4.3 %3,232 4.3 %2.66 %7.6 %12,919 4.4 %3,386 4.5 %2.85 %
202010.6 %37,419 13.0 %10,192 13.5 %1.41 %10.9 %39,426 13.6 %10,718 14.1 %1.52 %
202114.5 %59,315 20.6 %15,922 21.1 %1.45 %14.2 %62,382 21.5 %16,620 21.9 %1.52 %
202211.8 %55,401 19.3 %14,686 19.5 %1.50 %10.8 %57,175 19.7 %15,113 19.9 %1.51 %
20235.2 %35,836 12.5 %9,229 12.3 %1.17 %4.4 %36,827 12.7 %9,479 12.5 %1.12 %
20241.9 %44,203 15.4 %11,024 14.6 %0.47 %0.9 %45,502 15.7 %11,345 14.9 %0.30 %
20250.0 %9,113 3.2 %2,202 2.9 %0.01 %
Total100.0 %$287,768 100.0 %$75,300 100.0 %1.96 %100.0 %$290,435 100.0 %$76,034 100.0 %2.09 %

(1)    Total reserves for losses and loss adjustment expenses, net of recoverables, was $331.5 million at March 31, 2025, compared to $332.6 million at December 31, 2024.
(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,
 20252024202420242024
Gross premiums written$6,463 $4,756 $5,440 $5,382 $5,933 
Premiums ceded(1,948)(937)(1,393)(1,601)(1,848)
Net premiums written4,515 3,819 4,047 3,781 4,085 
Change in unearned premiums(327)324 (77)(216)(663)
Net premiums earned4,188 4,143 3,970 3,565 3,422 
Other underwriting income (loss)53 6 5 3 12 
Losses and loss adjustment expenses(2,587)(2,384)(2,403)(1,827)(1,728)
Acquisition expenses(764)(730)(681)(633)(607)
Other operating expenses(473)(410)(353)(346)(363)
Underwriting income (loss) (1)$417 $625 $538 $762 $736 
Underwriting Ratios
Loss ratio61.8 %57.5 %60.5 %51.2 %50.5 %
Acquisition expense ratio18.3 %17.6 %17.2 %17.8 %17.7 %
Other operating expense ratio10.0 %9.9 %8.9 %9.7 %10.6 %
Combined ratio90.1 %85.0 %86.6 %78.7 %78.8 %
Catastrophic activity and prior year development:
Current accident year catastrophic events, net of reinsurance and reinstatement premiums13.1 %9.5 %11.3 %5.5 %1.7 %
Net (favorable) adverse development in prior year loss reserves, net of related adjustments(4.0)%(3.5)%(3.0)%(3.5)%(3.7)%
Combined ratio excluding catastrophic activity and prior year development (1)81.0 %79.0 %78.3 %76.7 %80.8 %
Components of losses and loss adjustment expenses incurred
Paid losses and loss adjustment expenses$1,638 $1,554 $1,329 $1,120 $1,070 
Change in unpaid losses and loss adjustment expenses949 830 1,074 707 658 
Total losses and loss adjustment expenses$2,587 $2,384 $2,403 $1,827 $1,728 
Net premiums written to gross premiums written69.9 %80.3 %74.4 %70.3 %68.9 %
 
(1)See ‘Comments on Non-GAAP Financial Measures’ for further discussion.


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,
 20252024202420242024
Estimated net (favorable) adverse development in prior year loss reserves, net of related adjustments
Net impact on underwriting results:
Insurance$(10)$(2)$(12)$(4)$(7)
Reinsurance(92)(76)(36)(31)(41)
Mortgage(65)(68)(71)(89)(78)
Total $(167)$(146)$(119)$(124)$(126)
Impact on losses and loss adjustment expenses:
Insurance$(17)$(6)$(16)$(5)$(10)
Reinsurance(119)(73)(41)(34)(40)
Mortgage(61)(62)(64)(82)(74)
Total$(197)$(141)$(121)$(121)$(124)
Impact on acquisition expenses:
Insurance$7 $4 $4 $1 $3 
Reinsurance27 (3)5 3 (1)
Mortgage(4)(6)(7)(7)(4)
Total$30 $(5)$2 $(3)$(2)
Impact on combined ratio:
Insurance(0.5)%(0.1)%(0.7)%(0.2)%(0.5)%
Reinsurance(4.5)%(4.0)%(1.9)%(1.8)%(2.5)%
Mortgage(21.8)%(22.3)%(22.8)%(29.0)%(25.7)%
Total (4.0)%(3.5)%(3.0)%(3.5)%(3.7)%
Impact on loss ratio:
Insurance(0.9)%(0.3)%(0.9)%(0.3)%(0.7)%
Reinsurance(5.9)%(3.8)%(2.2)%(1.9)%(2.4)%
Mortgage(20.4)%(20.2)%(20.5)%(26.9)%(24.4)%
Total(4.7)%(3.4)%(3.1)%(3.4)%(3.6)%
Impact on acquisition expense ratio:
Insurance0.4 %0.2 %0.2 %0.1 %0.2 %
Reinsurance1.4 %(0.2)%0.3 %0.1 %(0.1)%
Mortgage(1.4)%(2.1)%(2.3)%(2.1)%(1.3)%
Total 0.7 %(0.1)%0.1 %(0.1)%(0.1)%
Estimated net losses incurred from current accident year catastrophic events (1)
Insurance$177 $161 $86 $30 $27 
Reinsurance370 232 364 166 31 
Total$547 $393 $450 $196 $58 
Impact on combined ratio:
Insurance9.5 %8.3 %4.9 %2.0 %1.9 %
Reinsurance18.3 %12.2 %19.3 %9.4 %1.8 %
Total13.1 %9.5 %11.3 %5.5 %1.7 %
(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,
20252024202420242024
Investable assets:
Fixed maturities available for sale, at fair value$28,798 66.9 %$27,035 65.3 %$28,434 66.5 %$25,202 66.7 %$23,628 65.7 %
Fixed maturities—fair value option (1)913 2.1 %854 2.1 %1,097 2.6 %973 2.6 %930 2.6 %
Total fixed maturities29,711 69.0 %27,889 67.4 %29,531 69.1 %26,175 69.2 %24,558 68.3 %
Equity securities, at fair value1,618 3.8 %1,675 4.0 %1,623 3.8 %1,397 3.7 %1,720 4.8 %
Equity securities—fair value option (1)5 0.0 %7 0.0 %7 0.0 %7 0.0 %7 0.0 %
Total equity securities1,623 3.8 %1,682 4.1 %1,630 3.8 %1,404 3.7 %1,727 4.8 %
Other investments—fair value option (1)1,866 4.3 %2,135 5.2 %2,096 4.9 %2,189 5.8 %1,914 5.3 %
Investments accounted for using the equity method (2)6,340 14.7 %5,980 14.4 %5,244 12.3 %4,983 13.2 %4,842 13.5 %
Short-term investments available for sale, at fair value2,477 5.8 %2,784 6.7 %3,341 7.8 %2,297 6.1 %2,142 6.0 %
Short-term investments—fair value option (1)104 0.2 %70 0.2 %61 0.1 %37 0.1 %35 0.1 %
Total short-term investments2,581 6.0 %2,854 6.9 %3,402 8.0 %2,334 6.2 %2,177 6.1 %
Cash1,187 2.8 %979 2.4 %1,025 2.4 %1,020 2.7 %993 2.8 %
Securities transactions entered into but not settled at the balance sheet date(254)(0.6)%(131)(0.3)%(177)(0.4)%(294)(0.8)%(267)(0.7)%
Total investable assets held by the Company$43,054 100.0 %$41,388 100.0 %$42,751 100.0 %$37,811 100.0 %$35,944 100.0 %
Average effective duration of fixed maturities (in years) (3)3.32 3.31 3.14 3.32  3.23
Average S&P/Moody’s credit ratings (4) AA-/Aa3  AA-/Aa3  AA-/Aa3  AA-/Aa3  AA-/Aa3  
(1)     Included in “other investments” on the balance sheet.
(2)    Changes in the carrying value of investment funds accounted for using the equity method are recorded as “equity in net income (loss) of investment funds accounted for using the equity method” rather than as                 an unrealized gain or loss component of accumulated other comprehensive income.
(3)     During the 2024 fourth quarter, the Company changed its presentation from a total portfolio duration to a duration on fixed maturities and short-term investments.
(4)    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,
 20252024202420242024
Composition of pre-tax net investment income:     
Fixed maturities$342 $340 $340 $306 $280 
Short-term investments26 42 38 35 29 
Equity securities (dividends)11 13 9 10 8 
Other (1)28 33 35 35 33 
Gross investment income407 428 422 386 350 
Investment expenses(29)(23)(23)(22)(23)
Pre-tax net investment income$378 $405 $399 $364 $327 
Per share$0.99 $1.06 $1.04 $0.95 $0.86 
Pre-tax equity in net income (loss) of investment funds accounted for using the equity method53 143 171 167 99 
Per share$0.14 $0.37 $0.45 $0.44 $0.26 
Investment income yield, at amortized cost (2):
Pre-tax4.16 %4.32 %4.40 %4.39 %4.14 %
After-tax3.35 %3.83 %3.88 %3.87 %3.61 %
Total return on investments (3)2.02 %(1.05)%3.97 %1.33 %0.80 %
(1)Amounts include dividends and other distributions on investment funds, term loan investments, funds held balances, cash balances and other.
(2)Presented on an annualized basis and excluding the impact of investments for which returns are not included within investment income, such as investments accounted for using the equity method and certain equities.
(3)Total return on investments includes investment income, equity in net income or loss of investment funds accounted for using the equity method, net realized gains and losses (excluding changes in allowance for credit losses on non-investment related financial assets) and the change in unrealized gains or losses and is calculated on a pre-tax basis and before investment expenses. See ‘Comments on Non-GAAP Financial Measures’ for a further discussion of the presentation of total return on investments.

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, 2025
Corporates$14,589 $153 $(267)$(114)$(12)$14,715 99.1 %49.1 %
U.S. government and government agencies6,535 36 (53)(17)— 6,552 99.7 %22.0 %
Asset-backed securities3,087 11 (30)(19)(8)3,114 99.1 %10.4 %
Non-U.S. government securities2,625 31 (81)(50)(1)2,676 98.1 %8.8 %
Residential mortgage-backed securities 1,755 16 (26)(10)— 1,765 99.4 %5.9 %
Commercial mortgage-backed securities931 5 (9)(4)— 935 99.6 %3.1 %
Municipal bonds189 — (8)(8)— 197 95.9 %0.6 %
Total$29,711 $252 $(474)$(222)$(21)$29,954 99.2 %100.0 %
At December 31, 2024
Corporates$13,319 $110 $(346)$(236)$(12)$13,567 98.2 %47.8 %
U.S. government and government agencies6,724 8 (149)(141)— 6,865 97.9 %24.1 %
Asset-backed securities2,900 19 (32)(13)(8)2,921 99.3 %10.4 %
Non-U.S. government securities2,546 30 (107)(77)(1)2,624 97.0 %9.1 %
Residential mortgage-backed securities 1,079 6 (31)(25)— 1,104 97.7 %3.9 %
Commercial mortgage-backed securities1,058 6 (11)(5)(1)1,064 99.4 %3.8 %
Municipal bonds263 — (16)(16)— 279 94.3 %0.9 %
Total$27,889 $179 $(692)$(513)$(22)$28,424 98.1 %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,
20252024202420242024
Credit quality distribution of total fixed maturities (1):
U.S. government and government agencies (2)$7,827 26.3 %$7,498 26.9 %$6,725 22.8 %$6,041 23.1 %$5,106 20.8 %
AAA4,698 15.8 %4,330 15.5 %4,876 16.5 %4,599 17.6 %4,495 18.3 %
AA2,287 7.7 %2,285 8.2 %2,552 8.6 %2,507 9.6 %2,405 9.8 %
A5,931 20.0 %5,138 18.4 %5,664 19.2 %4,854 18.5 %4,912 20.0 %
BBB6,625 22.3 %6,467 23.2 %7,361 24.9 %6,144 23.5 %5,672 23.1 %
BB1,051 3.5 %978 3.5 %1,097 3.7 %979 3.7 %920 3.7 %
B605 2.0 %458 1.6 %534 1.8 %521 2.0 %484 2.0 %
Lower than B26 0.1 %28 0.1 %37 0.1 %29 0.1 %30 0.1 %
Not rated661 2.2 %707 2.5 %685 2.3 %501 1.9 %534 2.2 %
Total fixed maturities, at fair value$29,711 100.0 %$27,889 100.0 %$29,531 100.0 %$26,175 100.0 %$24,558 100.0 %
Maturity profile of total fixed maturities:
Due in one year or less$533 1.8 %$486 1.7 %$506 1.7 %$672 2.6 %$580 2.4 %
Due after one year through five years16,570 55.8 %15,880 56.9 %16,255 55.0 %14,036 53.6 %13,582 55.3 %
Due after five years through ten years6,179 20.8 %5,993 21.5 %6,760 22.9 %5,852 22.4 %4,816 19.6 %
Due after 10 years656 2.2 %493 1.8 %562 1.9 %469 1.8 %440 1.8 %
23,938 80.6 %22,852 81.9 %24,083 81.6 %21,029 80.3 %19,418 79.1 %
Residential mortgage-backed securities1,755 5.9 %1,079 3.9 %1,313 4.4 %1,186 4.5 %1,179 4.8 %
Commercial mortgage-backed securities931 3.1 %1,058 3.8 %1,146 3.9 %1,160 4.4 %1,197 4.9 %
Asset-backed securities3,087 10.4 %2,900 10.4 %2,989 10.1 %2,800 10.7 %2,764 11.3 %
Total fixed maturities, at fair value$29,711 100.0 %$27,889 100.0 %$29,531 100.0 %$26,175 100.0 %$24,558 100.0 %

(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,
20252024202420242024
Sector:
Industrials$7,157 49.1 %$6,673 50.1 %$8,145 54.0 %$6,886 53.0 %$6,691 53.1 %
Financials5,881 40.3 %5,207 39.1 %5,208 34.5 %4,573 35.2 %4,477 35.5 %
Utilities1,039 7.1 %951 7.1 %1,237 8.2 %1,135 8.7 %1,065 8.4 %
All other (1)512 3.5 %488 3.7 %491 3.3 %401 3.1 %375 3.0 %
Total$14,589 100.0 %$13,319 100.0 %$15,081 100.0 %$12,995 100.0 %$12,608 100.0 %
Credit quality distribution (2):
AAA$194 1.3 %$196 1.5 %$241 1.6 %$213 1.6 %$229 1.8 %
AA915 6.3 %918 6.9 %1,002 6.6 %1,061 8.2 %1,067 8.5 %
A5,092 34.9 %4,248 31.9 %4,771 31.6 %4,092 31.5 %4,217 33.4 %
BBB6,308 43.2 %6,119 45.9 %7,022 46.6 %5,819 44.8 %5,362 42.5 %
BB1,001 6.9 %900 6.8 %1,019 6.8 %909 7.0 %856 6.8 %
B604 4.1 %454 3.4 %529 3.5 %516 4.0 %481 3.8 %
Lower than B26 0.2 %28 0.2 %37 0.2 %29 0.2 %30 0.2 %
Not rated449 3.1 %456 3.4 %460 3.1 %356 2.7 %366 2.9 %
Total$14,589 100.0 %$13,319 100.0 %$15,081 100.0 %$12,995 100.0 %$12,608 100.0 %

(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, 2025:
(U.S. Dollars in millions)Fair
Value		% of Asset Class% of Investable AssetsCredit Quality (1)
Issuer:
JPMorgan Chase & Co.$431 3.0 %1.0 %A/A1
Morgan Stanley400 2.7 %0.9 %A/A1
Bank of America Corporation350 2.4 %0.8 %A-/A1
The Goldman Sachs Group, Inc.253 1.7 %0.6 %A-/A2
Citigroup Inc.244 1.7 %0.6 %BBB+/A3
Hyundai Motor Company233 1.6 %0.5 %A-/A3
Blue Owl Capital Inc.231 1.6 %0.5 %BBB-/Baa3
Canada181 1.2 %0.4 %AA-/Aa2
Blackstone Inc.178 1.2 %0.4 %BBB-/Baa2
Wells Fargo & Company177 1.2 %0.4 %BBB+/A1
Total$2,678 18.4 %6.2 %
 
(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)AgenciesAAAAAABBBNon-Investment GradeTotal
At March 31, 2025      
Residential mortgage-backed securities$1,286 $468 $1 $— $— $— $1,755 
Commercial mortgage-backed securities7 446 188 49 151 90 931 
Asset-backed securities— 1,717 362 707 137 164 3,087 
Total$1,293 $2,631 $551 $756 $288 $254 $5,773 
At December 31, 2024
Residential mortgage-backed securities$769 $309 $— $1 $— $— $1,079 
Commercial mortgage-backed securities7 556 193 63 147 92 1,058 
Asset-backed securities— 1,432 336 715 184 233 2,900 
Total$776 $2,297 $529 $779 $331 $325 $5,037 
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 includes realized and unrealized changes in the fair value of equity securities and assets accounted for using the fair value option, realized and unrealized gains and losses on derivative instruments, changes in the allowance for credit losses on financial assets and gains and losses realized from the acquisition or disposition of subsidiaries), equity in net income or loss of investment funds accounted for using the equity method, net foreign exchange gains or losses, transaction costs and other, net of income taxes and the use of annualized operating return on average common equity. The presentation of after-tax operating income available to Arch common shareholders and annualized operating return on average common equity are non-GAAP financial measures as defined in Regulation G. The reconciliation of such measures to net income available to Arch common shareholders and annualized net income return on average common equity (the most directly comparable GAAP financial measures) in accordance with Regulation G is included on the following page.
The Company believes that net realized gains or losses, equity in net income or loss of investment funds accounted for using the equity method, net foreign exchange gains or losses and transaction costs and other, in any particular period are not indicative of the performance of, or trends in, the Company’s business. Although net realized gains or losses, equity in net income or loss of investment funds accounted for using the equity method and net foreign exchange gains or losses are an integral part of the Company’s operations, the decision to realize these items are independent of the insurance underwriting process and result, in large part, from general economic and financial market conditions. Furthermore, certain users of the Company’s financial information believe that, for many companies, the timing of the realization of investment gains or losses is largely opportunistic. In addition, changes in the allowance for credit losses and net impairment losses recognized in earnings on the Company’s investments represent other-than-temporary declines in expected recovery values on securities without actual realization.
The use of the equity method on certain of the Company’s investments in certain funds that invest in fixed maturity securities is driven by the ownership structure of such funds (either limited partnerships or limited liability companies). In applying the equity method, these investments are initially recorded at cost and are subsequently adjusted based on the Company’s proportionate share of the net income or loss of the funds (which include changes in the fair value of the underlying securities in the funds). This method of accounting is different from the way the Company accounts for its other fixed maturity securities and the timing of the recognition of equity in net income or loss of investment funds accounted for using the equity method may differ from gains or losses in the future upon sale or maturity of such investments.
Transaction costs and other include 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 (loss).’
Total return on investments includes investment income, equity in net income or loss of investment funds accounted for using the equity method, net realized gains and losses (excluding changes in the allowance for credit losses on non-investment related financial assets) and the change in unrealized gains and losses generated by the Company’s investment portfolio. Total return is calculated on a pre-tax basis and before investment expenses, and reflects the effect of financial market conditions along with foreign currency fluctuations. Management uses total return on investments as a key measure of the return generated to Arch common shareholders, and compares the return generated by the Company’s investment portfolio against benchmark returns during the periods presented.
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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,
 20252024202420242024
Net income available to Arch common shareholders$564 $925 $978 $1,259 $1,110 
Net realized (gains) losses (1)(3)161 (169)(122)(67)
Equity in net (income) loss of investment funds accounted for using the equity method(53)(143)(171)(167)(99)
Net foreign exchange (gains) losses27 (106)63 (1)(31)
Transaction costs and other10 26 30 18 7 
Income tax expense (benefit) (2)42 3 31 (6)13 
After-tax operating income available to Arch common shareholders$587 $866 $762 $981 $933 
Diluted per common share results:
Net income available to Arch common shareholders$1.48 $2.42 $2.56 $3.30 $2.92 
Net realized (gains) losses (1)(0.01)0.41 (0.44)(0.32)(0.18)
Equity in net (income) loss of investment funds accounted for using the equity method(0.14)(0.37)(0.45)(0.44)(0.26)
Net foreign exchange (gains) losses0.07 (0.28)0.16 0.00 (0.08)
Transaction costs and other0.03 0.07 0.08 0.05 0.02 
Income tax expense (benefit) (2)0.11 0.01 0.08 (0.02)0.03 
After-tax operating income available to Arch common shareholders$1.54 $2.26 $1.99 $2.57 $2.45 
Weighted average common shares and common share equivalents outstanding - diluted381.9 382.8 382.3 381.6 380.5 
Beginning common shareholders’ equity$19,990 $21,444 $19,835 $18,525 $17,523 
Ending common shareholders’ equity20,715 19,990 21,444 19,835 18,525 
Average common shareholders’ equity$20,353 $20,717 $20,640 $19,180 $18,024 
Annualized net income return on average common equity11.1 %17.9 %19.0 %26.3 %24.6 %
Annualized operating return on average common equity11.5 %16.7 %14.8 %20.5 %20.7 %

(1)    Net realized gains or losses include realized and unrealized changes in the fair value of equity securities and assets accounted for using the fair value option, realized and unrealized gains and losses on derivative instruments, changes in the allowance for credit losses on financial assets and gains and losses realized from the acquisition or disposition of subsidiaries.
(2)    Income tax expense (benefit) on net realized gains or losses, equity in net income (loss) of investment funds accounted for using the equity method, net foreign exchange gains or losses and transaction costs and other reflects the relative mix reported by jurisdiction and the varying tax rates in each jurisdiction.

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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,
 20252024202420242024
Arch Operating Income Components:
Income (loss) before income taxes and income (loss) from operating affiliates$678 $937 $1,050 $1,321 $1,166 
Net realized (gains) losses(3)161 (169)(122)(67)
Equity in net (income) loss of investment funds accounted for using the equity method(53)(143)(171)(167)(99)
Net foreign exchange (gains) losses27 (106)63 — (31)
Transaction costs and other10 26 30 18 7 
Income (loss) from operating affiliates
17 64 36 45 55 
Pre-tax operating income available to Arch (b)676 939 839 1,095 1,031 
Income tax (expense) benefit (a)(79)(63)(67)(104)(88)
After-tax operating income available to Arch597 876 772 991 943 
Preferred dividends(10)(10)(10)(10)(10)
After-tax operating income available to Arch common shareholders$587 $866 $762 $981 $933 
Effective tax rate on pre-tax operating income (loss) available to Arch (a)/(b)11.7 %6.7 %8.0 %9.5 %8.5 %

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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,
20252024202420242024
Debt:
Arch senior notes, due May 1, 2034 ($300 principal, 7.35%)$300 $300 $300 $300 $300 
Arch-U.S. senior notes, due Nov. 1, 2043 ($500 principal, 5.144%) (1)500 500 500 500 500 
Arch Finance senior notes, due December 15, 2026 ($500 principal, 4.011%) (2)500 500 500 500 500 
Arch Finance senior notes, due December 15, 2046 ($450 principal, 5.031%) (2)450 450 450 450 450 
Arch senior notes, due June 30, 2050 ($1,000 principal, 3.635%)1,000 1,000 1,000 1,000 1,000 
Deferred debt costs on senior notes(22)(22)(23)(23)(23)
Revolving credit agreement borrowings, due August 23, 2028— — — — — 
Total debt$2,728 $2,728 $2,727 $2,727 $2,727 
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)20,715 19,990 21,444 19,835 18,525 
Total shareholders’ equity available to Arch$21,545 $20,820 $22,274 $20,665 $19,355 
Total capital available to Arch$24,273 $23,548 $25,001 $23,392 $22,082 
Common shares outstanding, net of treasury shares (b)375.6 376.4 376.2 376.0 375.3 
Book value per common share (3) (a)/(b)$55.15 $53.11 $57.00 $52.75 $49.36 
Leverage ratios:
Senior notes/total capital available to Arch11.2 %11.6 %10.9 %11.7 %12.3 %
Revolving credit agreement borrowings/total capital available to Arch— %— %— %— %— %
Debt/total capital available to Arch11.2 %11.6 %10.9 %11.7 %12.3 %
Preferred/total capital available to Arch3.4 %3.5 %3.3 %3.5 %3.8 %
Debt and preferred/total capital available to Arch14.7 %15.1 %14.2 %15.2 %16.1 %

(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 EndedCumulative
 March 31,December 31,September 30,June 30,March 31,March 31,
 202520242024202420242025
Effect of share repurchases:
Aggregate cost of shares repurchased$196.4 $23.5 $— $— $— $6,089.6 
Shares repurchased2.2 0.3 — — — 436.0 
Average price per share repurchased$88.89 $89.63 $— $— $— $13.97 
Remaining share repurchase authorization (1)$800.4 
(1)    Repurchases under the share repurchase authorization may be effected from time to time in open market or privately negotiated transactions.
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