Exhibit 10.12

                              EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT ("Agreement") dated as of October 23, 2001 between
Arch Capital Group Ltd., a Bermuda corporation ("Parent"), Arch Reinsurance
Ltd., a Bermuda corporation (the "Company" and, together with Parent,
collectively referred to herein as the "Companies"), and Paul B. Ingrey (the
"Executive").

     The parties hereto agree as follows:


                                    ARTICLE 1

                                   DEFINITIONS

     SECTION 1.01. Definitions. For purposes of this Agreement, the following
terms have the meanings set forth below:

     "Base Salary" has the meaning set forth in Section 4.01.

     "Cause" means (a) theft or embezzlement by the Executive with respect to
the Companies or their Subsidiaries; (b) malfeasance or gross negligence in the
performance of the Executive's duties; (c) the commission by the Executive of
any felony or any crime involving moral turpitude; (d) willful or prolonged
absence from work by the Executive (other than by reason of disability due to
physical or mental illness) or failure, neglect or refusal by the Executive to
perform his duties and responsibilities without the same being corrected within
ten (10) days after being given written notice thereof; (e) continued and
habitual use of alcohol by the Executive to an extent which materially impairs
the Executive's performance of his duties without the same being corrected
within ten (10) days after being given written notice thereof; (f) the
Executive's use of illegal drugs without the same being corrected within ten
(10) days after being given written notice thereof; (g) the Executive's failure
to use his best efforts to obtain, maintain or renew the work permit described
in Section 3.02 below without the same being corrected within ten (10) days
after being given written notice thereof; or (h) the material breach by the
Executive of any of the covenants contained in this Agreement.

     "Confidential Information" means information that is not generally known to
the public and that was or is used, developed or obtained by the Companies or
their Subsidiaries in connection with their business. It shall not include
information (a) required to be disclosed by court or administrative order, (b)
lawfully obtainable from other sources or which is in the public domain through
no fault of the Executive; or (c) the disclosure of which is consented to in
writing by the Companies.

     "Date of Termination" has the meaning set forth in Section 5.06.


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     "Employment Period" has the meaning set forth in Section 2.01.

     "Good Reason" means, without the Executive's written consent, (a) the
material diminution of any material duties or responsibilities of the Executive
without the same being corrected within ten (10) days after being given written
notice thereof; (b) a material reduction in the Executive's Base Salary; or (c)
the Company giving written notice pursuant to Section 5.01 of its intention not
to extend the Employment Period.

     "Intellectual Property" has the meaning set forth in Section 7.01.

     "Notice of Termination" has the meaning set forth in Section 5.05.

     "Noncompetition Period" has the meaning set forth in Section 9.01.

     "Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, an estate, a trust, a
joint venture, an unincorporated organization or a governmental entity or any
department, agency or political subdivision thereof.

     "Permanent Disability" means those circumstances where the Executive is
unable to continue to perform the usual customary duties of his assigned job or
as otherwise assigned in accordance with the provisions of this Agreement for a
period of six (6) months in any twelve (12) month period because of physical,
mental or emotional incapacity resulting from injury, sickness or disease. Any
questions as to the existence of a Permanent Disability shall be determined by a
qualified, independent physician selected by the Companies and approved by the
Executive (which approval shall not be unreasonably withheld). The determination
of any such physician shall be final and conclusive for all purposes of this
Agreement.

     "Reimbursable Expenses" has the meaning set forth in Section 4.04.

     "Subsidiary" or "Subsidiaries" means, with respect to any Person, any
corporation, partnership, limited liability company, association or other
business entity of which (a) if a corporation, fifty (50) percent or more of the
total voting power of shares of stock entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or combination
thereof; or (b) if a partnership, limited liability company, association or
other business entity, fifty (50) percent or more of the partnership or other
similar ownership interest thereof is at the time owned or controlled, directly
or indirectly, by any Person or one or more Subsidiaries of that Person or a
combination thereof. For purposes of this definition, a Person or Persons will
be deemed to have a fifty (50) percent or more ownership interest in a
partnership, limited liability company, association or other business entity if
such Person or Persons are allocated fifty (50)


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                                      -3-


percent or more of partnership, limited liability company, association or other
business entity gains or losses or control the managing director or member or
general partner of such partnership, limited liability company, association or
other business entity.


                                    ARTICLE 2

                                   EMPLOYMENT

     SECTION 2.01. Employment. The Company shall employ the Executive, and the
Executive shall accept employment with the Company, upon the terms and
conditions set forth in this Agreement for the period beginning on the date the
work permit described in Section 3.02 is issued to the Executive (the "Work
Permit Date") and ending as provided in Section 5.01. For the period beginning
on the date hereof and ending on the Work Permit Date, Parent shall employ the
Executive, and the Executive hereby accepts employment with Parent for such
period. The period beginning on the date hereof and ending as provided in
Section 5.01 is referred to herein as the "Employment Period."


                                    ARTICLE 3

                               POSITION AND DUTIES

     SECTION 3.01. Position and Duties. Effective on the Work Permit Date, the
Executive shall serve as Chairman and Chief Executive Officer of the Company and
shall have such responsibilities, powers and duties as may from time to time be
prescribed by the Board of Directors of the Company; provided that such
responsibilities, powers and duties are substantially consistent with those
customarily assigned to individuals serving in such position at comparable
companies or as may be reasonably required by the conduct of the business of the
Company. Prior to the Work Permit Date the Executive shall be employed by Parent
and shall only provide services reasonably required in connection with obtaining
financing for Parent. During the Employment Period the Executive shall devote
substantially all of his working time and efforts to the business and affairs of
the Companies. The parties hereto anticipate that the Executive's working time
hereunder will be approximately three (3) days per week. The Executive shall not
directly or indirectly render any services of a business, commercial or
professional nature to any other person or for-profit organization not related
to the business of the Companies or their Subsidiaries, whether for compensation
or otherwise, without prior written consent of the Parent. Notwithstanding the
foregoing, the Executive may continue to serve as a non-employee director of
Fairfax Financial Holdings and its subsidiary, Odyssey Reinsurance so long as
such service does not materially interfere with the performance of the
Executive's duties hereunder.


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     SECTION 3.02. Work Permits. The Executive shall use his best efforts to
obtain, maintain and renew a suitable (for the purposes of the Executive's
contemplated employment by the Company) work permit by the Bermuda government
authorities and any other permits required by any Bermuda government authority.
The Company shall be responsible for permit fees.

     SECTION 3.03. Work Location. While employed by the Company hereunder, the
Executive shall perform his duties (when not traveling or engaged elsewhere
outside the United States in the performance of his duties) at the offices of
the Company in Bermuda. The Executive shall travel to such places outside the
United States on the business of the Company in such manner and on such
occasions as the Company may from time to time reasonably require.


                                    ARTICLE 4

                            BASE SALARY AND BENEFITS

     SECTION 4.01. Base Salary. During the Employment Period, the Executive's
base salary will be $750,000 per annum (the "Base Salary"). The Base Salary will
be payable bi-monthly on the 15th and last working day of each month in arrears.
Annually during the Employment Period the Board of Directors of the Company
shall review with the Executive his job performance and compensation, and if
deemed appropriate by the Board of Directors of the Company, in its discretion,
the Executive's Base Salary may be increased. Normal hours of employment at the
Company are 8:30 a.m. to 5:00 p.m., Monday to Friday. The Executive's salary has
been computed to reflect that his regular duties are likely, from time to time,
to require more than the normal hours per week and the Executive shall not be
entitled to receive any additional remuneration for work outside normal hours.

     SECTION 4.02. Bonuses. In addition to the Base Salary, the Executive shall
be eligible to participate in an annual bonus plan on terms set forth from time
to time by the Board of Directors of the Company; provided, however, that the
Executive's target annual bonus will be 100% of his Base Salary.

     SECTION 4.03. Benefits. In addition to the Base Salary, and any bonuses
payable to the Executive pursuant to this Agreement, the Executive shall be
entitled to the following benefits during the Employment Period:

          (a) such major medical, life insurance and disability insurance
     coverage as is, or may during the Employment Period, be provided generally
     for other senior executive officers of the Company as set forth from time
     to time in the applicable plan documents;


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          (b) in addition to the usual public holidays and eight (8) paid days
     off for sick leave, a maximum of four (4) weeks of paid vacation annually
     during the term of the Employment Period (Section 11 of the Bermuda
     Employment Act 2000 shall otherwise not apply to the Executive's employment
     hereunder); and

          (c) benefits under any plan or arrangement available generally for the
     senior executive officers of the Company, subject to and consistent with
     the terms and conditions and overall administration of such plans as set
     forth from time to time in the applicable plan documents.

     SECTION 4.04. Expenses. The Company shall reimburse the Executive for all
reasonable expenses incurred by him in the course of performing his duties under
this Agreement which are consistent with the Company's policies in effect from
time to time with respect to travel, entertainment and other business expenses
("Reimbursable Expenses"), subject to the Companies' requirements with respect
to reporting and documentation of expenses.

     SECTION 4.05. Stock Options Restricted Stock and Stock Purchase. On the
date hereof, Parent shall grant to the Executive an option to acquire 417,000
shares of Parent's common stock at an exercise price of $20.00 per share. The
other terms of the stock option shall be as set forth in the form of Stock
Option Agreement attached hereto as Exhibit A. On the date hereof, Parent shall
also grant to the Executive 417,000 shares of restricted common stock of Parent
on the terms set forth in the form of Restricted Stock Agreement attached hereto
as Exhibit B. The stock option and restricted stock awards provided for this
Section 4.05 are made as an inducement essential to the Executive's entering
into the Agreement.


                                    ARTICLE 5

                              TERM AND TERMINATION

     SECTION 5.01. Term. The Employment Period will terminate on the third
anniversary of the date hereof; provided that (a) the Employment Period shall
terminate prior to such date upon the Executive's death or Permanent Disability,
(b) the Employment Period may be terminated by the Companies for any reason
prior to such date, and (c) the Employment Period may be terminated by the
Executive at any time prior to such date, if such termination shall be for Good
Reason. In addition, this Agreement will be automatically extended on the same
terms and conditions for successive one year periods following the original
three (3) year term until either the Companies or the Executive, at least sixty
(60) days prior to the expiration of the original term or any extended term,
shall give written notice of their intention not to renew the Agreement.


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     SECTION 5.02. Unjustified Termination. Except as otherwise provided in
Section 5.03, if the Employment Period shall be terminated prior to the
expiration of the third anniversary of the date hereof (or the extension of the
Employment Period pursuant to Section 5.01) by the Executive for Good Reason or
by the Companies not for Cause (collectively, an "Unjustified Termination") (it
being understood that a termination (a) for Cause, (b) as a result of the
Executive's resignation or leaving his employment other than for Good Reason, or
(c) as a result of the death or Permanent Disability of the Executive shall not
constitute an Unjustified Termination), the Executive shall be paid solely
(except as provided in Section 5.04 below) the amount of his Base Salary,
provided the Executive shall be entitled to such payments only if the Executive
has not breached and does not breach the provisions of Sections 6.01, 7.01,
8.01, 9.01 or 9.02 and the Executive has entered into and not revoked a general
release of claims reasonably satisfactory to the Companies. Such amounts will be
payable in equal monthly installments for a period of twelve (12) months
commencing on the first month anniversary of the Date of Termination. In
addition, promptly following an Unjustified Termination, the Executive shall
also be reimbursed all Reimbursable Expenses incurred by the Executive prior to
such Unjustified Termination.

     SECTION 5.03. Justified Termination. If the Employment Period shall be
terminated prior to the expiration of the third anniversary of the date hereof
(or the extension of the Employment Period pursuant to Section 5.01) (a) for
Cause, (b) as a result of the Executive's resignation or leaving of his
employment, other than for Good Reason, (c) as a result of the death or
Permanent Disability of the Executive, or (d) as a result of the Executive's
provision of written notice not to extend the Employment Period under Section
5.01 (collectively, a "Justified Termination"), the Executive shall be entitled
to receive solely (except as provided in Section 5.04 below) his Base Salary
through the Date of Termination and reimbursement of all Reimbursable Expenses
incurred by the Executive prior to such Justified Termination.

     SECTION 5.04. Benefits. Except as otherwise required by mandatory
provisions of law, all of the Executive's rights to fringe and other benefits
under this Agreement or otherwise, if any, accruing after the termination of the
Employment Period as a result of a Justified Termination will cease upon such
Justified Termination. Notwithstanding the foregoing, if such Justified
Termination is a result of a Permanent Disability or if the Employment Period is
terminated as a result of an Unjustified Termination, the Executive shall
continue to receive his major medical insurance coverage benefits from the
Company's plan in effect at the time of such termination for a period of twelve
(12) months after the Date of Termination.

     SECTION 5.05. Notice of Termination. Any termination by the Companies for
Permanent Disability or Cause or without Cause or by the Executive for Good
Reason shall be communicated by written Notice of Termination to the other party
hereto. For


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purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of employment under the provision indicated.

     SECTION 5.06. Date of Termination. "Date of Termination" shall mean (a) if
the Employment Period is terminated as a result of a Permanent Disability, five
(5) days after a Notice of Termination is given, (b) if the Employment Period is
terminated for Good Reason, the date specified in the Notice of Termination, and
(c) if the Employment Period is terminated for any other reason (including for
Cause), the date designated by the Companies in the Notice of Termination.


                                    ARTICLE 6

                            CONFIDENTIAL INFORMATION

     SECTION 6.01. Nondisclosure and Nonuse of Confidential Information. The
Executive will not disclose or use at any time during or after the Employment
Period any Confidential Information of which the Executive is or becomes aware,
whether or not such information is developed by him, except to the extent that
such disclosure or use is directly related to and required by the Executive's
performance of duties assigned to the Executive pursuant to this Agreement.
Under all circumstances and at all times, the Executive will take all
appropriate steps to safeguard Confidential Information in his possession and to
protect it against disclosure, misuse, espionage, loss and theft.


                                    ARTICLE 7

                              INTELLECTUAL PROPERTY

     SECTION 7.01. Ownership of Intellectual Property. In the event that the
Executive as part of his activities on behalf of the Companies generates,
authors or contributes to any invention, design, new development, device,
product, method of process (whether or not patentable or reduced to practice or
comprising Confidential Information), any copyrightable work (whether or not
comprising Confidential Information) or any other form of Confidential
Information relating directly or indirectly to the business of the Companies as
now or hereinafter conducted (collectively, "Intellectual Property"), the
Executive acknowledges that such Intellectual Property is the sole and exclusive
property of the Companies and hereby assigns all right title and interest in and
to such Intellectual Property to the Companies. Any copyrightable work prepared
in whole or in part by the Executive during the Employment Period will be deemed
"a work made for hire" under Section 201(b) of the Copyright Act of 1976, as
amended, and the Companies will own all of the rights comprised


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in the copyright therein. The Executive will promptly and fully disclose all
Intellectual Property and will cooperate with the Companies to protect the
Companies' interests in and rights to such Intellectual Property (including
providing reasonable assistance in securing patent protection and copyright
registrations and executing all documents as reasonably requested by the
Companies, whether such requests occur prior to or after termination of
Executive's employment hereunder).


                                    ARTICLE 8

              DELIVERY OF MATERIALS UPON TERMINATION OF EMPLOYMENT

     SECTION 8.01. Delivery of Materials upon Termination of Employment. As
requested by the Companies, from time to time and upon the termination of the
Executive's employment with the Companies for any reason, the Executive will
promptly deliver to the Companies all copies and embodiments, in whatever form
or medium, of all Confidential Information or Intellectual Property in the
Executive's possession or within his control (including written records, notes,
photographs, manuals, notebooks, documentation, program listings, flow charts,
magnetic media, disks, diskettes, tapes and all other materials containing any
Confidential Information or Intellectual Property) irrespective of the location
or form of such material and, if requested by the Companies, will provide the
Companies with written confirmation that all such materials have been delivered
to the Companies.


                                    ARTICLE 9

                       NONCOMPETITION AND NONSOLICITATION

     SECTION 9.01. Noncompetition. The Executive acknowledges that during his
employment with the Companies, he will become familiar with trade secrets and
other Confidential Information concerning the Companies, their Subsidiaries and
their respective predecessors, and that his services will be of special, unique
and extraordinary value to the Companies. In addition, the Executive hereby
agrees that at any time during the Employment Period, and for a period ending
two (2) years after the Date of Termination (if such termination is for Cause or
as a result of the Executive's resignation or leaving employment not for Good
Reason) (the "Noncompetition Period"), he will not directly or indirectly own,
manage, control, participate in, consult with, render services for or in any
manner engage in any business competing with the businesses of the Companies or
their Subsidiaries as such businesses exist or are in process or being planned
as of the Date of Termination, within any geographical area in which the
Companies or their Subsidiaries engage or plan to engage in such businesses.
Notwithstanding the foregoing, the Noncompetition Period shall be twelve (12)
months following the Date of Termination if such termination is by the Companies
without Cause, by the Executive for Good Reason or due to the Executive giving
written


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                                      -9-


notice pursuant to Section 5.01 of his intention not to extend the Employment
Period; provided however, that in such circumstances, the Noncompetition Period
may be extended up to a period of eighteen (18) months following the Date of
Termination by the Company if it elects in writing to pay the Executive his Base
Salary for the additional six (6) month period, such amount to be payable in
monthly installments over the additional six (6) month period. It shall not be
considered a violation of this Section 9.01 for the Executive (i) to be a
passive owner of not more than 2% of the outstanding stock of any class of a
corporation which is publicly traded, so long as the Executive has no active
participation in the business of such corporation, or (ii) to serve as a
nonemployee director of Fairfax Financial Holdings or its subsidiary Odyssey
Reinsurance.

     SECTION 9.02. Nonsolicitation. The Executive hereby agrees that (a) during
the Employment Period and for a period of two (2) years after the Date of
Termination (the "Nonsolicitation Period") the Executive will not, directly or
indirectly through another entity, induce or attempt to induce any employee of
the Companies or their Subsidiaries to leave the employ of the Companies or
their Subsidiaries, or in any way interfere with the relationship between the
Companies or their Subsidiaries and any employee thereof or otherwise employ or
receive the services of any individual who was an employee of the Companies or
their Subsidiaries at any time during such Nonsolicitation Period or within the
six-month period prior thereto and (b) during the Nonsolicitation Period, the
Executive will not induce or attempt to induce any customer, supplier, client,
insured, reinsured, reinsurer, broker, licensee or other business relation of
the Companies or their Subsidiaries to cease doing business with the Companies
or their Subsidiaries.

     SECTION 9.03. Enforcement. If, at the enforcement of Sections 9.01 or 9.02,
a court holds that the duration, scope or area restrictions stated herein are
unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope or area reasonable under such circumstances will be
substituted for the stated duration, scope or area and that the court will be
permitted to revise the restrictions contained in this Section 9 to cover the
maximum duration, scope and area permitted by law.


                                   ARTICLE 10

                                EQUITABLE RELIEF

     SECTION 10.01. Equitable Relief. The Executive acknowledges that (a) the
covenants contained herein are reasonable, (b) the Executive's services are
unique, and (c) a breach or threatened breach by him of any of his covenants and
agreements with the Companies contained in Sections 6.01, 7.01, 8.01, 9.01 or
9.02 could cause irreparable harm to the Companies for which they would have no
adequate remedy at law. Accordingly, and in addition to any remedies which the
Companies may have at law, in the event of an actual or


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threatened breach by the Executive of his covenants and agreements contained in
Sections 6.01, 7.01, 8.01, 9.01 or 9.02, the Companies shall have the absolute
right to apply to any court of competent jurisdiction for such injunctive or
other equitable relief as such court may deem necessary or appropriate in the
circumstances.


                                   ARTICLE 11

                            EXECUTIVE REPRESENTATIONS

     SECTION 11.01. Executive Representations. The Executive hereby represents
and warrants to the Companies that (a) the execution, delivery and performance
of this Agreement by the Executive does not and will not conflict with, breach,
violate or cause a default under any contract, agreement, instrument, order,
judgment or decree to which the Executive is a party or by which he is bound,
(b) the Executive is not a party to or bound by any employment agreement,
noncompetition agreement or confidentiality agreement with any other Person and
(c) upon the execution and delivery of this Agreement by the Companies, this
Agreement will be the valid and binding obligation of the Executive, enforceable
in accordance with its terms.


                                   ARTICLE 12

                                  MISCELLANEOUS

     SECTION 12.01. Remedies. The Companies will have all rights and remedies
set forth in this Agreement, all rights and remedies which the Companies have
been granted at any time under any other agreement or contact and all of the
rights which the Companies have under any law. The Companies will be entitled to
enforce such rights specifically, without posting a bond or other security, to
recover damages by reason of any breach of any provision of this Agreement and
to exercise all other rights granted by law. There are currently no disciplinary
or grievance procedures in place, there is no collective agreement in place, and
there is no probationary period.

     SECTION 12.02. Consent to Amendments. The provisions of this Agreement may
be amended or waived only by a written agreement executed and delivered by the
Companies and the Executive. No other course of dealing between the parties to
this Agreement or any delay in exercising any rights hereunder will operate as a
waiver of any rights of any such parties.

     SECTION 12.03. Successors and Assigns. All covenants and agreements
contained in this Agreement by or on behalf of any of the parties hereto will
bind and inure to the benefit of the respective successors and assigns of the
parties hereto whether so expressed


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or not, provided that the Executive may not assign his rights or delegate his
obligations under this Agreement without the written consent of the Companies.

     SECTION 12.04. Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.

     SECTION 12.05. Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, any one of which need not contain the signatures of
more than one party, but all of which counterparts taken together will
constitute one and the same agreement.

     SECTION 12.06. Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.

     SECTION 12.07. Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement will
be in writing and will be deemed to have been given when delivered personally to
the recipient, two (2) business days after the date when sent to the recipient
by reputable express courier service (charges prepaid) or four (4) business days
after the date when mailed to the recipient by certified or registered mail,
return receipt requested and postage prepaid. Such notices, demands and other
communications will be sent to the Executive and to the Companies at the
addresses set forth below.

                  If to the Executive:         To the last
                                               address delivered to the
                                               Companies by the Executive in the
                                               manner set forth herein.

                  If to Parent:                Arch Capital Group Ltd,
                                               Executive Offices
                                               20 Horseneck Lane
                                               Greenwich, CT 06830

                                               Attn:  General Counsel

                  If to the Company:           Arch Reinsurance Ltd.
                                               Richmond House
                                               Par-la-Ville Road
                                               Hamilton HM 11
                                               Bermuda


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                                      -12-


                                               Attn:  General Counsel

                  Copies (which shall not constitute notice) of notices to
                  Parent and the Company shall also be sent to:

                                               Cahill Gordon & Reindel
                                               80 Pine Street
                                               New York, NY 10005

                                               Attn:  Immanuel Kohn, Esq.

or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.

     SECTION 12.08. Withholding. The Companies may withhold from any amounts
payable under this Agreement such federal, state, local or foreign taxes as
shall be required to be withheld pursuant to any applicable law or regulation.

     SECTION 12.09. No Third Party Beneficiary. This Agreement will not confer
any rights or remedies upon any person other than the Companies, the Executive
and their respective heirs, executors, successors and assigns.

     SECTION 12.10. Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the parties and
supersedes any prior understandings, agreements or representations by or among
the parties, written or oral, that may have related in any way to the subject
matter hereof. This Agreement shall serve as a written statement of employment
for purposes of Section 6 of the Bermuda Employment Act 2000.

     SECTION 12.11. Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rule of strict construction will be applied against any party. Any
reference to any federal, state, local or foreign statute or law will be deemed
also to refer to all rules and regulations promulgated thereunder, unless the
context requires otherwise. The use of the word "including" in this Agreement
means "including without limitation" and is intended by the parties to be by way
of example rather than limitation.

     SECTION 12.12. Survival. Sections 6.01, 7.01, 8.01 and Articles 9 and 12
will survive and continue in full force in accordance with their terms
notwithstanding any termination of the Employment Period.

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     SECTION 12.13. GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS AGREEMENT WILL BE GOVERNED BY THE INTERNAL
LAW OF BERMUDA, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.





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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.


                        ARCH CAPITAL GROUP LTD.



                        By:    /s/ Louis T. Petrillo
                               ----------------------------------------------
                        Printed Name:  Louis T. Petrillo
                        Title:  Senior Vice President and
                                  General Counsel



                        ARCH REINSURANCE LTD.



                        By:    /s/ Graham B.R. Collis
                               ----------------------------------------------
                        Printed Name:  Graham B.R. Collis
                        Title:  Director


                               /s/ Paul B. Ingrey
                               ------------------------------------------------
                               Paul B. Ingrey