# EDGAR Filing Document

**Accession Number:** 0000947484
**File Stem:** 0000947484-23-000005
**Filing Date:** 2023-2
**Character Count:** 184786
**Document Hash:** 53c7ed09004a5c7eb0a448649b9b2cd1
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000947484-23-000005.hdr.sgml**: 20230213

**ACCESSION NUMBER**: 0000947484-23-000005

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 18

**CONFORMED PERIOD OF REPORT**: 20230213

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230213

**DATE AS OF CHANGE**: 20230213

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** ARCH CAPITAL GROUP LTD.
- **CENTRAL INDEX KEY:** 0000947484
- **STANDARD INDUSTRIAL CLASSIFICATION:** FIRE, MARINE & CASUALTY INSURANCE [6331]
- **IRS NUMBER:** 980374481
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-16209
- **FILM NUMBER:** 23618549

**BUSINESS ADDRESS:**
- **STREET 1:** WATERLOO HOUSE, GROUND FLOOR
- **STREET 2:** 100 PITTS BAY ROAD
- **CITY:** PEMBROKE
- **STATE:** D0
- **ZIP:** HM 08
- **BUSINESS PHONE:** 441-278-9250

**MAIL ADDRESS:**
- **STREET 1:** WATERLOO HOUSE, GROUND FLOOR
- **STREET 2:** 100 PITTS BAY ROAD
- **CITY:** PEMBROKE
- **STATE:** D0
- **ZIP:** HM 08

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** ARCH CAPITAL GROUP LTD
- **DATE OF NAME CHANGE:** 20000508

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** RISK CAPITAL HOLDINGS INC
- **DATE OF NAME CHANGE:** 19950816

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** RISK CAPITAL RE INC
- **DATE OF NAME CHANGE:** 19950703

?xml version="1.0" ? acgl-20230213

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K** 

**Current Report Pursuant to Section 13 or 15(d)**

**of the Securities Exchange Act of 1934**

**February 13, 2023** 

Date of Report (Date of earliest event reported)

**Arch Capital Group Ltd.** 

(Exact name of registrant as specified in its charter)

---

| | | |
|:---|:---|:---|
| **Bermuda** | **001-16209** | **98-0374481** |
| (State or other<br>jurisdiction of<br>incorporation or<br>organization) | (Commission File Number) | (I.R.S. Employer<br>Identification No.) |

---

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

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code:

**(441) 278-9250** 

**N/A**

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

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

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

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

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

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

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

---

| | | | |
|:---|:---|:---|:---|
| **Title of each class** | **Trading Symbol (s)** | **Name of each exchange on which registered** | **Name of each exchange on which registered** |
| Common shares, $0.0011 par value per share | ACGL | NASDAQ | Stock Market |
| Depositary shares, each representing a 1/1,000th interest in a 5.45% Series F preferred share | ACGLO | NASDAQ | Stock Market |
| Depositary shares, each representing a 1/1,000th interest in a 4.55% Series G preferred share | ACGLN | NASDAQ | Stock Market |

---

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

&nbsp;&nbsp;&nbsp;&nbsp;Emerging growth company&nbsp;&nbsp;&nbsp;&nbsp; ☐

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

------

**ITEM 2.02&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Results of Operations and Financial Condition</u>.**

On February 13, 2023, Arch Capital Group Ltd. issued a press release reporting its earnings and the availability of its financial supplement for the quarter ended December 31, 2022. The press release and financial supplement are attached to this Current Report on Form 8-K as Exhibit 99.1 and Exhibit 99.2, respectively, and are incorporated herein by reference.

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

**ITEM 9.01&nbsp;&nbsp;&nbsp;&nbsp;<u>Financial Statements and Exhibits</u>.**

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

---

| | |
|:---|:---|
| **EXHIBIT NO.** | **DESCRIPTION** |
| 99.1 | <u>[Press Release dated February 13, 2023 announcing the earnings of Arch Capital Group Ltd. for the quarter ended December 31, 2022](ex-991release123122.htm)</u> |
| 99.2 | <u>[2022 Fourth Quarter Financial Supplement](ex-992supplement123122.htm)</u> |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

------

SIGNATURES

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

---

| | | | |
|:---|:---|:---|:---|
| | ARCH CAPITAL GROUP LTD. | ARCH CAPITAL GROUP LTD. | ARCH CAPITAL GROUP LTD. |
| Date: February 13, 2023 | By: | /s/ François Morin | /s/ François Morin |
|  |  | Name: | François Morin |
|  |  | Title: | Executive Vice President, Chief Financial Officer and Treasurer |

---

## Exhibit 99.1

---

| | | |
|:---|:---|:---|
| | | **EXHIBIT 99.1** |
| ![archlogorgbsolida38.jpg](archlogorgbsolida38.jpg) | **PRESS RELEASE** | Arch Capital Group Ltd. |
| ![archlogorgbsolida38.jpg](archlogorgbsolida38.jpg) | **NASDAQ Symbol: ACGL** | Waterloo House, Ground Floor |
| ![archlogorgbsolida38.jpg](archlogorgbsolida38.jpg) | **For Immediate Release** | 100 Pitts Bay Road |
| ![archlogorgbsolida38.jpg](archlogorgbsolida38.jpg) | **February 13, 2023** | Pembroke HM 08 Bermuda |

---

**ARCH CAPITAL GROUP LTD. REPORTS 2022 FOURTH QUARTER RESULTS**

PEMBROKE, BERMUDA--(BUSINESS WIRE)--Arch Capital Group Ltd. (NASDAQ: ACGL; "Arch" or "the Company") announces its 2022 fourth quarter results. The results included:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Net income available to Arch common shareholders of $849.5 million, or $2.26 per share, a 29.5% annualized net income return on average common equity, compared to $613.1 million, or $1.58 per share, for the 2021 fourth quarter;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• After-tax operating income available to Arch common shareholders<sup>(1)</sup> of $805.9 million, or $2.14 per share, a 28.0% annualized operating return on average common equity, compared to $493.3 million, or $1.27 per share, for the 2021 fourth quarter;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pre-tax current accident year catastrophic losses for the Company's insurance and reinsurance segments, net of reinsurance and reinstatement premiums <sup>(1)</sup>, of $34.6 million;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Combined ratio excluding catastrophic activity and prior year development<sup>(1)</sup> of 82.0%, compared to 80.1% for the 2021 fourth quarter;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Favorable development in prior year loss reserves, net of related adjustments<sup>(1)</sup> of $270.1 million;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Book value per common share of $32.62 at December 31, 2022, a 9.9% increase from September 30, 2022.

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

---

| | | | |
|:---|:---|:---|:---|
| (U.S. Dollars in thousands) | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Three Months Ended December 31,** |
|  | **2022** | **2021** | **% Change** |
| Gross premiums written | $3795262 | $2861575 | 32.6 |
| Net premiums written | 3034636 | 2034427 | 49.2 |
| Net premiums earned | 2760919 | 2083630 | 32.5 |
| Underwriting income | 734264 | 471611 | 55.7 |
| **Underwriting Ratios** |  |  | **% Point Change** |
| Loss ratio | 45.0% | 47.8% | (2.8) |
| Underwriting expense ratio | 28.5% | 29.8% | (1.3) |
| Combined ratio | 73.5% | 77.6% | (4.1) |
| Combined ratio excluding catastrophic activity and prior year development <sup>(1)</sup> | 82.0% | 80.1% | 1.9 |

---

(1)&nbsp;&nbsp;&nbsp;&nbsp;Presentation represents a "non-GAAP" financial measure as defined in Regulation G. See 'Comments on Regulation G' for further details.

------

The following table summarizes the Company's consolidated financial data, including a reconciliation of net income or loss available to Arch common shareholders to after-tax operating income or loss available to Arch common shareholders and related diluted per share results (see 'Comments on Regulation G' for a discussion of non-GAAP financial measures):

---

| | | |
|:---|:---|:---|
| (U.S. Dollars in thousands, except share data) | **Three Months Ended** | **Three Months Ended** |
|  | **December 31,** | **December 31,** |
|  | **2022** | **2021** |
| Net income available to Arch common shareholders | $849504 | $613081 |
| Net realized (gains) losses | (79932) | (59517) |
| Equity in net (income) loss of investment funds accounted for using the equity method | (40351) | (67132) |
| Net foreign exchange (gains) losses | 81201 | (3221) |
| Transaction costs and other | 358 | 310 |
| Income tax expense (benefit) (1) | (4858) | 9736 |
| After-tax operating income available to Arch common shareholders | $805922 | $493257 |
| <u>Diluted per common share results:</u> |  |  |
| Net income available to Arch common shareholders | $2.26 | $1.58 |
| Net realized (gains) losses | (0.22) | (0.16) |
| Equity in net (income) loss of investment funds accounted for using the equity method | (0.11) | (0.17) |
| Net foreign exchange (gains) losses | 0.22 | (0.01) |
| Transaction costs and other | 0.00 | 0.00 |
| Income tax expense (benefit) (1) | (0.01) | 0.03 |
| After-tax operating income available to Arch common shareholders | $2.14 | $1.27 |
| Weighted average common shares and common share equivalents outstanding — diluted | 375878279 | 388869378 |
| Beginning common shareholders' equity | $10965110 | $12557526 |
| Ending common shareholders' equity | 12080073 | 12715896 |
| &nbsp;&nbsp;&nbsp;Average common shareholders' equity | $11522592 | $12636711 |
| Annualized net income return on average common equity | 29.5% | 19.4% |
| Annualized operating return on average common equity | 28.0% | 15.6% |

---

(1)&nbsp;&nbsp;&nbsp;&nbsp;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, transaction costs and other and loss on redemption of preferred shares reflects the relative mix reported by jurisdiction and the varying tax rates in each jurisdiction.

------

**Segment Information** 

The following section provides analysis on the Company's 2022 fourth quarter performance by operating segment. For additional details regarding the Company's operating segments, please refer to the Company's Financial Supplement dated December 31, 2022. The Company's segment information includes the use of underwriting income (loss) and a combined ratio excluding catastrophic activity and prior year development. Such items are non-GAAP financial measures (see 'Comments on Regulation G' for further details).

***Insurance Segment***

---

| | | | |
|:---|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Three Months Ended December 31,** |
| (U.S. Dollars in thousands) | **2022** | **2021** | **% Change** |
| Gross premiums written | $1644066 | $1486362 | 10.6 |
| Net premiums written | 1216730 | 1035986 | 17.4 |
| Net premiums earned | 1243587 | 1002897 | 24.0 |
| Underwriting income | $97684 | $70545 | 38.5 |
| **Underwriting Ratios** |  |  | **% Point Change** |
| Loss ratio | 58.7% | 59.2% | (0.5) |
| Underwriting expense ratio | 33.4% | 33.7% | (0.3) |
| Combined ratio | 92.1% | 92.9% | (0.8) |
| Catastrophic activity and prior year development: |  |  |  |
| &nbsp;&nbsp;&nbsp;Current accident year catastrophic events, net of reinsurance and reinstatement premiums | 2.8% | 2.0% | 0.8 |
| &nbsp;&nbsp;&nbsp;Net (favorable) adverse development in prior year loss reserves, net of related adjustments | (0.3)% | (0.3)% |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Combined ratio excluding catastrophic activity and prior year development | 89.6% | 91.2% | (1.6) |

---

Gross premiums written by the insurance segment in the 2022 fourth quarter were 10.6% higher than in the 2021 fourth quarter while net premiums written were 17.4% higher than in the 2021 fourth quarter. The higher level of net premiums written reflected increases in most lines of business, due in part to rate increases, new business opportunities and growth in existing accounts. In addition, the insurance segment is retaining more business due to ongoing changes in its reinsurance programs, as well as higher levels of growth in lines with a higher retention rate. Net premiums earned in the 2022 fourth quarter were 24.0% higher than in the 2021 fourth quarter, and reflect changes in net premiums written over the previous five quarters.

The 2022 fourth quarter loss ratio reflected 2.8 points of current year catastrophic activity, spread across a series of global events that occurred in 2022, compared to 2.0 points of catastrophic activity in the 2021 fourth quarter. Estimated net favorable development of prior year loss reserves, before related adjustments, reduced the loss ratio by 0.5 points in the 2022 fourth quarter, compared to 0.3 in the 2021 fourth quarter. The improvement in the 2022 fourth quarter loss ratio also reflected the impact of rate increases and changes in mix of business.

The underwriting expense ratio was 33.4% in the 2022 fourth quarter, compared to 33.7% in the 2021 fourth quarter, with the decrease primarily due to growth in net premiums earned.

------

***Reinsurance Segment***

---

| | | | |
|:---|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Three Months Ended December 31,** |
| (U.S. Dollars in thousands) | **2022** | **2021** | **% Change** |
| Gross premiums written | $1797037 | $1013090 | 77.4 |
| Net premiums written | 1543382 | 709141 | 117.6 |
| Net premiums earned | 1225208 | 779817 | 57.1 |
| Other underwriting income (loss) | (943) | 521 | (281.0) |
| Underwriting income (loss) | $263046 | $132510 | 98.5 |
| **Underwriting Ratios** |  |  | **% Point Change** |
| Loss ratio | 52.9% | 55.2% | (2.3) |
| Underwriting expense ratio | 25.5% | 27.9% | (2.4) |
| Combined ratio | 78.4% | 83.1% | (4.7) |
| Catastrophic activity and prior year development: |  |  |  |
| &nbsp;&nbsp;&nbsp;Current accident year catastrophic events, net of reinsurance and reinstatement premiums | 0.0% | 6.7% | (6.7) |
| &nbsp;&nbsp;&nbsp;Net (favorable) adverse development in prior year loss reserves, net of related adjustments | (4.5)% | (6.4)% | 1.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;Combined ratio excluding catastrophic activity and prior year development | 82.9% | 82.8% | 0.1 |

---

Gross premiums written by the reinsurance segment in the 2022 fourth quarter were 77.4% higher than in the 2021 fourth quarter, while net premiums written were 117.6% higher than in the 2021 fourth quarter. The comparison of gross and net premiums written in the 2022 fourth quarter were affected by a few non-recurring transactions, primarily impacting the other specialty line of business. Absent these items, gross and net premiums written would have been higher than in the 2021 fourth quarter by 47.9% and 61.0%, respectively. The growth in net premiums written reflected increases in most lines of business, primarily related to rate increases, new business opportunities and growth in existing accounts. Excluding the transactions mentioned above, net premiums earned in the 2022 fourth quarter were 38.1% higher than in the 2021 fourth quarter, and reflect changes in net premiums written over the previous five quarters.

The 2022 fourth quarter loss ratio reflected minimal current year catastrophic activity, compared to 7.1 points of catastrophic activity in the 2021 fourth quarter. Estimated net favorable development of prior year loss reserves, before related adjustments, reduced the loss ratio by 5.2 points in the 2022 fourth quarter, compared to 7.6 points in the 2021 fourth quarter. In addition, the 2022 fourth quarter loss ratio reflected the impact of rate increases and changes in mix of business. Absent the non-recurring transactions noted above, the 2022 fourth quarter loss ratio would have been 5.0 points lower than reported.

The underwriting expense ratio was 25.5% in the 2022 fourth quarter, compared to 27.9% in the 2021 fourth quarter. Absent the non-recurring transactions noted above, the 2022 fourth quarter underwriting expense ratio would have been 2.0 points higher than reported.

------

***Mortgage Segment***

---

| | | | |
|:---|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Three Months Ended December 31,** |
| (U.S. Dollars in thousands) | **2022** | **2021** | **% Change** |
| Gross premiums written | $355827 | $364134 | (2.3) |
| Net premiums written | 274524 | 289300 | (5.1) |
| Net premiums earned | 292124 | 300916 | (2.9) |
| Other underwriting income | 2226 | 2639 | (15.6) |
| Underwriting income | $373534 | $268556 | 39.1 |
| **Underwriting Ratios** |  |  | **% Point Change** |
| Loss ratio | (46.9)% | (9.4)% | (37.5) |
| Underwriting expense ratio | 19.8% | 21.1% | (1.3) |
| Combined ratio | (27.1)% | 11.7% | (38.8) |
| Prior year development: |  |  |  |
| &nbsp;&nbsp;&nbsp;Net (favorable) adverse development in prior year loss reserves, net of related adjustments | (72.1)% | (24.2)% | (47.9) |
| &nbsp;&nbsp;&nbsp;&nbsp;Combined ratio excluding prior year development | 45.0% | 35.9% | 9.1 |

---

Gross premiums written by the mortgage segment in the 2022 fourth quarter were 2.3% lower than in the 2021 fourth quarter, while net premiums written were 5.1% lower. The decrease in gross premiums written primarily reflected lower origination volume in the Australian market and lower U.S. primary mortgage insurance single premium business, which was partially offset by a higher volume of credit risk transfer contracts. Net premiums earned in the 2022 fourth quarter were 2.9% lower than in the 2021 fourth quarter, primarily due to a reduction in earnings from single premium policy terminations and an increase in ceded premiums earned, partially offset by growth in credit risk transfer business.

Estimated net favorable development of prior year loss reserves, before related adjustments, reduced the loss ratio by 71.1 points, primarily related to reserves on loans becoming delinquent after the onset of the COVID-19 pandemic, compared to 23.4 points in the 2021 fourth quarter. The percentage of loans in default on U.S. primary mortgage insurance business was 1.77% at December 31, 2022, compared to 1.73% at September 30, 2022.

The underwriting expense ratio was 19.8% in the 2022 fourth quarter, compared to 21.1% in the 2021 fourth quarter, with the decrease reflecting lower operating expenses due in part to profit commissions on business ceded related to favorable development of prior year loss reserves in the U.S.

------

***Corporate Segment***

The corporate segment results include net investment income, net realized gains or losses (which includes changes in the allowance for credit losses on financial assets), 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.

Investment returns were as follows:

---

| | | | |
|:---|:---|:---|:---|
| (U.S. Dollars in thousands, except per share data) | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **December 31,** | **September 30,** | **December 31,** |
|  | **2022** | **2022** | **2021** |
| Pre-tax net investment income | $181079 | $128640 | $90454 |
| &nbsp;&nbsp;&nbsp;*Per diluted share* | $*0.48* | $*0.34* | $*0.23* |
| Pre-tax investment income yield, at amortized cost (1) | 2.80% | 2.06% | 1.46% |
| Total return on investments (2) | 2.60% | (3.01)% | 0.39% |

---

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

(2)&nbsp;&nbsp;&nbsp;&nbsp;Presentation represents a "non-GAAP" financial measure as defined in Regulation G. See 'Comments on Regulation G' for further details.

The growth in net investment income in the 2022 fourth quarter compared to the 2022 third quarter and 2021 fourth quarter primarily reflects the effects of higher interest rates available in the market. Net realized gains or losses reflect sales of investments along with the impact of financial market movements on the Company's investment portfolio, including 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 and changes in the allowance for credit losses on financial assets. On a pre-tax basis, net realized gains for the 2022 fourth quarter were $79.9 million, a substantial portion of which represented unrealized changes in the fair value of equity securities and assets accounted for using the fair value option.

On a pre-tax basis, net foreign exchange losses for the 2022 fourth quarter were $81.2 million, compared to net foreign exchange gains for the 2021 fourth quarter of $3.2 million. For both periods, such amounts were primarily unrealized and resulted from the effects of revaluing the Company's net insurance liabilities required to be settled in foreign currencies at each balance sheet date. Changes in the value of available-for-sale investments held in foreign currencies due to foreign currency rate movements are reflected as a direct increase or decrease to shareholders' equity and are not included in the consolidated statements of income. Although the Company generally attempts to match the currency of its projected liabilities with investments in the same currencies, the Company may elect to over or underweight one or more currencies from time to time, which could increase the Company's exposure to foreign currency fluctuations and increase the volatility of the Company's shareholders' equity.

The Company's effective tax rate on income before income taxes was 6.6% for the 2022 fourth quarter and 5.1% for the year ended December 31, 2022, compared to 5.2% for the 2021 fourth quarter and 5.6% for the year ended December 31, 2021. The Company's effective tax rate on pre-tax operating income available to Arch common shareholders was 7.5% for the 2022 fourth quarter, compared to 4.7% for the 2021 fourth quarter. The Company's effective tax rate may fluctuate from period to period based upon the relative mix of income or loss reported by jurisdiction and the varying tax rates in each jurisdiction. The 2022 fourth quarter included a net discrete income tax benefit of $4.1 million, which decreased the effective tax rate on operating income available to Arch common shareholders by 0.5%, compared to a net discrete income tax benefit of $10.6 million for the 2021 fourth quarter, which decreased the effective tax rate on operating income available to Arch common shareholders by 2.0%. The discrete tax items in both periods primarily related to valuation allowance adjustments and prior year true-ups of non-U.S. deferred tax assets.

Income from operating affiliates for the 2022 fourth quarter was $36.2 million, or $0.10 per share, compared to $40.6 million, or $0.10 per share, for the 2021 fourth quarter, and primarily reflects amounts related to the Company's investment in Somers Group Holdings Ltd. ("Somers") and Coface SA.

------

**Conference Call** 

The Company will hold a conference call for investors and analysts at 11:00 a.m. Eastern Time on February 14, 2023. A live webcast of this call will be available via the Investors section of the Company's website at http://www.archgroup.com/investors. A recording of the webcast will be available in the Investors section of the Company's website approximately two hours after the event concludes and will be archived on the site for one year.

Please refer to the Company's Financial Supplement dated December 31, 2022, which is available via the Investors section of the Company's website at http://www.archgroup.com/investors. The Financial Supplement provides additional detail regarding the financial performance of the Company. From time to time, the Company posts additional financial information and presentations to its website, including information with respect to its subsidiaries. Investors and other recipients of this information are encouraged to check the Company's website regularly for additional information regarding the Company.

Arch Capital Group Ltd., is a publicly listed Bermuda exempted company with approximately $15.6 billion in capital at December 31, 2022. Arch, which is part of the S&P 500 index, provides insurance, reinsurance and mortgage insurance on a worldwide basis through its wholly owned subsidiaries.

**Comments on Regulation G**

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

This presentation includes the use of "after-tax operating income or loss available to Arch common shareholders," which is defined as net income available to Arch common shareholders, excluding net realized gains or losses (which includes changes in the allowance for credit losses on financial assets and net impairment losses recognized in earnings), 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 and loss on redemption of preferred shares, net of income taxes, and the use of annualized operating return on average common equity. The presentation of after-tax operating income available to Arch common shareholders and annualized operating return on average common equity are non-GAAP financial measures as defined in Regulation G. The reconciliation of such measures to net income available to Arch common shareholders and annualized net income return on average common equity (the most directly comparable GAAP financial measures) in accordance with Regulation G is included on page 2 of this release.

The Company believes that net realized gains or losses, equity in net income or loss of investment funds accounted for using the equity method, net foreign exchange gains or losses, transaction costs and other and loss on redemption of preferred shares in any particular period are not indicative of the performance of, or trends in, the Company's business performance. Although net realized gains or losses, equity in net income or loss of investment funds accounted for using the equity method and net foreign exchange gains or losses are an integral part of the Company's operations, the decision to realize investment gains or losses, the recognition of the change in the carrying value of investments accounted for using the fair value option in net realized gains or losses, the recognition of equity in net income or loss of investment funds accounted for using the equity method and the recognition of foreign exchange gains or losses 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 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 loss on redemption of preferred shares related to

------

the redemption of the Company's Series E preferred shares in September 2021 had no impact on shareholders' equity or cash flows. Due to these reasons, the Company excludes 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 from the calculation of after-tax operating income or loss available to Arch common shareholders.

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

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

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

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

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

------

The following tables summarize the Company's results by segment for the 2022 fourth quarter and 2021 fourth quarter and a reconciliation of underwriting income or loss to income or loss before income taxes and net income or loss available to Arch common shareholders:

---

| | | | | |
|:---|:---|:---|:---|:---|
| (U.S. Dollars in thousands) | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **Insurance** | **Reinsurance** | **Mortgage** | **Total** |
| Gross premiums written (1) | $1644066 | $1797037 | $355827 | $3795262 |
| Premiums ceded | (427336) | (253655) | (81303) | (760626) |
| Net premiums written | 1216730 | 1543382 | 274524 | 3034636 |
| Change in unearned premiums | 26857 | (318174) | 17600 | (273717) |
| Net premiums earned | 1243587 | 1225208 | 292124 | 2760919 |
| Other underwriting income (loss) |  | (943) | 2226 | 1283 |
| Losses and loss adjustment expenses | (729784) | (648654) | 137108 | (1241330) |
| Acquisition expenses | (244059) | (243640) | (12816) | (500515) |
| Other operating expenses | (172060) | (68925) | (45108) | (286093) |
| **Underwriting income (loss)** | $97684 | $263046 | $373534 | 734264 |
| Net investment income |  |  |  | 181079 |
| Net realized gains (losses) |  |  |  | 79932 |
| Equity in net income (loss) of investment funds accounted for using the equity method |  |  |  | 40351 |
| Other income (loss) |  |  |  | 8321 |
| Corporate expenses (2) |  |  |  | (17462) |
| Transaction costs and other (2) |  |  |  | (358) |
| Amortization of intangible assets |  |  |  | (25722) |
| Interest expense |  |  |  | (31700) |
| Net foreign exchange gains (losses) |  |  |  | (81224) |
| **Income (loss) before income taxes and income (loss) from operating affiliates** |  |  |  | 887481 |
| Income tax expense |  |  |  | (60919) |
| Income (loss) from operating affiliates |  |  |  | 36226 |
| **Net income (loss)** |  |  |  | 862788 |
| Dividends attributable to redeemable noncontrolling interests |  |  |  | (3100) |
| **Net income (loss) available to Arch** |  |  |  | 859688 |
| Preferred dividends |  |  |  | (10184) |
| **Net income (loss) available to Arch common shareholders** |  |  |  | $849504 |
| **Underwriting Ratios** |  |  |  |  |
| Loss ratio | 58.7% | 52.9% | (46.9)% | 45.0% |
| Acquisition expense ratio | 19.6% | 19.9% | 4.4% | 18.1% |
| Other operating expense ratio | 13.8% | 5.6% | 15.4% | 10.4% |
| Combined ratio | 92.1% | 78.4% | (27.1)% | 73.5% |
| Net premiums written to gross premiums written | 74.0% | 85.9% | 77.2% | 80.0% |

---

(1)&nbsp;&nbsp;&nbsp;&nbsp;Certain amounts included in the gross premiums written of each segment are related to intersegment transactions and are included in the gross premiums written of each segment. Accordingly, the sum of gross premiums written for each segment does not agree to the total gross premiums written as shown in the table above due to the elimination of intersegment transactions in the total.

(2)&nbsp;&nbsp;&nbsp;&nbsp;Certain expenses have been excluded from 'corporate expenses' and reflected in 'Transaction costs and other.' See 'Comments on Regulation G' for a further discussion of such items.

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| (U.S. Dollars in thousands) | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|  | **Insurance** | **Reinsurance** | **Mortgage** | **Total** |
| Gross premiums written (1) | $1486362 | $1013090 | $364134 | $2861575 |
| Premiums ceded | (450376) | (303949) | (74834) | (827148) |
| Net premiums written | 1035986 | 709141 | 289300 | 2034427 |
| Change in unearned premiums | (33089) | 70676 | 11616 | 49203 |
| Net premiums earned | 1002897 | 779817 | 300916 | 2083630 |
| Other underwriting income (loss) |  | 521 | 2639 | 3160 |
| Losses and loss adjustment expenses | (594108) | (430180) | 28435 | (995853) |
| Acquisition expenses | (188724) | (155694) | (13121) | (357539) |
| Other operating expenses | (149520) | (61954) | (50313) | (261787) |
| **Underwriting income (loss)** | $70545 | $132510 | $268556 | 471611 |
| Net investment income |  |  |  | 90454 |
| Net realized gains (losses) |  |  |  | 59517 |
| Equity in net income (loss) of investment funds accounted for using the equity method |  |  |  | 67132 |
| Other income (loss) |  |  |  | 9093 |
| Corporate expenses (2) |  |  |  | (17840) |
| Transaction costs and other (2) |  |  |  | (310) |
| Amortization of intangible assets |  |  |  | (33132) |
| Interest expense |  |  |  | (32248) |
| Net foreign exchange gains (losses) |  |  |  | 3163 |
| **Income (loss) before income taxes and income (loss) from operating affiliates** |  |  |  | 617440 |
| Income tax expense |  |  |  | (34406) |
| Income (loss) from operating affiliates |  |  |  | 40641 |
| **Net income (loss)** |  |  |  | 623675 |
| Dividends attributable to redeemable noncontrolling interests |  |  |  | (410) |
| **Net income (loss) available to Arch** |  |  |  | 623265 |
| Preferred dividends |  |  |  | (10184) |
| **Net income (loss) available to Arch common shareholders** |  |  |  | $613081 |
| **Underwriting Ratios** |  |  |  |  |
| Loss ratio | 59.2% | 55.2% | (9.4)% | 47.8% |
| Acquisition expense ratio | 18.8% | 20.0% | 4.4% | 17.2% |
| Other operating expense ratio | 14.9% | 7.9% | 16.7% | 12.6% |
| Combined ratio | 92.9% | 83.1% | 11.7% | 77.6% |
| Net premiums written to gross premiums written | 69.7% | 70.0% | 79.4% | 71.1% |

---

(1)&nbsp;&nbsp;&nbsp;&nbsp;Certain amounts included in the gross premiums written of each segment are related to intersegment transactions and are included in the gross premiums written of each segment. Accordingly, the sum of gross premiums written for each segment does not agree to the total gross premiums written as shown in the table above due to the elimination of intersegment transactions in the total.

(2)&nbsp;&nbsp;&nbsp;&nbsp;Certain expenses have been excluded from 'corporate expenses' and reflected in 'Transaction costs and other.' See 'Comments on Regulation G' for a further discussion of such items.

------

**Cautionary Note Regarding Forward-Looking Statements**

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

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

• the Company's ability to successfully implement its business strategy during "soft" as well as "hard" markets;

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

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

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

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

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

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

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

• the loss and addition of key personnel;

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

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

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

• the adequacy of the Company's loss reserves;

• severity and/or frequency of losses;

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

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

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

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

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

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

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

------

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

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

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

• uncertainty relating to determination of the London Inter-bank Offered Rate ("LIBOR") and the phasing out and replacement of LIBOR with alternative benchmark rates;

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

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

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

• a disruption caused by cyber-attacks or other technology breaches or failures on the Company or the Company's business partners and service providers, which could negatively impact the Company's business and/or expose the Company to litigation;

• statutory or regulatory developments, including as to tax policy matters and insurance and other regulatory matters such as the adoption of proposed legislation that would affect Bermuda-headquartered companies and/or Bermuda-based insurers or reinsurers and/or changes in regulations or tax laws applicable to the Company, its subsidiaries, brokers or customers, including new guidance implementing the Tax Cuts and Jobs Act of 2017 and the possible implementation of the Organization for Economic Cooperation and Development ("OECD") Pillar I and Pillar II initiative; and

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

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

---

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

---

## Exhibit 99.2

**EXHIBIT 99.2**

---

| | |
|:---|:---|
| ![arch-slantedxheaderxbluexg.gif](arch-slantedxheaderxbluexg.gif) | ![arch-slantedxheaderxbluexg.gif](arch-slantedxheaderxbluexg.gif) |
| | **Arch Capital Group Ltd.** |
| | Waterloo House, Ground Floor |
| | 100 Pitts Bay Road |
| | Pembroke HM 08 Bermuda |

---

**Financial Supplement** 

 **December 31, 2022**

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 <u>www.archgroup.com</u> for further information describing Arch.

---

| | |
|:---|:---|
| ![arch-slantedxcontactsxblue.gif](arch-slantedxcontactsxblue.gif) |  |
| **Arch Capital Group Ltd.** | **Investor Relations** |
| François Morin: (441) 278-9250 | Donald Watson: (914) 872-3616; dwatson@archgroup.com |

---

------

**Arch Capital Group Ltd. and Subsidiaries**

**Table of Contents**

---

| | | | |
|:---|:---|:---|:---|
| | | | **Page** |
| **I.** | **Financial Highlights** | **Financial Highlights** | <u>[3](#ide53c999eed5488983e3b77bcd5bb5c5_10)</u> |
| **II.** | **Consolidated Financial Statements** | **Consolidated Financial Statements** |  |
|  | a. | Consolidated Statements of Income | <u>[4](#ide53c999eed5488983e3b77bcd5bb5c5_13)</u> |
|  | b. | Consolidated Balance Sheets | <u>[5](#ide53c999eed5488983e3b77bcd5bb5c5_16)</u> |
|  | c. | Consolidated Statements of Changes in Shareholders' Equity | <u>[6](#ide53c999eed5488983e3b77bcd5bb5c5_19)</u> |
|  | d. | Consolidated Statements of Cash Flows | <u>[7](#ide53c999eed5488983e3b77bcd5bb5c5_22)</u> |
| **III.** | **Segment Information** | **Segment Information** |  |
|  | a. | Overview | <u>[8](#ide53c999eed5488983e3b77bcd5bb5c5_25)</u> |
|  | b. | Consolidated Results | <u>[10](#ide53c999eed5488983e3b77bcd5bb5c5_28)</u> |
|  | c. | Insurance Segment Results | <u>[14](#ide53c999eed5488983e3b77bcd5bb5c5_40)</u> |
|  | d. | Reinsurance Segment Results | <u>[16](#ide53c999eed5488983e3b77bcd5bb5c5_46)</u> |
|  | e. | Mortgage Segment Results | <u>[18](#ide53c999eed5488983e3b77bcd5bb5c5_52)</u> |
|  | f. | Consolidated Results Excluding 'Other' Segment | <u>[22](#ide53c999eed5488983e3b77bcd5bb5c5_64)</u> |
|  | g. | Selected Information on Losses and Loss Adjustment Expenses | <u>[23](#ide53c999eed5488983e3b77bcd5bb5c5_67)</u> |
| **IV.** | **Investment Information** | **Investment Information** |  |
|  | a. | Investable Asset Summary and Investment Portfolio Metrics | <u>[24](#ide53c999eed5488983e3b77bcd5bb5c5_70)</u> |
|  | b. | Composition of Net Investment Income, Yield and Total Return | <u>[25](#ide53c999eed5488983e3b77bcd5bb5c5_76)</u> |
|  | c. | Composition of Fixed Maturities | <u>[26](#ide53c999eed5488983e3b77bcd5bb5c5_79)</u> |
|  | d. | Credit Quality Distribution and Maturity Profile | <u>[27](#ide53c999eed5488983e3b77bcd5bb5c5_82)</u> |
|  | e. | Analysis of Corporate Exposures | <u>[28](#ide53c999eed5488983e3b77bcd5bb5c5_85)</u> |
|  | f. | Structured Securities | <u>[29](#ide53c999eed5488983e3b77bcd5bb5c5_88)</u> |
| **V.** | **Other** | **Other** |  |
|  | a. | Comments on Regulation G | <u>[30](#ide53c999eed5488983e3b77bcd5bb5c5_91)</u> |
|  | b. | Operating Income Reconciliation and Annualized Operating Return on Average Common Equity | <u>[31](#ide53c999eed5488983e3b77bcd5bb5c5_94)</u> |
|  | c. | Operating Income and Effective Tax Rate Calculations | <u>[32](#ide53c999eed5488983e3b77bcd5bb5c5_97)</u> |
|  | d. | Capital Structure and Share Repurchase Activity | <u>[33](#ide53c999eed5488983e3b77bcd5bb5c5_100)</u> |

---

 1

------

**Arch Capital Group Ltd. and Subsidiaries**

**Basis of Presentation**

**<u>Basis of Presentation</u>**

All financial information contained herein is unaudited, however, certain information relating to the consolidated balance sheet at December 31, 2021 is derived from or agrees to audited financial information. During the 2021 first quarter, the Company changed its presentation of 'income (loss) from operating affiliates' on its consolidated statements of income for all periods presented to reclass such item from 'other income (loss)'. The Company also changed its presentation of 'investment in operating affiliates' on its consolidated balance sheet for all periods presented to reclass such item from 'other assets'. Unless otherwise noted, all data is in thousands, except for share and per share amounts and ratio information.

In March 2014, the Company invested $100.0 million to acquire common equity and a warrant to purchase additional common equity of Somers Group Holdings Ltd. (formerly Watford Holdings Ltd.), ("Somers"). In accordance with GAAP, the Company consolidated the results of Somers in its financial statements. Somers was considered a variable interest entity and the Company concluded that it was the primary beneficiary of Somers, through June 30, 2021. **As such, 100% of the results of Somers were included in the Company's consolidated financial statements as of and for the periods ended June 30, 2021.** The portion of Somers' earnings owned by third parties was recorded in the consolidated statements of income as 'amounts attributable to noncontrolling interests.' In addition, through June 30, 2021 the Company reflected Somers' redeemable preference shares in the mezzanine section of the Company's consolidated balance sheets as 'redeemable noncontrolling interests'. In July 2021, the Company announced the completion of the previously disclosed acquisition of Somers by Greysbridge. Based on the governing documents of Greysbridge, the Company has concluded that, while it will retain significant influence over Somers, Somers no longer constitutes a variable interest entity. **Accordingly, effective July 1, 2021, Arch no longer consolidates the results of Somers in its consolidated financial statements and footnotes.**

**<u>Cautionary Note Regarding Forward-Looking Statements</u>**

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

Forward-looking statements can generally be identified by the use of forward-looking terminology such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe" or "continue" or their negative or variations or similar terminology. Forward-looking statements involve the Company's current assessment of risks and uncertainties. Actual events and results may differ materially from those expressed or implied in these statements. A non-exclusive list of the important factors that could cause actual results to differ materially from those in such forward-looking statements includes the following: adverse general economic and market conditions; increased competition; pricing and policy term trends; fluctuations in the actions of rating agencies and the Company's ability to maintain and improve the Company's ratings; investment performance; the loss and addition of key personnel; the adequacy of the Company's loss reserves, severity and/or frequency of losses, greater than expected loss ratios and adverse development on claim and/or claim expense liabilities; greater frequency or severity of unpredictable natural and man-made catastrophic events; including pandemics such as COVID-19; the impact of acts of terrorism and acts of war; changes in regulations and/or tax laws in the United States or elsewhere; the Company's ability to successfully integrate, establish and maintain operating procedures as well as integrate the businesses we have acquired or may acquire into the existing operations; changes in accounting principles or policies; material differences between actual and expected assessments for guaranty funds and mandatory pooling arrangements; availability and cost to the Company of reinsurance to manage gross and net exposures; the failure of others to meet their obligations to the Company; uncertainty relating to determination of the London Inter-bank Offered Rate ("LIBOR") and the phasing out and replacement of LIBOR with alternative benchmark rates; a disruption caused by cyber-attacks or other technology breaches or failures on the Company or 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.

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. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on the Company's behalf are expressly qualified in their entirety by these cautionary statements. 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 (1):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| (U.S. Dollars in thousands, except share data) | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2021** | **Change** | **2022** | **2021** | **Change** |
| **Underwriting results:** |  |  |  |  |  |  |
| Gross premiums written | $3795262 | $2861575 | 32.6% | $15326447 | $12463788 | 23.0% |
| Net premiums written | 3034636 | 2034427 | 49.2% | 11077189 | 8663635 | 27.9% |
| Net premiums earned | 2760919 | 2083630 | 32.5% | 9678077 | 7750330 | 24.9% |
| Underwriting income (loss) (2) | 734264 | 471611 | 55.7% | 1796032 | 1239740 | 44.9% |
| Loss ratio | 45.0% | 47.8% | (2.8) | 51.9% | 55.8% | (3.9) |
| Acquisition expense ratio | 18.1% | 17.2% | 0.9 | 18.0% | 16.0% | 2.0 |
| Other operating expense ratio | 10.4% | 12.6% | (2.2) | 11.7% | 12.5% | (0.8) |
| Combined ratio | 73.5% | 77.6% | (4.1) | 81.6% | 84.3% | (2.7) |
| Net investment income | $181079 | $90454 | 100.2% | $496547 | $346808 | 43.2% |
| &nbsp;&nbsp;&nbsp;*Per diluted share* | $*0.48* | $*0.23* | *108.7 %* | $*1.31* | $*0.87* | *50.6 %* |
| Net income available to Arch common shareholders | $849504 | $613081 | 38.6% | $1436197 | $2093405 | (31.4)% |
| &nbsp;&nbsp;&nbsp;*Per diluted share* | $*2.26* | $*1.58* | *43.0 %* | $*3.80* | $*5.23* | *(27.3) %* |
| After-tax operating income available to Arch common shareholders (2) | $805922 | $493257 | 63.4% | $1840389 | $1434930 | 28.3% |
| &nbsp;&nbsp;&nbsp;*Per diluted share* | $*2.14* | $*1.27* | *68.5 %* | $*4.87* | $*3.58* | *36.0 %* |
| Comprehensive income (loss) available to Arch | $1105345 | $509482 | 117.0% | $(104637) | $1603354 | (106.5)% |
| Net cash provided by operating activities | $981510 | $800004 | 22.7% | $3815227 | $3380701 | 12.9% |
| Weighted average common shares and common share equivalents outstanding — diluted | 375878279 | 388869378 | (3.3)% | 377609767 | 400345936 | (5.7)% |
| **Financial measures:** |  |  |  |  |  |  |
| Change in book value per common share during period | 9.9% | 3.5% | 6.4 | (2.8)% | 10.7% | (13.5) |
| Annualized net income return on average common equity | 29.5% | 19.4% | 10.1 | 11.6% | 16.7% | (5.1) |
| Annualized operating return on average common equity (2) | 28.0% | 15.6% | 12.4 | 14.8% | 11.5% | 3.3 |
| Total return on investments (3) | 2.60% | 0.39% | 221 bps | (6.45)% | 1.90% | -835 bps |

---

(1)Presented on a 'core' basis which excludes amounts related to the 'other' segment (*i.e.*, results of Somers). See 'Comments on Regulation G' for a further discussion of the presentation of 'core' results.

(2)See 'Comments on Regulation G' 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.

(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 Regulation G' for a further discussion of the presentation of total return on investments.

 3

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**Arch Capital Group Ltd. and Subsidiaries**

**Consolidated Statements of Income**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| (U.S. Dollars in thousands, except share data) | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
|  | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2022** | **2022** | **2022** | **2021** | **2022** | **2021** |
| **Revenues** |  |  |  |  |  |  |  |
| Net premiums earned | $2760919 | $2470750 | $2325775 | $2120633 | $2083630 | $9678077 | $8082298 |
| Net investment income | 181079 | 128640 | 106392 | 80436 | 90454 | 496547 | 389118 |
| Net realized gains (losses) | 79932 | (183673) | (266579) | (292414) | 59517 | (662734) | 379845 |
| Other underwriting income | 1283 | 3077 | 2970 | 5897 | 3160 | 13227 | 22073 |
| Equity in net income (loss) of investment funds accounted for using the equity method | 40351 | (18861) | 58061 | 36305 | 67132 | 115856 | 366402 |
| Other income (loss) | 8321 | (13684) | (11777) | (9025) | 9093 | (26165) | 10244 |
| **Total revenues** | 3071885 | 2386249 | 2214842 | 1941832 | 2312986 | 9614808 | 9249980 |
| **Expenses** |  |  |  |  |  |  |  |
| Losses and loss adjustment expenses | (1241330) | (1682696) | (1102656) | (1000835) | (995853) | (5027517) | (4584803) |
| Acquisition expenses | (500515) | (447587) | (413319) | (378159) | (357539) | (1739580) | (1303178) |
| Other operating expenses | (286093) | (274747) | (277392) | (289943) | (261787) | (1128175) | (998595) |
| Corporate expenses | (17820) | (17710) | (27620) | (32332) | (18150) | (95482) | (79157) |
| Amortization of intangible assets | (25722) | (26104) | (27207) | (27167) | (33132) | (106200) | (82955) |
| Interest expense | (31700) | (33063) | (32795) | (32708) | (32248) | (130266) | (139470) |
| Net foreign exchange gains (losses) | (81224) | 90509 | 87775 | 3845 | 3163 | 100905 | 41529 |
| **Total expenses** | (2184404) | (2391398) | (1793214) | (1757299) | (1695546) | (8126315) | (7146629) |
| **Income (loss) before income taxes and income (loss) from operating affiliates** | 887481 | (5149) | 421628 | 184533 | 617440 | 1488493 | 2103351 |
| Income tax (expense) benefit | (60919) | 14900 | (22323) | (11619) | (34406) | (79961) | (128582) |
| Income (loss) from operating affiliates | 36226 | 8507 | 4640 | 24518 | 40641 | 73891 | 264693 |
| **Net income (loss)** | 862788 | 18258 | 403945 | 197432 | 623675 | 1482423 | 2239462 |
| Net (income) loss attributable to noncontrolling interests | (3100) | (1157) | 399 | (1632) | (410) | (5490) | (82613) |
| **Net income (loss) attributable to Arch** | 859688 | 17101 | 404344 | 195800 | 623265 | 1476933 | 2156849 |
| Preferred dividends | (10184) | (10184) | (10184) | (10184) | (10184) | (40736) | (48343) |
| Loss on redemption of preferred shares |  |  |  |  |  |  | (15101) |
| **Net income (loss) available to Arch common shareholders** | $849504 | $6917 | $394160 | $185616 | $613081 | $1436197 | $2093405 |
| **Comprehensive income (loss) available to Arch** | $1105345 | $(616461) | $(204476) | $(389045) | $509482 | $(104637) | $1603354 |
| **Net income (loss) per common share and common share equivalent** |  |  |  |  |  |  |  |
| Basic | $2.32 | $0.02 | $1.07 | $0.50 | $1.62 | $3.90 | $5.34 |
| Diluted | $2.26 | $0.02 | $1.04 | $0.48 | $1.58 | $3.80 | $5.23 |
| **Weighted average common shares and common share equivalents outstanding** |  |  |  |  |  |  |  |
| Basic | 365902520 | 365190527 | 369241193 | 374243812 | 379431442 | 368612197 | 391748715 |
| Diluted | 375878279 | 373727277 | 377952988 | 384194363 | 388869378 | 377609767 | 400345936 |

---

 4

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**Arch Capital Group Ltd. and Subsidiaries**

**Consolidated Balance Sheets**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| (U.S. Dollars in thousands, except share data) | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** |
|  | **2022** | **2022** | **2022** | **2022** | **2021** |
| **Assets** |  |  |  |  |  |
| Investments: |  |  |  |  |  |
| Fixed maturities available for sale, at fair value | $19682789 | $18120727 | $17585029 | $17648853 | $17998109 |
| Short-term investments available for sale, at fair value | 1331662 | 1940857 | 2227874 | 2332624 | 1734716 |
| Equity securities, at fair value | 859969 | 809869 | 772689 | 1002572 | 1804170 |
| Other investments | 1644197 | 1578751 | 1634368 | 1686666 | 1973550 |
| Investments accounted for using the equity method | 3774310 | 3565946 | 3496341 | 3325543 | 3077611 |
| &nbsp;&nbsp;&nbsp;Total investments | 27292927 | 26016150 | 25716301 | 25996258 | 26588156 |
| Cash | 855118 | 813583 | 813548 | 812917 | 858668 |
| Accrued investment income | 158680 | 116263 | 116102 | 82607 | 85453 |
| Investment in operating affiliates | 964604 | 891212 | 967603 | 1144255 | 1135655 |
| Premiums receivable | 3624777 | 3579380 | 3634182 | 3223504 | 2633280 |
| Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses | 6563654 | 6356456 | 5938511 | 5941000 | 5880735 |
| Contractholder receivables | 1731293 | 1735730 | 1758018 | 1810199 | 1828691 |
| Ceded unearned premiums | 1799197 | 2115539 | 2123915 | 1951960 | 1729455 |
| Deferred acquisition costs | 1263870 | 1122711 | 1069845 | 1001866 | 901841 |
| Receivable for securities sold | 12493 | 27042 | 157329 | 116633 | 60179 |
| Goodwill and intangible assets | 804289 | 806655 | 868014 | 926427 | 944983 |
| Other assets | 2919605 | 2756383 | 2555826 | 2670315 | 2453849 |
| &nbsp;&nbsp;&nbsp;**Total assets** | $47990507 | $46337104 | $45719194 | $45677941 | $45100945 |
| **Liabilities** |  |  |  |  |  |
| Reserve for losses and loss adjustment expenses | $20031943 | $19288291 | $18194324 | $18109107 | $17757156 |
| Unearned premiums | 7337002 | 7271279 | 7145297 | 6737779 | 6011942 |
| Reinsurance balances payable | 1529919 | 1669592 | 1634700 | 1510906 | 1583253 |
| Contractholder payables | 1733984 | 1738089 | 1761023 | 1813930 | 1832127 |
| Collateral held for insured obligations | 249238 | 254720 | 251063 | 244502 | 242352 |
| Senior notes | 2725410 | 2725153 | 2724896 | 2724642 | 2724394 |
| Payable for securities purchased | 95041 | 174769 | 292106 | 176452 | 64850 |
| Other liabilities | 1367068 | 1411193 | 1289760 | 1431271 | 1329742 |
| &nbsp;&nbsp;&nbsp;**Total liabilities** | 35069605 | 34533086 | 33293169 | 32748589 | 31545816 |
| **Redeemable noncontrolling interests** | 10829 | 8908 | 8459 | 9763 | 9233 |
| **Shareholders' equity** |  |  |  |  |  |
| Non-cumulative preferred shares | 830000 | 830000 | 830000 | 830000 | 830000 |
| Common shares | 654 | 652 | 652 | 651 | 648 |
| Additional paid-in capital | 2211444 | 2186599 | 2170661 | 2134241 | 2085075 |
| Retained earnings | 15892065 | 15042561 | 15035644 | 14641484 | 14455868 |
| Accumulated other comprehensive income (loss), net of deferred income tax | (1646170) | (1891827) | (1258265) | (649445) | (64600) |
| Common shares held in treasury, at cost | (4377920) | (4372875) | (4361126) | (4037342) | (3761095) |
| &nbsp;&nbsp;&nbsp;**Total shareholders' equity** | 12910073 | 11795110 | 12417566 | 12919589 | 13545896 |
| &nbsp;&nbsp;&nbsp;**Total liabilities, noncontrolling interests and shareholders' equity** | $47990507 | $46337104 | $45719194 | $45677941 | $45100945 |
| Common shares and common share equivalents outstanding, net of treasury shares | 370345997 | 369321990 | 369346815 | 375730891 | 378923894 |
| Book value per common share (1) | $32.62 | $29.69 | $31.37 | $32.18 | $33.56 |

---

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

 5

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**Arch Capital Group Ltd. and Subsidiaries**

**Consolidated Statements of Changes in Shareholders' Equity**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| (U.S. Dollars in thousands) | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
|  | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2022** | **2022** | **2022** | **2021** | **2022** | **2021** |
| **Non-cumulative preferred shares** |  |  |  |  |  |  |  |
| Balance at beginning of period | $830000 | $830000 | $830000 | $830000 | $830000 | $830000 | $780000 |
| &nbsp;&nbsp;&nbsp;Preferred shares issued |  |  |  |  |  |  | 500000 |
| &nbsp;&nbsp;&nbsp;Preferred shares redeemed |  |  |  |  |  |  | (450000) |
| Balance at beginning and end of period | $830000 | $830000 | $830000 | $830000 | $830000 | $830000 | $830000 |
| **Common shares** |  |  |  |  |  |  |  |
| Balance at beginning of period | 652 | 652 | 651 | 648 | 648 | 648 | 643 |
| &nbsp;&nbsp;&nbsp;Common shares issued, net | 2 |  | 1 | 3 |  | 6 | 5 |
| Balance at end of period | 654 | 652 | 652 | 651 | 648 | 654 | 648 |
| **Additional paid-in capital** |  |  |  |  |  |  |  |
| Balance at beginning of period | 2186599 | 2170661 | 2134241 | 2085075 | 2061906 | 2085075 | 1977794 |
| &nbsp;&nbsp;&nbsp;Issue costs on preferred shares |  |  |  |  |  |  | (14179) |
| &nbsp;&nbsp;&nbsp;Reversal of original issue costs on redeemed preferred shares |  |  |  |  |  |  | 15101 |
| &nbsp;&nbsp;&nbsp;Amortization of share-based compensation | 7597 | 13518 | 21137 | 45368 | 14774 | 87620 | 86053 |
| &nbsp;&nbsp;&nbsp;All other | 17248 | 2420 | 15283 | 3798 | 8395 | 38749 | 20306 |
| Balance at end of period | 2211444 | 2186599 | 2170661 | 2134241 | 2085075 | 2211444 | 2085075 |
| **Retained earnings** |  |  |  |  |  |  |  |
| Balance at beginning of period | 15042561 | 15035644 | 14641484 | 14455868 | 13842787 | 14455868 | 12362463 |
| &nbsp;&nbsp;&nbsp;Net income | 862788 | 18258 | 403945 | 197432 | 623675 | 1482423 | 2239462 |
| &nbsp;&nbsp;&nbsp;Amounts attributable to noncontrolling interests | (3100) | (1157) | 399 | (1632) | (410) | (5490) | (82613) |
| &nbsp;&nbsp;&nbsp;Preferred share dividends | (10184) | (10184) | (10184) | (10184) | (10184) | (40736) | (48343) |
| &nbsp;&nbsp;&nbsp;Loss on redemption of preferred shares |  |  |  |  |  |  | (15101) |
| Balance at end of period | 15892065 | 15042561 | 15035644 | 14641484 | 14455868 | 15892065 | 14455868 |
| **Accumulated other comprehensive income (loss), net of deferred income tax** |  |  |  |  |  |  |  |
| Balance at beginning of period | (1891827) | (1258265) | (649445) | (64600) | 49184 | (64600) | 488895 |
| &nbsp;&nbsp;&nbsp;Change in unrealized appreciation (decline) in value of available-for-sale investments | 160696 | (563174) | (540295) | (582077) | (103391) | (1524850) | (487809) |
| &nbsp;&nbsp;&nbsp;Change in foreign currency translation adjustments | 84961 | (70388) | (68525) | (2768) | (10393) | (56720) | (65686) |
| Balance at end of period | (1646170) | (1891827) | (1258265) | (649445) | (64600) | (1646170) | (64600) |
| **Common shares held in treasury, at cost** |  |  |  |  |  |  |  |
| Balance at beginning of period | (4372875) | (4361126) | (4037342) | (3761095) | (3396999) | (3761095) | (2503909) |
| &nbsp;&nbsp;&nbsp;Shares repurchased for treasury | (5045) | (11749) | (323784) | (276247) | (364096) | (616825) | (1257186) |
| Balance at end of period | (4377920) | (4372875) | (4361126) | (4037342) | (3761095) | (4377920) | (3761095) |
| **Total shareholders' equity** | $12910073 | $11795110 | $12417566 | $12919589 | $13545896 | $12910073 | $13545896 |

---

 6

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**Arch Capital Group Ltd. and Subsidiaries**

**Consolidated Statements of Cash Flows**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| (U.S. Dollars in thousands) | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
|  | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2022** | **2022** | **2022** | **2021** | **2022** | **2021** |
| **Operating Activities** |  |  |  |  |  |  |  |
| Net income (loss) | $862788 | $18258 | $403945 | $197432 | $623675 | $1482423 | $2239462 |
| Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net realized (gains) losses | (91112) | 187407 | 266060 | 289213 | (60054) | 651568 | (427367) |
| &nbsp;&nbsp;&nbsp;Equity in net (income) or loss of investment funds accounted for using the equity method and other income or loss | 46752 | 62590 | 55235 | (11420) | (91400) | 153157 | (464050) |
| &nbsp;&nbsp;&nbsp;Amortization of intangible assets | 25722 | 26104 | 27207 | 27167 | 33132 | 106200 | 82955 |
| &nbsp;&nbsp;&nbsp;Share-based compensation | 7599 | 13511 | 21139 | 45379 | 14791 | 87628 | 87094 |
| &nbsp;&nbsp;&nbsp;Changes in: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Reserve for losses and loss adjustment expenses, net | 335931 | 918602 | 358528 | 275954 | 213979 | 1889015 | 1762190 |
| &nbsp;&nbsp;&nbsp;&nbsp;Unearned premiums, net | 273717 | 253024 | 358864 | 513507 | (49203) | 1399112 | 936039 |
| &nbsp;&nbsp;&nbsp;&nbsp;Premiums receivable | (13488) | (9951) | (485099) | (600691) | 161884 | (1109229) | (685214) |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred acquisition costs | (131690) | (68466) | (76912) | (96999) | (15277) | (374067) | (263243) |
| &nbsp;&nbsp;&nbsp;&nbsp;Reinsurance balances payable | (163927) | 56323 | 146117 | (74022) | (118506) | (35509) | 500065 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other items, net | (170782) | (77653) | (172679) | (13957) | 86983 | (435071) | (340376) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | 981510 | 1379749 | 902405 | 551563 | 800004 | 3815227 | 3427555 |
| **Investing Activities** |  |  |  |  |  |  |  |
| Purchases of fixed maturity investments | (3325173) | (3359345) | (2978292) | (6727665) | (5581835) | (16390475) | (35451858) |
| Purchases of equity securities | (10265) | (131160) | (246958) | (408615) | (196529) | (796998) | (1175480) |
| Purchases of other investments | (450358) | (349715) | (303725) | (616659) | (509040) | (1720457) | (1859096) |
| Proceeds from sales of fixed maturity investments | 1853586 | 1911450 | 2025616 | 6053352 | 3509653 | 11844004 | 33577445 |
| Proceeds from sales of equity securities | 14308 | 49596 | 389956 | 1100256 | 222512 | 1554116 | 918145 |
| Proceeds from sales, redemptions and maturities of other investments | 145393 | 212346 | 292992 | 570341 | 277614 | 1221072 | 1765533 |
| Proceeds from redemptions and maturities of fixed maturity investments | 136655 | 133791 | 203320 | 240753 | 394343 | 714519 | 1628755 |
| Net settlements of derivative instruments | 37529 | (61509) | (42328) | (2510) | 27758 | (68818) | (40072) |
| Net (purchases) sales of short-term investments | 619229 | 288012 | 70760 | (510752) | 1338070 | 467249 | 165272 |
| Purchase of operating affiliate, net |  |  |  |  |  |  | (753916) |
| Impact of the deconsolidation of a variable interest entity |  |  |  |  |  |  | (349202) |
| Purchases of fixed assets | (13289) | (14553) | (12060) | (11770) | (6987) | (51672) | (41394) |
| Other | (2949) | 29968 | 97836 | 550 | (162007) | 125405 | (523864) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used for) investing activities | (995334) | (1291119) | (502883) | (312719) | (686448) | (3102055) | (2139732) |
| **Financing Activities** |  |  |  |  |  |  |  |
| Proceeds from issuance of preferred shares, net |  |  |  |  |  |  | 485821 |
| Redemption of preferred shares |  |  |  |  |  |  | (450000) |
| Purchases of common shares under share repurchase program |  | (10147) | (320688) | (254988) | (362097) | (585823) | (1234294) |
| Proceeds from common shares issued, net | 9523 | 1202 | 13195 | (17260) | 6137 | 6660 | 6418 |
| Third party investment in non-redeemable noncontrolling interests |  |  |  |  |  |  | 15971 |
| Dividends paid to redeemable noncontrolling interests |  |  |  |  |  |  | (1907) |
| Other | (1188) | (2632) | (130866) | 48859 | 18474 | (85827) | (3278) |
| Preferred dividends paid | (10184) | (10184) | (10184) | (10184) | (10184) | (40736) | (48280) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used for) financing activities | (1849) | (21761) | (448543) | (233573) | (347670) | (705726) | (1229549) |
| Effects of exchange rate changes on foreign currency cash and restricted cash | 30677 | (36776) | (38866) | (3924) | (24) | (48889) | (34047) |
| Increase (decrease) in cash and restricted cash | 15004 | 30093 | (87887) | 1347 | (234138) | (41443) | 24227 |
| Cash and restricted cash, beginning of period | 1258324 | 1228231 | 1316118 | 1314771 | 1548909 | 1314771 | 1290544 |
| Cash and restricted cash, end of period | $1273328 | $1258324 | $1228231 | $1316118 | $1314771 | $1273328 | $1314771 |
| &nbsp;&nbsp;&nbsp;Income taxes paid (received) | $53371 | $72930 | $119616 | $9005 | $84371 | $254922 | $286810 |
| &nbsp;&nbsp;&nbsp;Interest paid | $63413 | $416 | $63948 | $648 | $63498 | $128425 | $139301 |
| &nbsp;&nbsp;&nbsp;Net cash provided by operating activities, excluding the 'other' segment | $981510 | $1379749 | $902405 | $551563 | $800004 | $3815227 | $3380701 |

---

 7

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**Arch Capital Group Ltd. and Subsidiaries**

**Segment Information — Overview**

The Company classifies its businesses into three underwriting segments — insurance, reinsurance and mortgage — and two other operating segments — 'other' and corporate segment. 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 of Arch, the Chief Financial Officer and Treasurer of Arch and the President and Chief Underwriting Officer of Arch. 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 core 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.

**<u>Insurance Segment</u>**

The insurance segment consists of the Company's insurance underwriting units which offer specialty product lines on a worldwide basis. Product lines include:

• &nbsp;&nbsp;&nbsp;&nbsp;*Construction and national accounts:* primary and excess casualty coverages for middle market and large construction accounts, a comprehensive range of products for middle market accounts in specialty industries and casualty solutions for large national accounts, including loss sensitive primary insurance programs (large deductible, self-insured retention and retrospectively rated programs).

• &nbsp;&nbsp;&nbsp;&nbsp;*Excess and surplus casualty:* primary and excess casualty insurance coverages written on a non-admitted basis.

• &nbsp;&nbsp;&nbsp;&nbsp;*Warranty and lenders solutions:* collateral protection, debt cancellation and service contract reimbursement products to banks, credit unions, automotive dealerships and original equipment manufacturers and other specialty programs that pertain to automotive lending and leasing.

• &nbsp;&nbsp;&nbsp;&nbsp;*Professional lines:* directors' and officers' liability, errors and omissions liability, employment practices liability, fiduciary liability, crime, professional indemnity and other financial related coverages for corporate, private equity, venture capital, real estate investment trust, limited partnership, financial institution and not-for-profit clients of all sizes, cyber insurance, and medical professional and general liability insurance coverages for the healthcare industry. The business is predominately written on a claims-made basis.

• &nbsp;&nbsp;&nbsp;&nbsp;*Programs:* primarily targeting program managers with unique expertise and niche products offering some combination of general liability, commercial automobile, property, inland marine, umbrella and workers' compensation.

• &nbsp;&nbsp;&nbsp;&nbsp;*Property, energy, marine and aviation:* primary and excess general property insurance coverages, including catastrophe-exposed property coverage, for commercial clients. Coverages for marine include hull, cargo, war, specie and liability. Aviation, standalone terrorism and political risks are also offered. Coverage may be provided for operational and construction risk.

• &nbsp;&nbsp;&nbsp;&nbsp;*Travel, accident and health:* specialty travel and accident and related insurance products for individual, group travelers, travel agents and suppliers, as well as accident and health, which provides accident, disability and medical plan insurance coverages for employer groups, medical plan members, students and other participant groups.

• &nbsp;&nbsp;&nbsp;&nbsp;*Other:* includes alternative market risks (including captive insurance programs), excess workers' compensation and employer's liability insurance coverages for qualified self-insured groups, associations and trusts, and contract, commercial and transactional surety coverages.

 8

------

**Arch Capital Group Ltd. and Subsidiaries**

**Segment Information — Overview**

**<u>Reinsurance Segment</u>**

The reinsurance segment consists of the Company's reinsurance underwriting units which offer specialty product lines on a worldwide basis. Reinsurance agreements are typically offered on a proportional and/or excess of loss basis and provide coverage to ceding company clients for specific underlying written policies. Product lines include:

• *Casualty*: provides coverage on third party liability exposures including, among others, executive assurance, professional liability, excess and umbrella liability, excess motor and healthcare business, and workers' compensation. Business is assumed primarily on a treaty basis, with some facultative coverages also offered.

• *Marine and aviation:* provides coverage for energy, hull, cargo, specie, liability and transit, and aviation business, including airline and general aviation risks. Business written may also include space business, which includes coverages for satellite assembly, launch and operation for commercial space programs.

*• Other specialty:* provides coverage for proportional motor reinsurance, whole account multi-line treaties, cyber, trade credit and surety, accident and health, workers' compensation catastrophe, agriculture and political risk, among others.

• *Property catastrophe:* provides protection for most types of catastrophic losses, including hurricane, earthquake, flood, tornado, hail and fire, and for other perils on a case-by-case basis. Excess of loss coverages are triggered when aggregate losses and loss adjustment expense from a single occurrence of a covered peril exceed the retention specified in the contract.

• *Property excluding property catastrophe:* provides coverage for personal lines and/or commercial property exposures and principally covers buildings, structures, equipment and contents. The primary perils in this business include fire, explosion, collapse, riot, vandalism, wind, tornado, flood and earthquake. Business is assumed on either a treaty or facultative basis.

• *Other:* includes life reinsurance business, casualty clash business and, in limited instances, non-traditional business which is intended to provide insurers with risk management solutions that complement traditional reinsurance.

**<u>Mortgage Segment</u>**

The mortgage segment includes the Company's underwriting units which offer mortgage insurance and reinsurance products on a worldwide basis. Underwriting units include:

• *U.S. primary mortgage insurance:* offers private mortgage insurance through Arch Mortgage Insurance Company and United Guaranty Residential Insurance Company (combined "Arch MI U.S."), both approved eligible mortgage insurers by Fannie Mae and Freddie Mac. Arch MI U.S. also includes Arch Mortgage Guaranty Company, which is not a government sponsored enterprise ("GSE") approved entity.

• *U.S. credit risk transfer ("CRT") and other:* underwrites CRT transactions, which are predominantly with GSEs, and other U.S. reinsurance transactions.

• *International mortgage insurance/reinsurance:* underwrites mortgage insurance and reinsurance outside of the U.S.

**<u>Corporate Segment</u>**

The corporate segment results include net investment income, net realized gains or losses (which includes changes in the allowance for credit losses on financial assets and net impairment losses recognized in earnings), 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. Such amounts exclude the results of the 'other' segment.

**<u>Other Segment</u>**

Through June 30, 2021, the 'other' segment included the results of Somers. Pursuant to GAAP, Somers was considered a variable interest entity and the Company concluded that it was the primary beneficiary of Somers. As such, the Company consolidated the results of Somers in its consolidated financial statements through June 30, 2021. The portion of Somers' earnings attributable to third party investors was recorded in the consolidated statements of income as 'amounts attributable to noncontrolling interests.' Management measures segment performance for the 'other' segment based on net income or loss. In July 2021, the Company announced the completion of the previously disclosed acquisition of Somers by Greysbridge. Based on the governing documents of Greysbridge, the Company has concluded that, while it retains significant influence over Somers, Somers no longer constitutes a variable interest entity. Accordingly, effective July 1, 2021, Arch no longer consolidates the results of Somers in its consolidated financial statements.

 9

------

**Arch Capital Group Ltd. and Subsidiaries**

**Segment Information**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| (U.S. Dollars in thousands) | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **Insurance** | **Reinsurance** | **Mortgage** | **Sub-total (Core)** | **Other** | **Total** |
| Gross premiums written (1) | $1644066 | $1797037 | $355827 | $3795262 | $— | $3795262 |
| Premiums ceded | (427336) | (253655) | (81303) | (760626) |  | (760626) |
| Net premiums written | 1216730 | 1543382 | 274524 | 3034636 |  | 3034636 |
| Change in unearned premiums | 26857 | (318174) | 17600 | (273717) |  | (273717) |
| Net premiums earned | 1243587 | 1225208 | 292124 | 2760919 |  | 2760919 |
| Other underwriting income (loss) |  | (943) | 2226 | 1283 |  | 1283 |
| Losses and loss adjustment expenses | (729784) | (648654) | 137108 | (1241330) |  | (1241330) |
| Acquisition expenses | (244059) | (243640) | (12816) | (500515) |  | (500515) |
| Other operating expenses | (172060) | (68925) | (45108) | (286093) |  | (286093) |
| **Underwriting income (loss)** | $97684 | $263046 | $373534 | 734264 |  | 734264 |
| Net investment income |  |  |  | 181079 |  | 181079 |
| Net realized gains (losses) |  |  |  | 79932 |  | 79932 |
| Equity in net income (loss) of investment funds accounted for using the equity method |  |  |  | 40351 |  | 40351 |
| Other income (loss) |  |  |  | 8321 |  | 8321 |
| Corporate expenses (2) |  |  |  | (17462) |  | (17462) |
| Transaction costs and other (2) |  |  |  | (358) |  | (358) |
| Amortization of intangible assets |  |  |  | (25722) |  | (25722) |
| Interest expense |  |  |  | (31700) |  | (31700) |
| Net foreign exchange gains (losses) |  |  |  | (81224) |  | (81224) |
| **Income (loss) before income taxes and income (loss) from operating affiliates** |  |  |  | 887481 |  | 887481 |
| Income tax (expense) benefit |  |  |  | (60919) |  | (60919) |
| Income (loss) from operating affiliates |  |  |  | 36226 |  | 36226 |
| **Net income (loss)** |  |  |  | 862788 |  | 862788 |
| Amounts attributable to redeemable noncontrolling interests |  |  |  | (3100) |  | (3100) |
| **Net income (loss) available to Arch** |  |  |  | 859688 |  | 859688 |
| Preferred dividends |  |  |  | (10184) |  | (10184) |
| **Net income (loss) available to Arch common shareholders** |  |  |  | $849504 | $— | $849504 |
| **Underwriting Ratios** |  |  |  |  |  |  |
| Loss ratio | 58.7% | 52.9% | (46.9)% | 45.0% | —% | 45.0% |
| Acquisition expense ratio | 19.6% | 19.9% | 4.4% | 18.1% | —% | 18.1% |
| Other operating expense ratio | 13.8% | 5.6% | 15.4% | 10.4% | —% | 10.4% |
| Combined ratio | 92.1% | 78.4% | (27.1)% | 73.5% | —% | 73.5% |
| Net premiums written to gross premiums written | 74.0% | 85.9% | 77.2% | 80.0% | —% | 80.0% |
| Total investable assets |  |  |  | $28065497 | $— | $28065497 |
| Total assets |  |  |  | 47990507 |  | 47990507 |
| Total liabilities |  |  |  | 35069605 |  | 35069605 |

---

(1)&nbsp;&nbsp;&nbsp;&nbsp;Certain amounts included in the gross premiums written of each segment are related to intersegment transactions and are included in the gross premiums written of each segment. Accordingly, the sum of gross premiums written for each segment does not agree to the total gross premiums written as shown in the table above due to the elimination of intersegment transactions in the total.

(2)&nbsp;&nbsp;&nbsp;&nbsp;Certain expenses have been excluded from 'corporate expenses' and reflected in 'Transaction costs and other.' See 'Comments on Regulation G' for a further discussion of such items.

 10

------

**Arch Capital Group Ltd. and Subsidiaries**

**Segment Information**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| (U.S. Dollars in thousands) | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|  | **Insurance** | **Reinsurance** | **Mortgage** | **Sub-total (Core)** | **Other** | **Total** |
| Gross premiums written (1) | $1486362 | $1013090 | $364134 | $2861575 | $— | $2861575 |
| Premiums ceded | (450376) | (303949) | (74834) | (827148) |  | (827148) |
| Net premiums written | 1035986 | 709141 | 289300 | 2034427 |  | 2034427 |
| Change in unearned premiums | (33089) | 70676 | 11616 | 49203 |  | 49203 |
| Net premiums earned | 1002897 | 779817 | 300916 | 2083630 |  | 2083630 |
| Other underwriting income (loss) |  | 521 | 2639 | 3160 |  | 3160 |
| Losses and loss adjustment expenses | (594108) | (430180) | 28435 | (995853) |  | (995853) |
| Acquisition expenses | (188724) | (155694) | (13121) | (357539) |  | (357539) |
| Other operating expenses | (149520) | (61954) | (50313) | (261787) |  | (261787) |
| **Underwriting income (loss)** | $70545 | $132510 | $268556 | 471611 |  | 471611 |
| Net investment income |  |  |  | 90454 |  | 90454 |
| Net realized gains (losses) |  |  |  | 59517 |  | 59517 |
| Equity in net income (loss) of investment funds accounted for using the equity method |  |  |  | 67132 |  | 67132 |
| Other income (loss) |  |  |  | 9093 |  | 9093 |
| Corporate expenses (2) |  |  |  | (17840) |  | (17840) |
| Transaction costs and other (2) |  |  |  | (310) |  | (310) |
| Amortization of intangible assets |  |  |  | (33132) |  | (33132) |
| Interest expense |  |  |  | (32248) |  | (32248) |
| Net foreign exchange gains (losses) |  |  |  | 3163 |  | 3163 |
| **Income (loss) before income taxes and income (loss) from operating affiliates** |  |  |  | 617440 |  | 617440 |
| Income tax (expense) benefit |  |  |  | (34406) |  | (34406) |
| Income (loss) from operating affiliates |  |  |  | 40641 |  | 40641 |
| **Net income (loss)** |  |  |  | 623675 |  | 623675 |
| Amounts attributable to redeemable noncontrolling interests |  |  |  | (410) |  | (410) |
| **Net income (loss) available to Arch** |  |  |  | 623265 |  | 623265 |
| Preferred dividends |  |  |  | (10184) |  | (10184) |
| **Net income (loss) available to Arch common shareholders** |  |  |  | $613081 | $— | $613081 |
| **Underwriting Ratios** |  |  |  |  |  |  |
| Loss ratio | 59.2% | 55.2% | (9.4)% | 47.8% | —% | 47.8% |
| Acquisition expense ratio | 18.8% | 20.0% | 4.4% | 17.2% | —% | 17.2% |
| Other operating expense ratio | 14.9% | 7.9% | 16.7% | 12.6% | —% | 12.6% |
| Combined ratio | 92.9% | 83.1% | 11.7% | 77.6% | —% | 77.6% |
| Net premiums written to gross premiums written | 69.7% | 70.0% | 79.4% | 71.1% | —% | 71.1% |
| Total investable assets |  |  |  | $27442153 | $— | $27442153 |
| Total assets |  |  |  | 45100945 |  | 45100945 |
| Total liabilities |  |  |  | 31545816 |  | 31545816 |

---

(1)&nbsp;&nbsp;&nbsp;&nbsp;Certain amounts included in the gross premiums written of each segment are related to intersegment transactions and are included in the gross premiums written of each segment. Accordingly, the sum of gross premiums written for each segment does not agree to the total gross premiums written as shown in the table above due to the elimination of intersegment transactions in the total.

(2)&nbsp;&nbsp;&nbsp;&nbsp;Certain expenses have been excluded from 'corporate expenses' and reflected in 'Transaction costs and other.' See 'Comments on Regulation G' for a further discussion of such items.

 11

------

**Arch Capital Group Ltd. and Subsidiaries**

**Segment Information**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| (U.S. Dollars in thousands) | **Year Ended** | **Year Ended** | **Year Ended** | **Year Ended** | **Year Ended** | **Year Ended** |
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **Insurance** | **Reinsurance** | **Mortgage** | **Sub-total (Core)** | **Other** | **Total** |
| Gross premiums written (1) | $6930864 | $6948438 | $1454971 | $15326447 | $— | $15326447 |
| Premiums ceded | (1910222) | (2024462) | (322400) | (4249258) |  | (4249258) |
| Net premiums written | 5020642 | 4923976 | 1132571 | 11077189 |  | 11077189 |
| Change in unearned premiums | (461307) | (964595) | 26790 | (1399112) |  | (1399112) |
| Net premiums earned | 4559335 | 3959381 | 1159361 | 9678077 |  | 9678077 |
| Other underwriting income (loss) |  | 4871 | 8356 | 13227 |  | 13227 |
| Losses and loss adjustment expenses | (2782945) | (2568843) | 324271 | (5027517) |  | (5027517) |
| Acquisition expenses | (885866) | (813555) | (40159) | (1739580) |  | (1739580) |
| Other operating expenses | (665472) | (267531) | (195172) | (1128175) |  | (1128175) |
| **Underwriting income (loss)** | $225052 | $314323 | $1256657 | 1796032 |  | 1796032 |
| Net investment income |  |  |  | 496547 |  | 496547 |
| Net realized gains (losses) |  |  |  | (662734) |  | (662734) |
| Equity in net income (loss) of investment funds accounted for using the equity method |  |  |  | 115856 |  | 115856 |
| Other income (loss) |  |  |  | (26165) |  | (26165) |
| Corporate expenses (2) |  |  |  | (94390) |  | (94390) |
| Transaction costs and other (2) |  |  |  | (1092) |  | (1092) |
| Amortization of intangible assets |  |  |  | (106200) |  | (106200) |
| Interest expense |  |  |  | (130266) |  | (130266) |
| Net foreign exchange gains (losses) |  |  |  | 100905 |  | 100905 |
| **Income (loss) before income taxes and income (loss) from operating affiliates** |  |  |  | 1488493 |  | 1488493 |
| Income tax (expense) benefit |  |  |  | (79961) |  | (79961) |
| Income (loss) from operating affiliates |  |  |  | 73891 |  | 73891 |
| **Net income (loss)** |  |  |  | 1482423 |  | 1482423 |
| Amounts attributable to redeemable noncontrolling interests |  |  |  | (5490) |  | (5490) |
| **Net income (loss) available to Arch** |  |  |  | 1476933 |  | 1476933 |
| Preferred dividends |  |  |  | (40736) |  | (40736) |
| **Net income (loss) available to Arch common shareholders** |  |  |  | $1436197 | $— | $1436197 |
| **Underwriting Ratios** |  |  |  |  |  |  |
| Loss ratio | 61.0% | 64.9% | (28.0)% | 51.9% | —% | 51.9% |
| Acquisition expense ratio | 19.4% | 20.5% | 3.5% | 18.0% | —% | 18.0% |
| Other operating expense ratio | 14.6% | 6.8% | 16.8% | 11.7% | —% | 11.7% |
| Combined ratio | 95.0% | 92.2% | (7.7)% | 81.6% | —% | 81.6% |
| Net premiums written to gross premiums written | 72.4% | 70.9% | 77.8% | 72.3% | —% | 72.3% |

---

(1)&nbsp;&nbsp;&nbsp;&nbsp;Certain amounts included in the gross premiums written of each segment are related to intersegment transactions and are included in the gross premiums written of each segment. Accordingly, the sum of gross premiums written for each segment does not agree to the total gross premiums written as shown in the table above due to the elimination of intersegment transactions in the total.

(2)&nbsp;&nbsp;&nbsp;&nbsp;Certain expenses have been excluded from 'corporate expenses' and reflected in 'Transaction costs and other.' See 'Comments on Regulation G' for a further discussion of such items.

 12

------

**Arch Capital Group Ltd. and Subsidiaries**

**Segment Information**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| (U.S. Dollars in thousands) | **Year Ended** | **Year Ended** | **Year Ended** | **Year Ended** | **Year Ended** | **Year Ended** |
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|  | **Insurance** | **Reinsurance** | **Mortgage** | **Sub-total (Core)** | **Other** | **Total** |
| Gross premiums written (1) | $5867734 | $5093930 | $1507825 | $12463788 | $457465 | $12752487 |
| Premiums ceded | (1719541) | (1839556) | (246757) | (3800153) | (102763) | (3734150) |
| Net premiums written | 4148193 | 3254374 | 1261068 | 8663635 | 354702 | 9018337 |
| Change in unearned premiums | (521725) | (413931) | 22351 | (913305) | (22734) | (936039) |
| Net premiums earned | 3626468 | 2840443 | 1283419 | 7750330 | 331968 | 8082298 |
| Other underwriting income (loss) |  | 3669 | 17665 | 21334 | 739 | 22073 |
| Losses and loss adjustment expenses | (2344365) | (1924719) | (56677) | (4325761) | (259042) | (4584803) |
| Acquisition expenses | (606265) | (536754) | (97418) | (1240437) | (62741) | (1303178) |
| Other operating expenses | (558906) | (212810) | (194010) | (965726) | (32869) | (998595) |
| **Underwriting income (loss)** | $116932 | $169829 | $952979 | 1239740 | (21945) | 1217795 |
| Net investment income |  |  |  | 346808 | 42310 | 389118 |
| Net realized gains (losses) |  |  |  | 299207 | 80638 | 379845 |
| Equity in net income (loss) of investment funds accounted for using the equity method |  |  |  | 366402 |  | 366402 |
| Other income (loss) |  |  |  | 10244 |  | 10244 |
| Corporate expenses (2) |  |  |  | (77119) |  | (77119) |
| Transaction costs and other (2) |  |  |  | (1103) | (935) | (2038) |
| Amortization of intangible assets |  |  |  | (82057) | (898) | (82955) |
| Interest expense |  |  |  | (131060) | (8410) | (139470) |
| Net foreign exchange gains (losses) |  |  |  | 42854 | (1325) | 41529 |
| **Income (loss) before income taxes and income (loss) from operating affiliates** |  |  |  | 2013916 | 89435 | 2103351 |
| Income tax (expense) benefit |  |  |  | (128348) | (234) | (128582) |
| Income (loss) from operating affiliates |  |  |  | 264693 |  | 264693 |
| **Net income (loss)** |  |  |  | 2150261 | 89201 | 2239462 |
| Amounts attributable to redeemable noncontrolling interests |  |  |  | (2346) | (1953) | (4299) |
| Amounts attributable to nonredeemable noncontrolling interests |  |  |  |  | (78314) | (78314) |
| **Net income (loss) available to Arch** |  |  |  | 2147915 | 8934 | 2156849 |
| Preferred dividends |  |  |  | (48343) |  | (48343) |
| Loss on redemption of preferred shares |  |  |  | (15101) |  | (15101) |
| **Net income (loss) available to Arch common shareholders** |  |  |  | $2084471 | $8934 | $2093405 |
| **Underwriting Ratios** |  |  |  |  |  |  |
| Loss ratio | 64.6% | 67.8% | 4.4% | 55.8% | 78.0% | 56.7% |
| Acquisition expense ratio | 16.7% | 18.9% | 7.6% | 16.0% | 18.9% | 16.1% |
| Other operating expense ratio | 15.4% | 7.5% | 15.1% | 12.5% | 9.9% | 12.4% |
| Combined ratio | 96.7% | 94.2% | 27.1% | 84.3% | 106.8% | 85.2% |
| Net premiums written to gross premiums written | 70.7% | 63.9% | 83.6% | 69.5% | 77.5% | 70.7% |

---

(1)&nbsp;&nbsp;&nbsp;&nbsp;Certain amounts included in the gross premiums written of each segment are related to intersegment transactions and are included in the gross premiums written of each segment. Accordingly, the sum of gross premiums written for each segment does not agree to the total gross premiums written as shown in the table above due to the elimination of intersegment transactions in the total.

(2)&nbsp;&nbsp;&nbsp;&nbsp;Certain expenses have been excluded from 'corporate expenses' and reflected in 'Transaction costs and other.' See 'Comments on Regulation G' for a further discussion of such items.

 13

------

**Arch Capital Group Ltd. and Subsidiaries**

**Segment Information — Insurance Segment**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| (U.S. Dollars in thousands) | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
|  | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2022** | **2022** | **2022** | **2021** | **2022** | **2021** |
| Gross premiums written | $1644066 | $1862026 | $1705167 | $1719605 | $1486362 | $6930864 | $5867734 |
| Premiums ceded | (427336) | (493267) | (476910) | (512709) | (450376) | (1910222) | (1719541) |
| Net premiums written | 1216730 | 1368759 | 1228257 | 1206896 | 1035986 | 5020642 | 4148193 |
| Change in unearned premiums | 26857 | (181851) | (126113) | (180200) | (33089) | (461307) | (521725) |
| Net premiums earned | 1243587 | 1186908 | 1102144 | 1026696 | 1002897 | 4559335 | 3626468 |
| Losses and loss adjustment expenses | (729784) | (822663) | (629759) | (600739) | (594108) | (2782945) | (2344365) |
| Acquisition expenses | (244059) | (232469) | (213688) | (195650) | (188724) | (885866) | (606265) |
| Other operating expenses | (172060) | (165499) | (161088) | (166825) | (149520) | (665472) | (558906) |
| **Underwriting income (loss)** | $97684 | $(33723) | $97609 | $63482 | $70545 | $225052 | $116932 |
| **Underwriting Ratios** |  |  |  |  |  |  |  |
| Loss ratio | 58.7% | 69.3% | 57.1% | 58.5% | 59.2% | 61.0% | 64.6% |
| Acquisition expense ratio | 19.6% | 19.6% | 19.4% | 19.1% | 18.8% | 19.4% | 16.7% |
| Other operating expense ratio | 13.8% | 13.9% | 14.6% | 16.2% | 14.9% | 14.6% | 15.4% |
| &nbsp;&nbsp;&nbsp;Combined ratio | 92.1% | 102.8% | 91.1% | 93.8% | 92.9% | 95.0% | 96.7% |
| Catastrophic activity and prior year development: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Current accident year catastrophic events, net of reinsurance and reinstatement premiums | 2.8% | 13.4% | 1.5% | 3.1% | 2.0% | 5.3% | 5.6% |
| &nbsp;&nbsp;&nbsp;Net (favorable) adverse development in prior year loss reserves, net of related adjustments | (0.3)% | (0.1)% | (0.4)% | (0.1)% | (0.3)% | (0.2)% | (0.4)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Combined ratio excluding catastrophic activity and prior year development (1) | 89.6% | 89.5% | 90.0% | 90.8% | 91.2% | 89.9% | 91.5% |
| Net premiums written to gross premiums written | 74.0% | 73.5% | 72.0% | 70.2% | 69.7% | 72.4% | 70.7% |

---

(1)See 'Comments on Regulation G' for further discussion.

 14

------

**Arch Capital Group Ltd. and Subsidiaries**

**Segment Information — Insurance Segment**

---

| | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| (U.S. Dollars in thousands) | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** | **September 30,** | **September 30,** | **June 30,** | **June 30,** | **March 31,** | **March 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2022** | **2022** | **2022** | **2022** | **2022** | **2022** | **2022** | **2021** | **2021** | **2022** | **2022** | **2021** | **2021** |
| **Net premiums written** |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Professional Lines | $393032 | 32.3% | $412173 | 30.1% | $349402 | 28.4% | $347841 | 28.8% | $373752 | 36.1% | $1502448 | 29.9% | $1177144 | 28.4% |
| Property, energy, marine and aviation | 190325 | 15.6% | 241357 | 17.6% | 245724 | 20.0% | 200661 | 16.6% | 158120 | 15.3% | 878067 | 17.5% | 722582 | 17.4% |
| Construction and national accounts | 134997 | 11.1% | 98381 | 7.2% | 100656 | 8.2% | 135683 | 11.2% | 98468 | 9.5% | 469717 | 9.4% | 431952 | 10.4% |
| Programs | 129919 | 10.7% | 189263 | 13.8% | 163339 | 13.3% | 129401 | 10.7% | 92002 | 8.9% | 611922 | 12.2% | 595824 | 14.4% |
| Excess and surplus casualty | 129083 | 10.6% | 110917 | 8.1% | 120509 | 9.8% | 100289 | 8.3% | 101199 | 9.8% | 460798 | 9.2% | 359458 | 8.7% |
| Travel, accident and health | 106111 | 8.7% | 107434 | 7.8% | 105970 | 8.6% | 165332 | 13.7% | 79176 | 7.6% | 484847 | 9.7% | 305390 | 7.4% |
| Warranty and lenders solutions | 36084 | 3.0% | 41889 | 3.1% | 36042 | 2.9% | 25232 | 2.1% | 32833 | 3.2% | 139247 | 2.8% | 146984 | 3.5% |
| Other | 97179 | 8.0% | 167345 | 12.2% | 106615 | 8.7% | 102457 | 8.5% | 100436 | 9.7% | 473596 | 9.4% | 408859 | 9.9% |
| &nbsp;&nbsp;&nbsp;Total | $1216730 | 100.0% | $1368759 | 100.0% | $1228257 | 100.0% | $1206896 | 100.0% | $1035986 | 100.0% | $5020642 | 100.0% | $4148193 | 100.0% |
| <u>Underwriting location</u> |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| United States | $786692 | 64.7% | $915833 | 66.9% | $842851 | 68.6% | $794662 | 65.8% | $680840 | 65.7% | $3340038 | 66.5% | $2813039 | 67.8% |
| Europe | 351396 | 28.9% | 380063 | 27.8% | 316363 | 25.8% | 357897 | 29.7% | 292591 | 28.2% | 1405719 | 28.0% | 1125192 | 27.1% |
| Other | 78642 | 6.5% | 72863 | 5.3% | 69043 | 5.6% | 54337 | 4.5% | 62555 | 6.0% | 274885 | 5.5% | 209962 | 5.1% |
| &nbsp;&nbsp;&nbsp;Total | $1216730 | 100.0% | $1368759 | 100.0% | $1228257 | 100.0% | $1206896 | 100.0% | $1035986 | 100.0% | $5020642 | 100.0% | $4148193 | 100.0% |
| **Net premiums earned** |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Professional Lines | $368475 | 29.6% | $341833 | 28.8% | $314115 | 28.5% | $289813 | 28.2% | $280041 | 27.9% | $1314236 | 28.8% | $942817 | 26.0% |
| Property, energy, marine and aviation | 214907 | 17.3% | 202483 | 17.1% | 180663 | 16.4% | 174335 | 17.0% | 179566 | 17.9% | 772388 | 16.9% | 667892 | 18.4% |
| Construction and national accounts | 125816 | 10.1% | 109905 | 9.3% | 98831 | 9.0% | 97468 | 9.5% | 98510 | 9.8% | 432020 | 9.5% | 416107 | 11.5% |
| Programs | 150917 | 12.1% | 150453 | 12.7% | 148681 | 13.5% | 139809 | 13.6% | 137754 | 13.7% | 589860 | 12.9% | 506867 | 14.0% |
| Excess and surplus casualty | 104048 | 8.4% | 100175 | 8.4% | 98369 | 8.9% | 90761 | 8.8% | 85713 | 8.5% | 393353 | 8.6% | 318027 | 8.8% |
| Travel, accident and health | 123587 | 9.9% | 133445 | 11.2% | 130185 | 11.8% | 104630 | 10.2% | 87212 | 8.7% | 491847 | 10.8% | 255590 | 7.0% |
| Warranty and lenders solutions | 35787 | 2.9% | 33253 | 2.8% | 27594 | 2.5% | 30588 | 3.0% | 34451 | 3.4% | 127222 | 2.8% | 153958 | 4.2% |
| Other | 120050 | 9.7% | 115361 | 9.7% | 103706 | 9.4% | 99292 | 9.7% | 99650 | 9.9% | 438409 | 9.6% | 365210 | 10.1% |
| &nbsp;&nbsp;&nbsp;Total | $1243587 | 100.0% | $1186908 | 100.0% | $1102144 | 100.0% | $1026696 | 100.0% | $1002897 | 100.0% | $4559335 | 100.0% | $3626468 | 100.0% |

---

 15

------

**Arch Capital Group Ltd. and Subsidiaries**

**Segment Information — Reinsurance Segment**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| (U.S. Dollars in thousands) | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
|  | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2022** | **2022** | **2022** | **2021** | **2022** | **2021** |
| Gross premiums written | $1797037 | $1639061 | $1793398 | $1718942 | $1013090 | $6948438 | $5093930 |
| Premiums ceded | (253655) | (560225) | (630764) | (579818) | (303949) | (2024462) | (1839556) |
| Net premiums written | 1543382 | 1078836 | 1162634 | 1139124 | 709141 | 4923976 | 3254374 |
| Change in unearned premiums | (318174) | (77062) | (234635) | (334724) | 70676 | (964595) | (413931) |
| Net premiums earned | 1225208 | 1001774 | 927999 | 804400 | 779817 | 3959381 | 2840443 |
| Other underwriting income (loss) | (943) | 452 | 4526 | 836 | 521 | 4871 | 3669 |
| Losses and loss adjustment expenses | (648654) | (927911) | (537578) | (454700) | (430180) | (2568843) | (1924719) |
| Acquisition expenses | (243640) | (208425) | (189494) | (171996) | (155694) | (813555) | (536754) |
| Other operating expenses | (68925) | (62777) | (66053) | (69776) | (61954) | (267531) | (212810) |
| **Underwriting income (loss)** | $263046 | $(196887) | $139400 | $108764 | $132510 | $314323 | $169829 |
| **Underwriting Ratios** |  |  |  |  |  |  |  |
| Loss ratio | 52.9% | 92.6% | 57.9% | 56.5% | 55.2% | 64.9% | 67.8% |
| Acquisition expense ratio | 19.9% | 20.8% | 20.4% | 21.4% | 20.0% | 20.5% | 18.9% |
| Other operating expense ratio | 5.6% | 6.3% | 7.1% | 8.7% | 7.9% | 6.8% | 7.5% |
| &nbsp;&nbsp;&nbsp;Combined ratio | 78.4% | 119.7% | 85.4% | 86.6% | 83.1% | 92.2% | 94.2% |
| Catastrophic activity and prior year development: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Current accident year catastrophic events, net of reinsurance and reinstatement premiums | 0.0% | 39.1% | 7.1% | 6.7% | 6.7% | 12.9% | 15.4% |
| &nbsp;&nbsp;&nbsp;Net (favorable) adverse development in prior year loss reserves, net of related adjustments | (4.5)% | (4.9)% | (4.5)% | (2.8)% | (6.4)% | (4.3)% | (5.6)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Combined ratio excluding catastrophic activity and prior year development (1) | 82.9% | 85.5% | 82.8% | 82.7% | 82.8% | 83.6% | 84.4% |
| Net premiums written to gross premiums written | 85.9% | 65.8% | 64.8% | 66.3% | 70.0% | 70.9% | 63.9% |

---

(1)See 'Comments on Regulation G' for further discussion.

 16

------

**Arch Capital Group Ltd. and Subsidiaries**

**Segment Information — Reinsurance Segment**

---

| | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;(U.S. Dollars in thousands) | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** | **September 30,** | **September 30,** | **June 30,** | **June 30,** | **March 31,** | **March 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2022** | **2022** | **2022** | **2022** | **2022** | **2022** | **2022** | **2021** | **2021** | **2022** | **2022** | **2021** | **2021** |
| **Net premiums written** |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Other Specialty | $803046 | 52.0% | $381004 | 35.3% | $434710 | 37.4% | $363834 | 31.9% | $207812 | 29.3% | $1982594 | 40.3% | $955474 | 29.4% |
| Property excluding property catastrophe | 339813 | 22.0% | 341809 | 31.7% | 299042 | 25.7% | 295419 | 25.9% | 225127 | 31.7% | 1276083 | 25.9% | 1004086 | 30.9% |
| Casualty | 264461 | 17.1% | 230308 | 21.3% | 212724 | 18.3% | 266455 | 23.4% | 176952 | 25.0% | 973948 | 19.8% | 808164 | 24.8% |
| Property catastrophe | 54697 | 3.5% | 77606 | 7.2% | 154451 | 13.3% | 128971 | 11.3% | 35536 | 5.0% | 415725 | 8.4% | 233260 | 7.2% |
| Marine and aviation | 51354 | 3.3% | 28633 | 2.7% | 35129 | 3.0% | 51817 | 4.5% | 40708 | 5.7% | 166933 | 3.4% | 171753 | 5.3% |
| Other | 30011 | 1.9% | 19476 | 1.8% | 26578 | 2.3% | 32628 | 2.9% | 23006 | 3.2% | 108693 | 2.2% | 81637 | 2.5% |
| &nbsp;&nbsp;&nbsp;Total | $1543382 | 100.0% | $1078836 | 100.0% | $1162634 | 100.0% | $1139124 | 100.0% | $709141 | 100.0% | $4923976 | 100.0% | $3254374 | 100.0% |
| <u>Underwriting location</u> |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Bermuda | $910696 | 59.0% | $520594 | 48.3% | $589169 | 50.7% | $541312 | 47.5% | $340108 | 48.0% | $2561771 | 52.0% | $1557294 | 47.9% |
| United States | 376736 | 24.4% | 312179 | 28.9% | 286925 | 24.7% | 270667 | 23.8% | 201079 | 28.4% | 1246507 | 25.3% | 828504 | 25.5% |
| Europe and other | 255950 | 16.6% | 246063 | 22.8% | 286540 | 24.6% | 327145 | 28.7% | 167954 | 23.7% | 1115698 | 22.7% | 868576 | 26.7% |
| &nbsp;&nbsp;&nbsp;Total | $1543382 | 100.0% | $1078836 | 100.0% | $1162634 | 100.0% | $1139124 | 100.0% | $709141 | 100.0% | $4923976 | 100.0% | $3254374 | 100.0% |
| **Net premiums earned** |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Other Specialty | $531799 | 43.4% | $330142 | 33.0% | $284321 | 30.6% | $231618 | 28.8% | $247437 | 31.7% | $1377880 | 34.8% | $818801 | 28.8% |
| Property excluding property catastrophe | 309878 | 25.3% | 282488 | 28.2% | 266545 | 28.7% | 232529 | 28.9% | 235731 | 30.2% | 1091440 | 27.6% | 836573 | 29.5% |
| Casualty | 220335 | 18.0% | 221636 | 22.1% | 214714 | 23.1% | 197858 | 24.6% | 174180 | 22.3% | 854543 | 21.6% | 666754 | 23.5% |
| Property catastrophe | 77416 | 6.3% | 117820 | 11.8% | 94679 | 10.2% | 77076 | 9.6% | 55453 | 7.1% | 366991 | 9.3% | 280738 | 9.9% |
| Marine and aviation | 50259 | 4.1% | 25182 | 2.5% | 41768 | 4.5% | 42192 | 5.2% | 40256 | 5.2% | 159401 | 4.0% | 152955 | 5.4% |
| Other | 35521 | 2.9% | 24506 | 2.4% | 25972 | 2.8% | 23127 | 2.9% | 26760 | 3.4% | 109126 | 2.8% | 84622 | 3.0% |
| &nbsp;&nbsp;&nbsp;Total | $1225208 | 100.0% | $1001774 | 100.0% | $927999 | 100.0% | $804400 | 100.0% | $779817 | 100.0% | $3959381 | 100.0% | $2840443 | 100.0% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

 17

------

**Arch Capital Group Ltd. and Subsidiaries**

**Segment Information — Mortgage Segment**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| (U.S. Dollars in thousands) | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
|  | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2022** | **2022** | **2022** | **2021** | **2022** | **2021** |
| Gross premiums written | $355827 | $362409 | $371896 | $364839 | $364134 | $1454971 | $1507825 |
| Premiums ceded | (81303) | (86230) | (78148) | (76719) | (74834) | (322400) | (246757) |
| Net premiums written | 274524 | 276179 | 293748 | 288120 | 289300 | 1132571 | 1261068 |
| Change in unearned premiums | 17600 | 5889 | 1884 | 1417 | 11616 | 26790 | 22351 |
| Net premiums earned | 292124 | 282068 | 295632 | 289537 | 300916 | 1159361 | 1283419 |
| Other underwriting income (1) | 2226 | 2625 | (1556) | 5061 | 2639 | 8356 | 17665 |
| Losses and loss adjustment expenses | 137108 | 67878 | 64681 | 54604 | 28435 | 324271 | (56677) |
| Acquisition expenses | (12816) | (6693) | (10137) | (10513) | (13121) | (40159) | (97418) |
| Other operating expenses | (45108) | (46471) | (50251) | (53342) | (50313) | (195172) | (194010) |
| **Underwriting income** | $373534 | $299407 | $298369 | $285347 | $268556 | $1256657 | $952979 |
| **Underwriting Ratios** |  |  |  |  |  |  |  |
| Loss ratio | (46.9)% | (24.1)% | (21.9)% | (18.9)% | (9.4)% | (28.0)% | 4.4% |
| Acquisition expense ratio | 4.4% | 2.4% | 3.4% | 3.6% | 4.4% | 3.5% | 7.6% |
| Other operating expense ratio | 15.4% | 16.5% | 17.0% | 18.4% | 16.7% | 16.8% | 15.1% |
| &nbsp;&nbsp;&nbsp;Combined ratio | (27.1)% | (5.2)% | (1.5)% | 3.1% | 11.7% | (7.7)% | 27.1% |
| Net (favorable) adverse development in prior year loss reserves, net of related adjustments | (72.1)% | (45.1)% | (40.7)% | (36.5)% | (24.2)% | (48.6)% | (13.8)% |
| &nbsp;&nbsp;&nbsp;Combined ratio excluding prior year development (2) | 45.0% | 39.9% | 39.2% | 39.6% | 35.9% | 40.9% | 40.9% |
| Net premiums written to gross premiums written | 77.2% | 76.2% | 79.0% | 79.0% | 79.4% | 77.8% | 83.6% |
| **Net premiums written by underwriting location** |  |  |  |  |  |  |  |
| United States | $189650 | $188290 | $201166 | $201150 | $210988 | $780256 | $914477 |
| Other | 84874 | 87889 | 92582 | 86970 | 78312 | 352315 | 346591 |
| &nbsp;&nbsp;&nbsp;Total | $274524 | $276179 | $293748 | $288120 | $289300 | $1132571 | $1261068 |
| United States % | 69.1% | 68.2% | 68.5% | 69.8% | 72.9% | 68.9% | 72.5% |
| Other % | 30.9% | 31.8% | 31.5% | 30.2% | 27.1% | 31.1% | 27.5% |

---

(1)&nbsp;&nbsp;&nbsp;&nbsp; Primarily related to income earned on various risk-sharing products offered to government sponsored enterprises and mortgage lenders.

(2)&nbsp;&nbsp;&nbsp;&nbsp;See 'Comments on Regulation G' for further discussion.

 18

------

**Arch Capital Group Ltd. and Subsidiaries**

**Segment Information — Mortgage Segment**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| (U.S. Dollars in millions) | **December 31, 2022** | **December 31, 2022** | **September 30, 2022** | **September 30, 2022** | **June 30, 2022** | **June 30, 2022** | **March 31, 2022** | **March 31, 2022** | **December 31, 2021** | **December 31, 2021** |
| **Insurance In Force (IIF) (1)** |  |  |  |  |  |  |  |  |  |  |
| U.S. primary mortgage insurance | $295651 | 57.6% | $294857 | 58.8% | $291952 | 59.8% | $283484 | 59.7% | $280945 | 61.0% |
| U.S. credit risk transfer (CRT) and other (2) | 145087 | 28.3% | 143897 | 28.7% | 129203 | 26.5% | 122189 | 25.8% | 110018 | 23.9% |
| International mortgage insurance/reinsurance (3) | 72315 | 14.1% | 63068 | 12.6% | 67082 | 13.7% | 68800 | 14.5% | 69655 | 15.1% |
| &nbsp;&nbsp;&nbsp;Total | $513053 | 100.0% | $501822 | 100.0% | $488237 | 100.0% | $474473 | 100.0% | $460618 | 100.0% |
| **Risk In Force (RIF) (4)** |  |  |  |  |  |  |  |  |  |  |
| U.S. primary mortgage insurance | $75806 | 84.8% | $75343 | 85.1% | $74258 | 85.0% | $71699 | 84.3% | $70619 | 84.3% |
| U.S. credit risk transfer and other (2) | 6245 | 7.0% | 6473 | 7.3% | 6037 | 6.9% | 5670 | 6.7% | 5120 | 6.1% |
| International mortgage insurance/reinsurance (3) | 7369 | 8.2% | 6727 | 7.6% | 7103 | 8.1% | 7709 | 9.1% | 7983 | 9.5% |
| &nbsp;&nbsp;&nbsp;Total | $89420 | 100.0% | $88543 | 100.0% | $87398 | 100.0% | $85078 | 100.0% | $83722 | 100.0% |
| **Supplemental disclosures for U.S. primary mortgage insurance:** |  |  |  |  |  |  |  |  |  |  |
| <u>Total RIF by credit quality (FICO score):</u> |  |  |  |  |  |  |  |  |  |  |
| >=740 | $46812 | 61.8% | $46538 | 61.8% | $45612 | 61.4% | $43509 | 60.7% | $42451 | 60.1% |
| 680-739 | 24945 | 32.9% | 24671 | 32.7% | 24409 | 32.9% | 23827 | 33.2% | 23646 | 33.5% |
| 620-679 | 3772 | 5.0% | 3850 | 5.1% | 3942 | 5.3% | 4052 | 5.7% | 4196 | 5.9% |
| <620 | 277 | 0.4% | 284 | 0.4% | 295 | 0.4% | 311 | 0.4% | 326 | 0.5% |
| &nbsp;&nbsp;&nbsp;Total | $75806 | 100.0% | $75343 | 100.0% | $74258 | 100.0% | $71699 | 100.0% | $70619 | 100.0% |
| Weighted average FICO score | 750 |  | 748 |  | 747 |  | 747 |  | 746 |  |
| <u>Total RIF by Loan-To-Value (LTV):</u> |  |  |  |  |  |  |  |  |  |  |
| 95.01% and above | $7289 | 9.6% | $7334 | 9.7% | $7400 | 10.0% | $7421 | 10.4% | $7538 | 10.7% |
| 90.01% to 95.00% | 43681 | 57.6% | 43049 | 57.1% | 41951 | 56.5% | 39882 | 55.6% | 38829 | 55.0% |
| 85.01% to 90.00% | 20851 | 27.5% | 20876 | 27.7% | 20718 | 27.9% | 20183 | 28.1% | 20006 | 28.3% |
| 85.00% and below | 3985 | 5.3% | 4084 | 5.4% | 4189 | 5.6% | 4213 | 5.9% | 4246 | 6.0% |
| &nbsp;&nbsp;&nbsp;Total | $75806 | 100.0% | $75343 | 100.0% | $74258 | 100.0% | $71699 | 100.0% | $70619 | 100.0% |
| Weighted average LTV | 92.8% |  | 92.9% |  | 92.8% |  | 92.8% |  | 92.8% |  |
| <u>Total RIF by State:</u> |  |  |  |  |  |  |  |  |  |  |
| California | $6341 | 8.4% | $6219 | 8.3% | $6077 | 8.2% | $5781 | 8.1% | $5559 | 7.9% |
| Texas | 6151 | 8.1% | 6080 | 8.1% | 5971 | 8.0% | 5733 | 8.0% | 5594 | 7.9% |
| Florida | 3268 | 4.3% | 3275 | 4.3% | 3301 | 4.4% | 3272 | 4.6% | 3303 | 4.7% |
| Georgia | 3169 | 4.2% | 3150 | 4.2% | 3109 | 4.2% | 2978 | 4.2% | 2902 | 4.1% |
| North Carolina | 3160 | 4.2% | 3139 | 4.2% | 3075 | 4.1% | 2964 | 4.1% | 2921 | 4.1% |
| Illinois | 3081 | 4.1% | 3087 | 4.1% | 3054 | 4.1% | 2955 | 4.1% | 2933 | 4.2% |
| Minnesota | 3003 | 4.0% | 2996 | 4.0% | 2980 | 4.0% | 2913 | 4.1% | 2916 | 4.1% |
| Massachusetts | 2809 | 3.7% | 2771 | 3.7% | 2684 | 3.6% | 2566 | 3.6% | 2537 | 3.6% |
| Virginia | 2656 | 3.5% | 2647 | 3.5% | 2634 | 3.5% | 2504 | 3.5% | 2446 | 3.5% |
| Michigan | 2618 | 3.5% | 2587 | 3.4% | 2558 | 3.4% | 2509 | 3.5% | 2492 | 3.5% |
| Other | 39550 | 52.2% | 39392 | 52.3% | 38815 | 52.3% | 37524 | 52.3% | 37016 | 52.4% |
| &nbsp;&nbsp;&nbsp;Total | $75806 | 100.0% | $75343 | 100.0% | $74258 | 100.0% | $71699 | 100.0% | $70619 | 100.0% |
| Weighted average coverage (end of period RIF divided by IIF) | 25.6% |  | 25.6% |  | 25.4% |  | 25.3% |  | 25.1% |  |
| U.S. mortgage insurance total RIF, net of reinsurance (5) | $57151 |  | $56890 |  | $56529 |  | $54792 |  | $54574 |  |
| Analysts' persistency (6) | 79.5% |  | 75.4% |  | 71.3% |  | 66.9% |  | 62.4% |  |
| Risk-to-capital ratio -- Arch MI U.S. (7) | 7.2:1 |  | 7.6:1 |  | 7.8:1 |  | 7.8:1 |  | 8.0:1 |  |
| PMIER sufficiency ratio -- Arch MI U.S. (8) | 236% |  | 237% |  | 219% |  | 205% |  | 197% |  |

---

---

| | |
|:---|:---|
| (1) The aggregate dollar amount of each insured mortgage loan's current principal balance. | (5) Total RIF for the U.S. mortgage insurance operations (see note 4) after external reinsurance. |
| (2) Includes all CRT transactions, which are predominantly with GSEs, and other U.S. reinsurance transactions. | (6) Represents the % of IIF at the beginning of a 12-mo. period that remained in force at the end of the period. |
| (3) International mortgage insurance and reinsurance with risk primarily located in Australia and to lesser extent Europe and Asia. | (7) Represents current (non-delinquent) RIF, net of reinsurance, divided by statutory capital (estimate for December 31, 2022). |
| (4) 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 | (8) Calculated as available assets divided by required assets as defined within PMIERs (estimate for December 31, 2022). There was approximately $2.16 billion of excess available assets at December 31, 2022. |

---

 19

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**Arch Capital Group Ltd. and Subsidiaries**

**Segment Information — Mortgage Segment**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| (U.S. Dollars in millions, except policy/loan/claim count) | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **December 31, 2022** | **December 31, 2022** | **September 30, 2022** | **September 30, 2022** | **June 30, 2022** | **June 30, 2022** | **March 31, 2022** | **March 31, 2022** | **December 31, 2021** | **December 31, 2021** |
| **Supplemental disclosures for U.S. primary mortgage insurance:** |  |  |  |  |  |  |  |  |  |  |
| Total new insurance written (NIW) (1) | $11413 |  | $17425 |  | $23499 |  | $20015 |  | $22544 |  |
| <u>Total NIW by credit quality (FICO score):</u> |  |  |  |  |  |  |  |  |  |  |
| >=740 | $7155 | 62.7% | $11615 | 66.7% | $16121 | 68.6% | $13152 | 65.7% | $14349 | 63.6% |
| 680-739 | 3992 | 35.0% | 5322 | 30.5% | 6800 | 28.9% | 6254 | 31.2% | 7238 | 32.1% |
| 620-679 | 265 | 2.3% | 485 | 2.8% | 576 | 2.5% | 606 | 3.0% | 957 | 4.2% |
| <620 | 1 | —% | 3 | —% | 2 | —% | 3 | —% |  | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $11413 | 100.0% | $17425 | 100.0% | $23499 | 100.0% | $20015 | 100.0% | $22544 | 100.0% |
| <u>Total NIW by LTV:</u> |  |  |  |  |  |  |  |  |  |  |
| 95.01% and above | $555 | 4.9% | $973 | 5.6% | $1195 | 5.1% | $1096 | 5.5% | $1475 | 6.5% |
| 90.01% to 95.00% | 6725 | 58.9% | 9916 | 56.9% | 13290 | 56.6% | 10778 | 53.8% | 11382 | 50.5% |
| 85.01% to 90.00% | 3040 | 26.6% | 4839 | 27.8% | 6591 | 28.0% | 5733 | 28.6% | 6677 | 29.6% |
| 85.00% and below | 1093 | 9.6% | 1697 | 9.7% | 2423 | 10.3% | 2408 | 12.0% | 3010 | 13.4% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $11413 | 100.0% | $17425 | 100.0% | $23499 | 100.0% | $20015 | 100.0% | $22544 | 100.0% |
| <u>Total NIW monthly vs. single:</u> |  |  |  |  |  |  |  |  |  |  |
| Monthly | $11090 | 97.2% | $16911 | 97.1% | $22872 | 97.3% | $19201 | 95.9% | $21623 | 95.9% |
| Single | 323 | 2.8% | 514 | 2.9% | 627 | 2.7% | 814 | 4.1% | 921 | 4.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $11413 | 100.0% | $17425 | 100.0% | $23499 | 100.0% | $20015 | 100.0% | $22544 | 100.0% |
| <u>Total NIW purchase vs. refinance:</u> |  |  |  |  |  |  |  |  |  |  |
| Purchase | $11202 | 98.2% | $17159 | 98.5% | $23059 | 98.1% | $19157 | 95.7% | $21174 | 93.9% |
| Refinance | 211 | 1.8% | 266 | 1.5% | 440 | 1.9% | 858 | 4.3% | 1370 | 6.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $11413 | 100.0% | $17425 | 100.0% | $23499 | 100.0% | $20015 | 100.0% | $22544 | 100.0% |
| Ending number of policies in force (PIF) (2) | 1160219 |  | 1168735 |  | 1168147 |  | 1159020 |  | 1171835 |  |
| <u>Rollforward of insured loans in default:</u> |  |  |  |  |  |  |  |  |  |  |
| Beginning delinquent number of loans | 20214 |  | 20692 |  | 24270 |  | 27645 |  | 31770 |  |
| &nbsp;&nbsp;&nbsp;Plus: new notices | 10068 |  | 9515 |  | 7978 |  | 8835 |  | 9071 |  |
| &nbsp;&nbsp;&nbsp;Less: cures | (9564) |  | (9832) |  | (11363) |  | (12030) |  | (13038) |  |
| &nbsp;&nbsp;&nbsp;Less: paid claims | (151) |  | (161) |  | (193) |  | (180) |  | (158) |  |
| Ending delinquent number of loans (2) | 20567 |  | 20214 |  | 20692 |  | 24270 |  | 27645 |  |
| Ending percentage of loans in default (2) | 1.77% |  | 1.73% |  | 1.77% |  | 2.09% |  | 2.36% |  |
| <u>Losses:</u> |  |  |  |  |  |  |  |  |  |  |
| Number of claims paid | 151 |  | 161 |  | 193 |  | 180 |  | 158 |  |
| Total paid claims (in thousands) | $4547 |  | $5223 |  | $5626 |  | $6016 |  | $8131 |  |
| Average per claim (in thousands) | $30.1 |  | $32.4 |  | $29.2 |  | $33.4 |  | $51.5 |  |
| Severity (3) | 69.5% |  | 72.3% |  | 72.3% |  | 78.1% |  | 83.0% |  |
| Average case reserve per default (in thousands) | $21.1 |  | $27.7 |  | $30.3 |  | $28.4 |  | $26.7 |  |

---

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

(2)&nbsp;&nbsp;&nbsp;&nbsp;Includes first lien primary and pool policies.&nbsp;&nbsp;&nbsp;&nbsp;

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

 20

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**Arch Capital Group Ltd. and Subsidiaries**

**Segment Information — Mortgage Segment**

**Supplemental disclosures for U.S. primary mortgage insurance:**

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| (U.S. Dollars in millions) | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|  | **Loss Reserves, Net (1)** | **Primary IIF (2)** | **Primary IIF (2)** | **Primary RIF (3)** | **Primary RIF (3)** | **Delinquency Rate** | **Loss Reserves, Net (1)** | **Primary IIF (2)** | **Primary IIF (2)** | **Primary RIF (3)** | **Primary RIF (3)** | **Delinquency Rate** |
|  | **% of Total** | **Total** | **% of Total** | **Total** | **% of Total** | **Delinquency Rate** | **% of Total** | **Total** | **% of Total** | **Total** | **% of Total** | **Delinquency Rate** |
| <u>Policy year:</u> |  |  |  |  |  |  |  |  |  |  |  |  |
| 2012 and prior | 33.8% | $9931 | 3.4% | $2424 | 3.2% | 8.41% | 27.9% | $13030 | 4.6% | $2960 | 4.2% | 8.48% |
| 2013 | 2.2% | 3000 | 1.0% | 798 | 1.1% | 1.85% | 2.6% | 4206 | 1.5% | 1148 | 1.6% | 2.63% |
| 2014 | 1.9% | 3696 | 1.3% | 1012 | 1.3% | 2.61% | 1.9% | 4822 | 1.7% | 1328 | 1.9% | 3.14% |
| 2015 | 2.4% | 6236 | 2.1% | 1680 | 2.2% | 2.08% | 3.0% | 8703 | 3.1% | 2340 | 3.3% | 2.67% |
| 2016 | 5.8% | 10225 | 3.5% | 2744 | 3.6% | 2.66% | 7.6% | 14344 | 5.1% | 3841 | 5.4% | 3.29% |
| 2017 | 9.1% | 9508 | 3.2% | 2521 | 3.3% | 3.06% | 10.9% | 13128 | 4.7% | 3436 | 4.9% | 4.09% |
| 2018 | 11.6% | 10260 | 3.5% | 2625 | 3.5% | 4.11% | 15.2% | 14046 | 5.0% | 3562 | 5.0% | 5.28% |
| 2019 | 10.2% | 19096 | 6.5% | 4840 | 6.4% | 2.36% | 15.2% | 25841 | 9.2% | 6467 | 9.2% | 3.13% |
| 2020 | 11.3% | 65141 | 22.0% | 16414 | 21.7% | 1.20% | 12.5% | 82502 | 29.4% | 20341 | 28.8% | 0.97% |
| 2021 | 9.9% | 89621 | 30.3% | 22740 | 30.0% | 0.95% | 3.2% | 100323 | 35.7% | 25196 | 35.7% | 0.29% |
| 2022 | 1.7% | 68937 | 23.3% | 18008 | 23.8% | 0.20% |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Total | 100.0% | $295651 | 100.0% | $75806 | 100.0% | 1.77% | 100.0% | $280945 | 100.0% | $70619 | 100.0% | 2.36% |

---

(1)&nbsp;&nbsp;&nbsp;&nbsp;Total reserves for losses and loss adjustment expenses, net of recoverables, was $415.2 million at December 31, 2022, compared to $710.7 million at December 31, 2021.

(2)&nbsp;&nbsp;&nbsp;&nbsp;The aggregate dollar amount of each insured mortgage loan's current principal balance.

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

 21

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**Arch Capital Group Ltd. and Subsidiaries**

**Segment Information - Consolidated Excluding the 'Other' Segment (Sub-Total (Core))**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| (U.S. Dollars in thousands) | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
|  | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2022** | **2022** | **2022** | **2021** | **2022** | **2021** |
| Gross premiums written | $3795262 | $3860683 | $3869727 | $3800775 | $2861575 | $15326447 | $12463788 |
| Premiums ceded | (760626) | (1136909) | (1185088) | (1166635) | (827148) | (4249258) | (3800153) |
| Net premiums written | 3034636 | 2723774 | 2684639 | 2634140 | 2034427 | 11077189 | 8663635 |
| Change in unearned premiums | (273717) | (253024) | (358864) | (513507) | 49203 | (1399112) | (913305) |
| Net premiums earned | 2760919 | 2470750 | 2325775 | 2120633 | 2083630 | 9678077 | 7750330 |
| Other underwriting income (loss) | 1283 | 3077 | 2970 | 5897 | 3160 | 13227 | 21334 |
| Losses and loss adjustment expenses | (1241330) | (1682696) | (1102656) | (1000835) | (995853) | (5027517) | (4325761) |
| Acquisition expenses | (500515) | (447587) | (413319) | (378159) | (357539) | (1739580) | (1240437) |
| Other operating expenses | (286093) | (274747) | (277392) | (289943) | (261787) | (1128175) | (965726) |
| **Underwriting income (loss)** | $734264 | $68797 | $535378 | $457593 | $471611 | $1796032 | $1239740 |
| **Underwriting Ratios** |  |  |  |  |  |  |  |
| Loss ratio | 45.0% | 68.1% | 47.4% | 47.2% | 47.8% | 51.9% | 55.8% |
| Acquisition expense ratio | 18.1% | 18.1% | 17.8% | 17.8% | 17.2% | 18.0% | 16.0% |
| Other operating expense ratio | 10.4% | 11.1% | 11.9% | 13.7% | 12.6% | 11.7% | 12.5% |
| &nbsp;&nbsp;&nbsp;Combined ratio | 73.5% | 97.3% | 77.1% | 78.7% | 77.6% | 81.6% | 84.3% |
| Catastrophic activity and prior year development: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Current accident year catastrophic events, net of reinsurance and reinstatement premiums | 1.3% | 22.3% | 3.5% | 4.0% | 3.5% | 7.8% | 8.3% |
| &nbsp;&nbsp;&nbsp;Net (favorable) adverse development in prior year loss reserves, net of related adjustments | (9.8)% | (7.2)% | (7.2)% | (6.1)% | (6.0)% | (7.7)% | (4.5)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Combined ratio excluding catastrophic activity and prior year development (1) | 82.0% | 82.2% | 80.8% | 80.8% | 80.1% | 81.5% | 80.5% |
| **Components of losses and loss adjustment expenses incurred (1)** |  |  |  |  |  |  |  |
| Paid losses and loss adjustment expenses | $904261 | $765542 | $745134 | $727011 | $783806 | $3141948 | $2666773 |
| Change in unpaid losses and loss adjustment expenses | 337069 | 917154 | 357522 | 273824 | 212047 | 1885569 | 1658988 |
| Total losses and loss adjustment expenses | $1241330 | $1682696 | $1102656 | $1000835 | $995853 | $5027517 | $4325761 |
| Net premiums written to gross premiums written | 80.0% | 70.6% | 69.4% | 69.3% | 71.1% | 72.3% | 69.5% |

---

(1)See 'Comments on Regulation G' for further discussion.

 22

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**Arch Capital Group Ltd. and Subsidiaries**

**Segment Information — Selected Information on Losses and Loss Adjustment Expenses**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| (U.S. Dollars in thousands) | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
|  | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2022** | **2022** | **2022** | **2021** | **2022** | **2021** |
| **Estimated net (favorable) adverse development in prior year loss reserves, net of related adjustments (1)** | **Estimated net (favorable) adverse development in prior year loss reserves, net of related adjustments (1)** | **Estimated net (favorable) adverse development in prior year loss reserves, net of related adjustments (1)** | **Estimated net (favorable) adverse development in prior year loss reserves, net of related adjustments (1)** |  |  |  |  |
| Net impact on underwriting results: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Insurance | $(4206) | $(1171) | $(4469) | $(1406) | $(2990) | $(11252) | $(15543) |
| &nbsp;&nbsp;&nbsp;Reinsurance | (55341) | (49516) | (41907) | (22383) | (49762) | (169147) | (158275) |
| &nbsp;&nbsp;&nbsp;Mortgage | (210590) | (127290) | (120201) | (105619) | (72865) | (563700) | (176656) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $(270137) | $(177977) | $(166577) | $(129408) | $(125617) | $(744099) | $(350474) |
| Impact on losses and loss adjustment expenses: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Insurance | $(5946) | $(5411) | $(6711) | $(7271) | $(3115) | $(25339) | $(16236) |
| &nbsp;&nbsp;&nbsp;Reinsurance | (63472) | (49194) | (46422) | (32473) | (59219) | (191561) | (178823) |
| &nbsp;&nbsp;&nbsp;Mortgage | (207732) | (126218) | (118093) | (102068) | (70419) | (554111) | (169558) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $(277150) | $(180823) | $(171226) | $(141812) | $(132753) | $(771011) | $(364617) |
| Impact on acquisition expenses: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Insurance | $1740 | $4240 | $2242 | $5865 | $125 | $14087 | $693 |
| &nbsp;&nbsp;&nbsp;Reinsurance | 8131 | (322) | 4515 | 10090 | 9457 | 22414 | 20548 |
| &nbsp;&nbsp;&nbsp;Mortgage | (2858) | (1072) | (2108) | (3551) | (2446) | (9589) | (7098) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $7013 | $2846 | $4649 | $12404 | $7136 | $26912 | $14143 |
| Impact on combined ratio: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Insurance | (0.3)% | (0.1)% | (0.4)% | (0.1)% | (0.3)% | (0.2)% | (0.4)% |
| &nbsp;&nbsp;&nbsp;Reinsurance | (4.5)% | (4.9)% | (4.5)% | (2.8)% | (6.4)% | (4.3)% | (5.6)% |
| &nbsp;&nbsp;&nbsp;Mortgage | (72.1)% | (45.1)% | (40.7)% | (36.5)% | (24.2)% | (48.6)% | (13.8)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | (9.8)% | (7.2)% | (7.2)% | (6.1)% | (6.0)% | (7.7)% | (4.5)% |
| Impact on loss ratio: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Insurance | (0.5)% | (0.5)% | (0.6)% | (0.7)% | (0.3)% | (0.6)% | (0.4)% |
| &nbsp;&nbsp;&nbsp;Reinsurance | (5.2)% | (4.9)% | (5.0)% | (4.0)% | (7.6)% | (4.8)% | (6.3)% |
| &nbsp;&nbsp;&nbsp;Mortgage | (71.1)% | (44.7)% | (39.9)% | (35.3)% | (23.4)% | (47.8)% | (13.2)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | (10.0)% | (7.3)% | (7.4)% | (6.7)% | (6.4)% | (8.0)% | (4.7)% |
| Impact on acquisition expense ratio: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Insurance | 0.2% | 0.4% | 0.2% | 0.6% | 0.0% | 0.4% | 0.0% |
| &nbsp;&nbsp;&nbsp;Reinsurance | 0.7% | 0.0% | 0.5% | 1.2% | 1.2% | 0.5% | 0.7% |
| &nbsp;&nbsp;&nbsp;Mortgage | (1.0)% | (0.4)% | (0.8)% | (1.2)% | (0.8)% | (0.8)% | (0.6)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | 0.2% | 0.1% | 0.2% | 0.6% | 0.4% | 0.3% | 0.2% |
| **Estimated net losses incurred from current accident year catastrophic events (2)** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Insurance | $34485 | $158973 | $16360 | $31855 | $20312 | $241673 | $204620 |
| &nbsp;&nbsp;&nbsp;Reinsurance | 157 | 391843 | 66021 | 53977 | 51966 | 511998 | 438243 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $34642 | $550816 | $82381 | $85832 | $72278 | $753671 | $642863 |
| Impact on combined ratio: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Insurance | 2.8% | 13.4% | 1.5% | 3.1% | 2.0% | 5.3% | 5.6% |
| &nbsp;&nbsp;&nbsp;Reinsurance | 0.0% | 39.1% | 7.1% | 6.7% | 6.7% | 12.9% | 15.4% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | 1.3% | 22.3% | 3.5% | 4.0% | 3.5% | 7.8% | 8.3% |

---

(1)Presented on a 'core' basis which excludes amounts related to the 'other' segment (*i.e.*, results of Somers). See 'Comments on Regulation G' for a further discussion of the presentation of 'core' results.

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

 23

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**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 thousands) | **December 31,** | **December 31,** | **September 30,** | **September 30,** | **June 30,** | **June 30,** | **March 31,** | **March 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2022** | **2022** | **2022** | **2022** | **2022** | **2022** | **2022** | **2021** | **2021** |
| **Investable assets:** |  |  |  |  |  |  |  |  |  |  |
| Fixed maturities available for sale, at fair value | $19682789 | 70.1% | $18120727 | 67.9% | $17585029 | 66.6% | $17648853 | 66.0% | $17998109 | 65.6% |
| Fixed maturities—fair value option (1) | 554120 | 2.0% | 530303 | 2.0% | 525451 | 2.0% | 426187 | 1.6% | 416698 | 1.5% |
| &nbsp;&nbsp;&nbsp;Total fixed maturities | 20236909 | 72.1% | 18651030 | 69.9% | 18110480 | 68.6% | 18075040 | 67.6% | 18414807 | 67.1% |
| Equity securities, at fair value | 859969 | 3.1% | 809869 | 3.0% | 772689 | 2.9% | 1002572 | 3.7% | 1804170 | 6.6% |
| Equity securities—fair value option (1) | 13792 | 0.0% | 13905 | 0.1% | 14489 | 0.1% | 21300 | 0.1% | 26493 | 0.1% |
| &nbsp;&nbsp;&nbsp;Total equity securities | 873761 | 3.1% | 823774 | 3.1% | 787178 | 3.0% | 1023872 | 3.8% | 1830663 | 6.7% |
| Other investments—fair value option (1) | 1043184 | 3.7% | 1005929 | 3.8% | 1054771 | 4.0% | 1226808 | 4.6% | 1432553 | 5.2% |
| Investments accounted for using the equity method (2) | 3774310 | 13.4% | 3565946 | 13.4% | 3496341 | 13.2% | 3325543 | 12.4% | 3077611 | 11.2% |
| Short-term investments available for sale, at fair value | 1331662 | 4.7% | 1940857 | 7.3% | 2227874 | 8.4% | 2332624 | 8.7% | 1734716 | 6.3% |
| Short-term investments—fair value option (1) | 33101 | 0.1% | 28614 | 0.1% | 39657 | 0.2% | 12371 | 0.0% | 97806 | 0.4% |
| &nbsp;&nbsp;&nbsp;Total short-term investments | 1364763 | 4.9% | 1969471 | 7.4% | 2267531 | 8.6% | 2344995 | 8.8% | 1832522 | 6.7% |
| Cash | 855118 | 3.0% | 813583 | 3.0% | 813548 | 3.1% | 812917 | 3.0% | 858668 | 3.1% |
| Securities transactions entered into but not settled at the balance sheet date | (82548) | (0.3)% | (147727) | (0.6)% | (134777) | (0.5)% | (59819) | (0.2)% | (4671) | 0.0% |
| &nbsp;&nbsp;&nbsp;Total investable assets held by the Company | $28065497 | 100.0% | $26682006 | 100.0% | $26395072 | 100.0% | $26749356 | 100.0% | $27442153 | 100.0% |
| Average effective duration (in years) | 2.89 |  | 2.84 |  | 2.94 |  | 2.93 |  | 2.70 |  |
| Average S&P/Moody's credit ratings (3) | AA-/Aa3 |  | AA/Aa2 |  | AA-/Aa3 |  | AA-/Aa3 |  | AA-/Aa3 |  |

---

(1) &nbsp;&nbsp;&nbsp;&nbsp;Included in "other investments" on the balance sheet.

(2)&nbsp;&nbsp;&nbsp;&nbsp;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 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;an unrealized gain or loss component of accumulated other comprehensive income.

(3)&nbsp;&nbsp;&nbsp;&nbsp;Average credit ratings on the Company's investment portfolio on securities with ratings assigned by Standard & Poor's ("S&P") and Moody's Investors Service ("Moody's").

 24

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**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 (1):

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| (U.S. Dollars in thousands, except share data) | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
|  | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2022** | **2022** | **2022** | **2021** | **2022** | **2021** |
| **Composition of net investment income (1):** |  |  |  |  |  |  |  |
| Fixed maturities | $157696 | $123568 | $105342 | $82053 | $74846 | $468659 | $307536 |
| Equity securities (dividends) | 5877 | 4261 | 6121 | 6238 | 18295 | 22497 | 42094 |
| Short-term investments | 13520 | 9304 | 4120 | 2575 | 3325 | 29519 | 6799 |
| Other (2) | 17943 | 8644 | 7984 | 12076 | 12712 | 46647 | 68411 |
| &nbsp;&nbsp;&nbsp;Gross investment income | 195036 | 145777 | 123567 | 102942 | 109178 | 567322 | 424840 |
| Investment expenses | (13957) | (17137) | (17175) | (22506) | (18724) | (70775) | (78032) |
| &nbsp;&nbsp;&nbsp;Net investment income | $181079 | $128640 | $106392 | $80436 | $90454 | $496547 | $346808 |
| Per share | $0.48 | $0.34 | $0.28 | $0.21 | $0.23 | $1.31 | $0.87 |
| Equity in net income (loss) of investment funds accounted for using the equity method | 40351 | (18861) | 58061 | 36305 | 67132 | 115856 | 366402 |
| Per share | $0.11 | $(0.05) | $0.15 | $0.09 | $0.17 | $0.31 | $0.92 |
| **Investment income yield, at amortized cost (1) (3):** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Pre-tax | 2.80% | 2.06% | 1.76% | 1.34% | 1.46% | 1.99% | 1.41% |
| &nbsp;&nbsp;&nbsp;After-tax | 2.41% | 1.77% | 1.49% | 1.13% | 1.27% | 1.70% | 1.24% |
| **Total return on investments (1) (4)** | 2.60% | (3.01)% | (3.02)% | (3.07)% | 0.39% | (6.45)% | 1.90% |

---

(1)Presented on a 'core' basis which excludes amounts related to the 'other' segment (*i.e.*, results of Somers). See 'Comments on Regulation G' for a further discussion of the presentation of 'core' results.

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

(3)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.

(4)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 Regulation G' for a further discussion of the presentation of total return on investments.

 25

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**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 thousands) | **Fair<br>Value** | **Gross<br>Unrealized<br>Gains** | **Gross<br>Unrealized<br>Losses** | **Net<br>Unrealized<br>Gains (Losses)** | **Allowance <br>for Credit Losses** | **Amortized<br>Cost** | **Fair Value /<br>Amortized Cost** | **Fair Value % of Total** |
| **<u>At December 31, 2022</u>** |  |  |  |  |  |  |  |  |
| Corporates | $8562883 | $55468 | $(781353) | $(725885) | $(29950) | $9318718 | 91.9% | 42.3% |
| U.S. government and government agencies | 5166591 | 14891 | (342963) | (328072) |  | 5494663 | 94.0% | 25.5% |
| Municipal bonds | 419166 | 3149 | (33360) | (30211) | (100) | 449477 | 93.3% | 2.1% |
| Non-U.S. government securities | 2317134 | 8870 | (237846) | (228976) | (1882) | 2547992 | 90.9% | 11.5% |
| Asset-backed securities | 1928469 | 761 | (106623) | (105862) | (6010) | 2040341 | 94.5% | 9.5% |
| Commercial mortgage-backed securities | 1047275 | 608 | (57667) | (57059) | (3415) | 1107749 | 94.5% | 5.2% |
| Residential mortgage-backed securities | 795391 | 4933 | (86587) | (81654) | 2 | 877043 | 90.7% | 3.9% |
| &nbsp;&nbsp;&nbsp;Total | $20236909 | $88680 | $(1646399) | $(1557719) | $(41355) | $21835983 | 92.7% | 100.0% |
| **<u>At December 31, 2021</u>** |  |  |  |  |  |  |  |  |
| Corporates | $6941879 | $104170 | $(69194) | $34976 | $(2037) | $6908940 | 100.5% | 37.7% |
| U.S. government and government agencies | 4772764 | 10076 | (45967) | (35891) |  | 4808655 | 99.3% | 25.9% |
| Municipal bonds | 404666 | 18724 | (1409) | 17315 | (2) | 387353 | 104.5% | 2.2% |
| Non-U.S. government securities | 2144079 | 54048 | (34749) | 19299 | (82) | 2124862 | 100.9% | 11.6% |
| Asset-backed securities | 2696458 | 6540 | (11108) | (4568) | (708) | 2701734 | 99.8% | 14.6% |
| Commercial mortgage-backed securities | 1046484 | 1740 | (3117) | (1377) | (6) | 1047867 | 99.9% | 5.7% |
| Residential mortgage-backed securities | 408477 | 2825 | (5410) | (2585) | (48) | 411110 | 99.4% | 2.2% |
| &nbsp;&nbsp;&nbsp;Total | $18414807 | $198123 | $(170954) | $27169 | $(2883) | $18390521 | 100.1% | 100.0% |

---

 26

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**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 thousands) | **December 31,** | **December 31,** | **September 30,** | **September 30,** | **June 30,** | **June 30,** | **March 31,** | **March 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2022** | **2022** | **2022** | **2022** | **2022** | **2022** | **2022** | **2021** | **2021** |
| **Credit quality distribution of total fixed maturities (1):** |  |  |  |  |  |  |  |  |  |  |
| U.S. government and government agencies (2) | $5829279 | 28.8% | $5746853 | 30.8% | $4892483 | 27.0% | $4981102 | 27.6% | $5063191 | 27.5% |
| AAA | 3616537 | 17.9% | 3344746 | 17.9% | 3352551 | 18.5% | 3171975 | 17.5% | 3783386 | 20.5% |
| AA | 2214494 | 10.9% | 2030730 | 10.9% | 2064313 | 11.4% | 2222236 | 12.3% | 2459413 | 13.4% |
| A | 3993471 | 19.7% | 3382545 | 18.1% | 3464240 | 19.1% | 3227560 | 17.9% | 2943594 | 16.0% |
| BBB | 3324095 | 16.4% | 3001304 | 16.1% | 3114961 | 17.2% | 3181195 | 17.6% | 2936398 | 15.9% |
| BB | 560213 | 2.8% | 532162 | 2.9% | 551876 | 3.0% | 564762 | 3.1% | 501588 | 2.7% |
| B | 377462 | 1.9% | 357543 | 1.9% | 367275 | 2.0% | 364181 | 2.0% | 371747 | 2.0% |
| Lower than B | 12029 | 0.1% | 12417 | 0.1% | 4742 | —% | 7057 | —% | 43756 | 0.2% |
| Not rated | 309329 | 1.5% | 242730 | 1.3% | 298039 | 1.6% | 354972 | 2.0% | 311734 | 1.7% |
| &nbsp;&nbsp;&nbsp;Total fixed maturities, at fair value | $20236909 | 100.0% | $18651030 | 100.0% | $18110480 | 100.0% | $18075040 | 100.0% | $18414807 | 100.0% |
| **Maturity profile of total fixed maturities:** |  |  |  |  |  |  |  |  |  |  |
| Due in one year or less | $533889 | 2.6% | $602340 | 3.2% | $434779 | 2.4% | $323999 | 1.8% | $318572 | 1.7% |
| Due after one year through five years | 11291842 | 55.8% | 10285415 | 55.1% | 9661066 | 53.3% | 9756481 | 54.0% | 8536801 | 46.4% |
| Due after five years through ten years | 4155691 | 20.5% | 4031643 | 21.6% | 4261397 | 23.5% | 4296537 | 23.8% | 4807858 | 26.1% |
| Due after 10 years | 484352 | 2.4% | 312381 | 1.7% | 422104 | 2.3% | 535301 | 3.0% | 600157 | 3.3% |
|  | 16465774 | 81.4% | 15231779 | 81.7% | 14779346 | 81.6% | 14912318 | 82.5% | 14263388 | 77.5% |
| Residential mortgage-backed securities | 795391 | 3.9% | 763371 | 4.1% | 698168 | 3.9% | 416138 | 2.3% | 408477 | 2.2% |
| Commercial mortgage-backed securities | 1047275 | 5.2% | 1064238 | 5.7% | 1023088 | 5.6% | 1066365 | 5.9% | 1046484 | 5.7% |
| Asset-backed securities | 1928469 | 9.5% | 1591642 | 8.5% | 1609878 | 8.9% | 1680219 | 9.3% | 2696458 | 14.6% |
| &nbsp;&nbsp;&nbsp;Total fixed maturities, at fair value | $20236909 | 100.0% | $18651030 | 100.0% | $18110480 | 100.0% | $18075040 | 100.0% | $18414807 | 100.0% |

---

(1)&nbsp;&nbsp;&nbsp;&nbsp; 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)&nbsp;&nbsp;&nbsp;&nbsp; Includes U.S. government-sponsored agency mortgage backed securities and agency commercial mortgage backed securities.

 27

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**Arch Capital Group Ltd. and Subsidiaries**

**Investment Information — Analysis of Corporate Exposures**

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

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;(U.S. Dollars in thousands) | **December 31,** | **December 31,** | **September 30,** | **September 30,** | **June 30,** | **June 30,** | **March 31,** | **March 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2022** | **2022** | **2022** | **2022** | **2022** | **2022** | **2022** | **2021** | **2021** |
| **Sector:** |  |  |  |  |  |  |  |  |  |  |
| Industrials | $3463079 | 40.4% | $2926134 | 38.4% | $2928443 | 37.5% | $2990553 | 39.1% | $3082440 | 44.4% |
| Financials | 4246061 | 49.6% | 4094264 | 53.7% | 4191142 | 53.7% | 4054531 | 53.0% | 3397199 | 48.9% |
| Utilities | 545843 | 6.4% | 483490 | 6.3% | 559150 | 7.2% | 460793 | 6.0% | 363468 | 5.2% |
| Covered bonds | 4224 | 0.0% | 3848 | 0.1% | 1720 | 0.0% | 1870 | 0.0% | 4511 | 0.1% |
| All other (1) | 303676 | 3.5% | 112710 | 1.5% | 130807 | 1.7% | 145934 | 1.9% | 94261 | 1.4% |
| &nbsp;&nbsp;&nbsp;Total | $8562883 | 100.0% | $7620446 | 100.0% | $7811262 | 100.0% | $7653681 | 100.0% | $6941879 | 100.0% |
| **Credit quality distribution (2):** |  |  |  |  |  |  |  |  |  |  |
| AAA | $177808 | 2.1% | $162906 | 2.1% | $160327 | 2.1% | $144047 | 1.9% | $122008 | 1.8% |
| AA | 767130 | 9.0% | 823931 | 10.8% | 784206 | 10.0% | 835869 | 10.9% | 1006360 | 14.5% |
| A | 3266251 | 38.1% | 2741063 | 36.0% | 2796539 | 35.8% | 2549426 | 33.3% | 2280498 | 32.9% |
| BBB | 3095503 | 36.2% | 2834413 | 37.2% | 2931983 | 37.5% | 2968760 | 38.8% | 2453904 | 35.3% |
| BB | 541221 | 6.3% | 516986 | 6.8% | 522904 | 6.7% | 550960 | 7.2% | 463072 | 6.7% |
| B | 371457 | 4.3% | 351360 | 4.6% | 353134 | 4.5% | 360902 | 4.7% | 355993 | 5.1% |
| Lower than B | 11585 | 0.1% | 11390 | 0.1% | 4260 | 0.1% | 6210 | 0.1% | 30878 | 0.4% |
| Not rated | 331928 | 3.9% | 178397 | 2.3% | 257909 | 3.3% | 237507 | 3.1% | 229166 | 3.3% |
| &nbsp;&nbsp;&nbsp;Total | $8562883 | 100.0% | $7620446 | 100.0% | $7811262 | 100.0% | $7653681 | 100.0% | $6941879 | 100.0% |

---

(1)&nbsp;&nbsp;&nbsp;&nbsp;Includes sovereign securities, supranational securities and other.

(2)&nbsp;&nbsp;&nbsp;&nbsp;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 December 31, 2022:

---

| | | | | |
|:---|:---|:---|:---|:---|
| (U.S. Dollars in thousands) | **Fair<br>Value** | **% of Asset Class** | **% of Investable Assets** | **Credit Quality (1)** |
| **Issuer:** |  |  |  |  |
| Bank of America Corporation | $430071 | 5.0% | 1.5% | A-/A2 |
| JPMorgan Chase & Co. | 296901 | 3.5% | 1.1% | A-/A1 |
| Morgan Stanley | 290477 | 3.4% | 1.0% | A-/A1 |
| Citigroup Inc. | 270074 | 3.2% | 1.0% | BBB+/A3 |
| The Goldman Sachs Group, Inc. | 249547 | 2.9% | 0.9% | BBB+/A2 |
| Wells Fargo & Company | 242538 | 2.8% | 0.9% | BBB+/A1 |
| Blue Owl Capital Inc. | 164098 | 1.9% | 0.6% | BBB-/Baa3 |
| Blackstone Inc. | 150691 | 1.8% | 0.5% | BBB-/Baa3 |
| UBS Group AG | 130244 | 1.5% | 0.5% | A/Aa3 |
| Spring Funding II Llc | 121221 | 1.4% | 0.4% | NA/NA |
| &nbsp;&nbsp;&nbsp;Total | $2345862 | 27.4% | 8.4% |  |

---

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

 28

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**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 thousands) | **Agencies** | **AAA** | **AA** | **A** | **BBB** | **Non-Investment Grade** | **Total** |
| **<u>At December 31, 2022</u>** |  |  |  |  |  |  |  |
| Residential mortgage-backed securities | $645008 | $106077 | $27881 | $— | $— | $16425 | $795391 |
| Commercial mortgage-backed securities | 17680 | 681578 | 151774 | 32488 | 81556 | 82199 | 1047275 |
| Asset-backed securities |  | 1135331 | 184078 | 349768 | 118507 | 140785 | 1928469 |
| &nbsp;&nbsp;&nbsp;Total | $662688 | $1922986 | $363733 | $382256 | $200063 | $239409 | $3771135 |
| **<u>At December 31, 2021</u>** |  |  |  |  |  |  |  |
| Residential mortgage-backed securities | $268229 | $86344 | $40502 | $2444 | $6 | $10952 | $408477 |
| Commercial mortgage-backed securities | 22198 | 710692 | 141065 | 6990 | 67555 | 97984 | 1046484 |
| Asset-backed securities |  | 1548239 | 230922 | 397242 | 367504 | 152551 | 2696458 |
| &nbsp;&nbsp;&nbsp;Total | $290427 | $2345275 | $412489 | $406676 | $435065 | $261487 | $4151419 |

---

 29

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**Arch Capital Group Ltd. and Subsidiaries**

**Comments on Regulation G**

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 changes in the allowance for credit losses on financial assets and net impairment losses recognized in earnings), 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 and loss on redemption of preferred shares, 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, transaction costs and other and loss on redemption of preferred shares in any particular period are not indicative of the performance of, or trends in, the Company's business performance. Although net realized gains or losses, equity in net income or loss of investment funds accounted for using the equity method and net foreign exchange gains or losses are an integral part of the Company's operations, the decision to realize investment gains or losses, the recognition of the change in the carrying value of investments accounted for using the fair value option in net realized gains or losses, the recognition of equity in net income or loss of investment funds accounted for using the equity method and the recognition of foreign exchange gains or losses 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 loss on redemption of preferred shares related to the redemption of the Company's Series E preferred shares in September 2021 had no impact on shareholders' equity or cash flows. Due to these reasons, the Company excludes 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, transaction costs and other and loss on redemption of preferred shares from the calculation of after-tax operating income or loss available to Arch common shareholders.

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.

In addition, through June 30, 2021, the Company's presentation included the use of information prepared on a 'core' basis, which excluded amounts related to the 'other' segment (i.e., results of Somers). Information provided on a 'core' basis represent non-GAAP financial measures as defined in Regulation G. Pursuant to GAAP, Somers was considered a variable interest entity and the Company concluded that it was the primary beneficiary of Somers through June 30, 2021. As such, the Company consolidated the results of Somers in its consolidated financial statements. The Company's presentation of information on a 'core' basis enabled 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 analyzed performance. See 'Segment Information' for a further discussion of segment results and a reconciliation of core and consolidated results. In the 2020 fourth quarter, Arch, Somers, and Greysbridge Ltd., a wholly-owned subsidiary of Arch, entered into an Agreement and Plan of Merger (as amended, the "Merger Agreement"). Arch assigned its rights under the Merger Agreement to Greysbridge Holdings Ltd. ("Greysbridge"). The merger and the related Greysbridge equity financing closed on July 1, 2021. Effective July 1, 2021, Somers is wholly owned by Greysbridge, and Greysbridge is owned 40% by Arch and 30% by certain funds managed by Kelso & Company and 30% by certain funds managed by Warburg Pincus LLC. Based on the governing documents of Greysbridge, we concluded that, while we retain significant influence over Greysbridge, Greysbridge does not constitute a variable interest entity. Accordingly, effective July 1, 2021, we no longer consolidate the results of Somers in our consolidated financial statements and footnotes.

The Company's segment information includes the presentation of consolidated underwriting income or loss and a subtotal of underwriting income or loss on a 'core' basis (for periods prior to July 1, 2021). 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 incorporate items included in the Company's corporate segment. 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 and a 'core' basis (for periods prior to July 1, 2021), in accordance with Regulation G, is shown on pages 10 to 13.

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

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

 30

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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. Each line item reflects the impact of the Company's ownership of Somers' outstanding common equity through June 30, 2021:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| (U.S. Dollars in thousands, except share data) | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
|  | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2022** | **2022** | **2022** | **2021** | **2022** | **2021** |
| Net income available to Arch common shareholders | $849504 | $6917 | $394160 | $185616 | $613081 | $1436197 | $2093405 |
| Net realized (gains) losses | (79932) | 183674 | 266579 | 292414 | (59517) | 662735 | (307466) |
| Equity in net (income) loss of investment funds accounted for using the equity method | (40351) | 18861 | (58061) | (36305) | (67132) | (115856) | (366402) |
| Net foreign exchange (gains) losses | 81201 | (90537) | (87797) | (3855) | (3221) | (100988) | (42743) |
| Transaction costs and other | 358 | 76 | 261 | 397 | 310 | 1092 | 1199 |
| Loss on redemption of preferred shares |  |  |  |  |  |  | 15101 |
| Income tax expense (benefit) (1) | (4858) | (13019) | (8646) | (16268) | 9736 | (42791) | 41836 |
| After-tax operating income available to Arch common shareholders | $805922 | $105972 | $506496 | $421999 | $493257 | $1840389 | $1434930 |
| <u>Diluted per common share results:</u> |  |  |  |  |  |  |  |
| Net income available to Arch common shareholders | $2.26 | $0.02 | $1.04 | $0.48 | $1.58 | $3.80 | $5.23 |
| Net realized (gains) losses | (0.22) | 0.48 | 0.70 | 0.76 | (0.16) | 1.76 | (0.77) |
| Equity in net (income) loss of investment funds accounted for using the equity method | (0.11) | 0.05 | (0.15) | (0.09) | (0.17) | (0.31) | (0.92) |
| Net foreign exchange (gains) losses | 0.22 | (0.24) | (0.23) | (0.01) | (0.01) | (0.27) | (0.11) |
| Transaction costs and other | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Loss on redemption of preferred shares |  |  |  |  |  |  | 0.04 |
| Income tax expense (benefit) (1) | (0.01) | (0.03) | (0.02) | (0.04) | 0.03 | (0.11) | 0.11 |
| After-tax operating income available to Arch common shareholders | $2.14 | $0.28 | $1.34 | $1.10 | $1.27 | $4.87 | $3.58 |
| Weighted average common shares and common share equivalents outstanding - diluted | 375878279 | 373727277 | 377952988 | 384194363 | 388869378 | 377609767 | 400345936 |
| Beginning common shareholders' equity | $10965110 | $11587566 | $12089589 | $12715896 | $12557526 | $12715896 | $12325886 |
| Ending common shareholders' equity | 12080073 | 10965110 | 11587566 | 12089589 | 12715896 | 12080073 | 12715896 |
| &nbsp;&nbsp;&nbsp;Average common shareholders' equity | $11522592 | $11276338 | $11838578 | $12402743 | $12636711 | $12397985 | $12520891 |
| Annualized net income return on average common equity | 29.5% | 0.2% | 13.3% | 6.0% | 19.4% | 11.6% | 16.7% |
| Annualized operating return on average common equity | 28.0% | 3.8% | 17.1% | 13.6% | 15.6% | 14.8% | 11.5% |

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(1)Income tax expense on net realized gains or losses (which includes changes in the allowance for credit losses on financial assets and net impairment losses recognized in earnings), 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.

 31

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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:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| (U.S. Dollars in thousands) | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
|  | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2022** | **2022** | **2022** | **2021** | **2022** | **2021** |
| **Arch Operating Income Components (1):** |  |  |  |  |  |  |  |
| Income (loss) before income taxes and income (loss) from operating affiliates | $887481 | $(5149) | $421628 | $184533 | $617440 | $1488493 | $2013916 |
| &nbsp;&nbsp;&nbsp;Net realized (gains) losses | (79932) | 183673 | 266579 | 292414 | (59517) | 662734 | (299207) |
| &nbsp;&nbsp;&nbsp;Equity in net (income) loss of investment funds accounted for using the equity method | (40351) | 18861 | (58061) | (36305) | (67132) | (115856) | (366402) |
| &nbsp;&nbsp;&nbsp;Net foreign exchange (gains) losses | 81224 | (90509) | (87775) | (3845) | (3163) | (100905) | (42854) |
| &nbsp;&nbsp;&nbsp;Transaction costs and other | (2778) | (1108) | 658 | (170) | (171) | (3398) | (1236) |
| &nbsp;&nbsp;&nbsp;Income (loss) from operating affiliates | 36226 | 8507 | 4640 | 24518 | 40641 | 73891 | 264693 |
| Pre-tax operating income | 881870 | 114275 | 547669 | 461145 | 528098 | 2004959 | 1568910 |
| Arch share of 'other' segment operating income (loss) (2) |  |  |  |  |  |  | 931 |
| Pre-tax operating income available to Arch (b) | 881870 | 114275 | 547669 | 461145 | 528098 | 2004959 | 1569841 |
| Income tax (expense) benefit (a) | (65764) | 1881 | (30989) | (28962) | (24657) | (123834) | (86568) |
| After-tax operating income available to Arch | 816106 | 116156 | 516680 | 432183 | 503441 | 1881125 | 1483273 |
| Preferred dividends | (10184) | (10184) | (10184) | (10184) | (10184) | (40736) | (48343) |
| After-tax operating income available to Arch common shareholders | $805922 | $105972 | $506496 | $421999 | $493257 | $1840389 | $1434930 |
| Effective tax rate on pre-tax operating income (loss) available to Arch (a)/(b) | 7.5% | (1.6)% | 5.7% | 6.3% | 4.7% | 6.2% | 5.5% |

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(1)&nbsp;&nbsp;&nbsp;&nbsp;Line items are presented on a 'core' basis, excluding amounts related to the 'other' segment (*i.e.*, results of Somers). See 'Comments on Regulation G' for a further discussion of the presentation of 'core' results.

(2)&nbsp;&nbsp;&nbsp;&nbsp;Balances in the 'other' segment and a calculation of Arch's share of the 'other' segment operating income (loss) is as follows:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| (U.S. Dollars in thousands) | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** |
|  | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2022** | **2022** | **2022** | **2021** | **2022** | **2021** |
| **Balances in 'other' segment:** |  |  |  |  |  |  |  |
| Underwriting income (loss) | $— | $— | $— | $— | $— | $— | $(21945) |
| Net investment income |  |  |  |  |  |  | 42310 |
| Interest expense |  |  |  |  |  |  | (8410) |
| Amortization of intangible assets |  |  |  |  |  |  | (898) |
| Preferred dividends |  |  |  |  |  |  | (1953) |
| Pre-tax operating income (loss) available to common shareholders |  |  |  |  |  |  | 9104 |
| Arch ownership (3) | n/a | n/a | n/a | n/a | n/a | n/a | n/a |
| Arch share of 'Other' segment operating income (loss) (4) | $— | $— | $— | $— | $— | $— | $931 |

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(3) Effective July 1, 2021, Somers is wholly owned by Greysbridge and Greysbridge is owned 40% by the Company, accordingly, the Company no longer consolidates the results of Somers in its consolidated financial statements. See 'Comments on Regulation G' for a further discussion of the presentation of 'core' results.

(4) Excludes amounts attributable to net realized gains or losses and net foreign exchange gains or losses in the 'other' segment (see 'Segment Information').

 32

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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 (1):

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| (U.S. Dollars in thousands, except share data) | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** |
|  | **2022** | **2022** | **2022** | **2022** | **2021** |
| **Debt:** |  |  |  |  |  |
| Arch senior notes, due May 1, 2034 ($300,000 principal, 7.35%) | $300000 | $300000 | $300000 | $300000 | $300000 |
| Arch-U.S. senior notes, due Nov. 1, 2043 ($500,000 principal, 5.144%) (2) | 500000 | 500000 | 500000 | 500000 | 500000 |
| Arch Finance senior notes, due December 15, 2026 ($500,000 principal, 4.011%) (3) | 500000 | 500000 | 500000 | 500000 | 500000 |
| Arch Finance senior notes, due December 15, 2046 ($450,000 principal, 5.031%) (3) | 450000 | 450000 | 450000 | 450000 | 450000 |
| Arch senior notes, due June 30, 2050 ($1,000,000 principal, 3.635%) | 1000000 | 1000000 | 1000000 | 1000000 | 1000000 |
| Deferred debt costs on senior notes | (24590) | (24847) | (25104) | (25358) | (25606) |
| Revolving credit agreement borrowings, due December 17, 2024 (variable) |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;**Total debt** | $2725410 | $2725153 | $2724896 | $2724642 | $2724394 |
| **Shareholders' equity available to Arch:** |  |  |  |  |  |
| Series F non-cumulative preferred shares (5.45%) | 330000 | 330000 | 330000 | 330000 | 330000 |
| Series G non-cumulative preferred shares (4.55%) | 500000 | 500000 | 500000 | 500000 | 500000 |
| Common shareholders' equity (a) | 12080073 | 10965110 | 11587566 | 12089589 | 12715896 |
| &nbsp;&nbsp;&nbsp;Total shareholders' equity available to Arch | $12910073 | $11795110 | $12417566 | $12919589 | $13545896 |
| &nbsp;&nbsp;&nbsp;Total capital available to Arch | $15635483 | $14520263 | $15142462 | $15644231 | $16270290 |
| Common shares outstanding, net of treasury shares (b) | 370345997 | 369321990 | 369346815 | 375730891 | 378923894 |
| Book value per common share (4) (a)/(b) | $32.62 | $29.69 | $31.37 | $32.18 | $33.56 |
| **Leverage ratios:** |  |  |  |  |  |
| Senior notes/total capital available to Arch | 17.4% | 18.8% | 18.0% | 17.4% | 16.7% |
| Revolving credit agreement borrowings/total capital available to Arch | —% | —% | —% | —% | —% |
| &nbsp;&nbsp;&nbsp;Debt/total capital available to Arch | 17.4% | 18.8% | 18.0% | 17.4% | 16.7% |
| Preferred/total capital available to Arch | 5.3% | 5.7% | 5.5% | 5.3% | 5.1% |
| &nbsp;&nbsp;&nbsp;Debt and preferred/total capital available to Arch | 22.7% | 24.5% | 23.5% | 22.7% | 21.8% |

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(1)&nbsp;&nbsp;&nbsp;&nbsp;Presented on a 'core' basis which excludes amounts related to the 'other' segment (*i.e.*, results of Somers). See 'Comments on Regulation G' for a further discussion of the presentation of 'core' results.

(2)&nbsp;&nbsp;&nbsp;&nbsp;Issued by Arch Capital Group (U.S.) Inc. ("Arch-U.S."), a wholly owned subsidiary of Arch, and fully and unconditionally guaranteed by Arch.

(3)&nbsp;&nbsp;&nbsp;&nbsp;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.

(4)&nbsp;&nbsp;&nbsp;&nbsp;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:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| (U.S. Dollars in thousands except share data) | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Cumulative** |
|  | **December 31,** | **September 30,** | **June 30,** | **March 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2022** | **2022** | **2022** | **2021** | **2022** |
| **Effect of share repurchases:** |  |  |  |  |  |  |
| Aggregate cost of shares repurchased | $— | $10147 | $320688 | $254988 | $362097 | $5871883 |
| Shares repurchased |  | 236194 | 7090447 | 5564764 | 8668100 | 433570317 |
| Average price per share repurchased | $— | $42.96 | $45.23 | $45.82 | $41.77 | $13.54 |
| Remaining share repurchase authorization (1) |  |  |  |  |  | $1000000 |

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

 33