ARCH CAPITAL GROUP LTD. (ACGL) Risk Factors

Recent key developments

Concrete developments — dated events, named agreements and instruments, legal proceedings — that ARCH CAPITAL GROUP LTD. surfaced in its latest filing.

• In August 2024, we were added to the list of IAIGs, subjecting our global operations to additional regulation and scrutiny.August 2024
• Our U.S. insurance operations may be covered under TRIA for up to 80% subject to a mandatory deductible of 20% of our prior year’s direct earned premium for covered property and liability coverages and an industry aggregate retention of $53.4 billion. The program trigger for calendar year 2025 through 2027 is $200 million. If an act (or acts) of terrorism result in covered losses exceeding the $100 billion annual limit, insurers with losses exceeding their deductibles will not be responsible for additional losses.
• Our consolidated reserves for unpaid losses and loss adjustment expenses, net of recoverables, were approximately $24.5 billion as of December 31, 2025.December 31, 2025
• Fixed maturities constituted 70.8% of Arch's cash and invested assets as of December 31, 2025.December 31, 2025
• The Russian invasion of Ukraine in 2022 triggered multiple sanctions packages from the U.S., U.K., and EU that impact our business, requiring close review and assessment of complex and nuanced sanctions.2022
• In 2023, the FHA reduced its annual mortgage insurance premium rates by 30bps from .85% to .55% for most single family mortgages.2023
• The Australian Government introduced the First Home Guarantee Scheme (HGS) in 2020. Since inception through 2025, the HGS was substantially expanded.2020
• On January 2, 2025, the Treasury Department and FHFA announced an agreement to amend the preferred stock purchase agreements between the Treasury Department and the GSEs. The agreement codifies the requirement that Treasury consent before the conservatorships can be terminated.January 2, 2025
• GSEs updated PMIERs in August 2024 to incorporate new deductions to the definition of available assets for investment risk, effective March 31, 2025, phased in through September 30, 2026.August 2024
• The Federal banking agencies' proposed Basel III Endgame rule would eliminate capital relief for mortgage loans protected by private mortgage insurance.
• The U.K. and EU delayed Basel III implementation to January 1, 2027, and proposed amendments to SECR and CRR could improve capital relief for insurance-based SRT transactions.January 1, 2027
• The FHFA's ERCF significantly increased minimum capital requirements for Fannie Mae and Freddie Mac, including higher risk-capital charges for residential mortgages.
• A special cash dividend on common shares was paid in fiscal year 2024.2024
• The MCE Acquisition exemplifies such expansion activities.