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, the company was added to the list of IAIGs, subjecting global operations to additional regulation and scrutiny.August 2024
• U.S., U.K., and EU sanctions on Russia and Russia-related businesses have impacted our marine and energy lines of business.
• Recent U.S. policies and actions relating to Venezuela.
• Recent U.S. policies and actions relating to Greenland.
• TRIA coverage may apply for up to 80% subject to a mandatory deductible of 20% of prior year's direct earned premium.
• Industry aggregate retention of $53.4 billion under TRIA.
• Program trigger for calendar year 2025 through 2027 is $200 million.2025-2027
• $100 billion annual limit under TRIA, beyond which insurers are not responsible for additional losses.
• 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
• FHA reduced its annual mortgage insurance premium rates by 30bps from 0.85% to 0.55% for most single family mortgages in 2023.2023
• Australian Government introduced the First Home Guarantee Scheme in 2020, allowing first home buyers to purchase with a deposit as little as 5%.2020
• On January 2, 2025, the Treasury Department and FHFA announced an agreement to amend the preferred stock purchase agreements, originally entered into in 2008, to codify the requirement that Treasury consent before conservatorships can be terminated.January 2, 2025
• In August 2024, the GSEs updated PMIERs to incorporate new deductions to the definition of available assets for investment risk, effective March 31, 2025, with impact phased in through September 30, 2026.August 2024
• Basel III Endgame rules expected to be fully implemented by January 2027.January 2027
• Federal Reserve Vice Chair Michelle Bowman stated in September 2025 that revised Basel III Endgame may be unveiled by early 2026.September 2025
• U.K. and EU delayed start of Basel III Endgame implementation until January 1, 2027.January 1, 2027
• EU consulting on proposed amendments to SECR and CRR that would improve capital relief for insurance-based SRT transactions.
• 2020 FHFA ERCF significantly increased minimum capital requirements for Fannie Mae and Freddie Mac.2020
• 2022 ERCF changes incentivized CRT transactions.2022
• 2023 ERCF changes addressed capital requirements for derivatives, market risk, multifamily loans, and inter-Enterprise exposures.2023
• A special cash dividend on common shares was paid in fiscal year 2024, but there is no assurance of future dividends.2024
• We are subject to CSRD and other EU and U.K. climate-related disclosure regulations.
• Subject to SEC Cybersecurity Rules.
• Subject to EU GDPR and DORA.
• Subject to NYDFS cybersecurity requirements on U.S. operations.
• We established the Artificial Intelligence Governance and Oversight Committee ('AIGOC') to evaluate and approve new AI use cases and oversee our Artificial Intelligence Policy.
• The MCE Acquisition is an example of such expansion.
• 70.8% of cash and invested assets held by Arch consist of fixed maturities as of December 31, 2025.December 31, 2025
• Arch Re Bermuda is a registered Bermuda insurance company not licensed or admitted in any U.S. state.
• Arch Re Bermuda has been approved as a certified reinsurer and reciprocal reinsurer in certain U.S. states allowing reduced collateral.
• Our eligible mortgage insurers each satisfied the PMIERs' financial requirements as of December 31, 2025.December 31, 2025
• Our insurance subsidiaries cede a portion of their premiums through pro rata, excess of loss and facultative reinsurance agreements.
• Our reinsurance subsidiaries purchase a limited amount of retrocessional coverage as part of their aggregate risk management program.
• Our reinsurance subsidiaries participate in 'common account' retrocessional arrangements for certain pro rata treaties.
• Some assumed reinsurance agreements include provisions that a ratings downgrade or other specified triggering event with respect to our reinsurance operations, such as a reduction in surplus by specified amounts during specified periods, give ceding company clients rights, including termination or requiring additional collateral.
• A downgrade in ratings of certain of our operating subsidiaries may constitute an event of default under our credit facilities.