What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2025-02-27 compared with 2024-02-23 · 509 added, 424 removed, 1181 unchanged (44% of the section changed)

19 unchanged sentences

Our insurance underwriting platform initially consisted of our Bermuda and U.S.

operations, followed by the establishment of our United Kingdom-based carrier, Arch Insurance (U.K.) Limited (“Arch Insurance (U.K.)”) in 2004 and Canadian operations in 2005.

operations, followed by the establishment of our United Kingdom-based carrier, Arch Insurance (UK) Limited (“Arch Insurance (U.K.)”) in 2004 and Canadian operations in 2005.

In 2009, we established a managing agency and syndicate at Lloyd’s of London (“Lloyd’s”) and significantly expanded our U.K.

presence in 2019 through the acquisition of Barbican Group Holdings Limited (“Barbican Holdings”) and its subsidiaries (collectively, “Barbican”).

platform grew with the 2018 acquisition of McNeil & Company, Inc.

(“McNeil”), a U.S.

nationwide leader in specialized risk management and program administration.

Our Ireland-based carrier, Arch Insurance (EU) Designated Activity Company (“Arch Insurance (EU)”) writes primarily European Union (“EU”) business and expanded its presence across Europe in 2023 with branch offices in Spain and France.

On August 1, 2024 we expanded our U.S.

insurance middle market presence with the acquisition of Allianz’s U.S.

Middle Market Property and Casualty insurance business and U.S.

Entertainment Property and Casualty insurance business, representing an important part of our growth strategy in the U.S.

See “Operations—Insurance Operations” for further details on our insurance operations.

1 unchanged sentence

in Bermuda (“Arch Re Bermuda”) and Arch Reinsurance Company (“Arch Re U.S.”), our U.S.-licensed reinsurer.

Our European reinsurance operations commenced in 2006 in Zurich, Switzerland followed by the formation of a Danish underwriting agency in 2007.

In addition to the U.S.

reinsurance treaty activities of Arch Re U.S., we launched our property facultative reinsurance underwriting operations in 2007, which underwrite in the U.S., Canada and Europe.

In 2008, we formed Arch Reinsurance Europe Designated Activity Company (“Arch Re Europe”), our Ireland-based reinsurance company headquartered in Ireland with offices in Switzerland and the U.K.

The acquisition of Barbican in 2019 also contributed to our reinsurance operations.

In 2021, Arch Re Bermuda completed the acquisition of Somerset Bridge Group Limited, Southern Rock Holdings Limited and affiliates (“Somerset Group”).

The acquisition included Somerset’s Group’s motor insurance managing general agent, distribution capabilities

In 2006, we commenced our European reinsurance operations with Arch Reinsurance Europe Underwriting Designated Activity Company (“Arch Re Europe”), our Ireland-headquartered reinsurance company with offices in Switzerland, the U.K.

and, as of 2024, France.

Our Danish underwriting agency was formed in 2007 with a focus on Accident & Health business.

The acquisition of

ARCH CAPITAL 3

2024 FORM 10-K

through direct and aggregator channels, affiliated insurer and fully integrated claims operation.

Barbican in 2019 also contributed to our reinsurance operations in the London market.

Our property facultative reinsurance underwriting operations write business in the U.S., Canada and Europe.

In 2021, Arch Re Bermuda completed the acquisition of Somerset Bridge Group Limited, Southern Rock Holdings Limited and affiliates (“Somerset Group”).

The acquisition included Somerset Group’s motor insurance managing general agent, distribution capabilities through direct and aggregator channels, affiliated insurer and fully integrated claims operation.

See “Operations—Reinsurance Operations” for further details on our reinsurance operations.

3 unchanged sentences

primary mortgage operations provide mortgage insurance products and services to the U.S.

These operations include providers which are also approved as eligible mortgage insurers by Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”), each a GSE.

These operations include providers which are approved as eligible mortgage insurers by Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”), each a GSE.

The mortgage operations also include participation in GSE credit risk-sharing transactions and direct mortgage insurance to U.S.

mortgage lenders with respect to mortgages that lenders intend to retain in portfolio or include in non-agency securitizations along with mortgage insurance and reinsurance on a global basis.

The majority of our European business is written through our Ireland-based carrier, Arch Insurance (EU) Designated Activity Company (“Arch Insurance (EU)”), which was authorized in 2011 to provide mortgage insurance products and services to the European and U.K.

The majority of our European business is written through our Ireland-based carrier, Arch Insurance (EU), which was authorized in 2011 to provide mortgage insurance products and services to the European and U.K.

In 2019, Arch LMI Pty Ltd.

(“Arch LMI”) was authorized by the Australian Prudential Regulation Authority (“APRA”) to write lenders’ mortgage insurance on a direct basis in Australia.

(“Arch LMI”) was authorized by the Australian Prudential Regulation Authority (“APRA”) to write lenders’ mortgage insurance (“LMI”) on a direct basis in Australia.

We expanded our presence in Australia in August 2021 by acquiring Westpac Lenders Mortgage Insurance Limited, another APRA approved writer of lenders mortgage insurance, which has since been renamed Arch Lenders Mortgage Indemnity Ltd.

2 unchanged sentences

See “Operations—Mortgage Operations” for further details on our mortgage operations.

It is our belief that our underwriting platform, our experienced management team and our strong capital base have enabled us to establish a strong presence in the markets in which we participate.

It is our belief that our underwriting platform, our experienced management team and our strong capital base have enabled us to create a diversified, specialty-focused company targeting areas where we can best apply our specialized underwriting expertise, distribution and customer capabilities.

In 2014, we acquired approximately 11% of Somers Holdings Ltd.

2 unchanged sentences

is the parent of Somers Re Ltd.

(formerly Watford Re Ltd.), a multi-line Bermuda reinsurance company (together with Somers Holdings Ltd., “Somers”).

(formerly Watford Re Ltd.), a multi-line Bermuda (re)insurance company (together with Somers Holdings Ltd., “Somers”).

In the 2020 fourth quarter, Arch Capital, Somers, and Greysbridge Ltd., a wholly-owned subsidiary of Arch Capital, entered into an Agreement and Plan of Merger (as amended, the “Merger Agreement”).

2 unchanged sentences

The merger and the related Greysbridge equity financing closed on July 1, 2021.

Somers is wholly owned by Greysbridge, and Greysbridge is owned 40% by Arch, 30% by certain funds managed by Kelso & Company (“Kelso”) and 30% by certain funds managed by Warburg Pincus LLC (“Warburg”).

In 2017, we acquired approximately 25% of Premia Holdings Ltd.

Somers is wholly owned by Greysbridge, and Greysbridge is owned 40% by Arch, and the balance is owned by certain funds managed by Kelso & Company (“Kelso”) and certain funds managed by Warburg Pincus LLC (“Warburg”).

Under the terms of the Greysbridge shareholder agreement, beginning January 1, 2024, Arch Capital has a call right (but not the obligation) and Warburg and Kelso each have a put right (but not the obligation) to buy/sell a certain amount of each of Warburg and Kelso’s initial shares annually at the current year end tangible book value per share of Greysbridge.

In 2024, Warburg and Kelso both delivered a put option notice to sell a certain amount of their initial shares.

The transaction, which will involve third-party purchasers of such shares, is expected to close in the 2025 calendar year, subject to any required regulatory approvals and other closing conditions.

In 2017, Arch and certain co-investors acquired approximately 25% of Premia Holdings Ltd.

Premia Holdings Ltd.

is the parent of Premia Reinsurance Ltd., a multi-line Bermuda reinsurance company (together with Premia Holdings Ltd., “Premia”).

In 2021, a Company completed the share purchase agreement with Natixis, a French financial services firm, to purchase 29.5% of the common equity of Coface SA (“Coface”), a France-based leader in the global trade credit insurance market.

In 2021, the Company completed the share purchase agreement with Natixis, a French financial services firm, to purchase 29.5% of the common equity of Coface SA (“Coface”), a France-based leader in the global trade credit insurance market.

See “Operations—Other Operations” for further details on Somers, Premia and Coface.

The Board of Directors of Arch Capital (the “Board”) has authorized the investment in Arch Capital’s common shares through a share repurchase program.

Repurchases under the share repurchase program may be effected from time to time in open market or privately negotiated transactions through December 31, 2024.

The Board of Directors of Arch Capital (the “Board”) has approved common share repurchase authorizations under our share repurchase program.

Repurchases under the share repurchase program may be effected from time to time in open market or privately negotiated transactions.

Since the inception of the share repurchase program in February 2007 through December 31, 2024, Arch Capital has repurchased 433.8 million common shares for an aggregate purchase price of $5.9 billion.

At December 31, 2023, the total remaining authorization under the share repurchase program was $1.0 billion.

At December 31, 2024, the total remaining authorization under the share repurchase program was $996.8 million.

The timing and amount of the repurchase transactions under this program will depend on a variety of factors, including results of operations, market conditions and the development of the economy, as well as other factors.

We will consider share repurchases on an opportunistic basis.

During the 2023 fiscal year, we did not repurchase any shares under our share repurchase program.

We classify our businesses into three underwriting segments – insurance, reinsurance and mortgage and two operating segments – corporate and ‘other.’ For an analysis of our underwriting results by segment, see note 4, “Segment Information,” to our consolidated financial statements in Item 8 and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations.”

During the 2024 fiscal year, we repurchased approximately $24 million worth of ACGL common shares.

ARCH CAPITAL 4

2024 FORM 10-K

We classify our businesses into three underwriting segments – insurance, reinsurance and mortgage.

For an analysis of our underwriting results by segment, see note 4, “Segment Information,” to our consolidated financial statements in Item 8 and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations.”

Insurance Operations

1 unchanged sentence

Our insurance operations in Bermuda are conducted through Arch Insurance (Bermuda), a division of Arch Re Bermuda, and Alternative Re Limited.

ARCH CAPITAL 4

2023 FORM 10-K

In the U.S., our insurance group’s principal insurance subsidiaries are Arch Insurance Company (“Arch Insurance”), Arch Specialty Insurance Company (“Arch Specialty”), Arch Indemnity Insurance Company (“Arch Indemnity Insurance”) and Arch Property Casualty Insurance Company (“Arch P&C”).

In the U.S., we focus on various specialty lines on both an admitted and non-admitted basis.

Our insurance group’s principal insurance subsidiaries are Arch Insurance Company (“Arch Insurance”), Arch Specialty Insurance Company (“Arch Specialty”), Arch Indemnity Insurance Company (“Arch Indemnity Insurance”) and Arch Property Casualty Insurance Company (“Arch P&C”).

Arch Insurance is an admitted insurer in 50 states, the District of Columbia, Puerto Rico, the U.S.

4 unchanged sentences

Arch P&C, which is not currently writing business, is an admitted insurer in 47 states and the District of Columbia and is filing applications for admission in all remaining states where it is not yet admitted.

Our insurance group also operates McNeil, a specialized risk manager and a program administrator based in Cortland, New York.

In 2024, we acquired Watford Insurance Company (“WIC”) from Somers.

WIC is an admitted insurer in all 50 states and the District of Columbia.

Our insurance group also operates McNeil & Company, Inc., a specialized risk manager and a program administrator we acquired in 2018 based in Cortland, New York.

The headquarters for our insurance group’s U.S.

5 unchanged sentences

Dallas, Texas and additional branch offices.

On August 1, 2024, the Company completed the acquisition of Allianz’s U.S Middle Market Property & Casualty Insurance and U.S.

Entertainment Property and Casualty Insurance Business (“MCE Acquisition”).

This business is written by Fireman’s Fund Insurance Company, an affiliate of Allianz, and its subsidiaries (collectively, the “Business Entities”), in each case, relating to relevant policies with accident years 2016 and onwards (collectively, the

“Business”), as well as certain assets of Allianz and its affiliates related to the Business.

In connection with the acquisition of the Business, the Company also entered into certain reinsurance agreements relating to the Business and the Business Entities and other agreements providing for administration and other services for the Business Entities by the Company for the applicable policies being reinsured following the closing.

The acquisition of the Business is an important part of the Company’s growth strategy, and provides a ballast to our existing insurance business.

It further enhances the Company’s capabilities in the U.S.

middle markets and represents an attractive way to enter a new niche entertainment insurance market.

Our insurance operations in Canada are conducted through Arch Insurance Canada Ltd.

1 unchanged sentence

Arch Insurance Canada is headquartered in Toronto, Ontario.

In 2019, Arch Insurance (EU), based in Dublin, Ireland, received authorization from the Central Bank of Ireland (“CBI”) to expand its authorized classes of business as part of our plan to address the U.K.’s departure from the European Union (“Brexit”).

Arch Insurance (EU), based in Dublin, Ireland, received authorization from the Central Bank of Ireland (“CBI”) to expand its authorized classes of business as part of our plan to address the U.K.’s departure from the EU (“Brexit”).

At the end of 2020, Arch Insurance (U.K.) received court approval in the U.K.

1 unchanged sentence

Financial Services and Markets Act 2000.

From January 2020, all of the insurance business in the European Union (“EU”) previously written by Arch Insurance (U.K.) is now written through Arch Insurance (EU).

From January 2021, all of the insurance business in the EU previously written by Arch Insurance (U.K.) is now written through Arch Insurance (EU).

Arch Insurance (EU) has branches in Italy, France, Spain and the U.K.

8 unchanged sentences

conducts its operations from London and other locations in the U.K.

In December 2023, we signed an agreement for the sale of Castel Underwriting Agencies Limited, a managing general agency in the U.K.

On May 1, 2024, we completed the sale of Castel Underwriting Agencies Limited, a managing general agency in the U.K.

that we acquired as part of the Barbican acquisition.

The sale is expected to close in the first half of 2024, subject to regulatory approvals and other closing conditions.

ARCH CAPITAL 5

2024 FORM 10-K

Our insurance group’s strategy is to operate in lines of business in which underwriting expertise can make a meaningful difference in operating results.

8 unchanged sentences

The underwriting executive in charge of each product line oversees all aspects of the underwriting product development process within such product line.

Our insurance group believes that centralizing the control of such product line with the respective underwriting executive allows for close management of underwriting and creates clear accountability for results.

insurance group has five regional offices, and the executive in charge of each region is primarily responsible for all aspects of the marketing and distribution of our insurance group’s products, including the management of broker and other producer relationships in such executive’s respective region.

Our insurance group believes that centralizing control of such product line with the respective underwriting executive allows for tight management of underwriting and creates clear accountability for results.

In our non-U.S.

offices, a similar philosophy is observed, with responsibility for the management of each product line residing with the senior underwriting executive in charge of such product line.

• Maintain a disciplined underwriting philosophy .

offices, a similar philosophy is observed, with responsibility for the management of each product line residing with the senior underwriting executive in charge of the relevant product line.

• Maintain disciplined underwriting standards using our experience and strategic analytics to drive decisions .

Our insurance group’s underwriting philosophy is to generate an underwriting profit through prudent risk selection and proper pricing.

Our insurance group believes that the key to this approach is adherence to uniform underwriting

ARCH CAPITAL 5

2023 FORM 10-K

standards across all types of business.

Our insurance group believes that the key to this approach is adherence to uniform underwriting standards across all types of business.

Our insurance group’s senior management closely monitors the underwriting process.

This strategy is underpinned by our belief in using data and strategic analytics to assess business through hard and soft underwriting conditions.

• Focus on providing superior claims management .

Our insurance group believes that claims handling is an integral component of credibility in the market for insurance products.

We believe our ability to handle claims expeditiously and satisfactorily is a key to our success.

We believe our ability to handle claims expeditiously and satisfactorily is a key to our

Our insurance group employs experienced claims professionals and also utilizes experienced external claims managers (third party administrators) where appropriate.

1 unchanged sentence

Our insurance group believes that promoting and utilizing a multi-channel distribution system provides efficient access to its broad customer base.

We work with select international, national and regional retail and wholesale brokers and leading managing general agencies and program administrators, including McNeil, to distribute our insurance products.

The Arch U.K.

regional division has a retail distribution network in the U.K.

• Grow strategic partnerships or acquire strategic businesses in stable and niche areas.

We work with select international, national and regional retail and wholesale brokers and leading managing general agencies and program administrators, to distribute our insurance products.

• Grow strategic partnerships, acquire or build strategic businesses in niche areas or lines of business.

Our insurance group aims to build more integrated long-term alignment with strategic partners offering superior access to niche opportunities, quality scalable businesses, or lines with reliable defensive qualities.

We may grow existing partnerships or look to acquire businesses which further this strategy.

Our insurance group writes business in the U.S.

on both a U.S.

admitted and U.S.

non-admitted basis.

Our insurance group focuses on various specialty lines, as described in note 4, “Segment Information,” to our consolidated financial statements in Item 8.

We may grow existing partnerships or look to acquire businesses which further this strategy, such as our MCE Acquisition.

• Create or acquire scalable and diversified underwriting platforms which can flex depending on the underwriting cycle.

Our experience as cycle managers is complemented by scalable underwriting platforms enabling us to increase or decrease our business as market conditions demand.

The MCE platform enhances our U.S.

focus on middle market companies using our strategic analytics capabilities and continued focus on customer solutions.

We continue to focus on specialty risks as we build out a diversified platform across the insurance segment.

Outside of the U.S., we are focused on continued expansion in continental Europe and optimizing opportunities in the London Market.

Underwriting Philosophy.

Our insurance group’s underwriting philosophy is to generate an underwriting profit (on both a gross and net basis) through prudent risk selection and proper pricing across all types of business.

One key to this philosophy is the adherence to uniform underwriting standards across each product line that focuses on the following:

We seek to generate an underwriting profit based on our careful analysis across each product line that focuses on the following:

• risk selection;

4 unchanged sentences

• collaborative decision making.

We employ analytic capabilities to support this philosophy.

Our insurance group’s products are marketed principally through a group of licensed independent retail and wholesale brokers.

Clients (insureds) are referred to our insurance group through a large number of international, national and regional brokers and captive managers who receive from the insured or insurer a set fee or brokerage commission usually equal to a percentage of gross premiums.

Clients (insureds) are referred to our insurance group through a large number of international,

ARCH CAPITAL 6

2024 FORM 10-K

national and regional brokers and captive managers who receive from the insured or insurer a set fee or brokerage commission usually equal to a percentage of gross premiums.

Our insurance group may enter into contingent commission arrangements with some brokers that provide for the payment of additional commissions based on volume or profitability of business.

Currently, some of our contracts with brokers provide for additional commissions based on volume.

It is the practice for the brokers and producers to make the client aware of any contingent commission arrangements that may be in place with us.

9 unchanged sentences

Our principal insurance subsidiaries, with oversight by a group-wide reinsurance steering committee (“RSC”), are selective with regard to reinsurers, seeking to place reinsurance with only those reinsurers which meet and maintain specific standards of established criteria for financial strength.

The RSC evaluates the financial viability of its reinsurers through financial analysis, research and review of rating agencies’ reports and also monitors

ARCH CAPITAL 6

2023 FORM 10-K

reinsurance recoverables and collateral with unauthorized reinsurers.

The financial analysis includes ongoing qualitative and quantitative assessments of reinsurers, including a review of the financial stability, appropriate licensing, reputation, claims paying ability and underwriting philosophy of each reinsurer.

The RSC evaluates the financial viability of its reinsurers through financial analysis, research and review of rating agencies’ reports and also monitors reinsurance recoverables and collateral with unauthorized reinsurers.

philosophy of each reinsurer.

See note 8, “Reinsurance,” to our consolidated financial statements in Item 8.

3 unchanged sentences

Our insurance group’s claims management function is performed by claims professionals, as well as experienced external claims managers (third party administrators), where appropriate.

In addition to investigating, evaluating and resolving claims, members of our insurance group’s claims departments work with underwriting professionals as functional teams in order to develop products and services desired by the group’s clients.

In addition to investigating, evaluating and resolving claims, members of our insurance group’s claims departments work with underwriting professionals to develop products and services desired by the group’s clients.

Reinsurance Operations

Our reinsurance operations are conducted on a worldwide basis through our reinsurance subsidiaries, Arch Re Bermuda, Arch Re U.S., Arch Syndicate 2012, Arch Syndicate 1955 and Arch Re Europe.

Our reinsurance operations are conducted on a worldwide basis through our reinsurance subsidiaries, Arch Re Bermuda, Arch Re U.S., our Lloyd’s Syndicates, and Arch Re Europe.

Arch Re Bermuda is dual-licensed as a Class 4 general business insurer and Class C long-term insurer and is headquartered in Hamilton, Bermuda.

Arch Re Bermuda has been approved as a “certified reinsurer” in certain U.S.

states that allow reduced collateral for reinsurance ceded to such reinsurers.

Arch Re Bermuda has also been approved in certain U.S.

states as a “reciprocal jurisdiction reinsurer,” which allows ceding companies to eliminate collateral requirements for reinsurance ceded to such reinsurers and still take credit for that reinsurance.

Arch Re Bermuda has been approved as a “certified reinsurer,” which allows reduced collateral for reinsurance ceded to such reinsurers.

Arch Re Bermuda has also been approved as a “reciprocal jurisdiction reinsurer,” which allows ceding companies to eliminate regulatory collateral requirements for reinsurance ceded to such reinsurers and still take credit for that reinsurance.

In October 2024, the U.S.

Department of the Treasury, Bureau of Fiscal Services (“BFS”) recognized Arch Re Bermuda as an “Alien Reinsurer” (except on excess risks running to the U.S.), which allows T-Listed ceding companies to eliminate regulatory collateral requirements under the U.S.

Treasury rules.

is licensed or is an accredited or otherwise approved reinsurer in 50 states, the District of Columbia and Puerto Rico, the provinces of Ontario and Quebec in Canada with its principal U.S.

2 unchanged sentences

(“Arch Re Canada”).

is also an admitted insurer in Guam.

is also an authorized insurer in Guam.

Our property facultative reinsurance operations are conducted primarily through Arch Re U.S.

The property facultative reinsurance operations have offices throughout the U.S., Canada, Europe and the U.K.

Arch Re Europe, licensed and authorized as a non-life reinsurer and a life reinsurer, is headquartered in Dublin, Ireland with branch offices outside the EEA in Zurich and London.

AMAL is the managing agent for the reinsurance operations of Arch Syndicate 2012 and Arch Syndicate 1955.

In December 2022, Arch Group Reinsurance Ltd.

(“AGRL”) was registered as a Class 3A general business insurer carrying on affiliated reinsurance business pursuant to the Insurance Act of 1978 of Bermuda.

AGRL, a wholly-owned subsidiary of Arch-U.S., was established to provide internal quota share reinsurance covering certain U.S.

Arch Re Europe, licensed and authorized as a non-life

ARCH CAPITAL 7

2024 FORM 10-K

reinsurer and a life reinsurer, is headquartered in Dublin, Ireland with branch offices in France, Switzerland and the U.K.

AMAL is the managing agent for the reinsurance operations of our Lloyd’s Syndicates.

Arch Group Reinsurance Ltd.

(“AGRL”), formed in December 2022, is a registered Class 3A general business insurer carrying on affiliated reinsurance business pursuant to the Insurance Act of 1978 of Bermuda.

AGRL, a wholly-owned subsidiary of Arch-U.S., was established to provide internal reinsurance covering certain U.S.

lines of business.

8 unchanged sentences

Our reinsurance group’s organizational structure and philosophy allows it to take advantage of increases or changes in demand or favorable pricing trends.

Our reinsurance group believes that its existing platforms in Bermuda, the U.S., U.K., Europe and Canada, broad underwriting expertise and substantial capital facilitate adjustments to its mix of business geographically and by line and type of coverage.

Our reinsurance group believes that its existing platforms, broad underwriting expertise and substantial capital facilitate adjustments to its mix of business geographically and by line and type of coverage.

Our reinsurance group believes that this flexibility allows it to participate in those market opportunities that provide the greatest potential for underwriting profitability.

3 unchanged sentences

In a proportional reinsurance arrangement (also known as pro rata reinsurance, quota share reinsurance or participating reinsurance), the reinsurer shares a proportional part of the original premiums and losses of the reinsured.

The reinsurer pays the cedent a commission which is generally based on the cedent’s cost of acquiring the

ARCH CAPITAL 7

2023 FORM 10-K

business being reinsured (including commissions, premium taxes, assessments and miscellaneous administrative expenses) and may also include a profit factor.

The reinsurer pays the cedent a commission which is generally based on the cedent’s cost of acquiring the business being reinsured (including commissions, premium taxes, assessments and miscellaneous administrative

expenses) and may also include a profit factor.

Non-proportional (or excess of loss) reinsurance indemnifies the reinsured against all or a specified portion of losses on underlying insurance policies in excess of a specified amount, which is called a “retention.” Non-proportional business is written in layers and a reinsurer or group of reinsurers accepts a band of coverage up to a specified amount.

2 unchanged sentences

However, with respect to other classes of coverage, such as property catastrophe and casualty clash, the reinsurance group’s treaty operations participate in a relatively large number of treaties where they believe that they can underwrite and process the business efficiently.

The reinsurance group’s property facultative operations write reinsurance on a facultative basis whereby they assume part of the risk under primarily single insurance contracts.

The reinsurance group’s casualty facultative and property facultative underwriters write reinsurance on a facultative basis whereby they assume part of the risk under primarily single insurance contracts.

Facultative reinsurance is typically purchased by ceding companies for individual risks not covered by their reinsurance treaties, for unusual risks or for amounts in excess of the limits on their reinsurance treaties.

7 unchanged sentences

• the reputation of the proposed cedent and the likelihood of establishing a long-term relationship with the cedent, the geographic area in which the cedent does business, together with its catastrophe exposures, and our aggregate exposures in that area;

• historical loss data for the cedent and, where available, for the industry as a whole in the relevant regions, in order to compare the cedent’s historical loss experience to industry averages;

• historical loss data for the cedent and, where available, for the industry as a whole in the relevant regions, in

ARCH CAPITAL 8

2024 FORM 10-K

order to compare the cedent’s historical loss experience to industry averages;

• projections of future loss frequency and severity;

15 unchanged sentences

Our reinsurance group makes use of outside consultants for claims work from time to time.

ARCH CAPITAL 8

2023 FORM 10-K

Mortgage Operations

2 unchanged sentences

Our mortgage group includes direct mortgage insurance in the U.S.

primarily through Arch Mortgage Insurance Company, United Guaranty Residential Insurance Company, and Arch Mortgage Guaranty Company (together, “Arch MI U.S.”);

primarily through Arch Mortgage Insurance Company (“AMIC”), United Guaranty Residential Insurance Company (“UGRIC”), and Arch Mortgage Guaranty Company (“AMG” and together with AMIC and UGRIC, “Arch MI U.S.”);

mortgage reinsurance primarily through Arch Re Bermuda on both a proportional and non-proportional basis globally;

3 unchanged sentences

In 2014, we entered the U.S.

mortgage insurance marketplace, underwriting on the Arch Mortgage Insurance Company platform.

Arch Mortgage Insurance Company is licensed and operates in all 50 states, the District of Columbia and Puerto Rico.

In December 2016, we completed the acquisition of UGC and its primary operating subsidiary, United Guaranty Residential Insurance Company, which is licensed and operates in all 50 states and the District of Columbia.

In November 2023, we signed an agreement to acquire RMIC Companies, Inc.

and its subsidiaries that together comprise the run-off mortgage insurance business of Old Republic International Corporation.

The sale is expected to close in the first half of 2024, subject to regulatory approvals and other closing conditions.

Arch Mortgage Insurance Company and United Guaranty Residential Insurance Company have each been approved as an eligible mortgage insurer by Fannie Mae and Freddie Mac, subject to maintaining certain ongoing requirements (“eligible mortgage insurer”).

Arch Mortgage Guaranty Company offers direct mortgage insurance to U.S.

mortgage insurance marketplace, underwriting on the AMIC platform.

AMIC is licensed and operates in all 50 states, the District of Columbia, Puerto Rico and Guam.

In December 2016, we completed the acquisition of UGC and its primary operating subsidiary, UGRIC, which is licensed and operates in all 50 states, the District of Columbia and the U.S.

Virgin Islands.

AMIC and UGRIC have each been approved as an eligible mortgage insurer by Fannie Mae and Freddie Mac, subject to maintaining certain ongoing requirements (“eligible mortgage insurer”).

AMG offers direct mortgage insurance to U.S.

mortgage lenders with respect to mortgages that lenders intend to retain in portfolio or include in non-agency securitizations.

Arch Mortgage Guaranty Company, which is licensed in all 50 states and the District of Columbia, insures mortgages that are not intended to be sold to the GSEs, and it is therefore not approved by either GSE as an eligible mortgage insurer.

AMG, which is licensed in all 50 states and the District of Columbia, insures mortgages that are not intended to be sold to the GSEs, and it is therefore not approved by either GSE as an eligible mortgage insurer.

In 2019, Arch LMI was authorized by APRA to write lenders’ mortgage insurance.

5 unchanged sentences

As a result, the creation of the mortgage group provides us with a more diverse revenue stream.

Our mortgage group’s strategy is to capitalize on its financial capacity, mortgage insurance technology platform, operational flexibility and experienced management to offer mortgage insurance, reinsurance and other risk-sharing products in the U.S.

and around the world.

Our mortgage group’s strategy is to capitalize on its financial capacity, mortgage insurance technology platform, operational flexibility and experienced

ARCH CAPITAL 9

2024 FORM 10-K

management to offer mortgage insurance, reinsurance and other risk-sharing products in the U.S., Europe, the U.K.

and Australia.

Our mortgage group’s operating principles and goals are to:

9 unchanged sentences

mortgage insurance business .

With the acquisition of UGC in 2016, a leading provider of mortgage insurance products and services to national and regional banks and mortgage originators, we became a leading provider of U.S.

mortgage insurance .

We have been a leading provider of mortgage insurance products and services to national and regional banks and mortgage originators for most of the last decade, and this position has helped us generate significant business opportunities for Arch.

• Diversify revenues by capitalizing on international opportunities.

3 unchanged sentences

Under their monoline insurance licenses, each of Arch’s eligible mortgage insurers may only offer private mortgage insurance covering first lien, one-to-four family residential mortgages.

Nearly all of our mortgage insurance written provides first loss protection on loans

ARCH CAPITAL 9

2023 FORM 10-K

originated by mortgage lenders and sold to the GSEs.

Each GSE’s Congressional charter generally prohibits it from purchasing a mortgage where the principal balance of the mortgage is in excess of 80% of the value of the property securing the mortgage unless the excess portion of the mortgage is protected against default by lender recourse, participation or by a qualified insurer.

Nearly all of our mortgage insurance written provides first loss protection on loans originated by mortgage lenders and sold to the GSEs.

recourse, participation or by a qualified insurer.

As a result, such “high loan-to-value mortgages” purchased by Fannie Mae or Freddie Mac generally are insured with private mortgage insurance.

17 unchanged sentences

and international mortgages.

ARCH CAPITAL 10

2024 FORM 10-K

• Other credit risk-sharing products .

1 unchanged sentence

The GSEs have reduced their exposure to mortgage risk by shifting a portion of it to the private sector, creating opportunities for insurers to assume additional mortgage risk.

In 2013, Arch Re Bermuda became the first (re)insurance company to participate in Freddie Mac’s program to transfer certain credit risk in its single-family portfolio to the private sector.

Since that time, Arch Re Bermuda and its affiliates have regularly participated in both Fannie Mae and Freddie Mac single family and multifamily risk sharing programs.

Arch Re Bermuda and its affiliates have regularly participated in both Fannie Mae and Freddie Mac single family and multifamily risk sharing programs since their inception over 10 years ago.

In 2019, we established Arch Credit Risk Services (Bermuda) Ltd.

12 unchanged sentences

• adequacy of premium rates.

ARCH CAPITAL 10

2023 FORM 10-K

Sales and Distribution .

10 unchanged sentences

and/or (ii) adverse economic or housing market conditions caused by the physical impact of extreme weather conditions or events on a region or the financial impact of transitioning to a zero or low carbon economy on a region.

Generally, mortgage insurance policies exclude direct physical losses resulting from physical damages, such as damaged caused by extreme weather events, though we do have some exposure to physical damage in certain GSE credit risk transfer (“CRT”) transactions.

Generally, mortgage insurance policies exclude direct physical losses resulting from physical damages, such as damage caused by extreme weather events, though we do have some exposure to physical damage in certain GSE credit risk transfer (“CRT”) and European structured financial transactions.

Additionally, we actively monitor developments in the housing market, financial regulation and public policy in the geographies where our mortgage group operates to facilitate implementation of laws, regulations and policies which support sustainable environmental behavior and mitigate the effects of climate change.

For a discussion of our risk management policies, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Summary of Critical Accounting Estimates—Ceded Reinsurance” and “Risk Factors—Risks Relating to Our Industry, Business and Operations—The failure of any of the loss limitation methods we employ could have a material adverse effect on our financial condition or results of operations.”

Our mortgage group has ceded a portion of its premium on a quota share basis through certain reinsurance agreements and through aggregate excess of loss reinsurance agreements which provide reinsurance coverage for delinquencies on portfolios of in-force policies issued between certain periods.

ARCH CAPITAL 11

2024 FORM 10-K

Our mortgage group has ceded a portion of its premium through quota share and aggregate excess of loss reinsurance agreements which provide reinsurance coverage for delinquencies on portfolios of in-force policies issued between certain periods.

See note 8, “Reinsurance,” to our consolidated financial statements in Item 8 for further details.

14 unchanged sentences

• in the event the property is sold pursuant to an approved prearranged sale, paying the lesser of (i) 100% of the loss amount less the proceeds of sale of the property, or (ii) the specified coverage percentage multiplied by the loss amount;

ARCH CAPITAL 11

2023 FORM 10-K

• paying 100% of the loss amount in exchange for the insured’s conveyance to us of good and marketable title to the property, with us then selling the property for our own account.

11 unchanged sentences

Effective July 1, 2021, Somers is wholly owned by Greysbridge, and Greysbridge is owned 40% by Arch, 30% by certain investment funds managed by Kelso and 30% by certain investment funds managed by Warburg.

See note 12, “Variable Interest Entity and Noncontrolling Interests,” to our consolidated financial statements in Item 8 for further details.

See note 16, “Transactions with Related Parties,” to our consolidated financial statements in Item 8 for further details.

In 2017, we and Kelso sponsored the formation of Premia.

3 unchanged sentences

Arch has appointed two directors to serve on the seven person board of directors of Premia.

ARCH CAPITAL 12

2024 FORM 10-K

In 2021, the Company completed the share purchase agreement with Natixis to purchase 29.5% of the common equity of Coface.

This is a long-term, strategic investment in Coface, and fits with Arch’s efforts to develop uncorrelated sources of underwriting income.

Our companies share a focus

on specialty underwriting where knowledge and expertise create value for our clients, and trade credit contributes to Arch’s specialty-driven business model.

Our companies share a focus on specialty underwriting where knowledge and expertise create value for our clients, and trade credit contributes to Arch’s specialty-driven business model.

Arch has appointed four directors to serve on the ten person board of directors of Coface.

Climate Change Considerations

We are taking steps to address the effects of climate change and facilitate the transition toward decarbonization in all our underwriting segments.

We are taking steps to mitigate the effects of climate change in our underwriting segments.

We seek to identify business opportunities associated with environmentally friendly trends and incentivize responsible environmental behaviors.

We have adopted a thermal coal policy and provide environmentally sustainable insurance solutions in certain product lines.

We have adopted a thermal coal policy in our global insurance operations and provide environmentally sustainable insurance solutions in certain product lines.

Artificial Intelligence

Artificial intelligence (“AI”) encompasses a range of machine-based capabilities, including traditional rule-based and machine learning AI as well as generative AI.

We incorporate AI to assist with tasks such as catastrophe modeling and predictive analytics to help mitigate losses and enhance our product offerings.

We also use AI in our insurance operations in particular to provide more information about past experiences and submissions, thus allowing our professionals to make more data driven underwriting decisions.

The use of generative AI technologies is reviewed and monitored very closely with approval required for each new generative AI technology proposed for use in our operations.

We consider AI capabilities invaluable opportunities to assist with our goal of making data-driven decisions part of our business strategy.

HUMAN CAPITAL

1 unchanged sentence

This purpose is supported by our collaborative, results-driven culture which relies on our dedicated, engaged and talented people.

By continuously working to offer a meaningful and inclusive employee experience, we not only seek to help people perform at their best among colleagues who care, but also aim to support our strategy of delivering specialty products and innovative solutions to our customers in each of our business segments.

By continuously working to offer a meaningful and engaging employee experience, we not only seek to help people perform at their best among colleagues who care, but also aim to support our strategy of delivering specialty products and innovative solutions to our customers in each of our business segments.

As of February 20, 2025, we had just over 7,200 employees globally, compared to around 6,400 last year, which directly speaks to our ability to sustain our strong and unique culture as we grow, which is a key enabler to top talent retention.

We have approximately 3,600 employees in North America (U.S., Canada and Bermuda), 1,700 employees in Europe and the U.K.

We have approximately 4,100 employees in North America (U.S., Canada, Bermuda and Cayman Islands), 1,700 employees in Europe and the U.K.

and 1,400 employees in the Philippines, Australia and the rest of the world.

Our People and Culture .

An important part of our culture is sustaining an inclusive, diverse workforce.

By better reflecting the demographics in the markets in which we operate while also actively seeking to instill norms for inclusive behavior, we aim to leverage all the best contributions and thinking across our Company.

To that end, we are committed to further integrating diversity and inclusion principles in our operations.

In addition to “embedding” inclusion into our talent processes, e.g., promotion reviews, over 700 employees (mostly managers) have attended our intensive, six-week Fostering Inclusive Leadership program.

Importantly, this program requires participants to complete a business-related project as well as attend group discussions, where participants focus on how to apply inclusive techniques into the work experience.

Finally, in 2023 our six employee networks provided a forum for over 1,300 employees to share ideas, build community and

ARCH CAPITAL 12

2023 FORM 10-K

belonging, provide leadership opportunities for members and contribute meaningfully to business outcomes.

Importantly, our networks include significant ally representation, which underscores the inclusive behavior of our people.

An important aspect of our culture is sustaining an engaged and talented workforce.

We strive to leverage the best contributions and ideas of our employees across our Company.

To this end, we are committed to embedding these principles in our operations.

In 2024, our six employee networks provided a forum for over 1,400 employees to share ideas, build community, provide leadership opportunities for members and contribute meaningfully to business outcomes.

These networks are open to all our employees, fostering deeper connections with colleagues.

Talent Acquisition, Development, Rewards and Retention.

Our employees are integral to the company, and we maintain a sharp focus on improving the ways we attract, develop and retain our high-performing talent.

Our goal is to cultivate a workplace culture where all our employees can thrive by building awareness of inclusive practices and incorporating them into our regular course of business.

In 2023, we launched a new talent acquisition model that modernizes our approach to the talent market and maximizes our ability to find and hire top talent across multiple talent pools and proactively source pipelines of key talent.

In addition, the new model has streamlined this process across our Company by using a common platform that we can easily scale as we grow.

Our employees are integral to the Company, and we maintain a sharp focus on enhancing the ways we attract, develop and retain our high-performing talent.

In 2023, we launched a new talent acquisition model that modernized our approach to the talent market.

This aims to maximize our ability to find and hire top talent across multiple talent pools and proactively source pipelines of key talent.

We provide career growth opportunities through a combination of on-the-job training and experience, exposure to top-notch colleagues who coach and mentor, and education and training programs designed to accelerate learning and applying new skills and behaviors.

We offer competitive compensation and comprehensive benefits packages, including an employee share purchase plan, parental leave, contributions to retirement savings plans and programs to support employee mental and physical well-being.

We recognize the financial burden of educational loans in the United States and have supported our employees with a student debt assistance program.

Since the inception of the program in 2018, Arch has contributed approximately $5 million to this program, including $0.9 million in 2023.

We recognize the financial burden of educational loans in the U.S.

and have supported our employees with a student debt assistance program.

Since the inception of the program in 2018, we have contributed approximately $5 million to this

ARCH CAPITAL 13

2024 FORM 10-K

program, including $0.9 million in 2024.

We also match eligible contributions to qualified charitable organizations and employees are offered two paid volunteer time-off days per calendar year with an eligible non-profit organization.

Our Arch Achieve program has recognized over 500 employees for excellence since its inception in 2009, and each recipient is awarded a cash bonus to recognize their accomplishments.

In 2023, our senior leadership team met in person to discuss our strategy and vision for the future, foster continuous learning and a growth mindset for leaders and provide a forum for global executives to network across the Company.

To ease the impact on those most affected by inflation, effective in 2023, Arch introduced a salary-based premium structure for medical plans for U.S.

based employees to help keep health care costs equitable and affordable.

More than 65% of employees had reductions in medical premiums for the same plan and coverage tier.

We also encourage employees to continue their educational and professional development through tuition reimbursement

We continue to see high engagement with our global recognition program, with over 65,000 awards received by employees in 2024 (over 100,000 awards since inception in February 2023).

Awards are tied to Arch values and are used to recognize effort and impact associated with those values.

The program directly supports our collaborative and results-driven culture, as well as our focus on employee engagement and retention.

Approximately 70% of all awards in 2024 were peer to peer with “Embracing the power of teamwork” trending as the top award reason followed by “Striving to make a difference”.

We also encourage employees to continue their educational and professional development through tuition reimbursement plans.

To attract the best talent to our industry, we offer internship programs and an Early Career Program with an Underwriting Track which provides participants with a robust introduction and real technical skills to build a successful career at Arch.

As part of our talent attraction, we have targeted programs aimed at diversifying our workforce.

Experienced professionals at Arch may participate in manager and leadership development programs and, for our mortgage insurance segment employees, we offer the opportunity to seek a Mortgage Bankers Association Certified Banker designation.

Reserves for losses and loss adjustment expenses (“Loss Reserves”) represent estimates of what the insurer or reinsurer ultimately expects to pay on claims at a given time, based on facts and circumstances then known, and it is probable that the ultimate liability may exceed or be less than such estimates.

Reserves for losses and loss adjustment expenses (“Loss Reserves”) represent estimates of what the insurer or reinsurer ultimately expects to pay on claims at a given time, based on the facts and circumstances then known, and it is probable that the ultimate liability may exceed or be less than such estimates.

Even actuarially sound methods can lead to subsequent adjustments to reserves that are both significant and irregular due to the nature of the risks written.

5 unchanged sentences

For detail on our unpaid and paid losses and loss adjustment expenses, see the Reinsurance Recoverables section of “Financial Condition, Reinsurance Recoverables” in Item 7.

ARCH CAPITAL 13

2023 FORM 10-K

At December 31, 2024, total investable assets held by Arch were $41.4 billion.

11 unchanged sentences

Best”), Fitch Ratings (“Fitch”), Moody’s Investors Service (“Moody’s”) and Standard & Poor’s (“S&P”) are ratings agencies which have assigned financial strength and/or issuer ratings to Arch Capital and/or one or more of its subsidiaries.

The ratings issued on our companies by these agencies are announced publicly and are available directly from the agencies.

Our website www.archgroup.com (Investor Relations-Credit Ratings) contains information about our ratings, but such information on our website is not incorporated by reference into this report.

ARCH CAPITAL 14

2024 FORM 10-K

The ratings issued on our companies by these agencies are announced publicly and are available on our website and directly from the agencies.

The worldwide insurance markets are highly competitive.

13 unchanged sentences

Department of Veterans Affairs (“VA”).

Future changes to the FHA program, including any reduction to premiums charged, may impact the demand for private mortgage insurance.

ARCH CAPITAL 14

2023 FORM 10-K

Future changes to the FHA program, including any reduction to premiums

charged, may impact the demand for private mortgage insurance.

In addition, Arch MI U.S.

5 unchanged sentences

and QBE Insurance Group, Ltd.

in Australia;

in Australia as well as the Australian Government’s Home Guarantee Scheme that provides coverage to participating lenders for first time homebuyers and other eligible borrowers;

in Europe, our competitors on structured capital relief transactions include approximately 10-15 highly rated multi-line (re)insurers in addition to over 30 funded credit investors.

13 unchanged sentences

group risk including strategic, governance, rating agency and capital market risk;

and operational risk including regulatory, investor relations (reputational risk) and outsourcing risks.

We view environmental, social and governance (“ESG”) related risks not as standalone risks but as an integral part of our enterprise-wide risk management strategy.

and operational risk including

ARCH CAPITAL 15

2024 FORM 10-K

regulatory, cyber security, investor relations (reputational risk) and outsourcing risks.

We view sustainability related risks not as standalone risks but as an integral part of our enterprise-wide risk management strategy.

Consequently, evaluations of these risks are embedded throughout our risk management framework.

20 unchanged sentences

changes in the rating of high-level risks in the Arch Capital risk register;

and summaries of our largest exposures and reinsurance recoverables.

and summaries of our largest

exposures and reinsurance recoverables.

If necessary, risk management matters reviewed at the committee meetings are presented for discussion by the Board.

The CRO is responsible for immediately escalating any significant risk matters to executive management, the respective Board Committee and/or the Board for approval of the required remediation.

As part of our corporate governance, the Board

ARCH CAPITAL 15

2023 FORM 10-K

and certain of its committees hold regular executive sessions with members of our management team.

As part of our corporate governance, the Board and certain of its committees hold regular executive sessions with members of our management team.

These sessions are intended to ensure an open and frank dialogue exists about various forms of risk across the organization.

13 unchanged sentences

The results of the ORSA also contribute to various elements of our strategic decision-making including how best to optimize capital management, establish the most appropriate premium levels and decide whether to retain or transfer risks.

ARCH CAPITAL 16

2024 FORM 10-K

For further discussion of our risk management policies, see the Ceded Reinsurance section of “Summary of Critical Accounting Estimates” in Item 7.

Our insurance and reinsurance subsidiaries are subject to varying degrees of regulation and supervision in the various jurisdictions in which they operate.

We are subject to extensive regulation under applicable statutes in these countries and any other jurisdictions in which we operate.

The current material regulations under which we operate are described below.

We may become subject in the future to regulation in new jurisdictions or to additional regulations in existing jurisdictions.

Our main Bermuda insurance operating subsidiary, Arch Re Bermuda, is a Class 4 general business insurer and a Class C long-term insurer and is subject to the Insurance Act 1978 of Bermuda and related regulations, as amended (“Insurance Act”).

Our main Bermuda insurance operating subsidiary, Arch Re Bermuda, is dual licensed as a Class 4 general business insurer and a Class C long-term insurer and is subject to the Insurance Act 1978 of Bermuda and related regulations, as amended (“Insurance Act”).

AGRL, a Class 3A general insurer in Bermuda, is also subject to the Insurance Act.

Among other matters, the Insurance Act imposes certain solvency and liquidity standards, auditing and reporting requirements, the submission of certain period examinations of its financial conditions and grants the BMA powers to supervise, investigate, require information and demand the production of documents and intervene in the affairs of insurance companies.

1 unchanged sentence

generally accepted accounting principles (“GAAP”), the filing of an annual capital and solvency return, compliance with minimum and enhanced capital requirements, compliance with certain restrictions on reductions of capital and the payment of dividends and distributions, compliance with group solvency and supervision rules, if applicable, and compliance with the Insurance Code of Conduct (relating to corporate governance, risk management and internal controls).

Arch Re Bermuda must also comply with a minimum liquidity ratio and minimum solvency margin in respect of its general business.

The minimum liquidity ratio requires that the value of relevant assets must not be less than 75% of the amount of relevant liabilities.

The Insurance Act provides a minimum liquidity ratio for Bermuda insurers engaged in general business, such as AGRL and Arch Re Bermuda.

AGRL is required to maintain the value of its relevant assets at not less than 75% of the amount of its relevant liabilities.

Arch Re Bermuda must also comply with the same minimum liquidity ratio and minimum solvency margin in respect of its general business, only.

The minimum solvency margin, which varies depending on the class of the insurer, is determined as a percentage of either net reserves for losses and loss adjustment expenses (“LAE”) or premiums or pursuant to a risk-based capital measure.

Arch Re Bermuda is also subject to an enhanced capital requirement (“ECR”) which is established by reference to either the Bermuda Solvency Capital Requirement model (“BSCR”) or an approved internal capital model.

The BSCR model is a risk-based capital model which provides a method for determining an insurer’s capital requirements (statutory capital and

ARCH CAPITAL 16

2023 FORM 10-K

surplus) by taking into account the risk characteristics of different aspects of the insurer’s business.

The BMA has established a target capital level for each Class 4 insurer equal to 120% of its ECR.

While a Class 4 insurer is not currently required to maintain its available statutory economic capital and surplus at this level, the target capital level serves as an early warning tool for the BMA, and failure to maintain statutory capital at least equal to the target capital level will likely result in increased regulatory oversight.

Arch Re Bermuda and AGRL are also subject to an enhanced capital requirement (“ECR”) which is established by reference to either the Bermuda Solvency Capital Requirement model (“BSCR”) or an approved internal capital model.

The BSCR model is a risk-based capital model which provides a method for determining an insurer’s capital requirements (statutory capital and surplus) by taking into account the risk characteristics of different aspects of the insurer’s business.

The BMA has established a target capital level for each Class 3A and Class 4 insurer equal to 120% of its ECR.

While a Class 3A and/or Class 4 insurer is not currently required to maintain its available statutory economic capital and surplus at this level, the target capital level serves as an early warning tool for the BMA, and failure to maintain statutory capital at least equal to the target capital level will likely result in increased regulatory oversight.

As a Class C insurer, Arch Re Bermuda is also required to maintain available statutory economic capital and surplus in respect of its long-term business at a level equal to or in excess of its long-term enhanced capital requirement that is established by reference to either the Class C BSCR model or an approved internal capital model.

Arch Re Bermuda is prohibited from declaring or paying any dividends during any financial year if it is in breach of its general business or long-term business enhanced capital requirements, minimum solvency margins or its general business minimum liquidity ratio or if the declaration or payment of such dividends would cause such a breach.

If it has failed to meet its minimum solvency margins or minimum liquidity ratio on the last day of any financial year, Arch Re Bermuda will be prohibited, without the approval of the BMA, from declaring or paying any dividends during the next financial year.

In addition, Arch Re Bermuda is prohibited from declaring or paying in any financial year dividends of more than 25% of its total statutory capital and surplus (as shown on its previous financial year’s statutory balance sheet) unless it files (at least seven days before payment of such dividends) with the BMA an affidavit stating that it will continue to meet the required margins.

Without the approval of the BMA, Arch Re Bermuda is prohibited from reducing by 15% or more its total statutory capital as set out in its previous year’s financial statements and any application for such approval must include an affidavit stating that it will continue to meet the required margins.

As a general business insurer, AGRL is also prohibited from declaring or paying any dividends during any financial year if it is in breach of its capital requirements, solvency margins or its minimum liquidity ratio or if the declaration or payment thereof would cause such a breach.

If either Arch Re Bermuda and/or AGRL has failed to meet its minimum solvency margins or minimum liquidity ratio on the last day of any financial year, it will be prohibited, without the approval of the BMA, from declaring or paying any dividends during the next financial year.

In addition, each of Arch Re Bermuda and AGRL is prohibited from declaring or paying in any financial year dividends of more than 25% of its total statutory capital and surplus (as shown on its previous financial year’s statutory balance sheet) unless it files (at least seven days before payment of such dividends) with the BMA an affidavit stating that it will continue to meet the required margins.

Without the approval of the BMA, each of Arch Re Bermuda and AGRL are prohibited from reducing by 15% or more its total statutory capital as set out in its previous year’s financial statements and any application for such approval must include an affidavit stating that it will continue to meet the required margins.

Where such an affidavit is filed, it shall be available for public inspection at the offices of the BMA.

Under the Bermuda Companies Act of 1981, as amended (the “Companies Act”), Arch Re Bermuda may declare or pay a dividend out of distributable reserves only if it has reasonable grounds for believing that it is, or would after the payment be, able to pay its liabilities as they become due and if the realizable value of its assets would thereby not be less than its liabilities.

Under the Bermuda Companies Act of 1981, as amended (the “Companies Act”), Arch Re Bermuda and AGRL may each

ARCH CAPITAL 17

2024 FORM 10-K

declare or pay a dividend out of distributable reserves only if the company has reasonable grounds for believing that it is, or would after the payment be, able to pay its liabilities as they become due and if the realizable value of its assets would thereby not be less than its liabilities.

Policyholder Priority.

2 unchanged sentences

The amendments provide inter alia that, subject to certain statutorily preferred debts, the insurance debts of an insurer must be paid in priority to all other unsecured debts of the insurer.

Insurance debt is defined as a

debt to which an insurer is or may become liable pursuant to an insurance contract excluding debts owed to an insurer under an insurance contract where the insurer is the person insured.

Insurance debt is defined as a debt to which an insurer is or may become liable pursuant to an insurance contract excluding debts owed to an insurer under an insurance contract where the insurer is the person insured.

Group Supervision .

5 unchanged sentences

(iv) planning and coordinating through regular meetings held at least annually (or by other appropriate means) with other competent authorities, supervisory activities in respect of our Group;

both as a going concern and in emergency situations (v) coordinating any enforcement action that may need to be taken against our Group or any Group members;

both as a going concern and in emergency situations (v) coordinating any enforcement action that may need to be taken against our Group or any Group member(s);

and (vi) planning and coordinating meetings of colleges of supervisors in order to facilitate the carrying out of these functions.

As Designated Insurer, Arch Re Bermuda is required to facilitate compliance by our Group with the group insurance solvency and supervision rules.

On an annual basis, the Group is required to file Group statutory financial statements, a Group statutory financial return, a Group capital and solvency return, audited Group financial statements, a Group Solvency Self-Assessment (“GSSA”), and a financial condition report with the BMA.

On an annual basis, the Group is required to file the Group statutory financial statements, a Group statutory financial return, a Group capital and solvency return, audited Group financial statements, a Group Solvency Self-Assessment (“GSSA”), and a financial condition report with the BMA.

The GSSA is designed to document our perspective on the capital resources necessary to achieve our business strategies and remain solvent, and to provide the BMA with insights on our risk management, governance procedures and documentation related to this process.

In addition, the Designated Insurer is required to file quarterly group financial returns with the BMA.

In addition, the Designated Insurer is required to file quarterly group

financial returns with the BMA.

The Group is also required to maintain available Group statutory economic capital and surplus in an amount that is at least equal to the group enhanced capital requirement (“Group ECR”) and the BMA has established a group target capital level equal to 120% of the Group ECR.

Fit and Proper Controllers.

The BMA maintains supervision over the controllers of all Bermuda registered insurers, brokers, agents and insurance marketplace providers.

For so long as the shares of Arch Capital are listed on the Nasdaq or another recognized stock exchange, any person who, directly or indirectly, becomes a holder of at least 10%, 20%, 33% or 50% of our common shares must notify the BMA in writing

International Association of Insurance Supervisors (“IAIS”).

The IAIS is a voluntary membership organization of insurance supervisors and regulators from more than 200 jurisdictions, including Bermuda and the U.S.

states (through the National Association of Insurance Commissioners, or “NAIC”).

In November 2019, the IAIS adopted the Holistic Framework for Systemic Risk in the Insurance Sector (“Holistic Framework”) and the Common Framework for Supervision of Internationally Active Insurance Groups (“ComFrame”).

The Holistic Framework is an enhanced set of supervisory policy measures for macroprudential purposes, designed to mitigate systemic risk and increase resilience through a sector-wide approach.

ComFrame establishes supervisory standards and guidance focusing on the effective group-wide supervision of large Internationally Active Insurance Groups (“IAIGs”).

Among other things, ComFrame prescribes a risk-based, global insurance capital standard (“ICS”) for IAIGs for the purpose of creating a common framework for comparing and assessing IAIGs’ group-wide capital adequacy.

While IAIS standards currently have no legal effect, IAIS members, including the BMA and the NAIC, are required to implement certain IAIS standards to maintain good standing and prevent retaliatory measures from other IAIS members.

On that basis, IAIS members are required to implement ICS, or an alternative group-wide capital requirement that provides comparable outcomes, for IAIGs, beginning in 2025.

The BMA is expected to embed ComFrame and the Holistic Framework standards, including the ICS, into the Bermuda commercial regulatory regime (particularly for IAIGs) effective as of May 1, 2025.

The new standards aim to ensure that insurers prepare for a range of possible adverse situations ahead of any severe stress condition, including the creation and adoption of recovery plans through Arch Re Bermuda’s internal governance.

These standards are expected to apply to Arch Re Bermuda as a commercial insurer.

Additional guidance from the BMA in relation to recovery planning is expected to be consulted and published in 2025.

On October 30, 2024, the IAIS released a public register of 59 IAIGs that have been disclosed by relevant supervisors.

Arch Capital was formally designated as an IAIG by the BMA, its group-wide supervisor, in 2024 and listed by the BMA on the aforementioned public register.

As such, Arch is subject to international oversight coordinated by the BMA.

Consultation remains ongoing between Arch Re Bermuda

ARCH CAPITAL 18

2024 FORM 10-K

within 45 days of becoming such a holder (or ceasing to be such a holder).

and the BMA on the requirements applicable to the Group under Bermuda law and in line with the proposed modifications to the BMA’s prudential framework as ComFrame and the Holistic Framework develop.

Fit and Proper Controllers.

The BMA maintains supervision over the controllers of all Bermuda registered insurers, brokers, agents and insurance marketplace providers.

The BMA may object to such a person and require the holder to reduce its holding of common shares and direct, among other things, that voting rights attaching to the common shares shall not be exercisable.

13 unchanged sentences

and (b) the Insurance Act, that are applicable to the economic substance requirements, and the Registrar will have regard to such companies’ compliance in his assessment of compliance with the economic substance requirements.

That being said, such companies are still required to complete and file a Declaration Form, with the Bermuda Registrar of Companies and the Registrar will also have regard to the information provided in that Declaration Form in making his assessment of compliance with the ES Act.

That being said, such companies are still required to complete and file a Declaration Form, with the Bermuda Registrar of Companies

and the Registrar will also have regard to the information provided in that Declaration Form in making his assessment of compliance with the ES Act.

Insurance Sector Operational Cyber Risk Management Code of Conduct (“Cyber Risk Management Code of Conduct”) .

The BMA recognized that cyber incidents can cause significant financial losses and/or reputational impacts across the insurance industry and implemented the Cyber Risk Management Code of Conduct in October 2020.

All Bermuda insurers, insurance managers and intermediaries registered under the Insurance Act are required to comply with the

BMA’s Cyber Risk Management Code of Conduct, which established duties, requirements and standards to be complied by each registrant in relation to operational cyber risk management.

All Bermuda insurers, insurance managers and intermediaries registered under the Insurance Act are required to comply with the BMA’s Cyber Risk Management Code of Conduct, which established duties, requirements and standards to be complied by each registrant in relation to operational cyber risk management.

This requires Arch Re Bermuda to develop a cyber risk policy, which is to be delivered pursuant to an operational cyber risk management program and appoint an appropriately qualified member of staff or outsourced resource to the role of Chief Information Security Officer.

7 unchanged sentences

A Cyber Reporting Event includes any act that results in the unauthorized access to, disruption, or misuse of electronic systems or information stored on such systems of an insurer, including breach of security leading to the loss or unlawful destruction or unauthorized disclosure of or access to such systems or information where there is a likelihood of an adverse impact to policyholders, clients or the insurer’s insurance business, or an event that has occurred for which notice is required to be provided to a regulatory body or government agency.

Personal Information Protection Act 2016.

Bermuda’s principal data protection and privacy legislation is the Personal Information Protection Act 2016 (“PIPA”).

At present, the majority of the operative provisions of PIPA, which include detailed requirements around conditions for use and consent to use of personal information, specific obligations on organizations that use personal information, overseas data transfer assessment obligations and access, rectification and erasure rights for individuals, are not yet in force in Bermuda.

In June 2023, the Bermuda Government and the Office of the Privacy Commissioner for Bermuda announced that the remaining operative provisions of PIPA will become fully implemented on January 1, 2025.

ARCH CAPITAL 19

2024 FORM 10-K

PIPA (once in force) applies to every organization (which includes any individual, entity or public authority) that uses personal information in Bermuda where that personal information is used by automated or other means which form,

or are intended to form, part of a structured filing system.

the purposes of PIPA, “personal information” means any information about an identified or identifiable individual (meaning a natural person), and “use” or “using” are very broadly defined and effectively include possessing or carrying out any operation on personal information.

Many of our Bermuda subsidiaries which use and hold personal information will be in scope and must comply with the provisions of PIPA.

Personal Information Protection Act 2016.

Bermuda’s principal data protection and privacy legislation is the Personal Information Protection Act 2016 (“PIPA”).

O n January 1, 2025, PIPA was fully implemented.

PIPA applies to every organization (which includes any individual, entity or public authority) that uses personal information in Bermuda where that personal information is used by automated or other means which form, or are intended to form, part of a structured filing system.

PIPA does not define privacy explicitly but rather defines “personal information” and sets out privacy rules for institutions to follow for the collection, use, disclosure, maintenance, retention, security and disposal of personal information.

For the purposes of PIPA, “personal information” means any information about an identified or identifiable individual (meaning a natural person), and “use” or “using” are very broadly defined and means carrying out any operation on personal information, including collecting, obtaining, recording, holding, storing, organizing, adapting, altering, retrieving, transferring, consulting, disclosing, disseminating or otherwise making available, combining, blocking, erasing or destroying it.

Personal information used by an insurer in Bermuda would include (without limitation) information relating to policyholders, employees, consultants, service providers, officers, employees, consultants or any other third party of the insurer.

Our Bermuda entities are subject to PIPA requirements.

Corporate Income Tax Act 2023 (the “Bermuda CIT Act”).

25 unchanged sentences

insurance or reinsurance company unless that person has filed an application with specified information with such company’s domiciliary commissioner and has obtained the commissioner’s prior approval.

Under most states’ statutes acquiring 10% or more of the voting securities of an insurance company or its parent company is presumptively considered an acquisition of control of the insurance company, although such presumption may be rebutted.

State holding company acts and regulations also impose extensive informational requirements on parents and other affiliates of licensed insurers or reinsurers with the purpose of protecting them from enterprise risk, including requiring an annual enterprise risk report by the ultimate controlling person identifying the material risks within the insurance holding company system that could pose enterprise risk to the licensed companies and requiring a person divesting its controlling interest to make a confidential advance notice filing.

The National Association of Insurance Commissioners (“NAIC”) Insurance Holding Company System Model Act and Model Regulation includes provisions that, when adopted by states, will require the ultimate controlling person of an insurance holding company system to file an annual group capital calculation, unless the ultimate controlling

Under most states’ statutes

ARCH CAPITAL 20

2024 FORM 10-K

person or its insurance holding company system is exempt from the filing requirement.

lead state regulator, the Missouri Department of Commerce & Insurance, adopted the model group capital calculation provisions in 2021.

The group capital calculation is designed to assist state insurance regulators in understanding the financial condition of non-insurance entities that are part of an insurance holding company system and the degree to which insurance companies are supporting those non-insurance entities.

acquiring 10% or more of the voting securities of an insurance company or its parent company is presumptively considered an acquisition of control of the insurance company, although such presumption may be rebutted.

The NAIC Insurance Holding Company System Model Act and Model Regulation (“Insurance Holding Company Models”) include provisions that require the ultimate controlling person of an insurance holding company system to file an annual group capital calculation (“GCC”), unless the ultimate controlling person or its insurance holding company system is exempt from the filing requirement.

The GCC amendments to the Insurance Holding Company Models aim to streamline group-wide supervision by leveraging U.S.

regulators’ existing risk and solvency measures and applying them on a group-wide basis.

lead state regulator, the Missouri Department of Commerce & Insurance (“MDCI”), adopted the GCC provisions of the Insurance Holding Company Models in 2021.

In November 2024, the form of group capital calculation set forth in the Insurance Holding Company Models (“aggregation method”) was deemed by the IAIS to be an acceptable alternative group-wide capital requirement to the IAIS-developed ICS, meaning that the U.S.-developed aggregation method will be considered an outcome-equivalent approach to the ICS.

The Company has been advised by the MDCI that it has no current intention of requiring Arch to submit a GCC report.

Regulation of Dividends and Other Payments from Insurance Subsidiaries .

3 unchanged sentences

Credit for Reinsurance.

is subject to insurance regulation and supervision that is similar to the regulation of licensed primary insurers.

However, except for certain mandated provisions that must be included in order for a ceding company to obtain credit for reinsurance ceded, the terms and conditions of reinsurance agreements generally are not subject to regulation by any governmental authority.

primary insurer ordinarily will enter into a reinsurance agreement only if it is able to obtain credit for the reinsurance ceded on its U.S.

7 unchanged sentences

ceding insurers for reinsurance ceded to reinsurers that have been approved as “certified reinsurers” based upon less than 100% collateralization.

As of January 23, 2024,

Arch Re Bermuda is approved as a “certified reinsurer” for the 2024 calendar year in 44 states with applications pending in 8 additional states and territories.

As of January 24, 2025, Arch Re Bermuda is approved as a “certified reinsurer” for the 2025 calendar year in 47 states with applications pending in 6 additional states and territories.

In addition, 2019 amendments to the NAIC Model Law and Regulation eliminate reinsurance collateral requirements for reinsurers that (1) have their head office or are domiciled in EU Member States, the U.K., NAIC accredited U.S.

2 unchanged sentences

As of January 24, 2025, Arch Re Bermuda is approved as a “reciprocal jurisdiction reinsurer” for the 2025 calendar year in 49 states with applications pending in 4 additional states and territories.

In addition, AGRL received approval as a “reciprocal jurisdiction reinsurer” from its lead state of Missouri in November 2023, which is effective for the 2023 calendar year.

AGRL intends to seek renewal of its “reciprocal jurisdiction reinsurer” status from Missouri in 2024 and will potentially seek approval from additional states.

In addition, as of January 24, 2025, AGRL is approved as a “reciprocal jurisdiction reinsurer” in its lead state of Missouri and an additional four states for the 2025 calendar year.

In October 2024, the U.S.

Department of the Treasury recognized Arch Re Bermuda as an Alien Reinsurer (except on excess risks running to the U.S.), which allows T-Listed ceding companies to eliminate regulatory collateral requirements under the U.S.

Treasury rules.

ARCH CAPITAL 21

2024 FORM 10-K

Risk Management and ORSA .

4 unchanged sentences

Cybersecurity and Privacy .

In July 2023, the SEC adopted new cybersecurity disclosure rules (“SEC Cybersecurity Rules”) mandating cybersecurity incident and risk management disclosure for public companies such as Arch.

The SEC maintains cybersecurity disclosure rules (“SEC Cybersecurity Rules”) mandating cybersecurity incident and risk management disclosure for public companies such as Arch.

The SEC Cybersecurity Rules became effective in December 2023 and mandate that public companies report a cybersecurity incident on a Form 8-K within four days after they determine that the incident is material.

1 unchanged sentence

See Item 1C, “ Cybersecurity ” for further information about our disclosures.

ARCH CAPITAL 20

2023 FORM 10-K

In March 2022, the U.S.

2 unchanged sentences

The Cybersecurity & Infrastructure Security Agency considers financial services, which includes insurance companies, as a critical infrastructure sector.

The implementing regulations are not expected for another one-to-two years.

In September 2022, the Federal Insurance Office (“FIO”) within the Department of Treasury requested public comment on potential federal insurance responses to catastrophic cyber incidents affecting critical infrastructure.

In July 2023, the Biden Administration published a National Cybersecurity Strategy Implementation Plan that includes as a strategic objective the exploration of a federal cyber insurance backstop and identified FIO as the responsible agency for assessing the need for and possible structures of a federal insurance response.

In November 2023, the FIO announced initiatives to further study the development of a federal insurance backstop for catastrophic cyber events.

The implementing regulations are not expected on or before October 4, 2025.

The NAIC adopted an Insurance Data Security Model Law in 2017 that requires insurers, insurance producers and other entities required to be licensed under state insurance laws to comply with certain requirements under state insurance laws, such as developing and maintaining a written information security program, conducting risk assessments overseeing the data security practices of third-party service providers and meeting expanded breach notification requirements.

1 unchanged sentence

subsidiaries are licensed and operate.

In addition, certain state insurance regulators are developing or have developed regulations that may impose regulatory requirements relating to cybersecurity on insurance and reinsurance companies (potentially including insurance and reinsurance companies that are not domiciled, but are licensed, in the relevant state).

Many regulators, including the Federal Trade Commission (“FTC”), the New York Department of Financial Services (“NYDFS”), and the U.S.

Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), have issued new guidance on managing cybersecurity risks (or amended existing regulations) that expand existing regulatory requirements.

Privacy legislation and regulation has also become an issue of increasing focus in many states.

The California Consumer Privacy Act of 2018 (“CCPA”), which went into effect January 1, 2020 grants California consumers certain rights to, among other things, access and delete data about them subject to certain exceptions, as well as a private right of action related to cybersecurity breaches with statutory penalties.

Additionally, the California Privacy Rights Act of 2020 (“CPRA”) which became fully effective on January 1,

2023, applies to some of our data collecting and processing activities, and it provides for additional consumer privacy rights, and additional regulatory obligations over certain data.

It also created a new privacy focused California regulatory agency with enforcement authority, the California Privacy Protection Agency (“CPPA”).

CPPA regulations that implement the CPRA became effective on March 29, 2023 and, as delayed by a state court decision, are expected to become enforceable in February 2024.

Rulemaking is also underway on regulations mandated by the CPRA governing cybersecurity audits, risk assessments, and automated decision-making, but additional regulations have yet to be proposed.

The CPPA draft rules govern consumer notice, access, and opt-out rights with respect to automated decision-making.

Under the draft rules, businesses would also have to make significant disclosures about their implementation of automated decision-making.

At the CPPA December board meeting, the board requested the CPPA staff to further evaluate the draft regulations, particularly its impact within the workplace and in the employment context.

A range of new cybersecurity and privacy laws are also under consideration in other states, as well as by the federal government.

Several states, including Colorado, Connecticut, Utah, and Virginia adopted new comprehensive data privacy legislation that went into effect in 2023.

Additional states, including Delaware, Florida, Iowa, Montana, New Jersey, Oregon, Tennessee, and Texas, adopted new data privacy legislation that will go into effect over the next two years (with a new Indiana data privacy law to take effect in 2026).

While these state laws provide consumer privacy rights and protections like those in the CCPA and CPRA, they exempt entities subject to the Gramm-Leach-Bliley Act from their requirements.

In addition, certain state insurance regulators, such as the New York Department of Financial Services (“NYDFS”), continue to issue regulations and guidance that impose regulatory requirements relating to privacy and cybersecurity.

Privacy legislation and regulation also exists in many of the U.S.

The California Consumer Privacy Act of 2018 (“CCPA”), effective since January 1, 2023, grants California consumers certain rights to, among other things, access, correct and delete data about them subject to certain exceptions, as well as a private right of action related to cybersecurity breaches with statutory penalties.

The CCPA created a new privacy-focused California regulatory agency with enforcement authority, the California Privacy Protection Agency (“CPPA”) and certain rules regarding cybersecurity audits and privacy risk assessments that have been proposed by the CPPA may be adopted in the future.

In addition, a range of new cybersecurity and privacy laws have been passed or are under consideration in other states, as well as by the federal government.

Twenty states have passed comprehensive state data privacy laws and such laws are effective in thirteen of those states.

These state laws provide consumer privacy rights and protections like those in the CCPA and CPRA, although many of them exempt entities subject to the Gramm-Leach-Bliley Act from their requirements.

Artificial Intelligence.

The increased use of automated processes by insurers, including algorithms, artificial intelligence (generative and predictive) (“AI”) and predictive models that make use of large datasets and data analytics, has led to additional regulatory attention to insurer practices including in relation to risk selection, pricing and claims, as well as governance and oversight of AI and predictive models.

In late 2023, the NAIC adopted a model bulletin entitled “Use of Artificial Intelligence Systems by Insurers” that sets forth state insurance regulators’ expectations on how insurers should govern the use of advanced analytical and computational technologies used to make or support decisions impacting consumers.

In 2023, the NAIC adopted a model bulletin entitled “Use of Artificial Intelligence Systems by Insurers” that sets forth state insurance regulators’ expectations on how insurers should govern the use of advanced analytical and computational technologies used to make or support decisions impacting consumers.

Such expectations include implementation of a written program for the responsible use of AI systems that make or support decisions related to regulated insurance practices, which program should be designed to mitigate certain risks.

As of February 1, 2024, only one state has adopted the bulletin, but we expect it to be

As of February 1, 2025, at least 20 states have adopted the bulletin and we expect more states to do the same.

States with specific AI guidance or regulations impacting our U.S.

insurance companies include California, Colorado and New York.

NYDFS expects insurers doing business in New York to observe their 2024 Insurance Circulator Letter No.7 regarding the use of AI systems which adopts a risk-based approach to evaluating their AI systems used for underwriting and pricing of insurance products.

AI systems should be assessed to ensure that they do not produce disproportionate adverse effects in underwriting or pricing for similarly situated individuals and tested regularly to ensure that they do not produce unfair or unlawful outcomes.

ARCH CAPITAL 22

2024 FORM 10-K

adopted in states in which our U.S.

subsidiaries are licensed and operate.

In addition, state agencies, departments and insurance regulators, including the California Department of Insurance, California Privacy Protection Agency, Connecticut Insurance Department, New York Department of Consumer and Work Protection and NYDFS, have adopted, proposed or released for comment laws, regulations and guidance that may impose regulatory requirements relating to the use of AI and automated decision-making on insurance and reinsurance companies.

Such requirements include (or may include) risk management processes and controls, governance frameworks, vendor oversight and outcomes testing that may hinder or delay the implementation of new technologies available to other businesses.

In addition to insurance specific AI regulation there are many general AI proposals and frameworks.

For example, President Biden’s Executive Order 14110 on Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence, issued on October 30, 2023 establishes extensive new standards for AI safety and security.

Globally, many new AI laws are being proposed, the most significant of which may be in the EU.

The NYDFS also issued guidance regarding cybersecurity risks arising from AI requiring us to continuously assess these risks and implement appropriate cybersecurity measures to mitigate these threats.

California passed several AI statutes in 2024 (Assembly Bills 2885 and 1008, Senate Bill 1223 California AI Transparency Act and the Training Date Transparency Act) which may impact our U.S.

underwriting entities.

While some of these laws do not take effect until January 1, 2026, the requirements are comprehensive.

On November 8, 2024, the CPPA formally proposed draft amendments to regulations under the CCPA that would create new rules governing consumer notice, access, and opt-out rights with respect to Automated decision-making Technology (“ADMT”).

Under the proposed rules, businesses would also have to make significant disclosures about their implementation of ADMT.

The proposed language broadly defines ADMT to include any technologies that processes personal information and uses computation to execute a decision, replace human decision-making, or substantially facilitate human decision-making” and explicitly includes artificial intelligence, machine learning, and profiling.

On the federal level, on January 23, 2025 President Donald Trump issued an executive order on artificial intelligence requiring a review of existing AI policies and directives that act as barriers to American AI innovation.

It is difficult to know how the Trump administration will address AI at a federal level, and any changes to laws and regulations regarding how we may use AI could prevent or limit our use of AI.

On the state level, hundreds of a new proposed AI laws have been proposed this year across the U.S., including proposed bills in Connecticut, Massachusetts, New Mexico, New York and Virginia.

Globally, many new AI laws are being proposed or have taken effect, the most significant of which is in the EU.

See “Regulation—Europe” for further details on our insurance operations.

6 unchanged sentences

and declines in asset values arising from investment risks.

An insurer will be subject to varying degrees of regulatory action depending on how its statutory surplus compares to its risk-based capital calculation.

An insurer will be subject to varying degrees of regulatory action depending on how its statutory surplus compares to its risk-based capital

Under the approved formula, an insurer’s total adjusted capital is compared to its authorized control level risk-based capital.

3 unchanged sentences

the most severe requires an insurer to be rehabilitated or liquidated.

Our mortgage insurance operations are not currently subject to state risk-based capital requirements, but rather are subject to state risk to capital or minimum policyholder position

requirements.

Our mortgage insurance operations are not currently subject to state risk-based capital requirements, but rather are subject to state risk to capital or minimum policyholder position requirements.

The NAIC adopted a revised Mortgage Guaranty Insurance Model Act in 2023.

It is uncertain when or if it will be adopted in any jurisdiction.

Guaranty Funds .

Wisconsin is the only state that has begun the process to replace its current mortgage guaranty insurance regulations to more closely align with the revised Mortgage Guaranty Insurance Model Act.

Guaranty Funds and Market Restrictions .

Most states require all admitted insurance companies to participate in their respective guaranty funds which cover certain claims against insolvent insurers.

1 unchanged sentence

Mortgage guaranty insurance, among other lines of business, is typically exempt from participation in guaranty funds.

States also limit the ability of insurers to manage risk by restricting their ability to withdraw from or otherwise reduce their exposure based on a change in market conditions.

Some states’ laws also require or give regulators the discretion to take action in the aftermath of certain events, such as natural catastrophes, including the ability to impose moratoria on policy cancellations or nonrenewals, and to impose “grace periods” on premium payments.

These restrictions and requirements are generally limited to the personal lines insurance markets, but may affect our business as well.

ARCH CAPITAL 23

2024 FORM 10-K

Climate Change and Financial Risks.

3 unchanged sentences

New York and other states also require licensed insurers with countrywide premium written of at least $100 million to annually provide disclosure of their assessment and management of climate related risks.

In November 2023, the FIO published a request to proceed with a climate-related data call that would collect five years of homeowners’ insurance underwriting data to evaluate the relationship between underwriting trends and weather-related events.

Separately, in December 2023, the NAIC outlined plans for its own substantially similar climate-related data.

The FIO and NAIC climate-related information gathering could culminate in recommendations for new federal or state legislation.

Other Federal Regulation .

Although state regulation is the dominant form of regulation for insurance and reinsurance business, a number of federal laws affect and apply to the insurance industry.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”) created the FIO, which is not a federal regulator or supervisor of insurance, but monitors the insurance industry for systemic risk, administers the Terrorism Risk Insurance Program (“TRIP”), consults with the states regarding insurance matters, develops federal policy on aspects of international

ARCH CAPITAL 22

2023 FORM 10-K

insurance matters, and is authorized to assist the U.S.

Although state regulation is the dominant form of regulation for insurance and reinsurance business, a number of federal laws currently affect and apply to the insurance industry and the landscape of federal regulation could change.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”) created the FIO, which is not a federal regulator or supervisor of insurance, but monitors the insurance industry for systemic risk, consults with the states regarding insurance matters, develops federal policy on aspects of international insurance matters, is authorized to assist the U.S.

Secretary of the Treasury in negotiating “covered agreements” between the U.S.

and foreign governments that address insurance prudential measures.

and foreign governments that address insurance prudential measures, and administers the Terrorism Risk Insurance Program (“TRIP”).

The TRIP will expire on December 31, 2027 unless reauthorized by Congress.

Department of the Treasury, Bureau of Fiscal Service (“BFS”), also regulates insurance companies that write surety bonds on, or reinsure, federal surety bonds.

Arch Insurance Company and Arch Reinsurance Company are approved by BFS as “Certified Companies” meaning that they are permitted to insure and reinsure surety bond business, including federal surety bonds, subject to certain underwriting restrictions and BFS supervision.

In 2024, Arch Re Bermuda was approved for “Alien Reinsurer” status by the BFS, which subjects it to similar restrictions and requirements, but also enables it to provide credit for reinsurance to Treasury-authorized insurers and to reinsure certain risks without the need to post collateral for the benefit of the cedent.

In addition to provisions of Dodd-Frank pertaining to underwriting mortgages and a consumer’s ability to repay, certain other federal laws also directly or indirectly impact mortgage insurers, including the Real Estate Settlement Procedures Act of 1974, the Homeowners Protection Act of 1998, the Equal Credit Opportunity Act, the Fair Housing Act, the Truth In Lending Act, the Fair Credit Reporting Act of 1970, and the Fair Debt Collection Practices Act.

2 unchanged sentences

GSEs impose requirements on private mortgage insurers so that they may be eligible to insure loans sold to the GSEs, known as the Private Mortgage Insurer Eligibility Requirements (“PMIERs”).

The PMIERs apply to our eligible mortgage insurers, but do not apply to Arch Mortgage Guaranty Company, which is not GSE-approved.

The PMIERs apply to our eligible mortgage insurers, but do not apply to AMG, which is not GSE-approved.

The PMIERs impose limitations on the type of risk insured, the forms and insurance policies issued, standards for the geographic and customer diversification of risk, procedures for claims handling, acceptable underwriting practices, standards for certain reinsurance cessions and financial requirements, among other things.

The financial requirements require an eligible mortgage insurer’s available assets to meet or exceed “minimum required assets” as of each quarter end.

The financial requirements require an eligible mortgage insurer’s available assets, which generally include only the most liquid assets of an insurer to meet or exceed “minimum required assets” as of each quarter end.

In August 2024, the GSEs updated PMIERs to incorporate new deductions to the definition of available assets for investment risk.

This update will become effective March 31, 2025, but the impact will be phased in through September 30, 2026.

Minimum required assets are calculated from PMIERs tables with several risk dimensions including origination year, original loan-to-value, original credit score of performing loans, and the delinquency status of non-performing loans.

2 unchanged sentences

Since February 2022, the U.S.

has imposed additional sanctions on Russia in response to the Russian invasion of Ukraine and the ongoing hostilities.

Given the evolving situation, we are closely monitoring developments and the sanctions imposed, to ensure our business remains in compliance with any applicable sanctions measures imposed.

has since imposed several new sanctions on Russia in response to the Russian invasion of Ukraine and the ongoing hostilities.

Recent 2025 Biden administration sanctions also target the Russian energy sector, including Russian and non-Russian companies, persons and vessels which are aiding Russia’s production of oil.

These sanctions may have extra-territorial reach to our non-U.S.

underwriting subsidiaries.

The U.S.-Russia discussions regarding the war in Ukraine and the use of U.S.

sanctions is an evolving topic which we continue to review.

We will evaluate and prepare for any changes in our sanctions program and business operations.

ARCH CAPITAL 24

2024 FORM 10-K

Arch Insurance Canada and Arch Re Canada are subject to federal, as well as provincial and territorial, regulation in Canada in the provinces and territories in which they underwrite insurance/reinsurance.

9 unchanged sentences

In May 2004, Arch Insurance (U.K.) was granted the relevant permissions for the classes of insurance business which it underwrites in the U.K.

AMAL currently manages Arch Syndicate 2012 and Arch Syndicate 1955 pursuant to its authorizations by the U.K.

AMAL currently manages our Lloyd’s Syndicates pursuant to its authorizations by the U.K.

regulators and Lloyd’s.

1 unchanged sentence

Companies Act”).

ARCH CAPITAL 23

2023 FORM 10-K

The objectives of the PRA are to promote the safety and soundness of all firms it supervises and to secure an appropriate degree of protection for policyholders.

2 unchanged sentences

economy and its medium to long-term growth, subject to aligning with relevant international standards.

The PRA has responsibility for the prudential regulation of banks and insurers, while the FCA has responsibility for the conduct of business regulation in the wholesale and retail markets.

The PRA and the FCA adopt separate methods of assessing regulated firms on a periodic basis.

1 unchanged sentence

Arch Insurance (U.K.) and AMAL are subject to regulation by both the PRA and FCA.

Castel is authorized and regulated by the FCA and is subject to periodic assessment and review by the FCA.

Lloyd’s Supervision .

The operations of AMAL (as managing agent of Arch Syndicate 2012 and Arch Syndicate 1955) and each syndicate’s respective corporate members, are subject to the byelaws and regulations made by (or on behalf of) the Council of Lloyd’s, and requirements made under those byelaws.

The operations of AMAL (as managing agent of our Lloyd’s Syndicates) and each syndicate’s respective corporate members, are subject to the byelaws and regulations made by (or on behalf of) the Council of Lloyd’s, and requirements made under those byelaws.

The Council of Lloyd’s, established in 1982 by Lloyd’s Act 1982, has overall responsibility and control of Lloyd’s.

3 unchanged sentences

Lloyd's is authorized by the PRA and regulated by the PRA and FCA.

Those entities acting within the Lloyd’s market are required to comply with the requirements of the FSMA and provisions of the PRA’s or FCA's rules, although the PRA has delegated certain of its powers, including some of those relating to prudential requirements, to Lloyd’s.

Those entities acting within the Lloyd’s market are required to comply with the requirements of the FSMA and provisions of the PRA’s or

ARCH CAPITAL 25

2024 FORM 10-K

FCA's rules, although the PRA has delegated certain of its powers, including some of those relating to prudential requirements, to Lloyd’s.

Each corporate member of Lloyd’s is required to contribute a percentage of the member’s premium income for each year of account to the Lloyd’s Central Fund.

The Lloyd’s Central Fund is available if members of Lloyd’s assets are not sufficient to meet claims for which the member is liable.

Each corporate member of Lloyd’s may also be required to contribute to the central fund by way of a supplement to a callable layer of up to 5% of the

corresponding member’s premium income limit for the relevant year of account.

Each corporate member of Lloyd’s may also be required to contribute to the Central Fund by way of a supplement to a callable layer of up to 5% of the corresponding member’s premium income limit for the relevant year of account.

Principles for doing business at Lloyd’s (the “Principles”) replaced the Lloyd’s Minimum Standards (the previous regime which set out the Lloyd’s regulatory requirements for Lloyd’s managing agents) and became effective from the third quarter of 2022.

3 unchanged sentences

The European solvency framework and prudential regime for insurers and reinsurers, the Solvency II Directive 2009/138/EC (“Solvency II”), took effect in full on January 1, 2016.

See “European Union—Insurance and Reinsurance Regulatory Regime” below for additional details.

Arch Insurance (U.K.), and the corporate members of Arch Syndicate 2012 and Arch Syndicate 1955 are currently required to meet economic risk-based solvency requirements imposed under Solvency II.

Solvency II, together with European Commission “delegated acts” and guidance issued by the European Insurance and Occupational Pensions Authority (“EIOPA”) sets out classification and eligibility requirements, including the features which capital must display in order to qualify as regulatory capital.

See “European Union—Insurance and Reinsurance Regulatory Regime” below for additional details.

Arch Insurance (U.K.), and the corporate members of our Lloyd’s Syndicates are required to meet economic risk-based solvency requirements based on Solvency II.

On January 31, 2020, the U.K.

2 unchanged sentences

At the expiration of the transition period from January 31, 2020 until December 31, 2020 (the “Transition Period”), during which time the U.K.

remained in the EU customs union and single market, the European Union (Withdrawal) Act 2018, as amended, has transposed all applicable direct EU legislation into domestic U.K.

remained in the EU customs union and single market, the EU (Withdrawal) Act 2018, as amended, has transposed all applicable direct EU legislation into domestic U.K.

law, thus ensuring the continuing application of Solvency II under the U.K.’s financial services regulatory regime.

In November 2022, HM Treasury set out the U.K.

government’s final reform package on the Solvency II framework in the U.K., in response to an earlier consultation paper from April 2022.

government’s final reform package on the Solvency II framework in the U.K.

Significant changes to be introduced by these reforms included the reduction in risk margin by 30% for non-life insurers and the proposal to remove branch capital requirements.

This will benefit branches of foreign insurers based in the U.K.

immediately upon implementation, as well as reduce barriers for foreign insurers wishing to establish a U.K.

branch in the future.

government has also decided to introduce a new mobilization scheme for insurers which would create an optional stage in a

ARCH CAPITAL 24

2023 FORM 10-K

prospective insurer’s entry to the market, including adjusted entry requirements such as a lower capital floor, lower expectations for key personnel and governance structures, and exemptions from certain reporting requirements.

FSMA 2023 provides a framework for the revocation of retained EU law in financial services and its replacement with corresponding regulators’ rules (in the case of Solvency II, mainly in the PRA’s Rulebook).

Since the Transition Period, Solvency II has been subject to a major review in its application in the U.K., corresponding with a parallel review in the EU (known as the 2020 review).

The Insurance and Reinsurance Undertakings (Prudential Requirements) Regulations 2023 came into force on December 31, 2023 and modified the current risk margin calculation.

The PRA has also issued two consultations covering the Solvency II reform proposals for insurers.

It is expected that the reforms forming part of what will then be known as “Solvency U.K.”, will be in place by the end of 2024.

The implementation of these reforms by the U.K.

government and potential divergence between the U.K.

The other reforms forming part of what will eventually be known as “Solvency U.K.” became effective on December 31, 2024, on the implementation of the PRA’s Policy Statement PS15/24 (Review of Solvency II:

Restatement of assimilated law).

The PRA has stated that these reforms to Solvency II and restatement of rules provide a new regulatory framework for maintaining the safety and soundness of insurance firms and protecting their policyholders, and that the PRA will continue to evolve its prudential regulatory framework for the insurance sector in 2025 and beyond.

The implementation of these reforms and potential divergence between the U.K.

and the EU may have an impact on whether the U.K.

9 unchanged sentences

A controller is defined for these purposes as a person who holds (either alone or in concert with others) 10% or more of the shares or voting power in the relevant company or its parent undertaking.

ARCH CAPITAL 26

2024 FORM 10-K

Restrictions on Payment of Dividends .

Under English law, all companies are restricted from declaring a dividend to their shareholders unless they have “profits available for distribution.” The calculation as to whether a company has

sufficient profits is based on its accumulated realized profits minus its accumulated realized losses.

Under English law, all companies are restricted from declaring a dividend to their shareholders unless they have “profits available for distribution.” The calculation as to whether a company has sufficient profits is based on its accumulated realized profits minus its accumulated realized losses.

insurance regulatory laws do not prohibit the payment of dividends, but the PRA or FCA, as applicable, requires that insurance companies, insurance intermediaries and other regulated entities maintain certain solvency margins and may restrict the payment of a dividend by Arch Insurance (U.K.) or AMAL, for example.

European Union Considerations .

EU Considerations .

During the Transition Period, there was no change in passporting rights for financial institutions in the U.K.

2 unchanged sentences

Financial Services and Market Act 2000 at the end of December 2020 (“Part VII Transfer”).

Despite the loss of passporting rights, AMAL, Syndicate 2012 and Syndicate 1955 are still able to write business in the EEA via the Lloyd’s Insurance Company, S.A.

Despite the loss of passporting rights, AMAL, and our Lloyd’s Syndicates are still able to write business in the EEA via the Lloyd’s Insurance Company, S.A.

(“Lloyd’s Brussels”).

8 unchanged sentences

and the EU on the provision of financial services into the U.K., the post-Brexit status and rules applicable to U.K.

branches of EEA financial institutions will be primarily driven by U.K.

EEA financial institutions will be primarily driven by U.K.

law and regulation.

ARCH CAPITAL 25

2023 FORM 10-K

The ability of U.K.

3 unchanged sentences

firms are subject to more stringent requirements in carrying out reinsurance business with EEA firms.

See “Risk Factors—Risks Relating to Our Industry, Business and Operations—New legislation or regulations relating to the U.K.’s withdrawal from the EU could adversely affect us.”

ESG Considerations.

Sustainability Considerations.

government has a long-term ambition to “green” the financial system and align it with the U.K.’s 2050 “Net Zero” target (i.e.,100% greenhouse gas emissions reduction) under the Climate Change Act 2008.

7 unchanged sentences

Further to the Roadmap, the FCA issued its final Policy Statement on its sustainability disclosure requirements and the investment labels regime.

The FCA is, among other things, introducing a general ‘anti-greenwashing’ rule to clarify that sustainability-related claims must be clear, fair and not misleading.

The general ‘anti-greenwashing’ rule comes into force on May 31, 2024 and the FCA is also consulting on new guidance on the expectations for FCA-authorized firms subject to the general ‘anti-greenwashing rule’ which will take effect at the same time.

As a part of this regime, the FCA introduced, among other things, a general ‘anti-greenwashing’ rule to clarify that sustainability-related claims must be clear, fair and not misleading.

The general ‘anti-greenwashing’ rule came into force on May 31, 2024 and the FCA also published new guidance (FG24/3) on the expectations for FCA-authorized firms subject to the general ‘anti-greenwashing rule’ which took effect at the same time.

Consumer protection reforms under the new U.K.

Digital Markets, Competition and Consumers Act 2024 (“DMCC Act”) are expected to take effect in 2025, which will enable the U.K.’s competition regulator, the Competition and Markets Authority (“CMA”) to pursue enforcement for consumer law breaches such as greenwashing, and to directly impose fines of up to 10% of a business’s global turnover.

In October 2023, the Green Technical Advisory Group ("GTAG") published its final advice to the U.K.

2 unchanged sentences

Whilst not binding, the GTAG advice gives a likely indication as to what the U.K.

Green Taxonomy may look like and how it might differ from the EU Sustainable Finance Taxonomy Regulation (“EU Taxonomy”).

Green Taxonomy may look like and how it

ARCH CAPITAL 27

2024 FORM 10-K

might differ from the EU Sustainable Finance Taxonomy Regulation (“EU Taxonomy”).

The GTAG final report outlines sustainable governance arrangements for the U.K.

2 unchanged sentences

government establishing an advisory body to facilitate implementation and development.

If the GTAG advice is

adopted, the U.K.

If the GTAG advice is adopted, the U.K.

Green Taxonomy should align with the EU Taxonomy except where doing so impact the simplicity or usability of the activity classification system or increases the risk of greenwashing.

3 unchanged sentences

will restate EU law around the taxonomy and take additional time to decide the U.K.’s approach.

In addition, Lloyd’s has mandated that managing agents must create an ESG framework and strategy, which was to be considered in the 2023 business planning cycle.

Lloyd’s has also imposed ESG focused outcomes by way of the Principles with a particular focus on culture, investment and underwriting profitability.

Following the work of GTAG, in November 2024, the U.K.’s HM Treasury published a consultation to determine whether a U.K.

Green Taxonomy would be complementary to existing policies, with the consultation period due to close on February 4, 2025.

The PRA’s supervisory statement SS3/19 “Enhancing banks’ and insurers’ approaches to managing the financial risks from climate change” requires U.K.

regulated entities to comply with certain sustainability-related requirements.

In its January 2025 letter to CEOs on its 2025 priorities for insurance supervision, the PRA has indicated that it is planning to consult on an update to SS3/19 to support firms’ progress in improving their management of climate-related financial risks.

In addition, Lloyd’s has mandated that managing agents create a sustainability framework and strategy.

Lloyd’s has also imposed sustainability focused outcomes by way of the Principles with a particular focus on culture, investment and underwriting profitability.

See “Lloyd’s Supervision” above for additional details.

5 unchanged sentences

and EU often consult with each other with respect to their respective sanctions programs.

Given the evolving situation, we are closely monitoring developments and the sanctions imposed, to ensure our business remains in compliance with any applicable sanctions measures imposed.

Privacy and Cybersecurity.

4 unchanged sentences

(as applicable) and has extra-territorial effect where an entity established outside of the U.K.

processes personal data in relation to the offering of goods or services to individuals in the EEA and/or the U.K.

processes personal data in relation to the offering of goods or services to individuals in the U.K.

or the monitoring of their behavior.

6 unchanged sentences

and (v) an obligation to report personal data breaches to:

(i) the data protection supervisory authority without undue delay (and no

ARCH CAPITAL 26

2023 FORM 10-K

later than 72 hours) after becoming aware of the personal data breach, unless the personal data breach is unlikely to result in a risk to the data subjects’ rights and freedoms;

(i) the data protection supervisory authority without undue delay (and no later than 72 hours) after becoming aware of the personal data breach, unless the personal data breach is unlikely to result in a risk to the data subjects’ rights and freedoms;

and (ii) affected individuals, where the personal data breach is likely to result in a high risk to their rights and freedoms.

13 unchanged sentences

Information Commissioner’s Office (“ICO”) has the power under the GDPR to (amongst other things) impose fines for serious breaches of up to the higher of 4% of the organization’s annual worldwide turnover or £17.5 million.

Individuals also have a right to compensation, as a result of an organization’s breach of the U.K.

Individuals also have a right to compensation, as a result of

ARCH CAPITAL 28

2024 FORM 10-K

an organization’s breach of the U.K.

GDPR which has affected them, for financial or non-financial losses (e.g., distress).

4 unchanged sentences

Artificial Intelligence.

has adopted a “soft law” approach to AI regulation meaning it has not adopted formal legislation to regulate AI but has adopted soft law guidelines in the form of a White Paper published on March 29, 2023.

intends to develop a sector-specific, principle centered approach to AI regulation, with the relevant sectors being responsible for enforcemen t.

has adopted a (primarily) “soft law” approach to AI regulation meaning it has not adopted formal legislation to regulate AI but has adopted soft law guidelines in the form of a White Paper published on March 29, 2023.

intends to develop a sector-specific, principle centered approach to AI regulation, with the relevant sectors being responsible for enforcement.

However, in July 2024, the U.K.

government announced its intention to regulate the most powerful AI models.

The CBI regulates insurance and reinsurance companies and intermediaries authorized in Ireland.

16 unchanged sentences

Restrictions on Acquisitions.

Under Irish law, the prior consent of the CBI is required before any person can acquire or increase a qualifying holding in an Irish insurer or reinsurer, including Arch Insurance (EU) and Arch Re

ARCH CAPITAL 27

2023 FORM 10-K

Europe, or their parent undertakings.

Under Irish law, the prior consent of the CBI is required before any person can acquire or increase a qualifying holding in an Irish insurer or reinsurer, including Arch Insurance (EU) and Arch Re Europe, or their parent undertakings.

A qualifying holding is defined for these purposes as a direct or indirect holding that represents 10% or more of the capital of, or voting rights, in the undertaking or makes it possible to exercise a significant influence over the management of the undertaking.

3 unchanged sentences

Further, the CBI has powers to intervene if a dividend payment were to lead to a breach of regulatory capital requirements.

In response to the COVID-19 pandemic, the CBI issued guidance in April 2020, based on guidance issued by EIOPA, that insurance firms postpone any payment of dividend distributions or similar transactions until they can forecast their costs and future revenues with a greater degree of certainty.

However, the CBI modified its guidance, with effect from October 1, 2021, so that the general restrictions on the payment of dividend distributions or variable remuneration are no longer in place.

The CBI still requires (re)insurance firms to notify it in advance of any proposed distribution.

European Union Considerations .

ARCH CAPITAL 29

2024 FORM 10-K

EU Considerations .

As Arch Re Europe, Arch Insurance (EU) and Arch Underwriters Europe are authorized by the CBI in Ireland, a Member State of the EU, those authorizations are recognized throughout the EEA.

1 unchanged sentence

Although, in doing so, they may be subject to the laws of such Member States with respect to the conduct of business in such Member State, company law registrations and other matters, they will remain subject to financial and operational supervision by the CBI only.

Arch Insurance (EU) has branches in Italy and the U.K.

Arch Insurance (EU) has branches in Italy, France, Spain and the U.K.

Arch Re Underwriting ApS in Denmark (“Arch Re Denmark”) is an underwriting agency underwriting accident and health and other reinsurance business for Arch Re Europe.

Arch Re Europe also has branches in the U.K.

and Switzerland (“Arch Re Europe Swiss Branch”).

From January 1, 2021, under the provisions of the TCA our Irish regulated entities have lost their passporting rights into the U.K.

See “Risk Factors—Risks Relating to Our Industry, Business and Operations—New legislation or regulations relating to the U.K.’s withdrawal from the EU could adversely affect us.”

ESG Considerations.

ESG matters have been on the CBI's agenda for a number of years.

In November 2021, the CBI issued its expectations in respect of climate and broader ESG issues for all regulated firms in Ireland (including (re)insurers).

Arch Re Europe also has branches in the U.K., France and Switzerland (“Arch Re Europe Swiss Branch”).

From January 1, 2021, under the provisions of the TCA our Irish regulated entities lost their passporting rights into the U.K.

Sustainability Considerations.

Sustainability matters have been on the CBI's agenda for a number of years.

In November 2021, the CBI issued its expectations in respect of climate and broader sustainability issues for all regulated firms in Ireland (including (re)insurers).

The CBI's expectations focus on five key areas:

3 unchanged sentences

The finalized guidance was published by the CBI in March 2023 and clarifies the CBI’s expectations on how (re)insurers should address climate change risks in their business and to assist (re)insurers develop their governance and risk management frameworks to do this.

It is expected that over time, disclosures in respect to ESG matters may be captured in the Solvency and Financial Condition Reports of Arch's Irish entities.

In September 2024, the CBI published key findings from a thematic review of (re)insurers’ climate change risk materiality assessments.

As part of this report, the CBI reiterated that climate change risk remains a key strategic priority and will continue to be a feature of regular supervisory engagement with (re)insurers.

It is expected that over time, disclosures in respect to sustainability matters may be captured in the Solvency and Financial Condition Reports of Arch's Irish entities.

Arch continues to consider the impact of this guidance on its Irish entities.

See also “European Union – ESG Considerations.”

See also “European Union – Sustainability Considerations.”

Irish Individual Accountability Framework Act 2023.

The Central Bank (Individual Accountability Framework) Act 2023 (the “IAF Act”) was signed into law in March 2023 with the relevant provisions and obligations under the IAF Act coming into effect on a phased basis.

The Central Bank (Individual Accountability Framework) Act 2023 (the “IAF Act”) was signed into law in March 2023

with the relevant provisions and obligations under the IAF Act coming into effect on a phased basis.

The majority of provisions came into effect in December 2023, with remaining provisions coming into effect on July 1, 2024 and July 1, 2025.

The IAF Act implements substantive changes to the fitness and probity regime maintained by the CBI in Ireland and imposes certain additional obligations and liability for senior executives in Irish regulated financial service entities, including (re)insurance companies.

Arch has considered the impact of the IAF Act on its business and has catered for this accordingly.

See Item 1, “ Business—Regulation , European Union – ESG Considerations.”

Arch considered the impact of the IAF Act on its business and implemented the IAF Act requirements accordingly.

See Item 1, “ Business—Regulation , European Union – Sustainability Considerations.”

Third Country Governance Arrangements.

3 unchanged sentences

Arch reviewed, and continues to consider, the impact of this supervisory statement on its Irish and European operations.

ARCH CAPITAL 28

2023 FORM 10-K

FDI Screening .

In January 2025, the Screening of Third Country Transactions Act 2023 (“FDI Act”) came into effect.

The FDI Act was developed in accordance with the introduction of Regulation (EU) 2019/452 on foreign direct investment screening.

The FDI Act grants powers to the Irish State to review, examine and potentially block investment by acquirers from outside the EEA and Switzerland where such acquirers pose a risk to national security or public order.

While it is not anticipated that U.S., U.K.

or Bermuda based acquirers will be negatively impacted by the FDI Act, we will continue to review developments in respect of the FDI Act.

European Union

5 unchanged sentences

and Pillar III-market discipline, which is accomplished through reporting of the insurer’s financial condition to regulators and the public.

Solvency II is supplemented by European Commission Delegated Regulation (EU) 2015/35 (the “Delegated Regulation”), other European Commission “delegated acts” and binding technical standards, and guidelines issued by EIOPA.

Solvency II is supplemented by European

ARCH CAPITAL 30

2024 FORM 10-K

Commission Delegated Regulation (EU) 2015/35 (the “Delegated Regulation”), other European Commission “delegated acts” and binding technical standards, and guidelines issued by EIOPA.

The Delegated Regulation sets out more detailed requirements for individual insurance and reinsurance undertakings, as well as for groups, based on the overarching provisions of Solvency II, which together make up the core of the single prudential rulebook for insurance and reinsurance undertakings in the EU.

4 unchanged sentences

The proposed amendments cover a number of areas including proportionality, quality of supervision, sustainability risks and group and cross-border supervision.

The European Parliament and the Council reached provisional agreement on the Solvency II amendments in December 2023, with formal approval expected in 2024.

The European Parliament and the Council voted to adopt the amendments to the Solvency II Directive in April 2024 and November 2024 respectively.

The amendments to Solvency II entered into force on January 28, 2025 and will apply two years from this date.

In addition to the above Solvency II reform proposals, the European Commission continues to promote the development of the Insurance Recovery and Resolution Directive (“IRRD”).

The proposal aims to harmonize national laws on recovery and resolution of (re)insurance undertakings.

In December 2023, the European Parliament and Council reached provisional agreement on the IRRD.

Currently, it is anticipated that the IRRD will enter into force during the course of 2024.

The IRRD aims to harmonize national laws on recovery and resolution of (re)insurance undertakings.

The European Parliament and the Council voted to adopt the IRRD in April 2024 and November 2024 respectively.

The IRRD entered into force on January 28, 2025 and will apply two years from this date.

It should be noted that the CBI has already introduced certain insurance recovery requirements under Irish law that apply to Arch’s Irish operations, including the preparation of recovery plans.

We will continue to monitor

the development of the IRRD and its potential impact on our operations.

We will continue to monitor the implementation of IRRD and its potential impact on our operations.

Following entry into the TCA by the U.K.

2 unchanged sentences

It was originally envisaged that there would be a level of cooperation in relation to financial services, to be reflected in a MoU between the U.K.

However, the text of the MoU does not impose any binding substantive commitments nor is there any mention of taking forward the commitment in the Political Declaration accompanying the TCA regarding mutual equivalence.

However, the text of the MoU does not impose any binding substantive commitments nor is there any mention of taking forward the commitment in the Political

Declaration accompanying the TCA regarding mutual equivalence.

In early February 2023, EIOPA issued its finalized Supervisory Statement on the use by EU-authorized (re)insurers of governance arrangements (such as branches) in third countries to perform functions or activities in respect of EU policyholders and risks.

Arch is assessing the impact of the Supervisory Statement on its EU operations.

See “Risk Factors—Risks Relating to Our Industry, Business and Operations—New legislation or regulations relating to the U.K.’s withdrawal from the EU could adversely affect us.”

Arch has incorporated the Supervisory Statement in its EU operations and continues to monitor similar guidance.

Arch Re Europe and Arch Insurance (EU), being established in Ireland and authorized by the CBI, are able to establish branches and provide reinsurance services and, in respect of Arch Insurance (EU), insurance services in all EEA states.

6 unchanged sentences

However, as a consequence of the above determination of equivalence, pursuant to Article 260 of Solvency II, regulators within the EEA are required to rely on the worldwide group supervision exercised by the BMA.

EIOPA has also indicated that, on a case by case basis, groups subject to this worldwide supervision may be exempted from any EEA sub-group

ARCH CAPITAL 29

2023 FORM 10-K

supervision, where this results in more efficient supervision of the group and does not impair EEA supervisors in respect of their individual responsibilities.

EIOPA has also indicated that, on a case by case basis, groups subject to this worldwide supervision may be exempted from any EEA sub-group supervision, where this results in more efficient supervision of the group and does not impair EEA supervisors in respect of their individual responsibilities.

The IDD was published in February 2016.

2 unchanged sentences

The IDD applies to all distributors of insurance and reinsurance products (including insurers and reinsurers selling directly to customers) and strengthens the regulatory regime applicable to distribution activities through increased transparency, information and conduct requirements.

The principal impact of the IDD is on the insurance market, however, requirements that apply across insurance and reinsurance include more specific conditions regarding knowledge and continuing professional development for those involved in distribution of (re)insurance products.

The principal impact of the IDD is on the insurance market, however, requirements that apply across insurance and

ARCH CAPITAL 31

2024 FORM 10-K

reinsurance include more specific conditions regarding knowledge and continuing professional development for those involved in distribution of (re)insurance products.

The IDD continues the pre-existing ability of intermediaries established in a Member State of the EU to establish branches and provide services to all EEA states.

3 unchanged sentences

The EU GDPR governs the collection, use, disclosure, transfer or other processing of personal data.

Its scope extends to certain entities not established in the EEA if they process personal data or offer goods or services to, or monitor the behavior of, EEA data subjects.

Its scope extends to certain entities not established in the EEA if they offer goods or services to, or monitor the behavior of, EEA data subjects.

The EU GDPR contains a number of requirements regarding the processing of personal data about individuals, including mandatory security breach reporting, new and strengthened individual rights, evidenced data controller accountability for compliance with the GDPR principles (including fairness and transparency), maintenance of data processing activity records and the implementation of “privacy by design,” including through the completion of mandatory Data Protection Impact Assessments in connection with higher risk data processing activities.

2 unchanged sentences

Privacy Shield failed to offer adequate protections to EU personal information transferred to the U.S.

While the Court of Justice upheld the use of other data transfer mechanisms, such as the Standard Contractual Clauses (“EU SCCs”), the decision has led to some uncertainty regarding the use of such mechanisms for data transfers to the U.S., and the Court of Justice made clear that reliance on EU SCCs alone may not necessarily be sufficient

in all circumstances.

The European Data Protection Board issued additional guidance regarding international transfers which may require us to implement additional safeguards to further enhance the security of data transferred out of the EEA.

6 unchanged sentences

The DPF is the successor to the EU-U.S.

Privacy Shield and allows companies that participate in the DPF to transfer personal data freely to the U.S.

without the need for alternative data protection transfer mechanisms (such as SCCs or binding corporate rules).

Privacy Shield and allows companies that are subject to the GDPR to transfer personal data to U.S.

that participate in the DPF without the need for alternative data protection transfer mechanisms (such as SCCs or binding corporate rules).

The EU GDPR imposes substantial fines for breaches and violations (up to the greater of €20 million or 4% of global turnover).

The EU GDPR allows data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies and obtain compensation for damages resulting from violations of the EU GDPR.

In addition, the EU Data Act (“EUDA”) was published in the Official Journal of the EU on December 22, 2023, and is scheduled to come into effect on a phased basis from September 12, 2025, through to September 12, 2027.

EUDA creates a harmonized set of rules on fair access to and use of data in the interest of fostering data-driven innovation and increasing data availability in the EU.

EUDA may apply to certain insurance activities, primarily relating to the use of telemetric and similar devices.

Arch is assessing the impact of EUDA on its operations.

Cybersecurity and information security are an area of increasing focus for the EU.

1 unchanged sentence

The core aim of DORA is to prevent and mitigate cyber threats and sets uniform requirements for the security of network and information systems of financial sector entities (including (re)insurers) as well as critical third parties which provide ICT (information and communication technology)-related services, such as cloud platforms or data analytics services.

In scope entities will be required to comply with the obligations set out under DORA from January 2025.

Certain of our in-scope Irish entities are required to comply with the obligations set out under DORA from January 17, 2025.

In addition to the above, EIOPA continues to publish detailed guidelines, recommendations and expectations relating to cyber matters and how these should be managed and considered by the (re)insurance sector.

Artificial Intelligence.

On December 9, 2023, the EU Parliament and Council reached provisional agreement on the text of the Artificial Intelligence Act (the “EU AI Act”).

The EU AI Act aims to regulate AI and will apply directly, on a phased basis, in all EU Member States.

In February 2024, representatives of the governments of EU Member States signed off on the final text of the EU AI Act.

A vote in the European Parliament on the adoption of the EU AI Act is expected in April 2024.

The EU AI Act will introduce a categorization system for AI risks with the level of protection linked to the level of risk posed by the relevant AI.

Based on the final text, certain AI applications utilized by (re)insurers will fall within the scope

The EU Artificial Intelligence Act (the “EU AI Act”) came into effect on August 1, 2024.

As of February 2, 2025, companies are required to cease the use of AI systems which pose an unacceptable risk.

Further compliance obligations applicable to general purpose AI models take effect in August 2025, and the remainder of the EU AI Act (including compliance rules relating to AI systems) takes effect in August 2026.

The EU AI Act regulates the use of AI systems and general purpose AI models in all EU Member States through a risk-based framework, and a governance program relating to the use of AI systems generally.

Certain of the AI systems utilized by our (re)insurers will fall within the scope of the EU AI Act.

ARCH CAPITAL 32

2024 FORM 10-K

of the EU AI Act and will be subject to regulation.

Arch continues to monitor development of the EU AI Act and its potential impact on Arch’s operations.

ESG Considerations .

Sustainability Considerations .

A comprehensive package of measures to facilitate the progression towards sustainable economic activities was approved in principle by the European Commission in April 2021.

2 unchanged sentences

The EC Regulations apply from August 2022.

The Corporate Sustainability Reporting Directive (“CSRD”), which replaces the Non-Financial Reporting Directive (“NFRD”), was published in the Official Journal of the EU on November 16, 2022 and entered into effect on January 5, 2023.

The Corporate Sustainability Reporting Directive (“CSRD”), which replaces the Non-Financial Reporting Directive (“NFRD”), was published in the Official Journal of the EU on December 16, 2022 and entered into effect on January 5, 2023.

CSRD was transposed under Irish law pursuant to the EU (Corporate Sustainability Reporting) Regulations 2024, which came into effect on July 6, 2024 and the EU (Corporate Sustainability Reporting) (No.

2) Regulations 2024, which came into effect on October 1, 2024.

Certain of our European subsidiaries are subject to NFRD.

2 unchanged sentences

Reporting obligations for other companies fulfilling certain criteria will commence in 2026 for financial years starting on or after January 1, 2025.

In addition, the reporting standards under the CSRD, which provides in-scope companies with the technical detail on the information that will need to be disclosed and reported, were adopted by the European Commission in July 2023.

Certain of our European entities will fall within the scope of certain reporting obligations under the CSRD.

An additional ESG framework, the EU Taxonomy, came into force in July 2020, with in-scope companies required to comply with certain reporting obligations from January 1, 2022.

In addition, the reporting standards under the CSRD, which provide in-scope companies with the technical detail on the information that will need to be disclosed and reported, were adopted by the European Commission in July 2023.

Certain of our European entities and non-European entities will fall within the scope of certain reporting obligations under the CSRD.

An additional environmental sustainability framework, the EU Taxonomy, came into force in July 2020, with in-scope companies required to comply with certain reporting obligations from January 1, 2022.

The EU Taxonomy (which is a classification standard for reporting) sets out six environmental objectives with which companies' economic activities must comply if they are to be described as environmentally sustainable.

1 unchanged sentence

(1) climate change mitigation, (2) climate change adaptation, (3) sustainable use and protection of water and marine resources, (4) transition to a circular economy, (5) pollution prevention and control and (6) the protection and restoration of biodiversity and ecosystems.

In addition, reporting obligations apply to in-scope companies regarding (1) the financial products they provide and (2) the environmental sustainability of an in-scope company's activities, which is to be disclosed in non-financial statements that are required under the NFRD and the CSRD.

In February 2022, the European Commission adopted a proposal for the Corporate Sustainability Due Diligence Directive (“CSDD”).

Provisional agreement was reached between the European Parliament and Council in December 2023 however the text of the agreed CSDD has not yet been officially published.

Formal approval of the CSDD is expected to be provided in early 2024.

While the main focus of the CSDD is on conducting due diligence on human rights and environmental impacts within a company and across its value chain, there are also additional sustainability requirements for certain in-scope entities.

It is anticipated that certain obligations under the CSDD will apply to financial services entities (including (re)insurers) however it is expected that financial services entities (including (re)insurers) will be temporarily excluded from the obligation to conduct due diligence on their customers.We will closely monitor the continued development of the CSDD and its potential impact on Arch’s European operations.

In tandem with all of the above, EIOPA continues to engage with stakeholders in the (re)insurance sector and publish detailed guidelines, recommendations and expectations relating to ESG matters and how these should be managed and considered by the (re)insurance sector.

In February 2022, the European Commission adopted a proposal for the Corporate Sustainability Due Diligence Directive (“CSDDD”).

The CSDDD entered into force in July 2024 and its obligations will come into effect on a phased basis depending on an in-scope entity’s turnover threshold, employee count and jurisdiction of incorporation.

EU and EEA Member States have until July 26, 2026, to transpose the CSDDD.

The main focus of the CSDDD is for in-scope entities to conduct due diligence on human rights and environmental impacts within such in-scope entities, their subsidiaries and across its value chain.

Initially, the CSDDD will only apply in respect of financial service providers’ (including (re)insurers) upstream business partners.

This means that currently (re)insurers do not need to consider any downstream business partners when complying with their obligations under CSDDD.

However, the CSDDD provides scope for this to change upon future review by the European Commission, and financial service providers could be required in the future to comply with CSDDD in respect of both upstream and downstream business partners.

We continue to monitor the European Commission’s proposals to simplify sustainability reporting requirements and their impact on CSRD and CSDDD obligations of our European and non-European operations.

In tandem with all of the above, EIOPA continues to engage with stakeholders in the (re)insurance sector and publish detailed guidelines, recommendations and expectations relating to sustainability matters and how these should be managed and considered by the (re)insurance sector.

Russian Sanctions.

17 unchanged sentences

Arch LMI, which was formerly authorized by APRA in January 2019 to conduct monoline lenders’ mortgage insurance business in Australia, relinquished its APRA authorization in December 2022 and has been converted to a services company for our Australian lenders mortgage insurance operations.

Major regulatory requirements that are applicable to Arch Indemnity as a general insurance provider in Australia include requirements on minimum capital levels, remuneration practices, risk management, compliance with corporate governance standards, including requirements pursuant to the Financial Accountability Act passed in 2023 which take effect on March 15, 2025 for general insurers and additional operational risk management requirements on and from July 1, 2025.

In addition to its APRA authorization, Arch Indemnity has been licensed by the Australian Securities and Investments Commission (“ASIC”) since March 2011 to engage in credit activities in Australia.

2 unchanged sentences

This insurance business is managed by and distributed through local coverholders and is subject to Lloyd’s Supervision.

In addition, the business is subject to local Australian prudential regulatory oversight by APRA, and additional separate financial services market conduct regulation by ASIC.

In addition, there are other Australian legislation and regulations applicable to the financial services sector that our group operates in, such as:

In addition, the business is subject to local Australian prudential

regulatory oversight by APRA, and additional separate financial services market conduct regulation by ASIC.

In addition, there are other Australian legislation and regulations applicable to the financial services sector in which our group operates, such as:

• privacy legislation on the collection, use and storage of personal information and sensitive information of individuals and a mandatory data breach notification regime, which are overseen by the Office of the Australian Information Commissioner;

• cyber security obligations imposed by APRA and ASIC as part of their respective licensing regimes for insurers, and also on larger insurers in Australia under Australian security of critical infrastructure legislation;

• additional obligations under cyber security legislation passed in 2024 and expected to come into force in part from May 2025, which apply to various entities operating in Australia (subject to specific eligibility thresholds to be confirmed).

The requirements include mandatory reporting of cyber security incidents, which involve the payment of a ransom, to the Australian Government’s Department of Home Affairs and Australian Signals Directorate;

• modern slavery legislation which imposes a statutory reporting regime for larger companies operating in Australia;

• anti-money laundering and counter-terrorism financing legislation, which is administered by the Australian Transaction Reports and Analysis Centre.

Artificial Intelligence.

In Australia, businesses which develop and use AI are subject to various Australian laws relating to privacy, corporations and anti-discrimination which apply across all sectors of the economy.

1 unchanged sentence

The Australian Government has been undertaking consultation on “Safe and Responsible AI” regulation in Australia since June 2023.

In January 2024, the Australian Government published its Interim Response to the consultation, which indicates that:

• the Australian Government considers that Australia’s existing laws and current regulatory framework do not sufficiently address the risks presented by AI (particularly in “high-risk” applications and frontier models);

• the Australian Government will seek to regulate AI (rather than relying solely on voluntary standards) by adopting a risk-based regulatory approach to implement additional guardrails for AI in “high-risk” settings;

• the Australian Government is currently undertaking work to strengthen existing laws in areas that will help to address known harms with AI, including proposed privacy law reform.

The Australian Government’s final regulatory response to AI is subject to further consultation with industry before either amending existing laws or implementing new laws to regulate AI in Australia.

In September 2024, the Australian Government published a Voluntary AI Safety Standard which can be used on a voluntary basis by Australian businesses developing or implementing AI systems while the Australian Government continues to undertake consultation on proposed mandatory AI guardrails for high-risk applications that are to be defined following consultation.

ARCH CAPITAL 34

2024 FORM 10-K

The insurance industry is regulated by Hong Kong Insurance Authority (“HKIA”), whose principal function is to regulate and supervise the insurance industry for the promotion of the general stability of the insurance industry and for the protection of existing and potential policyholders.

Arch MI Asia Limited (“Arch MI Asia”) is not writing new business but is authorized to carry on general business Class 14 (Credit) and Class 16 (Miscellaneous Financial Loss), in or from Hong Kong.

Major regulatory requirements that are applicable to Arch MI Asia as a general business insurer include requirements on minimum paid-up capital, minimum solvency margin and maintenance of assets in Hong Kong.

Subject to the outcome of the consultation, the proposed mandatory AI guardrails for high-risk applications will replicate the 10 voluntary guardrails in the Voluntary AI Safety Standard, with the exception of the 10th voluntary guardrail which is proposed to focus on conformity standards under the mandatory guardrails rather than stakeholder engagement as set out under the voluntary guardrails.

Climate Change Reporting.

A mandatory climate-related risk disclosure regime has been introduced with the regime to be phased in for 3 groups of large Australian companies required to report under Chapter 2M of the Corporations Act 2001 (Cth) and the relevant commencement date of the reporting requirements determined by the Australian company (and its controlled entities) meeting certain criteria for each group of companies under the regime based on consolidated revenue, consolidated gross assets and number of employees.

The regime is regulated by ASIC and includes

new sustainability reporting requirements to be phased in over 3 years for the first annual reporting period beginning on or after January 1, 2025 for Group 1 companies, July 1, 2026 for Group 2 companies and July 1, 2027 for Group 3 companies.

Our Australia mortgage operations will be reporting as a Group 2 company.

The insurance industry is regulated by the Gibraltar Financial Services Commission (“GFSC”).

We have two carriers, Alwyn Insurance Company Limited and Southern Rock Insurance Company Limited (“SRICL”), which are authorized and regulated by the GFSC.

SRICL is no longer authorized to enter into new contracts of insurance or renew existing contracts of insurance and is no longer writing business.

Following the departure of the U.K.

from the EU, Gibraltar is not part of the EU and remains a British Overseas Territory.

Post-Brexit, Gibraltar’s licensed insurers are able to cover risks in the U.K.

via the Financial Services (Gibraltar) (Amendment) (EU Exit) Regulations, and Alwyn Insurance currently writes business for U.K.

policyholders.

Gibraltar is a Solvency II equivalent jurisdiction, and its regulatory requirements are similar to those in the U.K.

requiring compliance with minimum and solvency capital requirements and other relevant regulatory requirements.

The following summary of the taxation of Arch Capital and the taxation of our shareholders is based upon current law and is for general information only.

9 unchanged sentences

Taxation of Arch Capital

OECD’s Pillar II.

Under Pillar II, the OECD’s Inclusive Framework published the “Global Anti-Base Erosion,” or “GloBE” model rules in December 2021, which apply to certain in scope entities and provide for a coordinated system of taxation that imposes a “top-up” tax to ensure that any in scope entity pays a minimum rate of 15% tax on its net income in each country where it operates.

The members of the EU have either already adopted domestic legislation implementing the minimum tax rules, pursuant to the EU’s minimum tax directive, unanimously agreed by the member states in 2022, or have exercised their option to postpone implementation on the basis of certain exceptions available to countries that have a small number of multinational groups to which the rules would apply.

For many members of the EU, such rules are effective for periods beginning on or after December 31, 2023, with the “under-taxed profit rule” taking effect for periods beginning on or after January 1, 2025.

ARCH CAPITAL 35

2024 FORM 10-K

Legislatures in multiple countries outside of the EU (including the United Kingdom, Australia, Canada, Switzerland, Hong Kong, and Bermuda) have enacted, and are continuing to enact, legislation to implement the GloBE model rules.

A number of elements of Pillar II remain uncertain.

The OECD continues to release guidance regarding Pillar II, only certain jurisdictions have currently enacted laws to give effect to Pillar II, jurisdictions may interpret such laws in different manners, and certain elements of such laws are currently subject to challenge pursuant to legal proceedings.

Thus, the overall implementation of Pillar II remains uncertain and subject to change, possibly on a retroactive basis.

Although certain jurisdictions in which we and our affiliates do business have enacted an “under-taxed profit rule”, the impact of such rule and the extent to which such rule will change or be eliminated based on current legal and political challenges is uncertain.

The adoption of the tax laws described above (including, the adoption of an “under-taxed profit rule” by certain countries in which we and our affiliates do business) are expected to result in an increase to our effective tax rate and aggregate tax liability.

See Item 1A, “Risk Factors – Risk Relating to Taxation” for additional information.

Under current Bermuda law, Arch Capital does not pay any tax on income or profits and is not subject to payment of any tax on withholding, capital gains or capital transfers.

Arch Capital has obtained from the Minister of Finance under the Exempted Undertakings Tax Protection Act 1966 of Bermuda an assurance that, in the event that

Bermuda enacts legislation imposing tax computed on profits, income, any capital asset, gain or appreciation, or any tax in the nature of estate duty or inheritance, the imposition of any such tax shall not be applicable to Arch Capital or to any of our operations or our shares, debentures or other obligations until March 31, 2035.

However, on December 27, 2023, the Government of Bermuda enacted the Bermuda CIT Act, which will become effective for tax years beginning on or after January 1, 2025.

Given the potential for the new corporate income tax regime in Bermuda to supersede the Minister of Finance’s assurance, the Company is likely to become subject to taxes in Bermuda before March 31 ,2035.

Arch Capital has obtained from the Minister of Finance under the Exempted Undertakings Tax Protection Act 1966 of Bermuda, as amended (“EUTP Act”) an assurance that, in the event that Bermuda enacts legislation imposing tax computed on profits, income, any capital asset, gain or appreciation, or any tax in the nature of estate duty or inheritance, then the imposition of any such tax shall not be applicable to Arch Capital or to any of our operations or our shares, debentures or other obligations until March 31, 2035.

However, in response to the OECD Pillar II initiative, on December 27, 2023, the Government of Bermuda enacted the Bermuda CIT Act, which will become effective for tax years beginning on or after January 1, 2025.

In the event Arch Capital is subject to tax under the CIT Act, this would supersede the assurance received from the Minister of Finance under the EUTP Act and such tax would be charged at a rate of 15% of the Company’s net taxable income as determined in accordance with and subject to the adjustments set out in the CIT Act (including in respect of any foreign tax credits applicable to us) for tax years starting on or after January 1, 2025.

The CIT Act does not impose any withholding tax, capital transfer tax, estate duty or inheritance tax,;

and, so there will continue to be no such taxes payable by us or by our shareholders in respect of our shares following January 1, 2025.

See Item 1A.“ Risk Factors — Risks Relating to Taxation ” for additional information.

We pay annual Bermuda government fees, and our Bermuda insurance and reinsurance subsidiary pays annual insurance license fees.

We currently pay our Bermuda annual government fee;

our Bermuda insurance and reinsurance subsidiaries also pay their respective Bermuda annual government fees and annual insurance license fees.

In addition, all entities employing individuals in Bermuda are required to pay a payroll tax and other sundry taxes payable, directly or indirectly, to the Bermuda government.

17 unchanged sentences

(the “Treaty”), Arch Capital's Bermuda insurance subsidiaries will be subject to U.S.

income tax on any insurance premium income that is effectively connected with

ARCH CAPITAL 33

2023 FORM 10-K

income tax on any insurance premium income that is effectively connected with a U.S.

trade or business only if that trade or business is conducted through a permanent establishment in the U.S.

4 unchanged sentences

citizens or residents.

While Arch Capital believes that its Bermuda insurance subsidiaries have been eligible for Treaty benefits to date, there can be no assurance that this is the case or that the Bermuda insurance subsidiaries will continue to be eligible for Treaty benefits.

While Arch Capital

ARCH CAPITAL 36

2024 FORM 10-K

believes that its Bermuda insurance subsidiaries have been eligible for Treaty benefits to date, there can be no assurance that this is the case or that the Bermuda insurance subsidiaries will continue to be eligible for Treaty benefits.

The Treaty clearly applies to premium income but may be construed as not protecting investment income.

17 unchanged sentences

The Tax Cuts and Jobs Act of 2017 (the “Tax Cuts Act”) was signed into law by the President of the United States in 2017.

For taxable years beginning after 2017, the Tax Cuts Act

imposes a 10% minimum base erosion and anti-abuse tax (increased to 12.5% for taxable years after 2025) on the “modified taxable income” of a U.S.

For taxable years beginning after 2017, the Tax Cuts Act imposes a 10% minimum base erosion and anti-abuse tax (increased to 12.5% for taxable years after 2025) on the “modified taxable income” of a U.S.

corporation (or a non-U.S.

13 unchanged sentences

corporation tax on the profits (both income profits and chargeable gains) attributable to each branch.

The blended rate of U.K.

corporation tax for the 2023 financial year is approximately 23.5% on profits (the rate increased from 19% to 25% with effect from April 1, 2023).

The rate of U.K.

corporation tax for the 2024 financial year is 25%.

Pillar II has largely been enacted and in force in the U.K.

by way of a multinational top-up tax and a domestic top-up tax, together designed to ensure that any Pillar II taxes which can be levied on profits earned in the U.K.

will be paid in the U.K.

and not elsewhere, but broadly these measures are not currently expected to significantly adversely impact the quantum of taxes payable by the group in the U.K.

Arch Insurance Canada is taxed on its worldwide income.

2 unchanged sentences

Provincial and territorial corporate income tax rates are added to the general federal corporate income tax rate and generally vary between 8% and 16%.

Pillar II has largely been enacted in Canada but should not adversely impact taxes payable in Canada.

Each of Arch Re Europe, Arch Insurance (EU) and Arch Underwriters Europe is incorporated and resident in Ireland for corporation tax purposes and will be subject to Irish corporate tax on worldwide profits, including the profits of the branches of Arch Re Europe, Arch Insurance (EU) and Arch Underwriters Europe.

1 unchanged sentence

The current rate of Irish corporation tax applicable to such trading profits is 12.5%.

Pillar II has been enacted in Ireland which may result in additional taxation in Ireland.

Switzerland .

2 unchanged sentences

The effective tax rate of the annual cantonal and communal capital taxes on the equity which is allocated to Arch Re Europe Swiss Branch and Arch Underwriters Europe Swiss Branch is approximately 0.17%.

Pillar II has largely been enacted in Switzerland but should not adversely impact taxes payable in Switzerland.

ARCH CAPITAL 37

1 unchanged sentence

Arch Re Denmark, established as a subsidiary of Arch Re Bermuda, is subject to Danish corporation taxes on its profits at a rate of 22%.

Pillar II has been enacted in Denmark but should not adversely impact taxes payable in Denmark.

Our Gibraltar subsidiaries are companies that are incorporated and have their central management and control in Gibraltar and are therefore resident in Gibraltar for corporation tax purposes.

As a result, they are subject to Gibraltar corporation tax on their respective profits.

The rate of Gibraltar corporation tax for the 2024 financial year is 13.8% (the nominal rate increased from 12.5% to 15% with effect from July 1, 2024.

Pillar II has largely been enacted in Gibraltar which may result in additional taxation in Gibraltar in respect of 2024.

Arch MI Asia is subject to Hong Kong corporate tax on its assessable profits at a rate of 16.5%.

Assessable profits are the net profits for the basis period, arising in or derived from Hong Kong.

Pillar II has largely been enacted in Hong Kong but should not adversely impact taxes payable in Hong Kong.

Arch LMI and Arch Indemnity, Australian incorporated and tax resident companies, are subject to Australian corporate tax on its worldwide profits.

The current rate of Australian corporation tax applicable to such profits is 30%.

OECD’s Pillar II.

Under Pillar II, a global minimum tax at the rate of 15% would be imposed on certain in-scope entities.

Under the European Union’s minimum tax directive, unanimously agreed by the member states in 2022, each member state is required to adopt domestic legislation implementing the minimum tax rules effective for periods beginning on or after December 31, 2023, with the “under-taxed profit rule” to take effect for periods beginning on or after December 31, 2024.

Legislatures in multiple countries outside of the European Union have also drafted legislation to implement the OECD’s minimum tax proposal.

Given the OECD's continued release of guidance regarding Pillar II, that only certain jurisdictions have currently enacted laws to give effect to Pillar II, and that jurisdictions may interpret such laws in different manners, the overall implementation of Pillar II remains uncertain and subject to change, possibly on a retroactive basis.

Although certain jurisdictions in which we and our affiliates do business have enacted an “under-taxed profit rule”, such rule is only expected to take effect for taxable periods beginning on or after December 31, 2024.

The adoption of the tax laws described above (in particular, the adoption of an “under-taxed profit rule” by certain countries in which we and our affiliates do business) are expected to result in an increase to our effective tax rate and aggregate tax liability.

See Item 1A, “ Risk Fa ctors – Risk Relating to Taxation ” for additional information.

Pillar II has been enacted in Australia but should not adversely impact taxes payable in Australia.

Taxation of Shareholders

5 unchanged sentences

holders”) that are U.S.

Persons (as defined below) and to common shares and preferred shares

beneficially owned by such holder and held as capital assets.

Persons (as defined below) and to common shares and preferred shares beneficially owned by such holder and held as capital assets.

The following discussion is only a general summary of the U.S.

2 unchanged sentences

In addition, the following summary (except as to matters explicitly discussed therein) does not describe the U.S.

federal income tax consequences that may be relevant to certain types of shareholders, such as banks, insurance companies, and other financial institutions, regulated investment companies, real estate investment trusts, financial asset securitization investment trusts, brokers, dealers or traders in securities, entities or arrangements classified as partnerships or pass-through entities for U.S.

partnerships or pass-through entities for U.S.

federal income tax purposes or holders of equity interests therein, tax exempt entities, “individual retirement accounts” or “Roth IRAs”, expatriates and former citizens or long-term residents of the United States, persons whose functional currency for U.S.

11 unchanged sentences

federal tax laws to their particular situations as well as any tax consequences arising under the laws of any state, local or foreign taxing jurisdiction prior to making such investment.

ARCH CAPITAL 35

2023 FORM 10-K

If an entity that is treated as a partnership holds our common shares or preferred shares, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership.

If you are a partnership holding or considering an investment in our common shares or preferred shares or a partner therein, you should consult your tax advisor.

ARCH CAPITAL 38

2024 FORM 10-K

For purposes of this discussion, the term “U.S.

21 unchanged sentences

in the year in which the shareholder receives the dividend (which should be the case for shares that are listed on the Nasdaq Stock Market or the New York Stock Exchange) and Arch Capital is not considered to be a passive foreign investment company in either the year of the distribution or the preceding taxable year.

No assurance can be given that the preferred shares will be considered readily

tradable on an established securities market in the U.S.

No assurance can be given that the preferred shares will be considered readily tradable on an established securities market in the U.S.

See “—Taxation of Our U.S.

2 unchanged sentences

holder’s “net investment income” for the relevant taxable year and (2) the excess of the U.S.

holder’s modified adjusted gross income for the taxable year over a certain threshold (which in the case of individual will be between $125,000 and $250,000, depending on the individual’s circumstances).

holder’s modified adjusted

gross income for the taxable year over a certain threshold (which in the case of individual will be between $125,000 and $250,000, depending on the individual’s circumstances).

holder’s net investment income generally will include its dividend income and its net gains from the disposition of our common shares and preferred shares, unless such dividend income or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities).

13 unchanged sentences

A redemption of the preferred shares will be treated under Section 302 of the Code as a dividend to the extent we have earnings and profits allocable to such shares, unless the redemption satisfies one of the tests set forth in Section 302(b) of the Code enabling the redemption to be treated as a sale or exchange, subject to the discussion herein relating to the potential application of the CFC, RPII and PFIC rules.

Under the relevant Code Section 302(b) tests, the redemption should be treated as a sale or exchange only if it (1) is substantially disproportionate, (2) constitutes a complete

Under the relevant Code Section 302(b) tests, the redemption should be treated as a sale or exchange only if it (1) is substantially disproportionate, (2) constitutes a complete termination of the holder's stock interest in us or (3) is “not essentially equivalent to a dividend.” In determining whether any of these tests are met, shares considered to be owned by the holder by reason of certain constructive ownership rules set forth in the Code, as well as shares actually owned, must generally be taken into account.

It may be more difficult for a U.S.

holder who owns, actually or constructively by

ARCH CAPITAL 39

2024 FORM 10-K

termination of the holder's stock interest in us or (3) is “not essentially equivalent to a dividend.” In determining whether any of these tests are met, shares considered to be owned by the holder by reason of certain constructive ownership rules set forth in the Code, as well as shares actually owned, must generally be taken into account.

It may be more difficult for a U.S.

holder who owns, actually or constructively by operation of the attribution rules, any of our other shares to satisfy any of the above requirements.

operation of the attribution rules, any of our other shares to satisfy any of the above requirements.

In order to meet the substantially disproportionate test, the percentage of our issued and outstanding voting shares actually and constructively owned by the U.S.

17 unchanged sentences

holder should consult with its own tax advisors as to the tax consequences of a redemption of ours shares.

holders who actually or constructively own five percent or more of our shares (by vote or value) may be subject to special reporting requirements with respect to a redemption

of our shares, and such holders are urged to consult with their own tax advisors with respect to their reporting requirements.

holders who actually or constructively own five percent or more of our shares (by vote or value) may be subject to special reporting requirements with respect to a redemption of our shares, and such holders are urged to consult with their own tax advisors with respect to their reporting requirements.

Taxation of Our U.S.

29 unchanged sentences

federal income taxation (at ordinary income tax rates) to the extent of all or a portion of the undistributed earnings and profits of Arch Capital and our subsidiaries attributable to “subpart F income” (including certain insurance premium income and investment income) or global intangible low-taxed income and may be taxable at ordinary income tax rates on any gain recognized on a sale or other disposition (including by way of repurchase or liquidation) of our common shares or preferred shares to the extent of the current and accumulated earnings and profits attributable to such common shares or preferred shares.

Related Person Insurance Income Rules .

In general, with respect to RPII (a limited category of insurance income, as defined below), the CFC rules are expanded in two

ARCH CAPITAL 40

2024 FORM 10-K

significant respects.

Related Person Insurance Income Rules .

In general, with respect to RPII (a limited category of insurance income, as defined below), the CFC rules are expanded in two significant respects.

First, in determining CFC status, as well as determining which U.S.

23 unchanged sentences

Shareholder or whether the corporation qualifies for the RPII 20% gross income exception.

Although existing Treasury Regulations do not

address the question, proposed Treasury Regulations issued in April 1991 create some ambiguity as to whether Section 1248 and the requirement to file Form 5471 would apply when the non-U.S.

Although existing Treasury Regulations do not address the question, proposed Treasury Regulations issued in April 1991 create some ambiguity as to whether Section 1248 and the requirement to file Form 5471 would apply when the non-U.S.

corporation has a foreign insurance subsidiary that is a CFC for RPII purposes and that would be taxed as an insurance company if it were a domestic corporation.

16 unchanged sentences

In general, a shareholder receives an “excess distribution” if the amount of the distribution is more than 125% of the average distribution with respect to the shares during the three preceding taxable years (or shorter period during which the taxpayer held the stock).

In general, the penalty tax is equivalent to an interest charge on taxes that are deemed due during the period the shareholder owned the shares, computed by assuming that the excess distribution or gain (in the case of a sale) with respect

In general, the penalty tax is equivalent to an interest

ARCH CAPITAL 41

2024 FORM 10-K

to the shares was taxable in equal portions throughout the holder’s period of ownership.

charge on taxes that are deemed due during the period the shareholder owned the shares, computed by assuming that the excess distribution or gain (in the case of a sale) with respect to the shares was taxable in equal portions throughout the holder’s period of ownership.

The interest charge is equal to the applicable rate imposed on underpayments of U.S.

13 unchanged sentences

counsel expresses no opinion with respect to our PFIC status for our current or future taxable years.

On December 4, 2020, the IRS issued certain final Treasury Regulations (the “2020 final PFIC insurance regulations”)

and revised proposed Treasury Regulations (the “2020 proposed PFIC insurance regulations”) regarding the application of the insurance company exception.

On December 4, 2020, the IRS issued certain final Treasury Regulations (the “2020 final PFIC insurance regulations”) and revised proposed Treasury Regulations (the “2020 proposed PFIC insurance regulations”) regarding the application of the insurance company exception.

While we believe that the 2020 final PFIC insurance regulations and the 2020 proposed PFIC insurance regulations should not adversely impact our ability to satisfy the insurance company exception and avoid being treated as a PFIC, there can be no assurance that such exception will in fact apply and/or will continue to apply at all times in the future.

20 unchanged sentences

holders are urged to consult their tax advisers regarding the effect, if any, of these additional reporting requirements on their ownership and disposition of our common shares or preferred shares.

ARCH CAPITAL 42

2024 FORM 10-K

United States Taxation of Non-U.S.

4 unchanged sentences

holder”) generally will not be subject to U.S.

withholding tax (subject to certain exceptions that may apply if we were determined to be engaged in a trade or business in the United States and 25% or more of our gross

ARCH CAPITAL 39

2023 FORM 10-K

income were to be effectively connected to such U.S.

withholding tax (subject to certain exceptions that may apply if we were determined to be engaged in a trade or business in the United States and 25% or more of our gross income were to be effectively connected to such U.S.

trade or business).

26 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business