What changed in this filing

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Item 1. Business

2026-02-26 compared with 2025-02-27 · 447 added, 408 removed, 1282 unchanged (40% of the section changed)

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The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC (such as Arch Capital) and the address of that site is www.sec.gov .

Arch Capital may use its website as a distribution channel of material information.

Financial and other important information regarding Arch Capital is routinely posted on and accessible through its website.

Accordingly, investors should monitor this channel, in addition to following Arch

Capital’s press releases, SEC filings and public conference calls and webcasts.

Arch Capital was formed in September 2000 and became the sole shareholder of Arch Capital Group (U.S.) Inc.

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

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.

Our Ireland-based carrier, Arch Insurance (EU) Designated Activity Company (“Arch Insurance (EU)”) writes primarily European Union (“EU”) business with branches in Italy, Spain, France, the Netherlands and the U.K.

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

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

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.

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

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

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

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

In 2008, we commenced our European reinsurance operations with Arch Reinsurance Europe Underwriting Designated Activity Company (“Arch Re Europe”), our Ireland-headquartered reinsurance company with branches in Switzerland, the U.K.

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

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

The acquisition of 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.

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(“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.

We expanded our presence in Australia in 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.

(“Arch Indemnity”).

In December 2022, we converted Arch LMI into a services company for our Australian LMI operations and the company relinquished its APRA authorization.

In 2022, we converted Arch LMI into a services company for our Australian LMI operations and the company relinquished its APRA authorization.

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

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(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”).

Arch Capital assigned its rights under the Merger Agreement to Greysbridge Holdings Ltd.

In 2021, Somers became a wholly owned subsidiary of Greysbridge Holdings Ltd.

(“Greysbridge”).

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, 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.

Arch Capital currently owns 30% of Greysbridge, with the remaining common shares held by a number of third party investors.

Pursuant to the terms of the Greysbridge shareholder agreement, as amended, following the expiration of a specified period, Arch Capital has a call right (but not the obligation) and certain third party investors have put rights (but not the obligation) to purchase or sell, as applicable, a specified amount of each such investor’s initial common shares on an annual basis at Greysbridge’s year-end book value per share.

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

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

Since the inception of the share repurchase program in 2007 through December 31, 2025, Arch Capital has repurchased 455 million common shares for an aggregate purchase price of $7.8 billion.

At December 31, 2025, the total remaining authorization under the share repurchase program was $1.1 billion.

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

In 2025, we repurchased approximately $1.9 billion worth of ACGL common shares.

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

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.”

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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”).

Our insurance group’s insurance subsidiaries are Arch Insurance Company (“Arch Insurance”), Arch Specialty Insurance Company (“Arch Specialty”), Arch Indemnity Insurance Company (“Arch Indemnity Insurance”), Arch Property Casualty Insurance Company (“Arch PC”) and Arch Wilsure Insurance Company (“Arch Wilsure”).

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

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Arch Indemnity Insurance is an admitted insurer in 50 states and the District of Columbia.

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.

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

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

Arch PC, which is not currently writing business, is an admitted insurer in 46 states and the District of Columbia and is filing applications for admission in all remaining states where it is not yet admitted.

Arch Wilsure 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.

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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.

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.

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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.

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

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

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Arch Insurance Canada is headquartered in Toronto, Ontario.

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”).

Arch Insurance (EU), headquartered 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.

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Financial Services and Markets Act 2000.

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.

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

We conduct insurance operations on several platforms in the U.K., including Arch Insurance (U.K.) and our Lloyd’s syndicates:

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conducts its operations from London and other locations 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.

In May 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.

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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

We believe our ability to handle

claims expeditiously and satisfactorily is a key to our success.

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

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

• Artificial Intelligence.

We employ artificial intelligence (“AI”) technology and analytics to drive data-driven decisions, streamline processes or help serve our customers and partners.

The use of AI technology is vetted through our AI governance framework.

Underwriting Philosophy.

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• due diligence, including financial condition, claims history, management, and product, class and territorial exposure;

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• underwriting authority and appropriate approvals;

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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,

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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, 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.

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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.

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.

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

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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.

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Reinsurance Operations

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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.

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

offices in Morristown, New Jersey.

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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

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

Arch Re Europe, licensed and authorized as a non-life reinsurer and a life reinsurer, is headquartered in Dublin, Ireland.

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

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Our reinsurance group believes that maintaining tight control over its staffing level and operating primarily as a broker market reinsurer permits it to maintain low operating costs relative to its capital and premiums.

• Artificial Intelligence.

We employ AI technology and analytics to drive data-driven decisions, streamline processes or help serve our customers and partners.

The use of AI technology is vetted through our AI governance framework.

Our reinsurance group writes business on both a proportional and non-proportional basis and writes both treaty and facultative business.

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 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.

The total coverage purchased by the cedent is referred to as a “program.” Any liability exceeding the upper limit of the program reverts to the cedent.

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The reinsurance group’s treaty operations generally seek to write significant lines on less commoditized classes of coverage, such as specialty, property and casualty reinsurance treaties.

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• 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

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

• projections of future loss frequency and severity;

• the perceived financial strength of the cedent.

Our reinsurance group generally markets its reinsurance products through brokers, except our property facultative reinsurance group, which generally deals directly with the ceding companies.

Our reinsurance group generally markets its reinsurance products through brokers, except our property and casualty facultative reinsurance groups, which deal directly with ceding companies along with brokers.

Brokers do not have the authority to bind our reinsurance group with respect to reinsurance agreements, nor does our reinsurance group commit in advance to accept any portion of the business that brokers submit to them.

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

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Mortgage Operations

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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 2011, Arch Insurance (EU) was authorized by the CBI to provide mortgage insurance products and services to the European and U.K.

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

In August 2021, we acquired Arch Indemnity, which is also authorized by APRA to write lenders’ mortgage insurance.

In December 2022, we converted Arch LMI to a services company for our Australian lenders mortgage insurance operations and the company relinquished its APRA authorization.

In 2022, we converted Arch LMI to a services company for our Australian lenders mortgage insurance operations and the company relinquished its APRA authorization.

Arch LMI and Arch Indemnity are headquartered in Sydney, Australia.

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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

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

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., Europe, the U.K.

and Australia.

We employ AI technology and analytics to drive data-driven decisions, streamline processes or help serve our customers and partners.

The use of AI technology is vetted through our AI governance framework.

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

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With the acquisition of Arch Indemnity in Australia in 2021, and continued growth insuring and reinsuring European banks, we believe diversifying revenues on a global basis is a key operating principle.

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Our mortgage group focuses on the following areas:

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

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

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Arch Insurance (EU) offers mortgage insurance on both a “flow” basis to cover new originations and through structured transactions to cover one or more portfolios of previously originated residential loans.

Increasingly, Arch Insurance (EU) and Arch Re Bermuda are providing protection to European banks on structured capital relief transactions.

Increasingly, Arch Insurance (EU) and Arch Re Bermuda are providing protection to European banks on significant risk transfer (“SRT”) transactions.

In Australia, Arch Indemnity provides lenders’ mortgage insurance on a flow basis to cover new originations and offers coverage through structured transactions to cover one or more portfolios of previously originated residential loans.

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and international mortgages.

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• Other credit risk-sharing products .

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Arch CRS offers mortgage credit assessment and underwriting advisory services with respect to participation in GSE credit risk transfer transactions.

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Underwriting Philosophy .

Our mortgage group believes in a disciplined, analytical approach to underwriting mortgage risks by utilizing proprietary and third-party models, including forecasting delinquency and future home price movements with the goal of ensuring that premiums are adequate for the risk being insured.

Our mortgage group believes in a disciplined, analytical approach to underwriting mortgage risks, including forecasting delinquency and future home price movements with the goal of ensuring that premiums are adequate for the risk being insured.

Experienced actuaries and statistical modelers are engaged in analytics to inform the underwriting process.

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Exposure to climate risk has also been incorporated into the risk management framework of our mortgage group to monitor and manage our exposure to potential (i) losses related to the direct physical impact of extreme weather conditions or events in certain transactions;

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 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.

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.

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.”

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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.

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If the reinsurers are unable to satisfy their obligations under the agreements, our mortgage subsidiaries would be liable for such defaulted amounts.

mortgage insurance business, in addition to utilizing reinsurance, we have developed a proprietary risk model that simulates the maximum loss resulting from severe economic events impacting the housing market.

and Australian mortgage insurance businesses, in addition to utilizing reinsurance, we have developed proprietary risk models that simulate the maximum loss resulting from severe economic events impacting the housing market.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Catastrophic Events and Severe Economic Events.”

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Upon notice of a default, in certain cases we may coordinate with loan servicers to facilitate and enhance retention workouts on insured loans.

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Retention workouts include payment deferral or forbearance, loan modifications and other loan repayment options, which may enable borrowers to cure mortgage defaults and retain ownership of their homes.

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Other Operations

In 2014, we and HPS Investment Partners, LLC (formerly Highbridge Principal Strategies, LLC) (“HPS”) sponsored the formation of Somers.

Arch Re Bermuda invested $100.0 million in Somers common equity.

In 2014, we and third party investors sponsored the formation of Somers.

Somers is wholly owned by Greysbridge, which is currently 30% owned by Arch Capital, with the remaining balance of Greysbridge common shares held by third party investors.

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

Somers’ strategy is to combine a diversified reinsurance and insurance business with a disciplined investment strategy.

Somers’ own management and board of directors are responsible for its results and profitability.

Arch Re Bermuda has appointed three directors to serve on the seven person board of directors of Somers.

In the 2020 fourth quarter, Arch Capital, Somers and Greysbridge, a wholly-owned subsidiary of Arch Capital, entered into a Merger Agreement pursuant to which, among other things, Arch Capital agreed to acquire all of the common shares of Somers not owned by Arch for a cash purchase price of $35.00 per common share.

Arch Capital has assigned its rights under the Merger Agreement to Greysbridge.

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

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

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

Arch Re Bermuda has appointed three directors to serve on the ten person board of directors of Somers.

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

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

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

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

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.

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HUMAN CAPITAL

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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 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.

As of February 19, 2026, we had approximately 8,000 employees globally, compared to around 7,200 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 4,300 employees in North America (U.S., Canada and Bermuda), 1,700 employees in Europe and the U.K.

and 2,000 employees in the Philippines, India, Australia and the rest of the world.

Our People and Culture .

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

An important aspect of our culture is sustaining a highly 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.

In 2025, our multiple employee networks provided a forum for over 1,500 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.

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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.

Our talent acquisition approach 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, provide feedback 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.

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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

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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.

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.

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.

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Loss Reserves are inherently subject to uncertainty.

For detail on our Loss Reserves by segment and potential variability in the reserving process, see the Loss Reserves section of “Summary of Critical Accounting Estimates” in Item 7.

For an analysis of losses and loss adjustment expenses and a reconciliation of the beginning and ending Loss Reserves and information about prior year reserve development, see note 5, “Reserve for Losses and Loss Adjustment Expenses,” to our consolidated financial statements in Item 8.

For information on our reserving process, see note 6, “Short Duration Contracts,” to our consolidated financial statements in Item 8.

For more detail on our loss reserving process, please refer to the Loss Reserves section of “Summary of Critical Accounting Estimates” in Item 7, and the “Reserve for Losses and Loss Adjustment Expenses“ and “Short Duration Contracts“ sections in Item 8.

Unpaid and paid losses and loss adjustment expenses recoverable were approximately $9.5 billion at December 31, 2025.

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.

For more detail, refer to “Financial Condition, Reinsurance Recoverables” section in Item 7.

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At December 31, 2025, total investable assets held by Arch were $47.4 billion.

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Our investments are subject to market-wide risks and fluctuations, as well as to risks inherent in particular securities.

While maintaining our emphasis on preservation of capital and liquidity, we expect our portfolio to grow and, in the future, may expand into areas that are not part of our current investment strategy.

While maintaining our emphasis on preservation of capital and liquidity, some investments are not readily tradable.

We expect our portfolio to grow and, in the future, may expand into areas that are not part of our current investment strategy.

For detail on our investments, see the Investable Assets Held by Arch section of “Financial Condition” in Item 7 and note 9, “Investment Information,” to our consolidated financial statements in Item 8.

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Such ratings from third party internationally recognized statistical rating organizations or agencies are instrumental in establishing the financial security of companies in our industry.

We believe that the primary users of such ratings include commercial and investment banks, policyholders, brokers, ceding companies and investors.

Insurance ratings are also used by insurance and reinsurance intermediaries as an important means of assessing the financial strength and quality of insurers and reinsurers, and are often an important factor in the decision by an insured or intermediary of whether to place business with a particular insurance or reinsurance provider.

The primary users of such ratings include commercial and investment banks, policyholders, brokers, ceding companies and investors.

Insurance ratings are also used by insurance and reinsurance intermediaries as important means of assessing the financial strength and quality of insurers and reinsurers, and are often an important factor in the decision by an insured or intermediary of whether to place business with a particular insurance or reinsurance provider.

The financial strength ratings of our operating insurance and reinsurance subsidiaries are subject to periodic review as rating agencies evaluate us to confirm that we continue to meet their criteria for ratings they have assigned to us.

Such ratings may be revised or revoked at the discretion of such ratings agencies in response to a variety of factors, including capital adequacy, management, earnings, forms of capitalization and risk profile.

Such ratings may be revised or revoked at the discretion of such agencies in response to a variety of factors, including capital adequacy, management, earnings, forms of capitalization and risk profile.

Best Company (“A.M.

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.

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

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

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See “Risk Factors—Risks Relating to Our Industry, Business and Operations—“We operate in a highly competitive environment, and we may not be able to compete successfully in our industry.”

In our property casualty insurance and reinsurance businesses, we compete with insurers and reinsurers that provide specialty, property, and casualty lines of insurance, including, but not limited to Allianz, American Financial Group, Inc., American International Group, Inc., Aviva, AXA XL, AXIS Capital Holdings Limited, Berkshire Hathaway, Inc., Chubb Limited, CNA Financial Corp., Convex Group Limited, Everest Group Ltd., Fairfax Financial Holdings Limited, Hannover Rück SE, The Hartford Financial Services Group, Inc., Liberty Mutual Group, Lloyd’s, Markel Corporation, Munich Re Group, PartnerRe Ltd., RenaissanceRe Holdings Ltd., RLI Corp., SCOR, Sompo International, Swiss Reinsurance Company, Tokio Marine, The Travelers Companies, Inc., W.R.

In our property casualty insurance and reinsurance businesses, we compete with insurers and reinsurers that provide specialty, property, and casualty lines of insurance, including, but not limited to Allianz, American Financial Group, Inc., American International Group, Inc., Aviva plc, AXA XL, AXIS Capital Holdings Limited, Berkshire Hathaway, Inc., Chubb Limited, CNA Financial Corp., Convex Group Limited, Everest Group Ltd., Fairfax Financial Holdings Limited, Hannover Rück SE, The Hartford Financial Services Group, Inc., Liberty Mutual Group, Lloyd’s, Markel Group Inc., Munich Re Group, PartnerRe Ltd., RenaissanceRe Holdings Ltd., RLI Corp., SCOR SE, Sompo International, Swiss Reinsurance Company Ltd., Tokio Marine Holdings Inc., The Travelers Companies, Inc., W.R.

Berkley Corp.

and Zurich Insurance Group.

In our mortgage business, we compete with insurers and reinsurers that provide mortgage insurance, including the U.S mortgage insurance subsidiaries of Essent Group Ltd., Enact Holdings Inc., MGIC Investment Corporation, NMI Holdings Inc.

and Radian Group Inc.

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Private mortgage insurers generally compete on the basis of underwriting guidelines, pricing, terms and conditions, financial strength, product and service offerings, customer relationships, reputation, the strength of management, technology, and innovation in the delivery and servicing of insurance products.

Competition in this sector may increase if additional mortgage insurance providers enter the market or existing providers expand their offerings.

and other private mortgage insurers compete with federal and state government agencies that sponsor their own mortgage insurance programs.

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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.

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

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In addition, Arch MI U.S.

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In our non-U.S.

mortgage insurance businesses, we compete with insurance subsidiaries of Helia Group Ltd.

and QBE Insurance Group, Ltd.

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.

mortgage insurance businesses, we compete with insurance subsidiaries of Helia Group Limited and QBE Insurance Group Limited 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 SRT transactions include approximately 10-15 highly rated multi-line (re)insurers in addition to over 30 funded credit investors.

ENTERPRISE RISK MANAGEMENT

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

and operational risk including

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

and operational risk including 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.

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A key element of these monitoring activities is the periodic evaluation of our position relative to risk tolerances and limits approved by the Board.

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Risk Reporting.

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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.

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This oversight includes regular reviews of the ORSA process and output.

An ORSA report is produced at least annually, and the results of each assessment are reported to the Board.

An ORSA report and associated recovery plan are produced at least annually, and the results of each assessment are reported to the Board.

The Board actively participates in the ORSA process by steering how the assessment is performed and challenging its results.

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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.

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

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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.

AGRL, a Class 3A general business 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.

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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).

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

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

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

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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.

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 and AGRL may each

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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.

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

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

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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.

On January 7, 2026, the Insurance Amendment (No.

2) Act 2025 (“IAA”) came into effect and made certain amendments to the Insurance Act designed to enhance the oversight and regulation by the BMA of insurance groups by expanding the criteria for group supervision.

The amendments are designed to (i) ensure that insurance group supervision is mandatorily triggered in certain circumstances and (ii) apply a direct approach to the supervision of insurance groups by introducing provisions to allow for the designation and registration of a designated “insurance holding company” (being an entity that is a body corporate incorporated or formed (including by way of continuation) in Bermuda that holds participations in one or more companies where at least one of the companies is an insurer) through which supervision would be exercised.

Of note, the IAA provides that shareholder controller changes and certain material change provisions of the Insurance Act affecting a designated insurance holding company will be subject to the supervisory processes that currently apply to the Designated Insurer.

International Association of Insurance Supervisors (“IAIS”).

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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 BMA embedded the ComFrame and the Holistic Framework standards, including the ICS, into the Bermuda commercial regulatory regime (particularly for IAIGs).

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.

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Additional guidance from the BMA in relation to recovery planning is expected to be consulted and published in 2026.

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

In 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

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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.

Consultation remains ongoing between Arch Re Bermuda 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.

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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.

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Economic Substance Act.

In December 2018, Bermuda enacted the Economic Substance Act 2018 (as amended) of Bermuda and its related regulations (together, the “ES Act”).

The ES Act came into force on January 1, 2019, and provides that a registered entity other than an entity which is resident for tax purposes in certain jurisdictions outside Bermuda (“non-resident entity”) that carries on as a business any one or more of the “relevant activities” referred to in the ES Act must comply with economic substance requirements.

In 2018, Bermuda enacted the Economic Substance Act 2018 (as amended) of Bermuda and its related regulations (together, the “ES Act”).

The ES Act came into force in 2019, and provides that a registered entity other than an entity which is resident for tax purposes in certain jurisdictions outside Bermuda (“non-resident entity”) that carries on as a business any one or more of the “relevant activities” referred to in the ES Act must comply with economic substance requirements.

The list of “relevant activities” includes carrying on any one or more of the following activities:

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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.

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.

The role of the Chief Information Security Officer is to deliver the operational cyber risk management program.

It is expected that the cyber risk policy will be approved by the Arch Re Bermuda board of directors at least annually.

The BMA implemented the Cyber Risk Management Code of Conduct in 2020 which requires all Bermuda insurers, insurance managers and intermediaries registered under the Insurance Act to comply with duties, requirements and standards established by the BMA in relation to operational cyber risk management.

This requires Arch Re Bermuda to develop a cyber risk policy as part of an operational cyber risk management program and also requires the appointment of an appropriately qualified member of staff or outsourced resource to the role of Chief Information Security Officer.

The cyber risk policy is to be approved by the Arch Re Bermuda board of directors at least annually.

The BMA will assess Arch Re Bermuda’s compliance with the Cyber Risk Management Code of Conduct in a proportionate manner relative to the nature, scale and complexity of its business.

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Notification of Cyber Reporting Events.

Every Bermuda insurer is required to notify the BMA forthwith on it coming to the knowledge of the insurer, or where the insurer has reason to believe that a Cyber Reporting Event has occurred.

Every Bermuda insurer is required to notify the BMA forthwith if the insurer has knowledge, or where the insurer has reason to believe that, a Cyber Reporting Event has occurred.

Within fourteen (14) days of such notification, the insurer must also furnish the BMA with a written report setting out all of the particulars of the Cyber Reporting Event that are available to it.

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.

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Personal Information Protection Act 2016.

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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.

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

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If Bermuda constituent entities of a multi-national group are subject to tax under the Bermuda CIT Act, such tax is charged at a rate of 15% of the net income of such constituent entities (as determined in accordance with the Bermuda CIT Act, including after adjusting for any relevant foreign tax credits applicable to the Bermuda constituent entities).

Although the commencement date of the Bermuda CIT Act is January 1, 2024, no tax is chargeable under the Bermuda CIT Act until tax years starting on or after January 1, 2025.

All Arch Bermuda operations are subject to the requirements of the Bermuda CIT Act.

Starting on January 1, 2025, all Arch Bermuda operations are subject to the requirements of the Bermuda CIT Act.

Beneficial Ownership Act 2025 (the “BO Act”).

Bermuda’s new beneficial ownership framework is comprised of the BO Act, the Beneficial Ownership Regulations 2025 and related guidance notes.

The BO Act received Royal Assent and subsequently came into force on November 3, 2025.

The BO Act includes provisions to (a) enhance Bermuda’s current beneficial ownership regime in accordance with the revised Financial Action Task Force international standards, (b) transfer the central register of beneficial ownership information (“BOI”) from the BMA to the Registrar of Companies (“RoC”), and (c) extend access to the central register to certain competent authorities and “obliged entities”.

The BO Act applies to all legal persons (sometimes referred to herein as “in scope entities”), subject to limited exceptions.

Entities already in scope under the previous beneficial ownership regime are required to ensure that their beneficial ownership register is updated as necessary.

Newly-in-scope entities must establish and maintain a beneficial ownership register which meets the requirements of the new regime.

The only exception is for publicly listed entities on the Bermuda Stock Exchange or on an appointed stock exchange, and any subsidiary of such legal persons.

All other entities which were previously exempt and not required to comply with the beneficial ownership requirements under the prior legislative framework, for example, financial institutions like (re)insurance companies, are no longer subject to an exemption and will now be in scope.

As noted above, under the BO Act, Bermuda’s central register has been transferred from the BMA to the RoC.

As a result, for non-regulated entities, there will be no continuing touchpoints or interaction with the BMA.

The BMA will continue to regulate financial institutions such as AGRL and Arch Re Bermuda, under the same legislation as they do now, including retaining supervision over the controllers and shareholder controllers of regulated financial institutions.

United States

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The holding company acts also prohibit any person from directly or indirectly acquiring control of a U.S.

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

insurance or reinsurance company unless that person has filed an application with specified information with such company’s domiciliary commissioner

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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.

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 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.

The GCC provisions of 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.

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

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.

As of January 13, 2026, Arch Re Bermuda is approved as a “certified reinsurer” for the 2026 calendar year in 46 jurisdictions with applications pending in 7 additional jurisdictions.

In addition, as of January 13, 2026, AGRL is approved as a “certified reinsurer” in its lead state of Missouri and an additional four states for the 2026 calendar year.

The NAIC Model Law and Regulation also 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.

jurisdictions and other jurisdictions deemed “reciprocal jurisdictions” by the NAIC (although individual states may approve or reject the designation of such other jurisdictions as a “reciprocal jurisdiction”), and (2) have been approved as a “reciprocal jurisdiction reinsurer.” The NAIC list of approved reciprocal jurisdictions includes Bermuda, Japan and Switzerland.

states, the District of Columbia and Puerto Rico have adopted the 2019 amendments to the NAIC Model Law and Regulation.

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.

As of January 13, 2026, Arch Re Bermuda is approved as a “reciprocal jurisdiction reinsurer” for the 2026 calendar year in 45 jurisdictions with applications pending in 8 additional jurisdictions.

In addition, as of January 13, 2026, AGRL is approved as a “reciprocal jurisdiction reinsurer” in its lead state of Missouri and an additional four states for the 2026 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.

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In October 2024, the U.S.

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

Treasury rules (except on excess risks running to the U.S.).

Risk Management and ORSA .

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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.

The SEC Cybersecurity Rules became effective in 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.

Additional disclosure by registrants in the Form 10-K annual report should describe their processes for assessing, identifying and managing material risks from cybersecurity threats, the material impacts of cybersecurity threats and previous cybersecurity incidents.

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

In March 2022, the U.S.

In 2022, the U.S.

government passed the Cyber Incident Reporting for Critical Infrastructure Act of 2022, which will require companies deemed to be part of U.S.

critical infrastructure to report any substantial cybersecurity incidents or ransom payments to the federal government within 72 and 24 hours, respectively.

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

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.

This model law has been adopted in states in which our U.S.

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

CISA is expected to publish final implementing regulations in May 2026.

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.

A majority of states have adopted this model law, including states in which our U.S.

subsidiaries are licensed and operate.

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.

This includes amendments to NYDFS’s Cybersecurity Requirements for Financial Services Companies, which were finalized in 2024 and established several new requirements, including elevated requirements regarding the use of multi-factor authentication and board oversight of cybersecurity issues.

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.

The California Consumer Privacy Act of 2018 (“CCPA”), as amended by the California Privacy Rights Act (“CPRA”) that took effect in 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 CPRA created a new privacy-focused California regulatory agency with enforcement authority, the California Privacy Protection Agency (“CPPA”).

In September 2025, the CPPA finalized rules which impose requirements for annual cybersecurity audits and privacy risk assessments.

The amendments went into effect as of January 1, 2026, with various requirements under the amended regulations due to become effective in phases through 2028.

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.

Nineteen states have passed comprehensive state data privacy laws and numerous other states are actively considering bills.

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

Artificial Intelligence.

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

Such expectations include implementation of a written program for the responsible

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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 January 6, 2026, at least 24 states and Washington, D.C.

have adopted the bulletin.

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.

NYDFS expects insurers doing business in New York to observe and comply with its 2024 Insurance Circular Letter No.7 regarding the use of AI systems which adopts a risk-based approach to evaluating insurers’ use of AI systems and external consumer data and information sources 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.

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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.

California adopted regulations under the CCPA related to automated decision-making technologies (“ADMT”) on September 23, 2025.

These regulations impose new rules governing consumer notice, access, and opt-out rights with respect to ADMT and require different risk assessments and disclosures related to processing activities involving ADMT in various consumer contexts, including profiling.

At the federal level, in July 2025 the White House issued the AI Action Plan ordered by President Trump’s January 2025 executive order reorienting and reprioritizing the Administration’s policy approach to AI.

The AI Action Plan included a wide range of policy initiatives for accelerating AI innovation, building American AI infrastructure, and leading in international AI diplomacy and security.

On December 11, 2025, the White House issued an executive order entitled “ Ensuring a National Policy Framework for Artificial Intelligence ”, which clarifies federal AI policy and creates a framework for federal agencies to assess and challenge state laws that threaten to stymie innovation on the basis that they are preempted by federal regulation, impermissibly regulate interstate commerce, or are otherwise unconstitutional.

The extent to which the federal government intends to apply its AI policies to state insurance laws and the U.S.

insurance industry is not yet known and any such application could be challenged through judicial review.

At the state level, in 2025, several hundred bills related to AI were introduced across all 50 states in the U.S.

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

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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

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

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

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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.

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 non-renewals, and to impose “grace periods” on premium payments.

These restrictions and requirements are generally limited to the

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personal lines insurance markets, but may affect our business as well.

Climate Change and Financial Risks.

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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.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”) created the Federal Insurance Office (“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.

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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.

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.

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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.

This update became 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.

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Russian Sanctions.

first imposed sanctions on the Russian Federation following its annexation of Crimea in 2014.

Since February 2022, the U.S.

Since 2022, the U.S.

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.

Recent 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.

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

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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.

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under the Financial Services and Markets Act 2000 (the “FSMA”).

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.

In 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 our Lloyd’s Syndicates pursuant to its authorizations by the U.K.

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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.

withdrew from the EU with the terms of Brexit set forth in the Withdrawal Agreement agreed by the U.K.

Parliament and the EU Parliament.

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 EU (Withdrawal) Act 2018, as amended, has transposed all applicable direct EU legislation into domestic U.K.

Following the U.K.

withdrawal from the EU in 2020, the EU (Withdrawal) Act 2018, as amended, 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.

However, in 2022, HM Treasury set out the U.K.

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.

Significant changes introduced by these reforms included the reduction in risk margin by 30% for non-life insurers and the removal of branch capital 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).

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

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:

The other reforms forming part of what is 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.

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is granted Solvency II equivalence status by the EU in any of the three areas to which equivalence applies.

Beginning June 30, 2026, the PRA can request submission of a U.K.

insurer’s Solvent Exit Analysis (“SEA”).

insurers (other than those in passive run-off, third country branches and Lloyd’s managing agents) are expected to provide and maintain an SEA documenting preparations for an orderly solvent exit.

If a solvent exit becomes a reasonable prospect, the PRA expects firms to prepare a Solvent Exit Execution Plan and to manage and monitor the execution of the solvent exit in line with PRA expectations.

Financial Services Compensation Scheme.

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EU Considerations .

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

Under our Brexit plan, since January 2020 nearly all of the EEA insurance business of Arch Insurance (U.K.) has been conducted by Arch Insurance (EU).

As part of our Brexit planning, and in advance of the Transition Period expiring, a transfer of the EEA legacy business (excluding inwards reinsurance) from Arch Insurance (U.K.) to Arch Insurance (EU) was completed under Part VII of the U.K.

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

In anticipation of Brexit, since 2020 nearly all of the EEA insurance business of Arch Insurance (U.K.) has been conducted by Arch Insurance (EU).

A transfer of the EEA legacy business (excluding inwards reinsurance) from Arch Insurance (U.K.) to Arch Insurance (EU) was completed under Part VII of the U.K.

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

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.

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and the EU are now governed by a Trade and Cooperation Agreement (the “TCA”).

Following a report published by the European Affairs Committee in June 2022, which found that the TCA is limited in scope and silent as to EU equivalence in decisions over financial services, a Memorandum of Understanding (“MoU”) on regulatory cooperation between the U.K.

and the EU was signed in June 2023.

Following a report published by the European Affairs Committee in 2022, which found that the TCA is limited in scope and silent as to EU equivalence in decisions over financial services, a Memorandum of Understanding (“MoU”) on regulatory cooperation between the U.K.

and the EU was signed in 2023.

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

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

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

branches of EEA financial institutions are primarily driven by U.K.

law and regulation.

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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.

As part of those efforts, on January 17, 2022, the U.K.

As part of those efforts, in 2022, the U.K.

passed mandatory climate related financial disclosure requirements under the Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022.

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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.

The general ‘anti-greenwashing’ rule came into force in May 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.

The FCA has indicated that it continues to keep sustainability disclosure requirements under review and may propose further changes to the regime, which may also relate to the anti-greenwashing rule.

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.

government on the development of the U.K.

Green Taxonomy.

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

Green Taxonomy may look like and how it

Digital Markets, Competition and Consumers Act 2024 (“DMCC Act”) came into force on April 6, 2025, enabling 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.

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

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

Green Taxonomy and sets out various options for achieving this.

The recommended “least regrets” option involves the U.K.

government establishing an advisory body to facilitate implementation and development.

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.

On December 14, 2022, the U.K.

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

government on the development of the U.K.

Green Taxonomy including governance options (such as an advisory body to facilitate implementation and development).

In 2022, the U.K.

government said it would delay secondary legislation under the taxonomy regulations (originally anticipated by the end of 2022).

Instead, the U.K.

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

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.

Green Taxonomy would be complementary to existing policies;

the consultation period closed on February 4, 2025.

In July 2025, HM Treasury published its consultation response and concluded that a U.K.

Green Taxonomy would not be the most effective tool to deliver the green transition and decided not to proceed with this policy as part of the U.K.’s sustainable finance framework.

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 December 2025, the PRA published supervisory statement SS5/25 “Enhancing banks’ and insurers’ approaches to managing climate-related risks”, which builds on and updates the expectations in SS3/19.

SS5/25 took effect on December 3, 2025.

The PRA expects firms to complete an internal review of their current position against the updated expectations in order to identify any gaps and develop an appropriate plan to remedy such gaps within six months of commencement (i.e.

by June 3, 2026).

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

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

In December 2025, the FCA published PS25/23 “Tackling non-financial misconduct in financial services” finalizing FCA Handbook guidance on how non-financial misconduct (“NFM”) is assessed under the Code of Conduct (“COCON”) and the Fit and Proper test (“FIT”).

The FCA confirms that serious work-related misconduct (e.g.

bullying/harassment/violence) can give rise to conduct rule breaches, inform fitness and propriety decisions, and affect regulatory references.

The guidance will take effect on September 1, 2026, in line with the FCA’s new COCON rule extending the NFM framework across FSMA Part 4A-authorised firms and relevant staff.

Russian Sanctions .

Since the Russian invasion of Ukraine in February 2022, the U.K.

Since the Russian invasion of Ukraine in 2022, the U.K.

government has instituted a new sanctions regime targeting Russia.

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GDPR has direct effect where an entity is established in the U.K.

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

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 U.K.

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Processors are required to notify the controller without undue delay after becoming aware of a personal data breach.

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The Data (Use and Access) Act 2025 (“DUAA”) came into force on June 19, 2025 and amends certain U.K.

GDPR provisions, including but not limited to:

(i) introducing a list of “recognized legitimate interests”;

(ii) potentially streamlining responses to data subject access requests, by making clear that only “reasonable and proportionate” searches are required;

and (iii) relaxing rules around automated decision making, amongst other amendments.

GDPR also imposes similar international data transfer restrictions to the EU (see below) on transfers of personal data from the U.K.

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government has published its own form of the EU Standard Contractual Clauses (“SCCs”), known as the International Data Transfer Agreement and an International Data Transfer Addendum to the new EU SCCs.

Further, on September 21, 2023, the U.K.

Further, in 2023, the U.K.

Government established a U.K.-U.S.

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without using SCCs.

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

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an organization’s breach of the U.K.

Information Commissioner’s Office (“ICO”) has the power under the U.K.

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.

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

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Artificial Intelligence.

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.

In July 2024, the U.K.

government announced its intention to regulate the most powerful AI models, though nothing has been announced since that time.

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

Our three Irish operating subsidiaries are Arch Re Europe, Arch Insurance (EU) and Arch Underwriters Europe Limited (“Arch Underwriters Europe”).

Arch Re Europe was licensed and authorized by the CBI as a non-life reinsurer in October 2008 and as a life reinsurer in November 2009.

Arch Insurance (EU) was licensed and authorized by the CBI as a non-life insurer in December 2011.

As part of our Brexit plan, Arch Insurance (EU) received approval from the CBI to expand the nature of its business in 2019 and commenced writing expanded insurance lines in the EEA in 2020 with the Part VII Transfer completed at the end of December 2020.

Arch Underwriters Europe was registered by the CBI as an insurance and reinsurance intermediary in July 2014.

Arch Re Europe was licensed and authorized by the CBI as a non-life reinsurer in 2008 and as a life reinsurer in 2009.

Arch Insurance (EU) was licensed and authorized by the CBI as a non-life insurer in 2011.

Arch Underwriters Europe was registered by the CBI as an insurance and reinsurance intermediary in 2014.

Arch Re Europe, Arch Insurance (EU) and Arch Underwriters Europe are subject to the supervision of the CBI and must comply with Irish insurance acts and regulations as well as with directions and guidance issued by the CBI.

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Our Irish subsidiaries are also subject to the general body of Irish company laws and regulations including the provisions of the Companies Act 2014.

The CBI operates a risk-based supervision framework, entitled PRISM, in respect to its regulation of Irish regulated entities.

Under PRISM, the CBI applies an impact rating to each entity it regulates, ranging from Low to High, based on the nature, scale and complexity of its business.

The level of supervision applied by the CBI is commensurate with the impact rating applied under PRISM with higher rated entities subject to more focused supervision engagement from the CBI on a more frequent basis.

In February 2025, responding to rapid changes seen in the financial sector in recent years, the CBI published its plans to move away from the PRISM model of risk-based supervision in place since 2011 towards a new form of supervision that will be (i) outcome focused, (ii) risk-based, (iii) judgment led, (iv) forward looking and (v) focused on ensuring the resilience, adaptability and trustworthiness in the provision of financial services.

In December 2025, the CBI published a roadmap setting out its plans for delivering a more effective and efficient regulatory framework.

Included in the roadmap are proposals to carry out a compatibility review of Ireland’s insurance rulebook to eliminate duplication with Solvency II.

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Arch is monitoring developments as this progresses.

Financial Resources.

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

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EU Considerations .

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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, France, Spain and the U.K.

Arch Insurance (EU) has branches in Italy, France, Spain, the Netherlands 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., 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.

Since 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).

In 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:

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The CBI has indicated that its expectations will be applied in a proportionate manner.

In August 2022, the CBI published a Consultation Paper setting out its proposed guidance on climate change risk for the (re)insurance sector.

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.

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.

In 2022, the CBI published a Consultation Paper setting out its proposed guidance on climate change risk for the (re)insurance sector.

The finalized guidance was published by the CBI in 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.

In September 2024 and December 2025, the CBI published key findings from thematic reviews of (re)insurers’ climate change risk materiality assessments.

The CBI has 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.

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

The Central Bank (Individual Accountability Framework) Act 2023 (the “IAF Act”) was signed into law in March 2023 and took effect in full on 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 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.”

In November 2025, following a CBI review, further changes were made to the fitness and probity regime, including the introduction of revised Guidance on the Standards of Fitness and Probity.

Third Country Governance Arrangements.

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The CBI’s key expectations are that (i) third country branches should primarily serve the market in which they are established, with their sole objective to not simply support an Irish based (re)insurer and (ii) third country governance arrangements should not undermine the substance of Irish based (re)insurers.

The CBI instructed Irish (re)insurers to review their current business models in light of EIOPA’s supervisory statement and the CBI’s own expectations.

The CBI instructed Irish (re)insurers to

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review their current business models in light of EIOPA’s supervisory statement and the CBI’s own expectations.

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

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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

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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 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.

In December 2020, EIOPA provided an opinion to the European Commission in relation to the review of the Solvency II regime.

In 2020, EIOPA provided an opinion to the European Commission in relation to the review of the Solvency II regime.

This review was initiated by the European Commission to determine whether the Solvency II regime remains fit for purpose.

In its opinion, EIOPA confirms that the overall Solvency II framework is working well from a prudential perspective, suggesting that there are no fundamental changes needed but that a number of amendments are required to ensure the regime continues as a well-functioning risk-based regime.

In September 2021, the European Commission published legislative proposals for amendments to the Solvency II Directive arising out of EIOPA's review of the Solvency II regime.

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

In its opinion, EIOPA confirmed that the overall Solvency II framework is working well from a prudential perspective, suggesting that there are no fundamental changes needed but that a number of amendments are required to ensure the regime continues as a well-functioning risk-based regime.

In 2021, the European Commission published legislative proposals for amendments to the Solvency II Directive arising out of EIOPA's review of the Solvency II regime.

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

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 tandem with the Solvency II reforms, EIOPA has been engaging with stakeholders in the (re)insurance sector and publishing detailed guidelines, recommendations and expectations relating to the revised Solvency II framework.

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”).

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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.

While 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) in December 2025 it indicated that it intended to review these requirements to ensure no unnecessary duplication with between the Irish and IRRD regimes.

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

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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.

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

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 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 has considered the impact of the supervisory statement on its Irish and European operations and will continue to monitor developments.

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.

This is subject to certain regulatory notifications and there being no objection from the CBI and the Member States concerned.

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Solvency II does not prohibit EEA insurers from obtaining reinsurance from reinsurers licensed outside the EEA, such as Arch Re Bermuda.

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Article 172 of Solvency II provides that reinsurance contracts concluded by insurance undertakings in the EEA with reinsurers having their head office in a country whose solvency regime has been determined to be equivalent to Solvency II shall be treated in the same manner as reinsurance contracts with undertakings in the EEA authorized under Solvency II.

From January 1, 2016, Bermuda was deemed by the European Commission to be equivalent for Solvency II purposes.

Beginning in 2016, Bermuda was deemed by the European Commission to be equivalent for Solvency II purposes.

Solvency II also includes specific measures providing for the supervision of insurance and reinsurance groups.

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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.

EEA Member States were required to transpose the IDD by October 1, 2018.

The IDD replaces the existing Insurance Mediation Directive.

The IDD was published in 2016.

EEA Member States were required to transpose the IDD by 2018.

The IDD replaced the Insurance Mediation Directive.

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

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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 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.

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In addition, the EU GDPR increases scrutiny of transfers of personal data to jurisdictions which the European Commission does not recognize as having “adequate” data protection laws.

In particular, on July 16, 2020, the Court of Justice of the EU (Court of Justice) in Schrems II invalidated the European Union-United States (EU-U.S.) Privacy Shield on the grounds that the EU-U.S.

In particular in 2020, the Court of Justice of the EU (Court of Justice) in Schrems II invalidated the European Union-United States (EU-U.S.) Privacy Shield on the grounds that the EU-U.S.

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

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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.

The European Commission published new versions of the EU SCCs in June 2021, which place onerous obligations on the parties.

On October 7, 2022, the U.S.

The European Commission published new versions of the EU SCCs in 2021, which place onerous obligations on the parties.

In 2022, the U.S.

President introduced an Executive Order to facilitate a new Trans-Atlantic Data Privacy Framework to act as a successor to the invalidated EU-U.S.

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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).

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

On December 19, 2025, the EU Commission renewed the 2021 adequacy decision which allows for the free flow of personal data between the EU Member States and the UK.

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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.

The GDPR Procedural Regulation (Regulation 2025/2518) was published on December 12, 2025 and will apply from April 2, 2027.

The Regulation provides additional procedural rules for enforcing the GDPR and its key aim is to improve the cooperation mechanisms amongst GDPR supervisory authorities.

In addition, the EU Data Act (“EUDA”) was published in the Official Journal of the EU in 2023, and is coming 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.

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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.

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

Certain of our in-scope Irish entities are required to comply with the obligations set out under DORA since 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.

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

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

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

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

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In August 2025, EIOPA issued an Opinion on Artificial Intelligence Governance and Risk management.

The opinion provides guidance on the interpretation of insurance-focused legislation in the context of AI systems which may not have existed when the legislation entered into force.

It sets out expectations, which are risk-based and proportionate in approach, relating to insurers’ governance and risk-management systems in the context of AI and seeks to ensure consistency among national supervisory authorities in their approach to supervision of AI.

EIOPA plans to develop a more detailed analysis of specific AI systems and emerging challenges and provide further guidance where appropriate.

Arch continues to monitor the impact of this development on its operations.

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.

In August 2021, two delegated regulations (the “EC Regulations”) amending sectoral legislation, including the Solvency II Directive and the IDD, were published.

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

In 2021, two delegated regulations (the “EC Regulations”) amending sectoral legislation, including the Solvency II Directive and the IDD, were published.

The EC Regulations focus on the integration of sustainability into key activities including product oversight and governance, risk management and suitability assessment procedures.

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 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.

The EC Regulations apply from 2022.

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

CSRD was transposed under Irish law pursuant to the EU (Corporate Sustainability Reporting) Regulations 2024, which came into effect in July 2024.

Amending legislation was published in October 2024 to clarify certain provisions in the 2024 Regulations.

In July 2025, further implementing legislation was introduced to transpose the “Stop-the-Clock” Directive and to further clarify certain provisions introduced by the 2024 Regulations.

The CSRD expands the scope of sustainability reporting obligations to any European listed company or any company (including (re)insurers) meeting certain criteria.

Companies which are already subject to NFRD must start reporting relevant information for financial years starting on or after January 1, 2024, beginning in 2025.

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 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.

See also, “ Simplification of EU sustainability framework ,” below.

An additional environmental sustainability framework, the EU Taxonomy, came into force in 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.

These six environmental objectives are:

(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.

(1) climate change mitigation, (2) climate change adaptation, (3) sustainable use and protection of

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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 CSRD.

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

See also, “ Simplification of EU sustainability framework ,” below.

In 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.

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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.

See also, “ Simplification of EU sustainability framework ,” below.

Simplification of EU sustainability framework.

In 2025, the European Commission proposed major changes to CSRD, CSDDD and the EU Taxonomy as part of its ‘Omnibus I’ simplification package.

These included simplification of the EU Taxonomy (with changes effective from January 1, 2026), CSRD and CSDDD.

Among other things, CSRD reporting was delayed by two years for certain in-scope entities and CSDDD reporting was delayed by one year via a ‘Stop the Clock’ directive (effective April 2025), which was transposed into Irish law in July 2025.

The EU institutions are at an advanced stage of agreeing substantive amendments to CSRD and CSDDD, which are expected to be formalized in early 2026.

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.

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Russian Sanctions.

Since February 2022, the EU has imposed significant sanctions on the Russian Federation in response to its invasion of Ukraine.

Since 2022, the EU has imposed significant sanctions on the Russian Federation in response to its invasion of Ukraine.

These sanctions are similar to those imposed by the U.K.

Given the evolving situation, we are closely monitoring developments and the sanctions imposed, to ensure our European entities remain in compliance with any sanctions measures imposed.

The EU has adopted a range of measures to combat unprecedented levels of inflation, with EIOPA issuing a supervisory statement outlining its expectations of (re)insurers on inflation-related issues in December 2022.

We are monitoring ongoing developments and considering the impact of EU and EIOPA guidance on inflation on its business.

Third Country Governance Arrangements.

In February 2023, EIOPA published a 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.

In 2023, EIOPA published a 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.

See also “Ireland – Third Country Governance Arrangements.”

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In December 2008, Arch Re Europe opened Arch Re Europe Swiss Branch as a branch office.

In 2008, Arch Re Europe opened Arch Re Europe Swiss Branch as a branch office.

As Arch Re Europe is domiciled outside of Switzerland and its activities are limited to reinsurance, the Arch Re Europe Swiss Branch in Switzerland is not required to be licensed by the Swiss insurance regulatory authorities.

In August 2014, Arch Underwriters Europe opened a branch office in Zurich (“Arch Underwriters Europe Swiss Branch”) to render reinsurance advisory services to certain group companies.

In 2014, Arch Underwriters Europe opened a branch office in Zurich (“Arch Underwriters Europe Swiss Branch”) to render reinsurance advisory services to certain group companies.

Arch Underwriters Europe Swiss Branch is registered with the commercial register of the Canton of Zurich.

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APRA is an independent statutory authority responsible for prudential supervision of institutions across banking, insurance and superannuation and promotes financial stability in Australia.

Arch Indemnity has been authorized to conduct monoline lenders’ mortgage insurance business in Australia since June 2002 and was acquired by Arch Capital on August 30, 2021.

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.

Arch LMI has been licensed by ASIC since October 2023 as a Financial Services Licensee in Australia.

Arch Indemnity has been authorized to conduct monoline lenders’ mortgage insurance business in Australia since 2002 and was acquired by Arch Capital in 2021.

Arch LMI, which was formerly authorized by APRA in 2019 to conduct monoline lenders’ mortgage insurance business in Australia, relinquished its APRA authorization in 2022 and has been converted to a services company for our Australian lenders mortgage insurance operations.

Major regulatory requirements that are applicable to Arch

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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 took effect on March 15, 2025 for general insurers and additional operational risk management requirements on and from July 1, 2025 under APRA Prudential Standard CPS 230 Operational Risk Management .

In addition to its APRA authorization, Arch Indemnity has been licensed by the Australian Securities and Investments Commission (“ASIC”) since 2011 to engage in credit activities in Australia.

Arch LMI has been licensed by ASIC since 2023 as a Financial Services Licensee in Australia.

Our group also conducts property and casualty insurance business in Australia through Lloyd’s.

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, 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:

• 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).

• 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 under the Privacy Act 1988 (Cth) (with a new statutory cause of action for serious invasions of privacy effective as of June 10, 2025, and new obligations related to automated decision making to come into effect on December 10, 2026);

• cyber security obligations imposed by APRA and ASIC as part of their respective licensing regimes for insurers (such as APRA Prudential Standard CPS 234 Information Security ), and also on larger insurers in Australia under Australian security of critical infrastructure legislation;

• additional obligations under cyber security legislation passed in 2024, which came into force in part at the end of May 2025.

These obligations apply to various entities operating in Australia (subject to specific eligibility thresholds to be confirmed) and will be implemented in two stages, with the second phase commencing on January 1, 2026.

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.

• modern slavery legislation which imposes a statutory reporting regime for larger companies operating in Australia (which is subject to an ongoing public consultation process on options to strengthen the Modern Slavery Act 2018 (Cth));

• anti-money laundering and counter-terrorism financing (“AML/CTF”) legislation, which is administered by the Australian Transaction Reports and Analysis Centre.

Artificial Intelligence.

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There are also financial services sector specific laws in Australia administered by APRA and ASIC which impact the development and deployment of AI in the sector in which our group operates, although such existing laws are technology-neutral.

The Australian Government has been undertaking consultation on “Safe and Responsible AI” regulation in Australia since June 2023.

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.

The Australian Government has been undertaking consultation on “Safe and Responsible AI” regulation in Australia since 2023.

At the time of the consultation, the proposed mandatory AI guardrails for high-risk applications were expected to replicate the 10 voluntary guardrails in the Voluntary AI Safety Standard, with the exception of the 10th voluntary guardrail which proposed to focus on conformity standards under the mandatory guardrails rather than stakeholder engagement as set out under the voluntary guardrails.

In December 2025, the Australian Government released the National AI Plan signaling a shift away from the proposed mandatory AI guardrails for high-risk applications which was subject to consultation in September 2024.

Instead, the Australian Government’s National AI Plan seeks to use the existing, largely technology-neutral legal frameworks and regulators’ existing expertise rather than implementation of any standalone AI act.

The Australian Government is also establishing an AI Safety Institute (“AISI”) to monitor, test and share information on emerging AI capabilities, risks and harms.

Its operations will commence in early 2026 and will include supporting existing regulators with independent advice to ensure AI companies are compliant with Australian law and uphold legal standards around fairness and transparency.

Hence, AISI and the National AI Plan will reinforce existing technology-neutral legal frameworks such as the Privacy Act 1988 (Cth) and the Corporations Act 2001 (Cth).

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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.

Regulators such as APRA and ASIC, which already provide guidance on AI use in banking, insurance, and financial services (including operational risk and governance standards) will continue to identify and manage potential harms and report any legislative gaps to the AISI.

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.

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.

We have two carriers, Alwyn Insurance Company Limited (“Alwyn Insurance”) 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.

At the end of 2025, SRICL completed a transfer of its remaining business to Alwyn Insurance and will proceed to wind up its business.

Following the departure of the U.K.

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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.

Under Pillar II, the OECD’s Inclusive Framework published the “Global Anti-Base Erosion,” or “GloBE” model rules in 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 taxable 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.

Legislatures in multiple countries outside of the EU (including the United Kingdom, Australia, Canada and Switzerland) have enacted, and are continuing to enact, legislation to implement the GloBE model rules.

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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.

Thus, the overall implementation of Pillar II is 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, 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.

The adoption of the tax laws described above (including, the “under-taxed profit rule”, which is now effective in several jurisdictions in which we and our affiliates do business) resulted in an increase to our 2025 effective tax rate and aggregate tax liability.

See Item 1A, “ Risk Factors — Risks Relating to Taxation ” for additional information.

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.

Prior to January 1, 2025 and in accordance with the Exempted Undertakings Tax Protection Act 1966 of Bermuda, as amended, Arch Capital was not subject to tax on income or profits, withholding tax, capital transfer tax, estate duty or inheritance tax.

In response to the OECD Pillar II initiative, in 2023, the Government of Bermuda enacted the Bermuda CIT Act, which is effective for tax years beginning on or after January 1, 2025.

Arch Capital is subject to tax on income under the Bermuda CIT Act, which tax is 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 Bermuda CIT Act (including in respect of any foreign tax credits applicable to us) for tax years starting on January 1, 2025.

The Bermuda CIT Act does not impose any withholding tax, capital transfer tax, estate duty or inheritance tax, 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.

In addition to the Bermuda corporate income tax, we also currently pay our Bermuda annual government fee;

and, 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.

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federal income taxes (other than U.S.

excise taxes on insurance and reinsurance premiums and withholding taxes on dividends and certain other U.S.

excise taxes on insurance and reinsurance premiums and withholding taxes

on dividends and certain other U.S.

source investment income).

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citizens or residents.

While Arch Capital

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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 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.

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federal income tax.

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insurance companies carrying on an insurance business within the U.S.

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are nonetheless subject to U.S.

income tax on certain “fixed or determinable annual or periodic gains, profits and income” derived from sources within the U.S.

withholding tax on certain “fixed or determinable annual or periodic gains, profits and income” derived from sources within the U.S.

as enumerated in Section 881(a) of the Code (such as dividends and certain interest on investments), subject to exemption under the Code or reduction by an applicable treaty.

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tax treaty, are 4% for non-life insurance premiums and 1% for life insurance and all reinsurance premiums.

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.

corporation (or a non-U.S.

corporation engaged in a U.S.

trade or business) over such corporation’s regular U.S.

federal income tax, reduced by certain tax credits.

The “modified taxable income” of a corporation is determined without deduction for certain payments by such corporation to its non-U.S.

affiliates (including reinsurance premiums).

Final Treasury Regulations interpreting the base erosion and anti-abuse tax were issued in December 2019 and October 2020.

On July 4, 2025, P.L.

119-21, commonly referred to as the One Big Beautiful Bill Act (the "OBBBA"), was enacted into law.

Among other provisions, the OBBBA amended Section 59A of the Code relating to the base erosion and anti-abuse tax ("BEAT").

The BEAT operates as a minimum tax that applies when a taxpayer's regular U.S.

federal income tax liability (as reduced by certain tax credits) is less than a specified percentage of its "modified taxable income," which is generally computed without deductions for certain payments to non-U.S.

affiliates (including, in certain circumstances, intercompany reinsurance premiums).

The OBBBA amended the BEAT percentage applicable to a taxpayer's modified taxable income such that the rate is now permanently 10.5%, removing the prior statutory increase to 12.5% that would otherwise have applied for taxable years beginning after December 31, 2025.

The OBBBA amendments to Section 59A are effective for taxable years beginning after December 31, 2025.

The Company does not believe these amendments will have a material impact on its U.S.

operations, including the impact, if any, on its effective tax rate, cash taxes, and intercompany arrangements.

United Kingdom .

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corporation tax for the 2025 financial year is 25%.

Pillar II has largely been enacted and in force in the U.K.

Pillar II has 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.

and not elsewhere.

Due to the staggered UK implementation of OECD Pillar II guidance, a top up tax has been accrued on non-UK operations in 2025.

Arch Insurance Canada is taxed on its worldwide income.

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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.

Pillar II has largely been enacted in Canada and, due to the staggered Canadian implementation of OECD Pillar II guidance, a top up tax has been accrued on non-Canadian operations in 2025.

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.

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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.

Pillar II has been enacted in Ireland, including the Irish Qualified Domestic Minimum Top-Up Tax (“QDMTT”), which is intended to ensure a minimum effective tax rate of 15% for in‑scope groups.

As a result, our Irish subsidiaries may be subject to additional Irish tax liabilities under the QDMTT if their Pillar II effective tax rate falls below 15%.

Switzerland .

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Pillar II has largely been enacted in Switzerland but should not adversely impact taxes payable in Switzerland.

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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.

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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.

As a result, they are subject to Gibraltar corporation tax on their respective profits at a rate of 15%.

Pillar II has largely been enacted in Gibraltar but should not adversely impact taxes payable in Gibraltar.

Arch LMI and Arch Indemnity, Australian incorporated and tax resident companies, are subject to Australian corporate tax on their worldwide profits.

The current rate of Australian corporation tax applicable to such profits is 30%.

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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.

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.

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broker or other non-U.S.

intermediary, persons who hold our common shares or preferred shares as part of a hedging or conversion transaction or as part of a straddle or wash sale, who may be subject to special rules or treatment under the Code or persons required for U.S.

intermediary, persons who hold our common shares or preferred shares as part of a hedging or conversion transaction or as part of a straddle or wash sale, who may be

subject to special rules or treatment under the Code or persons required for U.S.

federal income tax purposed to recognize income no later than such income is reported on such persons’ applicable financial statements, and persons subject to the alternative minimum tax.

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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.

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For purposes of this discussion, the term “U.S.

10 unchanged sentences

federal income tax purposes.

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United States—Taxation of Dividends.

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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 individuals will be between $125,000 and $250,000, depending on the individual’s filing status).

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).

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It may be more difficult for a U.S.

holder who owns, actually or constructively by

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operation of the attribution rules, any of our other shares to satisfy any of the above requirements.

holder who owns, actually or constructively by 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.

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holder immediately before the redemption.

There will be a complete termination of a U.S.

There will be a

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complete termination of a U.S.

holder’s interest if either (i) all of our shares actually and constructively owned by the U.S.

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holder from being treated as a 10% U.S.

Due to the repeal of Section 958(b)(4) of the Code under the Tax Cuts Act, all non-U.S.

subsidiaries directly or indirectly owned by Arch Capital are treated as constructively owned by its U.S.

subsidiaries, and therefore are treated as CFCs.

Section 958(b)(4) of the Code was repealed under the Tax Cuts and Jobs Act of 2017 (the “Tax Cuts Act”), however, the OBBBA restored the limitation on downward attribution of stock ownership under Section 958(b)(4) of the Code.

The restoration is generally effective for taxable years of foreign corporations beginning after December 31, 2025.

Thus, for the last taxable year beginning before January 1, 2018, and through taxable years beginning on or before December 31, 2025, Section 958(b)(4) was not in effect as a result of the Tax Cuts Act.

For those periods, our U.S.

subsidiaries were treated as constructively owning stock of our non-U.S.

subsidiaries under the constructive ownership rules, and accordingly our non-U.S.

subsidiaries were treated as CFCs for U.S.

federal income tax purposes.

For taxable years of our non-U.S.

subsidiaries that begin after December 31, 2025, as a result of the restoration of Section 958(b)(4), our non-U.S.

subsidiaries are no longer treated as constructively owned by our U.S.

subsidiaries, and accordingly, whether any such non-U.S.

subsidiary is treated as a CFC under the Code will depend on whether such subsidiary otherwise meets the requirements to be treated as a CFC (including ownership by 10% U.S.

Shareholders applying relevant attribution and constructive ownership rules).

The OBBBA also enacted new Section 951B, which may, in certain circumstances, cause U.S.

persons to be subject to CFC-type income inclusion and/or reporting rules with respect to certain foreign corporations even if such

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corporations are not otherwise treated as CFCs after the restoration of Section 958(b)(4).

holders should consult their own tax advisors regarding the application of these rules to their particular circumstances.

Status as a CFC would not cause us or any of our non-U.S.

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holder that is considered a 10% U.S.

Shareholder would be subject to current U.S.

Shareholder (including, after December 31, 2025, a U.S.

holder that is considered a 10% U.S.

Shareholder on any day during a taxable year of the CFC) would be subject to current U.S.

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.

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Related Person Insurance Income Rules .

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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 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.

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There can be no assurance, however, that the IRS will interpret the proposed Treasury Regulations in this manner or that the Treasury will not take the position that Section 1248 and the requirement to file Form 5471 will apply to dispositions of our common shares or our preferred shares.

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If the IRS or U.S.

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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

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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.

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 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.

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holder should consult its own tax advisor as to the effects of these rules.

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Backup Withholding and Information Reporting .

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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.

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United States Taxation of Non-U.S.

32 unchanged sentences

Shareholders should consult their own tax advisors with respect to the applicability to them of the tax laws of other jurisdictions.

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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