10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2017
Or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number:  001-16209

ARCH CAPITAL GROUP LTD.

(Exact name of registrant as specified in its charter)

Bermuda	Not applicable
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
Waterloo House, Ground Floor
100 Pitts Bay Road, Pembroke HM 08, Bermuda	(441) 278-9250
(Address of principal executive offices)	(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þNo o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ     Noo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated Filer þAccelerated Filer o Non-accelerated Filer oSmaller reporting

company oEmerging growth company o

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

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes oNo þ

As of October 31, 2017, there were 130,874,024 common shares, $0.0033 par value per share, of the registrant outstanding.

ARCH CAPITAL GROUP LTD.

INDEX TO FORM 10-Q

		Page No.
	PART I
	Financial Information	2
Item 1.	Consolidated Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	50
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	75
Item 4.	Controls and Procedures	75
	PART II
	Other Information	76
Item 1.	Legal Proceedings	76
Item 1A.	Risk Factors	76
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	77
Item 5.	Other Information	77
Item 6.	Exhibits	78
	Signatures	79

ACGL 2017 THIRD QUARTER FORM 10-Q 1

PART I.  FINANCIAL INFORMATION

Cautionary Note Regarding Forward-Looking Statements

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

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

• our ability to successfully implement our business strategy during “soft” as well as “hard” markets;

• acceptance of our business strategy, security and financial condition by rating agencies and regulators, as well as by brokers and our insureds and reinsureds;

• the integration of United Guaranty and any other businesses we have acquired or may acquire into our existing operations;

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

• general economic and market conditions (including inflation, interest rates, foreign currency exchange rates, prevailing credit terms and the depth and duration of a recession) and conditions specific to the reinsurance and insurance markets (including the length and magnitude of the current “soft” market) in which we operate;

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

• developments in the world’s financial and capital markets and our access to such markets;

• our ability to successfully enhance, integrate and maintain operating procedures (including information technology) to effectively support our current and new business;

• the loss of key personnel;

• accuracy of those estimates and judgments utilized in the preparation of our financial statements, including those related to revenue recognition, insurance and other reserves, reinsurance recoverables, investment valuations, intangible assets, bad debts, income taxes, contingencies and litigation, and any determination to use the deposit method of accounting, which for a relatively new insurance and reinsurance company, like our company, are even more difficult to make than those made in a mature company since relatively limited historical information has been reported to us through September 30, 2017;

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

• severity and/or frequency of losses;

• claims for natural or man-made catastrophic events in our insurance, reinsurance and mortgage businesses could cause large losses and substantial volatility in our results of operations;

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

• availability to us of reinsurance to manage our gross and net exposures and the cost of such reinsurance;

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

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

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

ACGL 2017 THIRD QUARTER FORM 10-Q 2

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

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

• losses relating to aviation business and business produced by a certain managing underwriting agency for which we may be liable to the purchaser of our prior reinsurance business or to others in connection with the May 5, 2000 asset sale described in our periodic reports filed with the SEC;

• changes in accounting principles or policies or in our application of such accounting principles or policies;

• changes in the political environment of certain countries in which we operate or underwrite business;

• statutory or regulatory developments, including as to tax policy and matters and insurance and other regulatory matters such as the adoption of proposed legislation that would affect Bermuda-headquartered companies and/or Bermuda-based insurers or reinsurers and/or changes in regulations or tax laws applicable to us, our subsidiaries, brokers or customers; and

• the other matters set forth under Item 1A “Risk Factors”, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other sections of our Annual Report on Form 10-K for the year ended December 31, 2016, as well as the other factors set forth in our other documents on file with the SEC, and management’s response to any of the aforementioned factors.

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

ACGL 2017 THIRD QUARTER FORM 10-Q 3

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

	Page No.
Report of Independent Registered Public Accounting Firm	5
Consolidated Balance Sheets
September 30, 2017 (unaudited) and December 31, 2016	6
Consolidated Statements of Income
For the three and nine month periods ended September 30, 2017 and 2016 (unaudited)	7
Consolidated Statements of Comprehensive Income
For the three and nine month periods ended September 30, 2017 and 2016 (unaudited)	8
Consolidated Statements of Changes in Shareholders’ Equity
For the nine month periods ended September 30, 2017 and 2016 (unaudited)	9
Consolidated Statements of Cash Flows
For the nine month periods ended September 30, 2017 and 2016 (unaudited)	10
Notes to Consolidated Financial Statements (unaudited)
Note 1 - General	11
Note 2 - Recent Accounting Pronouncements	11
Note 3 - Variable Interest Entities and Noncontrolling Interests	12
Note 4 - Earnings (Loss) Per Common Share	15
Note 5 - Segment Information	16
Note 6 - Reserves for Losses and Loss Adjustment Expenses	21
Note 7 - Investment Information	24
Note 8 - Fair Value	30
Note 9 - Derivative Instruments	36
Note 10 - Commitments and Contingencies	37
Note 11 - Share Transactions	37
Note 12 - Other Comprehensive Income (Loss)	39
Note 13 - Guarantor Financial Information	40
Note 14 - Income Taxes	48
Note 15 - Legal Proceedings	48
Note 16 - Transactions With Related Parties	48
Note 17 - Acquisition	48
Note 18 - Subsequent Events	49

ACGL 2017 THIRD QUARTER FORM 10-Q 4

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Arch Capital Group Ltd.:

We have reviewed the accompanying consolidated balance sheet of Arch Capital Group Ltd. and its subsidiaries (the “Company”) as of September 30, 2017, and the related consolidated statements of income and comprehensive income for the three-month and nine-month periods ended September 30, 2017 and September 30,2016 and the consolidated statements of changes in shareholders’ equity and cash flows for the nine-month periods ended September 30, 2017 and September 30,2016. These interim financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of December 31, 2016, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for the year then ended (not presented herein), and in our report dated March 1, 2017, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2016, is fairly stated, in all material respects in relation to the consolidated balance sheet from which it has been derived.

/s/ PricewaterhouseCoopers LLP

November 3, 2017

ACGL 2017 THIRD QUARTER FORM 10-Q 5

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (U.S. dollars in thousands, except share data)
	(Unaudited)
	September 30, 2017			December 31, 2016
Assets
Investments:
Fixed maturities available for sale, at fair value (amortized cost: $13,722,581 and $13,522,671)	$	13,792,903		$	13,426,577
Short-term investments available for sale, at fair value (amortized cost: $1,645,873 and $611,878)	1,646,036			612,005
Collateral received under securities lending, at fair value (amortized cost: $543,243 and $762,554)	543,252			762,565
Equity securities available for sale, at fair value (cost: $401,674 and $475,085)	477,143			518,041
Other investments available for sale, at fair value (cost: $205,828 and $149,077)	260,339			167,970
Investments accounted for using the fair value option	4,249,634			3,421,220
Investments accounted for using the equity method	962,574			811,273
Total investments	21,931,881			19,719,651
Cash	862,361			842,942
Accrued investment income	101,104			124,483
Securities pledged under securities lending, at fair value (amortized cost: $529,700 and $746,409)	528,212			744,980
Premiums receivable	1,269,678			1,072,435
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses	2,506,015			2,114,138
Contractholder receivables	1,864,348			1,717,436
Ceded unearned premiums	947,135			859,567
Deferred acquisition costs	531,196			447,560
Receivable for securities sold	385,952			58,284
Goodwill and intangible assets	684,405			781,553
Other assets	1,012,510			889,080
Total assets	$	32,624,797		$	29,372,109
Liabilities
Reserve for losses and loss adjustment expenses	$	11,351,267		$	10,200,960
Unearned premiums	3,751,550			3,406,870
Reinsurance balances payable	352,006			300,407
Contractholder payables	1,864,348			1,717,436
Collateral held for insured obligations	345,726			301,406
Senior notes	1,732,726			1,732,258
Revolving credit agreement borrowings	826,242			756,650
Securities lending payable	543,243			762,554
Payable for securities purchased	1,091,464			76,183
Other liabilities	788,354			806,260
Total liabilities	22,646,926			20,060,984
Commitments and Contingencies
Redeemable noncontrolling interests	205,829			205,553
Shareholders' Equity
Non-cumulative preferred shares	772,555			772,555
Convertible non-voting common equivalent preferred shares	489,627			1,101,304
Common shares ($0.0033 par, shares issued: 182,924,882 and 174,644,101)	610			582
Additional paid-in capital	1,212,960			531,687
Retained earnings	8,359,354			7,996,701
Accumulated other comprehensive income (loss), net of deferred income tax	129,682			(114,541		)
Common shares held in treasury, at cost (shares: 52,058,509 and 51,856,584)	(2,053,644		)	(2,034,570		)
Total shareholders' equity available to Arch	8,911,144			8,253,718
Non-redeemable noncontrolling interests	860,898			851,854
Total shareholders' equity	9,772,042			9,105,572
Total liabilities, noncontrolling interests and shareholders' equity	$	32,624,797		$	29,372,109

See Notes to Consolidated Financial Statements

ACGL 2017 THIRD QUARTER FORM 10-Q 6

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (U.S. dollars in thousands, except share data)
	(Unaudited)						(Unaudited)
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Revenues
Net premiums written	$	1,325,403		$	1,014,278		$	3,850,358		$	3,159,076
Change in unearned premiums	(63,517		)	(55,875		)	(230,581		)	(243,109		)
Net premiums earned	1,261,886			958,403			3,619,777			2,915,967
Net investment income	116,459			93,618			345,457			275,691
Net realized gains (losses)	66,275			125,105			122,163			230,647
Other-than-temporary impairment losses	(1,878		)	(3,867		)	(5,415		)	(16,999		)
Less investment impairments recognized in other comprehensive income, before taxes	—			—			—			150
Net impairment losses recognized in earnings	(1,878		)	(3,867		)	(5,415		)	(16,849		)
Other underwriting income	6,064			7,980			15,519			38,251
Equity in net income (loss) of investment funds accounted for using the equity method	31,090			16,662			111,884			32,054
Other income (loss)	(342		)	(400		)	(3,118		)	(432		)
Total revenues	1,479,554			1,197,501			4,206,267			3,475,329
Expenses
Losses and loss adjustment expenses	1,046,141			524,183			2,288,571			1,631,724
Acquisition expenses	193,854			161,267			566,579			501,782
Other operating expenses	170,127			153,286			514,827			460,748
Corporate expenses	17,098			18,485			69,766			45,068
Amortization of intangible assets	31,824			4,865			93,942			14,493
Interest expense	29,510			15,943			86,935			47,713
Net foreign exchange losses (gains)	28,028			2,621			86,975			1,525
Total expenses	1,516,582			880,650			3,707,595			2,703,053
Income (loss) before income taxes	(37,028		)	316,851			498,672			772,276
Income tax expense	(8,189		)	(13,231		)	(70,755		)	(43,672		)
Net income (loss)	$	(45,217	)	$	303,620		$	427,917		$	728,604
Net (income) loss attributable to noncontrolling interests	11,561			(50,748		)	(23,279		)	(109,879		)
Net income (loss) available to Arch	(33,656		)	252,872			404,638			618,725
Preferred dividends	(12,369		)	(5,484		)	(34,936		)	(16,453		)
Loss on redemption of preferred shares	(6,735		)	—			(6,735		)	—
Net income (loss) available to Arch common shareholders	$	(52,760	)	$	247,388		$	362,967		$	602,272
Net income (loss) per common share and common share equivalent
Basic	$	(0.39	)	$	2.05		$	2.70		$	4.99
Diluted	$	(0.39	)	$	1.98		$	2.61		$	4.84
Weighted average common shares and common share equivalents outstanding
Basic	134,885,451			120,938,916			134,472,129			120,656,420
Diluted	134,885,451			124,931,653			139,222,324			124,528,174

See Notes to Consolidated Financial Statements

ACGL 2017 THIRD QUARTER FORM 10-Q 7

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (U.S. dollars in thousands)
	(Unaudited)						(Unaudited)
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Comprehensive Income
Net income (loss)	$	(45,217	)	$	303,620		$	427,917		$	728,604
Other comprehensive income (loss), net of deferred income tax
Unrealized appreciation (decline) in value of available-for-sale investments:
Unrealized holding gains (losses) arising during period	66,462			16,281			260,223			251,722
Portion of other-than-temporary impairment losses recognized in other comprehensive income, net of deferred income tax	—			—			—			(150		)
Reclassification of net realized (gains) losses, net of income taxes, included in net income (loss)	(23,912		)	(54,992		)	(46,180		)	(109,309		)
Foreign currency translation adjustments	8,280			(5,312		)	29,701			(6,150		)
Comprehensive income	5,613			259,597			671,661			864,717
Net (income) loss attributable to noncontrolling interests	11,561			(50,748		)	(23,279		)	(109,879		)
Foreign currency translation adjustments attributable to noncontrolling interests	411			(59		)	479			141
Comprehensive income available to Arch	$	17,585		$	208,790		$	648,861		$	754,979

See Notes to Consolidated Financial Statements

ACGL 2017 THIRD QUARTER FORM 10-Q 8

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (U.S. dollars in thousands)
	(Unaudited)
	Nine Months Ended
	September 30,
	2017			2016
Non-cumulative preferred shares
Balance at beginning of year	$	772,555		$	325,000
Preferred shares issued	230,000			450,000
Preferred shares redeemed	(230,000		)	—
Balance at end of period	772,555			775,000
Convertible non-voting common equivalent preferred shares
Balance at beginning of year	1,101,304			—
Preferred shares converted to common shares	(611,677		)	—
Balance at end of period	489,627			—
Common shares
Balance at beginning of year	582			577
Common shares issued, net	28			5
Balance at end of period	610			582
Additional paid-in capital
Balance at beginning of year	531,687			467,339
Preferred shares converted to common shares	611,653			—
Issue costs on preferred shares	(7,946		)	(15,101		)
Reversal of original issue costs on redeemed preferred shares	6,735			—
All other	70,831			63,966
Balance at end of period	1,212,960			516,204
Retained earnings
Balance at beginning of year	7,996,701			7,332,032
Cumulative effect of an accounting change	(314		)	—
Balance at beginning of year, as adjusted	7,996,387			7,332,032
Net income	427,917			728,604
Net (income) loss attributable to noncontrolling interests	(23,279		)	(109,879		)
Preferred share dividends	(34,936		)	(16,453		)
Loss on redemption of preferred shares	(6,735		)	—
Balance at end of period	8,359,354			7,934,304
Accumulated other comprehensive income (loss), net of deferred income tax
Balance at beginning of year	(114,541		)	(16,502		)
Unrealized appreciation (decline) in value of available-for-sale investments, net of deferred income tax:
Balance at beginning of year	(27,641		)	50,085
Unrealized holding gains (losses) arising during period, net of reclassification adjustment	214,043			142,413
Portion of other-than-temporary impairment losses recognized in other comprehensive income, net of deferred income tax	—			(150		)
Balance at end of period	186,402			192,348
Foreign currency translation adjustments:
Balance at beginning of year	(86,900		)	(66,587		)
Foreign currency translation adjustments	29,701			(6,150		)
Foreign currency translation adjustments attributable to noncontrolling interests	479			141
Balance at end of period	(56,720		)	(72,596		)
Balance at end of period	129,682			119,752
Common shares held in treasury, at cost
Balance at beginning of year	(2,034,570		)	(1,941,904		)
Shares repurchased for treasury	(19,074		)	(89,955		)
Balance at end of period	(2,053,644		)	(2,031,859		)
Total shareholders’ equity available to Arch	8,911,144			7,313,983
Non-redeemable noncontrolling interests	860,898			834,808
Total shareholders’ equity	$	9,772,042		$	8,148,791

See Notes to Consolidated Financial Statements

ACGL 2017 THIRD QUARTER FORM 10-Q 9

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. dollars in thousands)
	(Unaudited)
	Nine Months Ended
	September 30,
	2017			2016
Operating Activities
Net income	$	427,917		$	728,604
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized (gains) losses	(141,944		)	(262,112		)
Net impairment losses recognized in earnings	5,415			16,849
Equity in net income or loss of investment funds accounted for using the equity method and other income or loss	(63,784		)	8,157
Amortization of intangible assets	93,942			14,493
Share-based compensation	58,308			46,311
Changes in:
Reserve for losses and loss adjustment expenses, net of unpaid losses and loss adjustment expenses recoverable	602,652			277,277
Unearned premiums, net of ceded unearned premiums	230,581			243,109
Premiums receivable	(167,143		)	(198,909		)
Deferred acquisition costs	(73,631		)	(40,906		)
Reinsurance balances payable	37,528			49,198
Other items, net	71,293			155,068
Net Cash Provided By Operating Activities	1,081,134			1,037,139
Investing Activities
Purchases of fixed maturity investments	(28,079,129		)	(27,840,555		)
Purchases of equity securities	(667,135		)	(377,767		)
Purchases of other investments	(1,406,528		)	(1,008,774		)
Proceeds from sales of fixed maturity investments	27,629,474			26,731,924
Proceeds from sales of equity securities	751,873			464,904
Proceeds from sales, redemptions and maturities of other investments	938,581			879,330
Proceeds from redemptions and maturities of fixed maturity investments	747,621			540,823
Net settlements of derivative instruments	(20,952		)	23,396
Net (purchases) sales of short-term investments	(964,653		)	(604,162		)
Change in cash collateral related to securities lending	148,692			(27,935		)
Acquisitions, net of cash	(27,709		)	(20,911		)
Purchases of fixed assets	(16,862		)	(11,565		)
Other	86,145			(3,816		)
Net Cash Provided By (Used For) Investing Activities	(880,582		)	(1,255,108		)
Financing Activities
Proceeds from issuance of preferred shares, net	222,054			434,899
Redemption of preferred shares	(230,000		)	—
Purchases of common shares under share repurchase program	—			(75,256		)
Proceeds from common shares issued, net	(7,484		)	(3,785		)
Proceeds from borrowings	238,915			46,000
Repayments of borrowings	(172,000		)	(179,171		)
Change in cash collateral related to securities lending	(148,692		)	27,935
Dividends paid to redeemable noncontrolling interests	(13,491		)	(13,491		)
Other	(49,280		)	33,113
Preferred dividends paid	(34,936		)	(16,453		)
Net Cash Provided By (Used For) Financing Activities	(194,914		)	253,791
Effects of exchange rate changes on foreign currency cash	13,781			(10,332		)
Increase (decrease) in cash	19,419			25,490
Cash beginning of year	842,942			553,326
Cash end of period	$	862,361		$	578,816
Income taxes paid	$	47,907		$	40,742
Interest paid	$	64,613		$	35,234

See Notes to Consolidated Financial Statements

ACGL 2017 THIRD QUARTER FORM 10-Q 10

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.    General

Arch Capital Group Ltd. (“ACGL”) is a Bermuda public limited liability company which provides insurance, reinsurance and mortgage insurance on a worldwide basis through its wholly-owned subsidiaries. As used herein, the “Company” means ACGL and its subsidiaries. The Company’s consolidated financial statements include the results of Watford Holdings Ltd. and its wholly owned subsidiaries. See Note 3.

On December 31, 2016, the Company completed the acquisition of United Guaranty Corporation, a North Carolina corporation (“UGC”) pursuant to a stock purchase agreement with American International Group, Inc. (“AIG”). The acquisition of UGC (“UGC acquisition”) expanded the scale of Arch’s existing mortgage insurance businesses by combining UGC’s position as the market leader in the U.S. private mortgage insurance industry with Arch’s financial strength and history of innovation, further diversifying the Company’s business profile and customer base.

The interim consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). All significant intercompany transactions and balances have been eliminated in consolidation. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions. In the opinion of management, the accompanying unaudited interim consolidated financial statements reflect all adjustments (consisting of normally recurring accruals) necessary for a fair statement of results on an interim basis. The results of any interim period are not necessarily indicative of the results for a full year or any future periods.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted; however, management believes that the disclosures are adequate to make the information presented not misleading. This report should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (“2016 Form 10-K”), including the Company’s audited consolidated financial statements and related notes.

The Company has reclassified the presentation of certain prior year information to conform to the current presentation, including the presentation of ‘amortization of intangible assets’ on its consolidated statements of income to split out such item

(previously reflected in acquisition expenses and/or other operating expenses). Such reclassifications had no effect on the Company’s net income, comprehensive income, shareholders’ equity or cash flows. Tabular amounts are in U.S. Dollars in thousands, except share amounts, unless otherwise noted.

2.    Recent Accounting Pronouncements

Recently Issued Accounting Standards Adopted

The Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standard Update (“ASU”) 2016-09, “Compensation - Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment Accounting,” effective January 1, 2017. This ASU was issued in the 2016 first quarter to improve and simplify the accounting for employee share-based payment transactions. This ASU provides simplifications with respect to income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows for these types of transactions. With respect to the forfeiture accounting policy election, the Company has elected to account for forfeitures as they occur, which did not result in a material cumulative effect adjustment. With respect to the change in presentation in the statement of cash flows related to excess tax benefits, the Company has applied the guidance prospectively and prior periods have not been adjusted.

Recently Issued Accounting Standards Not Yet Adopted

ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” was issued in the 2014 second quarter and updated through various ASUs in 2016. This ASU (and as updated in 2016) creates a new comprehensive revenue recognition standard that will serve as a single source of revenue guidance for all companies in all industries. The guidance applies to all companies that either enter into contracts with customers to transfer goods or services or enter into contracts for the transfer of non-financial assets, unless those contracts are within the scope of other standards, such as insurance contracts or financial instruments.The ASU also requires enhanced disclosures about revenue. The ASU is effective in the 2018 first quarter and the Company intends on adopting the ASU using the modified retrospective method, whereby the cumulative effect of adoption will be recognized as an adjustment to retained earnings at the date of initial application. The adoption of this ASU will not impact the Company's insurance premium revenues or revenues from its investment portfolio, which represent a substantial portion of consolidated revenues, but may have an impact on the Company's other revenues. Based on the Company’s evaluation of the impacted revenue streams, the ASU is not expected to have a material effect on the Company’s consolidated financial statements and the cumulative effect adjustment to retained earnings at the date of initial application is not expected to be material.

ACGL 2017 THIRD QUARTER FORM 10-Q 11

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assetsand Financial Liabilities,” was issued in the 2016 first quarter to enhance the reporting model for financial instruments and to provide improved financial information to readers of the financial statements. Among other provisions focused on improving the recognition and measurement of financial instruments, the ASU requires that equity investments be measured at fair value on the balance sheet with changes in fair value reported in the income statement and that an exit price notion be used when measuring the fair value of financial instruments for disclosure purposes. The ASU is effective in the 2018 first quarter and, aside from limited situations, cannot be early adopted. The Company is currently assessing the impact the implementation of this ASU will have on its consolidated financial statements. The adoption of this ASU is not expected to have a material impact on the Company's financial position, cash flows, or total comprehensive income, but will have a material impact on the Company's results of operations as changes in fair value of equity instruments will be presented in net income rather than other comprehensive income.

ASU 2016-18, "Statement of Cash Flows (Topic 230) - Restricted Cash " was issued in the 2016 fourth quarter. The ASU requires that restricted cash and restricted cash equivalents be included with cash and cash equivalents in the reconciliation of beginning and ending cash on the statements of cash flows. As a result, transfers between cash and cash equivalents and restricted cash and restricted cash equivalents will no longer be presented on the statement of cash flows. The ASU is effective, with retrospective adoption, for interim and annual periods beginning after December 15, 2017, with early adoption permitted. The Company is currently assessing the impact the implementation of this ASU will have on its consolidated financial statements. The adoption of this ASU is not expected to have a material effect on the Company’s results of operations, financial position, comprehensive income or net cash provided from operating activities.

ASU 2017-08, “Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities,” was issued in the 2017 first quarter.The ASU amends the amortization period for certain purchased callable debt securities held at a premium by shortening the amortization period for the premium to the earliest call date. The ASU will be effective for the Company on January 1, 2019 and is required to be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company is currently assessing the impact the implementation of this ASU will have on its consolidated financial statements. The adoption of this

ASU is not expected to have a material effect on the Company’s results of operations, financial position or cash flows.

ASU 2017-09, “Compensation - Stock Compensation (Topic 718) - Scope of Modification Accounting” was issued in the 2017 second quarter. The ASU provides updated guidance to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. The ASU is effective prospectively for all companies for annual periods beginning on or after December 15, 2017, with early adoption permitted. The adoption of this ASU is not expected to have a material effect on the Company’s results of operations, financial position or cash flows.

3. Variable Interest Entities and Noncontrolling Interests

A variable interest entity (“VIE”) refers to an entity that has characteristics such as (i) insufficient equity at risk to allow the entity to finance its activities without additional financial support or (ii) instances where the equity investors, as a group, do not have characteristics of a controlling financial interest. The primary beneficiary of a VIE is defined as the variable interest holder that is determined to have the controlling financial interest as a result of having both (i) the power to direct the activities of a VIE that most significantly impact the economic performance of the VIE and (ii) the obligation to absorb losses or right to receive benefits from the VIE that could potentially be significant to the VIE. If a company is determined to be the primary beneficiary, it is required to consolidate the VIE in its financial statements.

Watford Holdings Ltd.

In March 2014, the Company invested $100.0 million and acquired approximately 11% of Watford Holdings Ltd.’s common equity and a warrant to purchase additional common equity. Watford Holdings Ltd. is the parent of Watford Re Ltd., a multi-line Bermuda reinsurance company (together with Watford Holdings Ltd., “Watford Re”). Watford Re is considered a VIE and the Company concluded that it is the primary beneficiary of Watford Re. As such, the results of Watford Re are included in the Company’s consolidated financial statements.

The Company does not guarantee or provide credit support for Watford Re, and the Company’s financial exposure to Watford Re is limited to its investment in Watford Re’s common and preferred shares and counterparty credit risk (mitigated by collateral) arising from reinsurance transactions.

ACGL 2017 THIRD QUARTER FORM 10-Q 12

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table provides the carrying amount and balance sheet caption in which the assets and liabilities of Watford Re are reported:

	September 30,		December 31,
	2017		2016
Assets
Investments accounted for using the fair value option	$	2,457,365	$	1,857,623
Cash	57,151		74,893
Accrued investment income	13,718		17,017
Premiums receivable	209,985		189,911
Reinsurance recoverable on unpaid and paid losses and LAE	37,575		24,420
Ceded unearned premiums	23,538		12,145
Deferred acquisition costs	87,692		86,379
Receivable for securities sold	74,051		1,326
Goodwill and intangible assets	7,650		7,650
Other assets	132,796		111,386
Total assets of consolidated VIE	$	3,101,521	$	2,382,750
Liabilities
Reserves for losses and loss adjustment expenses	$	735,132	$	510,809
Unearned premiums	344,060		293,480
Reinsurance balances payable	22,487		12,289
Revolving credit agreement borrowings	426,242		256,650
Payable for securities purchased	211,065		42,922
Other liabilities	174,472		88,976
Total liabilities of consolidated VIE	$	1,913,458	$	1,205,126
Redeemable noncontrolling interests	$	220,529	$	220,253

For the nine months ended September 30, 2017, Watford Re generated $221.9 million of cash provided by operating activities, $394.4 million of cash used for investing activities and $152.5 million of cash provided by financing activities, compared to $207.0 million of cash provided by operating activities, $124.0 million of cash used for investing activities and $119.6 million of cash used for financing activities for the nine months ended September 30, 2016.

Non-redeemable noncontrolling interests

The Company accounts for the portion of Watford Re’s common equity attributable to third party investors in the shareholders’ equity section of its consolidated balance sheets. The noncontrolling ownership in Watford Re’s common shares was approximately 89% at September 30, 2017. The portion of Watford Re’s income or loss attributable to third party investors is recorded in the consolidated statements of income in ‘net (income) loss attributable to noncontrolling interests.’

The following table sets forth activity in the non-redeemable noncontrolling interests:

	September 30,
	2017			2016
Three Months Ended
Balance, beginning of period	$	877,456		$	788,589
Amounts attributable to noncontrolling interests	(16,147		)	46,160
Foreign currency translation adjustments attributable to noncontrolling interests	(411		)	59
Balance, end of period	$	860,898		$	834,808
Nine Months Ended
Balance, beginning of year	$	851,854		$	738,831
Amounts attributable to noncontrolling interests	9,523			96,118
Foreign currency translation adjustments attributable to noncontrolling interests	(479		)	(141		)
Balance, end of period	$	860,898		$	834,808

Redeemable noncontrolling interests

The Company accounts for redeemable noncontrolling interests in the mezzanine section of its consolidated balance sheets in accordance with applicable accounting guidance. Such redeemable noncontrolling interests relate to the 9,065,200 cumulative redeemable preference shares (“Watford Preference Shares”) issued in March 2014 with a par value of $0.01 per share and a liquidation preference of $25.00 per share. Preferred dividends, including the accretion of the discount and issuance costs, are included in ‘net (income) loss attributable to noncontrolling interests’ in the Company’s consolidated statements of income.

The following table sets forth activity in the redeemable non-controlling interests:

	September 30,
	2017		2016
Three Months Ended
Balance, beginning of period	$	205,736	$	205,366
Accretion of preference share issuance costs	93		93
Balance, end of period	$	205,829	$	205,459
Nine Months Ended
Balance, beginning of year	$	205,553	$	205,182
Accretion of preference share issuance costs	276		277
Balance, end of period	$	205,829	$	205,459

ACGL 2017 THIRD QUARTER FORM 10-Q 13

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The portion of Watford Re’s income or loss attributable to third party investors, recorded in the Company’s consolidated statements of income in ‘net (income) loss attributable to noncontrolling interests,’ are summarized in the table below:

	September 30,
	2017			2016
Three Months Ended
Amounts attributable to non-redeemable noncontrolling interests	$	16,147		$	(46,160	)
Dividends attributable to redeemable noncontrolling interests	(4,586		)	(4,588		)
Net (income) loss attributable to noncontrolling interests	$	11,561		$	(50,748	)
Nine Months Ended
Amounts attributable to non-redeemable noncontrolling interests	$	(9,523	)	$	(96,118	)
Dividends attributable to redeemable noncontrolling interests	(13,756		)	(13,761		)
Net (income) loss attributable to noncontrolling interests	$	(23,279	)	$	(109,879	)

Bellemeade Re I and II

Upon closing of the UGC acquisition, the Company acquired the rights and obligations related to aggregate excess of loss reinsurance agreements with Bellemeade Re I Ltd. (“Bellemeade I”), entered into in July 2015, and with Bellemeade Re II Ltd. (“Bellemeade II”), entered into in May 2016 (the “Bellemeade Agreements”). Bellemeade I and Bellemeade II are special purpose reinsurance companies domiciled in Bermuda, each of which provided for up to approximately $300 million of aggregate excess of loss reinsurance coverage at inception for new delinquencies on portfolios of in-force policies issued.

As a result of the evaluation of the Bellemeade Agreements, the Company concluded that both Bellemeade I and Bellemeade II are VIEs. However, given that the ceding insurers do not have the unilateral power to direct those activities that are significant to the economic performance of Bellemeade I and Bellemeade II, the Company does not consolidate Bellemeade I and Bellemeade II in its consolidated financial statements.

The following table presents total assets of Bellemeade I and Bellemeade II as well as the Company’s maximum exposure to loss associated with these VIEs:

			Maximum Exposure to Loss
	Total VIE Assets		On-Balance Sheet			Off-Balance Sheet		Total
Bellemeade I	$	112,090	$	533		$	1,009	$	1,542
Bellemeade II	191,387		(53		)	746		693
Total	$	303,477	$	480		$	1,755	$	2,235

See note 18, “Subsequent Event.”

Irving Partners Limited Partnership

Upon closing of the UGC acquisition, the Company acquired a limited partnership interest in Irving Partners Limited Partnership (“Irving Partners”), which owns and operates an office building in Greensboro, North Carolina in which the Company is the main tenant. The Company concluded that Irving Partners is a VIE but that it is not the primary beneficiary. During the 2017 third quarter, the Company’s ownership in Irving Partners was sold to a third party for approximately $14.5 million.

ACGL 2017 THIRD QUARTER FORM 10-Q 14

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

4.    Earnings (Loss) Per Common Share

Due to the net loss recorded in the 2017 third quarter, diluted weighted average common shares and common share equivalents outstanding for the 2017 third quarter do not include the effect of 4.7 million otherwise dilutive securities since the inclusion of such securities is anti-dilutive to per share results. Since the Company reported net income for the other periods presented, the computation of diluted average shares outstanding includes dilutive securities for such periods.

The following table sets forth the computation of basic and diluted earnings (loss) per common share:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Numerator:
Net income (loss)	$	(45,217	)	$	303,620		$	427,917		$	728,604
Amounts attributable to noncontrolling interests	11,561			(50,748		)	(23,279		)	(109,879		)
Net income (loss) available to Arch	(33,656		)	252,872			404,638			618,725
Preferred dividends	(12,369		)	(5,484		)	(34,936		)	(16,453		)
Loss on redemption of preferred shares	(6,735		)	—			(6,735		)	—
Net income (loss) available to Arch common shareholders	$	(52,760	)	$	247,388		$	362,967		$	602,272
Denominator:
Weighted average common shares outstanding	129,211,251			120,938,916			124,526,611			120,656,420
Series D preferred shares (1)	5,674,200			—			9,945,518			—
Weighted average common shares and common share equivalents outstanding — basic	134,885,451			120,938,916			134,472,129			120,656,420
Effect of dilutive common share equivalents:
Nonvested restricted shares	—			1,313,025			1,459,879			1,295,825
Stock options (2)	—			2,679,712			3,290,316			2,575,929
Weighted average common shares and common share equivalents outstanding — diluted (3)	134,885,451			124,931,653			139,222,324			124,528,174
Earnings (loss) per common share:
Basic	$	(0.39	)	$	2.05		$	2.70		$	4.99
Diluted	$	(0.39	)	$	1.98		$	2.61		$	4.84

(1) Such shares are convertible non-voting common equivalent preferred shares issued in connection with the UGC acquisition.

(2) Certain stock options were not included in the computation of diluted earnings per share where the exercise price of the stock options exceeded the average market price and would have been anti-dilutive or where, when applying the treasury stock method to in-the-money options, the sum of the proceeds, including unrecognized compensation, exceeded the average market price and would have been anti-dilutive. For the 2017 third quarter and 2016 third quarter, the number of stock options excluded were nil and 334,203, respectively. For the nine months ended September 30, 2017 and 2016, the number of stock options excluded were 838,868 and 842,105, respectively.

ACGL 2017 THIRD QUARTER FORM 10-Q 15

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

5.    Segment Information

The Company classifies its businesses into three underwriting segments — insurance, reinsurance and mortgage — and two other operating segments — ‘other’ and corporate (non-underwriting). The Company determined its reportable segments using the management approach described in accounting guidance regarding disclosures about segments of an enterprise and related information. The accounting policies of the segments are the same as those used for the preparation of the Company’s consolidated financial statements. Intersegment business is allocated to the segment accountable for the underwriting results.

The Company’s insurance, reinsurance and mortgage segments each have managers who are responsible for the overall profitability of their respective segments and who are directly accountable to the Company’s chief operating decision makers, the Chairman and Chief Executive Officer, the President and Chief Operating Officer, and the Chief Financial Officer of ACGL. The chief operating decision makers do not assess performance, measure return on equity or make resource allocation decisions on a line of business basis. Management measures segment performance for its three underwriting segments based on underwriting income or loss. The Company does not manage its assets by underwriting segment, with the exception of goodwill and intangible assets, and, accordingly, investment income is not allocated to each underwriting segment.

The insurance segment consists of the Company’s insurance underwriting units which offer specialty product lines on a worldwide basis. Product lines include: construction and national accounts; excess and surplus casualty; lenders products; professional lines; programs; property, energy, marine and aviation; travel, accident and health; and other (consisting of alternative markets, excess workers' compensation and surety business).

The reinsurance segment consists of the Company’s reinsurance underwriting units which offer specialty product lines on a worldwide basis. Product lines include: casualty; marine and aviation; other specialty; property catastrophe; property excluding property catastrophe (losses on a single risk, both excess of loss and pro rata); and other (consisting of life reinsurance, casualty clash and other).

The mortgage segment includes the Company’s U.S. and international mortgage insurance and reinsurance operations as well as government sponsored enterprise (“GSE”) credit-risk sharing transactions. Arch Mortgage Insurance Company, United Guaranty Residential Insurance Company and United Guaranty Mortgage Indemnity Company (combined “Arch MI U.S.”) are approved as eligible mortgage insurers by Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”), each a GSE.

The corporate (non-underwriting) segment results include net investment income, other income (loss), corporate expenses, UGC transaction costs and other, interest expense, items related to the Company’s non-cumulative preferred shares, net realized gains or losses, net impairment losses included in earnings, equity in net income or loss of investment funds accounted for using the equity method, net foreign exchange gains or losses and income taxes. Such amounts exclude the results of the ‘other’ segment.

The ‘other’ segment includes the results of Watford Re (see Note 3). Watford Re has its own management and board of directors that is responsible for the overall profitability of the ‘other’ segment. For the ‘other’ segment, performance is measured based on net income or loss.

ACGL 2017 THIRD QUARTER FORM 10-Q 16

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following tables summarize the Company’s underwriting income or loss by segment, together with a reconciliation of underwriting income or loss to net income available to common shareholders:

	Three Months Ended
	September 30, 2017
	Insurance			Reinsurance			Mortgage			Sub-Total			Other			Total
Gross premiums written (1)	$	787,447		$	422,083		$	347,951		$	1,557,179		$	166,198		$	1,648,246
Premiums ceded	(222,516		)	(105,389		)	(57,900		)	(385,503		)	(12,471		)	(322,843		)
Net premiums written	564,931			316,694			290,051			1,171,676			153,727			1,325,403
Change in unearned premiums	(29,766		)	6,879			(15,533		)	(38,420		)	(25,097		)	(63,517		)
Net premiums earned	535,165			323,573			274,518			1,133,256			128,630			1,261,886
Other underwriting income (loss)	—			1,728			3,599			5,327			737			6,064
Losses and loss adjustment expenses	(568,795		)	(318,609		)	(35,156		)	(922,560		)	(123,581		)	(1,046,141		)
Acquisition expenses	(82,638		)	(57,340		)	(21,803		)	(161,781		)	(32,073		)	(193,854		)
Other operating expenses	(90,875		)	(36,214		)	(34,770		)	(161,859		)	(8,268		)	(170,127		)
Underwriting income (loss)	$	(207,143	)	$	(86,862	)	$	186,388		(107,617		)	(34,555		)	(142,172		)
Net investment income										94,127			22,332			116,459
Net realized gains (losses)										64,104			2,171			66,275
Net impairment losses recognized in earnings										(1,878		)	—			(1,878		)
Equity in net income (loss) of investment funds accounted for using the equity method										31,090			—			31,090
Other income (loss)										(342		)	—			(342		)
Corporate expenses (2)										(14,108		)	—			(14,108		)
UGC transaction costs and other (2)										(2,990		)	—			(2,990		)
Amortization of intangible assets										(31,824		)	—			(31,824		)
Interest expense										(26,264		)	(3,246		)	(29,510		)
Net foreign exchange gains (losses)										(27,785		)	(243		)	(28,028		)
Income (loss) before income taxes										(23,487		)	(13,541		)	(37,028		)
Income tax (expense) benefit										(8,168		)	(21		)	(8,189		)
Net income (loss)										(31,655		)	(13,562		)	(45,217		)
Dividends attributable to redeemable noncontrolling interests										—			(4,586		)	(4,586		)
Amounts attributable to nonredeemable noncontrolling interests										—			16,147			16,147
Net income (loss) available to Arch										(31,655		)	(2,001		)	(33,656		)
Preferred dividends										(12,369		)	—			(12,369		)
Loss on redemption of preferred shares										(6,735		)	—			(6,735		)
Net income (loss) available to Arch common shareholders										$	(50,759	)	$	(2,001	)	$	(52,760	)
Underwriting Ratios
Loss ratio	106.3		%	98.5		%	12.8		%	81.4		%	96.1		%	82.9		%
Acquisition expense ratio	15.4		%	17.7		%	7.9		%	14.3		%	24.9		%	15.4		%
Other operating expense ratio	17.0		%	11.2		%	12.7		%	14.3		%	6.4		%	13.5		%
Combined ratio	138.7		%	127.4		%	33.4		%	110.0		%	127.4		%	111.8		%
Goodwill and intangible assets	$	23,445		$	417		$	652,893		$	676,755		$	7,650		$	684,405

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

(2) Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘UGC transaction costs and other.’

ACGL 2017 THIRD QUARTER FORM 10-Q 17

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

	Three Months Ended
	September 30, 2016
	Insurance			Reinsurance			Mortgage			Sub-Total			Other			Total
Gross premiums written (1)	$	758,934		$	324,361		$	131,726		$	1,214,765		$	163,736		$	1,278,765
Premiums ceded	(217,446		)	(89,551		)	(51,182		)	(357,923		)	(6,300		)	(264,487		)
Net premiums written	541,488			234,810			80,544			856,842			157,436			1,014,278
Change in unearned premiums	(22,410		)	17,117			(3,582		)	(8,875		)	(47,000		)	(55,875		)
Net premiums earned	519,078			251,927			76,962			847,967			110,436			958,403
Other underwriting income (loss)	—			2,216			4,740			6,956			1,024			7,980
Losses and loss adjustment expenses	(332,845		)	(105,924		)	(11,107		)	(449,876		)	(74,307		)	(524,183		)
Acquisition expenses	(77,146		)	(50,192		)	(5,190		)	(132,528		)	(28,739		)	(161,267		)
Other operating expenses	(86,613		)	(35,389		)	(24,249		)	(146,251		)	(7,035		)	(153,286		)
Underwriting income (loss)	$	22,474		$	62,638		$	41,156		126,268			1,379			127,647
Net investment income										66,282			27,336			93,618
Net realized gains (losses)										95,946			29,159			125,105
Net impairment losses recognized in earnings										(3,867		)	—			(3,867		)
Equity in net income (loss) of investment funds accounted for using the equity method										16,662			—			16,662
Other income (loss)										(400		)	—			(400		)
Corporate expenses (2)										(11,343		)	—			(11,343		)
UGC transaction costs and other (2)										(7,142		)	—			(7,142		)
Amortization of intangible assets										(4,865		)	—			(4,865		)
Interest expense										(12,924		)	(3,019		)	(15,943		)
Net foreign exchange gains (losses)										(4,232		)	1,611			(2,621		)
Income (loss) before income taxes										260,385			56,466			316,851
Income tax (expense) benefit										(13,232		)	1			(13,231		)
Net income (loss)										247,153			56,467			303,620
Dividends attributable to redeemable noncontrolling interests										—			(4,588		)	(4,588		)
Amounts attributable to nonredeemable noncontrolling interests										—			(46,160		)	(46,160		)
Net income (loss) available to Arch										247,153			5,719			252,872
Preferred dividends										(5,484		)	—			(5,484		)
Net income (loss) available to Arch common shareholders										$	241,669		$	5,719		$	247,388
Underwriting Ratios
Loss ratio	64.1		%	42.0		%	14.4		%	53.1		%	67.3		%	54.7		%
Acquisition expense ratio	14.9		%	19.9		%	6.7		%	15.6		%	26.0		%	16.8		%
Other operating expense ratio	16.7		%	14.0		%	31.5		%	17.2		%	6.4		%	16.0		%
Combined ratio	95.7		%	75.9		%	52.6		%	85.9		%	99.7		%	87.5		%
Goodwill and intangible assets	$	26,367		$	1,228		$	55,696		$	83,291		$	7,650		$	90,941

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

(2) Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘UGC transaction costs and other.’

ACGL 2017 THIRD QUARTER FORM 10-Q 18

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

	Nine Months Ended
	September 30, 2017
	Insurance			Reinsurance			Mortgage			Sub-Total			Other			Total
Gross premiums written (1)	$	2,313,630		$	1,351,051		$	1,032,800		$	4,697,007		$	473,131		$	4,915,895
Premiums ceded	(704,057		)	(386,743		)	(194,139		)	(1,284,465		)	(35,315		)	(1,065,537		)
Net premiums written	1,609,573			964,308			838,661			3,412,542			437,816			3,850,358
Change in unearned premiums	(51,188		)	(81,182		)	(61,776		)	(194,146		)	(36,435		)	(230,581		)
Net premiums earned	1,558,385			883,126			776,885			3,218,396			401,381			3,619,777
Other underwriting income (loss)	—			1,143			11,999			13,142			2,377			15,519
Losses and loss adjustment expenses	(1,252,375		)	(631,669		)	(84,915		)	(1,968,959		)	(319,612		)	(2,288,571		)
Acquisition expenses	(236,378		)	(154,638		)	(76,235		)	(467,251		)	(99,328		)	(566,579		)
Other operating expenses	(271,268		)	(110,458		)	(108,790		)	(490,516		)	(24,311		)	(514,827		)
Underwriting income (loss)	$	(201,636	)	$	(12,496	)	$	518,944		304,812			(39,493		)	265,319
Net investment income										282,459			62,998			345,457
Net realized gains (losses)										110,662			11,501			122,163
Net impairment losses recognized in earnings										(5,415		)	—			(5,415		)
Equity in net income (loss) of investment funds accounted for using the equity method										111,884			—			111,884
Other income (loss)										(3,118		)	—			(3,118		)
Corporate expenses (2)										(48,517		)	—			(48,517		)
UGC transaction costs and other (2)										(21,249		)	—			(21,249		)
Amortization of intangible assets										(93,942		)	—			(93,942		)
Interest expense										(77,932		)	(9,003		)	(86,935		)
Net foreign exchange gains (losses)										(85,451		)	(1,524		)	(86,975		)
Income (loss) before income taxes										474,193			24,479			498,672
Income tax (expense) benefit										(70,734		)	(21		)	(70,755		)
Net income (loss)										403,459			24,458			427,917
Dividends attributable to redeemable noncontrolling interests										—			(13,756		)	(13,756		)
Amounts attributable to nonredeemable noncontrolling interests										—			(9,523		)	(9,523		)
Net income (loss) available to Arch										403,459			1,179			404,638
Preferred dividends										(34,936		)	—			(34,936		)
Loss on redemption of preferred shares										(6,735		)	—			(6,735		)
Net income (loss) available to Arch common shareholders										$	361,788		$	1,179		$	362,967
Underwriting Ratios
Loss ratio	80.4		%	71.5		%	10.9		%	61.2		%	79.6		%	63.2		%
Acquisition expense ratio	15.2		%	17.5		%	9.8		%	14.5		%	24.7		%	15.7		%
Other operating expense ratio	17.4		%	12.5		%	14.0		%	15.2		%	6.1		%	14.2		%
Combined ratio	113.0		%	101.5		%	34.7		%	90.9		%	110.4		%	93.1		%

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

(2) Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘UGC transaction costs and other.’

ACGL 2017 THIRD QUARTER FORM 10-Q 19

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

	Nine Months Ended
	September 30, 2016
	Insurance			Reinsurance			Mortgage			Sub-Total			Other			Total
Gross premiums written (1)	$	2,319,530		$	1,217,804		$	361,440		$	3,898,025		$	421,627		$	4,046,667
Premiums ceded	(713,110		)	(370,068		)	(62,918		)	(1,145,347		)	(15,229		)	(887,591		)
Net premiums written	1,606,420			847,736			298,522			2,752,678			406,398			3,159,076
Change in unearned premiums	(46,603		)	(43,345		)	(93,283		)	(183,231		)	(59,878		)	(243,109		)
Net premiums earned	1,559,817			804,391			205,239			2,569,447			346,520			2,915,967
Other underwriting income (loss)	—			22,659			12,670			35,329			2,922			38,251
Losses and loss adjustment expenses	(1,011,087		)	(363,613		)	(20,102		)	(1,394,802		)	(236,922		)	(1,631,724		)
Acquisition expenses	(228,806		)	(160,706		)	(16,947		)	(406,459		)	(95,323		)	(501,782		)
Other operating expenses	(263,111		)	(108,561		)	(70,590		)	(442,262		)	(18,486		)	(460,748		)
Underwriting income (loss)	$	56,813		$	194,170		$	110,270		361,253			(1,289		)	359,964
Net investment income										207,088			68,603			275,691
Net realized gains (losses)										168,735			61,912			230,647
Net impairment losses recognized in earnings										(16,849		)	—			(16,849		)
Equity in net income (loss) of investment funds accounted for using the equity method										32,054			—			32,054
Other income (loss)										(432		)	—			(432		)
Corporate expenses (2)										(37,926		)	—			(37,926		)
UGC transaction costs and other (2)										(7,142		)	—			(7,142		)
Amortization of intangible assets										(14,493		)	—			(14,493		)
Interest expense										(37,983		)	(9,730		)	(47,713		)
Net foreign exchange gains (losses)										(3,812		)	2,287			(1,525		)
Income (loss) before income taxes										650,493			121,783			772,276
Income tax (expense) benefit										(43,673		)	1			(43,672		)
Net income (loss)										606,820			121,784			728,604
Dividends attributable to redeemable noncontrolling interests										—			(13,761		)	(13,761		)
Amounts attributable to nonredeemable noncontrolling interests										—			(96,118		)	(96,118		)
Net income (loss) available to Arch										606,820			11,905			618,725
Preferred dividends										(16,453		)	—			(16,453		)
Net income (loss) available to Arch common shareholders										$	590,367		$	11,905		$	602,272
Underwriting Ratios
Loss ratio	64.8		%	45.2		%	9.8		%	54.3		%	68.4		%	56.0		%
Acquisition expense ratio	14.7		%	20.0		%	8.3		%	15.8		%	27.5		%	17.2		%
Other operating expense ratio	16.9		%	13.5		%	34.4		%	17.2		%	5.3		%	15.8		%
Combined ratio	96.4		%	78.7		%	52.5		%	87.3		%	101.2		%	89.0		%

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

(2) Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘UGC transaction costs and other.’

ACGL 2017 THIRD QUARTER FORM 10-Q 20

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

6.    Reserve for Losses and Loss Adjustment Expenses

The following table represents an analysis of losses and loss adjustment expenses and a reconciliation of the beginning and ending reserve for losses and loss adjustment expenses:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Reserve for losses and loss adjustment expenses at beginning of period	$	10,520,511		$	9,471,647		$	10,200,960		$	9,125,250
Unpaid losses and loss adjustment expenses recoverable and deferred charges	2,116,210			2,003,768			2,083,575			1,828,837
Net reserve for losses and loss adjustment expenses at beginning of period	8,404,301			7,467,879			8,117,385			7,296,413
Net incurred losses and loss adjustment expenses relating to losses occurring in:
Current year	1,092,175			598,940			2,487,212			1,848,299
Prior years	(45,232		)	(74,757		)	(197,839		)	(216,575		)
Discount and accretion on retroactive reinsurance	(802		)	—			(802		)	—
Total net incurred losses and loss adjustment expenses	1,046,141			524,183			2,288,571			1,631,724
Net foreign exchange losses (gains)	61,919			1,463			168,493			(13,270		)
Net paid losses and loss adjustment expenses relating to losses occurring in:
Current year	(167,450		)	(128,432		)	(282,952		)	(285,468		)
Prior years	(457,183		)	(304,673		)	(1,403,769		)	(1,068,979		)
Total net paid losses and loss adjustment expenses	(624,633		)	(433,105		)	(1,686,721		)	(1,354,447		)
Net reserve for losses and loss adjustment expenses at end of period	8,887,728			7,560,420			8,887,728			7,560,420
Unpaid losses and loss adjustment expenses recoverable and deferred charges	2,463,539			2,049,769			2,463,539			2,049,769
Reserve for losses and loss adjustment expenses at end of period	$	11,351,267		$	9,610,189		$	11,351,267		$	9,610,189

2017 Third Quarter Catastrophe Losses

The Company’s 2017 third quarter results reflect estimated net losses from current accident year catastrophic events of $347.8 million, net of reinsurance and reinstatement premiums, which consisted of $133.4 million from the reinsurance segment and $214.5 million from the insurance segment. Such amounts were primarily related to Hurricanes Harvey, Irma and Maria, along with the Mexican earthquakes and other more minor global events. In addition, estimated net losses from current accident year catastrophic events for the 2017 third quarter in the ‘other’ segment were $19.8 million.

Development on Prior Year Loss Reserves

2017 Third Quarter

During the 2017 third quarter, the Company recorded net favorable development on prior year loss reserves of $45.2 million, which consisted of $36.5 million from the reinsurance segment, $3.0 million from the insurance segment, $21.5 million from the mortgage segment and adverse development of $15.8 million from the ‘other’ segment.

The reinsurance segment’s net favorable development of $36.5 million, or 11.3 points, for the 2017 third quarter consisted of $16.9 million from short-tailed lines and $19.6 million from long-tailed and medium-tailed lines. Favorable development in

short-tailed lines included $11.8 million from property catastrophe and property other than property catastrophe reserves, across most underwriting years (i.e., all premiums and losses attributable to contracts having an inception or renewal date within the given twelve-month period), reflecting lower levels of reported and paid claims activity than previously anticipated which led to decreases in certain loss ratio selections during the period. Favorable development in long-tailed and medium-tailed lines reflected reductions in casualty reserves of $13.4 million based on varying levels of reported and paid claims activity, primarily from the 2002 to 2009 underwriting years, and favorable development in marine reserves of $4.3 million across most underwriting years.

The insurance segment’s net favorable development of $3.0 million, or 0.6 points, for the 2017 third quarter consisted of $1.8 million of net favorable development in short-tailed lines and $1.2 million of net favorable development in long-tailed and medium-tailed lines. Net favorable development in short-tailed lines primarily resulted from property (including special risk other than marine) reserves from the 2011 to 2016 accident years (i.e., the year in which a loss occurred). Net favorable development in medium-tailed lines reflected $11.9 million from professional liability reserves across most accident years and in surety reserves with $4.2 million of favorable development. Such amounts were partially offset by $12.9 million of adverse development on a small number of programs in the 2014 to 2016 accident years.

ACGL 2017 THIRD QUARTER FORM 10-Q 21

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The mortgage segment’s net favorable development was $21.5 million, or 7.8 points, for the 2017 third quarter. The 2017 third quarter development was primarily driven by continued lower than expected claim emergence across most origination years and also reflected $6.1 million related to second lien and other portfolios, primarily due to subrogation recoveries.

2016 Third Quarter

During the 2016 third quarter, the Company recorded net favorable development on prior year loss reserves of $74.8 million, which consisted of $59.5 million from the reinsurance segment, $13.7 million from the insurance segment, $2.5 million from the mortgage segment and adverse development of $0.9 million from the ‘other’ segment.

The reinsurance segment’s net favorable development of $59.5 million, or 23.6 points, for the 2016 third quarter consisted of $27.7 million from short-tailed lines and $31.8 million from long-tailed and medium-tailed lines. Favorable development in short-tailed lines included $23.2 million from property catastrophe and property other than property catastrophe reserves, across most underwriting years, reflecting lower levels of reported and paid claims activity than previously anticipated which led to decreases in certain loss ratio selections during the period. Favorable development in long-tailed lines reflected reductions in casualty reserves of $29.3 million based on varying levels of reported and paid claims activity, primarily from the 2002 to 2010 underwriting years and 2012 to 2013 underwriting years.

The insurance segment’s net favorable development of $13.7 million, or 2.6 points, for the 2016 third quarter consisted of $18.2 million of net favorable development in long-tailed lines, partially offset by $2.4 million of net adverse development in short-tailed lines and $2.0 million of net adverse development in medium-tailed lines. Net favorable development in long-tailed lines reflected net reductions in executive assurance reserves from the 2008 to 2015 accident years, and net reductions in casualty reserves from the 2007 and 2008 accident years. Net adverse development in short-tailed lines primarily resulted from property (including special risk other than marine) reserves from the 2015 accident year, primarily due to a small number of attritional losses. Net adverse development in medium-tailed lines primarily resulted from an increase in programs of $6.2 million stemming in part from terminated programs, partially offset by favorable development of $4.2 million in other medium-tailed lines, primarily in professional liability and surety.

The mortgage segment’s net favorable development was $2.5 million, or 3.2 points, for the 2016 third quarter. The 2016 third quarter development was primarily driven by lower than expected claim rates across most origination years.

Nine Months Ended September 30, 2017

During the nine months ended September 30, 2017, the Company recorded net favorable development on prior year loss reserves of $197.8 million, which consisted of $133.3 million from the reinsurance segment, $7.2 million from the insurance segment, $74.9 million from the mortgage segment and adverse development of $17.5 million from the ‘other’ segment.

The reinsurance segment’s net favorable development of $133.3 million, or 15.1 points, for the 2017 period consisted of $85.8 million from short-tailed lines and $47.5 million from long-tailed and medium-tailed lines. Favorable development in short-tailed lines included $62.7 million from property catastrophe and property other than property catastrophe reserves, across most underwriting years, reflecting lower levels of reported and paid claims activity than previously anticipated which led to decreases in certain loss ratio selections during the period. Favorable development in long-tailed and medium-tailed lines reflected reductions in casualty reserves of $28.0 million based on varying levels of reported and paid claims activity, primarily from the 2002 to 2013 underwriting years, and favorable development in marine reserves of $16.6 million across most underwriting years.

The insurance segment’s net favorable development of $7.2 million, or 0.5 points, for the 2017 period consisted of $9.0 million of net favorable development in short-tailed lines and $7.4 million of net favorable development in long-tailed lines, partially offset by $9.2 million of net adverse development in medium-tailed lines. Net favorable development in short-tailed lines primarily resulted from property (including special risk other than marine) reserves from the 2011 to 2016 accident years. Net favorable development in long-tailed lines reflected net reductions in executive assurance reserves from the 2008 to 2014 accident years and reductions in healthcare reserves across various accident years, partially offset by $17.2 million of adverse development on construction reserves across various accident years. Net adverse development in medium-tailed lines primarily resulted from an increase in programs of $39.3 million stemming in part from development on a small number of programs in the 2013 to 2015 accident years, partially offset by net favorable development of $30.1 million in other medium-tailed lines, primarily in professional liability and surety.

The mortgage segment’s net favorable development was $74.9 million, or 9.6 points, for the 2017 period. The development was primarily driven by continued lower than expected claim emergence across most origination years and also reflected $19.2 million related to second lien and other portfolios, primarily due to subrogation recoveries.

ACGL 2017 THIRD QUARTER FORM 10-Q 22

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Nine Months Ended September 30, 2016

During the nine months ended September 30, 2016, the Company recorded net favorable development on prior year loss reserves of $216.6 million, which consisted of $176.7 million from the reinsurance segment, $24.8 million from the insurance segment, $16.3 million from the mortgage segment and adverse development of $1.2 million from the ‘other’ segment.

The reinsurance segment’s net favorable development of $176.7 million, or 22.0 points, for the 2016 period consisted of $113.1 million from short-tailed lines and $63.6 million from long-tailed and medium-tailed lines. Favorable development in short-tailed lines included $92.6 million from property catastrophe and property other than property catastrophe reserves, across most underwriting years. The net reduction of loss estimates for the reinsurance segment’s short-tailed lines primarily resulted from varying levels of reported and paid claims activity than previously anticipated which led to decreases in certain loss ratio selections during the period. Favorable development in long-tailed lines reflected reductions in casualty reserves of $66.4 million based on varying levels of reported and paid claims activity, primarily from the 2002 to 2013 underwriting years. Such amounts were partially offset by net adverse development on marine reserves, primarily from the 2002 and 2015 underwriting years, partially offset by favorable development from most other underwriting years.

The insurance segment’s net favorable development of $24.8 million, or 1.6 points, for the 2016 period consisted of $36.2 million of net favorable development in long-tailed lines and $7.7 million of net favorable development in short-tailed lines, partially offset by $19.1 million of net adverse development in medium-tailed lines. Net favorable development in long-tailed lines reflected net reductions in executive assurance reserves from the 2008 to 2009 accident years and 2011 to 2013 accident years, and net reductions in casualty reserves across most accident years, partially offset by a large energy casualty claim from the 2015 accident year. Net favorable development in short-tailed lines primarily resulted from reductions in property (including special risk other than marine) reserves from the 2009 to 2014 accident years, primarily due to varying levels of reported claims activity. Net adverse development in medium-tailed lines primarily resulted from an increase in programs of $28.6 million stemming in part from terminated programs, partially offset by favorable development of $9.5 million in other medium-tailed lines, primarily in professional liability and surety.

The mortgage segment’s net favorable development was $16.3 million, or 7.9 points, for the 2016 period. The development was primarily driven by lower than expected claim rates across most origination years.

ACGL 2017 THIRD QUARTER FORM 10-Q 23

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

7.    Investment Information

At September 30, 2017, total investable assets of $22.00 billion included $19.70 billion managed by the Company and $2.30 billion attributable to Watford Re.

Available For Sale Investments

The following table summarizes the fair value and cost or amortized cost of the Company’s investments classified as available for sale:

	Estimated Fair Value		Gross Unrealized Gains		Gross Unrealized Losses			Cost or Amortized Cost		OTTI Unrealized Losses (2)
September 30, 2017
Fixed maturities (1):
Corporate bonds	$	4,275,437	$	49,576	$	(22,303	)	$	4,248,164	$	(73	)
Mortgage backed securities	323,900		5,078		(2,540		)	321,362		(2,146		)
Municipal bonds	2,353,234		31,202		(7,614		)	2,329,646		—
Commercial mortgage backed securities	584,730		3,114		(4,377		)	585,993		—
U.S. government and government agencies	3,761,612		3,303		(20,246		)	3,778,555		—
Non-U.S. government securities	1,473,819		49,570		(21,647		)	1,445,896		—
Asset backed securities	1,544,919		9,053		(4,748		)	1,540,614		(22		)
Total	14,317,651		150,896		(83,475		)	14,250,230		(2,241		)
Equity securities	480,607		84,755		(7,873		)	403,725		—
Other investments	260,339		54,512		(1		)	205,828		—
Short-term investments	1,646,036		667		(504		)	1,645,873		—
Total	$	16,704,633	$	290,830	$	(91,853	)	$	16,505,656	$	(2,241	)
December 31, 2016
Fixed maturities (1):
Corporate bonds	$	4,392,373	$	27,606	$	(46,905	)	$	4,411,672	$	(2,285	)
Mortgage backed securities	490,093		4,794		(8,357		)	493,656		(3,323		)
Municipal bonds	3,713,434		8,554		(29,154		)	3,734,034		(201		)
Commercial mortgage backed securities	536,051		2,876		(6,508		)	539,683		—
U.S. government and government agencies	2,804,540		9,319		(24,437		)	2,819,658		—
Non-U.S. government securities	1,096,440		19,036		(56,872		)	1,134,276		—
Asset backed securities	1,123,987		6,897		(6,526		)	1,123,616		(22		)
Total	14,156,918		79,082		(178,759		)	14,256,595		(5,831		)
Equity securities	532,680		62,627		(17,517		)	487,570		—
Other investments	167,970		21,358		(2,465		)	149,077		—
Short-term investments	612,005		272		(145		)	611,878		—
Total	$	15,469,573	$	163,339	$	(198,886	)	$	15,505,120	$	(5,831	)

(1) In securities lending transactions, the Company receives collateral in excess of the fair value of the securities pledged. For purposes of this table, the Company has excluded the collateral received under securities lending, at fair value and included the securities pledged under securities lending, at fair value. See “—Securities Lending Agreements.”

(2) Represents the total other-than-temporary impairments (“OTTI”) recognized in accumulated other comprehensive income (“AOCI”). It does not include the change in fair value subsequent to the impairment measurement date. At September 30, 2017, the net unrealized gain related to securities for which a non-credit OTTI was recognized in AOCI was $0.9 million, compared to a net unrealized gain of $2.8 million at December 31, 2016.

ACGL 2017 THIRD QUARTER FORM 10-Q 24

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table summarizes, for all available for sale securities in an unrealized loss position, the fair value and gross unrealized loss by length of time the security has been in a continual unrealized loss position:

	Less than 12 Months					12 Months or More					Total
	Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses
September 30, 2017
Fixed maturities (1):
Corporate bonds	$	1,173,096	$	(18,315	)	$	191,382	$	(3,988	)	$	1,364,478	$	(22,303	)
Mortgage backed securities	146,352		(2,477		)	1,511		(63		)	147,863		(2,540		)
Municipal bonds	745,410		(5,958		)	110,752		(1,656		)	856,162		(7,614		)
Commercial mortgage backed securities	282,901		(3,579		)	17,570		(798		)	300,471		(4,377		)
U.S. government and government agencies	3,083,239		(19,736		)	25,894		(510		)	3,109,133		(20,246		)
Non-U.S. government securities	1,149,528		(20,741		)	37,655		(906		)	1,187,183		(21,647		)
Asset backed securities	587,561		(4,404		)	22,051		(344		)	609,612		(4,748		)
Total	7,168,087		(75,210		)	406,815		(8,265		)	7,574,902		(83,475		)
Equity securities	170,937		(7,873		)	—		—			170,937		(7,873		)
Other investments	725		(1		)	—		—			725		(1		)
Short-term investments	110,444		(504		)	—		—			110,444		(504		)
Total	$	7,450,193	$	(83,588	)	$	406,815	$	(8,265	)	$	7,857,008	$	(91,853	)
December 31, 2016
Fixed maturities (1):
Corporate bonds	$	1,700,813	$	(43,011	)	$	46,902	$	(3,894	)	$	1,747,715	$	(46,905	)
Mortgage backed securities	402,699		(8,134		)	6,105		(223		)	408,804		(8,357		)
Municipal bonds	1,513,308		(28,504		)	29,636		(650		)	1,542,944		(29,154		)
Commercial mortgage backed securities	231,374		(6,331		)	5,635		(177		)	237,009		(6,508		)
U.S. government and government agencies	1,888,018		(24,437		)	—		—			1,888,018		(24,437		)
Non-U.S. government securities	807,598		(56,872		)	—		—			807,598		(56,872		)
Asset backed securities	627,557		(5,465		)	65,723		(1,061		)	693,280		(6,526		)
Total	7,171,367		(172,754		)	154,001		(6,005		)	7,325,368		(178,759		)
Equity securities	269,381		(17,517		)	—		—			269,381		(17,517		)
Other investments	39,299		(2,465		)	—		—			39,299		(2,465		)
Short-term investments	29,146		(145		)	—		—			29,146		(145		)
Total	$	7,509,193	$	(192,881	)	$	154,001	$	(6,005	)	$	7,663,194	$	(198,886	)

(1) In securities lending transactions, the Company receives collateral in excess of the fair value of the securities pledged. For purposes of this table, the Company has excluded the collateral received under securities lending, at fair value and included the securities pledged under securities lending, at fair value. See “—Securities Lending Agreements.”

At September 30, 2017, on a lot level basis, approximately 2,870 security lots out of a total of approximately 7,410 security lots were in an unrealized loss position and the largest single unrealized loss from a single lot in the Company’s fixed maturity portfolio was $1.6 million. At December 31, 2016, on a lot level basis, approximately 3,540 security lots out of a total of approximately 7,240 security lots were in an unrealized loss position and the largest single unrealized loss from a single lot in the Company’s fixed maturity portfolio was $4.6 million.

ACGL 2017 THIRD QUARTER FORM 10-Q 25

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The contractual maturities of the Company’s fixed maturities are shown in the following table. Expected maturities, which are management’s best estimates, will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	September 30, 2017				December 31, 2016
Maturity	Estimated Fair Value		Amortized Cost		Estimated Fair Value		Amortized Cost
Due in one year or less	$	537,043	$	534,513	$	560,830	$	557,675
Due after one year through five years	7,547,002		7,508,674		6,158,148		6,211,099
Due after five years through 10 years	3,495,424		3,480,251		4,676,847		4,710,017
Due after 10 years	284,633		278,823		610,962		620,849
	11,864,102		11,802,261		12,006,787		12,099,640
Mortgage backed securities	323,900		321,362		490,093		493,656
Commercial mortgage backed securities	584,730		585,993		536,051		539,683
Asset backed securities	1,544,919		1,540,614		1,123,987		1,123,616
Total (1)	$	14,317,651	$	14,250,230	$	14,156,918	$	14,256,595

(1) In securities lending transactions, the Company receives collateral in excess of the fair value of the securities pledged. For purposes of this table, the Company has excluded the collateral received under securities lending, at fair value and included the securities pledged under securities lending, at fair value. See “—Securities Lending Agreements.”

Securities Lending Agreements

The Company enters into securities lending agreements with financial institutions to enhance investment income whereby it loans certain of its securities to third parties, primarily major brokerage firms, for short periods of time through a lending agent. The Company maintains legal control over the securities it lends, retains the earnings and cash flows associated with the loaned securities and receives a fee from the borrower for the temporary use of the securities. An indemnification agreement with the lending agent protects the Company in the event a borrower becomes insolvent or fails to return any of the securities on loan from the Company.

The Company receives collateral in the form of cash or securities. At September 30, 2017, the fair value of the cash collateral received on securities lending was $63.8 million and the fair value of security collateral received was $479.5 million. At December 31, 2016, the fair value of the cash collateral received on securities lending was $212.5 million, and the fair value of security collateral received was $550.1 million. Cash collateral is reinvested in short-term investments.

The Company’s securities lending transactions were accounted for as secured borrowings with significant investment categories as follows:

	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Less than 30 Days		30-90 Days		90 Days or More		Total
September 30, 2017
U.S. government and government agencies	$	424,838	$	8,186	$	74,930	$	—	$	507,954
Corporate bonds	31,305		—		—		—		31,305
Equity securities	3,984		—		—		—		3,984
Total	$	460,127	$	8,186	$	74,930	$	—	$	543,243
Gross amount of recognized liabilities for securities lending in offsetting disclosure in Note 9									$	—
Amounts related to securities lending not included in offsetting disclosure in Note 9									$	543,243
December 31, 2016
U.S. government and government agencies	$	556,015	$	31,244	$	126,093	$	5,140	$	718,492
Corporate bonds	29,078		—		—		—		29,078
Equity securities	14,984		—		—		—		14,984
Total	$	600,077	$	31,244	$	126,093	$	5,140	$	762,554
Gross amount of recognized liabilities for securities lending in offsetting disclosure in Note 9									$	—
Amounts related to securities lending not included in offsetting disclosure in Note 9									$	762,554

ACGL 2017 THIRD QUARTER FORM 10-Q 26

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Other Investments

The following table summarizes the Company’s other investments, including available for sale and fair value option components:

	September 30, 2017		December 31, 2016
Available for sale:
Asian and emerging markets	$	123,225	$	84,778
Investment grade fixed income	53,325		33,923
Credit related funds	20,752		7,469
Other	63,037		41,800
Total available for sale	260,339		167,970
Fair value option:
Term loan investments (par value: $1,378,797 and $1,208,537)	1,387,663		1,190,799
Mezzanine debt funds	172,000		127,943
Credit related funds	194,200		218,298
Investment grade fixed income	95,151		75,468
Asian and emerging markets	300,552		178,568
Other (1)	147,639		129,717
Total fair value option	2,297,205		1,920,793
Total	$	2,557,544	$	2,088,763

(1) Includes fund investments with strategies in mortgage servicing rights, transportation, infrastructure and other.

Certain of the Company’s other investments are in investment funds for which the Company has the option to redeem at agreed upon values as described in each investment fund’s subscription agreement. Depending on the terms of the various subscription agreements, investments in investment funds may be redeemed daily, monthly, quarterly or on other terms. Two common redemption restrictions which may impact the Company’s ability to redeem these investment funds are gates and lockups. A gate is a suspension of redemptions which may be implemented by the general partner or investment manager of the fund in order to defer, in whole or in part, the redemption request in the event the aggregate amount of redemption requests exceeds a predetermined percentage of the investment fund’s net assets which may otherwise hinder the general partner or investment manager’s ability to liquidate holdings in an orderly fashion in order to generate the cash necessary to fund extraordinarily large redemption payouts. A lockup period is the initial amount of time an investor is contractually required to hold the security before having the ability to redeem. If the investment funds are eligible to be redeemed, the time to redeem such fund can take weeks or months following the notification.

Fair Value Option

The following table summarizes the Company’s assets and liabilities which are accounted for using the fair value option:

	September 30, 2017		December 31, 2016
Fixed maturities	$	1,508,204	$	1,099,116
Other investments	2,297,205		1,920,793
Short-term investments	349,540		373,669
Equity securities	94,685		27,642
Investments accounted for using the fair value option	$	4,249,634	$	3,421,220

Limited partnership interests

In the normal course of its activities, the Company invests in limited partnerships as part of its overall investment strategy. Such amounts are included in ‘investments accounted for using the equity method’ and ‘investments accounted for using the fair value option.’ The Company has determined that it is not required to consolidate these investments because it is not the primary beneficiary of the funds. The Company’s maximum exposure to loss with respect to these investments is limited to the investment carrying amounts reported in the Company’s consolidated balance sheet and any unfundedcommitment.

The following table summarizes investments in limited partnership interests where the Company has a variable interest by balance sheet line item:

	September 30, 2017		December 31, 2016
Investments accounted for using the equity method (1)	$	962,574	$	800,970
Investments accounted for using the fair value option (2)	109,157		90,804
Total	$	1,071,731	$	891,774

(1) Aggregate unfunded commitments were $850.4 million at September 30, 2017, compared to $776.6 million at December 31, 2016.

(2) Aggregate unfunded commitments were $162.3 million at September 30, 2017, compared to $16.7 million at December 31, 2016.

ACGL 2017 THIRD QUARTER FORM 10-Q 27

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Net Investment Income

The components of net investment income were derived from the following sources:

	September 30,
	2017			2016
Three Months Ended
Fixed maturities	$	96,144		$	71,366
Equity securities	2,887			3,311
Short-term investments	2,957			1,703
Other (1)	37,957			37,466
Gross investment income	139,945			113,846
Investment expenses	(23,486		)	(20,228		)
Net investment income	$	116,459		$	93,618
Nine Months Ended
Fixed maturities	$	284,807		$	223,033
Equity securities	9,184			10,409
Short-term investments	6,732			3,015
Other (1)	111,613			98,089
Gross investment income	412,336			334,546
Investment expenses	(66,879		)	(58,855		)
Net investment income	$	345,457		$	275,691

(1) Includes income distributions from investment funds, term loan investments and other items.

Net Realized Gains (Losses)

Net realized gains (losses) were as follows, excluding other than-temporary impairment provision.

	September 30,
	2017			2016
Three Months Ended
Available for sale securities:
Gross gains on investment sales	$	66,565		$	84,451
Gross losses on investment sales	(39,015		)	(22,985		)
Change in fair value of assets and liabilities accounted for using the fair value option:
Fixed maturities	4,035			43,935
Other investments	24,264			46,428
Equity securities	10,230			(52		)
Short-term investments	(3,320		)	1,150
Derivative instruments (1)	4,298			(16,964		)
Other (2)	(782		)	(10,858		)
Net realized gains (losses)	$	66,275		$	125,105
Nine Months Ended
Available for sale securities:
Gross gains on investment sales	$	212,470		$	266,965
Gross losses on investment sales	(152,996		)	(129,409		)
Change in fair value of assets and liabilities accounted for using the fair value option:
Fixed maturities	34,232			62,234
Other investments	42,149			38,016
Equity securities	16,604			385
Short-term investments	12			107
Derivative instruments (1)	(9,653		)	24,102
Other (2)	(20,655		)	(31,753		)
Net realized gains (losses)	$	122,163		$	230,647

(1) See Note 9 for information on the Company’s derivative instruments.

(2) Includes the re-measurement of contingent consideration liability amounts.

Equity in Net Income (Loss) of Investment Funds Accounted for Using the Equity Method

The Company recorded $31.1 million of equity in net income related to investment funds accounted for using the equity method in the 2017 third quarter, compared to $16.7 million for the 2016 third quarter, and $111.9 million for the nine months ended September 30, 2017, compared to $32.1 million for the 2016 period. In applying the equity method, investments are initially recorded at cost and are subsequently adjusted based on the Company’s proportionate share of the net income or loss of the funds (which include changes in the market value of the underlying securities in the funds). Such investments are generally recorded on a one to three month lag based on the availability of reports from the investment funds.

ACGL 2017 THIRD QUARTER FORM 10-Q 28

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Other-Than-Temporary Impairments

The Company performs quarterly reviews of its available for sale investments in order to determine whether declines in fair value below the amortized cost basis were considered other-than-temporary in accordance with applicable guidance.

The following table details the net impairment losses recognized in earnings by asset class:

	September 30,
	2017			2016
Three Months Ended
Fixed maturities:
Mortgage backed securities	$	(50	)	$	(233	)
Corporate bonds	(82		)	—
Non-U.S. government securities	(178		)	(545		)
U.S. government and government agencies	(426		)	—
Municipal bonds	(202		)	—
Total	(938		)	(778		)
Equity securities	(940		)	(557		)
Other investments	—			(2,532		)
Net impairment losses recognized in earnings	$	(1,878	)	$	(3,867	)
Nine Months Ended
Fixed maturities:
Mortgage backed securities	$	(1,461	)	$	(788	)
Corporate bonds	(1,484		)	(5,655		)
Non-U.S. government securities	(376		)	(777		)
Asset backed securities	—			(2,506		)
U.S. government and government agencies	(426		)	—
Municipal bonds	(375		)	—
Total	(4,122		)	(9,726		)
Equity securities	(1,126		)	(3,594		)
Other investments	(167		)	(3,529		)
Net impairment losses recognized in earnings	$	(5,415	)	$	(16,849	)

Net impairment losses recognized in earnings in the 2017 third quarter were primarily related to equities and on fixed maturities with foreign currency fluctuations. For the nine months ended September 30, 2017, net impairment losses recognized in earnings reflected the Company’s decision to liquidate a portfolio of mortgage backed securities in April 2017. The Company recorded impairment losses on securities in such portfolio that were in an unrealized loss position at March 31, 2017.

The Company believes that the $2.2 million of OTTI included in accumulated other comprehensive income at September 30, 2017 on the securities which were considered by the Company to be impaired was due to market and sector-related factors (i.e., not credit losses). At September 30, 2017, the Company did not intend to sell these securities, or any other securities which were in an unrealized loss position, and determined that it is more likely than not that the Company will not be required to sell such securities before recovery of their cost basis.

The following table provides a roll forward of the amount related to credit losses recognized in earnings for which a portion of an OTTI was recognized in accumulated other comprehensive income:

	September 30,
	2017			2016
Three Months Ended
Balance at start of period	$	4,437		$	14,847
Credit loss impairments recognized on securities not previously impaired	—			38
Credit loss impairments recognized on securities previously impaired	15			60
Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security	—			—
Reductions for securities sold during the period	(689		)	(1,166		)
Balance at end of period	$	3,763		$	13,779
Nine Months Ended
Balance at start of year	$	13,138		$	26,875
Credit loss impairments recognized on securities not previously impaired	31			1,388
Credit loss impairments recognized on securities previously impaired	210			582
Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security	—			—
Reductions for securities sold during the period	(9,616		)	(15,066		)
Balance at end of period	$	3,763		$	13,779

Restricted Assets

The Company is required to maintain assets on deposit, which primarily consist of fixed maturities, with various regulatory authorities to support its insurance and reinsurance operations. The Company’s insurance and reinsurance subsidiaries maintain assets in trust accounts as collateral for insurance and reinsurance transactions with affiliated companies and also have investments in segregated portfolios primarily to provide collateral or guarantees for letters of credit to third parties. See Note 10 for further details. The following table details the value of the Company’s restricted assets:

	September 30, 2017		December 31, 2016
Assets used for collateral or guarantees:
Affiliated transactions	$	4,264,131	$	3,871,971
Third party agreements	1,689,104		1,513,079
Deposits with U.S. regulatory authorities	618,136		472,890
Deposits with non-U.S. regulatory authorities	56,753		44,399
Total restricted assets	$	6,628,124	$	5,902,339

ACGL 2017 THIRD QUARTER FORM 10-Q 29

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

8.    Fair Value

Accounting guidance regarding fair value measurements addresses how companies should measure fair value when they are required to use a fair value measure for recognition or disclosure purposes under GAAP and provides a common definition of fair value to be used throughout GAAP. It defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly fashion between market participants at the measurement date. In addition, it establishes a three-level valuation hierarchy for the disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The level in the hierarchy within which a given fair value measurement falls is determined based on the lowest level input that is significant to the measurement (Level 1 being the highest priority and Level 3 being the lowest priority).

The levels in the hierarchy are defined as follows:

Level 1: Inputs to the valuation methodology are observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets

Level 2: Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument

Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement

Following is a description of the valuation methodologies used for securities measured at fair value, as well as the general classification of such securities pursuant to the valuation hierarchy. The Company reviews its securities measured at fair value and discusses the proper classification of such investments with investment advisers and others.

The Company determines the existence of an active market based on its judgment as to whether transactions for the financial instrument occur in such market with sufficient frequency and volume to provide reliable pricing information. The independent pricing sources obtain market quotations and actual transaction prices for securities that have quoted prices in active markets. The Company uses quoted values and other data provided by nationally recognized independent pricing sources as inputs into its process for determining fair values of its fixed maturity investments. To validate the techniques or models used by pricing sources, the Company's review process includes, but is not limited to: (i) quantitative analysis (e.g.,

comparing the quarterly return for each managed portfolio to its target benchmark, with significant differences identified and investigated); (ii) a review of the average number of prices obtained in the pricing process and the range of resulting fair values; (iii) initial and ongoing evaluation of methodologies used by outside parties to calculate fair value; (iv) a comparison of the fair value estimates to the Company’s knowledge of the current market; (v) a comparison of the pricing services' fair values to other pricing services' fair values for the same investments; and (vi) periodic back-testing, which includes randomly selecting purchased or sold securities and comparing the executed prices to the fair value estimates from the pricing service. A price source hierarchy was maintained in order to determine which price source would be used (i.e., a price obtained from a pricing service with more seniority in the hierarchy will be used over a less senior one in all cases). The hierarchy prioritizes pricing services based on availability and reliability and assigns the highest priority to index providers. Based on the above review, the Company will challenge any prices for a security or portfolio which are considered not to be representative of fair value. The Company did not adjust any of the prices obtained from the independent pricing sources at September 30, 2017.

In certain circumstances, when fair values are unavailable from these independent pricing sources, quotes are obtained directly from broker-dealers who are active in the corresponding markets. Such quotes are subject to the validation procedures noted above. Of the $21.14 billion of financial assets and liabilities measured at fair value at September 30, 2017, approximately $242.9 million, or 1.2%, were priced using non-binding broker-dealer quotes. Of the $19.10 billion of financial assets and liabilities measured at fair value at December 31, 2016, approximately $234.0 million, or 1.2%, were priced using non-binding broker-dealer quotes.

Fixed maturities

The Company uses the market approach valuation technique to estimate the fair value of its fixed maturity securities, when possible. The market approach includes obtaining prices from independent pricing services, such as index providers and pricing vendors, as well as to a lesser extent quotes from broker-dealers. The independent pricing sources obtain market quotations and actual transaction prices for securities that have quoted prices in active markets. Each source has its own proprietary method for determining the fair value of securities that are not actively traded. In general, these methods involve the use of “matrix pricing” in which the independent pricing source uses observable market inputs including, but not limited to, investment yields, credit risks and spreads, benchmarking of like securities, broker-dealer quotes, reported trades and sector groupings to determine a reasonable fair value.

ACGL 2017 THIRD QUARTER FORM 10-Q 30

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following describes the significant inputs generally used to determine the fair value of the Company’s fixed maturity securities by asset class:

•U.S. government and government agencies — valuations provided by independent pricing services, with all prices provided through index providers and pricing vendors. The Company determined that all U.S. Treasuries would be classified as Level 1 securities due to observed levels of trading activity, the high number of strongly correlated pricing quotes received on U.S. Treasuries and other factors. The fair values of U.S. government agency securities are generally determined using the spread above the risk-free yield curve. As the yields for the risk-free yield curve and the spreads for these securities are observable market inputs, the fair values of U.S. government agency securities are classified within Level 2.

•Corporate bonds — valuations provided by independent pricing services, substantially all through index providers and pricing vendors with a small amount through broker-dealers. The fair values of these securities are generally determined using the spread above the risk-free yield curve. These spreads are generally obtained from the new issue market, secondary trading and from broker-dealers who trade in the relevant security market. As the significant inputs used in the pricing process for corporate bonds are observable market inputs, the fair value of these securities are classified within Level 2. A small number of securities are included in Level 3 due to a low level of transparency on the inputs used in the pricing process.

•Mortgage-backed securities — valuations provided by independent pricing services, substantially all through pricing vendors and index providers with a small amount through broker-dealers. The fair values of these securities are generally determined through the use of pricing models (including Option Adjusted Spread) which use spreads to determine the expected average life of the securities. These spreads are generally obtained from the new issue market, secondary trading and from broker-dealers who trade in the relevant security market. The pricing services also review prepayment speeds and other indicators, when applicable. As the significant inputs used in the pricing process for mortgage-backed securities are observable market inputs, the fair value of these securities are classified within Level 2. A small number of securities are included in Level 3 due to a low level of transparency on the inputs used in the pricing process.

•Municipal bonds — valuations provided by independent pricing services, with all prices provided through index providers and pricing vendors. The fair values of these securities are generally determined using spreads obtained from broker-dealers who trade in the relevant security market, trade prices and the new issue market. As the significant inputs used in the pricing process for municipal bonds are observable market inputs, the fair value of these securities are classified within Level 2.

•Commercial mortgage-backed securities — valuations provided by independent pricing services, substantially all through index providers and pricing vendors with a small amount through broker-dealers. The fair values of these securities are generally determined through the use of pricing models which use spreads to determine the appropriate average life of the securities. These spreads are generally obtained from the new issue market, secondary trading and from broker-dealers who trade in the relevant security market. The pricing services also review prepayment speeds and other indicators, when applicable. As the significant inputs used in the pricing process for commercial mortgage-backed securities are observable market inputs, the fair value of these securities are classified within Level 2. A small number of securities are included in Level 3 due to a low level of transparency on the inputs used in the pricing process.

•Non-U.S. government securities — valuations provided by independent pricing services, with all prices provided through index providers and pricing vendors. The fair values of these securities are generally based on international indices or valuation models which include daily observed yield curves, cross-currency basis index spreads and country credit spreads. As the significant inputs used in the pricing process for non-U.S. government securities are observable market inputs, the fair value of these securities are classified within Level 2.

•Asset-backed securities — valuations provided by independent pricing services, substantially all through index providers and pricing vendors with a small amount through broker-dealers. The fair values of these securities are generally determined through the use of pricing models (including Option Adjusted Spread) which use spreads to determine the appropriate average life of the securities. These spreads are generally obtained from the new issue market, secondary trading and from broker-dealers who trade in the relevant security market. The pricing services also review prepayment speeds and other indicators, when applicable. As the significant inputs used in the pricing process for asset-backed securities are observable market inputs, the fair value of these securities are classified within Level 2. A small number of securities are included in Level 3 due to a low level of transparency on the inputs used in the pricing process.

During the 2017 third quarter, the Company transferred $17.6 million of fixed maturities from Level 2 to Level 3 based on a review of the pricing of such securities, as described above.

Equity securities

The Company determined that exchange-traded equity securities would be included in Level 1 as their fair values are based on quoted market prices in active markets. Other equity securities are included in Level 2 of the valuation hierarchy.

ACGL 2017 THIRD QUARTER FORM 10-Q 31

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Other investments

The Company determined that exchange-traded investments in mutual funds would be included in Level 1 as their fair values are based on quoted market prices in active markets. Other investments also include term loan investments for which fair values are estimated by using quoted prices of term loan investments with similar characteristics, pricing models or matrix pricing. Such investments are generally classified within Level 2. The fair values for certain of the Company’s other investments are determined using net asset values as advised by external fund managers. The net asset value is based on the fund manager’s valuation of the underlying holdings in accordance with the fund’s governing documents. In accordance with applicable accounting guidance, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. A small number of securities are included in Level 3 due to the lack of an available independent price source for such securities. During the 2017 third quarter, the Company transferred $4.8 million of other investments from Level 2 to Level 3 based on a review of the pricing of such securities, as described above.

Derivative instruments

The Company’s futures contracts, foreign currency forward contracts, interest rate swaps and other derivatives trade in the over-the-counter derivative market. The Company uses the market approach valuation technique to estimate the fair value for these derivatives based on significant observable market

inputs from third party pricing vendors, non-binding broker-dealer quotes and/or recent trading activity. As the significant inputs used in the pricing process for these derivative instruments are observable market inputs, the fair value of these securities are classified within Level 2.

Short-term investments

The Company determined that certain of its short-term investments held in highly liquid money market-type funds, Treasury bills and commercial paper would be included in Level 1 as their fair values are based on quoted market prices in active markets. The fair values of other short-term investments are generally determined using the spread above the risk-free yield curve and are classified within Level 2.

Contingent consideration liabilities

Contingent consideration liabilities (included in ‘other liabilities’ in the consolidated balance sheets) include amounts related to the acquisition of CMG Mortgage Insurance Company and its affiliated mortgage insurance companies and other acquisitions. Such amounts are remeasured at fair value at each balance sheet date with changes in fair value recognized in ‘net realized gains (losses).’ To determine the fair value of contingent consideration liabilities, the Company estimates future payments using an income approach based on modeled inputs which include a weighted average cost of capital. The Company determined that contingent consideration liabilities would be included within Level 3.

ACGL 2017 THIRD QUARTER FORM 10-Q 32

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table presents the Company’s financial assets and liabilities measured at fair value by level at September 30, 2017:

				Estimated Fair Value Measurements Using:
	Estimated Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets measured at fair value (1):
Available for sale securities:
Fixed maturities:
Corporate bonds	$	4,275,437		$	—	$	4,263,446		$	11,991
Mortgage backed securities	323,900			—		323,496			404
Municipal bonds	2,353,234			—		2,353,234			—
Commercial mortgage backed securities	584,730			—		584,185			545
U.S. government and government agencies	3,761,612			3,687,126		74,486			—
Non-U.S. government securities	1,473,819			—		1,473,819			—
Asset backed securities	1,544,919			—		1,539,919			5,000
Total	14,317,651			3,687,126		10,612,585			17,940
Equity securities	480,607			473,908		6,699			—
Short-term investments	1,646,036			1,600,885		45,151			—
Other investments	84,671			83,254		1,417			—
Other investments measured at net asset value (2)	175,668
Total other investments	260,339			83,254		1,417			—
Derivative instruments (4)	33,141			—		33,141			—
Fair value option:
Corporate bonds	823,181			—		811,710			11,471
Non-U.S. government bonds	97,614			—		97,614			—
Mortgage backed securities	21,218			—		21,218			—
Municipal bonds	2,740			—		2,740			—
Commercial mortgage backed securities	12,539			—		12,539			—
Asset backed securities	63,437			—		63,437			—
U.S. government and government agencies	487,475			487,475		—			—
Short-term investments	349,540			343,620		5,920			—
Equity securities	94,685			59,332		35,353			—
Other investments	1,298,198			120,212		1,146,840			31,146
Other investments measured at net asset value (2)	999,007
Total	4,249,634			1,010,639		2,197,371			42,617
Total assets measured at fair value	$	20,987,408		$	6,855,812	$	12,896,364		$	60,557
Liabilities measured at fair value:
Contingent consideration liabilities	$	(59,248	)	$	—	$	—		$	(59,248	)
Securities sold but not yet purchased (3)	(72,682		)	—		(72,682		)	—
Derivative instruments (4)	(23,037		)	—		(23,037		)	—
Total liabilities measured at fair value	$	(154,967	)	$	—	$	(95,719	)	$	(59,248	)

(1) In securities lending transactions, the Company receives collateral in excess of the fair value of the securities pledged. For purposes of this table, the Company has excluded the collateral received under securities lending, at fair value and included the securities pledged under securities lending, at fair value. See Note 7, “Investment Information—Securities Lending Agreements.”

(2) In accordance with applicable accounting guidance, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets.

(3) Represents the Company’s obligations to deliver securities that it did not own at the time of sale. Such amounts are included in “other liabilities” on the Company’s consolidated balance sheets.

(4) See Note 9, “Derivative Instruments.”

ACGL 2017 THIRD QUARTER FORM 10-Q 33

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table presents the Company’s financial assets and liabilities measured at fair value by level at December 31, 2016:

				Estimated Fair Value Measurements Using:
	Estimated Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets measured at fair value (1):
Available for sale securities:
Fixed maturities:
Corporate bonds	$	4,392,373		$	—	$	4,374,029		$	18,344
Mortgage backed securities	490,093			—		490,093			—
Municipal bonds	3,713,434			—		3,713,434			—
Commercial mortgage backed securities	536,051			—		536,051			—
U.S. government and government agencies	2,804,540			2,691,575		112,965			—
Non-U.S. government securities	1,096,440			—		1,096,440			—
Asset backed securities	1,123,987			—		1,112,698			11,289
Total	14,156,918			2,691,575		11,435,710			29,633
Equity securities	532,680			529,695		2,985			—
Short-term investments	612,005			608,862		3,143			—
Other investments	112,313			112,313		—			—
Other investments measured at net asset value (2)	55,657
Total other investments	167,970			112,313		—			—
Derivative instruments (4)	28,410			—		28,410			—
Fair value option:
Corporate bonds	790,935			—		790,935			—
Non-U.S. government bonds	61,747			—		61,747			—
Mortgage backed securities	18,624			—		18,624			—
Asset backed securities	30,324			—		30,324			—
U.S. government and government agencies	197,486			197,486		—			—
Short-term investments	373,669			309,127		64,542			—
Equity securities	27,642			25,328		2,314			—
Other investments	1,226,242			80,706		1,120,536			25,000
Other investments measured at net asset value (2)	694,551
Total	3,421,220			612,647		2,089,022			25,000
Total assets measured at fair value	$	18,919,203		$	4,555,092	$	13,559,270		$	54,633
Liabilities measured at fair value:
Contingent consideration liabilities	$	(122,350	)	$	—	$	—		$	(122,350	)
Securities sold but not yet purchased (3)	(33,157		)	—		(33,157		)	—
Derivative instruments (4)	(26,049		)	—		(26,049		)	—
Total liabilities measured at fair value	$	(181,556	)	$	—	$	(59,206	)	$	(122,350	)

(1) In securities lending transactions, the Company receives collateral in excess of the fair value of the securities pledged. For purposes of this table, the Company has excluded the collateral received under securities lending, at fair value and included the securities pledged under securities lending, at fair value. See Note 7, “Investment Information—Securities Lending Agreements.”

(2) In accordance with applicable accounting guidance, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets.

(3) Represents the Company’s obligations to deliver securities that it did not own at the time of sale. Such amounts are included in “other liabilities” on the Company’s consolidated balance sheets.

(4) See Note 9, “Derivative Instruments.”

ACGL 2017 THIRD QUARTER FORM 10-Q 34

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table presents a reconciliation of the beginning and ending balances for all financial assets and liabilities measured at fair value on a recurring basis using Level 3 inputs:

	Assets													Liabilities
s	Available For Sale						Fair Value Option
	Structured Securities (1)			Corporate Bonds			Corporate Bonds		Other Investments		Total			Contingent Consideration Liabilities
Three Months Ended September 30, 2017
Balance at beginning of period	$	—		$	11,570		$	—	$	25,000	$	36,570		$	(57,246	)
Total gains or (losses) (realized/unrealized)
Included in earnings (2)	—			—			—		—		—			(2,002		)
Included in other comprehensive income	—			289			—		—		289			—
Purchases, issuances, sales and settlements
Purchases	—			—			—		1,348		1,348			—
Issuances	—			—			—		—		—			—
Sales	—			—			—		—		—			—
Settlements	—			—			—		—		—			—
Transfers in and/or out of Level 3	5,949			132			11,471		4,798		22,350			—
Balance at end of period	$	5,949		$	11,991		$	11,471	$	31,146	$	60,557		$	(59,248	)
Three Months Ended September 30, 2016
Balance at beginning of period	$	49,211		$	17,305		$	—	$	—	$	66,516		$	(111,670	)
Total gains or (losses) (realized/unrealized)
Included in earnings (2)	—			1,667			—		—		1,667			(4,795		)
Included in other comprehensive income	—			—			—		—		—			88
Purchases, issuances, sales and settlements
Purchases	—			—			—		—		—			—
Issuances	—			—			—		—		—			—
Sales	—			—			—		—		—			—
Settlements	(22,435		)	—			—		—		(22,435		)	—
Transfers in and/or out of Level 3	—			—			—		—		—			—
Balance at end of period	$	26,776		$	18,972		$	—	$	—	$	45,748		$	(116,377	)
Nine Months Ended September 30, 2017
Balance at beginning of year	$	11,289		$	18,344		$	—	$	25,000	$	54,633		$	(122,350	)
Total gains or (losses) (realized/unrealized)
Included in earnings (2)	3,779			893			—		—		4,672			(9,089		)
Included in other comprehensive income	—			289			—		—		289			—
Purchases, issuances, sales and settlements
Purchases	—			4,935			—		1,348		6,283			—
Issuances	—			—			—		—		—			—
Sales	(13,640		)	(12,602		)	—		—		(26,242		)	—
Settlements	(1,428		)	—			—		—		(1,428		)	72,191
Transfers in and/or out of Level 3	5,949			132			11,471		4,798		22,350			—
Balance at end of period	$	5,949		$	11,991		$	11,471	$	31,146	$	60,557		$	(59,248	)
Nine Months Ended September 30, 2016
Balance at beginning of year	$	57,500		$	16,368		$	—	$	—	$	73,868		$	(96,048	)
Total gains or (losses) (realized/unrealized)
Included in earnings (2)	(2,500		)	1,828			—		—		(672		)	(20,916		)
Included in other comprehensive income	—			—			—		—		—			51
Purchases, issuances, sales and settlements
Purchases	—			776			—		—		776			—
Issuances	—			—			—		—		—			—
Sales	—			—			—		—		—			—
Settlements	(28,224		)	—			—		—		(28,224		)	536
Transfers in and/or out of Level 3	—			—			—		—		—			—
Balance at end of period	$	26,776		$	18,972		$	—	$	—	$	45,748		$	(116,377	)

(1) Includes asset backed securities, mortgage backed securities and commercial mortgage backed securities.

(2) For the 2017 periods, gains or losses were included in net realized gains (losses). For the 2016 periods, losses on structured securities were included in net impairment losses recognized in earnings gains or losses while gains or losses on corporate bonds and contingent consideration liabilities were included in net realized gains (losses).

ACGL 2017 THIRD QUARTER FORM 10-Q 35

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Financial Instruments Disclosed, But Not Carried, At Fair Value

The Company uses various financial instruments in the normal course of its business. The carrying values of cash, accrued investment income, receivable for securities sold, certain other assets, payable for securities purchased and certain other liabilities approximated their fair values at September 30, 2017, due to their respective short maturities. As these financial instruments are not actively traded, their respective fair values are classified within Level 2.

At September 30, 2017, the senior notes of ACGL were carried at their cost, net of debt issuance costs, of $297.0 million and had a fair value of $406.0 million, while the senior notes of Arch Capital Group (U.S.) Inc. (“Arch-U.S.”) were carried at their cost, net of debt issuance costs, of $494.6 million and had a fair value of $566.2 million. The senior notes of Arch Capital Finance LLC due in 2026 were carried at their cost, net of debt issuance costs, of $496.0 million and had a fair value of $519.8 million, while the senior notes due in 2046 were carried at their cost, net of debt issuance costs, of $445.1 million and had a fair value of $503.5 million. The fair values of the senior notes were obtained from a third party pricing service and are based on observable market inputs. As such, the fair values of the senior notes are classified within Level 2.

9.    Derivative Instruments

The Company’s investment strategy allows for the use of derivative instruments. The Company’s derivative instruments are recorded on its consolidated balance sheets at fair value. The Company utilizes exchange traded U.S. Treasury note, Eurodollar and other futures contracts and commodity futures to manage portfolio duration or replicate investment positions in its portfolios and the Company routinely utilizes foreign currency forward contracts, currency options, index futures contracts and other derivatives as part of its total return objective. In addition, certain of the Company’s investments are managed in portfolios which incorporate the use of foreign currency forward contracts which are intended to provide an economic hedge against foreign currency movements. 

In addition, the Company purchases to-be-announced mortgage backed securities (“TBAs”) as part of its investment strategy. TBAs represent commitments to purchase a future issuance of agency mortgage backed securities. For the period between purchase of a TBA and issuance of the underlying security, the Company’s position is accounted for as a derivative. The Company purchases TBAs in both long and short positions to enhance investment performance and as part of its overall investment strategy.

The following table summarizes information on the fair values and notional values of the Company’s derivative instruments:

	Estimated Fair Value
	Asset Derivatives		Liability Derivatives			Notional Value (1)
September 30, 2017
Futures contracts (2)	$	5,351	$	(6,722	)	$	1,524,985
Foreign currency forward contracts (2)	19,376		(5,348		)	805,201
TBAs (3)	18,331		—			18,143
Other (2)	8,414		(10,967		)	2,032,922
Total	$	51,472	$	(23,037	)
December 31, 2016
Futures contracts (2)	$	360	$	(9,398	)	$	1,655,530
Foreign currency forward contracts (2)	9,354		(12,941		)	1,186,386
TBAs (3)	—		—			—
Other (2)	20,287		(3,710		)	1,014,863
Total	$	30,001	$	(26,049	)

(1) Represents the absolute notional value of all outstanding contracts, consisting of long and short positions.

(2) The fair value of asset derivatives are included in ‘other assets’ and the fair value of liability derivatives are included in ‘other liabilities.’

(3) The fair value of TBAs are included in ‘fixed maturities available for sale, at fair value.’

The Company did not hold any derivatives which were designated as hedging instruments at September 30, 2017 or December 31, 2016.

The Company’s derivative instruments can be traded under master netting agreements, which establish terms that apply to all derivative transactions with a counterparty. In the event of a bankruptcy or other stipulated event of default, such agreements provide that the non-defaulting party may elect to terminate all outstanding derivative transactions, in which case all individual derivative positions (loss or gain) with a counterparty are closed out and netted and replaced with a single amount, usually referred to as the termination amount, which is expressed in a single currency. The resulting single net amount, where positive, is payable to the party “in-the-money” regardless of whether or not it is the defaulting party, unless the parties have agreed that only the non-defaulting party is entitled to receive a termination payment where the net amount is positive and is in its favor. Contractual close-out netting reduces derivatives credit exposure from gross to net exposure.

At September 30, 2017, asset derivatives and liability derivatives of $49.4 million and $22.5 million, respectively, were subject to a master netting agreement, compared to $28.4 million and $26.0 million, respectively, at December 31, 2016. The remaining derivatives included in the preceding table were not subject to a master netting agreement.

All realized and unrealized contract gains and losses on the Company’s derivative instruments are reflected in net realized

ACGL 2017 THIRD QUARTER FORM 10-Q 36

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

gains (losses) in the consolidated statements of income, as summarized in the following table:

Derivatives not designated as	September 30,
hedging instruments:	2017			2016
Three Months Ended
Net realized gains (losses):
Futures contracts	$	4,899		$	(15,368	)
Foreign currency forward contracts	(228		)	4,583
TBAs	122			(23		)
Other	(495		)	(6,156		)
Total	$	4,298		$	(16,964	)
Nine Months Ended
Net realized gains (losses):
Futures contracts	$	7,309		$	45,954
Foreign currency forward contracts	(12,266		)	(13,951		)
TBAs	143			311
Other	(4,839		)	(8,212		)
Total	$	(9,653	)	$	24,102

10.    Commitments and Contingencies

Letter of Credit and Revolving Credit Facilities

ACGL repaid $100.0 million of borrowings under its unsecured revolving loan and letter of credit facility in the 2017 third quarter, offset by an increase in borrowings in the Company’s ‘other’ segment.

Investment Commitments

The Company’s investment commitments, which are primarily related to agreements entered into by the Company to invest in funds and separately managed accounts when called upon, were approximately $1.58 billion at September 30, 2017, compared to $1.29 billion at December 31, 2016.

11.    Share Transactions

Share Repurchases

The board of directors of ACGL has authorized the investment in ACGL’s common shares through a share repurchase program. Since the inception of the share repurchase program, ACGL has repurchased approximately 125.2 million common shares for an aggregate purchase price of $3.68 billion. For the nine months ended September 30, 2017, the Company did not repurchase any shares under the share repurchase program, compared to 1.1 million common shares repurchased for the nine months ended September 30, 2016 with an aggregate purchase price of $75.3 million (no repurchases in the 2016 third quarter). At September 30, 2017, $446.5 million of share

repurchases were available under the program, which may be effected from time to time in open market or privately negotiated transactions through December 31, 2019. The timing and amount of the repurchase transactions under this program will depend on a variety of factors, including market conditions and corporate and regulatory considerations.

Conversion of Convertible Non-Voting Common Equivalent Preferred Shares

On June 8, 2017, ACGL and AIG entered into Amendment No. 1 (the “Amendment”) to the Investor Rights Agreement (the “Investor Rights Agreement”) dated as of December 31, 2016 to amend the restrictions on transfers of the 1,276,282 shares of ACGL’s convertible non-voting common-equivalent preference shares owned by AIG (the “Convertible Preferred Shares”). The Convertible Preferred Shares were issued to AIG as part of the consideration in UGC acquisition. Pursuant to the certificate of designations for the Convertible Preferred Shares and in accordance with the terms and conditions set forth therein, each Convertible Preferred Share is convertible into ten common shares of ACGL.

Pursuant to the Amendment, ACGL permitted AIG to transfer: (i) 638,141 Convertible Preferred Shares from and after June 8, 2017, and up to an additional 95,721 of the Convertible Preferred Shares to the extent that the several underwriters exercise the option to purchase additional securities expected to be granted pursuant to an underwritten secondary offering of ACGL common shares issuable upon conversion of the Convertible Preferred Shares by AIG and (ii) any and all of the Convertible Preferred Shares from and after January 15, 2018, subject to certain exceptions, and in each case subject to the terms and conditions of the Investor Rights Agreement. All other terms of the Investor Rights Agreement remain in effect.

In June 2017, ACGL completed an underwritten public secondary offering of 7,088,620 common shares by AIG following transfer of 708,862 Convertible Preferred Shares. Proceeds from the sale of common shares pursuant to the public offering were received by AIG. At September 30, 2017, 567,420 Convertible Preferred Shares were outstanding.

Series F Preferred Shares

In August 2017, ACGL completed a $230 million underwritten public offering of 9.2 million depositary shares (the “Depositary Shares”), each of which represents a 1/1,000th interest in a share of its 5.45% Non-Cumulative Preferred Shares, Series F, have a $0.01 par value and $25,000 liquidation preference per share (equivalent to $25 liquidation preference per Depositary Share) (the “Series F Preferred Shares”). Each Depositary Share, evidenced by a depositary receipt, entitles the holder, through the depositary, to a proportional fractional interest in all rights and preferences of the Series F Preferred Shares represented thereby (including any dividend, liquidation, redemption and voting rights).

ACGL 2017 THIRD QUARTER FORM 10-Q 37

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Holders of Series F Preferred Shares will be entitled to receive dividend payments only when, as and if declared by our board of directors or a duly authorized committee of the board. Any such dividends will be payable from, and including, the date of original issue on a noncumulative basis, quarterly in arrears on the last day of March, June, September and December of each year, at an annual rate of 5.45%. Dividends on the Series F Preferred Shares are not cumulative. The Company will be restricted from paying dividends on or repurchasing its common shares unless certain dividend payments are made on the Series F Preferred Shares.

Except in specified circumstances relating to certain tax or corporate events, the Series F Preferred Shares are not redeemable prior to August 17, 2022 (the fifth anniversary of the issue date). On and after that date, the Series F Preferred Shares will be redeemable at the Company’s option, in whole or in part, at a redemption price of $25,000 per share of the Series F Preferred Shares (equivalent to $25 per depositary share), plus any declared and unpaid dividends, without accumulation of any undeclared dividends to, but excluding, the redemption date. The Depositary Shares will be redeemed if and to the extent the related Series F Preferred Shares are redeemed by the Company. Neither the Depositary Shares nor the Series F Preferred Shares have a stated maturity, nor will they be subject to any sinking fund or mandatory redemption. The Series F Preferred Shares are not convertible into any other securities. The Series F Preferred Shares will not have voting rights, except under limited circumstances.

The net proceeds from the offering of $222.1 million and other available funds were used to redeem in part its outstanding 6.75% Series C Non-Cumulative Preferred Shares. The preferred shares were redeemed at a redemption price equal to $25 per share, plus all declared and unpaid dividends to (but excluding) the redemption date. In accordance with GAAP, following the redemption, original issuance costs related to such shares have been removed from additional paid-in capital and recorded as a “loss on redemption of preferred shares.” Such adjustment had no impact on total shareholders’ equity or cash flows.

ACGL 2017 THIRD QUARTER FORM 10-Q 38

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

12.    Other Comprehensive Income (Loss)

The following tables present details about amounts reclassified from accumulated other comprehensive income and the tax effects allocated to each component of other comprehensive income (loss):

		Amounts Reclassified from AOCI
	Consolidated Statement of Income	Three Months Ended						Nine Months Ended
Details About	Line Item That Includes	September 30,						September 30,
AOCI Components	Reclassification	2017			2016			2017			2016
Unrealized appreciation on available-for-sale investments
	Net realized gains (losses)	$	27,550		$	61,464		$	59,474		$	137,555
	Other-than-temporary impairment losses	(1,878		)	(3,867		)	(5,415		)	(16,999		)
	Total before tax	25,672			57,597			54,059			120,556
	Income tax (expense) benefit	(1,760		)	(2,605		)	(7,879		)	(11,247		)
	Net of tax	$	23,912		$	54,992		$	46,180		$	109,309

	Before Tax Amount			Tax Expense (Benefit)			Net of Tax Amount
Three Months Ended September 30, 2017
Unrealized appreciation (decline) in value of investments:
Unrealized holding gains (losses) arising during period	$	69,330		$	2,868		$	66,462
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss)	—			—			—
Less reclassification of net realized gains (losses) included in net income	25,672			1,760			23,912
Foreign currency translation adjustments	8,590			310			8,280
Other comprehensive income (loss)	$	52,248		$	1,418		$	50,830
Three Months Ended September 30, 2016
Unrealized appreciation (decline) in value of investments:
Unrealized holding gains (losses) arising during period	$	11,692		$	(4,589	)	$	16,281
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss)	—			—			—
Less reclassification of net realized gains (losses) included in net income	57,597			2,605			54,992
Foreign currency translation adjustments	(5,407		)	(95		)	(5,312		)
Other comprehensive income (loss)	$	(51,312	)	$	(7,289	)	$	(44,023	)
Nine Months Ended September 30, 2017
Unrealized appreciation (decline) in value of investments:
Unrealized holding gains (losses) arising during period	$	288,813		$	28,590		$	260,223
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss)	—			—			—
Less reclassification of net realized gains (losses) included in net income	54,059			7,879			46,180
Foreign currency translation adjustments	30,264			563			29,701
Other comprehensive income (loss)	$	265,018		$	21,274		$	243,744
Nine Months Ended September 30, 2016
Unrealized appreciation (decline) in value of investments:
Unrealized holding gains (losses) arising during period	$	281,770		$	30,048		$	251,722
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss)	(150		)	—			(150		)
Less reclassification of net realized gains (losses) included in net income	120,556			11,247			109,309
Foreign currency translation adjustments	(5,733		)	417			(6,150		)
Other comprehensive income (loss)	$	155,331		$	19,218		$	136,113

ACGL 2017 THIRD QUARTER FORM 10-Q 39

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

13.     Guarantor Financial Information

The following tables present condensed financial information for ACGL, Arch-U.S., a 100% owned subsidiary of ACGL, and ACGL’s other subsidiaries.

		September 30, 2017
Condensed Consolidating Balance Sheet		ACGL (Parent Guarantor)		Arch-U.S. (Subsidiary Issuer)		Other ACGL Subsidiaries		Consolidating Adjustments and Eliminations			ACGL Consolidated
Assets
Total investments		$	402	$	69,671	$	21,876,508	$	(14,700	)	$	21,931,881
Cash		4,868		88,818		768,675		—			862,361
Investments in subsidiaries		9,214,178		4,028,493		—		(13,242,671		)	—
Due from subsidiaries and affiliates		81		117		1,923,941		(1,924,139		)	—
Premiums receivable		—		—		1,863,203		(593,525		)	1,269,678
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses		—		—		7,023,836		(4,517,821		)	2,506,015
Contractholder receivables		—		—		1,864,348		—			1,864,348
Ceded unearned premiums		—		—		2,240,129		(1,292,994		)	947,135
Deferred acquisition costs		—		—		677,567		(146,371		)	531,196
Goodwill and intangible assets		—		—		684,405		—			684,405
Other assets		13,357		59,734		2,146,993		(192,306		)	2,027,778
	Total assets	$	9,232,886	$	4,246,833	$	41,069,605	$	(21,924,527	)	$	32,624,797
Liabilities
Reserve for losses and loss adjustment expenses		$	—	$	—	$	15,836,263	$	(4,484,996	)	$	11,351,267
Unearned premiums		—		—		5,044,544		(1,292,994		)	3,751,550
Reinsurance balances payable		—		—		945,530		(593,524		)	352,006
Contractholder payables		—		—		1,864,348		—			1,864,348
Collateral held for insured obligations		—		—		345,726					345,726
Senior notes		297,030		494,596		941,100		—			1,732,726
Revolving credit agreement borrowings		—		—		826,242		—			826,242
Due to subsidiaries and affiliates		41		542,103		1,381,996		(1,924,140		)	—
Other liabilities		24,671		100,278		2,669,614		(371,502		)	2,423,061
	Total liabilities	321,742		1,136,977		29,855,363		(8,667,156		)	22,646,926
Redeemable noncontrolling interests		—		—		220,529		(14,700		)	205,829
Shareholders’ Equity
Total shareholders’ equity available to Arch		8,911,144		3,109,856		10,132,815		(13,242,671		)	8,911,144
Non-redeemable noncontrolling interests		—		—		860,898		—			860,898
	Total shareholders’ equity	8,911,144		3,109,856		10,993,713		(13,242,671		)	9,772,042
	Total liabilities, noncontrolling interests and shareholders’ equity	$	9,232,886	$	4,246,833	$	41,069,605	$	(21,924,527	)	$	32,624,797

ACGL 2017 THIRD QUARTER FORM 10-Q 40

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

		December 31, 2016
Condensed Consolidating Balance Sheet		ACGL (Parent Guarantor)		Arch-U.S. (Subsidiary Issuer)		Other ACGL Subsidiaries		Consolidating Adjustments and Eliminations			ACGL Consolidated
Assets
Total investments		$	2,612	$	41,672	$	19,690,067	$	(14,700	)	$	19,719,651
Cash		1,687		71,955		769,300		—			842,942
Investments in subsidiaries		8,660,586		3,716,681		—		(12,377,267		)	—
Due from subsidiaries and affiliates		14,297		51,298		1,866,681		(1,932,276		)	—
Premiums receivable		—		—		1,579,865		(507,430		)	1,072,435
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses		—		—		6,114,518		(4,000,380		)	2,114,138
Contractholder receivables		—		—		1,717,436		—			1,717,436
Ceded unearned premiums		—		—		1,985,311		(1,125,744		)	859,567
Deferred acquisition costs		—		—		577,461		(129,901		)	447,560
Goodwill and intangible assets		—		—		781,553		—			781,553
Other assets		15,725		49,244		1,901,786		(149,928		)	1,816,827
	Total assets	$	8,694,907	$	3,930,850	$	36,983,978	$	(20,237,626	)	$	29,372,109
Liabilities
Reserve for losses and loss adjustment expenses		$	—	$	—	$	14,164,191	$	(3,963,231	)	$	10,200,960
Unearned premiums		—		—		4,532,614		(1,125,744		)	3,406,870
Reinsurance balances payable		—		—		807,837		(507,430		)	300,407
Contractholder payables		—		—		1,717,436		—			1,717,436
Collateral held for insured obligations		—		—		301,406		—			301,406
Deposit accounting liabilities		—		—		22,150		—			22,150
Senior notes		296,957		494,525		940,776		—			1,732,258
Revolving credit agreement borrowings		100,000		—		656,650		—			756,650
Due to subsidiaries and affiliates		26,270		535,584		1,370,422		(1,932,276		)	—
Other liabilities		17,962		54,823		1,867,040		(316,978		)	1,622,847
	Total liabilities	441,189		1,084,932		26,380,522		(7,845,659		)	20,060,984
Redeemable noncontrolling interests		—		—		220,253		(14,700		)	205,553
Shareholders’ Equity
Total shareholders’ equity available to Arch		8,253,718		2,845,918		9,531,349		(12,377,267		)	8,253,718
Non-redeemable noncontrolling interests		—		—		851,854		—			851,854
	Total shareholders’ equity	8,253,718		2,845,918		10,383,203		(12,377,267		)	9,105,572
	Total liabilities, noncontrolling interests and shareholders’ equity	$	8,694,907	$	3,930,850	$	36,983,978	$	(20,237,626	)	$	29,372,109

ACGL 2017 THIRD QUARTER FORM 10-Q 41

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

		Three Months Ended September 30, 2017
Condensed Consolidating Statement of Income and Comprehensive Income		ACGL (Parent Guarantor)			Arch-U.S. (Subsidiary Issuer)			Other ACGL Subsidiaries			Consolidating Adjustments and Eliminations			ACGL Consolidated
Revenues
Net premiums earned		$	—		$	—		$	1,261,886		$	—		$	1,261,886
Net investment income		117			151			138,784			(22,593		)	116,459
Net realized gains (losses)		—			—			66,275			—			66,275
Net impairment losses recognized in earnings		—			—			(1,878		)	—			(1,878		)
Other underwriting income		—			—			6,064			—			6,064
Equity in net income (loss) of investment funds accounted for using the equity method		—			—			31,090			—			31,090
Other income (loss)		(102		)	—			(240		)	—			(342		)
	Total revenues	15			151			1,501,981			(22,593		)	1,479,554
Expenses
Losses and loss adjustment expenses		—			—			1,046,141			—			1,046,141
Acquisition expenses		—			—			193,854			—			193,854
Other operating expenses		—			—			170,127			—			170,127
Corporate expenses		14,576			410			2,112			—			17,098
Amortization of intangible assets		—			—			31,824			—			31,824
Interest expense		5,934			12,037			33,811			(22,272		)	29,510
Net foreign exchange (gains) losses		—			—			20,510			7,518			28,028
	Total expenses	20,510			12,447			1,498,379			(14,754		)	1,516,582
Income (loss) before income taxes		(20,495		)	(12,296		)	3,602			(7,839		)	(37,028		)
Income tax (expense) benefit		—			4,432			(12,621		)	—			(8,189		)
Income (loss) before equity in net income of subsidiaries		(20,495		)	(7,864		)	(9,019		)	(7,839		)	(45,217		)
Equity in net income (loss) of subsidiaries		(13,161		)	50,057			—			(36,896		)	—
Net income (loss)		(33,656		)	42,193			(9,019		)	(44,735		)	(45,217		)
Net (income) loss attributable to noncontrolling interests		—			—			11,238			323			11,561
Net income (loss) available to Arch		(33,656		)	42,193			2,219			(44,412		)	(33,656		)
Preferred dividends		(12,369		)	—			—			—			(12,369		)
Loss on redemption of preferred shares		(6,735		)	—			—			—			(6,735		)
Net income (loss) available to Arch common shareholders		$	(52,760	)	$	42,193		$	2,219		$	(44,412	)	$	(52,760	)
Comprehensive income (loss) available to Arch		$	17,585		$	47,676		$	45,936		$	(93,612	)	$	17,585

ACGL 2017 THIRD QUARTER FORM 10-Q 42

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

		Three Months Ended September 30, 2016
Condensed Consolidating Statement of Income and Comprehensive Income		ACGL (Parent Guarantor)			Arch-U.S. (Subsidiary Issuer)			Other ACGL Subsidiaries			Consolidating Adjustments and Eliminations			ACGL Consolidated
Revenues
Net premiums earned		$	—		$	—		$	958,403		$	—		$	958,403
Net investment income		6			803			99,654			(6,845		)	93,618
Net realized gains (losses)		—			—			125,105			—			125,105
Net impairment losses recognized in earnings		—			—			(3,867		)	—			(3,867		)
Other underwriting income		—			—			7,980			—			7,980
Equity in net income (loss) of investment funds accounted for using the equity method		—			—			16,662			—			16,662
Other income (loss)		71			—			(471		)	—			(400		)
	Total revenues	77			803			1,203,466			(6,845		)	1,197,501
Expenses
Losses and loss adjustment expenses		—			—			524,183			—			524,183
Acquisition expenses		—			—			161,267			—			161,267
Other operating expenses		—			—			153,286			—			153,286
Corporate expenses		18,488			608			(611		)	—			18,485
Amortization of intangible assets		—			—			4,865			—			4,865
Interest expense		5,948			6,627			9,890			(6,522		)	15,943
Net foreign exchange (gains) losses		—			—			2,723			(102		)	2,621
	Total expenses	24,436			7,235			855,603			(6,624		)	880,650
Income (loss) before income taxes		(24,359		)	(6,432		)	347,863			(221		)	316,851
Income tax (expense) benefit		—			2,116			(15,347		)	—			(13,231		)
Income (loss) before equity in net income of subsidiaries		(24,359		)	(4,316		)	332,516			(221		)	303,620
Equity in net income of subsidiaries		277,231			21,945			—			(299,176		)	—
Net income		252,872			17,629			332,516			(299,397		)	303,620
Net (income) loss attributable to noncontrolling interests		—			—			(51,071		)	323			(50,748		)
Net income available to Arch		252,872			17,629			281,445			(299,074		)	252,872
Preferred dividends		(5,484		)	—			—			—			(5,484		)
Net income available to Arch common shareholders		$	247,388		$	17,629		$	281,445		$	(299,074	)	$	247,388
Comprehensive income (loss) available to Arch		$	208,790		$	2,019		$	237,555		$	(239,574	)	$	208,790

ACGL 2017 THIRD QUARTER FORM 10-Q 43

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

		Nine Months Ended September 30, 2017
Condensed Consolidating Statement of Income and Comprehensive Income		ACGL (Parent Guarantor)			Arch-U.S. (Subsidiary Issuer)			Other ACGL Subsidiaries			Consolidating Adjustments and Eliminations			ACGL Consolidated
Revenues
Net premiums earned		$	—		$	—		$	3,619,777		$	—		$	3,619,777
Net investment income		123			1,151			410,392			(66,209		)	345,457
Net realized gains (losses)		—			—			122,163			—			122,163
Net impairment losses recognized in earnings		—			—			(5,415		)	—			(5,415		)
Other underwriting income		—			—			15,519			—			15,519
Equity in net income of investment funds accounted for using the equity method		—			—			111,884			—			111,884
Other income (loss)		(368		)	—			(2,750		)	—			(3,118		)
	Total revenues	(245		)	1,151			4,271,570			(66,209		)	4,206,267
Expenses
Losses and loss adjustment expenses		—			—			2,288,571			—			2,288,571
Acquisition expenses		—			—			566,579			—			566,579
Other operating expenses		—			—			514,827			—			514,827
Corporate expenses		53,639			3,727			12,400			—			69,766
Amortization of intangible assets		—			—			93,942			—			93,942
Interest expense		18,024			35,956			98,197			(65,242		)	86,935
Net foreign exchange losses (gains)		—			—			65,701			21,274			86,975
	Total expenses	71,663			39,683			3,640,217			(43,968		)	3,707,595
Income (loss) before income taxes		(71,908		)	(38,532		)	631,353			(22,241		)	498,672
Income tax (expense) benefit		—			13,374			(84,129		)	—			(70,755		)
Income (loss) before equity in net income of subsidiaries		(71,908		)	(25,158		)	547,224			(22,241		)	427,917
Equity in net income of subsidiaries		476,546			213,586			—			(690,132		)	—
Net income		404,638			188,428			547,224			(712,373		)	427,917
Amounts attributable to noncontrolling interests		—			—			(24,247		)	968			(23,279		)
Net income available to Arch		404,638			188,428			522,977			(711,405		)	404,638
Preferred dividends		(34,936		)	—			—			—			(34,936		)
Loss on redemption of preferred shares		(6,735		)	—			—			—			(6,735		)
Net income available to Arch common shareholders		$	362,967		$	188,428		$	522,977		$	(711,405	)	$	362,967
Comprehensive income (loss) available to Arch		$	648,861		$	240,759		$	745,856		$	(986,615	)	$	648,861

ACGL 2017 THIRD QUARTER FORM 10-Q 44

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

		Nine Months Ended September 30, 2016
Condensed Consolidating Statement of Income and Comprehensive Income		ACGL (Parent Guarantor)			Arch-U.S. (Subsidiary Issuer)			Other ACGL Subsidiaries			Consolidating Adjustments and Eliminations			ACGL Consolidated
Revenues
Net premiums earned		$	—		$	—		$	2,915,967		$	—		$	2,915,967
Net investment income		7			2,351			294,012			(20,679		)	275,691
Net realized gains (losses)		—			—			230,647			—			230,647
Net impairment losses recognized in earnings		—			—			(16,849		)	—			(16,849		)
Other underwriting income		—			—			54,749			(16,498		)	38,251
Equity in net income of investment funds accounted for using the equity method		—			—			32,054			—			32,054
Other income (loss)		270			—			(702		)	—			(432		)
	Total revenues	277			2,351			3,509,878			(37,177		)	3,475,329
Expenses
Losses and loss adjustment expenses		—			—			1,631,724			—			1,631,724
Acquisition expenses		—			—			501,782			—			501,782
Other operating expenses		—			—			460,748			—			460,748
Corporate expenses		45,284			1,549			(1,765		)	—			45,068
Amortization of intangible assets		—			—			14,493			—			14,493
Interest expense		17,811			19,946			46,169			(36,213		)	47,713
Net foreign exchange losses (gains)		—			—			5,093			(3,568		)	1,525
	Total expenses	63,095			21,495			2,658,244			(39,781		)	2,703,053
Income (loss) before income taxes		(62,818		)	(19,144		)	851,634			2,604			772,276
Income tax (expense) benefit		—			6,446			(50,118		)	—			(43,672		)
Income (loss) before equity in net income of subsidiaries		(62,818		)	(12,698		)	801,516			2,604			728,604
Equity in net income of subsidiaries		681,543			64,684			—			(746,227		)	—
Net income		618,725			51,986			801,516			(743,623		)	728,604
Amounts attributable to noncontrolling interests		—			—			(110,844		)	965			(109,879		)
Net income available to Arch		618,725			51,986			690,672			(742,658		)	618,725
Preferred dividends		(16,453		)	—			—			—			(16,453		)
Net income available to Arch common shareholders		$	602,272		$	51,986		$	690,672		$	(742,658	)	$	602,272
Comprehensive income (loss) available to Arch		$	754,979		$	89,204		$	830,348		$	(919,552	)	$	754,979

ACGL 2017 THIRD QUARTER FORM 10-Q 45

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

		Nine Months Ended September 30, 2017
Condensed Consolidating Statement of Cash Flows		ACGL (Parent Guarantor)			Arch-U.S. (Subsidiary Issuer)			Other ACGL Subsidiaries			Consolidating Adjustments and Eliminations			ACGL Consolidated
Operating Activities
	Net Cash Provided By (Used For) Operating Activities	$	130,715		$	70,761		$	1,464,701		$	(585,043	)	$	1,081,134
Investing Activities
Purchases of fixed maturity investments		—			—			(28,079,129		)	—			(28,079,129		)
Purchases of equity securities		—			—			(667,135		)	—			(667,135		)
Purchases of other investments		—			—			(1,406,528		)	—			(1,406,528		)
Proceeds from the sales of fixed maturity investments		—			—			27,629,474			—			27,629,474
Proceeds from the sales of equity securities		—			—			751,873			—			751,873
Proceeds from the sales, redemptions and maturities of other investments		—			—			938,581			—			938,581
Proceeds from redemptions and maturities of fixed maturity investments		—			—			747,621			—			747,621
Net settlements of derivative instruments		—			—			(20,952		)	—			(20,952		)
Net (purchases) sales of short-term investments		2,209			(27,998		)	(938,864		)	—			(964,653		)
Change in cash collateral related to securities lending		—			—			148,692			—			148,692
Contributions to subsidiaries		20,641			(72,900		)	(353,588		)	405,847			—
Issuance of intercompany loans		—			—			(47,000		)	47,000			—
Repayment of intercompany loans		—			47,000			—			(47,000		)	—
Acquisitions, net of cash		—			—			(27,709		)	—			(27,709		)
Purchases of fixed assets		(18		)	—			(16,844		)	—			(16,862		)
Other		—			—			106,786			(20,641		)	86,145
	Net Cash Provided By (Used For) Investing Activities	22,832			(53,898		)	(1,234,722		)	385,206			(880,582		)
Financing Activities
Proceeds from issuance of preferred shares, net		222,054			—			—			—			222,054
Redemption of preferred shares		(230,000		)	—			—			—			(230,000		)
Proceeds from common shares issued, net		(7,484		)	—			405,847			(405,847		)	(7,484		)
Proceeds from intercompany borrowings		—			—			47,000			(47,000		)	—
Proceeds from borrowings		—			—			238,915			—			238,915
Repayments of intercompany borrowings		—			—			(47,000		)	47,000			—
Repayments of borrowings		(100,000		)	—			(72,000		)	—			(172,000		)
Change in cash collateral related to securities lending		—			—			(148,692		)	—			(148,692		)
Dividends paid to redeemable noncontrolling interests		—			—			(14,447		)	956			(13,491		)
Dividends paid to parent (1)		—			—			(584,087		)	584,087			—
Other		—			—			(69,921		)	20,641			(49,280		)
Preferred dividends paid		(34,936		)	—			—			—			(34,936		)
	Net Cash Provided By (Used For) Financing Activities	(150,366		)	—			(244,385		)	199,837			(194,914		)
Effects of exchange rates changes on foreign currency cash		—			—			13,781			—			13,781
Increase (decrease) in cash		3,181			16,863			(625		)	—			19,419
Cash beginning of year		1,687			71,955			769,300			—			842,942
Cash end of period		$	4,868		$	88,818		$	768,675		$	—		$	862,361

(1)     Dividends received by parent are included in net cash provided by (used for) operating activities.

ACGL 2017 THIRD QUARTER FORM 10-Q 46

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

		Nine Months Ended September 30, 2016
Condensed Consolidating Statement of Cash Flows		ACGL (Parent Guarantor)			Arch-U.S. (Subsidiary Issuer)			Other ACGL Subsidiaries			Consolidating Adjustments and Eliminations			ACGL Consolidated
Operating Activities
	Net Cash Provided By (Used For) Operating Activities	$	94,250		$	14,448		$	1,096,443		$	(168,002	)	$	1,037,139
Investing Activities
Purchases of fixed maturity investments		—			—			(27,840,555		)	—			(27,840,555		)
Purchases of equity securities		—			—			(377,767		)	—			(377,767		)
Purchases of other investments		—			—			(1,008,774		)	—			(1,008,774		)
Proceeds from the sales of fixed maturity investments		—			—			26,731,924			—			26,731,924
Proceeds from the sales of equity securities		—			—			464,904			—			464,904
Proceeds from the sales, redemptions and maturities of other investments		—			—			879,330			—			879,330
Proceeds from redemptions and maturities of fixed maturity investments		—			41,500			499,323			—			540,823
Net settlements of derivative instruments		—			—			23,396			—			23,396
Net (purchases) sales of short-term investments		(436,830		)	(53,779		)	(113,553		)	—			(604,162		)
Change in cash collateral related to securities lending		—			—			(27,935		)	—			(27,935		)
Contributions to subsidiaries		(3,585		)	—			(9,247		)	12,832			—
Acquisitions, net of cash		—			—			(20,911		)	—			(20,911		)
Purchases of fixed assets		(8		)	—			(11,557		)	—			(11,565		)
Other		2,000			—			(5,816		)	—			(3,816		)
	Net Cash Provided By (Used For) Investing Activities	(438,423		)	(12,279		)	(817,238		)	12,832			(1,255,108		)
Financing Activities
Proceeds from issuance of preferred shares, net		434,899			—			—			—			434,899
Purchases of common shares under share repurchase program		(75,256		)	—			—			—			(75,256		)
Proceeds from common shares issued, net		(3,785		)	—			12,832			(12,832		)	(3,785		)
Proceeds from borrowings		—			—			46,000			—			46,000
Repayments of borrowings		—			—			(179,171		)	—			(179,171		)
Change in cash collateral related to securities lending		—			—			27,935			—			27,935
Dividends paid to redeemable noncontrolling interests		—			—			(14,448		)	957			(13,491		)
Dividends paid to parent (1)		—			—			(167,045		)	167,045			—
Other		—			200			32,913			—			33,113
Preferred dividends paid		(16,453		)	—			—			—			(16,453		)
	Net Cash Provided By (Used For) Financing Activities	339,405			200			(240,984		)	155,170			253,791
Effects of exchange rates changes on foreign currency cash		—			—			(10,332		)	—			(10,332		)
Increase (decrease) in cash		(4,768		)	2,369			27,889			—			25,490
Cash beginning of year		6,809			17,023			529,494			—			553,326
Cash end of period		$	2,041		$	19,392		$	557,383		$	—		$	578,816

(1)     Dividends received by parent are included in net cash provided by (used for) operating activities.

ACGL 2017 THIRD QUARTER FORM 10-Q 47

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

14.    Income Taxes

The Company’s income tax provision on income before income taxes resulted in an expense of 14.2% for the nine months ended September 30, 2017, compared to an expense of 5.7% for the 2016 period. The Company’s effective tax rate, which is based upon the expected annual effective tax rate, may fluctuate from period to period based on the relative mix of income or loss reported by jurisdiction and the varying tax rates in each jurisdiction. For interim reporting purposes, the Company has calculated its effective tax rate for the full year of 2017 by treating any excess tax benefits that arise from the accounting for stock based compensation as a discrete item. As such, this amount is not included when projecting the Company’s full year effective tax rate but rather is accounted for at the U.S. Federal statutory rate of 35% after applying the projected full year effective tax rate to actual nine-month results before the discrete item. The impact of the discrete item resulted in a benefit of 1.5% for the nine months ended September 30, 2017.

The Company had a net deferred tax asset of $248.3 million at September 30, 2017, compared to $221.2 million at December 31, 2016. In addition, the Company paid$47.9 million and $40.7 million of income taxes for the nine months ended September 30, 2017 and 2016, respectively.

15.    Legal Proceedings

The Company, in common with the insurance industry in general, is subject to litigation and arbitration in the normal course of its business. As of September 30, 2017, the Company was not a party to any litigation or arbitration which is expected by management to have a material adverse effect on the Company’s results of operations and financial condition and liquidity. 

16.    Transactions with Related Parties

Kewsong Lee, a director of ACGL, is a Managing Director and Deputy Chief Investment Officer for Corporate Private Equity of Carlyle Group LP (“Carlyle”). As part of its investment philosophy, the Company invests a portion of its investment portfolio in alternative investment funds. As of September 30, 2017, the total value of the Company’s investments in funds or other investments managed by Carlyle was approximately $248.5 million, and the Company had aggregate unfunded commitments to funds managed by Carlyle of $471.6 million. The Company may make additional commitments to funds managed by Carlyle from time to time. During the nine months ended September 30, 2017 and 2016, the Company made aggregate capital contributions to funds managed by Carlyle of $86.0 million and $50.1 million, respectively, and received aggregate cash distributions from funds managed by Carlyle of $48.7 million and $17.9 million, respectively. Effective November 2, 2017, Mr. Lee resigned from ACGL’s Board of Directors because of the expansion of his duties at Carlyle following his recent promotion to co-CEO effective January 1, 2018.

17.    Acquisition

On July 1, 2017, the Company completed its previously announced acquisition of AIG United Guaranty Insurance (Asia) Limited (renamed “Arch MI Asia Limited”) following the payment of $40.0 million to AIG. Arch MI Asia Limited compliments the Company’s existing private mortgage insurance businesses, which have operations in the United States, Europe and Australia.

The purchase price was allocated to the acquired assets and liabilities of Arch MI Asia Limited based on estimated fair values on the acquisition date. The Company recognized other intangible assets of $2.3 million and goodwill of $0.8 million. The goodwill balance is primarily attributed to Arch MI Asia Limited’s assembled workforce and access to the mortgage insurance market. None of the goodwill recognized is expected to be deductible for income tax purposes.

ACGL 2017 THIRD QUARTER FORM 10-Q 48

ARCH CAPITAL GROUP LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

18.    Subsequent Events

On October 25, 2017, the Company’s first-lien U.S. mortgage insurance subsidiaries entered into an aggregate excess of loss reinsurance agreement with Bellemeade Re 2017-1 Ltd. (“Bellemeade III”), a special purpose reinsurance company domiciled in Bermuda. The Bellemeade III agreement provides for up to $368.1 million of aggregate excess of loss reinsurance coverage at inception for new delinquencies on a portfolio of in-force policies issued between January 1, 2017 and June 30, 2017. For the coverage period, Bellemeade III will cover $368.1 million in excess of $165.7 million of aggregate losses. The coverage amount decreases over a ten-year period as the underlying covered mortgages amortize.

Bellemeade III financed the coverage through the issuance of mortgage insurance-linked notes in an aggregate amount of approximately $368.1 million to unrelated investors (the “Notes”). The maturity date of the Notes is October 25, 2027. The Notes will be redeemed prior to maturity upon the occurrence of a mandatory termination event or if the ceding insurers trigger a termination of the reinsurance agreement following the occurrence of an optional termination event. All of the proceeds paid to Bellemeade III from the sale of the Notes were deposited into a reinsurance trust for the sole benefit of the ceding insurers as security for Bellemeade III’s obligations. At all times, funds in the reinsurance trust account are required to be invested in high credit quality money market funds.

In October 2017, a series of wildfires burned across several California counties. With the information available, the Company has established a preliminary range of pre-tax losses of $30 million to $55 million for these wildfires, net of reinsurance and reinstatement premiums. At this time, there are significant uncertainties surrounding the numbers of claims and scope of damage for these wildfires. The Company’s preliminary estimate for the wildfires is based on currently available information derived from modeling techniques, industry assessments of exposure, preliminary claims information obtained from the Company’s clients and brokers to date and a review of in-force contracts. Actual losses from these wildfires may vary materially from the estimates due to the inherent uncertainties in making such determinations.

ACGL 2017 THIRD QUARTER FORM 10-Q 49

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion and analysis of our financial condition and results of operations. This should be read in conjunction with our consolidated financial statements included in Item 1 of this report and also our Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2016 (“2016 Form 10-K”). In addition, readers should review “Risk Factors” set forth in Item 1A of Part I of our 2016 Form 10-K. Tabular amounts are in U.S. Dollars in thousands, except share amounts, unless otherwise noted.

Arch Capital Group Ltd. (“ACGL” and, together with its subsidiaries, “we” or “us”) is a Bermuda public limited liability company with approximately $11.04 billion in capital at September 30, 2017 and, through operations in Bermuda, the United States, Europe, Canada and Australia, writes insurance, reinsurance and mortgage insurance on a worldwide basis.

CURRENT OUTLOOK

The broad property casualty insurance market environment continues to be competitive in our business, consistent with our view in prior quarters, reflecting slight deterioration in rates across certain sectors. As in prior quarters, this has led to flat or lower writings in certain property casualty lines in the 2017 third quarter. However, with the continued low interest rate environment, additional price increases are needed in many lines in order for us to achieve our return requirements. Recent catastrophic loss activity, including Hurricanes Harvey, Irma and Maria and the California wildfires, may result in improvements in rates and provide opportunities for growth. Our underwriting teams continue to execute a disciplined strategy by emphasizing small and medium-sized accounts over large accounts and by utilizing reinsurance purchases to reduce volatility on large account, high capacity business.

Our mortgage segment continues to experience favorable market conditions. The mortgage segment includes our U.S. primary mortgage insurance operations, international mortgage insurance and reinsurance operations as well as government sponsored enterprise (“GSE”) credit-risk sharing transactions. On December 31, 2016, we completed the acquisition of United Guaranty Corporation, a North Carolina corporation (“UGC”) from American International Group, Inc. (“AIG”). The acquisition of UGC expanded our U.S. primary mortgage insurance operations by combining UGC’s position as the market leader in the U.S. private mortgage insurance industry with Arch’s financial strength and history of innovation. On July 1, 2017, we completed our previously announced

acquisition of AIG United Guaranty Insurance (Asia) Limited from AIG (renamed “Arch MI Asia Limited”).

We insure mortgages for homes in areas that have been impacted by catastrophic events, such as Hurricanes Harvey and Irma and the California wildfires. We anticipate that we will experience an increase in delinquency notices on insured loans impacted by such events, principally in the 2017 fourth quarter. Generally, mortgage insurance losses occur only when a credit event occurs and, following a physical damage event, when the home is restored to pre-storm condition. Our ultimate claims exposure will depend on the number of delinquency notices received and the ultimate claim rate related to such notices. In the event of natural disasters, cure rates are influenced by the adequacy of homeowners and flood insurance carried on a related property, and a borrower's access to aid from government entities and private organizations, in addition to other factors which generally impact cure rates in unaffected areas. The 2017 third quarter results do not include a reserve for claims associated with future notices not yet reported as, in accordance with GAAP, no reserves are recorded until we are notified of the delinquencies. Management anticipates that subsequent quarters may experience some loss activity from the impacted areas, but does not expect this to be material.

Our objective is to achieve an average operating return on average equity of 15% or greater over the insurance cycle, which we believe to be an attractive return to our common shareholders given the risks we assume. We continue to look for opportunities to find acceptable books of business to underwrite without sacrificing underwriting discipline and continue to write a portion of our overall book in catastrophe-exposed business which has the potential to increase the volatility of our operating results.

Changing economic conditions could have a material impact on the frequency and severity of claims and, therefore, could negatively impact our underwriting returns. In addition, volatility in the financial markets could continue to significantly affect our investment returns, reported results and shareholders’ equity. We consider the potential impact of economic trends in the estimation process for establishing unpaid losses and loss adjustment expenses and in determining our investment strategies. In addition, weakness of the U.S., European countries and other key economies, projected budget deficits for the U.S., European countries and other governments and the consequences associated with potential downgrades of securities of the U.S., European countries and other governments by credit rating agencies is inherently unpredictable and could have a material adverse effect on financial markets and economic conditions in the U.S. and

ACGL 2017 THIRD QUARTER FORM 10-Q 50

throughout the world. In turn, this could have a material adverse effect on our business, financial condition and results of operations and, in particular, this could have a material adverse effect on the value and liquidity of securities in our investment portfolio.

NATURAL CATASTROPHE RISK

We monitor our natural catastrophe risk globally for all perils and regions, in each case, where we believe there is significant exposure. Our models employ both proprietary and vendor-based systems and include cross-line correlations for property, marine, offshore energy, aviation, workers compensation and personal accident. Currently, we seek to limit our 1-in-250 year return period net probable maximum pre-tax loss from a severe catastrophic event in any geographic zone to approximately 25% of total shareholders’ equity available to Arch. We reserve the right to change this threshold at any time.

Based on in-force exposure estimated as of October 1, 2017, our modeled peak zone catastrophe exposure was a windstorm affecting the Northeastern U.S., with a net probable maximum pre-tax loss of $493 million, followed by windstorms affecting the Gulf of Mexico and Florida Tri-County regions with net probable maximum pre-tax losses of $442 million and $383 million, respectively. Our exposures to other perils, such as U.S. earthquake and international events, were less than the exposures arising from U.S. windstorms and hurricanes. As of October 1, 2017, our modeled peak zone earthquake exposure (Los Angeles earthquake) represented approximately 60% of our peak zone catastrophe exposure, and our modeled peak zone international exposure (Japan earthquake) was substantially less than both our peak zone windstorm and earthquake exposures.

Net probable maximum pre-tax loss estimates are net of expected reinsurance recoveries, before income tax and before excess reinsurance reinstatement premiums. Loss estimates are reflective of the zone indicated and not the entire portfolio. Since hurricanes and windstorms can affect more than one zone and make multiple landfalls, our loss estimates include clash estimates from other zones. The loss estimates shown above do not represent our maximum exposures and it is highly likely that our actual incurred losses would vary materially from the modeled estimates. There can be no assurances that we will not suffer a net loss greater than 25% of total shareholders’ equity available to Arch from one or more catastrophic events due to several factors, including the inherent uncertainties in estimating the frequency and severity of such events and the margin of error in making such determinations resulting from potential inaccuracies and inadequacies in the data provided by clients and brokers, the modeling techniques and the application of such techniques or as a result of a decision to change the percentage of shareholders’ equity exposed to a single catastrophic event. Actual losses may also increase if our

reinsurers fail to meet their obligations to us or the reinsurance protections purchased by us are exhausted or are otherwise unavailable. See “Risk Factors—Risks Relating to Our Industry” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Natural and Man-Made Catastrophic Events” in our 2016 Form 10-K.

FINANCIAL MEASURES

Management uses the following three key financial indicators in evaluating our performance and measuring the overall growth in value generated for ACGL’s common shareholders:

Book Value per Common Share

Book value per common share represents total common shareholders’ equity available to Arch divided by the number of common shares outstanding. Management uses growth in book value per common share as a key measure of the value generated for our common shareholders each period and believes that book value per common share is the key driver of ACGL’s share price over time. Book value per common share is impacted by, among other factors, our underwriting results, investment returns and share repurchase activity, which has an accretive or dilutive impact on book value per common share depending on the purchase price.

Book value per common share was $59.61 at September 30, 2017, compared to $59.60 at June 30, 2017 and $53.30 at September 30, 2016. The 11.8%increase over the trailing twelve months reflected strong investment and underwriting results, albeit impacted by the 2017 third quarter catastrophic event activity.

Operating Return on Average Common Equity

Operating return on average common equity (“Operating ROAE”) represents annualized after-tax operating income available to Arch common shareholders divided by the average of beginning and ending common shareholders’ equity available to Arch during the period. After-tax operating income available to Arch common shareholders, a non-GAAP financial measure as defined in Regulation G, represents net income available to Arch common shareholders, excluding net realized gains or losses, net impairment losses recognized in earnings, equity in net income or loss of investment funds accounted for using the equity method, net foreign exchange gains or losses, UGC transaction costs and other, loss on repurchase of preferred shares and income taxes. Management uses Operating ROAE as a key measure of the return generated to common shareholders. See “Comment on Non-GAAP Financial Measures.”

Our Operating ROAE was (5.3)% for the 2017 third quarter, compared to 9.3% for the 2016 third quarter, and 4.4% for the nine months ended September 30, 2017, compared to 9.4% for

ACGL 2017 THIRD QUARTER FORM 10-Q 51

the 2016 period. The 2017 returns reflect the high level of catastrophic loss activity in the 2017 third quarter, partially offset by strong mortgage insurance underwriting performance and favorable investment returns.

Total Return on Investments

Total return on investments includes investment income, equity in net income or loss of investment funds accounted for using the equity method, net realized gains and losses and the change in unrealized gains and losses generated by Arch’s investment portfolio. Total return is calculated on a pre-tax basis and before investment expenses, excludes amounts reflected in the ‘other’ segment, and reflects the effect of financial market conditions along with foreign currency fluctuations. In addition, total return incorporates the timing of investment returns during the periods. The following table summarizes our total return compared to the benchmark return against which we measured our portfolio during the periods. See “Comment on Non-GAAP Financial Measures.”

	Arch Portfolio		Benchmark Return
2017 Third Quarter	1.60	%	1.24	%
2016 Third Quarter	0.88	%	0.83	%
Nine Months Ended September 30, 2017	5.05	%	4.33	%
Nine Months Ended September 30, 2016	4.03	%	4.43	%

Excluding the effects of foreign exchange, total return was 1.26% for the 2017 third quarter and 4.24% for the nine months ended September 30, 2017, reflecting strong returns on equity and alternative strategies. Total return for the 2017 third quarter reflected the weakening of the U.S. Dollar against the Euro, British Pound Sterling and other major currencies on non-U.S. Dollar denominated investments.

The benchmark return index included weightings to the following indices, which are primarily from The Bank of America Merrill Lynch (“BoAML”):

	%
BoAML 1-10 Year U.S. Corporate & All Yankees, A - AAA Rated Index	20.00	%
BoAML 1-10 Year U.S. Municipal Securities Index	17.00
BoAML 1-5 Year U.S. Treasury Index	13.00
BoAML 3-5 Year Fixed Rate Asset Backed Securities Index	7.00
BoAML 5-10 Year U.S. Treasury Index	5.00
Barclays CMBS Inv. Grade, AAA Rated Index	5.00
MSCI All Country World Gross Total Return Index	5.00
BoAML German Government Index	4.50
BoAML U.S. Mortgage Backed Securities Index	4.00
BoAML 1-5 Year U.K. Gilt Index	3.00
Hedge Fund Research HFRX Fixed Income Credit Index	2.50
Hedge Fund Research HFRX Equal Weighted Strategies	2.50
BoAML U.S. High Yield Constrained Index	2.50
BoAML 1-5 Year Australian Governments Index	2.50
S&P Leveraged Loan Index	2.50
BoAML 0-3 Month U.S. Treasury Bill Index	2.00
BoAML 1-5 Year Canada Government Index	1.50
BoAML 20+ Year Canada Government Index	0.50
Total	100.00	%

The benchmark return index is a customized combination of indices intended to approximate a target portfolio by asset mix and average credit quality while also matching the approximate estimated duration and currency mix of our insurance and reinsurance liabilities. Although the estimated duration and average credit quality of this index will move as the duration and rating of its constituent securities change, generally we do not adjust the composition of the benchmark return index except to incorporate changes to the mix of liability currencies and durations noted above. The benchmark return index should not be interpreted as expressing a preference for or aversion to any particular sector or sector weight. The index is intended solely to provide, unlike many master indices that change based on the size of their constituent indices, a relatively stable basket of investable indices. At September 30, 2017, the benchmark return index had an average credit quality of “Aa2” by Moody’s Investors Service (“Moody’s”), and an estimated duration of 3.55 years.

ACGL 2017 THIRD QUARTER FORM 10-Q 52

COMMENT ON NON-GAAP FINANCIAL MEASURES

Throughout this filing, we present our operations in the way we believe will be the most meaningful and useful to investors, analysts, rating agencies and others who use our financial information in evaluating the performance of our company. This presentation includes the use of after-tax operating income available to Arch common shareholders, which is defined as net income available to Arch common shareholders, excluding net realized gains or losses, net impairment losses recognized in earnings, equity in net income or loss of investment funds accounted for using the equity method, net foreign exchange gains or losses, UGC transaction costs and other, loss on redemption of preferred shares and income taxes, and the use of annualized operating return on average common equity. The presentation of after-tax operating income available to Arch common shareholders and annualized operating return on average common equity are non-GAAP financial measures as defined in Regulation G. The reconciliation of such measures to net income available to Arch common shareholders and annualized return on average common equity (the most directly comparable GAAP financial measures) in accordance with Regulation G is included under “Results of Operations” below. 

We believe that net realized gains or losses, net impairment losses recognized in earnings, equity in net income or loss of investment funds accounted for using the equity method, net foreign exchange gains or losses, UGC transaction costs and other and loss on repurchase of preferred shares in any particular period are not indicative of the performance of, or trends in, our business. Although net realized gains or losses, net impairment losses recognized in earnings, equity in net income or loss of investment funds accounted for using the equity method and net foreign exchange gains or losses are an integral part of our operations, the decision to realize investment gains or losses, the recognition of the change in the carrying value of investments accounted for using the fair value option in net realized gains or losses, the recognition of net impairment losses, the recognition of equity in net income or loss of investment funds accounted for using the equity method and the recognition of foreign exchange gains or losses are independent of the insurance underwriting process and result, in large part, from general economic and financial market conditions. Furthermore, certain users of our financial information believe that, for many companies, the timing of the realization of investment gains or losses is largely opportunistic. In addition, net impairment losses recognized in earnings on our investments represent other-than-temporary declines in expected recovery values on securities without actual realization. The use of the equity method on certain of our investments in certain funds that invest in fixed maturity securities is driven by the ownership structure of such funds (either limited partnerships or limited liability companies). In applying the equity method, these investments are initially recorded at cost and are subsequently adjusted based on our

proportionate share of the net income or loss of the funds (which include changes in the market value of the underlying securities in the funds). This method of accounting is different from the way we account for our other fixed maturity securities and the timing of the recognition of equity in net income or loss of investment funds accounted for using the equity method may differ from gains or losses in the future upon sale or maturity of such investments. UGC transaction costs and other include advisory, financing, legal, severance, incentive compensation and other transaction costs related to the UGC acquisition. The Company believes that UGC transaction costs and other, due to their non-recurring nature, are not indicative of the performance of, or trends in, the Company’s business performance. The loss on redemption of preferred shares related to the redemption of our Series C preferred shares in September 2017 and had no impact on shareholders' equity or cash flows. Due to these reasons, we exclude net realized gains or losses, net impairment losses recognized in earnings, equity in net income or loss of investment funds accounted for using the equity method, net foreign exchange gains or losses, UGC transaction costs and other and loss on redemption of preferred shares from the calculation of after-tax operating income available to Arch common shareholders. 

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

Our segment information includes the presentation of consolidated underwriting income or loss and a subtotal of underwriting income or loss before the contribution from the ‘other’ segment. Such measures represent the pre-tax profitability of our underwriting operations and include net premiums earned plus other underwriting income, less losses and loss adjustment expenses, acquisition expenses and other operating expenses. Other operating expenses include those operating expenses that are incremental and/or directly attributable to our individual underwriting operations. Underwriting income or loss does not incorporate items included in our corporate (non-underwriting) segment. While these measures are presented in Note 5, “Segment Information,” of the notes accompanying our consolidated financial statements, they are considered non-GAAP financial measures when presented elsewhere on a consolidated basis. The

ACGL 2017 THIRD QUARTER FORM 10-Q 53

reconciliations of underwriting income or loss to income before income taxes (the most directly comparable GAAP financial measure) on a consolidated basis and a subtotal before the contribution from the ‘other’ segment, in accordance with Regulation G, is shown in Note 5, “Segment Information” of the notes accompanying our consolidated financial statements.

We measure segment performance for our three underwriting segments based on underwriting income or loss. We do not manage our assets by underwriting segment and, accordingly, investment income and other non-underwriting related items are not allocated to each underwriting segment. For the ‘other’ segment, performance is measured based on net income or loss.

Along with consolidated underwriting income, we provide a subtotal of underwriting income or loss before the contribution from the ‘other’ segment. Pursuant to generally accepted accounting principles, Watford Re is considered a variable interest entity and we concluded that we are the primary beneficiary of Watford Re. As such, we consolidate the results of Watford Re in our consolidated financial statements, although we only own approximately 11% of Watford Re’s common equity. Watford Re has its own management and board of directors that is responsible for its overall profitability. In addition, we do not guarantee or provide credit support for Watford Re. Since Watford Re is an independent company, the assets of Watford Re can be used only to settle obligations of Watford Re and Watford Re is solely responsible for its own liabilities and commitments. Our financial exposure to Watford Re is limited to our investment in Watford Re’s common and preferred shares and counterparty credit risk (mitigated by collateral) arising from the reinsurance transactions. We believe that presenting certain information excluding the ‘other’ segment enables investors and other users of our financial information to analyze our performance in a manner similar to how our management analyzes performance

Our presentation of segment information includes the use of a current year loss ratio which excludes favorable or adverse development in prior year loss reserves. This ratio is a non-GAAP financial measure as defined in Regulation G. The reconciliation of such measure to the loss ratio (the most directly comparable GAAP financial measure) in accordance with Regulation G is shown on the individual segment pages. Management utilizes the current year loss ratio in its analysis of the underwriting performance of each of our underwriting segments.

Total return on investments includes investment income, equity in net income or loss of investment funds accounted for using the equity method, net realized gains and losses and the change in unrealized gains and losses generated by Arch’s investment portfolio. Total return is calculated on a pre-tax basis and before investment expenses, excludes amounts reflected in the ‘other’ segment, and reflects the effect of financial market conditions along with foreign currency fluctuations. In addition, total return incorporates the timing of investment returns during the

periods. There is no directly comparable GAAP financial measure for total return. Management uses total return on investments as a key measure of the return generated to Arch common shareholders on the capital held in the business, and compares the return generated by our investment portfolio against benchmark returns which we measured our portfolio against during the periods.

RESULTS OF OPERATIONS

The following table summarizes our consolidated financial data, including a reconciliation of net income available to Arch common shareholders to after-tax operating income available to Arch common shareholders. Each line item reflects the impact of our approximate 11% ownership of Watford Re’s common equity.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Net income (loss) available to Arch common shareholders	$	(52,760	)	$	247,388		$	362,967		$	602,272
Net realized (gains) losses	(64,344		)	(99,159		)	(111,930		)	(175,558		)
Net impairment losses recognized in earnings	1,878			3,867			5,415			16,849
Equity in net (income) loss of investment funds accounted for using the equity method	(31,090		)	(16,662		)	(111,884		)	(32,054		)
Net foreign exchange (gains) losses	27,811			4,054			85,619			3,560
UGC transaction costs and other	2,990			7,142			21,249			7,142
Loss on redemption of preferred shares	6,735			—			6,735			—
Income tax expense (benefit) (1)	1,647			2,970			1,580			13,705
After-tax operating income (loss) available to Arch common shareholders	$	(107,133	)	$	149,600		$	259,751		$	435,916
Beginning common shareholders’ equity	$	8,126,332		$	6,340,583		$	7,481,163		$	5,841,542
Ending common shareholders’ equity	8,138,589			6,538,983			8,138,589			6,538,983
Average common shareholders’ equity	$	8,132,461		$	6,439,783		$	7,809,876		$	6,190,263
Annualized return on average common equity %	(2.6		)	15.4			6.2			13.0
Annualized operating return on average common equity %	(5.3		)	9.3			4.4			9.4

(1) Income tax on net realized gains or losses, net impairment losses recognized in earnings, equity in net income or loss of investment funds accounted for using the equity method, net foreign exchange gains or losses, UGC transaction costs and other and loss on redemption of preferred shares reflects the relative mix reported by jurisdiction and the varying tax rates in each jurisdiction.

ACGL 2017 THIRD QUARTER FORM 10-Q 54

Segment Information

We classify our businesses into three underwriting segments — insurance, reinsurance and mortgage — and two other operating segments — corporate (non-underwriting) and ‘other.’ Our insurance, reinsurance and mortgage segments each have managers who are responsible for the overall profitability of their respective segments and who are directly accountable to our chief operating decision makers, the Chairman and Chief Executive Officer, the President and Chief Operating Officer, and the Chief Financial Officer of ACGL. The chief operating decision makers do not assess performance, measure return on equity or make resource allocation decisions on a line of business basis. Management measures segment performance for our three underwriting segments based on underwriting income or loss. We do not manage our assets by underwriting segment, with the exception of goodwill and intangible assets, and, accordingly, investment income is not allocated to each underwriting segment.

We determined our reportable segments using the management approach described in accounting guidance regarding disclosures about segments of an enterprise and related information. The accounting policies of the segments are the same as those used for the preparation of our consolidated financial statements. Intersegment business is allocated to the segment accountable for the underwriting results.

Insurance Segment

The following tables set forth our insurance segment’s underwriting results:

	Three Months Ended September 30,
	2017			2016			% Change
Gross premiums written	$	787,447		$	758,934		3.8
Premiums ceded	(222,516		)	(217,446		)
Net premiums written	564,931			541,488			4.3
Change in unearned premiums	(29,766		)	(22,410		)
Net premiums earned	535,165			519,078			3.1
Losses and loss adjustment expenses	(568,795		)	(332,845		)
Acquisition expenses	(82,638		)	(77,146		)
Other operating expenses	(90,875		)	(86,613		)
Underwriting income (loss)	$	(207,143	)	$	22,474		(1,021.7	)
Underwriting Ratios							% Point Change
Loss ratio	106.3		%	64.1		%	42.2
Acquisition expense ratio	15.4		%	14.9		%	0.5
Other operating expense ratio	17.0		%	16.7		%	0.3
Combined ratio	138.7		%	95.7		%	43.0

	Nine Months Ended September 30,
	2017			2016			% Change
Gross premiums written	$	2,313,630		$	2,319,530		(0.3	)
Premiums ceded	(704,057		)	(713,110		)
Net premiums written	1,609,573			1,606,420			0.2
Change in unearned premiums	(51,188		)	(46,603		)
Net premiums earned	1,558,385			1,559,817			(0.1	)
Losses and loss adjustment expenses	(1,252,375		)	(1,011,087		)
Acquisition expenses	(236,378		)	(228,806		)
Other operating expenses	(271,268		)	(263,111		)
Underwriting income (loss)	$	(201,636	)	$	56,813		(454.9	)
Underwriting Ratios							% Point Change
Loss ratio	80.4		%	64.8		%	15.6
Acquisition expense ratio	15.2		%	14.7		%	0.5
Other operating expense ratio	17.4		%	16.9		%	0.5
Combined ratio	113.0		%	96.4		%	16.6

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

•Construction and national accounts: primary and excess casualty coverages to middle and large accounts in the construction industry and a wide range of products for middle and large national accounts, specializing in loss sensitive primary casualty insurance programs (including large deductible, self-insured retention and retrospectively rated programs).

•Excess and surplus casualty: primary and excess casualty insurance coverages, including middle market energy business, and contract binding, which primarily provides casualty coverage through a network of appointed agents to small and medium risks.

•Lenders products: collateral protection, debt cancellation and service contract reimbursement products to banks, credit unions, automotive dealerships and original equipment manufacturers and other specialty programs that pertain to automotive lending and leasing.

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

•Programs: primarily package policies, underwriting workers’ compensation and umbrella liability business in support of desirable package programs, targeting program

ACGL 2017 THIRD QUARTER FORM 10-Q 55

managers with unique expertise and niche products offering general liability, commercial automobile, inland marine and property business with minimal catastrophe exposure.

•Property, energy, marine and aviation: primary and excess general property insurance coverages, including catastrophe-exposed property coverage, for commercial clients. Coverages for marine include hull, war, specie and liability. Aviation and stand alone terrorism are also offered.

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

•Other: includes alternative market risks (including captive insurance programs), excess workers’ compensation and employer’s liability insurance coverages for qualified self-insured groups, associations and trusts, and contract and commercial surety coverages, including contract bonds (payment and performance bonds) primarily for medium and large contractors and commercial surety bonds for Fortune 1,000 companies and smaller transaction business programs.

Premiums Written.

The following table sets forth our insurance segment’s net premiums written by major line of business:

	Three Months Ended September 30,
	2017			2016
	Amount		%	Amount		%
Professional lines	$	120,509	21.3	$	119,198	22.0
Programs	109,805		19.4	91,165		16.8
Construction and national accounts	66,053		11.7	65,105		12.0
Travel, accident and health	71,386		12.6	63,453		11.7
Excess and surplus casualty	43,853		7.8	54,075		10.0
Property, energy, marine and aviation	48,396		8.6	42,092		7.8
Lenders products	25,732		4.6	28,633		5.3
Other	79,197		14.0	77,767		14.4
Total	$	564,931	100.0	$	541,488	100.0

2017 Third Quarter versus 2016 Third Quarter. Gross premiums written by the insurance segment in the 2017 third quarter were 3.8%higher than in the 2016 third quarter, while net premiums written were 4.3%higher than in the 2016 third quarter. The increase in net premiums written reflected growth in program business, due to the continued effects of two newer programs, and in travel business. Such amounts were partially offset by a decrease in excess and surplus casualty business which reflected a lower level of project-related premiums, primarily due to the fact that the 2016 period included a

significant amount of premium from one large construction project, along with a targeted reduction in certain exposures.

	Nine Months Ended September 30,
	2017			2016
	Amount		%	Amount		%
Professional lines	$	339,761	21.1	$	336,184	20.9
Programs	303,190		18.8	256,369		16.0
Construction and national accounts	239,504		14.9	254,839		15.9
Travel, accident and health	189,604		11.8	175,172		10.9
Excess and surplus casualty	134,907		8.4	168,144		10.5
Property, energy, marine and aviation	134,531		8.4	142,261		8.9
Lenders products	71,896		4.5	78,671		4.9
Other	196,180		12.2	194,780		12.1
Total	$	1,609,573	100.0	$	1,606,420	100.0

Nine Months Ended September 30, 2017 versus 2016 period. Gross premiums written by the insurance segment for the nine months ended September 30, 2017 were 0.3%lower than in the 2016 period, while net premiums written were 0.2%higher than in the 2016 period. The change in net premiums written largely reflected our response to weaker market conditions, with reductions in excess and surplus casualty, construction and property lines, partially offset by growth in programs and travel, accident and health. The lower level of excess and surplus casualty reflected a targeted reduction in certain exposures, increased use of reinsurance and other factors while the decrease in construction premiums reflected non-renewals as well as lower audit and project premiums. The reduction in property lines reflected continued weak market conditions. Growth in program business primarily reflected the continued impact of two newer programs while the increase in travel, accident and health reflected continued expansion in existing travel accounts.

ACGL 2017 THIRD QUARTER FORM 10-Q 56

Net Premiums Earned.

The following tables set forth our insurance segment’s net premiums earned by major line of business:

	Three Months Ended September 30,
	2017			2016
	Amount		%	Amount		%
Professional lines	$	113,146	21.1	$	110,614	21.3
Programs	94,353		17.6	84,889		16.4
Construction and national accounts	77,779		14.5	80,090		15.4
Travel, accident and health	66,136		12.4	57,097		11.0
Excess and surplus casualty	47,852		8.9	54,687		10.5
Property, energy, marine and aviation	46,906		8.8	45,304		8.7
Lenders products	23,499		4.4	25,090		4.8
Other	65,494		12.2	61,307		11.8
Total	$	535,165	100.0	$	519,078	100.0

	Nine Months Ended September 30,
	2017			2016
	Amount		%	Amount		%
Professional lines	$	330,159	21.2	$	324,114	20.8
Programs	267,115		17.1	273,985		17.6
Construction and national accounts	236,050		15.1	241,547		15.5
Travel, accident and health	188,053		12.1	164,463		10.5
Excess and surplus casualty	147,709		9.5	166,807		10.7
Property, energy, marine and aviation	126,407		8.1	141,417		9.1
Lenders products	72,160		4.6	72,499		4.6
Other	190,732		12.2	174,985		11.2
Total	$	1,558,385	100.0	$	1,559,817	100.0

Net premiums written are primarily earned on a pro rata basis over the terms of the policies for all products, usually 12 months. Net premiums earned reflect changes in net premiums written over the previous five quarters. Net premiums earned in the 2017 third quarter were 3.1%higher than in the 2016 third quarter, and 0.1%lower for the nine months ended September 30, 2017 than in the 2016 period.

Losses and Loss Adjustment Expenses.

The table below shows the components of the insurance segment’s loss ratio:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Current year	106.9	%	66.7	%	80.9	%	66.4	%
Prior period reserve development	(0.6	)%	(2.6	)%	(0.5	)%	(1.6	)%
Loss ratio	106.3	%	64.1	%	80.4	%	64.8	%

Current Year Loss Ratio.

The insurance segment’s current year loss ratio in the 2017 third quarter was 40.2 points higher than in the 2016 third quarter and reflected 40.1 points of current year catastrophic activity, primarily related to Hurricanes Harvey, Irma and Maria, compared to 0.3 points in the 2016 third quarter. The insurance segment’s current year loss ratio for the nine months ended September 30, 2017 was 14.5 points higher than in the 2016 period and reflected 14.5 points of current year catastrophic activity, compared to 1.5 points in the 2016 period. The current year loss ratios for the 2017 periods reflected changes in the mix of business and loss cost trends.

Prior Period Reserve Development.

The insurance segment’s net favorable development was $3.0 million, or 0.6 points, for the 2017 third quarter, compared to $13.7 million, or 2.6 points, for the 2016 third quarter, and $7.2 million, or 0.5 points, for the nine months ended September 30, 2017, compared to $24.8 million, or 1.6 points, for the 2016 period. See note 6, “Reserve for Losses and Loss Adjustment Expenses,” of the notes accompanying our consolidated financial statements for information about the insurance segment’s prior year reserve development.

Underwriting Expenses.

2017 Third Quarter versus 2016 Third Quarter: The insurance segment’s underwriting expense ratio was 32.4% in the 2017 third quarter, compared to 31.6% in the 2016 third quarter. The comparison of the underwriting expense ratios reflects changes in the level of reinsurance ceded on a quota share basis and changes in the mix of business.

Nine Months Ended September 30, 2017 versus 2016 period: The insurance segment’s underwriting expense ratio was 32.6% for the nine months ended September 30, 2017, compared to 31.6% for the 2016 period. The comparison of the underwriting expense ratios reflects changes in the level of reinsurance ceded on a quota share basis and changes in the mix of business.

ACGL 2017 THIRD QUARTER FORM 10-Q 57

Reinsurance Segment

The following tables set forth our reinsurance segment’s underwriting results:

	Three Months Ended September 30,
	2017			2016			% Change
Gross premiums written	$	422,083		$	324,361		30.1
Premiums ceded	(105,389		)	(89,551		)
Net premiums written	316,694			234,810			34.9
Change in unearned premiums	6,879			17,117
Net premiums earned	323,573			251,927			28.4
Other underwriting income	1,728			2,216
Losses and loss adjustment expenses	(318,609		)	(105,924		)
Acquisition expenses	(57,340		)	(50,192		)
Other operating expenses	(36,214		)	(35,389		)
Underwriting income (loss)	$	(86,862	)	$	62,638		(238.7	)
Underwriting Ratios							% Point Change
Loss ratio	98.5		%	42.0		%	56.5
Acquisition expense ratio	17.7		%	19.9		%	(2.2	)
Other operating expense ratio	11.2		%	14.0		%	(2.8	)
Combined ratio	127.4		%	75.9		%	51.5

	Nine Months Ended September 30,
	2017			2016			% Change
Gross premiums written	$	1,351,051		$	1,217,804		10.9
Premiums ceded	(386,743		)	(370,068		)
Net premiums written	964,308			847,736			13.8
Change in unearned premiums	(81,182		)	(43,345		)
Net premiums earned	883,126			804,391			9.8
Other underwriting income	1,143			22,659
Losses and loss adjustment expenses	(631,669		)	(363,613		)
Acquisition expenses	(154,638		)	(160,706		)
Other operating expenses	(110,458		)	(108,561		)
Underwriting income (loss)	$	(12,496	)	$	194,170		(106.4	)
Underwriting Ratios							% Point Change
Loss ratio	71.5		%	45.2		%	26.3
Acquisition expense ratio	17.5		%	20.0		%	(2.5	)
Other operating expense ratio	12.5		%	13.5		%	(1.0	)
Combined ratio	101.5		%	78.7		%	22.8

The reinsurance segment consists of our reinsurance underwriting units which offer specialty product lines on a worldwide basis. Product lines include:

•Casualty: provides coverage to ceding company clients on third party liability and workers’ compensation exposures from ceding company clients, primarily on a treaty basis. Exposures include, among others, executive assurance, professional liability, workers’ compensation, excess and umbrella liability, excess motor and healthcare business.

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

•Other specialty: provides coverage to ceding company clients for proportional motor and other lines including surety, accident and health, workers’ compensation catastrophe, agriculture, trade credit and political risk.

•Property catastrophe: provides protection for most catastrophic losses that are covered in the underlying policies written by reinsureds, including hurricane, earthquake, flood, tornado, hail and fire, and coverage for other perils on a case-by-case basis. Property catastrophe reinsurance provides coverage on an excess of loss basis when aggregate losses and loss adjustment expense from a single occurrence of a covered peril exceed the retention specified in the contract.

•Property excluding property catastrophe: provides coverage for both personal lines and commercial property exposures and principally covers buildings, structures, equipment and contents. The primary perils in this business include fire, explosion, collapse, riot, vandalism, wind, tornado, flood and earthquake. Business is assumed on both a proportional and excess of loss basis. In addition, facultative business is written which focuses on commercial property risks on an excess of loss basis.

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

ACGL 2017 THIRD QUARTER FORM 10-Q 58

Premiums Written.

The following table sets forth our reinsurance segment’s net premiums written by major line of business:

	Three Months Ended September 30,
	2017			2016
	Amount		%	Amount		%
Other specialty	$	101,400	32.0	$	74,169	31.6
Casualty	113,446		35.8	59,242		25.2
Property excluding property catastrophe	63,943		20.2	70,733		30.1
Property catastrophe	28,123		8.9	19,793		8.4
Marine and aviation	2,037		0.6	5,435		2.3
Other	7,745		2.4	5,438		2.3
Total	$	316,694	100.0	$	234,810	100.0
Pro rata	$	206,948	65.3	$	147,280	62.7
Excess of loss	109,746		34.7	87,530		37.3
Total	$	316,694	100.0	$	234,810	100.0

2017 Third Quarter versus 2016 Third Quarter. Gross premiums written by the reinsurance segment in the 2017 third quarter were 30.1%higher than in the 2016 third quarter, while net premiums written were 34.9%higher than in the 2016 third quarter. Gross and net premiums written for the 2017 third quarter reflected an increase of $45.4 million in casualty business related to a retroactive reinsurance contract which was substantially earned in the period and resulted in a corresponding increase to losses and loss adjustment expenses. In addition, reinstatement premiums related to Hurricanes Harvey, Irma and Maria contributed $25.0 million to gross premiums written and $15.8 million to net premiums written in the 2017 third quarter. The increase in net premiums written in the 2017 third quarter also reflected growth in other specialty business, primarily in international motor quota share contracts.

	Nine Months Ended September 30,
	2017			2016
	Amount		%	Amount		%
Other specialty	$	371,146	38.5	$	288,932	34.1
Casualty	287,120		29.8	247,280		29.2
Property excluding property catastrophe	208,445		21.6	214,287		25.3
Property catastrophe	57,773		6.0	59,269		7.0
Marine and aviation	20,510		2.1	24,438		2.9
Other	19,314		2.0	13,530		1.6
Total	$	964,308	100.0	$	847,736	100.0
Pro rata	$	536,857	55.7	$	405,720	47.9
Excess of loss	427,451		44.3	442,016		52.1
Total	$	964,308	100.0	$	847,736	100.0

Nine Months Ended September 30, 2017 versus 2016 period. Gross premiums written by the reinsurance segment for the nine months ended September 30, 2017 were 10.9%higher than in the 2016 period, while net premiums written were 13.8%higher than in the 2016 period. Gross and net premiums written for the

nine months ended September 30, 2017 reflected the casualty retroactive reinsurance contract from the 2017 third quarter noted above and reinstatement premiums from Hurricanes Harvey, Irma and Maria. Gross and net premiums written in both periods also reflected an increase in other specialty business related to certain other retroactive reinsurance contracts written in the second quarter of each period. In addition to the retroactive reinsurance contracts noted above, the increase in net premiums written in the nine months ended September 30, 2017 reflected growth in other specialty business, primarily in international motor quota share contracts.

Net Premiums Earned.

The following tables set forth our reinsurance segment’s net premiums earned by major line of business:

	Three Months Ended September 30,
	2017			2016
	Amount		%	Amount		%
Other specialty	$	96,090	29.7	$	76,686	30.4
Casualty	117,255		36.2	69,414		27.6
Property excluding property catastrophe	65,049		20.1	72,550		28.8
Property catastrophe	30,039		9.3	17,582		7.0
Marine and aviation	6,801		2.1	10,336		4.1
Other	8,339		2.6	5,359		2.1
Total	$	323,573	100.0	$	251,927	100.0
Pro rata	$	188,874	58.4	$	132,649	52.7
Excess of loss	134,699		41.6	119,278		47.3
Total	$	323,573	100.0	$	251,927	100.0

	Nine Months Ended September 30,
	2017			2016
	Amount		%	Amount		%
Other specialty	$	307,620	34.8	$	260,428	32.4
Casualty	270,126		30.6	225,624		28.0
Property excluding property catastrophe	197,785		22.4	209,990		26.1
Property catastrophe	61,975		7.0	55,358		6.9
Marine and aviation	26,277		3.0	40,773		5.1
Other	19,343		2.2	12,218		1.5
Total	$	883,126	100.0	$	804,391	100.0
Pro rata	$	503,954	57.1	$	426,275	53.0
Excess of loss	379,172		42.9	378,116		47.0
Total	$	883,126	100.0	$	804,391	100.0

Net premiums written, irrespective of the class of business, are generally earned on a pro rata basis over the terms of the underlying policies or reinsurance contracts. For the 2017 third quarter, net premiums earned were 28.4%higher than in the 2016 third quarter, and reflect the retroactive reinsurance contract and reinstatement premium impacts discussed above as well as in net premiums written over the previous five quarters. Net premiums earned for the nine months ended September 30, 2017 were 9.8%higher than in the 2016 period.

ACGL 2017 THIRD QUARTER FORM 10-Q 59

Other Underwriting Income (Loss).

Other underwriting income (loss) for the 2017 third quarter and nine months ended September 30, 2017 was $1.7 million, compared to $2.2 million for the 2016 third quarter, and $1.1 million for the nine months ended September 30, 2017, compared to $22.7 million for the 2016 period. The 2016 year-to-date period included $19.1 million related to a contract which was commuted during the 2016 second quarter. This contract had been reflected as a deposit accounting liability (i.e., a contract that, in accordance with GAAP, does not pass risk transfer) prior to the commutation.

Losses and Loss Adjustment Expenses.

The table below shows the components of the reinsurance segment’s loss ratio:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Current year	109.8	%	65.6	%	86.6	%	67.2	%
Prior period reserve development	(11.3	)%	(23.6	)%	(15.1	)%	(22.0	)%
Loss ratio	98.5	%	42.0	%	71.5	%	45.2	%

Current Year Loss Ratio.

The reinsurance segment’s current year loss ratio in the 2017 third quarter was 44.2 points higher than in the 2016 third quarter and reflected 46.3 points of current year catastrophic activity, primarily related to Hurricanes Harvey, Irma and Maria, compared to 4.1 points in the 2016 third quarter. The reinsurance segment’s current year loss ratio for the nine months ended September 30, 2017 was 19.4 points higher than in the 2016 period and reflected 20.0 points of current year catastrophic activity, compared to 3.9 points in the 2016 period. The balance of the change in the 2017 current year loss ratios resulted, in part, from the effects of market conditions and changes in the mix of business.

Prior Period Reserve Development.

The reinsurance segment’s net favorable development was $36.5 million, or 11.3 points, for the 2017 third quarter, compared to $59.5 million, or 23.6 points, for the 2016 third quarter, and $133.3 million, or 15.1 points, for the nine months ended September 30, 2017, compared to $176.7 million, or 22.0 points, for the 2016 period. See note 6, “Reserve for Losses and Loss Adjustment Expenses,” of the notes accompanying our consolidated financial statements for information about the reinsurance segment’s prior year reserve development.

Underwriting Expenses.

2017 Third Quarter versus 2016 Third Quarter: The underwriting expense ratio for the reinsurance segment was 28.9% in the 2017 third quarter, compared to 33.9% in the 2016

third quarter. The retroactive reinsurance contract noted above improved the reported 2017 third quarter underwriting expense ratio by 4.1 points. The comparison of the underwriting expense ratios also reflected changes in the mix and type of business and a higher level of net premiums earned in the 2017 third quarter.

Nine Months Ended September 30, 2017 versus 2016 period: The underwriting expense ratio for the reinsurance segment was 30.0% for the nine months ended September 30, 2017, compared to 33.5% for the 2016 period. The comparison of the underwriting expense ratios primarily reflected changes in the mix and type of business.

Mortgage Segment

The following tables set forth our mortgage segment’s underwriting results. On December 31, 2016, we completed the acquisition of UGC. As such, the 2017 results reflect the combination of Arch and UGC while the 2016 periods do not reflect UGC activity.

	Three Months Ended September 30,
	2017			2016			% Change
Gross premiums written	$	347,951		$	131,726		164.1
Premiums ceded	(57,900		)	(51,182		)
Net premiums written	290,051			80,544			260.1
Change in unearned premiums	(15,533		)	(3,582		)
Net premiums earned	274,518			76,962			256.7
Other underwriting income	3,599			4,740
Losses and loss adjustment expenses	(35,156		)	(11,107		)
Acquisition expenses	(21,803		)	(5,190		)
Other operating expenses	(34,770		)	(24,249		)
Underwriting income	$	186,388		$	41,156		352.9
Underwriting Ratios							% Point Change
Loss ratio	12.8		%	14.4		%	(1.6	)
Acquisition expense ratio	7.9		%	6.7		%	1.2
Other operating expense ratio	12.7		%	31.5		%	(18.8	)
Combined ratio	33.4		%	52.6		%	(19.2	)

ACGL 2017 THIRD QUARTER FORM 10-Q 60

	Nine Months Ended September 30,
	2017			2016			% Change
Gross premiums written	$	1,032,800		$	361,440		185.7
Premiums ceded	(194,139		)	(62,918		)
Net premiums written	838,661			298,522			180.9
Change in unearned premiums	(61,776		)	(93,283		)
Net premiums earned	776,885			205,239			278.5
Other underwriting income	11,999			12,670
Losses and loss adjustment expenses	(84,915		)	(20,102		)
Acquisition expenses	(76,235		)	(16,947		)
Other operating expenses	(108,790		)	(70,590		)
Underwriting income	$	518,944		$	110,270		370.6
Underwriting Ratios							% Point Change
Loss ratio	10.9		%	9.8		%	1.1
Acquisition expense ratio	9.8		%	8.3		%	1.5
Other operating expense ratio	14.0		%	34.4		%	(20.4	)
Combined ratio	34.7		%	52.5		%	(17.8	)

The mortgage segment includes the results of our U.S. primary mortgage insurance operations, including Arch Mortgage Insurance Company and United Guaranty Residential Insurance Company (combined “Arch MI U.S.”), which are approved as eligible mortgage insurers by Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”), each a GSE. Arch MI U.S. and Arch Mortgage Insurance Designated Activity Company are leading providers of mortgage insurance products and services to the U.S. and European markets, respectively. The mortgage segment also includes GSE credit risk-sharing transactions and mortgage reinsurance for the U.S. and Australian markets.

Premiums Written.

The following tables set forth our mortgage segment’s net premiums written by client location and underwriting location (i.e., where the business is underwritten):

	Three Months Ended September 30,
	2017			2016
	Amount		%	Amount		%
Client location:
United States	$	262,028	90.3	$	77,488	96.2
Other	28,023		9.7	3,056		3.8
Total	$	290,051	100.0	$	80,544	100.0
Underwriting location:
United States	$	235,447	81.2	$	50,236	62.4
Other	54,604		18.8	30,308		37.6
Total	$	290,051	100.0	$	80,544	100.0

	Nine Months Ended September 30,
	2017			2016
	Amount		%	Amount		%
Client location:
United States	756,620		90.2	199,552		66.8
Other	82,041		9.8	98,970		33.2
Total	$	838,661	100.0	$	298,522	100.0
Underwriting location:
United States	$	679,442	81.0	$	128,008	42.9
Other	159,219		19.0	170,514		57.1
Total	$	838,661	100.0	$	298,522	100.0

2017 Third Quarter versus 2016 Third Quarter. Gross premiums written by the mortgage segment in the 2017 third quarter were 164.1%higher than in the 2016 third quarter, primarily reflecting the growth in insurance in force due to the acquisition of UGC. Premiums ceded for the 2017 third quarter were primarily related to the 50% quota share reinsurance agreement to AIG, covering 2014 to 2016 policy years of UGC business on a run-off basis, while the 2016 third quarter reflected the retrocession of $45.4 million of Australian mortgage reinsurance business.

Nine Months Ended September 30, 2017 versus 2016 period. Gross premiums written by the mortgage segment were 185.7% higher than in the 2016 period, primarily reflecting the growth in insurance in force due to the acquisition of UGC.

The persistency rate, which represents the percentage of mortgage insurance in force at the beginning of a 12-month period that remains in force at the end of such period, of the Arch MI U.S. portfolio of mortgage loans was 80.2% at September 30, 2017, compared to 78.1% at June 30, 2017. The higher persistency rate at September 30, 2017 reflects changes in level of mortgage refinance activity and mortgage interest rates.

ACGL 2017 THIRD QUARTER FORM 10-Q 61

Arch MI U.S. generated $17.7 billion of new insurance written (“NIW”) in the 2017 third quarter, compared to $8.8 billion in the 2016 third quarter. NIW represents the original principal balance of all loans that received coverage during the period. Our NIW for the 2017 third quarter reflected the combination of Arch and UGC, a higher percentage of monthly premium business and an increase in purchase market activity.

The following tables provide details on the NIW generated by Arch MI U.S.:

(U.S. Dollars in millions)	Three Months Ended September 30,
	2017			2016
	Amount		%	Amount		%
Total new insurance written (NIW) (1)	$	17,683		$	8,753
Credit quality (FICO):
>=740	$	10,063	56.9	$	5,187	59.3
680-739	6,357		35.9	3,074		35.1
620-679	1,263		7.1	492		5.6
Total	$	17,683	100.0	$	8,753	100.0
Loan-to-value (LTV):
95.01% and above	$	1,757	9.9	$	507	5.8
90.01% to 95.00%	8,406		47.5	4,261		48.7
85.01% to 90.00%	5,668		32.1	2,883		32.9
85.01% and below	1,852		10.5	1,102		12.6
Total	$	17,683	100.0	$	8,753	100.0
Monthly vs. single:
Monthly	$	15,392	87.0	$	7,765	88.7
Single	2,291		13.0	988		11.3
Total	$	17,683	100.0	$	8,753	100.0
Purchase vs. refinance:
Purchase	$	16,460	93.1	$	7,264	83.0
Refinance	1,223		6.9	1,489		17.0
Total	$	17,683	100.0	$	8,753	100.0

(1) Represents the original principal balance of all loans that received coverage during the period.

(U.S. Dollars in millions)	Nine Months Ended September 30,
	2017			2016
	Amount		%	Amount		%
Total new insurance written (NIW) (1)	$	47,646		$	18,079
Credit quality (FICO):
>=740	$	27,061	56.8	$	10,945	60.5
680-739	17,246		36.2	6,195		34.3
620-679	3,339		7.0	938		5.2
<620	—		—	1		—
Total	$	47,646	100.0	$	18,079	100.0
Loan-to-value (LTV):
95.01% and above	$	4,429	9.3	$	1,233	6.8
90.01% to 95.00%	22,763		47.8	8,477		46.9
85.01% to 90.00%	15,191		31.9	5,982		33.1
85.01% and below	5,263		11.0	2,387		13.2
Total	$	47,646	100.0	$	18,079	100.0
Monthly vs. single:
Monthly	$	40,592	85.2	$	15,136	83.7
Single	7,054		14.8	2,943		16.3
Total	$	47,646	100.0	$	18,079	100.0
Purchase vs. refinance:
Purchase	$	43,243	90.8	$	14,628	80.9
Refinance	4,403		9.2	3,451		19.1
Total	$	47,646	100.0	$	18,079	100.0

(1) Represents the original principal balance of all loans that received coverage during the period.

Net Premiums Earned.

The following tables set forth our mortgage segment’s net premiums earned by client location and underwriting location:

	Three Months Ended September 30,
	2017			2016
	Amount		%	Amount		%
Client Location:
United States	$	262,324	95.6	$	64,616	84.0
Other	12,194		4.4	12,346		16.0
Total	$	274,518	100.0	$	76,962	100.0
Underwriting location:
United States	$	233,862	85.2	$	40,498	52.6
Other	40,656		14.8	36,464		47.4
Total	$	274,518	100.0	$	76,962	100.0

	Nine Months Ended September 30,
	2017			2016
	Amount		%	Amount		%
Client Location:
United States	$	745,011	95.9	$	182,794	89.1
Other	31,874		4.1	22,445		10.9
Total	$	776,885	100.0	$	205,239	100.0
Underwriting location:
United States	$	661,645	85.2	$	107,142	52.2
Other	115,240		14.8	98,097		47.8
Total	$	776,885	100.0	$	205,239	100.0

ACGL 2017 THIRD QUARTER FORM 10-Q 62

Net premiums earned for the 2017 periods were higher than in the 2016 periods, primarily due to the UGC acquisition and growth in insurance in force for Arch MI U.S.

Other Underwriting Income.

Other underwriting income, which is primarily related to older GSE risk-sharing transactions receiving derivative accounting treatment, was $3.6 million for the 2017 third quarter, compared to $4.7 million for the 2016 third quarter, and $12.0 million for the nine months ended September 30, 2017, compared to $12.7 million for the 2016 period.

Losses and Loss Adjustment Expenses.

The table below shows the components of the mortgage segment’s loss ratio:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Current year	20.6	%	17.6	%	20.5	%	17.7	%
Prior period reserve development	(7.8	)%	(3.2	)%	(9.6	)%	(7.9	)%
Loss ratio	12.8	%	14.4	%	10.9	%	9.8	%

Current Year Loss Ratio.

The mortgage segment’s current year loss ratio was 3.0 points higher in the 2017 third quarter than in the 2016 third quarter and 2.8 points higher for the nine months ended September 30, 2017 than in the 2016 period. The current year loss ratio for the 2017 third quarter reflects the UGC acquisition and growth in insurance in force along with changes in the mix of business.

Prior Period Reserve Development.

The mortgage segment’s net favorable development was $21.5 million, or 7.8 points, for the 2017 third quarter, compared to $2.5 million, or 3.2 points, for the 2016 third quarter, and $74.9 million, or 9.6 points for the nine months ended September 30, 2017, compared to $16.3 million, or 7.9 points, for the 2016 period. See note 6, “Reserve for Losses and Loss Adjustment Expenses,” of the notes accompanying our consolidated financial statements for information about the mortgage segment’s prior year reserve development.

Underwriting Expenses.

2017 Third Quarter versus 2016 Third Quarter. The underwriting expense ratio for the mortgage segment was 20.6% in the 2017 third quarter, compared to 38.2% in the 2016 third quarter. The improvement primarily resulted from a higher level of net premiums earned reflecting the UGC acquisition as Arch MI U.S. has increased its scale of operations.

Nine Months Ended September 30, 2017 versus 2016 period. The underwriting expense ratio for the mortgage segment was

23.8% for the nine months ended September 30, 2017, compared to 42.7% for the 2016 period. The improvement primarily resulted from a higher level of net premiums earned reflecting the UGC acquisition as Arch MI U.S. has increased its scale of operations.

Corporate (Non-Underwriting) Segment

The corporate (non-underwriting) segment results include net investment income, other income (loss), corporate expenses, UGC transaction costs and other, amortization of intangible assets, interest expense, items related to our non-cumulative preferred shares, net realized gains or losses, net impairment losses included in earnings, equity in net income or loss of investment funds accounted for using the equity method, net foreign exchange gains or losses and income taxes. Such amounts exclude the results of the ‘other’ segment.

Net Investment Income.

The components of net investment income were derived from the following sources:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Fixed maturities	$	84,602		$	58,542		$	251,039		$	181,908
Equity securities	3,210			3,633			10,152			11,373
Short-term investments	2,514			823			5,624			1,899
Other (1)	18,238			15,103			57,770			47,454
Gross investment income	108,564			78,101			324,585			242,634
Investment expenses (2)	(14,437		)	(11,819		)	(42,126		)	(35,546		)
Net investment income	$	94,127		$	66,282		$	282,459		207,088

(1) Amounts include dividends and interest distributions on investment funds, term loan investments and other items.

(2) Investment expenses were approximately 0.32% of average invested assets for the 2017 third quarter, compared to 0.31% for the 2016 third quarter, and 0.30% for the nine months ended September 30, 2017, compared to 0.32% for the 2016 period.

Net investment income for the 2017 periods reflected income on the acquired UGC portfolio and higher returns on fund investments than in the 2016 periods. The pre-tax investment income yield, calculated based on amortized cost and on an annualized basis, was 2.00% for the 2017 third quarter, compared to 1.81% for the 2016 third quarter, and 2.04% for the nine months ended September 30, 2017, compared to 1.95% for the 2016 period.

ACGL 2017 THIRD QUARTER FORM 10-Q 63

Corporate Expenses.

Corporate expenses were $14.1 million for the 2017 third quarter, compared to $11.3 million for the 2016 third quarter, and $48.5 million for the nine months ended September 30, 2017, compared to $37.9 million for the 2016 period. The higher level of corporate expenses in the 2017 periods was primarily due to higher incentive compensation costs.

UGC Transaction Costs and Other.

UGC transaction costs and other were $3.0 million for the 2017 third quarter and $21.2 million for the nine months ended September 30, 2017. UGC transaction costs and other include advisory, financing, legal and other transaction costs related to the UGC acquisition. Amounts for the 2017 third quarter primarily related to severance and related costs, while the total for the nine months ended September 30, 2017 reflected $13.2 million of severance and related costs, with the remainder primarily due to incentive compensation paid in conjunction with the UGC acquisition.

Amortization of Intangible Assets.

Amortization of intangible assets for the 2017 third quarter was $31.8 million, compared to $4.9 million for the 2016 third quarter, and $93.9 million for the nine months ended September 30, 2017, compared to $14.5 million for the 2016 period. During the 2017 first quarter, we reclassified our income statement presentation of amortization of intangible assets to reflect such item separately (previously reflected in acquisition and/or other operating expenses). The higher level of expense for the 2017 periods reflects the amortization of intangible assets included in the UGC acquisition, including intangible assets related to acquired insurance contracts and distribution relationships.

Interest Expense.

Interest expense was $26.3 million for the 2017 third quarter, compared to $12.9 million for the 2016 third quarter, and $77.9 million for the nine months ended September 30, 2017, compared to $38.0 million for the 2016 period. The increase in the 2017 periods primarily reflects the impact of the issuance of the Company’s 2026 and 2046 senior notes in December 2016 and the higher level of borrowings outstanding under our revolving credit agreement. The proceeds from the debt offering and additional borrowings under the revolving credit agreement were used to close the UGC acquisition on December 31, 2016.

Loss on Redemption of Preferred Shares.

In September 2017, we redeemed $230 million of 6.75% Series C preferred shares and, in accordance with GAAP, recorded a loss of $6.7 million to remove original issuance costs related to the redeemed shares from additional paid-in capital. Such adjustment had no impact on total shareholders’ equity or cash flows.

Net Realized Gains or Losses.

We recorded net realized gains of $64.1 million for the 2017 third quarter, compared to net realized gains of $95.9 million for the 2016 third quarter, and net realized gains of $110.7 million for the nine months ended September 30, 2017, compared to net realized gains of $168.7 million for the 2016 period. Currently, our portfolio is actively managed to maximize total return within certain guidelines. The effect of financial market movements on the investment portfolio will directly impact net realized gains and losses as the portfolio is adjusted and rebalanced. Net realized gains or losses from the sale of fixed maturities primarily results from our decisions to reduce credit exposure, to change duration targets, to rebalance our portfolios or due to relative value determinations. Net realized gains or losses also includes realized and unrealized contract gains and losses on our derivative instruments, changes in the fair value of assets and liabilities accounted for using the fair value option along with re-measurement of contingent consideration liability amounts.

Net Impairment Losses Recognized in Earnings.

We recorded $1.9 million of impairment losses for the 2017 third quarter, compared to $3.9 million for the 2016 third quarter, and $5.4 million for the nine months ended September 30, 2017, compared to $16.8 million for the 2016 period. See note 7, “Investment Information—Other-Than-Temporary Impairments,” of the notes accompanying our consolidated financial statements for additional information.

Equity in Net Income (Loss) of Investment Funds Accounted for Using the Equity Method.

We recorded $31.1 million of equity in net income related to investment funds accounted for using the equity method in the 2017 third quarter, compared to $16.7 million of income for the 2016 third quarter, and $111.9 million of income for the nine months ended September 30, 2017, compared to $32.1 million of income for the 2016 period. Investment funds accounted for using the equity method totaled $962.6 million at September 30, 2017, compared to $811.3 million at December 31, 2016.

Net Foreign Exchange Gains or Losses.

Net foreign exchange losses for the 2017 third quarter were $27.8 million, compared to net foreign exchange losses for the 2016 third quarter of $4.2 million, and net foreign exchange losses of $85.5 million for the nine months ended September 30, 2017, compared to net foreign exchange losses of $3.8 million for the 2016 period. Amounts in such periods were primarily unrealized and resulted from the effects of revaluing our net insurance liabilities required to be settled in foreign currencies at each balance sheet date.

ACGL 2017 THIRD QUARTER FORM 10-Q 64

Income Tax Expense.

Our income tax provision on income (loss) before income taxes resulted in an expense of 34.8% for the 2017 third quarter, compared to an expense of 5.1% for the 2016 third quarter, and an expense of 14.9% for the nine months ended September 30, 2017, compared to 6.7% for the 2016 period. The effective tax rates for the 2017 third quarter and nine months ended September 30, 2017 included a discrete income tax benefit of $1.3 million and $7.7 million, respectively, arising from the change in accounting for stock based compensation. Our effective tax rate, which is based upon the expected annual effective tax rate, may fluctuate from period to period based on the relative mix of income or loss reported by jurisdiction and the varying tax rates in each jurisdiction.

Other Segment

The ‘other’ segment includes the results of Watford Re. Pursuant to generally accepted accounting principles, Watford Re is considered a variable interest entity and we concluded that we are the primary beneficiary of Watford Re. As such, we consolidate the results of Watford Re in our consolidated financial statements, although we only own approximately 11% of Watford Re’s common equity. See note 3, “Variable Interest Entities and Noncontrolling Interests” and note 5, “Segment Information,” of the notes accompanying our consolidated financial statements for additional information on Watford Re.

CRITICAL ACCOUNTING POLICIES,

ESTIMATES AND RECENT ACCOUNTING PRONOUNCEMENTS

Critical accounting policies, estimates and recent accounting pronouncements are discussed in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our 2016 Form 10-K, updated where applicable in the notes accompanying our consolidated financial statements, including note 2, “Recent Accounting Pronouncements.”

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Financial Condition

Investable Assets

At September 30, 2017, total investable assets of $22.00 billion included $19.70 billion held by Arch and $2.30 billion included in the ‘other’ segment (i.e., attributable to Watford Re).

• Investable Assets Held by Arch

The following table summarizes the fair value of the investable assets held by Arch:

Investable assets (1):	Estimated Fair Value			% of Total
September 30, 2017
Fixed maturities (2)	$	14,731,262		74.8
Short-term investments	1,723,081			8.7
Cash	805,210			4.1
Equity securities (2)	546,027			2.8
Other investments (2)	1,496,531			7.6
Investments accounted for using the equity method	962,574			4.9
Securities transactions entered into but not settled at the balance sheet date	(568,498		)	(2.9	)
Total investable assets held by Arch	$	19,696,187		100.0
December 31, 2016
Fixed maturities (2)	$	14,521,774		77.9
Short-term investments	676,547			3.6
Cash	768,049			4.1
Equity securities (2)	558,008			3.0
Other investments (2)	1,276,841			6.9
Investments accounted for using the equity method	811,273			4.4
Securities transactions entered into but not settled at the balance sheet date	23,697			0.1
Total investable assets held by Arch	$	18,636,189		100.0

(1) In securities lending transactions, we receive collateral in excess of the fair value of the securities pledged. For purposes of this table, we have excluded the collateral received under securities lending, at fair value and included the securities pledged under securities lending, at fair value.

(2) Includes investments carried as available for sale, at fair value and at fair value under the fair value option.

At September 30, 2017, our fixed income portfolio, which includes fixed maturity securities and short-term investments, had average credit quality ratings from Standard & Poor’s Rating Services (“S&P”)/Moody’s of “AA/Aa2” and an average yield to maturity (embedded book yield), before investment expenses, of 2.20%. At December 31, 2016, our fixed income portfolio had average credit quality ratings from S&P/Moody’s of “AA-/Aa3” and an average yield to maturity of 2.03%. Our investment portfolio had an average effective duration of 3.14 years at September 30, 2017, compared to 3.64 years at December 31, 2016. At September 30, 2017, approximately $13.59 billion, or 69%, of total investable assets held by Arch were internally managed, compared to $13.90 billion, or 75%, at December 31, 2016.

ACGL 2017 THIRD QUARTER FORM 10-Q 65

The following table summarizes our fixed maturities and fixed maturities pledged under securities lending agreements (“Fixed Maturities”) by type:

	Estimated Fair Value		% of Total
September 30, 2017
Corporate bonds	$	4,588,758	31.1
Mortgage backed securities	337,478		2.3
Municipal bonds	2,353,234		16.0
Commercial mortgage backed securities	584,730		4.0
U.S. government and government agencies	3,761,612		25.5
Non-U.S. government securities	1,554,956		10.6
Asset backed securities	1,550,494		10.5
Total	$	14,731,262	100.0
December 31, 2016
Corporate bonds	$	4,696,079	32.3
Mortgage backed securities	504,677		3.5
Municipal bonds	3,713,434		25.6
Commercial mortgage backed securities	536,051		3.7
U.S. government and government agencies	2,804,811		19.3
Non-U.S. government securities	1,142,735		7.9
Asset backed securities	1,123,987		7.7
Total	$	14,521,774	100.0

The following table provides the credit quality distribution of our Fixed Maturities. For individual fixed maturities, S&P ratings are used. In the absence of an S&P rating, ratings from Moody’s are used, followed by ratings from Fitch Ratings.

	Estimated Fair Value		% of Total
September 30, 2017
U.S. government and gov’t agencies (1)	$	4,040,392	27.4
AAA	4,048,800		27.5
AA	2,406,692		16.3
A	2,285,336		15.5
BBB	1,110,089		7.5
BB	291,798		2.0
B	231,880		1.6
Lower than B	90,947		0.6
Not rated	225,328		1.5
Total	$	14,731,262	100.0
December 31, 2016
U.S. government and gov’t agencies (1)	$	3,210,899	22.1
AAA	3,918,739		27.0
AA	3,148,226		21.7
A	2,338,834		16.1
BBB	1,203,942		8.3
BB	226,321		1.6
B	156,405		1.1
Lower than B	90,833		0.6
Not rated	227,574		1.6
Total	$	14,521,774	100.0

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

The following table provides information on the severity of the unrealized loss position as a percentage of amortized cost for all Fixed Maturities which were in an unrealized loss position:

Severity of gross unrealized losses:	Estimated Fair Value		Gross Unrealized Losses			% of Total Gross Unrealized Losses
September 30, 2017
0-10%	$	7,499,372	$	(71,889	)	86.1
10-20%	73,042		(10,600		)	12.7
20-30%	2,164		(687		)	0.8
Greater than 30%	324		(299		)	0.4
Total	$	7,574,902	$	(83,475	)	100.0
December 31, 2016
0-10%	$	7,078,582	$	(127,909	)	71.6
10-20%	155,403		(24,219		)	13.5
20-30%	89,887		(25,929		)	14.5
Greater than 30%	1,496		(702		)	0.4
Total	$	7,325,368	$	(178,759	)	100.0

The following table summarizes our top ten exposures to fixed income corporate issuers by fair value at September 30, 2017, excluding guaranteed amounts and covered bonds:

	Estimated Fair Value		Credit Rating (1)
Apple Inc.	$	144,561	AA+/Aa1
Microsoft Corporation	131,597		AAA/Aaa
JPMorgan Chase & Co.	116,451		A-/A3
The Bank of New York Mellon Corporation	89,245		A/A1
Citigroup Inc.	87,285		A-/A3
Wells Fargo & Company	82,560		A/A2
New York Life Insurance Company	74,684		AA+/Aaa
Massmutual Global Funding II C	72,581		AA+/Aa2
MetLife, Inc.	71,893		AA-/Aa3
American Express Company	69,096		A-/A2
Total	$	939,953

(1) Average credit ratings as assigned by S&P and Moody’s, respectively.

ACGL 2017 THIRD QUARTER FORM 10-Q 66

The following table provides information on our structured securities, which includes residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”) and asset-backed securities (“ABS”):

	Agencies		Investment Grade		Below Investment Grade		Total
Sep. 30, 2017
RMBS	$	274,710	$	19,940	$	42,828	$	337,478
CMBS	4,071		509,080		71,579		584,730
ABS	—		1,458,114		92,380		1,550,494
Total	$	278,781	$	1,987,134	$	206,787	$	2,472,702
December 31, 2016
RMBS	$	393,188	$	60,600	$	50,889	$	504,677
CMBS	12,900		513,266		9,885		536,051
ABS	—		1,077,614		46,373		1,123,987
Total	$	406,088	$	1,651,480	$	107,147	$	2,164,715

At September 30, 2017, our structured securities included $40.5 million par value in sub-prime securities with a fair value of $34.5 million and average credit quality ratings from S&P/Moody’s of “CCC/Caa3.” At December 31, 2016, our fixed income portfolio included $25.3 million par value in sub-prime securities with a fair value of $23.3 million and average credit quality ratings from S&P/Moody’s of “CCC/Caa3.”

At September 30, 2017, our equity portfolio included $546.0 million of equity securities, compared to $558.0 million at December 31, 2016. Our equity portfolio includes publicly traded common stocks in the natural resources, energy, consumer staples and other sectors.

The following table provides information on the severity of the unrealized loss position as a percentage of cost for all equity securities classified as available for sale which were in an unrealized loss position:

Severity of gross unrealized losses:	Estimated Fair Value		Gross Unrealized Losses			% of Total Gross Unrealized Losses
September 30, 2017
0-10%	$	155,016	$	(3,670	)	46.6
10-20%	11,219		(1,804		)	22.9
20-30%	2,632		(848		)	10.8
Greater than 30%	2,070		(1,551		)	19.7
Total	$	170,937	$	(7,873	)	100.0
December 31, 2016
0-10%	$	214,364	$	(8,776	)	50.1
10-20%	52,034		(7,100		)	40.5
20-30%	1,983		(607		)	3.5
Greater than 30%	1,000		(1,034		)	5.9
Total	$	269,381	$	(17,517	)	100.0

The following table provides information on the fair value of our Eurozone investments at September 30, 2017:

Country (1)	Sovereign (2)		Corporate Bonds		Other (3)		Total
Netherlands	$	100,463	$	96,733	$	7,154	$	204,350
Germany	103,751		27,931		43,928		175,610
Belgium	47,890		7,522		—		55,412
Luxembourg	—		16,605		18,624		35,229
France	1,011		7,017		23,885		31,914
Austria	16,120		—		—		16,120
Spain	—		1,696		10,192		11,889
Ireland	—		6,698		2,670		9,369
Italy	—		1,685		6,942		8,626
Finland	—		—		4,306		4,306
Portugal	—		—		549		549
Greece	—		—		402		402
Total	$	269,236	$	165,887	$	118,653	$	553,777

(1) The country allocations set forth in the table are based on various assumptions made by us in assessing the country in which the underlying credit risk resides, including a review of the jurisdiction of organization, business operations and other factors. Based on such analysis, we do not believe that we have any other Eurozone investments at September 30, 2017.

(2) Includes securities issued and/or guaranteed by Eurozone governments.

(3) Includes bank loans, equities and other.

The following table summarizes our other investments:

	September 30, 2017		December 31, 2016
Available for sale:
Asian and emerging markets	$	123,225	$	84,778
Investment grade fixed income	53,325		33,923
Credit related funds	20,752		7,469
Other	63,037		41,800
Total available for sale	260,339		167,970
Fair value option:
Term loan investments	376,721		378,877
Mezzanine debt funds	172,000		127,943
Credit related funds	194,200		218,298
Investment grade fixed income	95,151		75,468
Asian and emerging markets	250,481		178,568
Other (1)	147,639		129,717
Total fair value option	1,236,192		1,108,871
Total	$	1,496,531	$	1,276,841

(1) Includes fund investments with strategies in mortgage servicing rights, transportation and infrastructure assets and other.

• Investable Assets in the ‘Other’ Segment

Investable assets in the ‘other’ segment are managed by Watford Re. The board of directors of Watford Re establishes their investment policies and guidelines. Watford Re’s investments are accounted for using the fair value option with changes in the carrying value of such investments recorded in net realized gains or losses.

ACGL 2017 THIRD QUARTER FORM 10-Q 67

The following table summarizes investable assets in the ‘other’ segment:

	September 30, 2017			December 31, 2016
Investments accounted for using the fair value option:
Other investments	$	1,061,013		$	811,922
Fixed maturities	1,094,593			734,260
Short-term investments	272,495			309,127
Equity securities	29,265			2,314
Total	2,457,366			1,857,623
Cash	57,151			74,893
Securities sold but not yet purchased	(72,682		)	(33,157		)
Securities transactions entered into but not settled at the balance sheet date	(137,014		)	(41,596		)
Total investable assets included in ‘other’ segment	$	2,304,821		$	1,857,763

Premiums Receivable and Reinsurance Recoverables

At September 30, 2017, 81.2% of premiums receivable of $1.27 billion represented amounts not yet due, while amounts in excess of 90 days overdue were 4.1% of the total. At December 31, 2016, 81.0% of premiums receivable of $1.07 billion represented amounts not yet due, while amounts in excess of 90 days overdue were 5.2% of the total. Our reserves for doubtful accounts were approximately $24.0 million at September 30, 2017, compared to $21.0 million at December 31, 2016.

At September 30, 2017 and December 31, 2016, approximately 72.5% and 75.7% of reinsurance recoverables on paid and unpaid losses (not including ceded unearned premiums) of $2.51 billion and $2.11 billion, respectively, were due from carriers which had an A.M. Best rating of “A-” or better while 27.5% and 24.3%, respectively, were from companies not rated. For items not rated, over 90% of such amount was collateralized through reinsurance trusts or letters of credit at September 30, 2017 and December 31, 2016. The largest reinsurance recoverables from any one carrier was approximately 2.2% and 2.4%, respectively, of total shareholders’ equity available to Arch at September 30, 2017 and December 31, 2016.

Approximately 4.1% of the $43.3 million of paid losses and loss adjustment expenses recoverable at September 30, 2017 were more than 90 days overdue, compared to 6.7% of the $30.6 million of paid losses and loss adjustment expenses recoverable at December 31, 2016. No collection issues were indicated on the amount in excess of 90 days overdue at September 30, 2017.

The effects of reinsurance on written and earned premiums and losses and loss adjustment expenses (“LAE”) with unaffiliated reinsurers were as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Premiums written:
Direct	$	1,147,793		$	841,119		$	3,338,106		$	2,539,073
Assumed	500,453			437,646			1,577,789			1,507,594
Ceded	(322,843		)	(264,487		)	(1,065,537		)	(887,591		)
Net	$	1,325,403		$	1,014,278		$	3,850,358		$	3,159,076
Premiums earned:
Direct	$	1,121,168		$	807,656		$	3,216,268		$	2,382,784
Assumed	501,587			413,960			1,431,746			1,308,349
Ceded	(360,869		)	(263,213		)	(1,028,237		)	(775,166		)
Net	$	1,261,886		$	958,403		$	3,619,777		$	2,915,967
Losses and LAE:
Direct	$	917,721		$	490,420		$	1,968,900		$	1,471,472
Assumed	621,717			172,490			1,112,255			630,271
Ceded	(493,297		)	(138,727		)	(792,584		)	(470,019		)
Net	$	1,046,141		$	524,183		$	2,288,571		$	1,631,724

Reserves for Losses and Loss Adjustment Expenses

We establish reserves for losses and loss adjustment expenses (“Loss Reserves”) which represent estimates involving actuarial and statistical projections, at a given point in time, of our expectations of the ultimate settlement and administration costs of losses incurred. Estimating Loss Reserves is inherently difficult, which is exacerbated by the fact that we have relatively limited historical experience upon which to base such estimates. We utilize actuarial models as well as available historical insurance industry loss ratio experience and loss development patterns to assist in the establishment of Loss Reserves. Actual losses and loss adjustment expenses paid will deviate, perhaps substantially, from the reserve estimates reflected in our financial statements.

ACGL 2017 THIRD QUARTER FORM 10-Q 68

At September 30, 2017 and December 31, 2016, our Loss Reserves, net of unpaid losses and loss adjustment expenses recoverable and deferred reinsurance charge asset, by type and by operating segment were as follows:

	September 30, 2017			December 31, 2016
Insurance segment:
Case reserves	$	1,524,718		$	1,414,603
IBNR reserves	3,411,009			3,187,451
Total net reserves	4,935,727			4,602,054
Reinsurance segment:
Case reserves	1,011,298			762,730
Additional case reserves	162,632			92,524
IBNR reserves	1,534,236			1,517,983
Deferred reinsurance charge asset	(802		)	—
Total net reserves	2,707,364			2,373,237
Mortgage segment:
Case reserves	458,960			593,222
IBNR reserves	84,926			59,791
Total net reserves (1)	543,886			653,013
Other segment:
Case reserves	232,345			125,703
Additional case reserves	31,575			9,513
IBNR reserves	436,831			353,865
Total net reserves	700,751			489,081
Total:
Case reserves	3,227,321			2,896,258
Additional case reserves	194,207			102,037
IBNR reserves	5,467,002			5,119,090
Deferred reinsurance charge asset	(802		)	—
Total net reserves	$	8,887,728		$	8,117,385

(1) At September 30, 2017, total net reserves include $481.5 million from U.S. primary mortgage insurance business, of which 72.2% represents policy years 2007 and prior, 11.7% from 2008 and the remainder from later policy years.

At September 30, 2017 and December 31, 2016, the insurance segment’s Loss Reserves by major line of business, net of unpaid losses and loss adjustment expenses recoverable, were as follows:

	September 30, 2017		December 31, 2016
Insurance segment:
Professional lines (1)	$	1,321,024	$	1,293,667
Construction and national accounts	1,064,949		976,109
Excess and surplus casualty (2)	683,852		687,305
Programs	677,879		667,677
Property, energy, marine and aviation	439,409		302,057
Travel, accident and health	80,391		72,726
Lenders products	53,512		42,147
Other (3)	614,711		560,366
Total net reserves	$	4,935,727	$	4,602,054

(1) Includes professional liability, executive assurance and healthcare business.

(2) Includes casualty and contract binding business.

(3) Includes alternative markets, excess workers’ compensation and surety business.

At September 30, 2017 and December 31, 2016, the reinsurance segment’s Loss Reserves by major line of business, net of unpaid losses and loss adjustment expenses recoverable and including deferred reinsurance charge asset, were as follows:

	September 30, 2017		December 31, 2016
Reinsurance segment:
Casualty (1)	$	1,482,463	$	1,355,362
Other specialty (2)	503,947		428,205
Property excluding property catastrophe (3)	392,002		297,200
Marine and aviation	140,432		147,700
Property catastrophe	128,988		86,026
Other (4)	59,532		58,744
Total net reserves	$	2,707,364	$	2,373,237

(1) Includes executive assurance, professional liability, workers’ compensation, excess motor, healthcare and other.

(2) Includes non-excess motor, surety, accident and health, workers’ compensation catastrophe, agriculture, trade credit and other.

(3) Includes facultative business.

(4) Includes life, casualty clash and other.

Mortgage Operations Supplemental Information

The mortgage segment’s insurance in force (“IIF”) and risk in force (“RIF”) were as follows at the end of the last two quarters:

(U.S. Dollars in millions)	September 30, 2017			June 30, 2017
	Amount		%	Amount		%
Insurance In Force (IIF) (1):
U.S. primary mortgage insurance	$	250,375	72.3	$	244,235	73.4
Mortgage reinsurance	26,869		7.8	26,120		7.8
Other (2)	68,925		19.9	62,503		18.8
Total	$	346,169	100.0	$	332,858	100.0
Risk In Force (RIF) (3):
U.S. primary mortgage insurance	$	64,005	92.5	$	62,362	92.6
Mortgage reinsurance	2,433		3.5	2,453		3.6
Other (2)	2,742		4.0	2,517		3.7
Total	$	69,180	100.0	$	67,332	100.0

(1) Represents the aggregate dollar amount of each insured mortgage loan’s current principal balance.

(2) Includes GSE credit risk-sharing transactions and international insurance business.

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

ACGL 2017 THIRD QUARTER FORM 10-Q 69

The insurance in force and risk in force for our U.S. primary mortgage insurance business by policy year were as follows at September 30, 2017:

(U.S. Dollars in millions)	IIF			RIF			Delinquency
	Amount		%	Amount		%	Rate (1)
Policy year:
2007 and prior	$	22,206	8.9	$	5,052	7.9	10.30	%
2008	5,192		2.1	1,273		2.0	6.27	%
2009	1,192		0.5	282		0.4	2.72	%
2010	1,368		0.5	369		0.6	1.70	%
2011	4,415		1.8	1,205		1.9	1.09	%
2012	14,995		6.0	4,101		6.4	0.60	%
2013	22,719		9.1	6,217		9.7	0.77	%
2014	24,747		9.9	6,582		10.3	0.81	%
2015	44,453		17.8	11,417		17.8	0.47	%
2016	63,805		25.5	16,027		25.0	0.32	%
2017	45,283		18.1	11,480		17.9	0.06	%
Total	$	250,375	100.0	$	64,005	100.0	1.98	%

(1) Represents the ending percentage of loans in default.

The following tables provide supplemental disclosures on risk in force for our U.S. primary mortgage insurance business at the end of the last two quarters:

(U.S. Dollars in millions)	September 30, 2017				June 30, 2017
	Amount			%	Amount			%
Credit quality (FICO):
>=740	$	37,297		58.3	$	36,378		58.3
680-739	20,822			32.5	20,122			32.3
620-679	5,178			8.1	5,118			8.2
<620	708			1.1	744			1.2
Total	$	64,005		100.0	$	62,362		100.0
Weighted average FICO score	743				743
Loan-to-value (LTV):
95.01% and above	$	6,175		9.6	$	5,983		9.6
90.01% to 95.00%	35,703			55.8	34,718			55.7
85.01% to 90.00%	19,247			30.1	18,810			30.2
85.00% and below	2,880			4.5	2,851			4.6
Total	$	64,005		100.0	$	62,362		100.0
Weighted average LTV	92.9		%		92.8		%
Total RIF, net of external reinsurance	$	47,980			$	45,774

(U.S. Dollars in millions)	September 30, 2017			June 30, 2017
	Amount		%	Amount		%
Total RIF by State:
Texas	$	5,120	8.0	$	5,075	8.1
California	3,671		5.7	3,524		5.7
Florida	2,764		4.3	2,622		4.2
Virginia	2,743		4.3	2,691		4.3
North Carolina	2,378		3.7	2,346		3.8
Washington	2,312		3.6	2,311		3.7
Georgia	2,293		3.6	2,239		3.6
Maryland	2,209		3.5	2,160		3.5
Illinois	2,200		3.4	2,157		3.5
Minnesota	2,138		3.3	2,072		3.3
Others	36,177		56.5	35,165		56.4
Total	$	64,005	100.0	$	62,362	100.0

The following table provides supplemental disclosures for our U.S. primary mortgage insurance business related to insured loans and loss metrics:

(U.S. Dollars in thousands, except policy, loan and claim count)	Three Months Ended
	September 30, 2017			June 30, 2017
Roll-forward of insured loans in default:
Beginning delinquent number of loans	23,903			26,234
New notices	9,028			8,858
Cures	(7,891		)	(9,078		)
Paid claims	(1,270		)	(2,111		)
Ending delinquent number of loans (1)	23,770			23,903
Ending number of policies in force (1)	1,202,619			1,183,659
Delinquency rate (1)	1.98		%	2.02		%
Losses:
Number of claims paid	1,270			2,111
Total paid claims	$	59,832		$	85,539
Average per claim	$	47.1		$	40.5
Severity (2)	103.5		%	104.4		%
Average reserve per default (in thousands) (1)	$	19.3		$	20.4

(1) Includes first lien primary and pool policies.

(2) Represents total paid claims divided by RIF of loans for which claims were paid.

The risk-to-capital ratio, which represents total current (non-delinquent) risk in force, net of reinsurance, divided by total statutory capital, for Arch MI U.S. was approximately 11.2 to 1 at September 30, 2017, compared to 12.0 to 1 at June 30, 2017.

Shareholders’ Equity and Book Value per Share

Total shareholders’ equity available to Arch was $8.91 billion at September 30, 2017, compared to $8.25 billion at December 31, 2016. The increase was primarily attributable to net income, reflecting contributions from both underwriting and investing activities.

ACGL 2017 THIRD QUARTER FORM 10-Q 70

The following table presents the calculation of book value per share:

(U.S. dollars in thousands, except  share data)	September 30, 2017		December 31, 2016
Total shareholders’ equity available to Arch	$	8,911,144	$	8,253,718
Less preferred shareholders’ equity	772,555		772,555
Common shareholders’ equity available to Arch	$	8,138,589	$	7,481,163
Common shares and common share equivalents outstanding, net of treasury shares (1)	136,540,573		135,550,337
Book value per share	$	59.61	$	55.19

(1) Excludes the effects of 6,784,649 and 6,872,494 stock options and 419,908 and 381,461 restricted stock units outstanding at September 30, 2017 and December 31, 2016, respectively.

Liquidity and Capital Resources

Refer to the ‘Liquidity and Capital Resources’ section contained in Item 7 of our 2016 Form 10-K for a general discussion of our liquidity and capital resources. This section does not include information specific to Watford Re. We do not guarantee or provide credit support for Watford Re, and our financial exposure to Watford Re is limited to our investment in Watford Re’s common and preferred shares and counterparty credit risk (mitigated by collateral) arising from reinsurance transactions with Watford Re.

The following table provided an analysis of our capital structure:

(U.S. dollars in thousands, except  share data)	September 30, 2017		December 31, 2016
Debt:
ACGL senior notes, due May 2034	$	297,030	$	296,957
Arch-U.S. senior notes, due Nov 2043 (1)	494,596		494,525
ACF senior notes, due Dec 2026 (2)	495,955		495,689
ACF senior notes, due Dec 2046 (2)	445,145		445,087
Revolving credit agreement borrowings due Oct 2021	400,000		500,000
Total	$	2,132,726	$	2,232,258
Shareholders’ equity available to Arch:
Series C non-cumulative preferred shares	$	92,555	$	322,555
Series E non-cumulative preferred shares	450,000		450,000
Series F non-cumulative preferred shares	230,000		—
Common shareholders’ equity	8,138,589		7,481,163
Total	$	8,911,144	$	8,253,718
Total capital available to Arch	$	11,043,870	$	10,485,976
Debt to total capital (%)	19.3		21.3
Debt and prefered to total capital (%)	26.3		28.7

(1) Issued by Arch Capital Group (U.S.) Inc., a wholly owned subsidiary of ACGL, and fully and unconditionally guaranteed by ACGL.

(2) Issued by Arch Capital Finance LLC (“ACF”), a wholly owned subsidiary of Arch U.S. MI Holdings Inc., and fully and unconditionally guaranteed by ACGL.

For the nine months ended September 30, 2017, ACGL received dividends of $182.5 million from Arch Reinsurance Ltd. (“Arch Re Bermuda”), our Bermuda-based reinsurer and insurer, which can pay approximately $1.79 billion to ACGL during the remainder of 2017 without providing an affidavit to the Bermuda Monetary Authority (“BMA”).

In August 2017, ACGL completed a $230.0 million underwritten public offering of 5.45% Series F preferred shares and, in September 2017, used the net proceeds received and other available funds to redeem in part its outstanding 6.75% Series C preferred shares.

Our U.S. insurance and reinsurance subsidiaries are subject to insurance laws and regulations in the jurisdictions in which they operate. The ability of our regulated insurance subsidiaries to pay dividends or make distributions is dependent on their ability to meet applicable regulatory standards. These regulations include restrictions that limit the amount of dividends or other distributions, such as loans or cash advances, available to shareholders without prior approval of the insurance regulatory authorities.

In addition, Arch MI U.S. is required to maintain compliance with the GSEs requirements, known as the Private Mortgage Insurer Eligibility Requirements or “PMIERs.” The financial requirements require an eligible mortgage insurer’s available assets, which generally include only the most liquid assets of an insurer, to meet or exceed “minimum required assets” as of each quarter end. Minimum required assets are calculated from PMIERs tables with several risk dimensions (including origination year, original loan-to-value and original credit score of performing loans, and the delinquency status of non-performing loans) and are subject to a minimum amount. Arch MI U.S. satisfied the PMIERs’ financial requirements as of September 30, 2017 with an estimated PMIER sufficiency ratio of 122%, compared to 122% at June 30, 2017.

For the nine months ended September 30, 2017, Arch U.S. MI Holdings Inc., a subsidiary of Arch-U.S., received $342.0 million of dividends from subsidiaries of United Guaranty Corporation, including United Guaranty Residential Insurance Company (“UGRIC”). Of such amount, $263.0 million was contributed to Arch Mortgage Insurance Company. UGRIC may not pay additional dividends during the remainder of 2017.

For the nine months ended September 30, 2017, Arch-U.S. received $50.0 million of dividends from Arch Reinsurance Company (“Arch Re U.S.”), our U.S.-licensed reinsurer. Arch Re U.S. can pay approximately $78.4 million to Arch-U.S. during the remainder of 2017, subject to the approval of the Commissioner of the Delaware Department of Insurance.

Pursuant to our 2014 acquisition of the CMG Entities, we made a contingent consideration payment of $71.7 million in April 2017. The maximum amount of remaining contingent

ACGL 2017 THIRD QUARTER FORM 10-Q 71

consideration payments over the remaining earn-out period is $68.3 million.

The following table summarizes our cash flows from operating, investing and financing activities, excluding amounts related to the ‘other’ segment (i.e., Watford Re). See Note 3, “Variable Interest Entities,” for cash flows related to Watford Re.

	Nine Months Ended
	September 30,
	2017			2016
Total cash provided by (used for):
Operating activities	$	860,197		$	831,086
Investing activities	(486,201		)	(1,131,147		)
Financing activities	(348,337		)	372,393
Effects of exchange rate changes on foreign currency cash	11,492			(5,322		)
Increase (decrease) in cash	$	37,151		$	67,010

•Cash provided by operating activities for the nine months ended September 30, 2017 was higher than in the 2016 period, primarily reflecting higher premiums collected, partially offset by a higher level of paid losses.

•Cash used for investing activities for the nine months ended September 30, 2017 was lower than in the 2016 period, reflecting changes in cash collateral related to securities lending. In addition, activity for the 2017 period reflected higher net sales of investments than in the 2016 period.

•Cash used for financing activities for the nine months ended September 30, 2017 was higher than the cash provided in the 2016 period, reflecting changes in cash collateral related to securities lending and a $100.0 million paydown of revolving credit agreement borrowings. Activity for the 2016 period reflected a $434.9 million inflow from the issuance of preferred shares and $75.3 million of repurchases under our share repurchase program.

At September 30, 2017, our investable assets were $19.70 billion (excluding the $2.30 billion of investable assets related to the ‘other’ segment). Our unfunded investment commitments totaled approximately $1.58 billion at September 30, 2017. Please refer to Item 1A “Risk Factors” of our 2016 Form 10-K for a discussion of other risks relating to our business and investment portfolio.

We expect that our liquidity needs, including our anticipated (re)insurance obligations and operating and capital expenditure needs, for the next twelve months, at a minimum, will be met by funds generated from underwriting activities and investment income, as well as by our balance of cash, short-term investments, proceeds on the sale or maturity of our investments, and our credit facilities.

Off-Balance Sheet Arrangements

Off-balance sheet arrangements are discussed in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our 2016 Form 10-K.

Market Sensitive Instruments and Risk Management

In accordance with the SEC’s Financial Reporting Release No. 48, we performed a sensitivity analysis to determine the effects that market risk exposures could have on the future earnings, fair values or cash flows of our financial instruments as of September 30, 2017. Market risk represents the risk of changes in the fair value of a financial instrument and is comprised of several components, including liquidity, basis and price risks. We have not included Watford Re in the following analyses as we do not guarantee or provide credit support for Watford Re, and our financial exposure to Watford Re is limited to our investment in Watford Re’s common and preferred shares and counterparty credit risk (mitigated by collateral) arising from reinsurance transactions.

An analysis of material changes in market risk exposures at September 30, 2017 that affect the quantitative and qualitative disclosures presented in our 2016 Form 10-K (see section captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Market Sensitive Instruments and Risk Management”) were as follows: 

Investment Market Risk

Fixed Income Securities. We invest in interest rate sensitive securities, primarily debt securities. We consider the effect of interest rate movements on the fair value of our fixed maturities, fixed maturities pledged under securities lending agreements, short-term investments and certain of our other investments which invest in fixed income securities and the corresponding change in unrealized appreciation. As interest rates rise, the fair value of our interest rate sensitive securities falls, and the converse is also true. Based on historical observations, there is a low probability that all interest rate yield curves would shift in the same direction at the same time. Accordingly, the actual effect of interest rate movements may differ materially from the amounts set forth in the following tables.

ACGL 2017 THIRD QUARTER FORM 10-Q 72

The following table summarizes the effect that an immediate, parallel shift in the interest rate yield curve would have had on our fixed income securities:

(U.S. dollars in  billions)	Interest Rate Shift in Basis Points
	-100			-50			—		+50			+100
Sep. 30, 2017
Total fair value	$	18.95		$	18.64		$	18.35	$	18.07		$	17.79
Change from base	3.3		%	1.6		%			(1.5		)%	(3.0		)%
Change in unrealized value	$	0.61		$	0.29				$	(0.28	)	$	(0.55	)
Dec. 31, 2016
Total fair value	$	17.95		$	17.62		$	17.31	$	17.00		$	16.70
Change from base	3.7		%	1.8		%			(1.8		)%	(3.5		)%
Change in unrealized value	$	0.64		$	0.31				$	(0.31	)	$	(0.61	)

In addition, we consider the effect of credit spread movements on the fair value of our fixed income securities and the corresponding change in unrealized appreciation. As credit spreads widen, the fair value of our fixed income securities falls, and the converse is also true.

The following table summarizes the effect that an immediate, parallel shift in credit spreads in a static interest rate environment would have had on our fixed income securities:

(U.S. dollars in  billions)	Credit Spread Shift in Percentage Points
	-100			-50			—		+50			+100
Sep. 30, 2017
Total fair value	$	18.73		$	18.55		$	18.35	$	18.14		$	17.96
Change from base	2.1		%	1.1		%			(1.1		)%	(2.1		)%
Change in unrealized value	$	0.39		$	0.20				$	(0.20	)	$	(0.39	)
Dec. 31, 2016
Total fair value	$	17.79		$	17.55		$	17.31	$	17.07		$	16.83
Change from base	2.8		%	1.4		%			(1.4		)%	(2.8		)%
Change in unrealized value	$	0.48		$	0.24				$	(0.24	)	$	(0.48	)

Another method that attempts to measure portfolio risk is Value-at-Risk (“VaR”). VaR attempts to take into account a broad cross-section of risks facing a portfolio by utilizing relevant securities volatility data skewed towards the most recent months and quarters. VaR measures the amount of a portfolio at risk for outcomes 1.65 standard deviations from the mean based on normal market conditions over a one year time horizon and is expressed as a percentage of the portfolio’s initial value. In other words, 95% of the time, should the risks taken into account in the VaR model perform per their historical tendencies, the portfolio’s loss in any one year period is expected to be less than or equal to the calculated VaR, stated as a percentage of the measured portfolio’s initial value. As of September 30, 2017, our portfolio’s VaR was estimated to be 3.76% compared to an estimated 3.75% at December 31, 2016.

Equity Securities. At September 30, 2017 and December 31, 2016, the fair value of our investments in equity securities totaled $546.0 million and $558.0 million, respectively. These investments are exposed to price risk, which is the potential loss arising from decreases in fair value. An immediate hypothetical 10% decline in the value of each position would reduce the fair value of such investments by approximately $54.6 million and $55.8 million at September 30, 2017 and December 31, 2016, respectively, and would have decreased book value per common share by approximately $0.40 and $0.41, respectively. An immediate hypothetical 10% increase in the value of each position would increase the fair value of such investments by approximately $54.6 million and $55.8 million at September 30, 2017 and December 31, 2016, respectively, and would have increased book value per common share by approximately $0.40 and $0.41, respectively.

Investment-Related Derivatives. At September 30, 2017, the notional value of all derivative instruments (excluding to-be-announced mortgage backed securities which are included in the fixed income securities analysis above and foreign currency forward contracts which are included in the foreign currency exchange risk analysis below) was $3.06 billion, compared to $2.12 billion at December 31, 2016. If the underlying exposure of each investment-related derivative held at September 30, 2017 depreciated by 100 basis points, it would have resulted in a reduction in net income of approximately $30.6 million, and a decrease in book value per common share of approximately $0.22 per share, compared to $21.2 million and $0.16 per share, respectively, on investment-related derivatives held at December 31, 2016. If the underlying exposure of each investment-related derivative held at September 30, 2017 appreciated by 100 basis points, it would have resulted in an increase in net income of approximately $30.6 million, and an increase in book value per common share of approximately $0.22 per share, compared to $21.2 million and $0.16 per share, respectively, on investment-related derivatives held at December 31, 2016. See note 9, “Derivative Instruments,” of the notes accompanying our consolidated financial statements for additional disclosures concerning derivatives.

Foreign Currency Exchange Risk

Foreign currency rate risk is the potential change in value, income and cash flow arising from adverse changes in foreign currency exchange rates. Through our subsidiaries and branches located in various foreign countries, we conduct our insurance and reinsurance operations in a variety of local currencies other than the U.S. Dollar. We generally hold investments in foreign currencies which are intended to mitigate our exposure to foreign currency fluctuations in our net insurance liabilities and also utilize foreign currency forward contracts and currency options as part of our investment strategy. From time to time, we may elect to over or underweight one or more currencies, which could increase our exposure to

ACGL 2017 THIRD QUARTER FORM 10-Q 73

foreign currency fluctuations and increase the volatility of our shareholders’ equity.

For further discussion on foreign exchange activity, please refer to “—Results of Operations” and note 9, “Derivative Instruments,” of the notes accompanying our consolidated financial statements.

The following table provides a summary of our net foreign currency exchange exposures, as well as foreign currency derivatives in place to manage these exposures:

(U.S. dollars in thousands, except  per share data)	September 30, 2017			December 31, 2016
Net assets (liabilities), denominated in foreign currencies, excluding shareholders’ equity and derivatives	$	(713,065	)	$	(63,077	)
Shareholders’ equity denominated in foreign currencies (1)	356,048			290,752
Net foreign currency forward contracts outstanding (2)	(191,878		)	(250,263		)
Net exposures denominated in foreign currencies	$	(548,895	)	$	(22,588	)
Pre-tax impact of a hypothetical 10% appreciation of the U.S. Dollar against foreign currencies:
Shareholders’ equity	$	54,890		$	2,259
Book value per common share	$	0.40		$	0.02
Pre-tax impact of a hypothetical 10% decline of the U.S. Dollar against foreign currencies:
Shareholders’ equity	$	(54,890	)	$	(2,259	)
Book value per common share	$	(0.40	)	$	(0.02	)

(1) Represents capital contributions held in the foreign currencies of our operating units.

(2) Represents the net notional value of outstanding foreign currency forward contracts.

Historical observations indicate a low probability that all foreign currency exchange rates would shift against the U.S. Dollar in the same direction and at the same time and, accordingly, the actual effect of foreign currency rate movements may differ materially from the amounts set forth above.

Other Financial Information

The consolidated financial statements as of September 30, 2017 and for the three month and nine month periods ended September 30, 2017 and 2016 have been reviewed by PricewaterhouseCoopers LLP, the registrant's independent public accountants, whose report is included as an exhibit to this filing. The report of PricewaterhouseCoopers LLP states that they did not audit and they do not express an opinion on that unaudited financial information. Accordingly, the degree of reliance on their report on such information should be restricted in light of the limited nature of the review procedures applied. PricewaterhouseCoopers LLP is not subject to the

liability provisions of Section 11 of the Securities Act of 1933 for their report on the unaudited financial information because that report is not a "report" or a "part" of the registration statement prepared or certified by PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the Securities Act of 1933.

ACGL 2017 THIRD QUARTER FORM 10-Q 74

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Reference is made to the information appearing above under the subheading “Market Sensitive Instruments and Risk Management” under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which information is hereby incorporated by reference. 

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

In connection with the filing of this Form 10-Q, our management, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of disclosure controls and procedures pursuant to applicable Exchange Act Rules as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of the end of and during the period covered by this report with respect to information being recorded, processed, summarized and reported within time periods specified in the SEC’s rules and forms and with respect to timely communication to them and other members of management responsible for preparing periodic reports of all material information required to be disclosed in this report as it relates to ACGL and its consolidated subsidiaries.

We continue to enhance our operating procedures and internal controls to effectively support our business and our regulatory and reporting requirements. Our management does not expect that our disclosure controls or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. As a result of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons or by collusion of two or more people. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in

achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. As a result of the inherent limitations in a cost-effective control system, misstatement due to error or fraud may occur and not be detected. Accordingly, our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the disclosure controls and procedures are met.

Changes in Internal Controls Over Financial Reporting

We acquired all of the issued and outstanding capital stock of UGC on December 31, 2016. As allowed under SEC guidance, management’s assessment of and conclusion regarding the design and operating effectiveness of internal control over financial reporting excluded the internal control over financial reporting of UGC, which is relevant to the Company’s consolidated financial statements as of and for the nine months ended September 30, 2017. UGC represents 14% of total assets as of September 30, 2017 and 13% of our total revenues for the nine months ended September 30, 2017. The financial reporting systems of UGC have not yet been fully integrated into our financial reporting systems and, as such, we did not have the practical ability to perform an assessment of UGC’s internal control over financial reporting in time for the current quarter-end. Management expects to complete the process of integrating UGC’s internal control over financial reporting during the 2017 fourth quarter. The UGC acquisition represents a material change in internal control over financial reporting as defined in Exchange Act Rule 13a-15(f) for the nine months ended September 30, 2017.

There have been no changes in internal control over financial reporting that occurred during the quarter ended September 30, 2017 that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting, other than the UGC acquisition as described in the preceding paragraph.

ACGL 2017 THIRD QUARTER FORM 10-Q 75

PART II.  OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We, in common with the insurance industry in general, are subject to litigation and arbitration in the normal course of our business. As of September 30, 2017, we were not a party to any litigation or arbitration which is expected by management to have a material adverse effect on our results of operations and financial condition and liquidity.

ITEM 1A. RISK FACTORS

There were no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2016.

ACGL 2017 THIRD QUARTER FORM 10-Q 76

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table summarizes our purchases of our common shares for the 2017 third quarter:

	Issuer Purchases of Equity Securities
Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that  May Yet be Purchased Under the Plan or Programs (2)
7/1/2017 - 7/31/2017	4,414	$	94.39	—	$	446,501
8/1/2017 - 8/31/2017	4,074	96.99		—	$	446,501
9/1/2017 - 9/30/2017	15,618	95.38		—	$	446,501
Total	24,106	$	95.47	—	$	446,501

(1) Represents repurchases by ACGL of shares, from time to time, from employees in order to facilitate the payment of withholding taxes on restricted shares granted and the exercise of stock appreciation rights. We purchased these shares at their fair value, as determined by reference to the closing price of our common shares on the day the restricted shares vested or the stock appreciation rights were exercised.

(2) Remaining amount available at September 30, 2017 under ACGL’s share repurchase authorization, under which repurchases may be effected from time to time in open market or privately negotiated transactions through December 31, 2019.

ITEM 5. OTHER INFORMATION

In accordance with Section 10a(i)(2) of the Securities Exchange Act of 1934, as amended, we are responsible for disclosing non-audit services to be provided by our independent auditor, PricewaterhouseCoopers LLP, which are approved by the Audit Committee of our board of directors. During the 2017 third quarter, the Audit Committee approved engagements of PricewaterhouseCoopers LLP for permitted non-audit services, which consisted of tax consulting services, tax compliance services and other accounting consulting services.

Disclosure of Certain Activities Under Section 13(r) of the Securities Exchange Act of 1934

Section 13(r) of the Securities Exchange Act of 1934, as amended, requires an issuer to disclose in its annual or quarterly reports whether it or an affiliate knowingly engaged in certain activities described in that section, including certain activities related to Iran during the period covered by the report.

Effective January 16, 2016, the Office of Foreign Assets Control of the U.S. Department of the Treasury adopted General License H which authorizes non-U.S. entities that are owned or controlled by a U.S. person to engage in certain activities with Iran so long as they comply with certain specific requirements set forth therein.

Certain of our non-U.S. subsidiaries provide global marine policies that provide coverage for vessels navigating into and out of ports worldwide. In light of European Union and U.S. modifications to Iran sanctions this year, including the issuance of General License H, and consistent with General License H, we have been notified that certain of our policyholders have begun to, or will begin to, ship cargo to and from Iran, and that such cargo may include transporting crude oil from Iran to another country. Since these policies insure multiple voyages and fleets containing multiple ships, we are unable to attribute gross revenues and net profits from such marine policies to these activities involving Iran. We intend for our non-U.S. subsidiaries to continue to provide such coverage to the extent permitted by applicable law.

ACGL 2017 THIRD QUARTER FORM 10-Q 77

ITEM 6. EXHIBITS

Exhibit No.	Description
10.1	Share Appreciation Right Agreement, dated as of May 6, 2011 between Arch Capital Group Ltd. and Maamoun Rajeh†
10.2	Share Appreciation Right Agreement, dated as of May 9, 2012, between Arch Capital Group Ltd. and Maamoun Rajeh†
10.3	Share Appreciation Right Agreement, dated as of May 9, 2012 between Arch Capital Group Ltd. and Andrew Rippert†
10.4	Share Appreciation Right Agreement, dated as of July 1, 2012, between Arch Capital Group Ltd. and Maamoun Rajeh†
10.5	Share Appreciation Agreement with Arch Capital Group Ltd. substantially in the form signed by each of Nicolas Papadopoulo and Maamoun Rajeh for November 12, 2012 grants†
10.6	Restricted Share Agreement, dated as of November 12, 2012 between Arch Capital Group Ltd. and Nicholas Papadopoulo†
10.7	Restricted Share Unit Agreement, dated as of November 12, 2012 between Arch Capital Group Ltd. and Maamoun Rajeh†
10.8	Restricted Share Agreement, dated as of November 12, 2012 between Arch Capital Group Ltd. and Andrew Rippert†
10.9	Share Appreciation Agreement, dated as of November 12, 2012 between Arch Capital Group Ltd. and Andrew Rippert†
10.10	Share Appreciation Right Agreement, dated as of May 9, 2013 between Arch Capital Group Ltd. and Maamoun Rajeh†
10.11	Share Appreciation Right Agreement, dated as of May 9, 2013 between Arch Capital Group Ltd. and Andrew Rippert†
10.12	Share Appreciation Right Agreement, dated as of February 4, 2014 between Arch Capital Group Ltd. and Andrew Rippert†
10.13	Share Appreciation Right Agreement, dated as of May 13, 2014 between Arch Capital Group Ltd. and Maamoun Rajeh†
10.14	Share Appreciation Right Agreement, dated as of May 13, 2014 between Arch Capital Group Ltd. and Andrew Rippert†
10.15	Share Appreciation Right Agreement, dated as of July 1, 2014 between Arch Capital Group Ltd. and Maamoun Rajeh†
10.16	Restricted Share Agreement, dated as of November 6, 2014 between Arch Capital Group Ltd. and Nicolas Papadopoulo†
10.17	Share Appreciation Right Agreement, dated as of November 6, 2014 between Arch Capital Group Ltd. and Nicolas Papadopoulo†
10.18	Stock Option Agreement with Arch Capital Group Ltd. substantially in the form signed by each of Nicolas Papadopoulo, Maamoun Rajeh, and Andrew Rippert for May 13, 2015 grants†
10.19	Restricted Share Agreement with Arch Capital Group Ltd. substantially in the form signed by each of Nicolas Papadopoulo, Maamoun Rajeh, and Andrew Rippert for May 13, 2015 grants†
10.20	Stock Option Agreement with Arch Capital Group Ltd. substantially in the form signed by each of Nicolas Papadopoulo, Maamoun Rajeh, and Andrew Rippert for May 13, 2016 grants†
10.21	Restricted Share Agreement with Arch Capital Group Ltd. substantially in the form signed by each of Nicolas Papadopoulo, Maamoun Rajeh, and Andrew Rippert for May 13, 2016 grants†
10.22	Stock Option Agreement, dated as of February 24, 2017 between Arch Capital Group Ltd. and Constantine Iordanou†
10.23	Stock Option Agreement, dated as of May 8, 2017 between Arch Capital Group Ltd. and Maamoun Rajeh†
10.24	Restricted Share Agreement, dated as of May 8, 2017 between Arch Capital Group Ltd. and Maamoun Rajeh†
10.25	Consulting Letter Agreement, dated September 19, 2017, between Arch Capital Group Ltd. and David McElroy
10.26	Employment Agreement, dated as of October 1, 2017 between Arch Capital Group Ltd. and Maamoun Rajeh
10.27	Employment Agreement, dated as of October 1, 2017 between Arch Capital Group Ltd. and Nicholas Papadopoulo
10.28	Employment Agreement, dated as of October 30, 2017, between Arch Capital Group Ltd. and Andrew Rippert
15	Accountants’ Awareness Letter (regarding unaudited interim financial information)
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following financial information from Arch Capital Group Ltd.’s Quarterly Report for the quarter ended September 30, 2017 formatted in XBRL: (i) Consolidated Balance Sheets at September 30, 2017 and December 31, 2016; (ii) Consolidated Statements of Income for the three and nine month periods ended September 30, 2017 and 2016; (iii) Consolidated Statements of Comprehensive Income for the three and nine month periods ended September 30, 2017 and 2016; (iv) Consolidated Statements of Changes in Shareholders’ Equity for the nine month periods ended September 30, 2017 and 2016; (v) Consolidated Statements of Cash Flows for the nine month periods ended September 30, 2017 and 2016; and (vi) Notes to Consolidated Financial Statements.
†	Management contract or compensatory plan or arrangement.

ACGL 2017 THIRD QUARTER FORM 10-Q 78

SIGNATURES

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

	ARCH CAPITAL GROUP LTD.
	(REGISTRANT)
	/s/ Constantine Iordanou
Date: November 3, 2017	Constantine Iordanou
	Chief Executive Officer (Principal Executive Officer) and Chairman of the Board of Directors
	/s/ Mark D. Lyons
Date: November 3, 2017	Mark D. Lyons
	Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

ACGL 2017 THIRD QUARTER FORM 10-Q 79

EX-10.1

Exhibit 10.1

ARCH CAPITAL GROUP LTD.Share Appreciation Right Agreement

AGREEMENT, made and entered into this 6th day of May, 2011, by and between Arch Capital Group Ltd. (the “Company”), a Bermuda company, and Maamoun Rajeh (the “SAR Holder”).

WHEREAS, the SAR Holder has been granted the following award under the Company’s 2007 Long Term Incentive and Share Award Plan (the “Plan”);

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for other good and valuable consideration, the Company and the SAR Holder agree as follows:

(a)Grant. Pursuant to the provisions of the Plan, the terms of which are incorporated herein by reference, the Company hereby grants to the SAR Holder a Share Appreciation Right (the “SAR”) with respect to 8,850 Shares. The SAR represents a right to be paid, upon exercise of the SAR, an amount measured by (x) the difference between the Fair Market Value per Share on the date of exercise and the exercise price per Share of the SAR, multiplied by (y) the number of Shares with respect to which the SAR is exercised, with such amount to be paid in the form of Shares valued at their Fair Market Value on the date of exercise. The SAR is granted as of May 6, 2011 (the “Date of Grant”), and such grant is subject to the terms and conditions herein and the terms and conditions of the Plan. In the event there is any conflict between the terms of the Plan and this Agreement, the terms of the Plan shall control. Capitalized terms used herein but not defined shall have the meanings given to them in the Plan.

(b)Exercise Price. The exercise price of the SAR shall be equal to $33.91 per Share.

(c)Status of Shares. Upon issue, the shares received upon exercise of the SAR shall rank equally in all respects with the other Shares.

(d)Term of SAR. The SAR may be exercised only during the period (the “SAR Period”) set forth in paragraph (f) below and shall remain exercisable until the tenth anniversary of the Date of Grant. Thereafter, the SAR Holder shall cease to have any rights in respect thereof. The right to exercise the SAR shall be subject to sooner termination as provided in paragraph (j) below.

(e)No Rights of Shareholder. The SAR Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or in equity.

(f)Exercisability. Except as otherwise set forth in paragraph (j) below, the SAR shall become exercisablein three equal annual installments on the first, second and third anniversaries of the Date of Grant, in each case subject to paragraph (j) below. Subject to paragraph (j) below, the SAR may be exercised at any time or from time to time during the SAR Period in regard to all or any portion of the SAR which is then exercisable, as may be adjusted pursuant to paragraph (g) below.

(g)Anti-dilution Adjustment. For the avoidance of doubt, the terms of Section 4(c) of the Plan, relating to anti-dilution adjustments, will apply to the SAR.

(h)Nontransferability. The SAR, or any interest therein, may not be assigned or otherwise transferred, disposed of or encumbered by the SAR Holder, other than by will or by the laws of descent and distribution. During the lifetime of the SAR Holder, the SAR shall be exercisable only by the SAR Holder or by his or her guardian or legal representative. Notwithstanding the foregoing, the SAR may be transferred by the SAR Holder to members of his or her “immediate family” or to a trust or other entity established for the exclusive benefit of solely one or more members of the SAR Holder’s “immediate family.” Any SAR held by the transferee will continue to be subject to the same terms and conditions that were applicable to the SAR immediately prior to the transfer, except that the SAR will be transferable by the transferee only by will or the laws of descent and distribution. For purposes hereof, “immediate family” means the SAR Holder’s children, stepchildren, grandchildren, parents, stepparents, grandparents, spouse, siblings (including half brother and sisters), in laws, and relationships

arising because of legal adoption.

(i)Exercise of SAR. In order to exercise the SAR, the SAR Holder shall submit to the Company an instrument specifying the whole number of Shares in respect of which the SAR is being exercised. Shares will be issued accordingly by the Company within 30 days. The payment upon a SAR exercise shall be solely the number of whole Shares calculated in paragraph (a) above. Fractional Shares shall be rounded down to the nearest whole Share with no cash consideration being paid upon exercise. Anything to the contrary herein notwithstanding, the Company shall not be obligated to issue any Shares hereunder if the issuance of such Shares would violate the provision of any applicable law, in which event the Company shall, as soon as practicable, take whatever action it reasonably can so that such Shares may be issued without resulting in such violations of law.

(j)Termination of Service.

1.In the event the SAR Holder ceases to be an employee of the Company due to his death or Permanent Disability (as defined in the Company’s Incentive Compensation Plan on the date hereof), the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder (or his Beneficiary or estate in the event of his death) for a period of three years following such termination of employment (but not beyond the SAR Period).

2.    In the event of termination of employment (other than by the Company for Cause, as such term is defined in the Company’s Incentive Compensation Plan on the date hereof) after the attainment of Retirement Age (as defined in the Company’s Incentive Compensation Plan on the date hereof), the SAR shall continue to become exercisable on the schedule set forth in paragraph (f) above so long as the SAR Holder does not engage in any activity in competition with any activity of the Company or any of its Subsidiaries other than serving on the board of directors (or similar governing body) of another company or as a consultant for no more than 26 weeks per calendar year (“Competitive Activity”) and shall continue to be exercisable by the SAR Holder (or his Beneficiary or estate in the event of his death) for the remainder of the SAR Period. In the event the SAR Holder engages in a Competitive Activity, (A) the SAR, to the extent then exercisable, may be exercised for 30 days following the date on which the SAR Holder engages in such Competitive Activity (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited.

3.    In the event the SAR Holder ceases to be an employee of the Company after a Change in Control (as defined below) due to termination by the Company not for Cause on or before the second anniversary of the occurrence of the Change in Control, the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period).

4.    In the event that the SAR Holder ceases to be an employee of the Company for any other reason, except due to a termination of the SAR Holder’s employment by the Company for Cause, (A) the SAR, to the extent then exercisable, may be exercised for 90 days following termination of employment (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited; provided that, in the event of a Redundancy (as defined below), the Committee, in its sole discretion, may, in accordance with its authority under the Plan, determine that the SAR, to the extent not exercisable, shall become exercisable and shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period).

5.    In the event of a termination of the SAR Holder’s employment for Cause, the SAR shall immediately cease to be exercisable and shall be immediately forfeited.

6.    For purposes of this SAR, service with any of the Company’s Subsidiaries (as defined in the Plan) shall be considered to be service with the Company.

7.    “Change in Control” shall mean:

(A) any person (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting Securities representing 50% or more of the total voting power or value of all the then outstanding Voting Securities; or

2

(B) the individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Board”) together with those who become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of at least a majority of the directors then still in office who either were directors as of such date or whose recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(C) the consummation of a merger, consolidation, recapitalization, liquidation, sale or disposition by the Company of all or substantially all of the Company's assets, or reorganization of the Company, other than any such transaction which would (x) result in more than 50% of the total voting power and value represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the former shareholders of the Company and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or (B) of this paragraph.

“Permitted Persons” means (A) the Company; (B) any Related Party; or (C) any group (as defined in Rule 13b-3 under the Exchange Act) comprised of any or all of the foregoing.

“Related Party” means (A) a majority-owned subsidiary of the Company; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (C) any entity, 50% or more of the voting power of which is owned directly or indirectly by the shareholders of the Company in substantially the same proportion as their ownership of Voting Securities immediately prior to the transaction.

“Voting Security” means any security of the Company which carries the right to vote generally in the election of directors.

8.    “Redundancy” shall mean termination of employment by the Company due to its need to reduce the size of its workforce, including due to closure of a business or a particular workplace or change in business process.  Whether a termination of employment is due to a "redundancy" shall be determined by the Committee in its sole and absolute discretion, such determination being final and binding on all parties hereto and all persons claiming through, in the name of or on behalf of such parties.

(k)     Obligations as to Capital. The Company agrees that it will at all times maintain authorized and unissued share capital sufficient to fulfill all of its obligations under the SAR.

(l)     Transfer of Shares. The SAR, the Shares issued hereunder, or any interest in either, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable United States federal and state securities laws and the terms and conditions hereof.

(m)    Expenses of Issuance of Shares. The issuance of stock certificates upon the exercise of the SAR in whole or in part, shall be without charge to the SAR Holder. The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the exercise of the SAR in whole or in part or the resulting issuance of Shares hereunder.

(n)    Withholding. No later than the date of exercise of the SAR granted hereunder, the SAR Holder shall pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld upon the exercise of such SAR and the Company shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the SAR Holder, federal, state and local taxes of any kind required by law to be withheld upon the exercise of such SAR.

(o)    References. References herein to rights and obligations of the SAR Holder shall apply, where appropriate, to the SAR Holder’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this SAR.

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(p)    Notices. Any notice required or permitted to be given under this agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Arch Capital Group Ltd.:

Wessex House
45 Reid Street
Hamilton HM 12 Bermuda
Attn: Secretary

If to the SAR Holder:

The last address delivered to the Company by the SAR Holder in the manner set forth herein.

(q)    Governing Law. This agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to principles of conflict of laws thereof.

(r)    Entire Agreement. This agreement and the Plan constitute the entire agreement among the parties relating to the subject matter hereof, and any previous agreement or understanding among the parties with respect thereto is superseded by this agreement and the Plan.

(s)    Counterparts. This agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the undersigned have executed this agreement as of the Date of Grant.

ARCH CAPITAL GROUP LTD.
By:	/s/ Dawna Ferguson
	Name:	Dawna Ferguson
	Title:	Secretary
	/s/ Maamoun Rajeh
	Maamoun Rajeh

5

EX-10.2

Exhibit 10.2

ARCH CAPITAL GROUP LTD.Share Appreciation Right Agreement

AGREEMENT, made and entered into this 9th day of May, 2012, by and between Arch Capital Group Ltd. (the “Company”), a Bermuda company, and Maamoun Rajeh (the “SAR Holder”).

WHEREAS, the SAR Holder has been granted the following award under the Company’s 2012 Long Term Incentive and Share Award Plan (the “Plan”);

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for other good and valuable consideration, the Company and the SAR Holder agree as follows:

(a)Grant. Pursuant to the provisions of the Plan, the terms of which are incorporated herein by reference, the Company hereby grants to the SAR Holder a Share Appreciation Right (the “SAR”) with respect to 8,250 Shares. The SAR represents a right to be paid, upon exercise of the SAR, an amount measured by (x) the difference between the Fair Market Value per Share on the date of exercise and the exercise price per Share of the SAR, multiplied by (y) the number of Shares with respect to which the SAR is exercised, with such amount to be paid in the form of Shares valued at their Fair Market Value on the date of exercise. The SAR is granted as of May 9, 2012 (the “Date of Grant”), and such grant is subject to the terms and conditions herein and the terms and conditions of the Plan. In the event there is any conflict between the terms of the Plan and this Agreement, the terms of the Plan shall control. Capitalized terms used herein but not defined shall have the meanings given to them in the Plan.

(b)Exercise Price. The exercise price of the SAR shall be equal to $38.58 per Share.

(c)Status of Shares. Upon issue, the shares received upon exercise of the SAR shall rank equally in all respects with the other Shares.

(d)Term of SAR. The SAR may be exercised only during the period (the “SAR Period”) set forth in paragraph (f) below and shall remain exercisable until the tenth anniversary of the Date of Grant. Thereafter, the SAR Holder shall cease to have any rights in respect thereof. The right to exercise the SAR shall be subject to sooner termination as provided in paragraph (j) below.

(e)No Rights of Shareholder. The SAR Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or in equity.

(f)Exercisability. Except as otherwise set forth in paragraph (j) below, the SAR shall become exercisablein three equal annual installments on the first, second and third anniversaries of the Date of Grant, in each case subject to paragraph (j) below. Subject to paragraph (j) below, the SAR may be exercised at any time or from time to time during the SAR Period in regard to all or any portion of the SAR which is then exercisable, as may be adjusted pursuant to paragraph (g) below.

(g)Anti-dilution Adjustment. For the avoidance of doubt, the terms of Section 4(c) of the Plan, relating to anti-dilution adjustments, will apply to the SAR.

(h)Nontransferability. The SAR, or any interest therein, may not be assigned or otherwise transferred, disposed of or encumbered by the SAR Holder, other than by will or by the laws of descent and distribution. During the lifetime of the SAR Holder, the SAR shall be exercisable only by the SAR Holder or by his or her guardian or legal representative. Notwithstanding the foregoing, the SAR may be transferred by the SAR Holder to members of his or her “immediate family” or to a trust or other entity established for the exclusive benefit of solely one or more members of the SAR Holder’s “immediate family.” Any SAR held by the transferee will continue to be subject to the same terms and conditions that were applicable to the SAR immediately prior to the transfer, except that the SAR will be transferable by the transferee only by will or the laws of descent and distribution. For purposes hereof, “immediate family” means the SAR Holder’s children, stepchildren,

grandchildren, parents, stepparents, grandparents, spouse, siblings (including half brother and sisters), in laws, and relationships arising because of legal adoption.

(i)Exercise of SAR. In order to exercise the SAR, the SAR Holder shall submit to the Company an instrument specifying the whole number of Shares in respect of which the SAR is being exercised. Shares will be issued accordingly by the Company within 30 days. The payment upon a SAR exercise shall be solely the number of whole Shares calculated in paragraph (a) above. Fractional Shares shall be rounded down to the nearest whole Share with no cash consideration being paid upon exercise. Anything to the contrary herein notwithstanding, the Company shall not be obligated to issue any Shares hereunder if the issuance of such Shares would violate the provision of any applicable law, in which event the Company shall, as soon as practicable, take whatever action it reasonably can so that such Shares may be issued without resulting in such violations of law.

(j)Termination of Service.

1.In the event the SAR Holder ceases to be an employee of the Company due to his death or Permanent Disability (as defined in the Company’s Incentive Compensation Plan on the date hereof), the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder (or his Beneficiary or estate in the event of his death) for a period of three years following such termination of employment (but not beyond the SAR Period).

2.    In the event of termination of employment (other than by the Company for Cause, as such term is defined in the Company’s Incentive Compensation Plan on the date hereof) after the attainment of Retirement Age (as defined in the Company’s Incentive Compensation Plan on the date hereof), the SAR shall continue to become exercisable on the schedule set forth in paragraph (f) above so long as the SAR Holder does not engage in any activity in competition with any activity of the Company or any of its Subsidiaries other than serving on the board of directors (or similar governing body) of another company or as a consultant for no more than 26 weeks per calendar year (“Competitive Activity”) and shall continue to be exercisable by the SAR Holder (or his Beneficiary or estate in the event of his death) for the remainder of the SAR Period. In the event the SAR Holder engages in a Competitive Activity, (A) the SAR, to the extent then exercisable, may be exercised for 30 days following the date on which the SAR Holder engages in such Competitive Activity (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited.

3.    In the event the SAR Holder ceases to be an employee of the Company after a Change in Control (as defined below) due to termination (A) by the Company not for Cause or (B) by the SAR Holder for Good Reason (as defined below), in either case, on or before the second anniversary of the occurrence of the Change in Control, the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period). “Good Reason” means, without the SAR Holder ’s written consent, (a) the material diminution of any material duties or responsibilities of the SAR Holder without the same being corrected within thirty (30) days after being given written notice thereof; or (b) a material reduction in the SAR Holder’s Base Salary without the same being corrected within thirty (30) days after being given written notice thereof.

4.    In the event that the SAR Holder ceases to be an employee of the Company for any other reason, except due to a termination of the SAR Holder’s employment by the Company for Cause, (A) the SAR, to the extent then exercisable, may be exercised for 90 days following termination of employment (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited; provided that, in the event of a Redundancy (as defined below), the Committee, in its sole discretion, may, in accordance with its authority under the Plan, determine that the SAR, to the extent not exercisable, shall become exercisable and shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period).

5.    In the event of a termination of the SAR Holder’s employment for Cause, the SAR shall immediately cease to be exercisable and shall be immediately forfeited.

6.    For purposes of this SAR, service with any of the Company’s Subsidiaries (as defined in the Plan) shall be considered to be service with the Company.

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7.    “Change in Control” shall mean:

(A) any person (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting Securities representing 50% or more of the total voting power or value of all the then outstanding Voting Securities; or

(B) the individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Board”) together with those who become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of at least a majority of the directors then still in office who either were directors as of such date or whose recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(C) the consummation of a merger, consolidation, recapitalization, liquidation, sale or disposition by the Company of all or substantially all of the Company's assets, or reorganization of the Company, other than any such transaction which would (x) result in more than 50% of the total voting power and value represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the former shareholders of the Company and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or (B) of this paragraph.

“Permitted Persons” means (A) the Company; (B) any Related Party; or (C) any group (as defined in Rule 13b-3 under the Exchange Act) comprised of any or all of the foregoing.

“Related Party” means (A) a majority-owned subsidiary of the Company; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (C) any entity, 50% or more of the voting power of which is owned directly or indirectly by the shareholders of the Company in substantially the same proportion as their ownership of Voting Securities immediately prior to the transaction.

“Voting Security” means any security of the Company which carries the right to vote generally in the election of directors.

8.    “Redundancy” shall mean termination of employment by the Company due to its need to reduce the size of its workforce, including due to closure of a business or a particular workplace or change in business process.  Whether a termination of employment is due to a "redundancy" shall be determined by the Committee in its sole and absolute discretion, such determination being final and binding on all parties hereto and all persons claiming through, in the name of or on behalf of such parties.  

(k)     Obligations as to Capital. The Company agrees that it will at all times maintain authorized and unissued share capital sufficient to fulfill all of its obligations under the SAR.

(l)     Transfer of Shares. The SAR, the Shares issued hereunder, or any interest in either, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable United States federal and state securities laws and the terms and conditions hereof.

(m)    Expenses of Issuance of Shares. The issuance of stock certificates upon the exercise of the SAR in whole or in part, shall be without charge to the SAR Holder. The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the exercise of the SAR in whole or in part or the resulting issuance of Shares hereunder.

(n)    Withholding. No later than the date of exercise of the SAR granted hereunder, the SAR Holder shall pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld upon the exercise of such SAR and the Company shall, to the extent permitted or

3

required by law, have the right to deduct from any payment of any kind otherwise due to the SAR Holder, federal, state and local taxes of any kind required by law to be withheld upon the exercise of such SAR.

(o)    References. References herein to rights and obligations of the SAR Holder shall apply, where appropriate, to the SAR Holder’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this SAR.

(p)    Notices. Any notice required or permitted to be given under this agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Arch Capital Group Ltd.:

Wessex House
45 Reid Street
Hamilton HM 12 Bermuda
Attn: Secretary

If to the SAR Holder:

The last address delivered to the Company by the SAR Holder in the manner set forth herein.

(q)    Governing Law. This agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to principles of conflict of laws thereof.

(r)    Entire Agreement. This agreement and the Plan constitute the entire agreement among the parties relating to the subject matter hereof, and any previous agreement or understanding among the parties with respect thereto is superseded by this agreement and the Plan.

(s)    Counterparts. This agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

4

IN WITNESS WHEREOF, the undersigned have executed this agreement as of the Date of Grant.

ARCH CAPITAL GROUP LTD.
By:	/s/ Dawna Ferguson
	Name:	Dawna Ferguson
	Title:	Secretary
	/s/ Maamoun Rajeh
	Maamoun Rajeh

5

EX-10.3

Exhibit 10.3

ARCH CAPITAL GROUP LTD.Share Appreciation Right Agreement

AGREEMENT, made and entered into this 9th day of May, 2012, by and between Arch Capital Group Ltd. (the “Company”), a Bermuda company, and Andrew Rippert (the “SAR Holder”).

WHEREAS, the SAR Holder has been granted the following award under the Company’s 2012 Long Term Incentive and Share Award Plan (the “Plan”);

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for other good and valuable consideration, the Company and the SAR Holder agree as follows:

(a)    Grant. Pursuant to the provisions of the Plan, the terms of which are incorporated herein by reference, the Company hereby grants to the SAR Holder a Share Appreciation Right (the “SAR”) with respect to 8,250 Shares. The SAR represents a right to be paid, upon exercise of the SAR, an amount measured by (x) the difference between the Fair Market Value per Share on the date of exercise and the exercise price per Share of the SAR, multiplied by (y) the number of Shares with respect to which the SAR is exercised, with such amount to be paid in the form of Shares valued at their Fair Market Value on the date of exercise. The SAR is granted as of May 9, 2012 (the “Date of Grant”), and such grant is subject to the terms and conditions herein and the terms and conditions of the Plan. In the event there is any conflict between the terms of the Plan and this Agreement, the terms of the Plan shall control. Capitalized terms used herein but not defined shall have the meanings given to them in the Plan.

(b)    Exercise Price. The exercise price of the SAR shall be equal to $38.58 per Share.

(c)    Status of Shares. Upon issue, the shares received upon exercise of the SAR shall rank equally in all respects with the other Shares.

(d)    Term of SAR. The SAR may be exercised only during the period (the “SAR Period”) set forth in paragraph (f) below and shall remain exercisable until the tenth anniversary of the Date of Grant. Thereafter, the SAR Holder shall cease to have any rights in respect thereof. The right to exercise the SAR shall be subject to sooner termination as provided in paragraph (j) below.

(e)    No Rights of Shareholder. The SAR Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or in equity.

(f)    Exercisability. Except as otherwise set forth in paragraph (j) below, the SAR shall become exercisable in three equal annual installments on the first, second and third anniversaries of the Date of Grant, in each case subject to paragraph (j) below. Subject to paragraph (j) below, the SAR may be exercised at any time or from time to time during the SAR Period in regard to all or any portion of the SAR which is then exercisable, as may be adjusted pursuant to paragraph (g) below.

(g)    Anti-dilution Adjustment. For the avoidance of doubt, the terms of Section 4(c) of the Plan, relating to anti-dilution adjustments, will apply to the SAR.

(h)    Nontransferability. The SAR, or any interest therein, may not be assigned or otherwise transferred, disposed of or encumbered by the SAR Holder, other than by will or by the laws of descent and distribution. During the lifetime of the SAR Holder, the SAR shall be exercisable only by the SAR Holder or by his or her guardian or legal representative. Notwithstanding the foregoing, the SAR may be transferred by the SAR Holder to members of his or her “immediate family” or to a trust or other entity established for the exclusive benefit of solely one or more members of the SAR Holder’s “immediate family.” Any SAR held by the transferee will continue to be subject to the same terms and conditions that were applicable to the SAR immediately prior to the transfer, except that the SAR will be transferable by the transferee only by will or the laws of descent and distribution. For purposes hereof, “immediate family” means the SAR Holder’s children, stepchildren, grandchildren, parents, stepparents, grandparents, spouse, siblings (including half brother and sisters), in laws, and relationships arising because of legal adoption.

(i)    Exercise of SAR. In order to exercise the SAR, the SAR Holder shall submit to the Company an instrument specifying the whole number of Shares in respect of which the SAR is being exercised. Shares will be issued accordingly by the

Company within 30 days. The payment upon a SAR exercise shall be solely the number of whole Shares calculated in paragraph (a) above. Fractional Shares shall be rounded down to the nearest whole Share with no cash consideration being paid upon exercise. Anything to the contrary herein notwithstanding, the Company shall not be obligated to issue any Shares hereunder if the issuance of such Shares would violate the provision of any applicable law, in which event the Company shall, as soon as practicable, take whatever action it reasonably can so that such Shares may be issued without resulting in such violations of law.

(j)    Termination of Service.

1.In the event the SAR Holder ceases to be an employee of the Company due to his death or Permanent Disability (as defined in the Company’s Incentive Compensation Plan on the date hereof), the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder (or his Beneficiary or estate in the event of his death) for a period of three years following such termination of employment (but not beyond the SAR Period).

2.In the event of termination of employment (other than by the Company for Cause, as such term is defined in the Company’s Incentive Compensation Plan on the date hereof) after the attainment of Retirement Age (as defined in the Company’s Incentive Compensation Plan on the date hereof), the SAR shall continue to become exercisable on the schedule set forth in paragraph (f) above so long as the SAR Holder does not engage in any activity in competition with any activity of the Company or any of its Subsidiaries other than serving on the board of directors (or similar governing body) of another company or as a consultant for no more than 26 weeks per calendar year (“Competitive Activity”) and shall continue to be exercisable by the SAR Holder (or his Beneficiary or estate in the event of his death) for the remainder of the SAR Period. In the event the SAR Holder engages in a Competitive Activity, (A) the SAR, to the extent then exercisable, may be exercised for 30 days following the date on which the SAR Holder engages in such Competitive Activity (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited.

3.In the event the SAR Holder ceases to be an employee of the Company after a Change in Control (as defined below) due to termination by the Company not for Cause on or before the second anniversary of the occurrence of the Change in Control, the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period).

4.In the event that the SAR Holder ceases to be an employee of the Company for any other reason, except due to a termination of the SAR Holder’s employment by the Company for Cause, (A) the SAR, to the extent then exercisable, may be exercised for 90 days following termination of employment (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited; provided that, in the event of a Redundancy (as defined below), the Committee, in its sole discretion, may, in accordance with its authority under the Plan, determine that the SAR, to the extent not exercisable, shall become exercisable and shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period).

5.In the event of a termination of the SAR Holder’s employment for Cause, the SAR shall immediately cease to be exercisable and shall be immediately forfeited.

6.For purposes of this SAR, service with any of the Company’s Subsidiaries (as defined in the Plan) shall be considered to be service with the Company.

7.“Change in Control” shall mean:

(A) any person (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting Securities representing 50% or more of the total voting power or value of all the then outstanding Voting Securities; or

(B) the individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Board”) together with those who become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of at least a majority of the directors then still in office who either were directors as of such date or whose

2

recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(C) the consummation of a merger, consolidation, recapitalization, liquidation, sale or disposition by the Company of all or substantially all of the Company's assets, or reorganization of the Company, other than any such transaction which would (x) result in more than 50% of the total voting power and value represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the former shareholders of the Company and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or (B) of this paragraph.

“Permitted Persons” means (A) the Company; (B) any Related Party; or (C) any group (as defined in Rule 13b-3 under the Exchange Act) comprised of any or all of the foregoing.

“Related Party” means (A) a majority-owned subsidiary of the Company; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (C) any entity, 50% or more of the voting power of which is owned directly or indirectly by the shareholders of the Company in substantially the same proportion as their ownership of Voting Securities immediately prior to the transaction.

“Voting Security” means any security of the Company which carries the right to vote generally in the election of directors.

8.    “Redundancy” shall mean termination of employment by the Company due to its need to reduce the size of its workforce, including due to closure of a business or a particular workplace or change in business process.  Whether a termination of employment is due to a "redundancy" shall be determined by the Committee in its sole and absolute discretion, such determination being final and binding on all parties hereto and all persons claiming through, in the name of or on behalf of such parties.

(k)     Obligations as to Capital. The Company agrees that it will at all times maintain authorized and unissued share capital sufficient to fulfill all of its obligations under the SAR.

(l)     Transfer of Shares. The SAR, the Shares issued hereunder, or any interest in either, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable United States federal and state securities laws and the terms and conditions hereof.

(m)     Expenses of Issuance of Shares. The issuance of stock certificates upon the exercise of the SAR in whole or in part, shall be without charge to the SAR Holder. The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the exercise of the SAR in whole or in part or the resulting issuance of Shares hereunder.

(n)     Withholding. No later than the date of exercise of the SAR granted hereunder, the SAR Holder shall pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld upon the exercise of such SAR and the Company shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the SAR Holder, federal, state and local taxes of any kind required by law to be withheld upon the exercise of such SAR.

(o)     References. References herein to rights and obligations of the SAR Holder shall apply, where appropriate, to the SAR Holder’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this SAR.

(p)     Notices. Any notice required or permitted to be given under this agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

3

If to the Company:

Arch Capital Group Ltd.:

Wessex House
45 Reid Street
Hamilton HM 12 Bermuda
Attn: Secretary

If to the SAR Holder:

The last address delivered to the Company by the SAR Holder in the manner set forth herein.

(q)    Governing Law. This agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to principles of conflict of laws thereof.

(r)     Entire Agreement. This agreement and the Plan constitute the entire agreement among the parties relating to the subject matter hereof, and any previous agreement or understanding among the parties with respect thereto is superseded by this agreement and the Plan.

(s)     Counterparts. This agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

4

IN WITNESS WHEREOF, the undersigned have executed this agreement as of the Date of Grant.

ARCH CAPITAL GROUP LTD.
By:	/s/ Dawna Ferguson
	Name:	Dawna Ferguson
	Title:	Secretary
	/s/Andrew Rippert
	Andrew Rippert

5

EX-10.4

Exhibit 10.4

ARCH CAPITAL GROUP LTD.
Share Appreciation Right Agreement

AGREEMENT, made and entered into this 1st day of July, 2012, by and between Arch Capital Group Ltd. (the “Company”), a Bermuda company, and Maamoun Rajeh (the “SAR Holder”).

WHEREAS, the SAR Holder has been granted the following award under the Company’s 2012 Long Term Incentive and Share Award Plan (the “Plan”);

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for other good and valuable consideration, the Company and the SAR Holder agree as follows:

(a)Grant. Pursuant to the provisions of the Plan, the terms of which are incorporated herein by reference, the Company hereby grants to the SAR Holder a Share Appreciation Right (the “SAR”) with respect to 19,071 Shares. The SAR represents a right to be paid, upon exercise of the SAR, an amount measured by (x) the difference between the Fair Market Value per Share on the date of exercise and the exercise price per Share of the SAR, multiplied by (y) the number of Shares with respect to which the SAR is exercised, with such amount to be paid in the form of Shares valued at their Fair Market Value on the date of exercise. The SAR is granted as of July 1, 2012 (the “Date of Grant”), and such grant is subject to the terms and conditions herein and the terms and conditions of the Plan. In the event there is any conflict between the terms of the Plan and this Agreement, the terms of the Plan shall control. Capitalized terms used herein but not defined shall have the meanings given to them in the Plan.

(b)Exercise Price. The exercise price of the SAR shall be equal to $39.69 per Share.

(c)Status of Shares. Upon issue, the shares received upon exercise of the SAR shall rank equally in all respects with the other Shares.

(d)Term of SAR. The SAR may be exercised only during the period (the “SAR Period”) set forth in paragraph (f) below and shall remain exercisable until the tenth anniversary of the Date of Grant. Thereafter, the SAR Holder shall cease to have any rights in respect thereof. The right to exercise the SAR shall be subject to sooner termination as provided in paragraph (j) below.

(e)No Rights of Shareholder. The SAR Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or in equity. The SAR Holder acknowledges that there is no legal obligation of Arch Capital Group Ltd. or any of its Subsidiaries to offer a participation in the Plan and that the offer, even if made again in this form or in similar form in the future, will not create any obligation of Arch Capital Group Ltd. or any of its Subsidiaries to make any such offer.

(f)Exercisability. Except as otherwise set forth in paragraph (j) below, the SAR shall become exercisable in three equal annual installments on the first, second and third anniversaries of the Date of Grant, in each case subject to paragraph (j) below. Subject to paragraph (j) below, the SAR may be exercised at any time or from time to time during the SAR Period in regard to all or any portion of the SAR which is then exercisable, as may be adjusted pursuant to paragraph (g) below.

(g)Anti-dilution Adjustment. For the avoidance of doubt, the terms of Section 4(c) of the Plan, relating to anti-dilution adjustments, will apply to the SAR.

(h)Nontransferability. The SAR, or any interest therein, may not be assigned or otherwise transferred, disposed of or encumbered by the SAR Holder, other than by will or by the laws of descent and distribution. During the lifetime of the SAR Holder, the SAR shall be exercisable only by the SAR Holder or by his or her guardian or legal representative. Notwithstanding the foregoing, the SAR may be transferred by the SAR Holder to members of his or her “immediate family” or to a trust or other entity established for the exclusive benefit of solely one or more members of the SAR Holder’s “immediate family.” Any SAR held by the transferee will continue to be subject to the same terms and conditions that were applicable to the SAR immediately prior to the transfer, except that the SAR will be transferable by the transferee only by will or the laws of descent and distribution. For purposes hereof, “immediate family” means the SAR Holder’s children, stepchildren,

grandchildren, parents, stepparents, grandparents, spouse, siblings (including half brother and sisters), in laws, and relationships arising because of legal adoption.

(i)Exercise of SAR. In order to exercise the SAR, the SAR Holder shall submit to the Company an instrument specifying the whole number of Shares in respect of which the SAR is being exercised. Shares will be issued accordingly by the Company within 30 days. The payment upon a SAR exercise shall be solely the number of whole Shares calculated in paragraph (a) above. Fractional Shares shall be rounded down to the nearest whole Share with no cash consideration being paid upon exercise. Anything to the contrary herein notwithstanding, the Company shall not be obligated to issue any Shares hereunder if the issuance of such Shares would violate the provision of any applicable law, in which event the Company shall, as soon as practicable, take whatever action it reasonably can so that such Shares may be issued without resulting in such violations of law.

(j)Termination of Service.

1.In the event the SAR Holder ceases to be an employee of the Company due to his death or Permanent Disability (as defined in the Company’s Incentive Compensation Plan on the date hereof), the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder (or his Beneficiary or estate in the event of his death) for a period of three years following such termination of employment (but not beyond the SAR Period).

2.In the event of termination of employment (other than by the Company for Cause, as such term is defined in the Company’s Incentive Compensation Plan on the date hereof) after the attainment of Retirement Age (as defined in the Company’s Incentive Compensation Plan on the date hereof), the SAR shall continue to become exercisable on the schedule set forth in paragraph (f) above so long as the SAR Holder does not engage in any activity in competition with any activity of the Company or any of its Subsidiaries other than serving on the board of directors (or similar governing body) of another company or as a consultant for no more than 26 weeks per calendar year (“Competitive Activity”) and shall continue to be exercisable by the SAR Holder (or his Beneficiary or estate in the event of his death) for the remainder of the SAR Period. In the event the SAR Holder engages in a Competitive Activity, (A) the SAR, to the extent then exercisable, may be exercised for 30 days following the date on which the SAR Holder engages in such Competitive Activity (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited.

3.In the event the SAR Holder ceases to be an employee of the Company after a Change in Control (as defined below) due to termination (A) by the Company not for Cause or (B) by the SAR Holder for Good Reason (as defined below), in either case, on or before the second anniversary of the occurrence of the Change in Control, the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period). “Good Reason” means, without the SAR Holder ’s written consent, (a) the material diminution of any material duties or responsibilities of the SAR Holder without the same being corrected within thirty (30) days after being given written notice thereof; or (b) a material reduction in the SAR Holder’s Base Salary without the same being corrected within thirty (30) days after being given written notice thereof.

4.In the event that the SAR Holder ceases to be an employee of the Company for any other reason, except due to a termination of the SAR Holder’s employment by the Company for Cause, (A) the SAR, to the extent then exercisable, may be exercised for 90 days following termination of employment (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited; provided that, in the event of a Redundancy (as defined below), the Committee, in its sole discretion, may, in accordance with its authority under the Plan, determine that the SAR, to the extent not exercisable, shall become exercisable and shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period).

5.In the event of a termination of the SAR Holder’s employment for Cause, the SAR shall immediately cease to be exercisable and shall be immediately forfeited.

6.For purposes of this SAR, service with any of the Company’s Subsidiaries (as defined in the Plan) shall be considered to be service with the Company.

7.    “Change in Control” shall mean:

(A) any person (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as defined in Rule 13d-3

2

under the Exchange Act), directly or indirectly, of Voting Securities representing 50% or more of the total voting power or value of all the then outstanding Voting Securities; or

(B) the individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Board”) together with those who become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of at least a majority of the directors then still in office who either were directors as of such date or whose recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(C) the consummation of a merger, consolidation, recapitalization, liquidation, sale or disposition by the Company of all or substantially all of the Company's assets, or reorganization of the Company, other than any such transaction which would (x) result in more than 50% of the total voting power and value represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the former shareholders of the Company and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or (B) of this paragraph.

“Permitted Persons” means (A) the Company; (B) any Related Party; or (C) any group (as defined in Rule 13b-3 under the Exchange Act) comprised of any or all of the foregoing.

“Related Party” means (A) a majority-owned subsidiary of the Company; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (C) any entity, 50% or more of the voting power of which is owned directly or indirectly by the shareholders of the Company in substantially the same proportion as their ownership of Voting Securities immediately prior to the transaction.

“Voting Security” means any security of the Company which carries the right to vote generally in the election of directors.

8.    “Redundancy” shall mean termination of employment by the Company due to its need to reduce the size of its workforce, including due to closure of a business or a particular workplace or change in business process. Whether a termination of employment is due to a "redundancy" shall be determined by the Committee in its sole and absolute discretion, such determination being final and binding on all parties hereto and all persons claiming through, in the name of or on behalf of such parties.

(k)     Obligations as to Capital. The Company agrees that it will at all times maintain authorized and unissued share capital sufficient to fulfill all of its obligations under the SAR.

(l)     Transfer of Shares. The SAR, the Shares issued hereunder, or any interest in either, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable United States federal and state securities laws and the terms and conditions hereof.

(m)    Expenses of Issuance of Shares. The issuance of stock certificates upon the exercise of the SAR in whole or in part, shall be without charge to the SAR Holder. The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the exercise of the SAR in whole or in part or the resulting issuance of Shares hereunder.

(n)    Withholding. No later than the date of exercise of the SAR granted hereunder, the SAR Holder shall pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld upon the exercise of such SAR and the Company shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the SAR Holder, federal, state and local taxes of any kind required by law to be withheld upon the exercise of such SAR.

(o)    References. References herein to rights and obligations of the SAR Holder shall apply, where appropriate, to the SAR Holder’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this SAR.

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(p)    Notices. Any notice required or permitted to be given under this agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Arch Capital Group Ltd.:

Wessex House
45 Reid Street
Hamilton HM 12 Bermuda
Attn: Secretary

If to the SAR Holder:

The last address delivered to the Company by the SAR Holder in the manner set forth herein.

(q)    Governing Law. This agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to principles of conflict of laws thereof.

(r)    Entire Agreement. This agreement and the Plan constitute the entire agreement among the parties relating to the subject matter hereof, and any previous agreement or understanding among the parties with respect thereto is superseded by this agreement and the Plan.

(s)    Counterparts. This agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the undersigned have executed this agreement as of the Date of Grant.

ARCH CAPITAL GROUP LTD.
By:	/s/ Dawna Ferguson
	Name:	Dawna Ferguson
	Title:	Secretary
	/s/ Maamoun Rajeh
	Maamoun Rajeh

5

EX-10.5

Exhibit 10.5

ARCH CAPITAL GROUP LTD.
Share Appreciation Right Agreement

AGREEMENT, made and entered into this 12th day of November, 2012, by and between Arch Capital Group Ltd. (the “Company”), a Bermuda company, and ____ (the “SAR Holder”).

WHEREAS, the SAR Holder has been granted the following award under the Company’s 2012 Long Term Incentive and Share Award Plan (the “Plan”);

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for other good and valuable consideration, the Company and the SAR Holder agree as follows:

(a)Grant. Pursuant to the provisions of the Plan, the terms of which are incorporated herein by reference, the Company hereby grants to the SAR Holder a Share Appreciation Right (the “SAR”) with respect to ____ Shares. The SAR represents a right to be paid, upon exercise of the SAR, an amount measured by (x) the difference between the Fair Market Value per Share on the date of exercise and the exercise price per Share of the SAR, multiplied by (y) the number of Shares with respect to which the SAR is exercised, with such amount to be paid in the form of Shares valued at their Fair Market Value on the date of exercise. The SAR is granted as of November 12, 2012 (the “Date of Grant”), and such grant is subject to the terms and conditions herein and the terms and conditions of the Plan. In the event there is any conflict between the terms of the Plan and this Agreement, the terms of the Plan shall control. Capitalized terms used herein but not defined shall have the meanings given to them in the Plan.

(b)Exercise Price. The exercise price of the SAR shall be equal to $42.65 per Share.

(c)Status of Shares. Upon issue, the shares received upon exercise of the SAR shall rank equally in all respects with the other Shares.

(d)Term of SAR. The SAR may be exercised only during the period (the “SAR Period”) set forth in paragraph (f) below and shall remain exercisable until the tenth anniversary of the Date of Grant. Thereafter, the SAR Holder shall cease to have any rights in respect thereof. The right to exercise the SAR shall be subject to sooner termination as provided in paragraph (j) below.

(e)No Rights of Shareholder. The SAR Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or in equity.

(f)Exercisability. Except as otherwise set forth in paragraph (j) below, the SAR shall become exercisablein one installment on the fifth anniversary of the Date of Grant, subject to paragraph (j) below. Subject to paragraph (j) below, the SAR may be exercised at any time or from time to time during the SAR Period in regard to all or any portion of the SAR which is then exercisable, as may be adjusted pursuant to paragraph (g) below.

(g)Anti-dilution Adjustment. For the avoidance of doubt, the terms of Section 4(c) of the Plan, relating to anti-dilution adjustments, will apply to the SAR.

(h)Nontransferability. The SAR, or any interest therein, may not be assigned or otherwise transferred, disposed of or encumbered by the SAR Holder, other than by will or by the laws of descent and distribution. During the lifetime of the SAR Holder, the SAR shall be exercisable only by the SAR Holder or by his or her guardian or legal representative. Notwithstanding the foregoing, the SAR may be transferred by the SAR Holder to members of his or her “immediate family” or to a trust or other entity established for the exclusive benefit of solely one or more members of the SAR Holder’s “immediate family.” Any SAR held by the transferee will continue to be subject to the same terms and conditions that were applicable to the SAR immediately prior to the transfer, except that the SAR will be transferable by the transferee only by will or the laws of descent and distribution. For purposes hereof, “immediate family” means the SAR Holder’s children, stepchildren, grandchildren, parents, stepparents, grandparents, spouse, siblings (including half brother and sisters), in laws, and relationships arising because of legal adoption.

(i)Exercise of SAR. In order to exercise the SAR, the SAR Holder shall submit to the Company an instrument specifying the whole number of Shares in respect of which the SAR is being exercised. Shares will be issued accordingly by the Company within 30 days. The payment upon a SAR exercise shall be solely the number of whole Shares calculated in paragraph (a) above. Fractional Shares shall be rounded down to the nearest whole Share with no cash consideration being paid upon exercise. Anything to the contrary herein notwithstanding, the Company shall not be obligated to issue any Shares hereunder if the issuance of such Shares would violate the provision of any applicable law, in which event the Company shall, as soon as practicable, take whatever action it reasonably can so that such Shares may be issued without resulting in such violations of law.

(j)Termination of Service

1.In the event the SAR Holder ceases to be an employee of the Company due to the SAR Holder’s death or Permanent Disability (as defined in the Company’s Incentive Compensation Plan on the date hereof), the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder (or the SAR Holder’s Beneficiary or estate in the event of the SAR Holder’s death) for a period of three years following such termination of employment (but not beyond the SAR Period).

2.    In the event of termination of employment (other than by the Company for Cause, as such term is defined in the Company’s Incentive Compensation Plan on the date hereof, and other than as set forth in paragraphs (j)(1), (j)(3) or (j)(4) hereof) after the attainment of Retirement Age (as defined in the Company’s Incentive Compensation Plan on the date hereof), the Applicable Percentage (as defined below) of the SAR shall continue to become exercisable on the schedule set forth in paragraph (f) above so long as the SAR Holder does not engage in any activity in competition with any activity of the Company or any of its Subsidiaries other than serving on the board of directors (or similar governing body) of another company or as a consultant for no more than 26 weeks per calendar year (“Competitive Activity”) and shall continue to be exercisable by the SAR Holder (or the SAR Holder’s Beneficiary or estate in the event of the SAR Holder’s death) for the remainder of the SAR Period. In the event the SAR Holder engages in a Competitive Activity, (A) the SAR, to the extent then exercisable, may be exercised for 30 days following the date on which the SAR Holder engages in such Competitive Activity (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited. The “Applicable Percentage” of the SAR will be equal to the number of full years elapsed from the Date of Grant through the date of such termination of employment, divided by five. The remaining portion of the SAR shall be immediately forfeited upon such termination of employment.

3.    In the event the SAR Holder ceases to be an employee of the Company after a Change in Control (as defined below) due to termination (A) by the Company not for Cause or (B) by the SAR Holder for Good Reason (as defined in the Employment Agreement, dated as of _______, between the SAR Holder and the Company (the “Employment Agreement”)), in either case, on or before the second anniversary of the occurrence of the Change in Control, the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period).

4.    In the event the SAR Holder ceases to be an employee of the Company, other than as set forth in paragraph (j)(3) above, due to termination (A) by the Company not for Cause or (B) by the SAR Holder for Good Reason (as defined in the Employment Agreement), the SAR, if not already exercisable, shall become immediately exercisable at the time of such termination of service with respect to a number of Shares determined by multiplying the total number of Shares subject to the SAR by a fraction, the numerator of which is the number of full years elapsed from the Date of Grant through the SAR Holder’s termination date and the denominator of which is five, and the portion of the SAR that is exercisable shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period). Any portion of the SAR that is not exercisable, and does not become exercisable, at the time of termination shall be immediately forfeited.

5.    In the event that the SAR Holder ceases to be an employee of the Company for any other reason, except due to a termination of the SAR Holder’s employment by the Company for Cause, (A) the SAR, to the extent then exercisable, may be exercised for 90 days following termination of employment (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited.

6.    In the event of a termination of the SAR Holder’s employment for Cause, the SAR shall immediately cease to be exercisable and shall be immediately forfeited.

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7.    For purposes of this SAR, service with any of the Company’s Subsidiaries (as defined in the Plan) shall be considered to be service with the Company.

8.    “Change in Control” shall mean:

(A) any person (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting Securities representing 50% or more of the total voting power or value of all the then outstanding Voting Securities; or

(B) the individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Board”) together with those who become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of at least a majority of the directors then still in office who either were directors as of such date or whose recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(C) the consummation of a merger, consolidation, recapitalization, liquidation, sale or disposition by the Company of all or substantially all of the Company's assets, or reorganization of the Company, other than any such transaction which would (x) result in more than 50% of the total voting power and value represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the former shareholders of the Company and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or (B) of this paragraph.

“Permitted Persons” means (A) the Company; (B) any Related Party; or (C) any group (as defined in Rule 13b-3 under the Exchange Act) comprised of any or all of the foregoing.

“Related Party” means (A) a majority-owned subsidiary of the Company; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (C) any entity, 50% or more of the voting power of which is owned directly or indirectly by the shareholders of the Company in substantially the same proportion as their ownership of Voting Securities immediately prior to the transaction.

“Voting Security” means any security of the Company which carries the right to vote generally in the election of directors.

(k)     Obligations as to Capital. The Company agrees that it will at all times maintain authorized and unissued share capital sufficient to fulfill all of its obligations under the SAR.

(l)     Transfer of Shares. The SAR, the Shares issued hereunder, or any interest in either, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable United States federal and state securities laws and the terms and conditions hereof.

(m)    Expenses of Issuance of Shares. The issuance of stock certificates upon the exercise of the SAR in whole or in part, shall be without charge to the SAR Holder. The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the exercise of the SAR in whole or in part or the resulting issuance of Shares hereunder.

(n)    Withholding. No later than the date of exercise of the SAR granted hereunder, the SAR Holder shall pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld upon the exercise of such SAR and the Company shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the SAR Holder, federal, state and local taxes of any kind required by law to be withheld upon the exercise of such SAR.

-3-

(o)    References. References herein to rights and obligations of the SAR Holder shall apply, where appropriate, to the SAR Holder’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this SAR.

(p)    Notices. Any notice required or permitted to be given under this agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Arch Capital Group Ltd.:

Wessex House
45 Reid Street
Hamilton HM 12 Bermuda
Attn: Secretary

If to the SAR Holder:

The last address delivered to the Company by the SAR Holder in the manner set forth herein.

(q)    Governing Law. This agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to principles of conflict of laws thereof.

(r)    Entire Agreement. This agreement and the Plan constitute the entire agreement among the parties relating to the subject matter hereof, and any previous agreement or understanding among the parties with respect thereto is superseded by this agreement and the Plan.

(s)    Counterparts. This agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

-4-

IN WITNESS WHEREOF, the undersigned have executed this agreement as of the Date of Grant.

ARCH CAPITAL GROUP LTD.
By:	/s/ Dawna Ferguson
	Name:	Dawna Ferguson
	Title:	Secretary
	/s/ Employee Signature

-5-

EX-10.6

Exhibit 10.6

ARCH CAPITAL GROUP LTD.
Restricted Share Agreement

THIS AGREEMENT, dated as of November 12, 2012, between Arch Capital Group Ltd. (the “Company”), a Bermuda company, and Nicolas Papadopoulo (the “Employee”).

WHEREAS, the Employee has been granted the following award under the Company’s 2012 Long Term Incentive and Share Award Plan (the “Plan”);

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the parties hereto agree as follows.

1.Award of Shares. Pursuant to the provisions of the Plan, the terms of which are incorporated herein by reference, the Employee is hereby awarded 22,410 Restricted Shares (the “Award”), subject to the terms and conditions herein set forth. Capitalized terms used herein and not defined shall have the meanings set forth in the Plan. In the event of any conflict between this Agreement and the Plan, the Plan shall control.

2.    Terms and Conditions. It is understood and agreed that the Award of Restricted Shares evidenced hereby is subject to the following terms and conditions:

(a)    Vesting of Award. Subject to Section 2(b) below and the other terms and conditions of this Agreement, this Award shall become vested in one installment on the fifth anniversary of the date hereof. Unless otherwise provided by the Company, all dividends and other amounts receivable in connection with any adjustments to the Shares under Section 4(c) of the Plan shall be subject to the vesting schedule in this Section 2(a).

(b)    Termination of Service; Forfeiture of Unvested Shares.

(i)    In the event the Employee ceases to be an employee of the Company prior to the date the Restricted Shares otherwise become vested due to his or her death or Permanent Disability (as defined in the Company’s Incentive Compensation Plan on the date hereof), the Restricted Shares shall become immediately vested in full upon such termination of employment.

(ii)    In the event of termination of employment (other than by the Company for Cause, as such term is defined in the Company’s Incentive Compensation Plan on the date hereof, and other than as set forth in Section 2(b)(i), (iii) or (iv) hereof) after the attainment of Retirement Age (as defined in the Company’s Incentive Compensation Plan on the date hereof), the Applicable Percentage (as defined below) of the Restricted Shares shall continue to vest on the schedule set forth in Section 2(a) above so long as the Employee does not engage in any activity in competition with any activity of the Company or any of its Subsidiaries other than serving on the board of directors (or similar governing body) of another company or as a consultant for no more than 26 weeks per calendar year (“Competitive Activity”). In the event the Employee engages in a Competitive Activity, any unvested Restricted Shares shall be forfeited by the Employee and become the property of the Company. The “Applicable Percentage” of the Restricted Shares will be equal to the number of full years elapsed from the date hereof through the date of such termination of employment, divided by five. The remaining portion of the Restricted Shares shall be immediately forfeited upon such termination of employment.

(iii)    In the event the Employee ceases to be an employee of the Company after a Change in Control (as defined below) due to termination (A) by the Company not for Cause or (B) by the Employee for Good Reason (as defined in the Employment Agreement, dated as of November 17, 2005, as amended, between the Employee and Arch Reinsurance Ltd. (the “Employment Agreement”)), in either case, on or before the second anniversary of the occurrence of the Change in Control, the Restricted Shares, to the extent not already vested, shall become immediately vested in full upon such termination of employment.

(iv)    In the event the Employee ceases to be an employee of the Company, other than as set forth in Section 2(b)(iii) above, due to termination (A) by the Company not for Cause or (B) by the Employee for Good Reason (as defined in the Employment Agreement), a pro rata number of the Restricted Shares subject to the Award, if not already vested, shall become vested upon such termination of service determined by multiplying the total number of Restricted Shares subject to the Award by a fraction, the numerator of which is the number of full years elapsed since the date hereof through the

Employee’s termination date and the denominator of which is five. Any of the Restricted Shares subject to the Award that are not vested, and do not become vested, at the time of termination shall be immediately forfeited.

(v)    If the Employee ceases to be an Employee of the Company for any other reason prior to the date the Restricted Shares become vested, the Award shall be forfeited by the Employee and become the property of the Company.

(vi)    For purposes of this Agreement, service with any of the Company’s Subsidiaries (as defined in the Plan) shall be considered to be service with the Company.

(vii)    “Change in Control” shall mean:

(A) any person (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting Securities representing 50% or more of the total voting power or value of all the then outstanding Voting Securities; or

(B) the individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Board”) together with those who become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of at least a majority of the directors then still in office who either were directors as of such date or whose recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(C) the consummation of a merger, consolidation, recapitalization, liquidation, sale or disposition by the Company of all or substantially all of the Company's assets, or reorganization of the Company, other than any such transaction which would (x) result in more than 50% of the total voting power and value represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the former shareholders of the Company and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or (B) of this paragraph.

“Permitted Persons” means (A) the Company; (B) any Related Party; or (C) any group (as defined in Rule 13b-3 under the Exchange Act) comprised of any or all of the foregoing.

“Related Party” means (A) a majority-owned subsidiary of the Company; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (C) any entity, 50% or more of the voting power of which is owned directly or indirectly by the shareholders of the Company in substantially the same proportion as their ownership of Voting Securities immediately prior to the transaction.

“Voting Security” means any security of the Company which carries the right to vote generally in the election of directors.

(c)    Certificates. Each certificate issued in respect of Restricted Shares awarded hereunder shall be issued in book entry format with the Company’s transfer agent and shall bear a legend disclosing the restrictions on transferability imposed on such Restricted Shares by this Agreement (the “Restrictive Legend”). Upon the vesting of Restricted Shares pursuant to Section 2 hereof and the satisfaction of any withholding tax liability pursuant to Section 5 hereof, such vested Shares, not bearing the Restrictive Legend, shall be delivered to the Employee.

(d)    Rights of a Stockholder. Prior to the time a Restricted Share is fully vested hereunder, the Employee shall have no right to transfer, pledge, hypothecate or otherwise encumber such Restricted Share. During such period, the Employee

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shall have all other rights of a stockholder, including, but not limited to, the right to vote and to receive dividends (subject to Section 2(a) hereof) at the time paid on such Restricted Shares.

(e)    No Right to Continued Employment. This Award shall not confer upon the Employee any right with respect to continuance of employment by the Company nor shall this Award interfere with the right of the Company to terminate the Employee’s employment at any time.

3.    Transfer of Shares. The Shares delivered hereunder, or any interest therein, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable United States federal and state securities laws or any other applicable laws or regulations and the terms and conditions hereof.

4.    Expenses of Issuance of Shares. The issuance of stock certificates hereunder shall be without charge to the Employee. The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) or by reason of the issuance of Shares.

5.    Withholding. No later than the date of vesting of (or the date of an election by the Employee under Section 83(b) of the Code with respect to) the Award granted hereunder, the Employee shall pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld at such time with respect to such Award and the Company shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the Employee, federal, state and local taxes of any kind required by law to be withheld at such time.

6.    References. References herein to rights and obligations of the Employee shall apply, where appropriate, to the Employee’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this Agreement.

7.    Notices. Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Arch Capital Group Ltd.
Wessex House
45 Reid Street
Hamilton HM 12 Bermuda
Attn.: Secretary

If to the Employee:

To the last address delivered to the Company by the
Employee in the manner set forth herein.

8.    Governing Law. This Agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to principles of conflict of laws.

9.    Entire Agreement. This Agreement and the Plan constitute the entire agreement among the parties relating to the subject matter hereof, and any previous agreement or understanding among the parties with respect thereto is superseded by this Agreement and the Plan.

10.    Counterparts. This Agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

ARCH CAPITAL GROUP LTD.
By:	/s/ Dawna Ferguson
	Name:	Dawna Ferguson
	Title:	Secretary
	/s/ Nicolas Papadopoulo
	Nicolas Papadopoulo

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EX-10.7

Exhibit 10.7

ARCH CAPITAL GROUP LTD.Restricted Share Unit Agreement

THIS AGREEMENT, dated as of November 12, 2012, between Arch Capital Group Ltd. (the “Company”), a Bermuda company, and Maamoun Rajeh (the “Employee”).

WHEREAS, the Employee has been granted the following award under the Company’s 2012 Long Term Incentive and Share Award Plan (the “Plan”);

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the parties hereto agree as follows.

1.Award of Share Units. Pursuant to the provisions of the Plan, the terms of which are incorporated herein by reference, the Employee is hereby awarded 16,130 Restricted Share Units (the “Award”), subject to the terms and conditions herein set forth. Capitalized terms used herein and not defined shall have the meanings set forth in the Plan. In the event of any conflict between this Agreement and the Plan, the Plan shall control.

2.    Terms and Conditions. It is understood and agreed that the Award of Restricted Share Units evidenced hereby is subject to the following terms and conditions:

(a)    Vesting of Award. Subject to Section 2(b) below and the other terms and conditions of this Agreement, this Award shall become vested in one installment on the fifth anniversary of the date hereof. Unless otherwise provided by the Company, all amounts receivable in connection with any adjustments to the Shares under Section 4(c) of the Plan or Section 2(e) below shall be subject to the vesting schedule in this Section 2(a).

(b)    Termination of Service; Forfeiture of Unvested Share Units.

(i)     In the event the Employee ceases to be an employee of the Company prior to the date the Restricted Share Units otherwise become vested due to his or her death or Permanent Disability (as defined in the Company’s Incentive Compensation Plan on the date hereof), the Restricted Share Units shall become immediately vested in full upon such termination of employment.

(ii)    In the event of termination of employment (other than by the Company for Cause, as such term is defined in the Company’s Incentive Compensation Plan on the date hereof, and other than as set forth in Section 2(b)(i), (iii) or (iv) hereof) after the attainment of Retirement Age (as defined in the Company’s Incentive Compensation Plan on the date hereof), the Applicable Percentage (as defined below) of the Restricted Share Units shall continue to vest on the schedule set forth in Section 2(a) above so long as the Employee does not engage in any activity in competition with any activity of the Company or any of its Subsidiaries other than serving on the board of directors (or similar governing body) of another company or as a consultant for no more than 26 weeks per calendar year (“Competitive Activity”). In the event the Employee engages in a Competitive Activity, any unvested Restricted Share Units shall be forfeited by the Employee and become the property of the Company. The “Applicable Percentage” of the Restricted Share Units will be equal to the number of full years elapsed from the date hereof through the date of such termination of employment, divided by five. The remaining portion of the Restricted Share Units shall be immediately forfeited upon such termination of employment.

(iii)    In the event the Employee ceases to be an employee of the Company after a Change in Control (as defined below) due to termination (A) by the Company not for Cause or (B) by the Employee for Good Reason (as defined below), in either case, on or before the second anniversary of the occurrence of the Change in Control, the Restricted Share Units, to the extent not already vested, shall become immediately vested in full upon such termination of employment. “Good Reason” means, without the Employee’s written consent, (a) the material diminution of any material duties or responsibilities of the Employee without the same being corrected within thirty (30) days after being given written notice thereof; or (b) a material reduction in the Employee’s Base Salary without the same being corrected within thirty (30) days after being given written notice thereof.

(iv)    In the event the Employee ceases to be an employee of the Company, other than as set forth in Section 2(b)(iii) above, due to termination (A) by the Company not for Cause or (B) by the Employee for Good Reason (as

defined in Section 2(b)(iii) hereof), a pro rata number of the Restricted Share Units subject to the Award, if not already vested, shall become vested upon such termination of service determined by multiplying the total number of Restricted Share Units subject to the Award by a fraction, the numerator of which is the number of full years elapsed since the date hereof through the Employee’s termination date and the denominator of which is five. Any of the Restricted Share Units subject to the Award that are not vested, and do not become vested, at the time of termination shall be immediately forfeited.

(v)    If the Employee ceases to be an Employee of the Company for any other reason prior to the date the Restricted Share Units become vested, the unvested Restricted Share Units shall be forfeited by the Employee and become the property of the Company.

(vi)    For purposes of this Agreement, service with any of the Company’s Subsidiaries (as defined in the Plan) shall be considered to be service with the Company.

(vii)    “Change in Control” shall mean:

(A) any person (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting Securities representing 50% or more of the total voting power or value of all the then outstanding Voting Securities; or

(B) the individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Board”) together with those who become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of at least a majority of the directors then still in office who either were directors as of such date or whose recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(C) the consummation of a merger, consolidation, recapitalization, liquidation, sale or disposition by the Company of all or substantially all of the Company's assets, or reorganization of the Company, other than any such transaction which would (x) result in more than 50% of the total voting power and value represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the former shareholders of the Company and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or (B) of this paragraph.

“Permitted Persons” means (A) the Company; (B) any Related Party; or (C) any group (as defined in Rule 13b-3 under the Exchange Act) comprised of any or all of the foregoing.

“Related Party” means (A) a majority-owned subsidiary of the Company; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (C) any entity, 50% or more of the voting power of which is owned directly or indirectly by the shareholders of the Company in substantially the same proportion as their ownership of Voting Securities immediately prior to the transaction.

“Voting Security” means any security of the Company which carries the right to vote generally in the election of directors.

(c)    Distribution of Shares. At the time of vesting as provided above in Section 2(a) or Section 2(b), as applicable, the Company shall distribute to the Employee (or his or her heirs in the event of the Employee’s death) a number of Shares equal to the number of vested Restricted Share Units then held by the Employee.

(d)    Rights and Restrictions. The Restricted Share Units shall not be transferable, other than pursuant to will or the laws of descent and distribution. Prior to vesting of the Restricted Share Units and delivery of the Shares to the Employee following his termination of employment, the Employee shall not have any rights or privileges of a shareholder as to the Shares subject to the Award. Specifically, the Employee shall not have the right to receive dividends or the right to vote such Shares prior to vesting of the Award and delivery of the Shares.

(e)    Anti-dilution Adjustment. For the avoidance of doubt, the terms of Section 4(c) of the Plan, relating to anti-dilution adjustments, will apply to the Restricted Share Units.

(f)    Dividend Equivalents. As of each date on which a cash dividend is paid on Shares, there shall be granted to the Employee that number of additional Restricted Share Units (including fractional units) determined by (i) multiplying the amount of such dividend per Share by the number of Restricted Share Units held by the Employee, and (ii) dividing the total so determined by the Fair Market Value of a Share on the date of payment of such cash dividend. The Restricted Share Units granted pursuant to this Section 2(f) will have the same terms and conditions (including vesting dates) as the Restricted Share Units with respect to which they are granted.

(g)    No Right to Continued Employment. This Award shall not confer upon the Employee any right with respect to continuance of employment by the Company nor shall this Award interfere with the right of the Company to terminate the Employee’s employment at any time. The Employee acknowledges that there is no legal obligation of Arch Capital Group Ltd. or any of its Subsidiaries to offer a participation in the Plan and that the offer, even if made again in this form or in similar form in the future, will not create any obligation of Arch Capital Group Ltd. or any of its Subsidiaries to make any such offer.

3.    Transfer of Shares. The Shares delivered hereunder, or any interest therein, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable United States federal and state securities laws or any other applicable laws or regulations and the terms and conditions hereof.

4.    Expenses of Issuance of Shares. The issuance of stock certificates hereunder shall be without charge to the Employee. The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) or by reason of the issuance of Shares.

5.    Withholding. The Employee shall pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld with respect to the Award and the Company shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the Employee, federal, state and local taxes of any kind required by law to be withheld.

6.    References. References herein to rights and obligations of the Employee shall apply, where appropriate, to the Employee’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this Agreement.

7.    Notices. Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Arch Capital Group Ltd.
Wessex House
45 Reid Street
Hamilton HM 12 Bermuda
Attn.: Secretary

If to the Employee:

To the last address delivered to the Company by the
Employee in the manner set forth herein.

8.    Governing Law. This Agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to principles of conflict of laws.

9.    Entire Agreement. This Agreement and the Plan constitute the entire agreement among the parties relating to the subject matter hereof, and any previous agreement or understanding among the parties with respect thereto is superseded by this Agreement and the Plan.

10.    Counterparts. This Agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

11.    Section 409A. It is intended that this Agreement and the Award will comply with Section 409A of the Code (and any regulations and guidelines issued thereunder), to the extent the Agreement and Award are subject thereto, and the Agreement shall be interpreted on a basis consistent with such intent. If an amendment of the Agreement is necessary in order for it to comply with Section 409A, the parties hereto will negotiate in good faith to amend the Agreement in a manner that preserves the original intent of the parties to the extent reasonably possible. Notwithstanding any provision of this Agreement to the contrary, for purposes of any provision of this Agreement providing for the distribution of any Shares upon or following a termination of employment that is considered deferred compensation under Section 409A, references to the Employee’s “termination of employment” (and corollary terms) with the Company shall be construed to refer to the Employee’s “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company. Notwithstanding any provision to the contrary in this Agreement, if the Employee is deemed on the date of his or her “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) to be a “specified employee” (within the meaning of Treas. Reg. Section 1.409A-1(i)), then with regard to any payment that is considered deferred compensation under Section 409A payable on account of a “separation from service” that is required to be delayed pursuant to Section 409A(a)(2)(B) of the Code (after taking into account any applicable exceptions to such requirement), such payment shall not be made prior to the earlier of (i) the expiration of the six (6)-month period measured from the date of the Employee’s “separation from service,” or (ii) the date of the Employee’s death (the “Delay Period”). Upon the expiration of the Delay Period, all payments delayed pursuant hereto (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid to the Employee in a lump sum and any remaining payments due under this Agreement shall be paid in accordance with the normal payment dates specified for them herein. Whenever payments under this Agreement are to be made in installments, each such installment shall be deemed to be a separate payment for purposes of Section 409A. No action or failure to act, pursuant to this Section 11 shall subject the Company to any claim, liability, or expense, and the Company shall not have any obligation to indemnify or otherwise protect the Employee from the obligation to pay any taxes, interest or penalties pursuant to Section 409A of the Code.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

ARCH CAPITAL GROUP LTD.
By:	/s/ Dawna Ferguson
	Name:	Dawna Ferguson
	Title:	Secretary
	/s/ Maamoun Rajeh
	Maamoun Rajeh

EX-10.8

Exhibit 10.8

ARCH CAPITAL GROUP LTD.
Restricted Share Agreement

THIS AGREEMENT, dated as of November 12, 2012, between Arch Capital Group Ltd. (the “Company”), a Bermuda company, and Andrew Rippert (the “Employee”).

WHEREAS, the Employee has been granted the following award under the Company’s 2012 Long Term Incentive and Share Award Plan (the “Plan”);

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the parties hereto agree as follows.

1.Award of Shares.  Pursuant to the provisions of the Plan, the terms of which are incorporated herein by reference, the Employee is hereby awarded 8,960 Restricted Shares (the “Award”), subject to the terms and conditions herein set forth. Capitalized terms used herein and not defined shall have the meanings set forth in the Plan. In the event of any conflict between this Agreement and the Plan, the Plan shall control.

2.    Terms and Conditions.  It is understood and agreed that the Award of Restricted Shares evidenced hereby is subject to the following terms and conditions:

(a)    Vesting of Award. Subject to Section 2(b) below and the other terms and conditions of this Agreement, this Award shall become vested in one installment on the fifth anniversary of the date hereof. Unless otherwise provided by the Company, all dividends and other amounts receivable in connection with any adjustments to the Shares under Section 4(c) of the Plan shall be subject to the vesting schedule in this Section 2(a).

(b)    Termination of Service; Forfeiture of Unvested Shares.

(i)    In the event the Employee ceases to be an employee of the Company prior to the date the Restricted Shares otherwise become vested due to his or her death or Permanent Disability (as defined in the Company’s Incentive Compensation Plan on the date hereof), the Restricted Shares shall become immediately vested in full upon such termination of employment.

(ii)    In the event of termination of employment (other than by the Company for Cause, as such term is defined in the Company’s Incentive Compensation Plan on the date hereof, and other than as set forth in Section 2(b)(i), (iii) or (iv) hereof) after the attainment of Retirement Age (as defined in the Company’s Incentive Compensation Plan on the date hereof), the Applicable Percentage (as defined below) of the Restricted Shares shall continue to vest on the schedule set forth in Section 2(a) above so long as the Employee does not engage in any activity in competition with any activity of the Company or any of its Subsidiaries other than serving on the board of directors (or similar governing body) of another company or as a consultant for no more than 26 weeks per calendar year (“Competitive Activity”). In the event the Employee engages in a Competitive Activity, any unvested Restricted Shares shall be forfeited by the Employee and become the property of the Company. The “Applicable Percentage” of the Restricted Shares will be equal to the number of full years elapsed from the date hereof through the date of such termination of employment, divided by five. The remaining portion of the Restricted Shares shall be immediately forfeited upon such termination of employment.

(iii)    In the event the Employee ceases to be an employee of the Company after a Change in Control (as defined below) due to termination by the Company not for Cause on or before the second anniversary of the occurrence of the Change in Control, the Restricted Shares, to the extent not already vested, shall become immediately vested in full upon such termination of employment.

(iv)    In the event the Employee ceases to be an employee of the Company, other than as set forth in Section 2(b)(iii) above, due to termination by the Company not for Cause, a pro rata number of the Restricted Shares subject to the Award, if not already vested, shall become vested upon such termination of service determined by multiplying the total number of Restricted Shares subject to the Award by a fraction, the numerator of which is the number of full years elapsed since the date hereof through the Employee’s termination date and the denominator of which is five. Any of the Restricted Shares subject to the Award that are not vested, and do not become vested, at the time of termination shall be immediately forfeited.

(v)    If the Employee ceases to be an Employee of the Company for any other reason prior to the date the Restricted Shares become vested, the Award shall be forfeited by the Employee and become the property of the Company.

(vi)    For purposes of this Agreement, service with any of the Company’s Subsidiaries (as defined in the Plan) shall be considered to be service with the Company.

(vii)    “Change in Control” shall mean:

(A) any person (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting Securities representing 50% or more of the total voting power or value of all the then outstanding Voting Securities; or

(B) the individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Board”) together with those who become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of at least a majority of the directors then still in office who either were directors as of such date or whose recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(C) the consummation of a merger, consolidation, recapitalization, liquidation, sale or disposition by the Company of all or substantially all of the Company's assets, or reorganization of the Company, other than any such transaction which would (x) result in more than 50% of the total voting power and value represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the former shareholders of the Company and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or (B) of this paragraph.

“Permitted Persons” means (A) the Company; (B) any Related Party; or (C) any group (as defined in Rule 13b-3 under the Exchange Act) comprised of any or all of the foregoing.

“Related Party” means (A) a majority-owned subsidiary of the Company; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (C) any entity, 50% or more of the voting power of which is owned directly or indirectly by the shareholders of the Company in substantially the same proportion as their ownership of Voting Securities immediately prior to the transaction.

“Voting Security” means any security of the Company which carries the right to vote generally in the election of directors.

(c)    Certificates.  Each certificate issued in respect of Restricted Shares awarded hereunder shall be issued in book entry format with the Company’s transfer agent and shall bear a legend disclosing the restrictions on transferability imposed on such Restricted Shares by this Agreement (the “Restrictive Legend”). Upon the vesting of Restricted Shares pursuant to Section 2 hereof and the satisfaction of any withholding tax liability pursuant to Section 5 hereof, such vested Shares, not bearing the Restrictive Legend, shall be delivered to the Employee.

(d)    Rights of a Stockholder.  Prior to the time a Restricted Share is fully vested hereunder, the Employee shall have no right to transfer, pledge, hypothecate or otherwise encumber such Restricted Share. During such period, the Employee shall have all other rights of a stockholder, including, but not limited to, the right to vote and to receive dividends (subject to Section 2(a) hereof) at the time paid on such Restricted Shares.

(e)    No Right to Continued Employment. This Award shall not confer upon the Employee any right with respect to continuance of employment by the Company nor shall this Award interfere with the right of the Company to terminate the Employee’s employment at any time.

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3.    Transfer of Shares. The Shares delivered hereunder, or any interest therein, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable United States federal and state securities laws or any other applicable laws or regulations and the terms and conditions hereof.

4.    Expenses of Issuance of Shares. The issuance of stock certificates hereunder shall be without charge to the Employee. The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) or by reason of the issuance of Shares.

5.    Withholding. No later than the date of vesting of (or the date of an election by the Employee under Section 83(b) of the Code with respect to) the Award granted hereunder, the Employee shall pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld at such time with respect to such Award and the Company shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the Employee, federal, state and local taxes of any kind required by law to be withheld at such time.

6.    References.  References herein to rights and obligations of the Employee shall apply, where appropriate, to the Employee’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this Agreement.

7.    Notices.  Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Arch Capital Group Ltd.
Wessex House
45 Reid Street
Hamilton HM 12 Bermuda
Attn.: Secretary

If to the Employee:

To the last address delivered to the Company by the
Employee in the manner set forth herein.

8.    Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to principles of conflict of laws.

9.    Entire Agreement. This Agreement and the Plan constitute the entire agreement among the parties relating to the subject matter hereof, and any previous agreement or understanding among the parties with respect thereto is superseded by this Agreement and the Plan.

10.    Counterparts.  This Agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

ARCH CAPITAL GROUP LTD.
By:	/s/ Dawna Ferguson
	Name:	Dawna Ferguson
	Title:	Secretary
	/s/ Andrew Rippert
	Andrew Rippert

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EX-10.9

Exhibit 10.9

ARCH CAPITAL GROUP LTD.
Share Appreciation Right Agreement

AGREEMENT, made and entered into this 12th day of November, 2012, by and between Arch Capital Group Ltd. (the “Company”), a Bermuda company, and Andrew Rippert (the “SAR Holder”).

WHEREAS, the SAR Holder has been granted the following award under the Company’s 2012 Long Term Incentive and Share Award Plan (the “Plan”);

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for other good and valuable consideration, the Company and the SAR Holder agree as follows:

(a)Grant. Pursuant to the provisions of the Plan, the terms of which are incorporated herein by reference, the Company hereby grants to the SAR Holder a Share Appreciation Right (the “SAR”) with respect to 8,960 Shares. The SAR represents a right to be paid, upon exercise of the SAR, an amount measured by (x) the difference between the Fair Market Value per Share on the date of exercise and the exercise price per Share of the SAR, multiplied by (y) the number of Shares with respect to which the SAR is exercised, with such amount to be paid in the form of Shares valued at their Fair Market Value on the date of exercise. The SAR is granted as of November 12, 2012 (the “Date of Grant”), and such grant is subject to the terms and conditions herein and the terms and conditions of the Plan. In the event there is any conflict between the terms of the Plan and this Agreement, the terms of the Plan shall control. Capitalized terms used herein but not defined shall have the meanings given to them in the Plan.

(b)Exercise Price. The exercise price of the SAR shall be equal to $42.65 per Share.

(c)Status of Shares. Upon issue, the shares received upon exercise of the SAR shall rank equally in all respects with the other Shares.

(d)Term of SAR. The SAR may be exercised only during the period (the “SAR Period”) set forth in paragraph (f) below and shall remain exercisable until the tenth anniversary of the Date of Grant. Thereafter, the SAR Holder shall cease to have any rights in respect thereof. The right to exercise the SAR shall be subject to sooner termination as provided in paragraph (j) below.

(e)No Rights of Shareholder. The SAR Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or in equity.

(f)Exercisability. Except as otherwise set forth in paragraph (j) below, the SAR shall become exercisablein one installment on the fifth anniversary of the Date of Grant, subject to paragraph (j) below. Subject to paragraph (j) below, the SAR may be exercised at any time or from time to time during the SAR Period in regard to all or any portion of the SAR which is then exercisable, as may be adjusted pursuant to paragraph (g) below.

(g)Anti-dilution Adjustment. For the avoidance of doubt, the terms of Section 4(c) of the Plan, relating to anti-dilution adjustments, will apply to the SAR.

(h)Nontransferability. The SAR, or any interest therein, may not be assigned or otherwise transferred, disposed of or encumbered by the SAR Holder, other than by will or by the laws of descent and distribution. During the lifetime of the SAR Holder, the SAR shall be exercisable only by the SAR Holder or by his or her guardian or legal representative. Notwithstanding the foregoing, the SAR may be transferred by the SAR Holder to members of his or her “immediate family” or to a trust or other entity established for the exclusive benefit of solely one or more members of the SAR Holder’s “immediate family.” Any SAR held by the transferee will continue to be subject to the same terms and conditions that were applicable to the SAR immediately prior to the transfer, except that the SAR will be transferable by the transferee only by will or the laws of descent and distribution. For purposes hereof, “immediate family” means the SAR Holder’s children, stepchildren, grandchildren, parents, stepparents, grandparents, spouse, siblings (including half brother and sisters), in laws, and relationships arising because of legal adoption.

(i)Exercise of SAR. In order to exercise the SAR, the SAR Holder shall submit to the Company an instrument specifying the whole number of Shares in respect of which the SAR is being exercised. Shares will be issued accordingly by the Company within 30 days. The payment upon a SAR exercise shall be solely the number of whole Shares calculated in paragraph (a) above. Fractional Shares shall be rounded down to the nearest whole Share with no cash consideration being paid upon exercise. Anything to the contrary herein notwithstanding, the Company shall not be obligated to issue any Shares hereunder if the issuance of such Shares would violate the provision of any applicable law, in which event the Company shall, as soon as practicable, take whatever action it reasonably can so that such Shares may be issued without resulting in such violations of law.

(j)Termination of Service.

1.In the event the SAR Holder ceases to be an employee of the Company due to the SAR Holder’s death or Permanent Disability (as defined in the Company’s Incentive Compensation Plan on the date hereof), the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder (or the SAR Holder’s Beneficiary or estate in the event of the SAR Holder’s death) for a period of three years following such termination of employment (but not beyond the SAR Period).

2.    In the event of termination of employment (other than by the Company for Cause, as such term is defined in the Company’s Incentive Compensation Plan on the date hereof, and other than as set forth in paragraphs (j)(1), (j)(3) or (j)(4) hereof) after the attainment of Retirement Age (as defined in the Company’s Incentive Compensation Plan on the date hereof), the Applicable Percentage (as defined below) of the SAR shall continue to become exercisable on the schedule set forth in paragraph (f) above so long as the SAR Holder does not engage in any activity in competition with any activity of the Company or any of its Subsidiaries other than serving on the board of directors (or similar governing body) of another company or as a consultant for no more than 26 weeks per calendar year (“Competitive Activity”) and shall continue to be exercisable by the SAR Holder (or the SAR Holder’s Beneficiary or estate in the event of the SAR Holder’s death) for the remainder of the SAR Period. In the event the SAR Holder engages in a Competitive Activity, (A) the SAR, to the extent then exercisable, may be exercised for 30 days following the date on which the SAR Holder engages in such Competitive Activity (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited. The “Applicable Percentage” of the SAR will be equal to the number of full years elapsed from the Date of Grant through the date of such termination of employment, divided by five. The remaining portion of the SAR shall be immediately forfeited upon such termination of employment.

3.    In the event the SAR Holder ceases to be an employee of the Company after a Change in Control (as defined below) due to termination by the Company not for Cause on or before the second anniversary of the occurrence of the Change in Control, the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period).

4.    In the event the SAR Holder ceases to be an employee of the Company, other than as set forth in paragraph (j)(3) above, due to termination by the Company not for Cause, the SAR, if not already exercisable, shall become immediately exercisable at the time of such termination of service with respect to a number of Shares determined by multiplying the total number of Shares subject to the SAR by a fraction, the numerator of which is the number of full years elapsed from the Date of Grant through the SAR Holder’s termination date and the denominator of which is five, and the portion of the SAR that is exercisable shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period). Any portion of the SAR that is not exercisable, and does not become exercisable, at the time of termination shall be immediately forfeited.

5.    In the event that the SAR Holder ceases to be an employee of the Company for any other reason, except due to a termination of the SAR Holder’s employment by the Company for Cause, (A) the SAR, to the extent then exercisable, may be exercised for 90 days following termination of employment (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited.

6.    In the event of a termination of the SAR Holder’s employment for Cause, the SAR shall immediately cease to be exercisable and shall be immediately forfeited.

7.    For purposes of this SAR, service with any of the Company’s Subsidiaries (as defined in the Plan) shall be considered to be service with the Company.

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8.    “Change in Control” shall mean:

(A) any person (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting Securities representing 50% or more of the total voting power or value of all the then outstanding Voting Securities; or

(B) the individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Board”) together with those who become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of at least a majority of the directors then still in office who either were directors as of such date or whose recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(C) the consummation of a merger, consolidation, recapitalization, liquidation, sale or disposition by the Company of all or substantially all of the Company's assets, or reorganization of the Company, other than any such transaction which would (x) result in more than 50% of the total voting power and value represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the former shareholders of the Company and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or (B) of this paragraph.

“Permitted Persons” means (A) the Company; (B) any Related Party; or (C) any group (as defined in Rule 13b-3 under the Exchange Act) comprised of any or all of the foregoing.

“Related Party” means (A) a majority-owned subsidiary of the Company; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (C) any entity, 50% or more of the voting power of which is owned directly or indirectly by the shareholders of the Company in substantially the same proportion as their ownership of Voting Securities immediately prior to the transaction.

“Voting Security” means any security of the Company which carries the right to vote generally in the election of directors.

(k)     Obligations as to Capital. The Company agrees that it will at all times maintain authorized and unissued share capital sufficient to fulfill all of its obligations under the SAR.

(l)     Transfer of Shares. The SAR, the Shares issued hereunder, or any interest in either, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable United States federal and state securities laws and the terms and conditions hereof.

(m)    Expenses of Issuance of Shares. The issuance of stock certificates upon the exercise of the SAR in whole or in part, shall be without charge to the SAR Holder. The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the exercise of the SAR in whole or in part or the resulting issuance of Shares hereunder.

(n)    Withholding. No later than the date of exercise of the SAR granted hereunder, the SAR Holder shall pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld upon the exercise of such SAR and the Company shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the SAR Holder, federal, state and local taxes of any kind required by law to be withheld upon the exercise of such SAR.

(o)    References. References herein to rights and obligations of the SAR Holder shall apply, where appropriate, to the SAR Holder’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this SAR.

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(p)    Notices. Any notice required or permitted to be given under this agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Arch Capital Group Ltd.:

Wessex House
45 Reid Street
Hamilton HM 12 Bermuda
Attn: Secretary

If to the SAR Holder:

The last address delivered to the Company by the SAR Holder in the manner set forth herein.

(q)    Governing Law. This agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to principles of conflict of laws thereof.

(r)    Entire Agreement. This agreement and the Plan constitute the entire agreement among the parties relating to the subject matter hereof, and any previous agreement or understanding among the parties with respect thereto is superseded by this agreement and the Plan.

(s)    Counterparts. This agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the undersigned have executed this agreement as of the Date of Grant.

ARCH CAPITAL GROUP LTD.
By:	/s/ Dawna Ferguson
	Name:	Dawna Ferguson
	Title:	Secretary
	/s/ Andrew Rippert
	Andrew Rippert

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EX-10.10

Exhibit 10.10

ARCH CAPITAL GROUP LTD.Share Appreciation Right Agreement

AGREEMENT, made and entered into this 9th day of May, 2013, by and between Arch Capital Group Ltd. (the “Company”), a Bermuda company, and Maamoun Rajeh (the “SAR Holder”).

WHEREAS, the SAR Holder has been granted the following award under the Company’s 2012 Long Term Incentive and Share Award Plan (the “Plan”);

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for other good and valuable consideration, the Company and the SAR Holder agree as follows:

(a)Grant. Pursuant to the provisions of the Plan, the terms of which are incorporated herein by reference, the Company hereby grants to the SAR Holder a Share Appreciation Right (the “SAR”) with respect to 6,600 Shares. The SAR represents a right to be paid, upon exercise of the SAR, an amount measured by (x) the difference between the Fair Market Value per Share on the date of exercise and the exercise price per Share of the SAR, multiplied by (y) the number of Shares with respect to which the SAR is exercised, with such amount to be paid in the form of Shares valued at their Fair Market Value on the date of exercise. The SAR is granted as of May 9, 2013 (the “Date of Grant”), and such grant is subject to the terms and conditions herein and the terms and conditions of the Plan. In the event there is any conflict between the terms of the Plan and this Agreement, the terms of the Plan shall control. Capitalized terms used herein but not defined shall have the meanings given to them in the Plan.

(b)Exercise Price. The exercise price of the SAR shall be equal to $53.53 per Share.

(c)Status of Shares. Upon issue, the shares received upon exercise of the SAR shall rank equally in all respects with the other Shares.

(d)Term of SAR. The SAR may be exercised only during the period (the “SAR Period”) set forth in paragraph (f) below and shall remain exercisable until the tenth anniversary of the Date of Grant. Thereafter, the SAR Holder shall cease to have any rights in respect thereof. The right to exercise the SAR shall be subject to sooner termination as provided in paragraph (j) below.

(e)No Rights of Shareholder. The SAR Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or in equity. The SAR Holder acknowledges that there is no legal obligation of the Company or any of its subsidiaries to offer a participation in the Plan and that the offer, even if made again in this form or in similar form in the future, will not create any obligation of the Company or any of its subsidiaries to make any such offer.

(f)Exercisability. Except as otherwise set forth in paragraph (j) below, the SAR shall become exercisablein three equal annual installments on the first, second and third anniversaries of the Date of Grant, in each case subject to paragraph (j) below. Subject to paragraph (j) below, the SAR may be exercised at any time or from time to time during the SAR Period in regard to all or any portion of the SAR which is then exercisable, as may be adjusted pursuant to paragraph (g) below.

(g)Anti-dilution Adjustment. For the avoidance of doubt, the terms of Section 4(c) of the Plan, relating to anti-dilution adjustments, will apply to the SAR.

(h)Nontransferability. The SAR, or any interest therein, may not be assigned or otherwise transferred, disposed of or encumbered by the SAR Holder, other than by will or by the laws of descent and distribution. During the lifetime of the SAR Holder, the SAR shall be exercisable only by the SAR Holder or by his or her guardian or legal representative. Notwithstanding the foregoing, the SAR may be transferred by the SAR Holder to members of his or her “immediate family” or to a trust or other entity established for the exclusive benefit of solely one or more members of the SAR Holder’s “immediate family.” Any SAR held by the transferee will continue to be subject to the same terms and conditions that were applicable to the SAR immediately prior to the transfer, except that the SAR will be transferable by the transferee only by will or the laws of descent and distribution. For purposes hereof, “immediate family” means the SAR Holder’s children, stepchildren,

grandchildren, parents, stepparents, grandparents, spouse, siblings (including half brother and sisters), in laws, and relationships arising because of legal adoption.

(i)Exercise of SAR. In order to exercise the SAR, the SAR Holder shall submit to the Company an instrument specifying the whole number of Shares in respect of which the SAR is being exercised. Shares will be issued accordingly by the Company within 30 days. The payment upon a SAR exercise shall be solely the number of whole Shares calculated in paragraph (a) above. Fractional Shares shall be rounded down to the nearest whole Share with no cash consideration being paid upon exercise. Anything to the contrary herein notwithstanding, the Company shall not be obligated to issue any Shares hereunder if the issuance of such Shares would violate the provision of any applicable law, in which event the Company shall, as soon as practicable, take whatever action it reasonably can so that such Shares may be issued without resulting in such violations of law.

(j)Termination of Service.

1.In the event the SAR Holder ceases to be an employee of the Company due to the SAR Holder’s death or Permanent Disability (as defined in the Company’s Incentive Compensation Plan on the date hereof), the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder (or the SAR Holder’s Beneficiary or estate in the event of the SAR Holder’s death) for a period of three years following such termination of employment (but not beyond the SAR Period).

2.    In the event of termination of employment (other than by the Company for Cause, as such term is defined in the Company’s Incentive Compensation Plan on the date hereof, and other than as set forth in paragraphs (j)(1) or (j)(3) hereof) after the attainment of Retirement Age (as defined in the Company’s Incentive Compensation Plan on the date hereof), the SAR shall continue to become exercisable on the schedule set forth in paragraph (f) above so long as the SAR Holder does not engage in any activity in competition with any activity of the Company or any of its Subsidiaries other than serving on the board of directors (or similar governing body) of another company or as a consultant for no more than 26 weeks per calendar year (“Competitive Activity”) and shall continue to be exercisable by the SAR Holder (or the SAR Holder’s Beneficiary or estate in the event of the SAR Holder’s death) for the remainder of the SAR Period. In the event the SAR Holder engages in a Competitive Activity, (A) the SAR, to the extent then exercisable, may be exercised for 30 days following the date on which the SAR Holder engages in such Competitive Activity (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited.

3.    In the event the SAR Holder ceases to be an employee of the Company after a Change in Control (as defined below) due to termination (A) by the Company not for Cause or (B) by the SAR Holder for Good Reason (as defined below), in either case, on or before the second anniversary of the occurrence of the Change in Control, the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period). “Good Reason” means without the SAR Holder’s written consent, (a) the material diminution of any material duties or responsibilities of the SAR Holder without the same being corrected within thirty (30) days after being given written notice thereof; or (b) a material reduction in the SAR Holder’s Base Salary without the same being corrected within thirty (30) days after being given written notice thereof.

4.    In the event that the SAR Holder ceases to be an employee of the Company for any other reason, except due to a termination of the SAR Holder’s employment by the Company for Cause, (A) the SAR, to the extent then exercisable, may be exercised for 90 days following termination of employment (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited; provided that, in the event of a Redundancy (as defined below), the Committee, in its sole discretion, may, in accordance with its authority under the Plan, determine that the SAR, to the extent not exercisable, shall become exercisable and shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period).

5.    In the event of a termination of the SAR Holder’s employment for Cause, the SAR shall immediately cease to be exercisable and shall be immediately forfeited.

6.    For purposes of this SAR, service with any of the Company’s Subsidiaries (as defined in the Plan) shall be considered to be service with the Company.

7.    “Change in Control” shall mean:

2

(A) any person (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting Securities representing 50% or more of the total voting power or value of all the then outstanding Voting Securities; or

(B) the individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Board”) together with those who become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of at least a majority of the directors then still in office who either were directors as of such date or whose recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(C) the consummation of a merger, consolidation, recapitalization, liquidation, sale or disposition by the Company of all or substantially all of the Company's assets, or reorganization of the Company, other than any such transaction which would (x) result in more than 50% of the total voting power and value represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the former shareholders of the Company and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or (B) of this paragraph.

“Permitted Persons” means (A) the Company; (B) any Related Party; or (C) any group (as defined in Rule 13b-3 under the Exchange Act) comprised of any or all of the foregoing.

“Related Party” means (A) a majority-owned subsidiary of the Company; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (C) any entity, 50% or more of the voting power of which is owned directly or indirectly by the shareholders of the Company in substantially the same proportion as their ownership of Voting Securities immediately prior to the transaction.

“Voting Security” means any security of the Company which carries the right to vote generally in the election of directors.

8.    “Redundancy” shall mean termination of employment by the Company due to its need to reduce the size of its workforce, including due to closure of a business or a particular workplace or change in business process. Whether a termination of employment is due to a "redundancy" shall be determined by the Committee in its sole and absolute discretion, such determination being final and binding on all parties hereto and all persons claiming through, in the name of or on behalf of such parties.

(k)     Obligations as to Capital. The Company agrees that it will at all times maintain authorized and unissued share capital sufficient to fulfill all of its obligations under the SAR.

(l)     Transfer of Shares. The SAR, the Shares issued hereunder, or any interest in either, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable United States federal and state securities laws and the terms and conditions hereof.

(m)    Expenses of Issuance of Shares. The issuance of stock certificates upon the exercise of the SAR in whole or in part, shall be without charge to the SAR Holder. The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the exercise of the SAR in whole or in part or the resulting issuance of Shares hereunder.

(n)    Withholding. No later than the date of exercise of the SAR granted hereunder, the SAR Holder shall pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld upon the exercise of such SAR and the Company shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the SAR Holder, federal, state and local taxes of any kind required by law to be withheld upon the exercise of such SAR.

3

(o)    References. References herein to rights and obligations of the SAR Holder shall apply, where appropriate, to the SAR Holder’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this SAR.

(p)    Notices. Any notice required or permitted to be given under this agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Arch Capital Group Ltd.:

Wessex House
45 Reid Street
Hamilton HM 12 Bermuda
Attn: Secretary

If to the SAR Holder:

The last address delivered to the Company by the SAR Holder in the manner set forth herein.

(q)    Governing Law. This agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to principles of conflict of laws thereof.

(r)    Entire Agreement. This agreement and the Plan constitute the entire agreement among the parties relating to the subject matter hereof, and any previous agreement or understanding among the parties with respect thereto is superseded by this agreement and the Plan.

(s)    Counterparts. This agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

4

IN WITNESS WHEREOF, the undersigned have executed this agreement as of the Date of Grant.

ARCH CAPITAL GROUP LTD.
By:	/s/ Dawna Ferguson
	Name:	Dawna Ferguson
	Title:	Secretary
	/s/ Maamoun Rajeh
	Maamoun Rajeh

5

EX-10.11

Exhibit 10.11

ARCH CAPITAL GROUP LTD.Share Appreciation Right Agreement

AGREEMENT, made and entered into this 9^th day of May, 2013, by and between Arch Capital Group Ltd. (the “Company”), a Bermuda company, and Andrew Rippert (the “SAR Holder”).

WHEREAS, the SAR Holder has been granted the following award under the Company’s 2012 Long Term Incentive and Share Award Plan (the “Plan”);

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for other good and valuable consideration, the Company and the SAR Holder agree as follows:

(a)Grant. Pursuant to the provisions of the Plan, the terms of which are incorporated herein by reference, the Company hereby grants to the SAR Holder a Share Appreciation Right (the “SAR”) with respect to 2,500 Shares. The SAR represents a right to be paid, upon exercise of the SAR, an amount measured by (x) the difference between the Fair Market Value per Share on the date of exercise and the exercise price per Share of the SAR, multiplied by (y) the number of Shares with respect to which the SAR is exercised, with such amount to be paid in the form of Shares valued at their Fair Market Value on the date of exercise. The SAR is granted as of May 9, 2013 (the “Date of Grant”), and such grant is subject to the terms and conditions herein and the terms and conditions of the Plan. In the event there is any conflict between the terms of the Plan and this Agreement, the terms of the Plan shall control. Capitalized terms used herein but not defined shall have the meanings given to them in the Plan.

(b)Exercise Price. The exercise price of the SAR shall be equal to $53.53 per Share.

(c)Status of Shares. Upon issue, the shares received upon exercise of the SAR shall rank equally in all respects with the other Shares.

(d)Term of SAR. The SAR may be exercised only during the period (the “SAR Period”) set forth in paragraph (f) below and shall remain exercisable until the tenth anniversary of the Date of Grant. Thereafter, the SAR Holder shall cease to have any rights in respect thereof. The right to exercise the SAR shall be subject to sooner termination as provided in paragraph (j) below.

(e)No Rights of Shareholder. The SAR Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or in equity.

(f)Exercisability. Except as otherwise set forth in paragraph (j) below, the SAR shall become exercisablein three equal annual installments on the first, second and third anniversaries of the Date of Grant, in each case subject to paragraph (j) below. Subject to paragraph (j) below, the SAR may be exercised at any time or from time to time during the SAR Period in regard to all or any portion of the SAR which is then exercisable, as may be adjusted pursuant to paragraph (g) below.

(g)Anti-dilution Adjustment. For the avoidance of doubt, the terms of Section 4(c) of the Plan, relating to anti-dilution adjustments, will apply to the SAR.

(h)Nontransferability. The SAR, or any interest therein, may not be assigned or otherwise transferred, disposed of or encumbered by the SAR Holder, other than by will or by the laws of descent and distribution. During the lifetime of the SAR Holder, the SAR shall be exercisable only by the SAR Holder or by his or her guardian or legal representative. Notwithstanding the foregoing, the SAR may be transferred by the SAR Holder to members of his or her “immediate family” or to a trust or other entity established for the exclusive benefit of solely one or more members of the SAR Holder’s “immediate family.” Any SAR held by the transferee will continue to be subject to the same terms and conditions that were applicable to the SAR immediately prior to the transfer, except that the SAR will be transferable by the transferee only by will or the laws of descent and distribution. For purposes hereof, “immediate family” means the SAR Holder’s children, stepchildren, grandchildren, parents, stepparents, grandparents, spouse, siblings (including half brother and sisters), in laws, and relationships arising because of legal adoption.

(i)Exercise of SAR. In order to exercise the SAR, the SAR Holder shall submit to the Company an instrument specifying the whole number of Shares in respect of which the SAR is being exercised. Shares will be issued accordingly by the Company within 30 days. The payment upon a SAR exercise shall be solely the number of whole Shares calculated in paragraph (a) above. Fractional Shares shall be rounded down to the nearest whole Share with no cash consideration being paid upon exercise. Anything to the contrary herein notwithstanding, the Company shall not be obligated to issue any Shares hereunder if the issuance of such Shares would violate the provision of any applicable law, in which event the Company shall, as soon as practicable, take whatever action it reasonably can so that such Shares may be issued without resulting in such violations of law.

(j)Termination of Service.

1.In the event the SAR Holder ceases to be an employee of the Company due to the SAR Holder’s death or Permanent Disability (as defined in the Company’s Incentive Compensation Plan on the date hereof), the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder (or the SAR Holder’s Beneficiary or estate in the event of the SAR Holder’s death) for a period of three years following such termination of employment (but not beyond the SAR Period).

2.    In the event of termination of employment (other than by the Company for Cause, as such term is defined in the Company’s Incentive Compensation Plan on the date hereof, and other than as set forth in paragraphs (j)(1) or (j)(3) hereof) after the attainment of Retirement Age (as defined in the Company’s Incentive Compensation Plan on the date hereof), the SAR shall continue to become exercisable on the schedule set forth in paragraph (f) above so long as the SAR Holder does not engage in any activity in competition with any activity of the Company or any of its Subsidiaries other than serving on the board of directors (or similar governing body) of another company or as a consultant for no more than 26 weeks per calendar year (“Competitive Activity”) and shall continue to be exercisable by the SAR Holder (or the SAR Holder’s Beneficiary or estate in the event of the SAR Holder’s death) for the remainder of the SAR Period. In the event the SAR Holder engages in a Competitive Activity, (A) the SAR, to the extent then exercisable, may be exercised for 30 days following the date on which the SAR Holder engages in such Competitive Activity (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited.

3.    In the event the SAR Holder ceases to be an employee of the Company after a Change in Control (as defined below) due to termination by the Company not for Cause on or before the second anniversary of the occurrence of the Change in Control, the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period).

4.    In the event that the SAR Holder ceases to be an employee of the Company for any other reason, except due to a termination of the SAR Holder’s employment by the Company for Cause, (A) the SAR, to the extent then exercisable, may be exercised for 90 days following termination of employment (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited; provided that, in the event of a Redundancy (as defined below), the Committee, in its sole discretion, may, in accordance with its authority under the Plan, determine that the SAR, to the extent not exercisable, shall become exercisable and shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period).

5.    In the event of a termination of the SAR Holder’s employment for Cause, the SAR shall immediately cease to be exercisable and shall be immediately forfeited.

6.    For purposes of this SAR, service with any of the Company’s Subsidiaries (as defined in the Plan) shall be considered to be service with the Company.

7.    “Change in Control” shall mean:

(A) any person (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting Securities representing 50% or more of the total voting power or value of all the then outstanding Voting Securities; or

2

(B) the individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Board”) together with those who become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of at least a majority of the directors then still in office who either were directors as of such date or whose recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(C) the consummation of a merger, consolidation, recapitalization, liquidation, sale or disposition by the Company of all or substantially all of the Company's assets, or reorganization of the Company, other than any such transaction which would (x) result in more than 50% of the total voting power and value represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the former shareholders of the Company and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or (B) of this paragraph.

“Permitted Persons” means (A) the Company; (B) any Related Party; or (C) any group (as defined in Rule 13b-3 under the Exchange Act) comprised of any or all of the foregoing.

“Related Party” means (A) a majority-owned subsidiary of the Company; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (C) any entity, 50% or more of the voting power of which is owned directly or indirectly by the shareholders of the Company in substantially the same proportion as their ownership of Voting Securities immediately prior to the transaction.

“Voting Security” means any security of the Company which carries the right to vote generally in the election of directors.

8.    “Redundancy” shall mean termination of employment by the Company due to its need to reduce the size of its workforce, including due to closure of a business or a particular workplace or change in business process.  Whether a termination of employment is due to a "redundancy" shall be determined by the Committee in its sole and absolute discretion, such determination being final and binding on all parties hereto and all persons claiming through, in the name of or on behalf of such parties.

(k)    Obligations as to Capital. The Company agrees that it will at all times maintain authorized and unissued share capital sufficient to fulfill all of its obligations under the SAR.

(l)     Transfer of Shares. The SAR, the Shares issued hereunder, or any interest in either, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable United States federal and state securities laws and the terms and conditions hereof.

(m)    Expenses of Issuance of Shares. The issuance of stock certificates upon the exercise of the SAR in whole or in part, shall be without charge to the SAR Holder. The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the exercise of the SAR in whole or in part or the resulting issuance of Shares hereunder.

(n)    Withholding. No later than the date of exercise of the SAR granted hereunder, the SAR Holder shall pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld upon the exercise of such SAR and the Company shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the SAR Holder, federal, state and local taxes of any kind required by law to be withheld upon the exercise of such SAR.

(o)    References. References herein to rights and obligations of the SAR Holder shall apply, where appropriate, to the SAR Holder’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this SAR.

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(p)    Notices. Any notice required or permitted to be given under this agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:    

If to the Company:

Arch Capital Group Ltd.:

Wessex House
45 Reid Street
Hamilton HM 12 Bermuda

Attn: Secretary

If to the SAR Holder:

The last address delivered to the Company by the SAR Holder in the manner set forth herein.

(q)    Governing Law. This agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to principles of conflict of laws thereof.

(r)    Entire Agreement. This agreement and the Plan constitute the entire agreement among the parties relating to the subject matter hereof, and any previous agreement or understanding among the parties with respect thereto is superseded by this agreement and the Plan.

(s)    Counterparts. This agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the undersigned have executed this agreement as of the Date of Grant.

ARCH CAPITAL GROUP LTD.
By:	/s/ Dawna Ferguson
	Name:	Dawna Ferguson
	Title:	Secretary
	/s/ Andrew Rippert
	Andrew Rippert

5

EX-10.12

Exhibit 10.12

ARCH CAPITAL GROUP LTD.Share Appreciation Right Agreement

AGREEMENT, made and entered into this 4th day of February, 2014, by and between Arch Capital Group Ltd. (the “Company”), a Bermuda company, and Andrew Rippert (the “SAR Holder”).

WHEREAS, the SAR Holder has been granted the following award under the Company’s 2012 Long Term Incentive and Share Award Plan (the “Plan”);

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for other good and valuable consideration, the Company and the SAR Holder agree as follows:

(a)Grant. Pursuant to the provisions of the Plan, the terms of which are incorporated herein by reference, the Company hereby grants to the SAR Holder a Share Appreciation Right (the “SAR”) with respect to 10,062 Shares. The SAR represents a right to be paid, upon exercise of the SAR, an amount measured by (x) the difference between the Fair Market Value per Share on the date of exercise and the exercise price per Share of the SAR, multiplied by (y) the number of Shares with respect to which the SAR is exercised, with such amount to be paid in the form of Shares valued at their Fair Market Value on the date of exercise. The SAR is granted as of February 4, 2014 (the “Date of Grant”), and such grant is subject to the terms and conditions herein and the terms and conditions of the Plan. In the event there is any conflict between the terms of the Plan and this Agreement, the terms of the Plan shall control. Capitalized terms used herein but not defined shall have the meanings given to them in the Plan.

(b)Exercise Price. The exercise price of the SAR shall be equal to $53.04 per Share.

(c)Status of Shares. Upon issue, the shares received upon exercise of the SAR shall rank equally in all respects with the other Shares.

(d)Term of SAR. The SAR may be exercised only during the period (the “SAR Period”) set forth in paragraph (f) below and shall remain exercisable until the tenth anniversary of the Date of Grant. Thereafter, the SAR Holder shall cease to have any rights in respect thereof. The right to exercise the SAR shall be subject to sooner termination as provided in paragraph (j) below.

(e)No Rights of Shareholder.The SAR Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or in equity.

(f)Exercisability. Except as otherwise set forth in paragraph (j) below, the SAR shall become exercisablein three equal annual installments on the first, second and third anniversaries of the Date of Grant, in each case subject to paragraph (j) below. Subject to paragraph (j) below, the SAR may be exercised at any time or from time to time during the SAR Period in regard to all or any portion of the SAR which is then exercisable, as may be adjusted pursuant to paragraph (g) below.

(g)Anti-dilution Adjustment. For the avoidance of doubt, the terms of Section 4(c) of the Plan, relating to anti-dilution adjustments, will apply to the SAR.

(h)Nontransferability. The SAR, or any interest therein, may not be assigned or otherwise transferred, disposed of or encumbered by the SAR Holder, other than by will or by the laws of descent and distribution. During the lifetime of the SAR Holder, the SAR shall be exercisable only by the SAR Holder or by his or her guardian or legal representative. Notwithstanding the foregoing, the SAR may be transferred by the SAR Holder to members of his or her “immediate family” or to a trust or other entity established for the exclusive benefit of solely one or more members of the SAR Holder’s “immediate family.” Any SAR held by the transferee will continue to be subject to the same terms and conditions that were applicable to the SAR immediately prior to the transfer, except that the SAR will be transferable by the transferee only by will or the laws of descent and distribution. For purposes hereof, “immediate family” means the SAR Holder’s children, stepchildren, grandchildren, parents, stepparents, grandparents, spouse, siblings (including half brother and sisters), in laws, and relationships arising because of legal adoption.

(i)Exercise of SAR. In order to exercise the SAR, the SAR Holder shall submit to the Company an instrument specifying the whole number of Shares in respect of which the SAR is being exercised. Shares will be issued accordingly by the Company within 30 days. The payment upon a SAR exercise shall be solely the number of whole Shares calculated in paragraph (a) above. Fractional Shares shall be rounded down to the nearest whole Share with no cash consideration being paid upon exercise. Anything to the contrary herein notwithstanding, the Company shall not be obligated to issue any Shares hereunder if the issuance of such Shares would violate the provision of any applicable law, in which event the Company shall, as soon as practicable, take whatever action it reasonably can so that such Shares may be issued without resulting in such violations of law.

(j)Termination of Service.

1.    In the event the SAR Holder ceases to be an employee of the Company due to the SAR Holder’s death or Permanent Disability (as defined in the Company’s Incentive Compensation Plan on the date hereof), the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder (or the SAR Holder’s Beneficiary or estate in the event of the SAR Holder’s death) for a period of three years following such termination of employment (but not beyond the SAR Period).

2.    In the event of termination of employment (other than by the Company for Cause, as such term is defined in the Company’s Incentive Compensation Plan on the date hereof, and other than as set forth in paragraphs (j)(1) or (j)(3) hereof) after the attainment of Retirement Age (as defined in the Company’s Incentive Compensation Plan on the date hereof), the SAR shall continue to become exercisable on the schedule set forth in paragraph (f) above so long as the SAR Holder does not engage in any activity in competition with any activity of the Company or any of its Subsidiaries other than serving on the board of directors (or similar governing body) of another company or as a consultant for no more than 26 weeks per calendar year (“Competitive Activity”) and shall continue to be exercisable by the SAR Holder (or the SAR Holder’s Beneficiary or estate in the event of the SAR Holder’s death) for the remainder of the SAR Period. In the event the SAR Holder engages in a Competitive Activity, (A) the SAR, to the extent then exercisable, may be exercised for 30 days following the date on which the SAR Holder engages in such Competitive Activity (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited.

3.    In the event the SAR Holder ceases to be an employee of the Company after a Change in Control (as defined below) due to termination by the Company not for Cause on or before the second anniversary of the occurrence of the Change in Control, the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period).

4.    In the event that the SAR Holder ceases to be an employee of the Company for any other reason, except due to a termination of the SAR Holder’s employment by the Company for Cause, (A) the SAR, to the extent then exercisable, may be exercised for 90 days following termination of employment (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited; provided that, in the event of a Redundancy (as defined below), the Committee, in its sole discretion, may, in accordance with its authority under the Plan, determine that the SAR, to the extent not exercisable, shall become exercisable and shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period).

5.    In the event of a termination of the SAR Holder’s employment for Cause, the SAR shall immediately cease to be exercisable and shall be immediately forfeited.

6.    For purposes of this SAR, service with any of the Company’s Subsidiaries (as defined in the Plan) shall be considered to be service with the Company.

7.    “Change in Control” shall mean:

(A) any person (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting Securities representing 50% or more of the total voting power or value of all the then outstanding Voting Securities; or

2

(B) the individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Board”) together with those who become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of at least a majority of the directors then still in office who either were directors as of such date or whose recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(C) the consummation of a merger, consolidation, recapitalization, liquidation, sale or disposition by the Company of all or substantially all of the Company's assets, or reorganization of the Company, other than any such transaction which would (x) result in more than 50% of the total voting power and value represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the former shareholders of the Company and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or (B) of this paragraph.

“Permitted Persons” means (A) the Company; (B) any Related Party; or (C) any group (as defined in Rule 13b-3 under the Exchange Act) comprised of any or all of the foregoing.

“Related Party” means (A) a majority-owned subsidiary of the Company; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (C) any entity, 50% or more of the voting power of which is owned directly or indirectly by the shareholders of the Company in substantially the same proportion as their ownership of Voting Securities immediately prior to the transaction.

“Voting Security” means any security of the Company which carries the right to vote generally in the election of directors.

8.    “Redundancy” shall mean termination of employment by the Company due to its need to reduce the size of its workforce, including due to closure of a business or a particular workplace or change in business process.  Whether a termination of employment is due to a "redundancy" shall be determined by the Committee in its sole and absolute discretion, such determination being final and binding on all parties hereto and all persons claiming through, in the name of or on behalf of such parties. 

(k)     Obligations as to Capital. The Company agrees that it will at all times maintain authorized and unissued share capital sufficient to fulfill all of its obligations under the SAR.

(l)     Transfer of Shares. The SAR, the Shares issued hereunder, or any interest in either, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable United States federal and state securities laws and the terms and conditions hereof.

(m)    Expenses of Issuance of Shares. The issuance of stock certificates upon the exercise of the SAR in whole or in part, shall be without charge to the SAR Holder. The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the exercise of the SAR in whole or in part or the resulting issuance of Shares hereunder.

(n)    Withholding. No later than the date of exercise of the SAR granted hereunder, the SAR Holder shall pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld upon the exercise of such SAR and the Company shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the SAR Holder, federal, state and local taxes of any kind required by law to be withheld upon the exercise of such SAR.

(o)    References. References herein to rights and obligations of the SAR Holder shall apply, where appropriate, to the SAR Holder’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this SAR.

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(p)    Notices. Any notice required or permitted to be given under this agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Arch Capital Group Ltd.:

Wessex House
45 Reid Street
Hamilton HM 12 Bermuda
Attn: Secretary

If to the SAR Holder:

The last address delivered to the Company by the SAR Holder in the manner set forth herein.

(q)    Governing Law.This agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to principles of conflict of laws thereof.

(r)    Entire Agreement. This agreement and the Plan constitute the entire agreement among the parties relating to the subject matter hereof, and any previous agreement or understanding among the parties with respect thereto is superseded by this agreement and the Plan.

(s)    Counterparts. This agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

4

IN WITNESS WHEREOF, the undersigned have executed this agreement as of the Date of Grant.

ARCH CAPITAL GROUP LTD.
By:	/s/ Dawna Ferguson
	Name:	Dawna Ferguson
	Title:	Secretary
	/s/ Andrew Rippert
	Andrew Rippert

5

EX-10.13

Exhibit 10.13

ARCH CAPITAL GROUP LTD.Share Appreciation Right Agreement

AGREEMENT, made and entered into this 13th day of May, 2014, by and between Arch Capital Group Ltd. (the “Company”), a Bermuda company, and Maamoun Rajeh (the “SAR Holder”).

WHEREAS, the SAR Holder has been granted the following award under the Company’s 2012 Long Term Incentive and Share Award Plan (the “Plan”);

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for other good and valuable consideration, the Company and the SAR Holder agree as follows:

(a)Grant. Pursuant to the provisions of the Plan, the terms of which are incorporated herein by reference, the Company hereby grants to the SAR Holder a Share Appreciation Right (the “SAR”) with respect to 6,500 Shares. The SAR represents a right to be paid, upon exercise of the SAR, an amount measured by (x) the difference between the Fair Market Value per Share on the date of exercise and the exercise price per Share of the SAR, multiplied by (y) the number of Shares with respect to which the SAR is exercised, with such amount to be paid in the form of Shares valued at their Fair Market Value on the date of exercise. The SAR is granted as of May 13, 2014 (the “Date of Grant”), and such grant is subject to the terms and conditions herein and the terms and conditions of the Plan. In the event there is any conflict between the terms of the Plan and this Agreement, the terms of the Plan shall control. Capitalized terms used herein but not defined shall have the meanings given to them in the Plan.

(b)Exercise Price. The exercise price of the SAR shall be equal to $57.27 per Share.

(c)Status of Shares. Upon issue, the shares received upon exercise of the SAR shall rank equally in all respects with the other Shares.

(d)Term of SAR. The SAR may be exercised only during the period (the “SAR Period”) set forth in paragraph (f) below and shall remain exercisable until the tenth anniversary of the Date of Grant. Thereafter, the SAR Holder shall cease to have any rights in respect thereof. The right to exercise the SAR shall be subject to sooner termination as provided in paragraph (j) below.

(e)No Rights of Shareholder. The SAR Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or in equity. The SAR Holder acknowledges that there is no legal obligation of the Company or any of its subsidiaries to offer a participation in the Plan and that the offer, even if made again in this form or in similar form in the future, will not create any obligation of the Company or any of its subsidiaries to make any such offer.

(f)Exercisability. Except as otherwise set forth in paragraph (j) below, the SAR shall become exercisablein three equal annual installments on the first, second and third anniversaries of the Date of Grant, in each case subject to paragraph (j) below. Subject to paragraph (j) below, the SAR may be exercised at any time or from time to time during the SAR Period in regard to all or any portion of the SAR which is then exercisable, as may be adjusted pursuant to paragraph (g) below.

(g)Anti-dilution Adjustment. For the avoidance of doubt, the terms of Section 4(c) of the Plan, relating to anti-dilution adjustments, will apply to the SAR.

(h)Nontransferability. The SAR, or any interest therein, may not be assigned or otherwise transferred, disposed of or encumbered by the SAR Holder, other than by will or by the laws of descent and distribution. During the lifetime of the SAR Holder, the SAR shall be exercisable only by the SAR Holder or by his or her guardian or legal representative. Notwithstanding the foregoing, the SAR may be transferred by the SAR Holder to members of his or her “immediate family” or to a trust or other entity established for the exclusive benefit of solely one or more members of the SAR Holder’s “immediate family.” Any SAR held by the transferee will continue to be subject to the same terms and conditions that were applicable to the SAR immediately prior to the transfer, except that the SAR will be transferable by the transferee only by will or the laws of descent and distribution. For purposes hereof, “immediate family” means the SAR Holder’s children, stepchildren, grandchildren, parents, stepparents, grandparents, spouse, siblings (including half brother and sisters), in laws, and relationships arising because of legal adoption.

(i)Exercise of SAR. In order to exercise the SAR, the SAR Holder shall submit to the Company an instrument specifying the whole number of Shares in respect of which the SAR is being exercised. Shares will be issued accordingly by the Company within 30 days. The payment upon a SAR exercise shall be solely the number of whole Shares calculated in paragraph (a) above. Fractional Shares shall be rounded down to the nearest whole Share with no cash consideration being paid upon exercise. Anything to the contrary herein notwithstanding, the Company shall not be obligated to issue any Shares hereunder if the issuance of such Shares would violate the provision of any applicable law, in which event the Company shall, as soon as practicable, take whatever action it reasonably can so that such Shares may be issued without resulting in such violations of law.

(j)Termination of Service.

1.In the event the SAR Holder ceases to be an employee of the Company due to the SAR Holder’s death or Permanent Disability (as defined in the Company’s Incentive Compensation Plan on the date hereof), the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder (or the SAR Holder’s Beneficiary or estate in the event of the SAR Holder’s death) for a period of three years following such termination of employment (but not beyond the SAR Period).

2.    In the event of termination of employment (other than by the Company for Cause, as such term is defined in the Company’s Incentive Compensation Plan on the date hereof, and other than as set forth in paragraphs (j)(1) or (j)(3) hereof) after the attainment of Retirement Age (as defined in the Company’s Incentive Compensation Plan on the date hereof), the SAR shall continue to become exercisable on the schedule set forth in paragraph (f) above so long as the SAR Holder does not engage in any activity in competition with any activity of the Company or any of its Subsidiaries other than serving on the board of directors (or similar governing body) of another company or as a consultant for no more than 26 weeks per calendar year (“Competitive Activity”) and shall continue to be exercisable by the SAR Holder (or the SAR Holder’s Beneficiary or estate in the event of the SAR Holder’s death) for the remainder of the SAR Period. In the event the SAR Holder engages in a Competitive Activity, (A) the SAR, to the extent then exercisable, may be exercised for 30 days following the date on which the SAR Holder engages in such Competitive Activity (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited.

3.    In the event the SAR Holder ceases to be an employee of the Company after a Change in Control (as defined below) due to termination (A) by the Company not for Cause or (B) by the SAR Holder for Good Reason (as defined below), in either case, on or before the second anniversary of the occurrence of the Change in Control, the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period). “Good Reason” means without the SAR Holder’s written consent, (a) the material diminution of any material duties or responsibilities of the SAR Holder without the same being corrected within thirty (30) days after being given written notice thereof; or (b) a material reduction in the SAR Holder’s Base Salary without the same being corrected within thirty (30) days after being given written notice thereof.

4.    In the event that the SAR Holder ceases to be an employee of the Company for any other reason, except due to a termination of the SAR Holder’s employment by the Company for Cause, (A) the SAR, to the extent then exercisable, may be exercised for 90 days following termination of employment (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited; provided that, in the event of a Redundancy (as defined below), the Committee, in its sole discretion, may, in accordance with its authority under the Plan, determine that the SAR, to the extent not exercisable, shall become exercisable and shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period).

5.    In the event of a termination of the SAR Holder’s employment for Cause, the SAR shall immediately cease to be exercisable and shall be immediately forfeited.

6.    For purposes of this SAR, service with any of the Company’s Subsidiaries (as defined in the Plan) shall be considered to be service with the Company.

7.    “Change in Control” shall mean:

(A) any person (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting Securities

2

representing 50% or more of the total voting power or value of all the then outstanding Voting Securities; or

(B) the individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Board”) together with those who become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of at least a majority of the directors then still in office who either were directors as of such date or whose recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(C) the consummation of a merger, consolidation, recapitalization, liquidation, sale or disposition by the Company of all or substantially all of the Company's assets, or reorganization of the Company, other than any such transaction which would (x) result in more than 50% of the total voting power and value represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the former shareholders of the Company and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or (B) of this paragraph.

“Permitted Persons” means (A) the Company; (B) any Related Party; or (C) any group (as defined in Rule 13b-3 under the Exchange Act) comprised of any or all of the foregoing.

“Related Party” means (A) a majority-owned subsidiary of the Company; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (C) any entity, 50% or more of the voting power of which is owned directly or indirectly by the shareholders of the Company in substantially the same proportion as their ownership of Voting Securities immediately prior to the transaction.

“Voting Security” means any security of the Company which carries the right to vote generally in the election of directors.

8.    “Redundancy” shall mean termination of employment by the Company due to its need to reduce the size of its workforce, including due to closure of a business or a particular workplace or change in business process.  Whether a termination of employment is due to a "redundancy" shall be determined by the Committee in its sole and absolute discretion, such determination being final and binding on all parties hereto and all persons claiming through, in the name of or on behalf of such parties.

(k)     Obligations as to Capital. The Company agrees that it will at all times maintain authorized and unissued share capital sufficient to fulfill all of its obligations under the SAR.

(l)     Transfer of Shares. The SAR, the Shares issued hereunder, or any interest in either, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable United States federal and state securities laws and the terms and conditions hereof.

(m)    Expenses of Issuance of Shares. The issuance of stock certificates upon the exercise of the SAR in whole or in part, shall be without charge to the SAR Holder. The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the exercise of the SAR in whole or in part or the resulting issuance of Shares hereunder.

(n)    Withholding. No later than the date of exercise of the SAR granted hereunder, the SAR Holder shall pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld upon the exercise of such SAR and the Company shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the SAR Holder, federal, state and local taxes of any kind required by law to be withheld upon the exercise of such SAR.

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(o)    References. References herein to rights and obligations of the SAR Holder shall apply, where appropriate, to the SAR Holder’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this SAR.

(p)    Notices. Any notice required or permitted to be given under this agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Arch Capital Group Ltd.:

Waterloo House
100 Pitts Bay Road
Pembroke HM 08 Bermuda

Attn: Secretary

If to the SAR Holder:

The last address delivered to the Company by the SAR Holder in the manner set forth herein.

(q)    Governing Law. This agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to principles of conflict of laws thereof.

(r)    Entire Agreement. This agreement and the Plan constitute the entire agreement among the parties relating to the subject matter hereof, and any previous agreement or understanding among the parties with respect thereto is superseded by this agreement and the Plan.

(s)    Counterparts. This agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the undersigned have executed this agreement as of the Date of Grant.

ARCH CAPITAL GROUP LTD.
By:	/s/ Dawna Ferguson
	Name:	Dawna Ferguson
	Title:	Secretary
	/s/ Maamoun Rajeh
	Maamoun Rajeh

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EX-10.14

Exhibit 10.14

ARCH CAPITAL GROUP LTD.Share Appreciation Right Agreement

AGREEMENT, made and entered into this 13th day of May, 2014, by and between Arch Capital Group Ltd. (the “Company”), a Bermuda company, and Andrew Rippert (the “SAR Holder”).

WHEREAS, the SAR Holder has been granted the following award under the Company’s 2012 Long Term Incentive and Share Award Plan (the “Plan”);

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for other good and valuable consideration, the Company and the SAR Holder agree as follows:

(a)Grant. Pursuant to the provisions of the Plan, the terms of which are incorporated herein by reference, the Company hereby grants to the SAR Holder a Share Appreciation Right (the “SAR”) with respect to 4,100 Shares. The SAR represents a right to be paid, upon exercise of the SAR, an amount measured by (x) the difference between the Fair Market Value per Share on the date of exercise and the exercise price per Share of the SAR, multiplied by (y) the number of Shares with respect to which the SAR is exercised, with such amount to be paid in the form of Shares valued at their Fair Market Value on the date of exercise. The SAR is granted as of May 13, 2014 (the “Date of Grant”), and such grant is subject to the terms and conditions herein and the terms and conditions of the Plan. In the event there is any conflict between the terms of the Plan and this Agreement, the terms of the Plan shall control. Capitalized terms used herein but not defined shall have the meanings given to them in the Plan.

(b)Exercise Price. The exercise price of the SAR shall be equal to $57.27 per Share.

(c)Status of Shares. Upon issue, the shares received upon exercise of the SAR shall rank equally in all respects with the other Shares.

(d)Term of SAR. The SAR may be exercised only during the period (the “SAR Period”) set forth in paragraph (f) below and shall remain exercisable until the tenth anniversary of the Date of Grant. Thereafter, the SAR Holder shall cease to have any rights in respect thereof. The right to exercise the SAR shall be subject to sooner termination as provided in paragraph (j) below.

(e)No Rights of Shareholder. The SAR Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or in equity.

(f)Exercisability. Except as otherwise set forth in paragraph (j) below, the SAR shall become exercisablein three equal annual installments on the first, second and third anniversaries of the Date of Grant, in each case subject to paragraph (j) below. Subject to paragraph (j) below, the SAR may be exercised at any time or from time to time during the SAR Period in regard to all or any portion of the SAR which is then exercisable, as may be adjusted pursuant to paragraph (g) below.

(g)Anti-dilution Adjustment. For the avoidance of doubt, the terms of Section 4(c) of the Plan, relating to anti-dilution adjustments, will apply to the SAR.

(h)Nontransferability. The SAR, or any interest therein, may not be assigned or otherwise transferred, disposed of or encumbered by the SAR Holder, other than by will or by the laws of descent and distribution. During the lifetime of the SAR Holder, the SAR shall be exercisable only by the SAR Holder or by his or her guardian or legal representative. Notwithstanding the foregoing, the SAR may be transferred by the SAR Holder to members of his or her “immediate family” or to a trust or other entity established for the exclusive benefit of solely one or more members of the SAR Holder’s “immediate family.” Any SAR held by the transferee will continue to be subject to the same terms and conditions that were applicable to the SAR immediately prior to the transfer, except that the SAR will be transferable by the transferee only by will or the laws of descent and distribution. For purposes hereof, “immediate family” means the SAR Holder’s children, stepchildren, grandchildren, parents, stepparents, grandparents, spouse, siblings (including half brother and sisters), in laws, and relationships arising because of legal adoption.

(i)Exercise of SAR. In order to exercise the SAR, the SAR Holder shall submit to the Company an instrument specifying the whole number of Shares in respect of which the SAR is being exercised. Shares will be issued accordingly by the Company within 30 days. The payment upon a SAR exercise shall be solely the number of whole Shares calculated in paragraph (a) above. Fractional Shares shall be rounded down to the nearest whole Share with no cash consideration being paid upon exercise. Anything to the contrary herein notwithstanding, the Company shall not be obligated to issue any Shares hereunder if the issuance of such Shares would violate the provision of any applicable law, in which event the Company shall, as soon as practicable, take whatever action it reasonably can so that such Shares may be issued without resulting in such violations of law.

(j)Termination of Service.

1.In the event the SAR Holder ceases to be an employee of the Company due to the SAR Holder’s death or Permanent Disability (as defined in the Company’s Incentive Compensation Plan on the date hereof), the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder (or the SAR Holder’s Beneficiary or estate in the event of the SAR Holder’s death) for a period of three years following such termination of employment (but not beyond the SAR Period).

2.    In the event of termination of employment (other than by the Company for Cause, as such term is defined in the Company’s Incentive Compensation Plan on the date hereof, and other than as set forth in paragraphs (j)(1) or (j)(3) hereof) after the attainment of Retirement Age (as defined in the Company’s Incentive Compensation Plan on the date hereof), the SAR shall continue to become exercisable on the schedule set forth in paragraph (f) above so long as the SAR Holder does not engage in any activity in competition with any activity of the Company or any of its Subsidiaries other than serving on the board of directors (or similar governing body) of another company or as a consultant for no more than 26 weeks per calendar year (“Competitive Activity”) and shall continue to be exercisable by the SAR Holder (or the SAR Holder’s Beneficiary or estate in the event of the SAR Holder’s death) for the remainder of the SAR Period. In the event the SAR Holder engages in a Competitive Activity, (A) the SAR, to the extent then exercisable, may be exercised for 30 days following the date on which the SAR Holder engages in such Competitive Activity (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited.

3.    In the event the SAR Holder ceases to be an employee of the Company after a Change in Control (as defined below) due to termination by the Company not for Cause on or before the second anniversary of the occurrence of the Change in Control, the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period).

4.    In the event that the SAR Holder ceases to be an employee of the Company for any other reason, except due to a termination of the SAR Holder’s employment by the Company for Cause, (A) the SAR, to the extent then exercisable, may be exercised for 90 days following termination of employment (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited; provided that, in the event of a Redundancy (as defined below), the Committee, in its sole discretion, may, in accordance with its authority under the Plan, determine that the SAR, to the extent not exercisable, shall become exercisable and shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period).

5.    In the event of a termination of the SAR Holder’s employment for Cause, the SAR shall immediately cease to be exercisable and shall be immediately forfeited.

6.    For purposes of this SAR, service with any of the Company’s Subsidiaries (as defined in the Plan) shall be considered to be service with the Company.

7.    “Change in Control” shall mean:

(A) any person (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting Securities representing 50% or more of the total voting power or value of all the then outstanding Voting Securities; or

(B) the individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Board”) together with those who become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of

2

at least a majority of the directors then still in office who either were directors as of such date or whose recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(C) the consummation of a merger, consolidation, recapitalization, liquidation, sale or disposition by the Company of all or substantially all of the Company's assets, or reorganization of the Company, other than any such transaction which would (x) result in more than 50% of the total voting power and value represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the former shareholders of the Company and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or (B) of this paragraph.

“Permitted Persons” means (A) the Company; (B) any Related Party; or (C) any group (as defined in Rule 13b-3 under the Exchange Act) comprised of any or all of the foregoing.

“Related Party” means (A) a majority-owned subsidiary of the Company; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (C) any entity, 50% or more of the voting power of which is owned directly or indirectly by the shareholders of the Company in substantially the same proportion as their ownership of Voting Securities immediately prior to the transaction.

“Voting Security” means any security of the Company which carries the right to vote generally in the election of directors.

8.    “Redundancy” shall mean termination of employment by the Company due to its need to reduce the size of its workforce, including due to closure of a business or a particular workplace or change in business process. Whether a termination of employment is due to a "redundancy" shall be determined by the Committee in its sole and absolute discretion, such determination being final and binding on all parties hereto and all persons claiming through, in the name of or on behalf of such parties.

(k)     Obligations as to Capital. The Company agrees that it will at all times maintain authorized and unissued share capital sufficient to fulfill all of its obligations under the SAR.

(l)     Transfer of Shares. The SAR, the Shares issued hereunder, or any interest in either, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable United States federal and state securities laws and the terms and conditions hereof.

(m)    Expenses of Issuance of Shares. The issuance of stock certificates upon the exercise of the SAR in whole or in part, shall be without charge to the SAR Holder. The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the exercise of the SAR in whole or in part or the resulting issuance of Shares hereunder.

(n)    Withholding. No later than the date of exercise of the SAR granted hereunder, the SAR Holder shall pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld upon the exercise of such SAR and the Company shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the SAR Holder, federal, state and local taxes of any kind required by law to be withheld upon the exercise of such SAR.

(o)    References. References herein to rights and obligations of the SAR Holder shall apply, where appropriate, to the SAR Holder’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this SAR.

(p)    Notices. Any notice required or permitted to be given under this agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

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If to the Company:

Arch Capital Group Ltd.:

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

Attn: Secretary

If to the SAR Holder:

The last address delivered to the Company by the SAR Holder in the manner set forth herein.

(q)    Governing Law. This agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to principles of conflict of laws thereof.

(r)    Entire Agreement. This agreement and the Plan constitute the entire agreement among the parties relating to the subject matter hereof, and any previous agreement or understanding among the parties with respect thereto is superseded by this agreement and the Plan.

(s)    Counterparts. This agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the undersigned have executed this agreement as of the Date of Grant.

ARCH CAPITAL GROUP LTD.
By:	/s/ Dawna Ferguson
	Name:	Dawna Ferguson
	Title:	Secretary
	/s/ Andrew Rippert
	Andrew Rippert

5

EX-10.15

Exhibit 10.15

ARCH CAPITAL GROUP LTD.Share Appreciation Right Agreement

AGREEMENT, made and entered into this 1st day of July, 2014, by and between Arch Capital Group Ltd. (the “Company”), a Bermuda company, and Maamoun Rajeh (the “SAR Holder”).

WHEREAS, the SAR Holder has been granted the following award under the Company’s 2012 Long Term Incentive and Share Award Plan (the “Plan”);

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for other good and valuable consideration, the Company and the SAR Holder agree as follows:

(a)Grant. Pursuant to the provisions of the Plan, the terms of which are incorporated herein by reference, the Company hereby grants to the SAR Holder a Share Appreciation Right (the “SAR”) with respect to 10,762 Shares. The SAR represents a right to be paid, upon exercise of the SAR, an amount measured by (x) the difference between the Fair Market Value per Share on the date of exercise and the exercise price per Share of the SAR, multiplied by (y) the number of Shares with respect to which the SAR is exercised, with such amount to be paid in the form of Shares valued at their Fair Market Value on the date of exercise. The SAR is granted as of May 13, 2014 (the “Date of Grant”), and such grant is subject to the terms and conditions herein and the terms and conditions of the Plan. In the event there is any conflict between the terms of the Plan and this Agreement, the terms of the Plan shall control. Capitalized terms used herein but not defined shall have the meanings given to them in the Plan.

(b)Exercise Price. The exercise price of the SAR shall be equal to $58.00 per Share.

(c)Status of Shares. Upon issue, the shares received upon exercise of the SAR shall rank equally in all respects with the other Shares.

(d)Term of SAR. The SAR may be exercised only during the period (the “SAR Period”) set forth in paragraph (f) below and shall remain exercisable until the tenth anniversary of the Date of Grant. Thereafter, the SAR Holder shall cease to have any rights in respect thereof. The right to exercise the SAR shall be subject to sooner termination as provided in paragraph (j) below.

(e)No Rights of Shareholder. The SAR Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or in equity.

(f)Exercisability. Except as otherwise set forth in paragraph (j) below, the SAR shall become exercisablein three equal annual installments on the first, second and third anniversaries of the Date of Grant, in each case subject to paragraph (j) below. Subject to paragraph (j) below, the SAR may be exercised at any time or from time to time during the SAR Period in regard to all or any portion of the SAR which is then exercisable, as may be adjusted pursuant to paragraph (g) below.

(g)Anti-dilution Adjustment. For the avoidance of doubt, the terms of Section 4(c) of the Plan, relating to anti-dilution adjustments, will apply to the SAR.

(h)Nontransferability. The SAR, or any interest therein, may not be assigned or otherwise transferred, disposed of or encumbered by the SAR Holder, other than by will or by the laws of descent and distribution. During the lifetime of the SAR Holder, the SAR shall be exercisable only by the SAR Holder or by his or her guardian or legal representative. Notwithstanding the foregoing, the SAR may be transferred by the SAR Holder to members of his or her “immediate family” or to a trust or other entity established for the exclusive benefit of solely one or more members of the SAR Holder’s “immediate family.” Any SAR held by the transferee will continue to be subject to the same terms and conditions that were applicable to the SAR immediately prior to the transfer, except that the SAR will be transferable by the transferee only by will or the laws of descent and distribution. For purposes hereof, “immediate family” means the SAR Holder’s children, stepchildren, grandchildren, parents, stepparents, grandparents, spouse, siblings (including half brother and sisters), in laws, and relationships arising because of legal adoption.

(i)Exercise of SAR. In order to exercise the SAR, the SAR Holder shall submit to the Company an instrument specifying the whole number of Shares in respect of which the SAR is being exercised. Shares will be issued accordingly by the Company within 30 days. The payment upon a SAR exercise shall be solely the number of whole Shares calculated in paragraph (a) above. Fractional Shares shall be rounded down to the nearest whole Share with no cash consideration being paid upon exercise. Anything to the contrary herein notwithstanding, the Company shall not be obligated to issue any Shares hereunder if the issuance of such Shares would violate the provision of any applicable law, in which event the Company shall, as soon as practicable, take whatever action it reasonably can so that such Shares may be issued without resulting in such violations of law.

(j)Termination of Service.

1.In the event the SAR Holder ceases to be an employee of the Company due to the SAR Holder’s death or Permanent Disability (as defined in the Company’s Incentive Compensation Plan on the date hereof), the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder (or the SAR Holder’s Beneficiary or estate in the event of the SAR Holder’s death) for a period of three years following such termination of employment (but not beyond the SAR Period).

2.    In the event of termination of employment (other than by the Company for Cause, as such term is defined in the Company’s Incentive Compensation Plan on the date hereof, and other than as set forth in paragraphs (j)(1) or (j)(3) hereof) after the attainment of Retirement Age (as defined in the Company’s Incentive Compensation Plan on the date hereof), the SAR shall continue to become exercisable on the schedule set forth in paragraph (f) above so long as the SAR Holder does not engage in any activity in competition with any activity of the Company or any of its Subsidiaries other than serving on the board of directors (or similar governing body) of another company or as a consultant for no more than 26 weeks per calendar year (“Competitive Activity”) and shall continue to be exercisable by the SAR Holder (or the SAR Holder’s Beneficiary or estate in the event of the SAR Holder’s death) for the remainder of the SAR Period. In the event the SAR Holder engages in a Competitive Activity, (A) the SAR, to the extent then exercisable, may be exercised for 30 days following the date on which the SAR Holder engages in such Competitive Activity (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited.

3.    In the event the SAR Holder ceases to be an employee of the Company after a Change in Control (as defined below) due to termination (A) by the Company not for Cause or (B) by the SAR Holder for Good Reason (as defined below), in either case, on or before the second anniversary of the occurrence of the Change in Control, the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period). “Good Reason” means without the SAR Holder’s written consent, (a) the material diminution of any material duties or responsibilities of the SAR Holder without the same being corrected within thirty (30) days after being given written notice thereof; or (b) a material reduction in the SAR Holder’s Base Salary without the same being corrected within thirty (30) days after being given written notice thereof.

4.    In the event that the SAR Holder ceases to be an employee of the Company for any other reason, except due to a termination of the SAR Holder’s employment by the Company for Cause, (A) the SAR, to the extent then exercisable, may be exercised for 90 days following termination of employment (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited; provided that, in the event of a Redundancy (as defined below), the Committee, in its sole discretion, may, in accordance with its authority under the Plan, determine that the SAR, to the extent not exercisable, shall become exercisable and shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period).

5.    In the event of a termination of the SAR Holder’s employment for Cause, the SAR shall immediately cease to be exercisable and shall be immediately forfeited.

6.    For purposes of this SAR, service with any of the Company’s Subsidiaries (as defined in the Plan) shall be considered to be service with the Company.

7.    “Change in Control” shall mean:

(A) any person (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting Securities

2

representing 50% or more of the total voting power or value of all the then outstanding Voting Securities; or

(B) the individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Board”) together with those who become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of at least a majority of the directors then still in office who either were directors as of such date or whose recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(C) the consummation of a merger, consolidation, recapitalization, liquidation, sale or disposition by the Company of all or substantially all of the Company's assets, or reorganization of the Company, other than any such transaction which would (x) result in more than 50% of the total voting power and value represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the former shareholders of the Company and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or (B) of this paragraph.

“Permitted Persons” means (A) the Company; (B) any Related Party; or (C) any group (as defined in Rule 13b-3 under the Exchange Act) comprised of any or all of the foregoing.

“Related Party” means (A) a majority-owned subsidiary of the Company; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (C) any entity, 50% or more of the voting power of which is owned directly or indirectly by the shareholders of the Company in substantially the same proportion as their ownership of Voting Securities immediately prior to the transaction.

“Voting Security” means any security of the Company which carries the right to vote generally in the election of directors.

8.    “Redundancy” shall mean termination of employment by the Company due to its need to reduce the size of its workforce, including due to closure of a business or a particular workplace or change in business process.  Whether a termination of employment is due to a "redundancy" shall be determined by the Committee in its sole and absolute discretion, such determination being final and binding on all parties hereto and all persons claiming through, in the name of or on behalf of such parties.

(k)     Obligations as to Capital. The Company agrees that it will at all times maintain authorized and unissued share capital sufficient to fulfill all of its obligations under the SAR.

(l)     Transfer of Shares. The SAR, the Shares issued hereunder, or any interest in either, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable United States federal and state securities laws and the terms and conditions hereof.

(m)    Expenses of Issuance of Shares. The issuance of stock certificates upon the exercise of the SAR in whole or in part, shall be without charge to the SAR Holder. The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the exercise of the SAR in whole or in part or the resulting issuance of Shares hereunder.

(n)    Withholding. No later than the date of exercise of the SAR granted hereunder, the SAR Holder shall pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld upon the exercise of such SAR and the Company shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the SAR Holder, federal, state and local taxes of any kind required by law to be withheld upon the exercise of such SAR.

3

(o)    References. References herein to rights and obligations of the SAR Holder shall apply, where appropriate, to the SAR Holder’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this SAR.

(p)    Notices. Any notice required or permitted to be given under this agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Arch Capital Group Ltd.:

Waterloo House
100 Pitts Bay Road
Pembroke HM 08 Bermuda
Attn: Secretary

If to the SAR Holder:

The last address delivered to the Company by the SAR Holder in the manner set forth herein.

(q)    Governing Law. This agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to principles of conflict of laws thereof.

(r)    Entire Agreement. This agreement and the Plan constitute the entire agreement among the parties relating to the subject matter hereof, and any previous agreement or understanding among the parties with respect thereto is superseded by this agreement and the Plan.

(s)    Counterparts. This agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the undersigned have executed this agreement as of the Date of Grant.

ARCH CAPITAL GROUP LTD.
By:	/s/ Dawna Ferguson
	Name:	Dawna Ferguson
	Title:	Secretary
	/s/ Maamoun Rajeh
	Maamoun Rajeh

5

EX-10.16

Exhibit 10.16

ARCH CAPITAL GROUP LTD.
Restricted Share Agreement

THIS AGREEMENT, dated as of November 6, 2014, between Arch Capital Group Ltd. (the “Company”), a Bermuda company, and Nicolas Papadopoulo (the “Employee”).

WHEREAS, the Employee has been granted the following award under the Company’s 2012 Long Term Incentive and Share Award Plan (the “Plan”);

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the parties hereto agree as follows.

1.    Award of Shares. Pursuant to the provisions of the Plan, the terms of which are incorporated herein by reference, the Employee is hereby awarded 17,417 Restricted Shares (the “Award”), subject to the terms and conditions herein set forth. Capitalized terms used herein and not defined shall have the meanings set forth in the Plan. In the event of any conflict between this Agreement and the Plan, the Plan shall control.

2.    Terms and Conditions. It is understood and agreed that the Award of Restricted Shares evidenced hereby is subject to the following terms and conditions:

(a)    Vesting of Award. Subject to Section 2(b) below and the other terms and conditions of this Agreement, this Award shall become vested in three equal annual installments on the first, second and third anniversaries of the date hereof. Unless otherwise provided by the Company, all dividends and other amounts receivable in connection with any adjustments to the Shares under Section 4(c) of the Plan shall be subject to the vesting schedule in this Section 2(a).

(b)    Termination of Service; Forfeiture of Unvested Shares.

(i)    In the event the Employee ceases to be an employee of the Company prior to the date the Restricted Shares otherwise become vested due to his or her death or Permanent Disability (as defined in the Company’s Incentive Compensation Plan on the date hereof), the Restricted Shares shall become immediately vested in full upon such termination of employment.

(ii)    In the event of termination of employment (other than by the Company for Cause, as such term is defined in the Company’s Incentive Compensation Plan on the date hereof, and other than as set forth in Section 2(b)(i) or (iii) hereof) after the attainment of Retirement Age (as defined in the Company’s Incentive Compensation Plan on the date hereof), the Restricted Shares shall continue to vest on the schedule set forth in Section 2(a) above so long as the Employee does not engage in any activity in competition with any activity of the Company or any of its Subsidiaries other than serving on the board of directors (or similar governing body) of another company or as a consultant for no more than 26 weeks per calendar year (“Competitive Activity”). In the event the Employee engages in a Competitive Activity, any unvested Restricted Shares shall be forfeited by the Employee and become the property of the Company.

(iii)    In the event the Employee ceases to be an employee of the Company after a Change in Control (as defined below) due to termination (A) by the Company not for Cause or (B) by the Employee for Good Reason (as defined in the Employment Agreement dated as of November 17, 2005, as amended, between the Employee and Arch Reinsurance Ltd.), in either case, on or before the second anniversary of the occurrence of the Change in Control, the Restricted Shares, to the extent not already vested, shall become immediately vested in full upon such termination of employment.

(iv)    If the Employee ceases to be an Employee of the Company for any other reason prior to the date the Restricted Shares become vested, the Award shall be forfeited by the Employee and become the property of the Company; provided that, in the event of a Redundancy (as defined below), the Committee, in its sole discretion, may, in accordance with its authority under the Plan, determine that the Restricted Shares, to the extent not vested, shall become vested upon such termination of employment.

(v)    For purposes of this Agreement, service with any of the Company’s Subsidiaries (as defined in the Plan) shall be considered to be service with the Company.

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(vi)    “Change in Control” shall mean:

(A) any person (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting Securities representing 50% or more of the total voting power or value of all the then outstanding Voting Securities; or

(B) the individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Board”) together with those who become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of at least a majority of the directors then still in office who either were directors as of such date or whose recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(C) the consummation of a merger, consolidation, recapitalization, liquidation, sale or disposition by the Company of all or substantially all of the Company's assets, or reorganization of the Company, other than any such transaction which would (x) result in more than 50% of the total voting power and value represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the former shareholders of the Company and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or (B) of this paragraph.

“Permitted Persons” means (A) the Company; (B) any Related Party; or (C) any group (as defined in Rule 13b-3 under the Exchange Act) comprised of any or all of the foregoing.

“Related Party” means (A) a majority-owned subsidiary of the Company; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (C) any entity, 50% or more of the voting power of which is owned directly or indirectly by the shareholders of the Company in substantially the same proportion as their ownership of Voting Securities immediately prior to the transaction.

“Voting Security” means any security of the Company which carries the right to vote generally in the election of directors.

(vii)    “Redundancy” shall mean termination of employment by the Company due to its need to reduce the size of its workforce, including due to closure of a business or a particular workplace or change in business process.  Whether a termination of employment is due to a "redundancy" shall be determined by the Committee in its sole and absolute discretion, such determination being final and binding on all parties hereto and all persons claiming through, in the name of or on behalf of such parties.

(c)    Certificates. Each certificate issued in respect of Restricted Shares awarded hereunder shall be issued in book entry format with the Company’s transfer agent and shall bear a legend disclosing the restrictions on transferability imposed on such Restricted Shares by this Agreement (the “Restrictive Legend”). Upon the vesting of Restricted Shares pursuant to Section 2 hereof and the satisfaction of any withholding tax liability pursuant to Section 5 hereof, such vested Shares, not bearing the Restrictive Legend, shall be delivered to the Employee.

(d)    Rights of a Stockholder. Prior to the time a Restricted Share is fully vested hereunder, the Employee shall have no right to transfer, pledge, hypothecate or otherwise encumber such Restricted Share. During such period, the Employee shall have all other rights of a stockholder, including, but not limited to, the right to vote and to receive dividends (subject to Section 2(a) hereof) at the time paid on such Restricted Shares.

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(e)    No Right to Continued Employment. This Award shall not confer upon the Employee any right with respect to continuance of employment by the Company nor shall this Award interfere with the right of the Company to terminate the Employee’s employment at any time.

3.    Transfer of Shares. The Shares delivered hereunder, or any interest therein, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable United States federal and state securities laws or any other applicable laws or regulations and the terms and conditions hereof.

4.    Expenses of Issuance of Shares. The issuance of stock certificates hereunder shall be without charge to the Employee. The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) or by reason of the issuance of Shares.

5.    Withholding. No later than the date of vesting of (or the date of an election by the Employee under Section 83(b) of the Code with respect to) the Award granted hereunder, the Employee shall pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld at such time with respect to such Award and the Company shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the Employee, federal, state and local taxes of any kind required by law to be withheld at such time.

6.    References. References herein to rights and obligations of the Employee shall apply, where appropriate, to the Employee’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this Agreement.

7.    Notices. Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Arch Capital Group Ltd.
Waterloo House
100 Pitts Bay Road
Pembroke HM 08 Bermuda
Attn.: Secretary

If to the Employee:

To the last address delivered to the Company by the
Employee in the manner set forth herein.

8.    Governing Law. This Agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to principles of conflict of laws.

9.    Entire Agreement. This Agreement and the Plan constitute the entire agreement among the parties relating to the subject matter hereof, and any previous agreement or understanding among the parties with respect thereto is superseded by this Agreement and the Plan.

10.    Counterparts. This Agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

ARCH CAPITAL GROUP LTD.
By:	/s/ Dawna Ferguson
	Name:	Dawna Ferguson
	Title:	Secretary
	/s/ Nicolas Papadopoulo
	Nicolas Papadopoulo

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EX-10.17

Exhibit 10.17

ARCH CAPITAL GROUP LTD.Share Appreciation Right Agreement

AGREEMENT, made and entered into this 6th day of November, 2014, by and between Arch Capital Group Ltd. (the “Company”), a Bermuda company, and Nicolas Papadopoulo (the “SAR Holder”).

WHEREAS, the SAR Holder has been granted the following award under the Company’s 2012 Long Term Incentive and Share Award Plan (the “Plan”);

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for other good and valuable consideration, the Company and the SAR Holder agree as follows:

(a)Grant. Pursuant to the provisions of the Plan, the terms of which are incorporated herein by reference, the Company hereby grants to the SAR Holder a Share Appreciation Right (the “SAR”) with respect to 17,417 Shares. The SAR represents a right to be paid, upon exercise of the SAR, an amount measured by (x) the difference between the Fair Market Value per Share on the date of exercise and the exercise price per Share of the SAR, multiplied by (y) the number of Shares with respect to which the SAR is exercised, with such amount to be paid in the form of Shares valued at their Fair Market Value on the date of exercise. The SAR is granted as of November 6, 2014 (the “Date of Grant”), and such grant is subject to the terms and conditions herein and the terms and conditions of the Plan. In the event there is any conflict between the terms of the Plan and this Agreement, the terms of the Plan shall control. Capitalized terms used herein but not defined shall have the meanings given to them in the Plan.

(b)Exercise Price. The exercise price of the SAR shall be equal to $57.08 per Share.

(c)Status of Shares. Upon issue, the shares received upon exercise of the SAR shall rank equally in all respects with the other Shares.

(d)Term of SAR. The SAR may be exercised only during the period (the “SAR Period”) set forth in paragraph (f) below and shall remain exercisable until the tenth anniversary of the Date of Grant. Thereafter, the SAR Holder shall cease to have any rights in respect thereof. The right to exercise the SAR shall be subject to sooner termination as provided in paragraph (j) below.

(e)No Rights of Shareholder. The SAR Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or in equity.

(f)Exercisability. Except as otherwise set forth in paragraph (j) below, the SAR shall become exercisablein three equal annual installments on the first, second and third anniversaries of the Date of Grant, in each case subject to paragraph (j) below. Subject to paragraph (j) below, the SAR may be exercised at any time or from time to time during the SAR Period in regard to all or any portion of the SAR which is then exercisable, as may be adjusted pursuant to paragraph (g) below.

(g)Anti-dilution Adjustment. For the avoidance of doubt, the terms of Section 4(c) of the Plan, relating to anti-dilution adjustments, will apply to the SAR.

(h)Nontransferability. The SAR, or any interest therein, may not be assigned or otherwise transferred, disposed of or encumbered by the SAR Holder, other than by will or by the laws of descent and distribution. During the lifetime of the SAR Holder, the SAR shall be exercisable only by the SAR Holder or by his or her guardian or legal representative. Notwithstanding the foregoing, the SAR may be transferred by the SAR Holder to members of his or her “immediate family” or to a trust or other entity established for the exclusive benefit of solely one or more members of the SAR Holder’s “immediate family.” Any SAR held by the transferee will continue to be subject to the same terms and conditions that were applicable to the SAR immediately prior to the transfer, except that the SAR will be transferable by the transferee only by will or the laws of descent and distribution. For purposes hereof, “immediate family” means the SAR Holder’s children, stepchildren, grandchildren, parents, stepparents, grandparents, spouse, siblings (including half brother and sisters), in laws, and relationships arising because of legal adoption.

(i)Exercise of SAR. In order to exercise the SAR, the SAR Holder shall submit to the Company an instrument specifying the whole number of Shares in respect of which the SAR is being exercised. Shares will be issued accordingly by the Company within 30 days. The payment upon a SAR exercise shall be solely the number of whole Shares calculated in paragraph (a) above. Fractional Shares shall be rounded down to the nearest whole Share with no cash consideration being paid upon exercise. Anything to the contrary herein notwithstanding, the Company shall not be obligated to issue any Shares hereunder if the issuance of such Shares would violate the provision of any applicable law, in which event the Company shall, as soon as practicable, take whatever action it reasonably can so that such Shares may be issued without resulting in such violations of law.

(j)Termination of Service.

1.In the event the SAR Holder ceases to be an employee of the Company due to the SAR Holder’s death or Permanent Disability (as defined in the Company’s Incentive Compensation Plan on the date hereof), the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder (or the SAR Holder’s Beneficiary or estate in the event of the SAR Holder’s death) for a period of three years following such termination of employment (but not beyond the SAR Period).

2.    In the event of termination of employment (other than by the Company for Cause, as such term is defined in the Company’s Incentive Compensation Plan on the date hereof, and other than as set forth in paragraphs (j)(1) or (j)(3) hereof) after the attainment of Retirement Age (as defined in the Company’s Incentive Compensation Plan on the date hereof), the SAR shall continue to become exercisable on the schedule set forth in paragraph (f) above so long as the SAR Holder does not engage in any activity in competition with any activity of the Company or any of its Subsidiaries other than serving on the board of directors (or similar governing body) of another company or as a consultant for no more than 26 weeks per calendar year (“Competitive Activity”) and shall continue to be exercisable by the SAR Holder (or the SAR Holder’s Beneficiary or estate in the event of the SAR Holder’s death) for the remainder of the SAR Period. In the event the SAR Holder engages in a Competitive Activity, (A) the SAR, to the extent then exercisable, may be exercised for 30 days following the date on which the SAR Holder engages in such Competitive Activity (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited.

3.    In the event the SAR Holder ceases to be an employee of the Company after a Change in Control (as defined below) due to termination (A) by the Company not for Cause or (B) by the SAR Holder for Good Reason (as defined in the Employment Agreement, dated as of November 17, 2005, as amended, between the SAR Holder and Arch Reinsurance Ltd.), in either case, on or before the second anniversary of the occurrence of the Change in Control, the SAR, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period).

4.    In the event that the SAR Holder ceases to be an employee of the Company for any other reason, except due to a termination of the SAR Holder’s employment by the Company for Cause, (A) the SAR, to the extent then exercisable, may be exercised for 90 days following termination of employment (but not beyond the SAR Period) and (B) the SAR, to the extent then not exercisable, shall be immediately forfeited; provided that, in the event of a Redundancy (as defined below), the Committee, in its sole discretion, may, in accordance with its authority under the Plan, determine that the SAR, to the extent not exercisable, shall become exercisable and shall continue to be exercisable by the SAR Holder for a period of 90 days following such termination of employment (but not beyond the SAR Period).

5.    In the event of a termination of the SAR Holder’s employment for Cause, the SAR shall immediately cease to be exercisable and shall be immediately forfeited.

6.    For purposes of this SAR, service with any of the Company’s Subsidiaries (as defined in the Plan) shall be considered to be service with the Company.

7.    “Change in Control” shall mean:

(A) any person (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting Securities representing 50% or more of the total voting power or value of all the then outstanding Voting Securities; or

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(B) the individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Board”) together with those who become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of at least a majority of the directors then still in office who either were directors as of such date or whose recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(C) the consummation of a merger, consolidation, recapitalization, liquidation, sale or disposition by the Company of all or substantially all of the Company's assets, or reorganization of the Company, other than any such transaction which would (x) result in more than 50% of the total voting power and value represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the former shareholders of the Company and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or (B) of this paragraph.

“Permitted Persons” means (A) the Company; (B) any Related Party; or (C) any group (as defined in Rule 13b-3 under the Exchange Act) comprised of any or all of the foregoing.

“Related Party” means (A) a majority-owned subsidiary of the Company; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (C) any entity, 50% or more of the voting power of which is owned directly or indirectly by the shareholders of the Company in substantially the same proportion as their ownership of Voting Securities immediately prior to the transaction.

“Voting Security” means any security of the Company which carries the right to vote generally in the election of directors.

8.    “Redundancy” shall mean termination of employment by the Company due to its need to reduce the size of its workforce, including due to closure of a business or a particular workplace or change in business process. Whether a termination of employment is due to a "redundancy" shall be determined by the Committee in its sole and absolute discretion, such determination being final and binding on all parties hereto and all persons claiming through, in the name of or on behalf of such parties. 

(k)     Obligations as to Capital. The Company agrees that it will at all times maintain authorized and unissued share capital sufficient to fulfill all of its obligations under the SAR.

(l)     Transfer of Shares. The SAR, the Shares issued hereunder, or any interest in either, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable United States federal and state securities laws and the terms and conditions hereof.

(m)    Expenses of Issuance of Shares. The issuance of stock certificates upon the exercise of the SAR in whole or in part, shall be without charge to the SAR Holder. The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the exercise of the SAR in whole or in part or the resulting issuance of Shares hereunder.

(n)    Withholding. No later than the date of exercise of the SAR granted hereunder, the SAR Holder shall pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld upon the exercise of such SAR and the Company shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the SAR Holder, federal, state and local taxes of any kind required by law to be withheld upon the exercise of such SAR.

(o)    References. References herein to rights and obligations of the SAR Holder shall apply, where appropriate, to the SAR Holder’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this SAR.

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(p)    Notices. Any notice required or permitted to be given under this agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Arch Capital Group Ltd.:

Waterloo House
100 Pitts Bay Road
Pembroke HM 08 Bermuda

Attn: Secretary

If to the SAR Holder:

The last address delivered to the Company by the SAR Holder in the manner set forth herein.

(q)    Governing Law. This agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to principles of conflict of laws thereof.

(r)    Entire Agreement. This agreement and the Plan constitute the entire agreement among the parties relating to the subject matter hereof, and any previous agreement or understanding among the parties with respect thereto is superseded by this agreement and the Plan.

(s)    Counterparts. This agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the undersigned have executed this agreement as of the Date of Grant.

ARCH CAPITAL GROUP LTD.
By:	/s/ Dawna Ferguson
	Name:	Dawna Ferguson
	Title:	Secretary
	/s/ Nicolas Papadopoulo
	Nicolas Papadopoulo

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EX-10.18

Exhibit 10.18

ARCH CAPITAL GROUP LTD.
Non-Qualified Stock Option Agreement

FOR GOOD AND VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Arch Capital Group Ltd. (the “Company”), a Bermuda company, hereby grants to _____________, an employee of the Company on the date hereof (the “Option Holder”), the option to purchase common shares, $0.0033 par value per share, of the Company (“Shares”), upon the following terms:

WHEREAS, the Option Holder has been granted the following award under the Company’s 2015 Long Term Incentive and Share Award Plan (the “Plan”);

(a)Grant. The Option Holder is hereby granted an option (the “Option”) to purchase ___ Shares (the “Option Shares”) pursuant to the Plan, the terms of which are incorporated herein by reference. The Option is granted as of May 13, 2015, (the “Date of Grant”) and such grant is subject to the terms and conditions herein and the terms and conditions of the applicable provisions of the Plan. This Option shall not be treated as an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended. In the event of any conflict between this Agreement and the Plan, the Plan shall control.

(b)Status of Option Shares. Upon issue, the Option Shares shall rank equally in all respects with the other Shares.

(c)Option Price. The purchase price for the Option Shares shall be, except as herein provided, $62.505 per Option Share, hereinafter sometimes referred to as the “Option Price,” payable immediately in full upon the exercise of the Option.

(d)Term of Option. The Option may be exercised only during the period (the “Option Period”) set forth in paragraph (f) below and shall remain exercisable until the tenth anniversary of the Date of Grant. Thereafter, the Option Holder shall cease to have any rights in respect thereof. The right to exercise the Option shall be subject to sooner termination as provided in paragraph (j) below.

(e)No Rights of Shareholder. The Option Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or in equity.

(f)Exercisability. Except as otherwise set forth in paragraph (j) below, the Option shall become exercisable in three equal annual installments on the first, second and third anniversaries of the Date of Grant, in each case subject to paragraph (j) below. Subject to paragraph (j) below, the Option may be exercised at any time or from time to time during the Option Period in regard to all or any portion of the Option which is then exercisable, as may be adjusted pursuant to paragraph (g) below.

(g)Anti-dilution Adjustment. For the avoidance of doubt, the terms of Section 4(c) of the Plan, relating to anti-dilution adjustments, will apply to the Option.

(h)Nontransferability. The Option, or any interest therein, may not be assigned or otherwise transferred, disposed of or encumbered by the Option Holder, other than by will or by the laws of descent and distribution. During the lifetime of the Option Holder, the Option shall be exercisable only by the Option Holder or by his or her guardian or legal representative. Notwithstanding the foregoing, the Option may be transferred by the Option Holder to members of his or her “immediate family” or to a trust or other entity established for the exclusive benefit of solely one or more members of the Option Holder’s “immediate family.” Any Option held by the transferee will continue to be subject to the same terms and conditions that were applicable to the Option immediately prior to the transfer, except that the Option will be transferable by the transferee only by will or the laws of descent and distribution. For purposes hereof, “immediate family” means the Option Holder’s children, stepchildren, grandchildren, parents, stepparents, grandparents, spouse, siblings (including half brother and sisters), in laws, and relationships arising because of legal adoption.

(i)Exercise of Option. In order to exercise the Option, the Option Holder shall, in the manner directed by the Company, specify the whole number of Option Shares in respect of which the Option is being exercised, accompanied by

payment, in a manner acceptable to the Company (which shall include a broker assisted exercise arrangement), of the Option Price for the Option Shares for which the Option is being exercised. Payment to the Company in cash or Shares already owned by the Option Holder (provided that the Option Holder has owned such Shares for a minimum period of six months or has purchased such Shares on the open market) and having a total Fair Market Value equal to the exercise price, or in a combination of cash and such Shares, shall be deemed acceptable for purposes hereof. In addition, in lieu of making payment of the exercise price of the Option and receiving the number of Shares for which the Option is being exercised as described above, the Option Holder may instead elect to exercise the Option by making no cash exercise price payment but having the Company issue to the Option Holder the number of Shares (rounded down to the nearest whole number) equal to the net result obtained by (A) subtracting the exercise price per Share from the Fair Market Value per Share on the date of exercise, (B) multiplying the difference by the number of Shares for which the Option is being exercised, and (C) dividing the product by the Fair Market Value per Share on the date of exercise. For the avoidance of doubt, if the calculation in the immediately preceding sentence results in a negative number, no Shares will be issued upon exercise. Option Shares will be issued accordingly by the Company, and a share certificate dispatched or electronic delivery of such Option Shares to the Option Holder within 30 days.

The Company shall not be required to issue fractional Shares upon the exercise of the Option. If any fractional interest in a Share would be deliverable upon the exercise of the Option in whole or in part but for the provisions of this paragraph, the Company, in lieu of delivering any such fractional share therefor, shall pay a cash adjustment therefor in an amount equal to their Fair Market Value multiplied by the fraction of the fractional share which would otherwise have been issued hereunder. Anything to the contrary herein notwithstanding, the Company shall not be obligated to issue any Option Shares hereunder if the issuance of such Option Shares would violate the provision of any applicable law, in which event the Company shall, as soon as practicable, take whatever action it reasonably can so that such Option Shares may be issued without resulting in such violations of law.

(j)    Termination of Service.

1.    In the event the Option Holder ceases to be an employee of the Company due to the Option Holder’s death or Permanent Disability (as defined in the Company’s Incentive Compensation Plan on the date hereof), the Option, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the Option Holder (or the Option Holder’s Beneficiary or estate in the event of the Option Holder’s death) for a period of three years following such termination of employment (but not beyond the Option Period).

2.    In the event of termination of employment (other than by the Company for Cause, as such term is defined in the Company’s Incentive Compensation Plan on the date hereof and other than as set forth in paragraphs (j)(1) or (j)(3) hereof) after the attainment of Retirement Age (as defined in the Company’s Incentive Compensation Plan on the date hereof), the Option shall continue to become exercisable on the schedule set forth in paragraph (f) above so long as the Option Holder does not engage in any activity in competition with any activity of the Company or any of its Subsidiaries other than serving on the board of directors (or similar governing body) of another company or as a consultant for no more than 26 weeks per calendar year (“Competitive Activity”) and shall continue to be exercisable by the Option Holder (or the Option Holder’s Beneficiary or estate in the event of the Option Holder’s death) for the remainder of the Option Period. In the event the Option Holder engages in a Competitive Activity, (A) the Option, to the extent then exercisable, may be exercised for 30 days following the date on which the Option Holder engages in such Competitive Activity (but not beyond the Option Period) and (B) the Option, to the extent then not exercisable, shall be immediately forfeited.

3.    In the event the Option Holder ceases to be an employee of the Company after a Change in Control (as defined below) due to termination (A) by the Company not for Cause or (B) by the Option Holder for Good Reason (as defined in the Employment Agreement, as of __, between the Option Holder and the Company), in either case, on or before the second anniversary of the occurrence of the Change in Control, the Option, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the Option Holder for a period of 90 days following such termination of employment (but not beyond the Option Period).

4.    In the event that the Option Holder ceases to be an employee of the Company for any other reason, except due to a termination of the Option Holder’s employment by the Company for Cause, (A) the Option, to the extent then exercisable, may be exercised for 90 days following termination of employment (but not beyond the Option Period) and (B) the Option, to the extent then not exercisable, shall be immediately forfeited.

5.    In the event of a termination of the Option Holder’s employment for Cause, the Option shall immediately cease to be exercisable and shall be immediately forfeited.

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6.    For purposes of this Option, service with any of the Company’s Subsidiaries (as defined in the Plan) shall be considered to be service with the Company.

7.    “Change in Control” shall mean:

(A) any person (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting Securities representing 50% or more of the total voting power or value of all the then outstanding Voting Securities; or

(B) the individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Board”) together with those who become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of at least a majority of the directors then still in office who either were directors as of such date or whose recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(C) the consummation of a merger, consolidation, recapitalization, liquidation, sale or disposition by the Company of all or substantially all of the Company's assets, or reorganization of the Company, other than any such transaction which would (x) result in more than 50% of the total voting power and value represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the former shareholders of the Company and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or (B) of this paragraph.

“Permitted Persons” means (A) the Company; (B) any Related Party; or (C) any group (as defined in Rule 13b-3 under the Exchange Act) comprised of any or all of the foregoing.

“Related Party” means (A) a majority-owned subsidiary of the Company; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (C) any entity, 50% or more of the voting power of which is owned directly or indirectly by the shareholders of the Company in substantially the same proportion as their ownership of Voting Securities immediately prior to the transaction.

“Voting Security” means any security of the Company which carries the right to vote generally in the election of directors.

(k)    Obligations as to Capital. The Company agrees that it will at all times maintain authorized and unissued share capital sufficient to fulfill all of its obligations under the Option.

(l)    Transfer of Shares. The Option, the Option Shares, or any interest in either, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable United States federal and state securities laws and the terms and conditions hereof.

(m)    Expenses of Issuance of Option Shares. The issuance of stock certificates or the electronic delivery of Option Shares upon the exercise of the Option in whole or in part, shall be without charge to the Option Holder. The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the exercise of the Option in whole or in part or the resulting issuance of the Option Shares.

(n)    Withholding. No later than the date of exercise of the Option granted hereunder, the Option Holder shall pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld upon the exercise of such Option and the Company shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the Option Holder, federal, state and local taxes of any kind required by law to be withheld upon the exercise of such Option.

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(o)    References. References herein to rights and obligations of the Option Holder shall apply, where appropriate, to the Option Holder’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this Option.

(p)    Notices. Any notice required or permitted to be given under this agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Arch Capital Group Ltd.:

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

Attn: Secretary

If to the Option Holder:

The last address delivered to the Company by the Option Holder in the manner set forth herein.

(q)    Governing Law. This agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to principles of conflict of laws thereof.

(r)    Entire Agreement. This agreement and the Plan constitute the entire agreement among the parties relating to the subject matter hereof, and any previous agreement or understanding among the parties with respect thereto is superseded by this agreement and the Plan.

(s)    Counterparts. This agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the undersigned have executed this agreement as of the Date of Grant.

ARCH CAPITAL GROUP LTD.
By:	/s/ Dawna Ferguson
	Name:	Dawna Ferguson
	Title:	Secretary
	/s/ Employee Signature

5

EX-10.19

Exhibit 10.19

ARCH CAPITAL GROUP LTD.
Restricted Share Agreement

THIS AGREEMENT, dated as of May 13, 2015, between Arch Capital Group Ltd. (the “Company”), a Bermuda company, and _____________ (the “Employee”).

WHEREAS, the Employee has been granted the following award under the Company’s 2015 Long Term Incentive and Share Award Plan (the “Plan”);

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the parties hereto agree as follows.

1.    Award of Shares. Pursuant to the provisions of the Plan, the terms of which are incorporated herein by reference, the Employee is hereby awarded __ Restricted Shares (the “Award”), subject to the terms and conditions herein set forth. Capitalized terms used herein and not defined shall have the meanings set forth in the Plan. In the event of any conflict between this Agreement and the Plan, the Plan shall control.

2.    Terms and Conditions. It is understood and agreed that the Award of Restricted Shares evidenced hereby is subject to the following terms and conditions:

(a)    Vesting of Award. Subject to Section 2(b) below and the other terms and conditions of this Agreement, this Award shall become vested in three equal annual installments on the first, second and third anniversaries of the date hereof. Unless otherwise provided by the Company, all dividends and other amounts receivable in connection with any adjustments to the Shares under Section 4(c) of the Plan shall be subject to the vesting schedule in this Section 2(a).

(b)    Termination of Service; Forfeiture of Unvested Shares.

(i)    In the event the Employee ceases to be an employee of the Company prior to the date the Restricted Shares otherwise become vested due to his or her death or Permanent Disability (as defined in the Company’s Incentive Compensation Plan on the date hereof), the Restricted Shares shall become immediately vested in full upon such termination of employment.

(ii)    In the event of termination of employment (other than by the Company for Cause, as such term is defined in the Company’s Incentive Compensation Plan on the date hereof, and other than as set forth in Section 2(b)(i) or (iii) hereof) after the attainment of Retirement Age (as defined in the Company’s Incentive Compensation Plan on the date hereof), the Restricted Shares shall continue to vest on the schedule set forth in Section 2(a) above so long as the Employee does not, without the written consent of the Company, engage in any activity in competition with any activity of the Company or any of its Subsidiaries other than (i) serving on the board of directors (or similar governing body) of another company or (ii) serving as a consultant for no more than 26 weeks per calendar year providing services that do not, in whole or in part, relate to the business or operations of an insurance or reinsurance company (“Competitive Activity”). In the event the Employee engages in a Competitive Activity, any unvested Restricted Shares shall be forfeited by the Employee and become the property of the Company.

(iii)    In the event the Employee ceases to be an employee of the Company after a Change in Control (as defined below) due to termination (A) by the Company not for Cause or (B) by the Employee for Good Reason (as defined in the Employment Agreement, dated as of __, between the Employee and the Company), in either case, on or before the second anniversary of the occurrence of the Change in Control, the Restricted Shares, to the extent not already vested, shall become immediately vested in full upon such termination of employment.

(iv)    If the Employee ceases to be an Employee of the Company for any other reason prior to the date the Restricted Shares become vested, the Award shall be forfeited by the Employee and become the property of the Company.

(v)    For purposes of this Agreement, service with any of the Company’s Subsidiaries (as defined in the Plan) shall be considered to be service with the Company.

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(vi)    “Change in Control” shall mean:

(A) any person (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting Securities representing 50% or more of the total voting power or value of all the then outstanding Voting Securities; or

(B) the individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Board”) together with those who become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of at least a majority of the directors then still in office who either were directors as of such date or whose recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(C) the consummation of a merger, consolidation, recapitalization, liquidation, sale or disposition by the Company of all or substantially all of the Company's assets, or reorganization of the Company, other than any such transaction which would (x) result in more than 50% of the total voting power and value represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the former shareholders of the Company and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or (B) of this paragraph.

“Permitted Persons” means (A) the Company; (B) any Related Party; or (C) any group (as defined in Rule 13b-3 under the Exchange Act) comprised of any or all of the foregoing.

“Related Party” means (A) a majority-owned subsidiary of the Company; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (C) any entity, 50% or more of the voting power of which is owned directly or indirectly by the shareholders of the Company in substantially the same proportion as their ownership of Voting Securities immediately prior to the transaction.

“Voting Security” means any security of the Company which carries the right to vote generally in the election of directors.

(c)    Certificates. Each certificate issued in respect of Restricted Shares awarded hereunder shall be issued in book entry format with the Company’s transfer agent and shall bear a legend disclosing the restrictions on transferability imposed on such Restricted Shares by this Agreement (the “Restrictive Legend”). Upon the vesting of Restricted Shares pursuant to Section 2 hereof and the satisfaction of any withholding tax liability pursuant to Section 5 hereof, such vested Shares, not bearing the Restrictive Legend, shall be delivered to the Employee.

(d)    Rights of a Stockholder. Prior to the time a Restricted Share is fully vested hereunder, the Employee shall have no right to transfer, pledge, hypothecate or otherwise encumber such Restricted Share. During such period, the Employee shall have all other rights of a stockholder, including, but not limited to, the right to vote and to receive dividends (subject to Section 2(a) hereof) at the time paid on such Restricted Shares.

(e)    No Right to Continued Employment. This Award shall not confer upon the Employee any right with respect to continuance of employment by the Company nor shall this Award interfere with the right of the Company to terminate the Employee’s employment at any time.

3.    Transfer of Shares. The Shares delivered hereunder, or any interest therein, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance

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with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable United States federal and state securities laws or any other applicable laws or regulations and the terms and conditions hereof.

4.    Expenses of Issuance of Shares. The issuance of stock certificates hereunder shall be without charge to the Employee. The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) or by reason of the issuance of Shares.

5.    Withholding. No later than the date of vesting of (or the date of an election by the Employee under Section 83(b) of the Code with respect to) the Award granted hereunder, the Employee shall pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld at such time with respect to such Award and the Company shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the Employee, federal, state and local taxes of any kind required by law to be withheld at such time.

6.    References. References herein to rights and obligations of the Employee shall apply, where appropriate, to the Employee’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this Agreement.

7.    Notices. Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Arch Capital Group Ltd.
Waterloo House
100 Pitts Bay Road
Pembroke HM 08 Bermuda

Attn.: Secretary

If to the Employee:

To the last address delivered to the Company by the
Employee in the manner set forth herein.

8.    Governing Law. This Agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to principles of conflict of laws.

9.    Entire Agreement. This Agreement and the Plan constitute the entire agreement among the parties relating to the subject matter hereof, and any previous agreement or understanding among the parties with respect thereto is superseded by this Agreement and the Plan.

10.    Counterparts. This Agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

ARCH CAPITAL GROUP LTD.
By:	/s/ Dawna Ferguson
	Name:	Dawna Ferguson
	Title:	Secretary
	/s/ Employee Signature

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EX-10.20

Exhibit 10.20

ARCH CAPITAL GROUP LTD.
Non-Qualified Stock Option Agreement

FOR GOOD AND VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Arch Capital Group Ltd. (the “Company”), a Bermuda company, hereby grants to [Employee Name], an employee of the Company on the date hereof (the “Option Holder”), the option to purchase common shares, $0.0033 par value per share, of the Company (“Shares”), upon the following terms:

WHEREAS, the Option Holder has been granted the following award under the Company’s 2015 Long Term Incentive and Share Award Plan (the “Plan”);

(a)Grant. The Option Holder is hereby granted an option (the “Option”) to purchase ___ Shares (the “Option Shares”) pursuant to the Plan, the terms of which are incorporated herein by reference. The Option is granted as of May 13, 2016, (the “Date of Grant”) and such grant is subject to the terms and conditions herein and the terms and conditions of the applicable provisions of the Plan. This Option shall not be treated as an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended. In the event of any conflict between this Agreement and the Plan, the Plan shall control.

(b)    Status of Option Shares. Upon issue, the Option Shares shall rank equally in all respects with the other Shares.

(c)    Option Price. The purchase price for the Option Shares shall be, except as herein provided, $71.70 per Option Share, hereinafter sometimes referred to as the “Option Price,” payable immediately in full upon the exercise of the Option.

(d)    Term of Option. The Option may be exercised only during the period (the “Option Period”) set forth in paragraph (f) below and shall remain exercisable until the tenth anniversary of the Date of Grant. Thereafter, the Option Holder shall cease to have any rights in respect thereof. The right to exercise the Option shall be subject to sooner termination as provided in paragraph (j) below.

(e)    No Rights of Shareholder. The Option Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or in equity.

(f)    Exercisability. Except as otherwise set forth in paragraph (j) below, the Option shall become exercisable in three equal annual installments on the first, second and third anniversaries of the Date of Grant, in each case subject to paragraph (j) below. Subject to paragraph (j) below, the Option may be exercised at any time or from time to time during the Option Period in regard to all or any portion of the Option which is then exercisable, as may be adjusted pursuant to paragraph (g) below.

(g)    Anti-dilution Adjustment. For the avoidance of doubt, the terms of Section 4(c) of the Plan, relating to anti-dilution adjustments, will apply to the Option.

(h)    Nontransferability. The Option, or any interest therein, may not be assigned or otherwise transferred, disposed of or encumbered by the Option Holder, other than by will or by the laws of descent and distribution. During the lifetime of the Option Holder, the Option shall be exercisable only by the Option Holder or by his or her guardian or legal representative. Notwithstanding the foregoing, the Option may be transferred by the Option Holder to members of his or her “immediate family” or to a trust or other entity established for the exclusive benefit of solely one or more members of the Option Holder’s “immediate family.” Any Option held by the transferee will continue to be subject to the same terms and conditions that were applicable to the Option immediately prior to the transfer, except that the Option will be transferable by the transferee only by will or the laws of descent and distribution. For purposes hereof, “immediate family” means the Option Holder’s children, stepchildren, grandchildren, parents, stepparents, grandparents, spouse, siblings (including half brother and sisters), in laws, and relationships arising because of legal adoption.

(i)    Exercise of Option. In order to exercise the Option, the Option Holder shall, in the manner directed by the Company, specify the whole number of Option Shares in respect of which the Option is being exercised, accompanied by

payment, in a manner acceptable to the Company (which shall include a broker assisted exercise arrangement), of the Option Price for the Option Shares for which the Option is being exercised. Payment to the Company in cash or Shares already owned by the Option Holder (provided that the Option Holder has owned such Shares for a minimum period of six months or has purchased such Shares on the open market) and having a total Fair Market Value equal to the exercise price, or in a combination of cash and such Shares, shall be deemed acceptable for purposes hereof. In addition, in lieu of making payment of the exercise price of the Option and receiving the number of Shares for which the Option is being exercised as described above, the Option Holder may instead elect to exercise the Option by making no cash exercise price payment but having the Company issue to the Option Holder the number of Shares (rounded down to the nearest whole number) equal to the net result obtained by (A) subtracting the exercise price per Share from the Fair Market Value per Share on the date of exercise, (B) multiplying the difference by the number of Shares for which the Option is being exercised, and (C) dividing the product by the Fair Market Value per Share on the date of exercise. For the avoidance of doubt, if the calculation in the immediately preceding sentence results in a negative number, no Shares will be issued upon exercise. Option Shares will be issued accordingly by the Company, and a share certificate dispatched or electronic delivery of such Option Shares to the Option Holder within 30 days.

The Company shall not be required to issue fractional Shares upon the exercise of the Option. If any fractional interest in a Share would be deliverable upon the exercise of the Option in whole or in part but for the provisions of this paragraph, the Company, in lieu of delivering any such fractional share therefor, shall pay a cash adjustment therefor in an amount equal to their Fair Market Value multiplied by the fraction of the fractional share which would otherwise have been issued hereunder. Anything to the contrary herein notwithstanding, the Company shall not be obligated to issue any Option Shares hereunder if the issuance of such Option Shares would violate the provision of any applicable law, in which event the Company shall, as soon as practicable, take whatever action it reasonably can so that such Option Shares may be issued without resulting in such violations of law.

(j)    Termination of Service.

1.    In the event the Option Holder ceases to be an employee of the Company due to the Option Holder’s death or Permanent Disability (as defined in the Company’s Incentive Compensation Plan on the date hereof), the Option, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the Option Holder (or the Option Holder’s Beneficiary or estate in the event of the Option Holder’s death) for a period of three years following such termination of employment (but not beyond the Option Period).

2.    In the event of termination of employment (other than by the Company for Cause, as such term is defined in the Company’s Incentive Compensation Plan on the date hereof and other than as set forth in paragraphs (j)(1) or (j)(3) hereof) after the attainment of Retirement Age (as defined in the Company’s Incentive Compensation Plan on the date hereof), the Option shall continue to become exercisable on the schedule set forth in paragraph (f) above so long as the Option Holder does not, without the written consent of the Company, engage in any activity in competition with any activity of the Company or any of its Subsidiaries other than (i) serving on the board of directors (or similar governing body) of another company or (ii) serving as a consultant for no more than 26 weeks per calendar year providing services that do not, in whole or in part, relate to the business or operations of an insurance or reinsurance company (“Competitive Activity”) and shall continue to be exercisable by the Option Holder (or the Option Holder’s Beneficiary or estate in the event of the Option Holder’s death) for the remainder of the Option Period. In the event the Option Holder engages in a Competitive Activity, (A) the Option, to the extent then exercisable, may be exercised for 30 days following the date on which the Option Holder engages in such Competitive Activity (but not beyond the Option Period) and (B) the Option, to the extent then not exercisable, shall be immediately forfeited.

3.    In the event the Option Holder ceases to be an employee of the Company after a Change in Control (as defined below) due to termination (A) by the Company not for Cause or (B) by the Option Holder for Good Reason (as defined in the Employment Agreement, as of __, between the Option Holder and the Company), in either case, on or before the second anniversary of the occurrence of the Change in Control, the Option, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the Option Holder for a period of 90 days following such termination of employment (but not beyond the Option Period).

4.    In the event that the Option Holder ceases to be an employee of the Company for any other reason, except due to a termination of the Option Holder’s employment by the Company for Cause, (A) the Option, to the extent then exercisable, may be exercised for 90 days following termination of employment (but not beyond the Option Period) and (B) the Option, to the extent then not exercisable, shall be immediately forfeited.

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5.    In the event of a termination of the Option Holder’s employment for Cause, the Option shall immediately cease to be exercisable and shall be immediately forfeited.

6.    For purposes of this Option, service with any of the Company’s Subsidiaries (as defined in the Plan) shall be considered to be service with the Company.

7.    “Change in Control” shall mean:

(A) any person (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting Securities representing 50% or more of the total voting power or value of all the then outstanding Voting Securities; or

(B) the individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Board”) together with those who become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of at least a majority of the directors then still in office who either were directors as of such date or whose recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(C) the consummation of a merger, consolidation, recapitalization, liquidation, sale or disposition by the Company of all or substantially all of the Company's assets, or reorganization of the Company, other than any such transaction which would (x) result in more than 50% of the total voting power and value represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the former shareholders of the Company and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or (B) of this paragraph.

“Permitted Persons” means (A) the Company; (B) any Related Party; or (C) any group (as defined in Rule 13b-3 under the Exchange Act) comprised of any or all of the foregoing.

“Related Party” means (A) a majority-owned subsidiary of the Company; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (C) any entity, 50% or more of the voting power of which is owned directly or indirectly by the shareholders of the Company in substantially the same proportion as their ownership of Voting Securities immediately prior to the transaction.

“Voting Security” means any security of the Company which carries the right to vote generally in the election of directors.

(k)    Obligations as to Capital. The Company agrees that it will at all times maintain authorized and unissued share capital sufficient to fulfill all of its obligations under the Option.

(l)    Transfer of Shares. The Option, the Option Shares, or any interest in either, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable United States federal and state securities laws and the terms and conditions hereof.

(m)    Expenses of Issuance of Option Shares. The issuance of stock certificates or the electronic delivery of Option Shares upon the exercise of the Option in whole or in part, shall be without charge to the Option Holder. The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the exercise of the Option in whole or in part or the resulting issuance of the Option Shares.

(n)    Withholding. No later than the date of exercise of the Option granted hereunder, the Option Holder shall pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local

3

taxes of any kind required by law to be withheld upon the exercise of such Option and the Company shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the Option Holder, federal, state and local taxes of any kind required by law to be withheld upon the exercise of such Option.

(o)    References. References herein to rights and obligations of the Option Holder shall apply, where appropriate, to the Option Holder’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this Option.

(p)    Notices. Any notice required or permitted to be given under this agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Arch Capital Group Ltd.:

Waterloo House, Ground Floor
100 Pitts Bay Road
Pembroke HM 08 Bermuda
Attn: Secretary

If to the Option Holder:

The last address delivered to the Company by the Option Holder in the manner set forth herein.

(q)    Governing Law. This agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to principles of conflict of laws thereof.

(r)    Entire Agreement. This agreement and the Plan constitute the entire agreement among the parties relating to the subject matter hereof, and any previous agreement or understanding among the parties with respect thereto is superseded by this agreement and the Plan.

(s)    Counterparts. This agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the undersigned have executed this agreement as of the Date of Grant.

ARCH CAPITAL GROUP LTD.
By:	/s/ Dawna Ferguson
	Name:	Dawna Ferguson
	Title:	Secretary
	/s/ Employee Signature

5

EX-10.21

Exhibit 10.21

ARCH CAPITAL GROUP LTD.
Restricted Share Agreement

THIS AGREEMENT, dated as of May 13, 2016, between Arch Capital Group Ltd. (the “Company”), a Bermuda company, and [Employee Name] (the “Employee”).

WHEREAS, the Employee has been granted the following award under the Company’s 2015 Long Term Incentive and Share Award Plan (the “Plan”);

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the parties hereto agree as follows.

1.    Award of Shares.  Pursuant to the provisions of the Plan, the terms of which are incorporated herein by reference, the Employee is hereby awarded ___ Restricted Shares (the “Award”), subject to the terms and conditions herein set forth. Capitalized terms used herein and not defined shall have the meanings set forth in the Plan. In the event of any conflict between this Agreement and the Plan, the Plan shall control.

2.    Terms and Conditions.  It is understood and agreed that the Award of Restricted Shares evidenced hereby is subject to the following terms and conditions:

(a)    Vesting of Award. Subject to Section 2(b) below and the other terms and conditions of this Agreement, this Award shall become vested in three equal annual installments on the first, second and third anniversaries of the date hereof. Unless otherwise provided by the Company, all dividends and other amounts receivable in connection with any adjustments to the Shares under Section 4(c) of the Plan shall be subject to the vesting schedule in this Section 2(a).

(b)    Termination of Service; Forfeiture of Unvested Shares.

(i)    In the event the Employee ceases to be an employee of the Company prior to the date the Restricted Shares otherwise become vested due to his or her death or Permanent Disability (as defined in the Company’s Incentive Compensation Plan on the date hereof), the Restricted Shares shall become immediately vested in full upon such termination of employment.

(ii)    In the event of termination of employment (other than by the Company for Cause, as such term is defined in the Company’s Incentive Compensation Plan on the date hereof, and other than as set forth in Section 2(b)(i) or (iii) hereof) after the attainment of Retirement Age (as defined in the Company’s Incentive Compensation Plan on the date hereof), the Restricted Shares shall continue to vest on the schedule set forth in Section 2(a) above so long as the Employee does not, without the written consent of the Company, engage in any activity in competition with any activity of the Company or any of its Subsidiaries other than (i) serving on the board of directors (or similar governing body) of another company or (ii) serving as a consultant for no more than 26 weeks per calendar year providing services that do not, in whole or in part, relate to the business or operations of an insurance or reinsurance company (“Competitive Activity”). In the event the Employee engages in a Competitive Activity, any unvested Restricted Shares shall be forfeited by the Employee and become the property of the Company.

(iii)    In the event the Employee ceases to be an employee of the Company after a Change in Control (as defined below) due to termination (A) by the Company not for Cause or (B) by the Employee for Good Reason (as defined in the Employment Agreement, dated as of ___, between the Employee and the Company), in either case, on or before the second anniversary of the occurrence of the Change in Control, the Restricted Shares, to the extent not already vested, shall become immediately vested in full upon such termination of employment.

(iv)    If the Employee ceases to be an Employee of the Company for any other reason prior to the date the Restricted Shares become vested, the Award shall be forfeited by the Employee and become the property of the Company.

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(v)    For purposes of this Agreement, service with any of the Company’s Subsidiaries (as defined in the Plan) shall be considered to be service with the Company.

(vi)    “Change in Control” shall mean:

(A) any person (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting Securities representing 50% or more of the total voting power or value of all the then outstanding Voting Securities; or

(B) the individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Board”) together with those who become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of at least a majority of the directors then still in office who either were directors as of such date or whose recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(C) the consummation of a merger, consolidation, recapitalization, liquidation, sale or disposition by the Company of all or substantially all of the Company's assets, or reorganization of the Company, other than any such transaction which would (x) result in more than 50% of the total voting power and value represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the former shareholders of the Company and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or (B) of this paragraph.

“Permitted Persons” means (A) the Company; (B) any Related Party; or (C) any group (as defined in Rule 13b-3 under the Exchange Act) comprised of any or all of the foregoing.

“Related Party” means (A) a majority-owned subsidiary of the Company; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (C) any entity, 50% or more of the voting power of which is owned directly or indirectly by the shareholders of the Company in substantially the same proportion as their ownership of Voting Securities immediately prior to the transaction.

“Voting Security” means any security of the Company which carries the right to vote generally in the election of directors.

(c)    Certificates.  Each certificate issued in respect of Restricted Shares awarded hereunder shall be issued in book entry format with the Company’s transfer agent and shall bear a legend disclosing the restrictions on transferability imposed on such Restricted Shares by this Agreement (the “Restrictive Legend”). Upon the vesting of Restricted Shares pursuant to Section 2 hereof and the satisfaction of any withholding tax liability pursuant to Section 5 hereof, such vested Shares, not bearing the Restrictive Legend, shall be delivered to the Employee.

(d)    Rights of a Stockholder.  Prior to the time a Restricted Share is fully vested hereunder, the Employee shall have no right to transfer, pledge, hypothecate or otherwise encumber such Restricted Share. During such period, the Employee shall have all other rights of a stockholder, including, but not limited to, the right to vote and to receive dividends (subject to Section 2(a) hereof) at the time paid on such Restricted Shares.

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(e)    No Right to Continued Employment. This Award shall not confer upon the Employee any right with respect to continuance of employment by the Company nor shall this Award interfere with the right of the Company to terminate the Employee’s employment at any time.

3.    Transfer of Shares. The Shares delivered hereunder, or any interest therein, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable United States federal and state securities laws or any other applicable laws or regulations and the terms and conditions hereof.

4.    Expenses of Issuance of Shares. The issuance of stock certificates hereunder shall be without charge to the Employee. The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) or by reason of the issuance of Shares.

5.    Withholding. No later than the date of vesting of (or the date of an election by the Employee under Section 83(b) of the Code with respect to) the Award granted hereunder, the Employee shall pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld at such time with respect to such Award and the Company shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the Employee, federal, state and local taxes of any kind required by law to be withheld at such time.

6.    References.  References herein to rights and obligations of the Employee shall apply, where appropriate, to the Employee’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this Agreement.

7.    Notices.  Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Arch Capital Group Ltd.
Waterloo House
100 Pitts Bay Road
Pembroke HM 08 Bermuda

Attn.: Secretary

If to the Employee:

To the last address delivered to the Company by the
Employee in the manner set forth herein.

8.    Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to principles of conflict of laws.

9.    Entire Agreement. This Agreement and the Plan constitute the entire agreement among the parties relating to the subject matter hereof, and any previous agreement or understanding among the parties with respect thereto is superseded by this Agreement and the Plan.

10.    Counterparts.  This Agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

ARCH CAPITAL GROUP LTD.
By:	/s/ Dawna Ferguson
	Name:	Dawna Ferguson
	Title:	Secretary
	/s/ Employee Signature

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EX-10.22

Exhibit 10.22

ARCH CAPITAL GROUP LTD.
Non-Qualified Stock Option Agreement

FOR GOOD AND VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Arch Capital Group Ltd. (the “Company”), a Bermuda company, hereby grants to Constantine Iordanou, an employee of the Company on the date hereof (the “Option Holder”), the option to purchase common shares, $0.0033 par value per share, of the Company (“Shares”), upon the following terms:

WHEREAS, the Option Holder has been granted the following award under the Company’s 2012 Long Term Incentive and Share Award Plan (the “Plan”);

(a)Grant. The Option Holder is hereby granted an option (the “Option”) to purchase 250,468 Shares (the “Option Shares”) pursuant to the Plan, the terms of which are incorporated herein by reference. The Option is granted as of February 24, 2017, (the “Date of Grant”) and such grant is subject to the terms and conditions herein and the terms and conditions of the applicable provisions of the Plan. This Option shall not be treated as an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended. In the event of any conflict between this Agreement and the Plan, the Plan shall control.

(b)    Status of Option Shares. Upon issue, the Option Shares shall rank equally in all respects with the other Shares.

(c)    Option Price. The purchase price for the Option Shares shall be, except as herein provided, $94.54 per Option Share, hereinafter sometimes referred to as the “Option Price,” payable immediately in full upon the exercise of the Option.

(d)    Term of Option. The Option may be exercised only during the period (the “Option Period”) set forth in paragraph (f) below and shall remain exercisable until the tenth anniversary of the Date of Grant. Thereafter, the Option Holder shall cease to have any rights in respect thereof. The right to exercise the Option shall be subject to sooner termination as provided in paragraph (j) below.

(e)    No Rights of Shareholder. The Option Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or in equity.

(f)    Exercisability. Except as otherwise set forth in paragraph (j) below, the Option shall be fully exercisable on the Date of Grant. The Option may be exercised at any time or from time to time during the Option Period in regard to all or any portion of the Option, as may be adjusted pursuant to paragraph (g) below.

(g)    Anti-dilution Adjustment. For the avoidance of doubt, the terms of Section 4(c) of the Plan, relating to anti-dilution adjustments, will apply to the Option.

(h)    Nontransferability. The Option, or any interest therein, may not be assigned or otherwise transferred, disposed of or encumbered by the Option Holder, other than by will or by the laws of descent and distribution. During the lifetime of the Option Holder, the Option shall be exercisable only by the Option Holder or by his or her guardian or legal representative. Notwithstanding the foregoing, the Option may be transferred by the Option Holder to members of his or her “immediate family” or to a trust or other entity established for the exclusive benefit of solely one or more members of the Option Holder’s “immediate family.” Any Option held by the transferee will continue to be subject to the same terms and conditions that were applicable to the Option immediately prior to the transfer, except that the Option will be transferable by the transferee only by will or the laws of descent and distribution. For purposes hereof, “immediate family” means the Option Holder’s children, stepchildren, grandchildren, parents, stepparents, grandparents, spouse, siblings (including half brother and sisters), in laws, and relationships arising because of legal adoption.

(i)    Exercise of Option. In order to exercise the Option, the Option Holder shall, in the manner directed by the Company, specify the whole number of Option Shares in respect of which the Option is being exercised, accompanied by payment, in a manner acceptable to the Company (which shall include a broker assisted exercise arrangement), of the Option Price for the Option Shares for which the Option is being exercised. Payment to the Company in cash or Shares already owned

by the Option Holder (provided that the Option Holder has owned such Shares for a minimum period of six months or has purchased such Shares on the open market) and having a total Fair Market Value equal to the exercise price, or in a combination of cash and such Shares, shall be deemed acceptable for purposes hereof. In addition, in lieu of making payment of the exercise price of the Option and receiving the number of Shares for which the Option is being exercised as described above, the Option Holder may instead elect to exercise the Option by making no cash exercise price payment but having the Company issue to the Option Holder the number of Shares (rounded down to the nearest whole number) equal to the net result obtained by (A) subtracting the exercise price per Share from the Fair Market Value per Share on the date of exercise, (B) multiplying the difference by the number of Shares for which the Option is being exercised, and (C) dividing the product by the Fair Market Value per Share on the date of exercise. For the avoidance of doubt, if the calculation in the immediately preceding sentence results in a negative number, no Shares will be issued upon exercise. Option Shares will be issued accordingly by the Company, and a share certificate dispatched or electronic delivery of such Option Shares to the Option Holder within 30 days.

The Company shall not be required to issue fractional Shares upon the exercise of the Option. If any fractional interest in a Share would be deliverable upon the exercise of the Option in whole or in part but for the provisions of this paragraph, the Company, in lieu of delivering any such fractional share therefor, shall pay a cash adjustment therefor in an amount equal to their Fair Market Value multiplied by the fraction of the fractional share which would otherwise have been issued hereunder. Anything to the contrary herein notwithstanding, the Company shall not be obligated to issue any Option Shares hereunder if the issuance of such Option Shares would violate the provision of any applicable law, in which event the Company shall, as soon as practicable, take whatever action it reasonably can so that such Option Shares may be issued without resulting in such violations of law.

(j)    Termination of Service. In the event of a termination of the Option Holder’s employment for Cause, as such term is defined in the Company’s Incentive Compensation Plan on the date hereof, the Option shall immediately cease to be exercisable and shall be immediately forfeited.

(k)    Obligations as to Capital. The Company agrees that it will at all times maintain authorized and unissued share capital sufficient to fulfill all of its obligations under the Option.

(l)    Transfer of Shares. The Option, the Option Shares, or any interest in either, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable United States federal and state securities laws and the terms and conditions hereof.

(m)    Expenses of Issuance of Option Shares. The issuance of stock certificates or the electronic delivery of Option Shares upon the exercise of the Option in whole or in part, shall be without charge to the Option Holder. The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the exercise of the Option in whole or in part or the resulting issuance of the Option Shares hereunder.

(n)    Withholding. No later than the date of exercise of the Option granted hereunder, the Option Holder shall pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld upon the exercise of such Option and the Company shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the Option Holder, federal, state and local taxes of any kind required by law to be withheld upon the exercise of such Option.

(o)    References. References herein to rights and obligations of the Option Holder shall apply, where appropriate, to the Option Holder’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this Option.

(p)    Notices. Any notice required or permitted to be given under this agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

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If to the Company:

Arch Capital Group Ltd.:

Waterloo House, Ground Floor
100 Pitts Bay Road
Pembroke HM 08 Bermuda
Attn: Secretary

If to the Option Holder:

The last address delivered to the Company by the Option Holder in the manner set forth herein.

(q)    Governing Law. This agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to principles of conflict of laws thereof.

(r)    Entire Agreement. This agreement and the Plan constitute the entire agreement among the parties relating to the subject matter hereof, and any previous agreement or understanding among the parties with respect thereto is superseded by this agreement and the Plan.

(s)    Counterparts. This agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the undersigned have executed this agreement as of the Date of Grant.

ARCH CAPITAL GROUP LTD.
By:	/s/ Susie Tindall
	Name:	Susie Tindall
	Title:	Secretary
	/s/ Constantine Iordanou
	Constantine Iordanou

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EX-10.23

Exhibit 10.23

ARCH CAPITAL GROUP LTD.
Non-Qualified Stock Option Agreement

FOR GOOD AND VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Arch Capital Group Ltd. (the “Company”), a Bermuda company, hereby grants to Maamoun Rajeh, an employee of the Company on the date hereof (the “Option Holder”), the option to purchase common shares, $0.0033 par value per share, of the Company (“Shares”), upon the following terms:

WHEREAS, the Option Holder has been granted the following award under the Company’s 2015 Long Term Incentive and Share Award Plan (the “Plan”);

(a)Grant. The Option Holder is hereby granted an option (the “Option”) to purchase 5,310 Shares (the “Option Shares”) pursuant to the Plan, the terms of which are incorporated herein by reference. The Option is granted as of May 8, 2017, (the “Date of Grant”) and such grant is subject to the terms and conditions herein and the terms and conditions of the applicable provisions of the Plan. This Option shall not be treated as an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended. In the event of any conflict between this Agreement and the Plan, the Plan shall control.

(b)    Status of Option Shares. Upon issue, the Option Shares shall rank equally in all respects with the other Shares.

(c)    Option Price. The purchase price for the Option Shares shall be, except as herein provided, $96.26 per Option Share, hereinafter sometimes referred to as the “Option Price,” payable immediately in full upon the exercise of the Option.

(d)    Term of Option. The Option may be exercised only during the period (the “Option Period”) set forth in paragraph (f) below and shall remain exercisable until the tenth anniversary of the Date of Grant. Thereafter, the Option Holder shall cease to have any rights in respect thereof. The right to exercise the Option shall be subject to sooner termination as provided in paragraph (j) below.

(e)    No Rights of Shareholder. The Option Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or in equity.

(f)    Exercisability. Except as otherwise set forth in paragraph (j) below, the Option shall become exercisable in three equal annual installments on the first, second and third anniversaries of the Date of Grant, in each case subject to paragraph (j) below. Subject to paragraph (j) below, the Option may be exercised at any time or from time to time during the Option Period in regard to all or any portion of the Option which is then exercisable, as may be adjusted pursuant to paragraph (g) below.

(g)    Anti-dilution Adjustment. For the avoidance of doubt, the terms of Section 4(c) of the Plan, relating to anti-dilution adjustments, will apply to the Option.

(h)    Nontransferability. The Option, or any interest therein, may not be assigned or otherwise transferred, disposed of or encumbered by the Option Holder, other than by will or by the laws of descent and distribution. During the lifetime of the Option Holder, the Option shall be exercisable only by the Option Holder or by his or her guardian or legal representative. Notwithstanding the foregoing, the Option may be transferred by the Option Holder to members of his or her “immediate family” or to a trust or other entity established for the exclusive benefit of solely one or more members of the Option Holder’s “immediate family.” Any Option held by the transferee will continue to be subject to the same terms and conditions that were applicable to the Option immediately prior to the transfer, except that the Option will be transferable by the transferee only by will or the laws of descent and distribution. For purposes hereof, “immediate family” means the Option Holder’s children, stepchildren, grandchildren, parents, stepparents, grandparents, spouse, siblings (including half brother and sisters), in laws, and relationships arising because of legal adoption.

(i)    Exercise of Option. In order to exercise the Option, the Option Holder shall, in the manner directed by the Company, specify the whole number of Option Shares in respect of which the Option is being exercised, accompanied by

payment, in a manner acceptable to the Company (which shall include a broker assisted exercise arrangement), of the Option Price for the Option Shares for which the Option is being exercised. Payment to the Company in cash or Shares already owned by the Option Holder (provided that the Option Holder has owned such Shares for a minimum period of six months or has purchased such Shares on the open market) and having a total Fair Market Value equal to the exercise price, or in a combination of cash and such Shares, shall be deemed acceptable for purposes hereof. In addition, in lieu of making payment of the exercise price of the Option and receiving the number of Shares for which the Option is being exercised as described above, the Option Holder may instead elect to exercise the Option by making no cash exercise price payment but having the Company issue to the Option Holder the number of Shares (rounded down to the nearest whole number) equal to the net result obtained by (A) subtracting the exercise price per Share from the Fair Market Value per Share on the date of exercise, (B) multiplying the difference by the number of Shares for which the Option is being exercised, and (C) dividing the product by the Fair Market Value per Share on the date of exercise. For the avoidance of doubt, if the calculation in the immediately preceding sentence results in a negative number, no Shares will be issued upon exercise. Option Shares will be issued accordingly by the Company, and a share certificate dispatched or electronic delivery of such Option Shares to the Option Holder within 30 days.

The Company shall not be required to issue fractional Shares upon the exercise of the Option. If any fractional interest in a Share would be deliverable upon the exercise of the Option in whole or in part but for the provisions of this paragraph, the Company, in lieu of delivering any such fractional share therefor, shall pay a cash adjustment therefor in an amount equal to their Fair Market Value multiplied by the fraction of the fractional share which would otherwise have been issued hereunder. Anything to the contrary herein notwithstanding, the Company shall not be obligated to issue any Option Shares hereunder if the issuance of such Option Shares would violate the provision of any applicable law, in which event the Company shall, as soon as practicable, take whatever action it reasonably can so that such Option Shares may be issued without resulting in such violations of law.

(j)    Termination of Service.

1.    In the event the Option Holder ceases to be an employee of the Company due to the Option Holder’s death or Permanent Disability (as defined in the Company’s Incentive Compensation Plan on the date hereof), the Option, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the Option Holder (or the Option Holder’s Beneficiary or estate in the event of the Option Holder’s death) for a period of three years following such termination of employment (but not beyond the Option Period).

2.    In the event of termination of employment (other than by the Company for Cause, as such term is defined in the Company’s Incentive Compensation Plan on the date hereof and other than as set forth in paragraphs (j)(1) or (j)(3) hereof) after the attainment of Retirement Age (as defined in the Company’s Incentive Compensation Plan on the date hereof), the Option shall continue to become exercisable on the schedule set forth in paragraph (f) above so long as the Option Holder does not, without the written consent of the Company, engage in any activity in competition with any activity of the Company or any of its Subsidiaries other than (i) serving on the board of directors (or similar governing body) of another company or (ii) serving as a consultant for no more than 26 weeks per calendar year providing services that do not, in whole or in part, relate to the business or operations of an insurance or reinsurance company (“Competitive Activity”) and shall continue to be exercisable by the Option Holder (or the Option Holder’s Beneficiary or estate in the event of the Option Holder’s death) for the remainder of the Option Period. In the event the Option Holder engages in a Competitive Activity, (A) the Option, to the extent then exercisable, may be exercised for 30 days following the date on which the Option Holder engages in such Competitive Activity (but not beyond the Option Period) and (B) the Option, to the extent then not exercisable, shall be immediately forfeited.

3.    In the event the Option Holder ceases to be an employee of the Company after a Change in Control (as defined below) due to termination (A) by the Company not for Cause or (B) by the Option Holder for Good Reason (as defined below), in either case, on or before the second anniversary of the occurrence of the Change in Control, the Option, to the extent not already exercisable in full, shall become immediately exercisable in full and shall continue to be exercisable by the Option Holder for a period of 90 days following such termination of employment (but not beyond the Option Period). “Good Reason” means, without the Employee’s written consent, (a) the material diminution of any material duties or responsibilities of the Employee without the same being corrected within thirty (30) days after being given written notice thereof; or (b) a material reduction in the Employee’s Base Salary without the same being corrected within thirty (30) days after being given written notice thereof.

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4.    In the event that the Option Holder ceases to be an employee of the Company for any other reason, except due to a termination of the Option Holder’s employment by the Company for Cause, (A) the Option, to the extent then exercisable, may be exercised for 90 days following termination of employment (but not beyond the Option Period) and (B) the Option, to the extent then not exercisable, shall be immediately forfeited.

5.    In the event of a termination of the Option Holder’s employment for Cause, the Option shall immediately cease to be exercisable and shall be immediately forfeited.

6.    For purposes of this Option, service with any of the Company’s Subsidiaries (as defined in the Plan) shall be considered to be service with the Company.

7.    “Change in Control” shall mean:

(A) any person (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting Securities representing 50% or more of the total voting power or value of all the then outstanding Voting Securities; or

(B) the individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Board”) together with those who become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of at least a majority of the directors then still in office who either were directors as of such date or whose recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(C) the consummation of a merger, consolidation, recapitalization, liquidation, sale or disposition by the Company of all or substantially all of the Company's assets, or reorganization of the Company, other than any such transaction which would (x) result in more than 50% of the total voting power and value represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the former shareholders of the Company and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or (B) of this paragraph.

“Permitted Persons” means (A) the Company; (B) any Related Party; or (C) any group (as defined in Rule 13b-3 under the Exchange Act) comprised of any or all of the foregoing.

“Related Party” means (A) a majority-owned subsidiary of the Company; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (C) any entity, 50% or more of the voting power of which is owned directly or indirectly by the shareholders of the Company in substantially the same proportion as their ownership of Voting Securities immediately prior to the transaction.

“Voting Security” means any security of the Company which carries the right to vote generally in the election of directors.

(k)    Obligations as to Capital. The Company agrees that it will at all times maintain authorized and unissued share capital sufficient to fulfill all of its obligations under the Option.

(l)    Transfer of Shares. The Option, the Option Shares, or any interest in either, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable United States federal and state securities laws and the terms and conditions hereof.

(m)    Expenses of Issuance of Option Shares. The issuance of stock certificates or the electronic delivery of Option Shares upon the exercise of the Option in whole or in part, shall be without charge to the Option Holder. The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any

3

governmental body, agency or official (other than income taxes) by reason of the exercise of the Option in whole or in part or the resulting issuance of the Option Shares.

(n)    Withholding. No later than the date of exercise of the Option granted hereunder, the Option Holder shall pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld upon the exercise of such Option and the Company shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the Option Holder, federal, state and local taxes of any kind required by law to be withheld upon the exercise of such Option.

(o)    References. References herein to rights and obligations of the Option Holder shall apply, where appropriate, to the Option Holder’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this Option.

(p)    Notices. Any notice required or permitted to be given under this agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Arch Capital Group Ltd.:

Waterloo House, Ground Floor
100 Pitts Bay Road
Pembroke HM 08 Bermuda
Attn: Secretary

If to the Option Holder:

The last address delivered to the Company by the Option Holder in the manner set forth herein.

(q)    Governing Law. This agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to principles of conflict of laws thereof.

(r)    Entire Agreement. This agreement and the Plan constitute the entire agreement among the parties relating to the subject matter hereof, and any previous agreement or understanding among the parties with respect thereto is superseded by this agreement and the Plan.

(s)    Counterparts. This agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the undersigned have executed this agreement as of the Date of Grant.

ARCH CAPITAL GROUP LTD.
By:	/s/ Susie Tindall
	Name:	Susie Tindall
	Title:	Secretary
	/s/ Maamoun Rajeh
	Maamoun Rajeh

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EX-10.24

Exhibit 10.24

ARCH CAPITAL GROUP LTD.
Restricted Share Agreement

THIS AGREEMENT, dated as of May 8, 2017, between Arch Capital Group Ltd. (the “Company”), a Bermuda company, and Maamoun Rajeh (the “Employee”).

WHEREAS, the Employee has been granted the following award under the Company’s 2015 Long Term Incentive and Share Award Plan (the “Plan”);

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the parties hereto agree as follows.

1.    Award of Shares.  Pursuant to the provisions of the Plan, the terms of which are incorporated herein by reference, the Employee is hereby awarded 5,310 Restricted Shares (the “Award”), subject to the terms and conditions herein set forth. Capitalized terms used herein and not defined shall have the meanings set forth in the Plan. In the event of any conflict between this Agreement and the Plan, the Plan shall control.

2.    Terms and Conditions.  It is understood and agreed that the Award of Restricted Shares evidenced hereby is subject to the following terms and conditions:

(a)    Vesting of Award. Subject to Section 2(b) below and the other terms and conditions of this Agreement, this Award shall become vested in three equal annual installments on the first, second and third anniversaries of the date hereof. Unless otherwise provided by the Company, all dividends and other amounts receivable in connection with any adjustments to the Shares under Section 4(c) of the Plan shall be subject to the vesting schedule in this Section 2(a).

(b)    Termination of Service; Forfeiture of Unvested Shares.

(i)    In the event the Employee ceases to be an employee of the Company prior to the date the Restricted Shares otherwise become vested due to his or her death or Permanent Disability (as defined in the Company’s Incentive Compensation Plan on the date hereof), the Restricted Shares shall become immediately vested in full upon such termination of employment.

(ii)    In the event of termination of employment (other than by the Company for Cause, as such term is defined in the Company’s Incentive Compensation Plan on the date hereof, and other than as set forth in Section 2(b)(i) or (iii) hereof) after the attainment of Retirement Age (as defined in the Company’s Incentive Compensation Plan on the date hereof), the Restricted Shares shall continue to vest on the schedule set forth in Section 2(a) above so long as the Employee does not, without the written consent of the Company, engage in any activity in competition with any activity of the Company or any of its Subsidiaries other than (i) serving on the board of directors (or similar governing body) of another company or (ii) serving as a consultant for no more than 26 weeks per calendar year providing services that do not, in whole or in part, relate to the business or operations of an insurance or reinsurance company (“Competitive Activity”). In the event the Employee engages in a Competitive Activity, any unvested Restricted Shares shall be forfeited by the Employee and become the property of the Company.

(iii)    In the event the Employee ceases to be an employee of the Company after a Change in Control (as defined below) due to termination (A) by the Company not for Cause or (B) by the Employee for Good Reason (as defined below), in either case, on or before the second anniversary of the occurrence of the Change in Control, the Restricted Shares, to the extent not already vested, shall become immediately vested in full upon such termination of employment. “Good Reason” means, without the Employee’s written consent, (a) the material diminution of any material duties or responsibilities of the Employee without the same being corrected within thirty (30) days after being given written notice thereof; or (b) a material reduction in the Employee’s Base Salary without the same being corrected within thirty (30) days after being given written notice thereof.

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(iv)    If the Employee ceases to be an Employee of the Company for any other reason prior to the date the Restricted Shares become vested, the Award shall be forfeited by the Employee and become the property of the Company.

(v)    For purposes of this Agreement, service with any of the Company’s Subsidiaries (as defined in the Plan) shall be considered to be service with the Company.

(vi)    “Change in Control” shall mean:

(A) any person (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a Permitted Person, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting Securities representing 50% or more of the total voting power or value of all the then outstanding Voting Securities; or

(B) the individuals who, as of the date hereof, constitute the Board of Directors of the Company (the “Board”) together with those who become directors subsequent to such date and whose recommendation, election or nomination for election to the Board was approved by a vote of at least a majority of the directors then still in office who either were directors as of such date or whose recommendation, election or nomination for election was previously so approved, cease for any reason to constitute a majority of the members of the Board; or

(C) the consummation of a merger, consolidation, recapitalization, liquidation, sale or disposition by the Company of all or substantially all of the Company's assets, or reorganization of the Company, other than any such transaction which would (x) result in more than 50% of the total voting power and value represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by the former shareholders of the Company and (y) not otherwise be deemed a Change in Control under subparagraphs (A) or (B) of this paragraph.

“Permitted Persons” means (A) the Company; (B) any Related Party; or (C) any group (as defined in Rule 13b-3 under the Exchange Act) comprised of any or all of the foregoing.

“Related Party” means (A) a majority-owned subsidiary of the Company; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any majority-owned subsidiary of the Company; or (C) any entity, 50% or more of the voting power of which is owned directly or indirectly by the shareholders of the Company in substantially the same proportion as their ownership of Voting Securities immediately prior to the transaction.

“Voting Security” means any security of the Company which carries the right to vote generally in the election of directors.

(c)    Certificates.  Each certificate issued in respect of Restricted Shares awarded hereunder shall be issued in book entry format with the Company’s transfer agent and shall bear a legend disclosing the restrictions on transferability imposed on such Restricted Shares by this Agreement (the “Restrictive Legend”). Upon the vesting of Restricted Shares pursuant to Section 2 hereof and the satisfaction of any withholding tax liability pursuant to Section 5 hereof, such vested Shares, not bearing the Restrictive Legend, shall be delivered to the Employee.

(d)    Rights of a Stockholder.  Prior to the time a Restricted Share is fully vested hereunder, the Employee shall have no right to transfer, pledge, hypothecate or otherwise encumber such Restricted Share. During such period, the Employee shall have all other rights of a stockholder, including, but not limited to, the right to vote and to receive dividends (subject to Section 2(a) hereof) at the time paid on such Restricted Shares.

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(e)    No Right to Continued Employment. This Award shall not confer upon the Employee any right with respect to continuance of employment by the Company nor shall this Award interfere with the right of the Company to terminate the Employee’s employment at any time.

3.    Transfer of Shares. The Shares delivered hereunder, or any interest therein, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, applicable United States federal and state securities laws or any other applicable laws or regulations and the terms and conditions hereof.

4.    Expenses of Issuance of Shares. The issuance of stock certificates hereunder shall be without charge to the Employee. The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) or by reason of the issuance of Shares.

5.    Withholding. No later than the date of vesting of (or the date of an election by the Employee under Section 83(b) of the Code with respect to) the Award granted hereunder, the Employee shall pay to the Company or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld at such time with respect to such Award and the Company shall, to the extent permitted or required by law, have the right to deduct from any payment of any kind otherwise due to the Employee, federal, state and local taxes of any kind required by law to be withheld at such time.

6.    References.  References herein to rights and obligations of the Employee shall apply, where appropriate, to the Employee’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this Agreement.

7.    Notices.  Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Arch Capital Group Ltd.
Waterloo House
100 Pitts Bay Road
Pembroke HM 08 Bermuda
Attn.: Secretary

If to the Employee:

To the last address delivered to the Company by the
Employee in the manner set forth herein.

8.    Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of New York, without giving effect to principles of conflict of laws.

9.    Entire Agreement. This Agreement and the Plan constitute the entire agreement among the parties relating to the subject matter hereof, and any previous agreement or understanding among the parties with respect thereto is superseded by this Agreement and the Plan.

10.    Counterparts.  This Agreement may be executed in two counterparts, each of which shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

ARCH CAPITAL GROUP LTD.
By:	/s/ Susie Tindall
	Name:	Susie Tindall
	Title:	Secretary
	/s/ Maamoun Rajeh
	Maamoun Rajeh

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EX-10.25

Exhibit 10.25

September 19, 2017

Mr. David McElroy

22 Joshua Dr.

West Simsbury, CT  06092

Dear David:

This letter agreement confirms your and our understanding and agreement on the terms under which you will provide consulting services to Arch Capital Group Ltd. (the “Company”).

1.    From October 1, 2017 until December 31, 2017, you will serve as Executive Chairman of Arch Insurance Group Inc. (“AIGI”) and Vice Chairman of Arch Worldwide Insurance Group on a full time basis. As of January 1, 2018 (the “Effective Date”), you will retire as an employee of AIGI, and your employment with AIGI will terminate in accordance with Section 5.03 of your employment agreement with AIGI, dated as of June 5, 2009 and as amended on July 25, 2012 (“Prior Agreement”). For the avoidance of doubt, certain provisions of the Prior Agreement will survive in accordance with their terms as provided in Section 12.16 of the Prior Agreement.

2. During the term of this letter agreement commencing on the Effective Date (the “Consulting Term”), you shall serve as Vice Chairman of Arch Worldwide Insurance Group and make yourself available to provide consulting services to the Company for up to 50 days per year as reasonably requested by the Company on specific projects, including, among other things, assistance in the transition to the new Chairman and Chief Executive Officer of Arch Worldwide Insurance Group, participation in meetings and other activities of the Underwriting Oversight Committee of the Board of Directors of the Company and due diligence relating to proposed acquisitions by the Company and its subsidiaries. During the Consulting Term, you shall receive compensation of $150,000 per calendar year, payable in four equal quarterly installments within 10 days of the close of each calendar quarter. You will also be eligible for an annual bonus based on your performance, as determined in the discretion of the Board of Directors of the Company (or a duly authorized committee) (the “Board”). It is anticipated by both you and the Company that the level of services you will perform hereunder will be no more than 20% of the average level of services performed by you for the Company and its affiliates over the immediately preceding three years. In performing your services hereunder, you will comply with the applicable operating guidelines of the Company and its subsidiaries, which contain restrictions on activities within the United States.

3.    During the Consulting Term, the Company shall reimburse you for all reasonable out-of-pocket expenses incurred by you in connection with your provision of consulting services hereunder, including business class air travel, upon presentation to the Company of appropriate documentation. Additionally, in the event of a federal income tax law change applicable to 2018 that would have reduced federal income tax payments by you in respect of distributions in 2017 from the Arch Capital Group (U.S.) supplemental non-qualified plan (taking into account reductions in tax rates and adjustments to the tax base), the Company shall reimburse you, on an after-tax basis, for the amount of such reduced income tax payments as calculated by the Company. Any reimbursement under this Section 2 shall be made on or before the last day of the calendar year following the calendar year for which the expense was incurred, and the amount of any benefit or reimbursement under this Section 2 for one calendar year shall not affect the amount of any benefit or reimbursement available hereunder in any other calendar year.

4.    You understand and agree that (1) you shall not, directly or indirectly, divulge to any person or use for your own benefit or the benefit of any person any information of a private, secret or confidential nature concerning the business, accounts, finances, transactions or other affairs of the Company, or any of its affiliates or business partners which has come into your knowledge during the course of your services with the Company, (2) you shall not remove from the premises of the Company or any of its affiliates, except in connection with your duties pursuant to this letter agreement, any document or other object containing or reflecting any such information, (3) all of such information, including any written reports prepared by you, are and shall remain the sole and exclusive property of the Company, and upon completion of your services hereunder, you shall return to the Company the originals and all copies and extracts of any such

information, and (4) any remedy at law for any breach by you of this paragraph 3 shall be inadequate and that the Company shall be entitled to temporary and permanent injunctive relief without the necessity of proving actual damages.

5.    Both you and the Company agree that you will act as an independent contractor in the performance of your services under this letter agreement, and that nothing herein shall be taken to imply any relationship of partnership, agency or employer and employee between you and the Company. In addition, you shall not delegate any of your responsibilities hereunder to any other person.     

6.    This letter agreement is of unlimited duration unless terminated as provided below. Either party may terminate this letter agreement by providing at least 30 days’ prior written notice to the other party. If you shall fail to perform your duties hereunder in any respect, the Company may terminate this letter agreement immediately upon notice to you with no obligation to make further payment to you hereunder. You shall not assign this letter agreement or any rights, benefits, duties or obligations hereunder to any other party.            

7. For the bonus paid on or before March 15, 2018 for calendar year 2017, a bonus for you will be recommended for approval by the Board in an amount of not less than 5.4% (the “Percentage”) of the aggregate formula approach pool for the Company’s insurance segment paid at such time (for such purposes, the Percentage was determined by dividing your bonus for the 2016 year by the aggregate insurance segment pool of $16,652,338 paid in March 2017).

8.    This letter agreement constitutes the entire agreement among the parties regarding the subject matter hereof, and shall be governed by and construed in accordance with the laws of New York, without reference to the principles of conflict of laws thereof.

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Please confirm your agreement to the above by signing and returning the enclosed duplicate of this letter agreement.

	ARCH CAPITAL GROUP LTD.
	By:	/s/ Marc Grandisson
		Name:	Marc Grandisson
		Title:	President & Chief Operating Officer
	ARCH INSURANCE GROUP INC.
	By:	/s/ Carl Sullo
		Name:	Carl Sullo
		Title:	SVP
Accepted as of the date hereof:
/s/ David McElroy
David McElroy

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EX-10.26

Exhibit 10.26

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (“Agreement”), dated as of September 19, 2017, between Arch Capital Group Ltd., a Bermuda corporation (the “Company”), and Maamoun Rajeh (the “Executive”). This Agreement will become effective as of October 1, 2017 and, as of such effective date, will supersede in its entirety the Prior Agreement.

The parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

SECTION 1.01. Definitions. For purposes of this Agreement, the following terms have the meanings set forth below:

“Accounting Firm” has the meaning set forth in Section 12.10.

“Affiliate” means any Person, directly or indirectly, through one or more intermediaries, Controlling, Controlled by, or under common Control with the Company. For purposes hereof, (a) “Control” means the ownership, directly or indirectly, of (i) in the case of a corporation, Voting Securities (as defined below) representing 50% or more of the total voting power or value of all the then outstanding Voting Securities of such corporation or (ii) in the case of a partnership, limited liability company, association or other business entity (“Business Entity”), 50% or more of the partnership or other similar ownership interest of such Business Entity; and (b) “Voting Security” means any security of a corporation which carries the right to vote generally in the election of directors. For purposes of the definition of “Control,” (x) a Person will be deemed to have a 50% or more ownership interest in a Business Entity if such Person is allocated 50% or more of Business Entity gains or losses or controls the managing director or member or general partner of such Business Entity; and (y) “Controlling” and “Controlled” have meanings correlative thereto.

“Base Salary” has the meaning set forth in Section 4.01.

“Bonus Amount” means the greater of (i) the Executive’s target annual bonus for the year during which Notice of Termination is given, or (ii) the average of the Executive’s actual annual bonus for the three years immediately preceding the year during which Notice of Termination is given (or such lesser number of years in which the Executive was employed by the Company or its Affiliate).

“Cause” means (a) theft or embezzlement by the Executive with respect to the Company or its Affiliates; (b) malfeasance or gross negligence in the performance of the Executive’s duties; (c) the Executive’s conviction of any felony or any crime involving moral turpitude; (d) willful or prolonged absence from work by the Executive (other than by reason of disability due to physical or mental illness) or failure, neglect or refusal by the Executive to perform his duties and responsibilities without the same being corrected within ten (10) days after being given written notice thereof; (e) continued and habitual use of alcohol by the Executive to an extent which materially impairs the Executive’s performance of his duties; (f) the Executive’s use of illegal drugs; or (g) the material breach by the Executive of any of the covenants contained in this Agreement.

“Code” means the U.S. Internal Revenue Code of 1986, as amended.

“Confidential Information” means information that is not generally known to the public and that was or is used, developed or obtained by the Company or its Affiliates in connection with their business. It shall not include information (a) required to be disclosed by court or administrative order or called for in a subpoena or discovery request regular on its face, (b) lawfully obtainable from other sources or which is in the public domain through no fault of the Executive; or (c) the disclosure of which is consented to in writing by the Company.

“Date of Termination” has the meaning set forth in Section 5.01.

“Employment Period” has the meaning set forth in Section 2.01.

“Good Reason” means, without the Executive’s written consent and subject to the timely notice requirement and the Company’s opportunity to cure set forth in Section 5.05 below, (a) the material diminution of any material duties or

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responsibilities of the Executive; (b) a material reduction in the Executive’s Base Salary; or (c) any material breach by the Company of the provisions contained in this Agreement.

“Intellectual Property” has the meaning set forth in Section 7.01.

“Notice of Termination” has the meaning set forth in Section 5.05.

“Noncompetition Period”has the meaning set forth in Section 9.01.

“Nonsolicitation Period” has the meaning set forth in Section 9.02.

“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, an estate, a trust, a joint venture, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof.

“Permanent Disability” means those circumstances where the Executive is unable to continue to perform the usual customary duties of his assigned job or as otherwise assigned in accordance with the provisions of this Agreement for a period of six (6) months in any twelve (12) month period because of physical, mental or emotional incapacity resulting from injury, sickness or disease. Any questions as to the existence of a Permanent Disability shall be determined by a qualified, independent physician selected by the Company and approved by the Executive (which approval shall not be unreasonably withheld). The determination of any such physician shall be final and conclusive for all purposes of this Agreement.

“Reimbursable Expenses” has the meaning set forth in Section 4.04.

“Start Date” has the meaning set forth in Section 2.01.

ARTICLE 2

EMPLOYMENT

SECTION 2.01. Employment. The Company shall employ the Executive, and the Executive shall accept employment with the Company, for the period beginning on October 1, 2017 (the “Start Date”) and ending on the Date of Termination as provided in Section 5.01 (the “Employment Period”). If the Executive fails to satisfy the condition set forth in the preceding sentence, he shall forfeit all rights hereunder.

ARTICLE 3

POSITION AND DUTIES

SECTION 3.01. Position and Duties. During the Employment Period, the Executive shall serve as Chairman and Chief Executive Officer of Arch Worldwide Reinsurance Group of the Company and shall have such responsibilities, powers and duties as may from time to time be prescribed by the President of the Company; provided that such responsibilities, powers and duties are substantially consistent with those customarily assigned to individuals serving in such positions at comparable companies or as may be reasonably required by the conduct of the business of the Company. During the Employment Period the Executive shall devote substantially all of his working time and efforts to the business and affairs of the Company. The Executive shall not directly or indirectly render any services of a business, commercial or professional nature to any other person or for-profit organization not related to the business of the Company or its Affiliates, whether for compensation or otherwise, without prior written consent of the Company.

SECTION 3.02. Work Permits. The Executive shall cooperate in all reasonable respects with the Company to obtain, maintain and renew a suitable (for the purposes of the Executive’s contemplated employment by the Company) work permit by the Bermuda government authorities and any other permits required by any Bermuda government authority. The Company shall be responsible for permit fees, and all other expenses, including legal expenses, in connection with obtaining and maintaining such work permit.

SECTION 3.03. Work Location. While employed by the Company hereunder, the Executive shall perform his duties (when not traveling or engaged elsewhere in the performance of his duties) at the offices of the Company in Bermuda. The Executive shall travel to such places on the business of the Company in such manner and on such occasions as the Company may from time to time reasonably require.

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SECTION 3.04. Relocation. Upon the termination of Executive’s employment for any reason, the Company shall reimburse the Executive for all reasonable expenses incurred by him for the cost of relocating all of his household items to the United States and airfare for Executive and his family to return to the United States, in each case, subject to the Company’s requirements with respect to reporting and documentation of such expenses; provided, however, that any such expenses must be incurred by the Executive not later than the last day of the calendar year following the calendar year in which the Executive’s “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company occurs, and any such reimbursement shall be made promptly upon presentation by the Executive to the Company of the required documentation and, in all events, no later than the last day of the second calendar year following the calendar year in which the Executive’s “separation from service” with the Company occurs.

ARTICLE 4

BASE SALARY AND BENEFITS

SECTION 4.01. Base Salary. During the Employment Period, the Executive’s base salary will be $650,000 per annum (the “Base Salary”). The Base Salary will be payable monthly on the 15th day of each month, two weeks in arrears and two weeks in advance. Annually during the Employment Period the Company shall review with the Executive his job performance and compensation, and if deemed appropriate by the Board of Directors of the Company, in its discretion, the Executive’s Base Salary may be increased. Normal hours of employment are 8:30 a.m. to 5:00 p.m., Monday to Friday. The Executive’s salary has been computed to reflect that his regular duties are likely, from time to time, to require more than the normal hours per week and the Executive shall not be entitled to receive any additional remuneration for work outside normal hours.

SECTION 4.02. Bonuses. In addition to the Base Salary, the Executive shall be eligible to participate in an annual bonus plan on terms set forth from time to time by the Board of Directors of the Company. The Executive’s target annual bonus will be 100% of his Base Salary.

SECTION 4.03. Benefits. In addition to the Base Salary, and any bonuses payable to the Executive pursuant to this Agreement, the Executive shall be entitled to the following benefits during the Employment Period:

(a) such major medical, life insurance and disability insurance coverage as is, or may during the Employment Period, be provided generally for other senior executive officers of the Company as set forth from time to time in the applicable plan documents;

(b) in addition to the usual public holidays and eight (8) paid days off for sick leave, a maximum of five (5) weeks of paid vacation annually during the term of the Employment Period (Section 11 of the Bermuda Employment Act 2000 shall otherwise not apply to the Executive’s employment hereunder);

(c) benefits under any plan or arrangement available generally for the senior executive officers of the Company, subject to and consistent with the terms and conditions and overall administration of such plans as set forth from time to time in the applicable plan documents;

(d) payment by the Company of the reasonable cost of preparation of annual tax returns and associated tax planning on a basis no less favorable than such arrangements provided on the date hereof to similarly situated senior executives residing in Bermuda, and the cost paid by the Company under this Section 4.03(d) for one calendar year shall be paid by the Company promptly upon presentation by the Executive to the Company of the required documentation and, in all events, not later than the end of the following calendar year; and

(e) other fringe benefits customarily provided from time to time during the Employment Period to similarly situated senior executives residing in Bermuda.

SECTION 4.04. Expenses. The Company shall reimburse the Executive for all reasonable expenses incurred by him in the course of performing his duties under this Agreement which are consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses (“Reimbursable Expenses”),subject to the Company’s requirements with respect to reporting and documentation of expenses.

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SECTION 4.05. Share-Based Awards. The Executive shall be eligible to participate in the Company’s Long Term Incentive and Share Award Plans (and any similar plan adopted by the Company) under which share-based awards may be granted, as determined by the Board of Directors of the Company in its discretion.

ARTICLE 5

TERM AND TERMINATION

SECTION 5.01. Term. The expected term of this Agreement is for at least three years from the Start Date.  Notwithstanding the foregoing, the Employment Period shall in all events end on the Date of Termination, whenever occurring.  For purposes of this Agreement, the “Date of Termination” shall mean the first to occur of the following:  (a) the six (6) month anniversary of the Company providing Notice of Termination (as defined below) without Cause to the Executive; (b) immediately upon the Company providing Notice of Termination for Cause to the Executive; (c) the six (6) month anniversary of the Executive providing Notice of Termination specifying his resignation for Good Reason to the Company; (d) the six (6) month anniversary of the Executive providing Notice of Termination by the Executive without Good Reason to the Company; (e) the fifth (5th) day following the Company providing Notice of Termination to the Executive as a result of the Executive’s Permanent Disability; and (f) the date of Executive’s death.  In the event that there are circumstances which would give rise to a termination by the Company for Cause, the Company may, in its sole and exclusive discretion, treat such termination as a termination without Cause. Upon termination of the Executive’s employment with the Company for any reason, the Executive shall resign from all positions and in all capacities with the Company and its Affiliates or from any other company or other Person with which the Executive is serving at the Company’s request.

SECTION 5.02 Resignation by the Executive Without Good Reason. If the Employment Period shall be terminated as a result of the Executive’s resignation or leaving of his employment, other than for Good Reason, the Executive shall continue to: (a) receive Base Salary and benefits set forth in Section 4.03 through the Date of Termination, except that any amount payable after the Executive’s “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company will be subject to Section 12.09 below; and (b) the Company will make a cash lump sum payment to the Executive equal to one half of the sum of (I) the Bonus Amount, and (II) a pro-rated portion of the Bonus Amount based on the number of days elapsed in the calendar year through the date Notice of Termination is given, which payment shall be made on the date that is sixty (60) days following the Date of Termination, and (c) receive reimbursement of all Reimbursable Expenses incurred by the Executive prior to the Date of Termination. The Executive’s entitlements under all other benefit plans and programs of the Company shall be as determined thereunder.

SECTION 5.03 Termination for Good Reason or Without Cause. If the Employment Period shall be terminated by the Executive for Good Reason or by the Company without Cause, the Executive shall continue to: (a) receive Base Salary through the six (6) month anniversary of the Date of Termination, such amount to be paid in accordance with the regular payroll practices of the Company (except that any amount otherwise payable after the Date of Termination and prior to the sixtieth (60^th) day following the Date of Termination shall instead be paid on such sixtieth (60^th) day), and except that any amount payable after the Executive’s “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company will be subject to Section 12.09 below; (b) receive an amount equal to the sum of (i) the Executive’s target annual bonus plus (ii) a pro-rated portion of the Executive’s target annual bonus based on the number of days elapsed in the calendar year through the date Notice of Termination is given, one half of which amount shall be paid in cash in a single lump sum on the date that is sixty (60) days following the Date of Termination and the remaining half of which shall be paid in accordance with the regular payroll practices of the Company (except that any amount otherwise payable after the Date of Termination and prior to the sixtieth (60^th) day following the Date of Termination shall instead be paid on such sixtieth (60^th) day); (c) receive benefits set forth in Section 4.03 above through the Date of Termination, except that any amount payable after the Executive’s “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company will be subject to Section 12.09 below, and (d) receive his major medical insurance coverage benefits from the Company’s plan in effect from time to time (provided the Executive continues to pay the portion of the premiums for such coverage that are charged to similarly situated active employees) for a period equal to the lesser of (i) six (6) months after the Date of Termination, and (ii) until the Executive is provided by another employer with benefits substantially comparable to the benefits provided by such plan; and (f) receive reimbursement for all Reimbursable Expenses incurred by the Executive prior to the Date of Termination. The Executive’s entitlements under all other benefit plans and programs of the Company shall be as determined thereunder. Notwithstanding the foregoing, the Executive shall be entitled to the amounts described above (other than Base Salary and benefits as set forth in Section 4.03 through the Date of Termination) only if (i) the Executive has entered into an irrevocable (except to the extent required by law, and to the extent required by law to be revocable, has not revoked) general release of claims, which, subject to Section 5.07 below, is reasonably satisfactory to the Company (“Release”), on or before the date that

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is fifty (50) days following the Date of Termination (but not prior to the Date of Termination), and (ii) the Executive has not breached and does not breach the provisions of Sections 6.01, 7.01, 8.01, 9.01, 9.02 or 11.01 of this Agreement.

SECTION 5.04 Termination for Other Reasons. If the Employment Period shall be terminated by the Company with Cause, as a result of the Executive’s Permanent Disability or upon the Executive’s death, the Executive (or his beneficiaries or estate, in the case of death) shall continue to (a) receive Base Salary and benefits set forth in Section 4.03 above through the Date of Termination, except that any amount payable after the Executive’s “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company will be subject to Section 12.09 below; and (b) in the case of termination due to the Executive’s Permanent Disability or death, receive his major medical insurance coverage benefits from the Company’s plan in effect at the time of such termination for a period equal to the lesser of (i) twelve (12) months after the Date of Termination, and (ii) until the Executive is provided by another employer with benefits substantially comparable to the benefits provided by such plan; and (d) receive reimbursement for all Reimbursable Expenses incurred by the Executive prior to the Date of Termination. The Executive’s entitlements under all other benefit plans and programs of the Company shall be as determined thereunder.

SECTION 5.05. Notice of Termination and Opportunity to Cure. Any termination by the Company for Permanent Disability or Cause or without Cause or by the Executive for Good Reason or without Good Reason shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the date the termination is to take effect (consistent with the terms of this Agreement), the specific termination provision in this Agreement relied upon and, for a termination for Permanent Disability or for Cause or for a resignation for Good Reason, shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of employment under the provision indicated. It shall be a condition precedent to the Executive’s right to terminate employment for Good Reason that (i) the Executive shall first have given the Company written notice that an event or condition constituting Good Reason has occurred within ninety (90) days after such occurrence, and any failure to give such written notice within such period will result in a waiver by the Executive of his right to terminate for Good Reason as a result of such event or condition, and (ii) a period of thirty (30) days from and after the giving of such written notice shall have elapsed without the Company having effectively cured or remedied such occurrence during such 30-day period, unless such occurrence cannot be cured or remedied within thirty (30) days, in which case the period for remedy or cure shall be extended for a reasonable time (not to exceed an additional fifteen (15) days) provided that the Company has made and continues to make a diligent effort to effect such remedy or cure.

SECTION 5.06. Garden Leave. Following any Notice of Termination, whether by the Company or the Executive and until the end of the Employment Period, the Company may direct, in its sole and exclusive discretion, that the Executive perform no duties and exercise no powers or authorities in connection with his employment, resign from any office with the Company and its Affiliates and not attend any premises of any of the Company and its Affiliates; provided, however, that, following any such direction, the Executive will continue to be required to comply with his other obligations under this Agreement and will continue to have a duty of loyalty to the Company as an employee (“Garden Leave”). Notwithstanding the above, the Company may at its discretion require the Executive to perform duties at any time during the Garden Leave, which duties may be withdrawn at any time at the Company’s discretion, and, during the Garden Leave, the Executive shall: (a) remain an employee of the Company and be bound by the terms of this Agreement; (b) not, without the prior written consent of the Company, attend his place of work or any other premises of any of the Company and its Affiliates or access the information technology systems of the Company and its Affiliates; (c) not, without the prior written consent of the Company, contact or deal with (or attempt to contact or deal with) any officer, employee, consultant, client, customer, investor, supplier, agent, distributor, shareholder, adviser or other business contact of any of the Company and its Affiliates; (d) promptly disclose in writing to the Company any attempt at contact with the Executive made by any such person or entity with whom the Executive has been required to have no contact pursuant to this Section 5.06; and (e) be ready and available to perform such duties as the Company may require, ensuring that the Company knows where and how he can be contacted and complying with any written requests to contact a specified employee of the Company at specified intervals.

SECTION 5.07 Release. In consideration of the mutual promises herein and the payments detailed in this Article 5, the Executive, on behalf of himself and his heirs and assigns, in a form reasonably satisfactory to the Company, shall, with respect to any termination of employment under Section 5.03, execute a Release which irrevocably and unconditionally releases and forever discharges, individually and collectively, the Company and its Affiliates, and each of their respective officers, directors, employees, shareholders, representatives, parent companies, subsidiaries, predecessors, successors, assigns, attorneys and all persons acting by, through or in concert with them, of and from any and all charges, claims, complaints, demands, liabilities or causes of action, known or unknown, that the Executive may have at the effective date of the Release or has ever had against

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any such Person. Notwithstanding any other provision hereof, the Executive shall not be required by any general release to release claims that the Executive may have against the Company that arise after the effective date of the Release, any rights the Executive may have to enforce Section 5.03 of this Agreement, or any rights of the Executive to be indemnified under the organizational documents of the Company and its Affiliates or under applicable law or pursuant to the Company’s directors’ and officers’ liability insurance policies.

ARTICLE 6

CONFIDENTIAL INFORMATION

SECTION 6.01. Nondisclosure and Nonuse of Confidential Information. The Executive will not disclose or use at any time during or after the Employment Period any Confidential Information of which the Executive is or becomes aware, whether or not such Confidential Information is developed by him, except to the extent that such disclosure or use is directly related to and required by the Executive’s performance of duties assigned to the Executive pursuant to this Agreement. Under all circumstances and at all times, the Executive will take all appropriate steps to safeguard Confidential Information in his possession and to protect it against disclosure, misuse, espionage, loss and theft.

SECTION 6.02. Defend Trade Secrets Act. Pursuant to 18 U.S.C. § 1833(b), the Executive understands that the Executive will not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret of the Company that (i) is made (x) in confidence to a Federal, State, or local government official, either directly or indirectly, or to the Executive’s attorney and (y) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. The Executive understands that if the Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, the Executive may disclose the trade secret to the Executive’s attorney and use the trade secret information in the court proceeding if the Executive (I) files any document containing the trade secret under seal, and (II) does not disclose the trade secret, except pursuant to court order. Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by such section. Further, nothing in this Agreement or any other agreement or arrangement with the Company or any of its Affiliates shall prohibit or restrict the Executive from making any disclosure of information or documents to any governmental agency or legislative body, any self-regulatory organization, the Legal Department of the Company, and/or pursuant to the whistleblower provisions of the Dodd-Frank Act or Sarbanes-Oxley Act.

ARTICLE 7

INTELLECTUAL PROPERTY

SECTION 7.01. Ownership of Intellectual Property. In the event that the Executive as part of his activities on behalf of the Company generates, authors or contributes to any invention, design, new development, device, product, method of process (whether or not patentable or reduced to practice or comprising Confidential Information), any copyrightable work (whether or not comprising Confidential Information) or any other form of Confidential Information relating directly or indirectly to the business of the Company as now or hereinafter conducted (collectively, “Intellectual Property”), the Executive acknowledges that such Intellectual Property is the sole and exclusive property of the Company and hereby assigns all right title and interest in and to such Intellectual Property to the Company. Any copyrightable work prepared in whole or in part by the Executive during the Employment Period will be deemed “a work made for hire” under Section 201(b) of the United States Copyright Act of 1976, as amended, and the Company will own all of the rights comprised in the copyright therein. The Executive will promptly and fully disclose all Intellectual Property and will cooperate with the Company to protect the Company’s interests in and rights to such Intellectual Property (including providing reasonable assistance in securing patent protection and copyright registrations and executing all documents as reasonably requested by the Company, whether such requests occur prior to or after termination of Executive’s employment hereunder).

ARTICLE 8

DELIVERY OF MATERIALS UPON TERMINATION OF EMPLOYMENT

SECTION 8.01. Delivery of Materials upon Termination of Employment. As requested by the Company, from time to time and upon the termination of the Executive’s employment with the Company for any reason, the Executive will promptly deliver to the Company all property of the Company in the Executive’s possession or within his control, including, without limitation, all copies and embodiments, in whatever form or medium, of all Confidential Information or Intellectual Property in

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the Executive’s possession or within his control (including written records, notes, photographs, manuals, notebooks, documentation, program listings, flow charts, magnetic media, disks, diskettes, tapes and all other materials containing any Confidential Information or Intellectual Property), irrespective of the location or form of such property and, if requested by the Company, will provide the Company with written confirmation that all such property have been delivered to the Company.

ARTICLE 9

NONCOMPETITION AND NONSOLICITATION

SECTION 9.01. Noncompetition.The Executive acknowledges that during his employment with the Company, hewill become familiar with trade secrets and other Confidential Information concerning the Company and its Affiliates and their respective predecessors, and that his services will be of special, unique and extraordinary value to the Company. In addition, the Executive hereby agrees that at any time during the Employment Period, and for a period ending one (1) year after the termination of the Executive's employment (the “Noncompetition Period”), he will not directly or indirectly own, manage, control, participate in, consult with, render services for or in any manner engage in any Restricted Business;

provided, however, that if the Executive’s termination of employment occurs as a result of the Executive’s resignation or leaving of his employment other than for Good Reason, except as provided in clause (Y) below, the Noncompetition Period shall continue beyond the Date of Termination only if (i) the Company pays the Executive, for each day during which the Noncompetition Period so continues (taking into account Section 9.04 below), an amount equal to 1/365^th of the sum of (A) the Executive’s annual Base Salary, plus (B) the Executive’s Bonus Amount, and (C) a pro-rated portion of the Executive’s Bonus Amount based on the number of days elapsed in the calendar year through the date Notice of Termination is given, such amount to be paid in accordance with the regular payroll practices of the Company (except that any amount otherwise payable after the Date of Termination and prior to the sixtieth (60^th) day following the Date of Termination shall instead be paid on such sixtieth (60^th) day); and (ii) the Executive shall continue to receive his major medical insurance coverage benefits from the Company’s plan in effect from time to time (provided the Executive continues to pay the portion of the premiums for such coverage that are charged to similarly situated active employees) for a period equal to the lesser of (x) the end of the Noncompetition Period, and (y) until the Executive is provided by another employer with benefits substantially comparable (with no pre-existing condition limitations) to the benefits provided by such plan; and provided further, however, that:

(X) the Company may elect, in its sole discretion, by written notice to the Executive given not more than ten (10) business days after the date Notice of Termination is given by the Executive without Good Reason, to not continue the Noncompetition Period beyond the Date of Termination or to reduce the Noncompetition Period under such circumstances so that it ends on the date set forth in such written notice (which shall not be later than twelve (12) months after the Date of Termination), in which case the Company’s obligation to make payments and provide benefits under this Section 9.01 shall end at the end of the Noncompetition Period, and

(Y) the Company’s requirement to make payments under this Section 9.01 as a condition to continuation of the Noncompetition Period shall apply only if the Executive has entered into a general release of claims reasonably satisfactory to the Company on or before the date that is fifty (50) days following the Date of Termination (but not prior to the Date of Termination) and does not revoke such release prior to the end of any applicable revocation period (it being understood that such general release will not require the Executive to release his rights under this Section 9.01 and will not contain any employment restrictions or non-solicitation obligations other than those set forth in this Agreement) and the Executive has not breached and does not breach the provisions of Sections 6.01, 7.01, 8.01, 9.01, 9.02 or 10.01 hereof.

“Restricted Business” means (i) any business competing with the reinsurance businesses of the Company or its Affiliates as such businesses exist or are in process as of the date of termination, within any geographical area in which the Company or its Affiliates engage or plan to engage in such businesses, and (ii) any business that is materially competitive with the businesses that (I) are at the time in question being conducted by the Company or its Affiliates with which the Executive was involved to a material extent in the twelve (12) months prior to termination of the Executive’s employment, or (II) were, during the Executive’s employment, either being conducted by, or being actively developed by, the Company or its Affiliates with which the Executive was involved to a material extent in the twelve (12) months prior to termination of Executive’s employment. It shall not be considered a violation of this Section 9.01 for the Executive to be a passive owner of not more than

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2% of the outstanding stock of any class of a corporation which is publicly traded, so long as the Executive has no active participation in the business of such corporation.

SECTION 9.02. Nonsolicitation. The Executive acknowledges that during his employment with the Company, he will become familiar with trade secrets and other Confidential Information concerning the Company, its Affiliates and their respective predecessors, and that his services will be of special, unique and extraordinary value to the Company. The Executive hereby agrees that (a) during the Employment Period and for a period of one (1) year after the date of termination of employment (the “Nonsolicitation Period”) the Executive will not, directly or indirectly, induce or attempt to induce any Relevant Employee of the Company or its Affiliates to leave the employ of the Company or its Affiliates, or in any way interfere with the relationship between the Company or its Affiliates and any Relevant Employee thereof or otherwise employ or receive the services of any individual who was a Relevant Employee of the Company or its Affiliates at the Date of Termination or within the twelve-month period prior thereto, and (b) during the Nonsolicitation Period, the Executive will not induce or attempt to induce any Restricted Customer to cease doing business with the Company or its Affiliates. For purposes of this Agreement, a “Relevant Employee” shall mean a director, officer, underwriter or manager of the Company or its Affiliates, in each case with whom the Executive had material dealings at any time during the period of twelve (12) months prior to the Date of Termination. A “Restricted Customer” shall mean any firm, company or Person who was a customer, investor, supplier, client, insured, reinsured, reinsurer, broker, agent, licensee or other business relation of the Company or its Affiliates and with whom Executive had material dealings during the twelve (12) months prior to termination of the Executive’s employment.

SECTION 9.03. Enforcement. If, at the enforcement of Sections 9.01 or 9.02, a court holds that the duration or scope stated herein are unreasonable under circumstances then existing, the parties agree that the maximum duration and scope reasonable under such circumstances will be substituted for the stated duration or scope and that the court will be permitted to revise the restrictions contained in this Article 9 to cover the maximum duration and scope permitted by law.

SECTION 9.04 Coordination with Garden Leave. The lengths of the Noncompetition Period and the Nonsolicitation Period shall be reduced by any period that the Executive is required to remain away from the office during his notice period or not undertake his normal duties pursuant to Section 5.06 above.

ARTICLE 10

EQUITABLE RELIEF

SECTION 10.01. Injunctive or Other Equitable Relief. The Executive acknowledges that (a) the covenants contained herein are reasonable, (b) the Executive’s services are unique, and (c) a breach or threatened breach by him of any of his covenants and agreements with the Company and its Affiliates contained in Sections 6.01, 7.01, 8.01, 9.01 or 9.02 could cause irreparable harm to the Company or its Affiliates for which they would have no adequate remedy at law. Accordingly, and in addition to any remedies which the Company and its Affiliates may have at law, in the event of an actual or threatened breach by the Executive of his covenants and agreements contained in Sections 6.01, 7.01, 8.01, 9.01 or 9.02, the Company and its Affiliates shall have the absolute right, without the need to post a bond or any other type of security, to commence a lawsuit or other proceeding in any court of competent jurisdiction (the “Selected Court”) seeking injunctive or other equitable relief (an “Injunction Proceeding”). In furtherance thereof, the Executive expressly and irrevocably agrees that the Selected Court may exercise personal jurisdiction over him in connection with any Injunction Proceeding and further agrees not to assert that any court other than the Selected Court is a more suitable forum for an Injunction Proceeding.

ARTICLE 11

EXECUTIVE REPRESENTATIONS

SECTION 11.01. Executive Representations. The Executive hereby represents and warrants to the Company that (a) the execution, delivery and performance of this Agreement by the Executive does not and will not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which the Executive is a party or by which he is bound, (b) the Executive is not a party to or bound by any employment agreement, noncompetition agreement or confidentiality agreement with any other Person that affects his right or ability to perform the duties contemplated by this Agreement, , and (c) upon the execution and delivery of this Agreement by the Company, this Agreement will be the valid and binding obligation of the Executive, enforceable in accordance with its terms.

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SECTION 11.02. Company Representations. The Company hereby represents and warrants to the Executive that (a) all acts required to be taken to authorize, deliver and perform this Agreement and the obligations of the Company provided for hereunder have been duly taken; and (b) upon the execution and delivery of this Agreement by the Company, this Agreement will be valid and binding obligation of the Company, enforceable in accordance with its terms.

ARTICLE 12

MISCELLANEOUS

SECTION 12.01. Remedies. The Company will have all rights and remedies set forth in this Agreement, all rights and remedies which the Company has been granted at any time under any other agreement or contract and all of the rights which the Company has under any law. The Company will be entitled to enforce such rights specifically, without posting a bond or other security, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. There are currently no disciplinary or grievance procedures in place, there is no collective agreement in place, and there is no probationary period.

SECTION 12.02. Consent to Amendments. The provisions of this Agreement may be amended or waived only by a written agreement executed and delivered by the Company and the Executive. No other course of dealing between the parties to this Agreement or any delay in exercising any rights hereunder will operate as a waiver of any rights of any such parties.

SECTION 12.03. Successors and Assigns. All covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto will bind and inure to the benefit of the respective successors and assigns of the parties hereto whether so expressed or not, provided that the Executive may not assign his rights or delegate his obligations under this Agreement without the written consent of the Company.

SECTION 12.04. Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

SECTION 12.05. Counterparts. This Agreement may be executed simultaneously in two counterparts, any one of which need not contain the signatures of more than one party, but all of which counterparts taken together will constitute one and the same agreement.

SECTION 12.06. Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.

SECTION 12.07. Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement will be in writing and shall be delivered personally by hand, by electronic transmission (with a copy following by hand or by overnight courier), by registered or certified mail, postage prepaid, return receipt requested, or by overnight courier service (charges prepaid). Communications delivered personally by hand shall be deemed received on the date when delivered personally to the recipient; communications sent by electronic means shall be deemed received one (1) business day after the sending thereof; communications sent by registered or certified mail shall be deemed received four (4) business days after the sending thereof; and communications delivered by overnight courier shall be deemed received one (1) business day after the date when sent to the recipient. Such notices, demands and other communications will be sent to the Executive and to the Company at the addresses set forth below.

If to the Executive: To the last address delivered to the Company by the Executive in the manner set forth herein.

If to the Company:    Arch Capital Group Ltd.
        Waterloo House

100 Pitts Bay Road

Hamilton HM 12, Bermuda

Attention: Secretary

Tel: (441) 278-9250

Fax: 441-278-9255    

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or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party.

SECTION 12.08. Withholding. The Company may withhold from any amounts payable under this Agreement such federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.

SECTION 12.09. 409A and 457A. This Section 12.09 shall apply to the Executive only if, and to the extent, he is subject to Section 409A or Section 457A of the Code. It is intended that this Agreement will comply with Sections 409A and 457A of the Code (and any regulations and guidelines issued thereunder), to the extent the Agreement is subject thereto, and the Agreement shall be interpreted on a basis consistent with such intent. If an amendment of the Agreement is necessary in order for it to comply with Section 409A or Section 457A, the parties hereto will negotiate in good faith to amend the Agreement in a manner that preserves the original intent of the parties to the extent reasonably possible. No action or failure to act, pursuant to this Section 12.09 shall subject the Company to any claim, liability, or expense, and the Company shall not have any obligation to indemnify or otherwise protect the Executive from the obligation to pay any taxes, interest or penalties pursuant to Section 409A or Section 457A of the Code.

Notwithstanding any provision to the contrary in this Agreement, if the Executive is deemed on the date of his “separation from service” (within the meaning of Treasury Regulation Section 1.409A-1(h)) to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B) of the Code, then with regard to any payment that is required to be delayed pursuant to Section 409A(a)(2)(B) of the Code (after taking into account the applicable provisions of Treasury Regulation Section 1.409A-1(b)(9)(iii)), the portion, if any, of such payment so required to be delayed shall not be made prior to the earlier of (i) the expiration of the six (6)-month period measured from the date of his “separation from service” or (ii) the date of his death (the “Delay Period”). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum, and any remaining payments due under this Agreement shall be paid in accordance with the normal payment dates specified for them herein. Whenever payments under this Agreement are to be made in installments, each such installment shall be deemed to be a separate payment for purposes of Section 409A of the Code. Notwithstanding any provision of this Agreement to the contrary, for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment that are considered deferred compensation under Section 409A, references to the Executive’s “termination of employment” (and corollary terms) with the Company shall be construed to refer to the Executive’s “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company. In no case will compliance with this Section by the Company constitute a breach of the Company’s obligations under this Agreement.

With respect to any reimbursement or in-kind benefit arrangements of the Company and its subsidiaries provided for herein that constitute deferred compensation for purposes of Section 409A, except as otherwise permitted by Section 409A, the following conditions shall be applicable: (i) the amount eligible for reimbursement, or in-kind benefits provided, under any such arrangement in one calendar year may not affect the amount eligible for reimbursement, or in-kind benefits to be provided, under such arrangement in any other calendar year (except that the health and dental plans may impose a limit on the amount that may be reimbursed or paid), (ii) any reimbursement must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred, and (iii) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

SECTION 12.10. Section 4999 of the Code. Anything in this Agreement or the Company’s Incentive Compensation Plan to the contrary notwithstanding, in the event it shall bedetermined that any payment, award, benefit or distribution (including, without limitation, the acceleration of any payment, award, distribution or benefit), by the Company or any of its affiliates to or for the benefit of the Executive (whether pursuant to the terms of this Agreement or otherwise) (a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Code or any corresponding provisions of state or local tax law (the “Excise Tax”), then such Payments shall either (a) be delivered in full, or (b) subject to, and in a manner consistent with the requirements of Section 409A of the Code, be reduced to the minimum extent necessary to ensure that no portion thereof will be subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state or local income and employment taxes and the Excise Tax, results in receipt by the Executive, on an after-tax basis, of the greatest amount of payments and benefits, notwithstanding that all or some portion of such payments and benefits may be subject to the Excise Tax. In the event that any Payments are to be reduced pursuant to this Section 12.10, then the reduction shall be applied as follows: (i) first, on a pro rata basis to the Executive’s cash severance payments under Section 5.03 above, and (ii) second, on a pro rata basis to Executive’s equity incentive awards. All determinations required to be made under this Article 12 shall be made by a nationally recognized accounting or consulting firm (other than the regular outside accounting

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firm retained by the Company) selected by the Company and agreed to by the Executive, which agreement shall not be unreasonably withheld (the “Accounting Firm”), which Accounting Firm shall provide detailed supporting calculations both to the Company and the Executive within 15 business days after the receipt of notice from the Company that the Executive has received a Payment, or such earlier time as is requested by the Company. Any determination by the Accounting Firm meeting the requirements of this Section 12.10 shall be binding upon the Company and the Executive. The fees and disbursements of the Accounting Firm shall be paid by the Company. If required, the Company shall enter into an engagement letter with the Accounting Firm containing reasonable and customary terms and provisions.

SECTION 12.11. No Third Party Beneficiary. This Agreement will not confer any rights or remedies upon any person other than the Company, the Executive and their respective heirs, executors, successors and assigns.

SECTION 12.12. Entire Agreement. This Agreement (including the documents referred to herein) constitutes the entire agreement among the parties and supersedes any prior understandings, agreements or representations by or among the parties, written or oral, that may have related in any way to the subject matter hereof, including, without limitation, the Employment Agreement, dated November 6, 2001, between Arch Reinsurance Ltd. and the Executive (the “Prior Agreement”). This Agreement shall serve as a written statement of employment for purposes of Section 6 of the Bermuda Employment Act 2000.

SECTION 12.13. Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party. Any reference to any federal, state, local or foreign statute or law will be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The use of the word “including” in this Agreement means including without limitation and is intended by the parties to be by way of example rather than limitation.

SECTION 12.14. Survival. Sections 3.04, 5.03, 5.04, 6.01, 6.02, 7.01, 8.01 and Articles 9, 10, 11 and 12 will survive and continue in full force in accordance with their terms notwithstanding any termination of the Employment Period.

SECTION 12.15. GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT WILL BE GOVERNED BY THE LAW OF BERMUDA, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS, SAVE THAT WHERE PROVISIONS OF FOREIGN LAW APPLY IN THIS AGREEMENT, THEY WILL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH SUCH FOREIGN LAW.

SECTION 12.16. Arbitration. Save for where the Company chooses to exercise its rights as described in Section 10.01, in the event that a dispute or difference shall arise between the parties out of, in connection with, or concerning this Agreement, such dispute shall be referred to and determined by a sole arbitrator in a confidential private arbitration in accordance with the UNCITRAL rules as same are incorporated into the Bermuda International Conciliation and Arbitration Act 1986, except as they may be modified herein or by mutual agreement of the parties. Any such arbitration proceeding shall take place before a single arbitrator. The arbitrator shall be acceptable to both the Company and the Executive. However, if the parties cannot agree on an acceptable arbitrator, then the arbitrator is to be appointed by the Appointments’ Committee of the Chartered Institute of Arbitrators Bermuda Branch. The seat of arbitration shall be Bermuda and it shall be conducted in the English language. The parties shall bear their respective costs (including attorney’s fees) and shall split the fee of the arbitrators (50% paid by the Company and 50% by the Executive). Judgment upon the final award rendered by such arbitrator may be entered in any court having jurisdiction thereof. Each party agrees that it shall maintain confidentiality in respect to any arbitration between them (including any decision rendered in such arbitration) except as necessary in connection with an enforcement proceeding or as required by law.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written.

ARCH CAPITAL GROUP LTD.
By:	/s/ Marc Grandisson
	Name:	Marc Grandisson
	Title:	President & Chief Operating Officer
	/s/ Maamoun Rajeh
	Maamoun Rajeh

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EX-10.27

Exhibit 10.27

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (“Agreement”), dated as of September 19, 2017, between Arch Capital Group Ltd., a Bermuda corporation (the “Company”), and Nicolas Papadopoulo (the “Executive”). This Agreement will become effective as of October 1, 2017 and, as of such effective date, will supersede in its entirety the Prior Agreement.

The parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

SECTION 1.01. Definitions. For purposes of this Agreement, the following terms have the meanings set forth below:

“Accounting Firm” has the meaning set forth in Section 12.10.

“Affiliate” means any Person, directly or indirectly, through one or more intermediaries, Controlling, Controlled by, or under common Control with the Company. For purposes hereof, (a) “Control” means the ownership, directly or indirectly, of (i) in the case of a corporation, Voting Securities (as defined below) representing 50% or more of the total voting power or value of all the then outstanding Voting Securities of such corporation or (ii) in the case of a partnership, limited liability company, association or other business entity (“Business Entity”), 50% or more of the partnership or other similar ownership interest of such Business Entity; and (b) “Voting Security” means any security of a corporation which carries the right to vote generally in the election of directors. For purposes of the definition of “Control,” (x) a Person will be deemed to have a 50% or more ownership interest in a Business Entity if such Person is allocated 50% or more of Business Entity gains or losses or controls the managing director or member or general partner of such Business Entity; and (y) “Controlling” and “Controlled” have meanings correlative thereto.

“Base Salary” has the meaning set forth in Section 4.01.

“Bonus Amount” means the greater of (i) the Executive’s target annual bonus for the year during which Notice of Termination is given, or (ii) the average of the Executive’s actual annual bonus for the three years immediately preceding the year during which Notice of Termination is given (or such lesser number of years in which the Executive was employed by the Company or its Affiliate).

“Cause” means (a) theft or embezzlement by the Executive with respect to the Company or its Affiliates; (b) malfeasance or gross negligence in the performance of the Executive’s duties; (c) the Executive’s conviction of any felony or any crime involving moral turpitude; (d) willful or prolonged absence from work by the Executive (other than by reason of disability due to physical or mental illness) or failure, neglect or refusal by the Executive to perform his duties and responsibilities without the same being corrected within ten (10) days after being given written notice thereof; (e) continued and habitual use of alcohol by the Executive to an extent which materially impairs the Executive’s performance of his duties; (f) the Executive’s use of illegal drugs; or (g) the material breach by the Executive of any of the covenants contained in this Agreement.

“Code” means the U.S. Internal Revenue Code of 1986, as amended.

“Confidential Information” means information that is not generally known to the public and that was or is used, developed or obtained by the Company or its Affiliates in connection with their business. It shall not include information (a) required to be disclosed by court or administrative order or called for in a subpoena or discovery request regular on its face, (b) lawfully obtainable from other sources or which is in the public domain through no fault of the Executive; or (c) the disclosure of which is consented to in writing by the Company.

“Date of Termination” has the meaning set forth in Section 5.01.

“Employment Period” has the meaning set forth in Section 2.01.

“Good Reason” means, without the Executive’s written consent and subject to the timely notice requirement and the Company’s opportunity to cure set forth in Section 5.05 below, (a) the material diminution of any material duties or

responsibilities of the Executive; (b) a material reduction in the Executive’s Base Salary; or (c) any material breach by the Company of the provisions contained in this Agreement.

“Intellectual Property” has the meaning set forth in Section 7.01.

“Notice of Termination” has the meaning set forth in Section 5.05.

“Noncompetition Period”has the meaning set forth in Section 9.01.

“Nonsolicitation Period” has the meaning set forth in Section 9.02.

“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, an estate, a trust, a joint venture, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof.

“Permanent Disability” means those circumstances where the Executive is unable to continue to perform the usual customary duties of his assigned job or as otherwise assigned in accordance with the provisions of this Agreement for a period of six (6) months in any twelve (12) month period because of physical, mental or emotional incapacity resulting from injury, sickness or disease. Any questions as to the existence of a Permanent Disability shall be determined by a qualified, independent physician selected by the Company and approved by the Executive (which approval shall not be unreasonably withheld). The determination of any such physician shall be final and conclusive for all purposes of this Agreement.

“Reimbursable Expenses” has the meaning set forth in Section 4.04.

“Start Date” has the meaning set forth in Section 2.01.

ARTICLE 2

EMPLOYMENT

SECTION 2.01. Employment. The Company shall employ the Executive, and the Executive shall accept employment with the Company, for the period beginning on October 1, 2017 (the “Start Date”) and ending on the Date of Termination as provided in Section 5.01 (the “Employment Period”). If the Executive fails to satisfy the condition set forth in the preceding sentence, he shall forfeit all rights hereunder.

ARTICLE 3

POSITION AND DUTIES

SECTION 3.01. Position and Duties. During the Employment Period, the Executive shall serve as Chairman and Chief Executive Officer of Arch Worldwide Insurance Group and Chief Underwriting Officer for Property & Casualty Operations of the Company and shall have such responsibilities, powers and duties as may from time to time be prescribed by the President of the Company; provided that such responsibilities, powers and duties are substantially consistent with those customarily assigned to individuals serving in such positions at comparable companies or as may be reasonably required by the conduct of the business of the Company. During the Employment Period the Executive shall devote substantially all of his working time and efforts to the business and affairs of the Company. The Executive shall not directly or indirectly render any services of a business, commercial or professional nature to any other person or for-profit organization not related to the business of the Company or its Affiliates, whether for compensation or otherwise, without prior written consent of the Company.

SECTION 3.02. Work Permits. The Executive shall cooperate in all reasonable respects with the Company to obtain, maintain and renew a suitable (for the purposes of the Executive’s contemplated employment by the Company) work permit by the Bermuda government authorities and any other permits required by any Bermuda government authority. The Company shall be responsible for permit fees, and all other expenses, including legal expenses, in connection with obtaining and maintaining such work permit.

SECTION 3.03. Work Location. While employed by the Company hereunder, the Executive shall perform his duties (when not traveling or engaged elsewhere in the performance of his duties) at the offices of the Company in Bermuda. The Executive shall travel to such places on the business of the Company in such manner and on such occasions as the Company may from time to time reasonably require.

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SECTION 3.04. Relocation. In the event that, upon the termination of Executive’s employment for any reason, Executive moves his principal residence from Bermuda to a different country, the Company shall reimburse the Executive for all reasonable expenses incurred by him for the cost of relocating all of his household items from Bermuda to the other country and airfare for a flight by Executive and his family to travel from Bermuda to the other country, in each case, subject to the Company’s requirements with respect to reporting and documentation of such expenses; provided, however, that any such expenses must be incurred by the Executive not later than the last day of the calendar year following the calendar year in which the Executive’s “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company occurs, and any such reimbursement shall be made promptly upon presentation by the Executive to the Company of the required documentation and, in all events, no later than the last day of the second calendar year following the calendar year in which the Executive’s “separation from service” with the Company occurs.

ARTICLE 4

BASE SALARY AND BENEFITS

SECTION 4.01. Base Salary. During the Employment Period, the Executive’s base salary will be $750,000 per annum (the “Base Salary”). The Base Salary will be payable monthly on the 15th day of each month, two weeks in arrears and two weeks in advance. Annually during the Employment Period the Company shall review with the Executive his job performance and compensation, and if deemed appropriate by the Board of Directors of the Company, in its discretion, the Executive’s Base Salary may be increased. Normal hours of employment are 8:30 a.m. to 5:00 p.m., Monday to Friday. The Executive’s salary has been computed to reflect that his regular duties are likely, from time to time, to require more than the normal hours per week and the Executive shall not be entitled to receive any additional remuneration for work outside normal hours.

SECTION 4.02. Bonuses. In addition to the Base Salary, the Executive shall be eligible to participate in an annual bonus plan on terms set forth from time to time by the Board of Directors of the Company. The Executive’s target annual bonus will be 100% of his Base Salary (“Target Bonus”); provided that, for calendar years 2018 and 2019, the Executive will receive a minimum bonus of at least two times the Target Bonus Amount.

SECTION 4.03. Benefits. In addition to the Base Salary, and any bonuses payable to the Executive pursuant to this Agreement, the Executive shall be entitled to the following benefits during the Employment Period:

(a) such major medical, life insurance and disability insurance coverage as is, or may during the Employment Period, be provided generally for other senior executive officers of the Company as set forth from time to time in the applicable plan documents;

(b) in addition to the usual public holidays and eight (8) paid days off for sick leave, a maximum of five (5) weeks of paid vacation annually during the term of the Employment Period (Section 11 of the Bermuda Employment Act 2000 shall otherwise not apply to the Executive’s employment hereunder);

(c) benefits under any plan or arrangement available generally for the senior executive officers of the Company, subject to and consistent with the terms and conditions and overall administration of such plans as set forth from time to time in the applicable plan documents;

(d) payment by the Company of the reasonable cost of preparation of annual tax returns and associated tax planning on a basis no less favorable than such arrangements provided on the date hereof to similarly situated senior executives residing in Bermuda, and the cost paid by the Company under this Section 4.03(d) for one calendar year shall be paid by the Company promptly upon presentation by the Executive to the Company of the required documentation and, in all events, not later than the end of the following calendar year;

(e) and other fringe benefits customarily provided from time to time during the Employment Period to similarly situated senior executives residing in Bermuda.

SECTION 4.04. Expenses. The Company shall reimburse the Executive for all reasonable expenses incurred by him in the course of performing his duties under this Agreement which are consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses (“Reimbursable Expenses”),subject to the Company’s requirements with respect to reporting and documentation of expenses.

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SECTION 4.05. Share-Based Awards. The Executive shall be eligible to participate in the Company’s Long Term Incentive and Share Award Plans (and any similar plan adopted by the Company) under which share-based awards may be granted, as determined by the Board of Directors of the Company in its discretion.

ARTICLE 5

TERM AND TERMINATION

SECTION 5.01. Term. The expected term of this Agreement is for at least three years from the Start Date.  Notwithstanding the foregoing, the Employment Period shall in all events end on the Date of Termination, whenever occurring.  For purposes of this Agreement, the “Date of Termination” shall mean the first to occur of the following:  (a) the six (6) month anniversary of the Company providing Notice of Termination (as defined below) without Cause to the Executive; (b) immediately upon the Company providing Notice of Termination for Cause to the Executive; (c) the six (6) month anniversary of the Executive providing Notice of Termination specifying his resignation for Good Reason to the Company; (d) the six (6) month anniversary of the Executive providing Notice of Termination by the Executive without Good Reason to the Company; (e) the fifth (5th) day following the Company providing Notice of Termination to the Executive as a result of the Executive’s Permanent Disability; and (f) the date of Executive’s death.  In the event that there are circumstances which would give rise to a termination by the Company for Cause, the Company may, in its sole and exclusive discretion, treat such termination as a termination without Cause. Upon termination of the Executive’s employment with the Company for any reason, the Executive shall resign from all positions and in all capacities with the Company and its Affiliates or from any other company or other Person with which the Executive is serving at the Company’s request.

SECTION 5.02 Resignation by the Executive Without Good Reason. If the Employment Period shall be terminated as a result of the Executive’s resignation or leaving of his employment, other than for Good Reason, the Executive shall continue to: (a) receive Base Salary and benefits set forth in Section 4.03 through the Date of Termination, except that any amount payable after the Executive’s “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company will be subject to Section 12.09 below; and (b) the Company will make a cash lump sum payment to the Executive equal to one half of the sum of (I) the Bonus Amount, and (II) a pro-rated portion of the Bonus Amount based on the number of days elapsed in the calendar year through the date Notice of Termination is given, which payment shall be made on the date that is sixty (60) days following the Date of Termination, and (c) receive reimbursement of all Reimbursable Expenses incurred by the Executive prior to the Date of Termination. The Executive’s entitlements under all other benefit plans and programs of the Company shall be as determined thereunder.

SECTION 5.03 Termination for Good Reason or Without Cause. If the Employment Period shall be terminated by the Executive for Good Reason or by the Company without Cause, the Executive shall continue to: (a) receive Base Salary through the six (6) month anniversary of the Date of Termination, such amount to be paid in accordance with the regular payroll practices of the Company (except that any amount otherwise payable after the Date of Termination and prior to the sixtieth (60^th) day following the Date of Termination shall instead be paid on such sixtieth (60^th) day), and except that any amount payable after the Executive’s “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company will be subject to Section 12.09 below; (b) receive an amount equal to the sum of (i) the Executive’s target annual bonus plus (ii) a pro-rated portion of the Executive’s target annual bonus based on the number of days elapsed in the calendar year through the date Notice of Termination is given, one half of which amount shall be paid in cash in a single lump sum on the date that is sixty (60) days following the Date of Termination and the remaining half of which shall be paid in accordance with the regular payroll practices of the Company (except that any amount otherwise payable after the Date of Termination and prior to the sixtieth (60^th) day following the Date of Termination shall instead be paid on such sixtieth (60^th) day); (c) receive benefits set forth in Section 4.03 above through the Date of Termination, except that any amount payable after the Executive’s “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company will be subject to Section 12.09 below, and (d) receive his major medical insurance coverage benefits from the Company’s plan in effect from time to time (provided the Executive continues to pay the portion of the premiums for such coverage that are charged to similarly situated active employees) for a period equal to the lesser of (i) six (6) months after the Date of Termination, and (ii) until the Executive is provided by another employer with benefits substantially comparable to the benefits provided by such plan; and (f) receive reimbursement for all Reimbursable Expenses incurred by the Executive prior to the Date of Termination. The Executive’s entitlements under all other benefit plans and programs of the Company shall be as determined thereunder. Notwithstanding the foregoing, the Executive shall be entitled to the amounts described above (other than Base Salary and benefits as set forth in Section 4.03 through the Date of Termination) only if (i) the Executive has entered into an irrevocable (except to the extent required by law, and to the extent required by law to be revocable, has not revoked) general release of claims, which, subject to Section 5.07 below, is reasonably satisfactory to the Company (“Release”), on or before the date that

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is fifty (50) days following the Date of Termination (but not prior to the Date of Termination), and (ii) the Executive has not breached and does not breach the provisions of Sections 6.01, 7.01, 8.01, 9.01, 9.02 or 11.01 of this Agreement.

SECTION 5.04 Termination for Other Reasons. If the Employment Period shall be terminated by the Company with Cause, as a result of the Executive’s Permanent Disability or upon the Executive’s death, the Executive (or his beneficiaries or estate, in the case of death) shall continue to (a) receive Base Salary and benefits set forth in Section 4.03 above through the Date of Termination, except that any amount payable after the Executive’s “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company will be subject to Section 12.09 below; and (b) in the case of termination due to the Executive’s Permanent Disability or death, receive his major medical insurance coverage benefits from the Company’s plan in effect at the time of such termination for a period equal to the lesser of (i) twelve (12) months after the Date of Termination, and (ii) until the Executive is provided by another employer with benefits substantially comparable to the benefits provided by such plan; and (d) receive reimbursement for all Reimbursable Expenses incurred by the Executive prior to the Date of Termination. The Executive’s entitlements under all other benefit plans and programs of the Company shall be as determined thereunder.

SECTION 5.05. Notice of Termination and Opportunity to Cure. Any termination by the Company for Permanent Disability or Cause or without Cause or by the Executive for Good Reason or without Good Reason shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the date the termination is to take effect (consistent with the terms of this Agreement), the specific termination provision in this Agreement relied upon and, for a termination for Permanent Disability or for Cause or for a resignation for Good Reason, shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of employment under the provision indicated. It shall be a condition precedent to the Executive’s right to terminate employment for Good Reason that (i) the Executive shall first have given the Company written notice that an event or condition constituting Good Reason has occurred within ninety (90) days after such occurrence, and any failure to give such written notice within such period will result in a waiver by the Executive of his right to terminate for Good Reason as a result of such event or condition, and (ii) a period of thirty (30) days from and after the giving of such written notice shall have elapsed without the Company having effectively cured or remedied such occurrence during such 30-day period, unless such occurrence cannot be cured or remedied within thirty (30) days, in which case the period for remedy or cure shall be extended for a reasonable time (not to exceed an additional fifteen (15) days) provided that the Company has made and continues to make a diligent effort to effect such remedy or cure.

SECTION 5.06. Garden Leave. Following any Notice of Termination, whether by the Company or the Executive and until the end of the Employment Period, the Company may direct, in its sole and exclusive discretion, that the Executive perform no duties and exercise no powers or authorities in connection with his employment, resign from any office with the Company and its Affiliates and not attend any premises of any of the Company and its Affiliates; provided, however, that, following any such direction, the Executive will continue to be required to comply with his other obligations under this Agreement and will continue to have a duty of loyalty to the Company as an employee (“Garden Leave”). Notwithstanding the above, the Company may at its discretion require the Executive to perform duties at any time during the Garden Leave, which duties may be withdrawn at any time at the Company’s discretion, and, during the Garden Leave, the Executive shall: (a) remain an employee of the Company and be bound by the terms of this Agreement; (b) not, without the prior written consent of the Company, attend his place of work or any other premises of any of the Company and its Affiliates or access the information technology systems of the Company and its Affiliates; (c) not, without the prior written consent of the Company, contact or deal with (or attempt to contact or deal with) any officer, employee, consultant, client, customer, investor, supplier, agent, distributor, shareholder, adviser or other business contact of any of the Company and its Affiliates; (d) promptly disclose in writing to the Company any attempt at contact with the Executive made by any such person or entity with whom the Executive has been required to have no contact pursuant to this Section 5.06; and (e) be ready and available to perform such duties as the Company may require, ensuring that the Company knows where and how he can be contacted and complying with any written requests to contact a specified employee of the Company at specified intervals.

SECTION 5.07 Release. In consideration of the mutual promises herein and the payments detailed in this Article 5, the Executive, on behalf of himself and his heirs and assigns, in a form reasonably satisfactory to the Company, shall, with respect to any termination of employment under Section 5.03, execute a Release which irrevocably and unconditionally releases and forever discharges, individually and collectively, the Company and its Affiliates, and each of their respective officers, directors, employees, shareholders, representatives, parent companies, subsidiaries, predecessors, successors, assigns, attorneys and all persons acting by, through or in concert with them, of and from any and all charges, claims, complaints, demands, liabilities or causes of action, known or unknown, that the Executive may have at the effective date of the Release or has ever had against

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any such Person. Notwithstanding any other provision hereof, the Executive shall not be required by any general release to release claims that the Executive may have against the Company that arise after the effective date of the Release, any rights the Executive may have to enforce Section 5.03 of this Agreement, or any rights of the Executive to be indemnified under the organizational documents of the Company and its Affiliates or under applicable law or pursuant to the Company’s directors’ and officers’ liability insurance policies.

ARTICLE 6

CONFIDENTIAL INFORMATION

SECTION 6.01. Nondisclosure and Nonuse of Confidential Information. The Executive will not disclose or use at any time during or after the Employment Period any Confidential Information of which the Executive is or becomes aware, whether or not such Confidential Information is developed by him, except to the extent that such disclosure or use is directly related to and required by the Executive’s performance of duties assigned to the Executive pursuant to this Agreement. Under all circumstances and at all times, the Executive will take all appropriate steps to safeguard Confidential Information in his possession and to protect it against disclosure, misuse, espionage, loss and theft.

SECTION 6.02. Defend Trade Secrets Act. Pursuant to 18 U.S.C. § 1833(b), the Executive understands that the Executive will not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret of the Company that (i) is made (x) in confidence to a Federal, State, or local government official, either directly or indirectly, or to the Executive’s attorney and (y) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. The Executive understands that if the Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, the Executive may disclose the trade secret to the Executive’s attorney and use the trade secret information in the court proceeding if the Executive (I) files any document containing the trade secret under seal, and (II) does not disclose the trade secret, except pursuant to court order. Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by such section. Further, nothing in this Agreement or any other agreement or arrangement with the Company or any of its Affiliates shall prohibit or restrict the Executive from making any disclosure of information or documents to any governmental agency or legislative body, any self-regulatory organization, the Legal Department of the Company, and/or pursuant to the whistleblower provisions of the Dodd-Frank Act or Sarbanes-Oxley Act.

ARTICLE 7

INTELLECTUAL PROPERTY

SECTION 7.01. Ownership of Intellectual Property. In the event that the Executive as part of his activities on behalf of the Company generates, authors or contributes to any invention, design, new development, device, product, method of process (whether or not patentable or reduced to practice or comprising Confidential Information), any copyrightable work (whether or not comprising Confidential Information) or any other form of Confidential Information relating directly or indirectly to the business of the Company as now or hereinafter conducted (collectively, “Intellectual Property”), the Executive acknowledges that such Intellectual Property is the sole and exclusive property of the Company and hereby assigns all right title and interest in and to such Intellectual Property to the Company. Any copyrightable work prepared in whole or in part by the Executive during the Employment Period will be deemed “a work made for hire” under Section 201(b) of the United States Copyright Act of 1976, as amended, and the Company will own all of the rights comprised in the copyright therein. The Executive will promptly and fully disclose all Intellectual Property and will cooperate with the Company to protect the Company’s interests in and rights to such Intellectual Property (including providing reasonable assistance in securing patent protection and copyright registrations and executing all documents as reasonably requested by the Company, whether such requests occur prior to or after termination of Executive’s employment hereunder).

ARTICLE 8

DELIVERY OF MATERIALS UPON TERMINATION OF EMPLOYMENT

SECTION 8.01. Delivery of Materials upon Termination of Employment. As requested by the Company, from time to time and upon the termination of the Executive’s employment with the Company for any reason, the Executive will promptly deliver to the Company all property of the Company in the Executive’s possession or within his control, including, without limitation, all copies and embodiments, in whatever form or medium, of all Confidential Information or Intellectual Property in

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the Executive’s possession or within his control (including written records, notes, photographs, manuals, notebooks, documentation, program listings, flow charts, magnetic media, disks, diskettes, tapes and all other materials containing any Confidential Information or Intellectual Property), irrespective of the location or form of such property and, if requested by the Company, will provide the Company with written confirmation that all such property have been delivered to the Company.

ARTICLE 9

NONCOMPETITION AND NONSOLICITATION

SECTION 9.01. Noncompetition.The Executive acknowledges that during his employment with the Company, he will become familiar with trade secrets and other Confidential Information concerning the Company and its Affiliates and their respective predecessors, and that his services will be of special, unique and extraordinary value to the Company. In addition, the Executive hereby agrees that at any time during the Employment Period, and for a period ending one (1) year after the termination of the Executive's employment (the “Noncompetition Period”), he will not directly or indirectly own, manage, control, participate in, consult with, render services for or in any manner engage in any Restricted Business;

provided, however, that if the Executive’s termination of employment occurs as a result of the Executive’s resignation or leaving of his employment other than for Good Reason, except as provided in clause (Y) below, the Noncompetition Period shall continue beyond the Date of Termination only if (i) the Company pays the Executive, for each day during which the Noncompetition Period so continues (taking into account Section 9.04 below), an amount equal to 1/365^th of the sum of (A) the Executive’s annual Base Salary, plus (B) the Executive’s Bonus Amount, and (C) a pro-rated portion of the Executive’s Bonus Amount based on the number of days elapsed in the calendar year through the date Notice of Termination is given, such amount to be paid in accordance with the regular payroll practices of the Company (except that any amount otherwise payable after the Date of Termination and prior to the sixtieth (60^th) day following the Date of Termination shall instead be paid on such sixtieth (60^th) day); and (ii) the Executive shall continue to receive his major medical insurance coverage benefits from the Company’s plan in effect from time to time (provided the Executive continues to pay the portion of the premiums for such coverage that are charged to similarly situated active employees) for a period equal to the lesser of (x) the end of the Noncompetition Period, and (y) until the Executive is provided by another employer with benefits substantially comparable (with no pre-existing condition limitations) to the benefits provided by such plan; and provided further, however, that:

(X) the Company may elect, in its sole discretion, by written notice to the Executive given not more than ten (10) business days after the date Notice of Termination is given by the Executive without Good Reason, to not continue the Noncompetition Period beyond the Date of Termination or to reduce the Noncompetition Period under such circumstances so that it ends on the date set forth in such written notice (which shall not be later than twelve (12) months after the Date of Termination), in which case the Company’s obligation to make payments and provide benefits under this Section 9.01 shall end at the end of the Noncompetition Period, and

(Y) the Company’s requirement to make payments under this Section 9.01 as a condition to continuation of the Noncompetition Period shall apply only if the Executive has entered into a general release of claims reasonably satisfactory to the Company on or before the date that is fifty (50) days following the Date of Termination (but not prior to the Date of Termination) and does not revoke such release prior to the end of any applicable revocation period (it being understood that such general release will not require the Executive to release his rights under this Section 9.01 and will not contain any employment restrictions or non-solicitation obligations other than those set forth in this Agreement) and the Executive has not breached and does not breach the provisions of Sections 6.01, 7.01, 8.01, 9.01, 9.02 or 10.01 hereof.

“Restricted Business” means (i) any business competing with the insurance businesses of the Company or its Affiliates as such businesses exist or are in process as of the date of termination, within any geographical area in which the Company or its Affiliates engage or plan to engage in such businesses, and (ii) any business that is materially competitive with the businesses that (I) are at the time in question being conducted by the Company or its Affiliates with which the Executive was involved to a material extent in the twelve (12) months prior to termination of the Executive’s employment, or (II) were, during the Executive’s employment, either being conducted by, or being actively developed by, the Company or its Affiliates with which the Executive was involved to a material extent in the twelve (12) months prior to termination of Executive’s employment. It shall not be considered a violation of this Section 9.01 for the Executive to be a passive owner of not more than

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2% of the outstanding stock of any class of a corporation which is publicly traded, so long as the Executive has no active participation in the business of such corporation.

SECTION 9.02. Nonsolicitation. The Executive acknowledges that during his employment with the Company, he will become familiar with trade secrets and other Confidential Information concerning the Company, its Affiliates and their respective predecessors, and that his services will be of special, unique and extraordinary value to the Company. The Executive hereby agrees that (a) during the Employment Period and for a period of one (1) year after the date of termination of employment (the “Nonsolicitation Period”) the Executive will not, directly or indirectly, induce or attempt to induce any Relevant Employee of the Company or its Affiliates to leave the employ of the Company or its Affiliates, or in any way interfere with the relationship between the Company or its Affiliates and any Relevant Employee thereof or otherwise employ or receive the services of any individual who was a Relevant Employee of the Company or its Affiliates at the Date of Termination or within the twelve-month period prior thereto, and (b) during the Nonsolicitation Period, the Executive will not induce or attempt to induce any Restricted Customer to cease doing business with the Company or its Affiliates. For purposes of this Agreement, a “Relevant Employee” shall mean a director, officer, underwriter or manager of the Company or its Affiliates, in each case with whom the Executive had material dealings at any time during the period of twelve (12) months prior to the Date of Termination. A “Restricted Customer” shall mean any firm, company or Person who was a customer, investor, supplier, client, insured, reinsured, reinsurer, broker, agent, licensee or other business relation of the Company or its Affiliates and with whom Executive had material dealings during the twelve (12) months prior to termination of the Executive’s employment.

SECTION 9.03. Enforcement. If, at the enforcement of Sections 9.01 or 9.02, a court holds that the duration or scope stated herein are unreasonable under circumstances then existing, the parties agree that the maximum duration and scope reasonable under such circumstances will be substituted for the stated duration or scope and that the court will be permitted to revise the restrictions contained in this Article 9 to cover the maximum duration and scope permitted by law.

SECTION 9.04 Coordination with Garden Leave. The lengths of the Noncompetition Period and the Nonsolicitation Period shall be reduced by any period that the Executive is required to remain away from the office during his notice period or not undertake his normal duties pursuant to Section 5.06 above.

ARTICLE 10

EQUITABLE RELIEF

SECTION 10.01. Injunctive or Other Equitable Relief. The Executive acknowledges that (a) the covenants contained herein are reasonable, (b) the Executive’s services are unique, and (c) a breach or threatened breach by him of any of his covenants and agreements with the Company and its Affiliates contained in Sections 6.01, 7.01, 8.01, 9.01 or 9.02 could cause irreparable harm to the Company or its Affiliates for which they would have no adequate remedy at law. Accordingly, and in addition to any remedies which the Company and its Affiliates may have at law, in the event of an actual or threatened breach by the Executive of his covenants and agreements contained in Sections 6.01, 7.01, 8.01, 9.01 or 9.02, the Company and its Affiliates shall have the absolute right, without the need to post a bond or any other type of security, to commence a lawsuit or other proceeding in any court of competent jurisdiction (the “Selected Court”) seeking injunctive or other equitable relief (an “Injunction Proceeding”). In furtherance thereof, the Executive expressly and irrevocably agrees that the Selected Court may exercise personal jurisdiction over him in connection with any Injunction Proceeding and further agrees not to assert that any court other than the Selected Court is a more suitable forum for an Injunction Proceeding.

ARTICLE 11

EXECUTIVE REPRESENTATIONS

SECTION 11.01. Executive Representations. The Executive hereby represents and warrants to the Company that (a) the execution, delivery and performance of this Agreement by the Executive does not and will not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which the Executive is a party or by which he is bound, (b) the Executive is not a party to or bound by any employment agreement, noncompetition agreement or confidentiality agreement with any other Person that affects his right or ability to perform the duties contemplated by this Agreement, , and (c) upon the execution and delivery of this Agreement by the Company, this Agreement will be the valid and binding obligation of the Executive, enforceable in accordance with its terms.

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SECTION 11.02. Company Representations. The Company hereby represents and warrants to the Executive that (a) all acts required to be taken to authorize, deliver and perform this Agreement and the obligations of the Company provided for hereunder have been duly taken; and (b) upon the execution and delivery of this Agreement by the Company, this Agreement will be valid and binding obligation of the Company, enforceable in accordance with its terms.

ARTICLE 12

MISCELLANEOUS

SECTION 12.01. Remedies. The Company will have all rights and remedies set forth in this Agreement, all rights and remedies which the Company has been granted at any time under any other agreement or contract and all of the rights which the Company has under any law. The Company will be entitled to enforce such rights specifically, without posting a bond or other security, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. There are currently no disciplinary or grievance procedures in place, there is no collective agreement in place, and there is no probationary period.

SECTION 12.02. Consent to Amendments. The provisions of this Agreement may be amended or waived only by a written agreement executed and delivered by the Company and the Executive. No other course of dealing between the parties to this Agreement or any delay in exercising any rights hereunder will operate as a waiver of any rights of any such parties.

SECTION 12.03. Successors and Assigns. All covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto will bind and inure to the benefit of the respective successors and assigns of the parties hereto whether so expressed or not, provided that the Executive may not assign his rights or delegate his obligations under this Agreement without the written consent of the Company.

SECTION 12.04. Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

SECTION 12.05. Counterparts. This Agreement may be executed simultaneously in two counterparts, any one of which need not contain the signatures of more than one party, but all of which counterparts taken together will constitute one and the same agreement.

SECTION 12.06. Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.

SECTION 12.07. Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement will be in writing and shall be delivered personally by hand, by electronic transmission (with a copy following by hand or by overnight courier), by registered or certified mail, postage prepaid, return receipt requested, or by overnight courier service (charges prepaid). Communications delivered personally by hand shall be deemed received on the date when delivered personally to the recipient; communications sent by electronic means shall be deemed received one (1) business day after the sending thereof; communications sent by registered or certified mail shall be deemed received four (4) business days after the sending thereof; and communications delivered by overnight courier shall be deemed received one (1) business day after the date when sent to the recipient. Such notices, demands and other communications will be sent to the Executive and to the Company at the addresses set forth below.

If to the Executive: To the last address delivered to the Company by the Executive in the manner set forth herein.    

If to the Company:    Arch Capital Group Ltd.
        Waterloo House

100 Pitts Bay Road

Hamilton HM 12, Bermuda

Attention: Secretary

Tel: (441) 278-9250

Fax: 441-278-9255

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or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party.

SECTION 12.08. Withholding. The Company may withhold from any amounts payable under this Agreement such federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.

SECTION 12.09. 409A and 457A. This Section 12.09 shall apply to the Executive only if, and to the extent, he is subject to Section 409A or Section 457A of the Code. It is intended that this Agreement will comply with Sections 409A and 457A of the Code (and any regulations and guidelines issued thereunder), to the extent the Agreement is subject thereto, and the Agreement shall be interpreted on a basis consistent with such intent. If an amendment of the Agreement is necessary in order for it to comply with Section 409A or Section 457A, the parties hereto will negotiate in good faith to amend the Agreement in a manner that preserves the original intent of the parties to the extent reasonably possible. No action or failure to act, pursuant to this Section 12.09 shall subject the Company to any claim, liability, or expense, and the Company shall not have any obligation to indemnify or otherwise protect the Executive from the obligation to pay any taxes, interest or penalties pursuant to Section 409A or Section 457A of the Code.

Notwithstanding any provision to the contrary in this Agreement, if the Executive is deemed on the date of his “separation from service” (within the meaning of Treasury Regulation Section 1.409A-1(h)) to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B) of the Code, then with regard to any payment that is required to be delayed pursuant to Section 409A(a)(2)(B) of the Code (after taking into account the applicable provisions of Treasury Regulation Section 1.409A-1(b)(9)(iii)), the portion, if any, of such payment so required to be delayed shall not be made prior to the earlier of (i) the expiration of the six (6)-month period measured from the date of his “separation from service” or (ii) the date of his death (the “Delay Period”). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum, and any remaining payments due under this Agreement shall be paid in accordance with the normal payment dates specified for them herein. Whenever payments under this Agreement are to be made in installments, each such installment shall be deemed to be a separate payment for purposes of Section 409A of the Code. Notwithstanding any provision of this Agreement to the contrary, for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment that are considered deferred compensation under Section 409A, references to the Executive’s “termination of employment” (and corollary terms) with the Company shall be construed to refer to the Executive’s “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company. In no case will compliance with this Section by the Company constitute a breach of the Company’s obligations under this Agreement.

With respect to any reimbursement or in-kind benefit arrangements of the Company and its subsidiaries provided for herein that constitute deferred compensation for purposes of Section 409A, except as otherwise permitted by Section 409A, the following conditions shall be applicable: (i) the amount eligible for reimbursement, or in-kind benefits provided, under any such arrangement in one calendar year may not affect the amount eligible for reimbursement, or in-kind benefits to be provided, under such arrangement in any other calendar year (except that the health and dental plans may impose a limit on the amount that may be reimbursed or paid), (ii) any reimbursement must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred, and (iii) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

SECTION 12.10. Section 4999 of the Code. Anything in this Agreement or the Company’s Incentive Compensation Plan to the contrary notwithstanding, in the event it shall bedetermined that any payment, award, benefit or distribution (including, without limitation, the acceleration of any payment, award, distribution or benefit), by the Company or any of its affiliates to or for the benefit of the Executive (whether pursuant to the terms of this Agreement or otherwise) (a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Code or any corresponding provisions of state or local tax law (the “Excise Tax”), then such Payments shall either (a) be delivered in full, or (b) subject to, and in a manner consistent with the requirements of Section 409A of the Code, be reduced to the minimum extent necessary to ensure that no portion thereof will be subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state or local income and employment taxes and the Excise Tax, results in receipt by the Executive, on an after-tax basis, of the greatest amount of payments and benefits, notwithstanding that all or some portion of such payments and benefits may be subject to the Excise Tax. In the event that any Payments are to be reduced pursuant to this Section 12.10, then the reduction shall be applied as follows: (i) first, on a pro rata basis to the Executive’s cash severance payments under Section 5.03 above,

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and (ii) second, on a pro rata basis to Executive’s equity incentive awards. All determinations required to be made under this Article 12 shall be made by a nationally recognized accounting or consulting firm (other than the regular outside accounting firm retained by the Company) selected by the Company and agreed to by the Executive, which agreement shall not be unreasonably withheld (the “Accounting Firm”), which Accounting Firm shall provide detailed supporting calculations both to the Company and the Executive within 15 business days after the receipt of notice from the Company that the Executive has received a Payment, or such earlier time as is requested by the Company. Any determination by the Accounting Firm meeting the requirements of this Section 12.10 shall be binding upon the Company and the Executive. The fees and disbursements of the Accounting Firm shall be paid by the Company. If required, the Company shall enter into an engagement letter with the Accounting Firm containing reasonable and customary terms and provisions.

SECTION 12.11. No Third Party Beneficiary. This Agreement will not confer any rights or remedies upon any person other than the Company, the Executive and their respective heirs, executors, successors and assigns.

SECTION 12.12. Entire Agreement. This Agreement (including the documents referred to herein) constitutes the entire agreement among the parties and supersedes any prior understandings, agreements or representations by or among the parties, written or oral, that may have related in any way to the subject matter hereof, including, without limitation, the Employment Agreement, dated November 17, 2005 (as amended), between Arch Reinsurance Ltd. and the Executive, which was transferred to the Company on July 1, 2014. This Agreement shall serve as a written statement of employment for purposes of Section 6 of the Bermuda Employment Act 2000.

SECTION 12.13. Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party. Any reference to any federal, state, local or foreign statute or law will be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The use of the word “including” in this Agreement means including without limitation and is intended by the parties to be by way of example rather than limitation.

SECTION 12.14. Survival. Sections 3.04, 5.03, 5.04, 6.01, 6.02, 7.01, 8.01 and Articles 9, 10, 11 and 12 will survive and continue in full force in accordance with their terms notwithstanding any termination of the Employment Period.

SECTION 12.15. GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT WILL BE GOVERNED BY THE LAW OF BERMUDA, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS, SAVE THAT WHERE PROVISIONS OF FOREIGN LAW APPLY IN THIS AGREEMENT, THEY WILL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH SUCH FOREIGN LAW.

SECTION 12.16. Arbitration. Save for where the Company chooses to exercise its rights as described in Section 10.01, in the event that a dispute or difference shall arise between the parties out of, in connection with, or concerning this Agreement, such dispute shall be referred to and determined by a sole arbitrator in a confidential private arbitration in accordance with the UNCITRAL rules as same are incorporated into the Bermuda International Conciliation and Arbitration Act 1986, except as they may be modified herein or by mutual agreement of the parties. Any such arbitration proceeding shall take place before a single arbitrator. The arbitrator shall be acceptable to both the Company and the Executive. However, if the parties cannot agree on an acceptable arbitrator, then the arbitrator is to be appointed by the Appointments’ Committee of the Chartered Institute of Arbitrators Bermuda Branch. The seat of arbitration shall be Bermuda and it shall be conducted in the English language. The parties shall bear their respective costs (including attorney’s fees) and shall split the fee of the arbitrators (50% paid by the Company and 50% by the Executive). Judgment upon the final award rendered by such arbitrator may be entered in any court having jurisdiction thereof. Each party agrees that it shall maintain confidentiality in respect to any arbitration between them (including any decision rendered in such arbitration) except as necessary in connection with an enforcement proceeding or as required by law.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written.

ARCH CAPITAL GROUP LTD.
By:	/s/ Marc Grandisson
	Name:	Marc Grandisson
	Title:	President & Chief Operating Officer
	/s/ Nicolas Papadopoulo
	Nicolas Papadopoulo

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EX-10.28

Exhibit 10.28

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (“Agreement”), dated as of October 30, 2017, between Arch Capital Group Ltd., a Bermuda corporation (the “Company”), and Andrew Rippert (the “Executive”).

The parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

SECTION 1.01. Definitions. For purposes of this Agreement, the following terms have the meanings set forth below:

“Accounting Firm” has the meaning set forth in Section 12.10.

“Affiliate” means any Person, directly or indirectly, through one or more intermediaries, Controlling, Controlled by, or under common Control with the Company. For purposes hereof, (a) “Control” means the ownership, directly or indirectly, of (i) in the case of a corporation, Voting Securities (as defined below) representing 50% or more of the total voting power or value of all the then outstanding Voting Securities of such corporation or (ii) in the case of a partnership, limited liability company, association or other business entity (“Business Entity”), 50% or more of the partnership or other similar ownership interest of such Business Entity; and (b) “Voting Security” means any security of a corporation which carries the right to vote generally in the election of directors. For purposes of the definition of “Control,” (x) a Person will be deemed to have a 50% or more ownership interest in a Business Entity if such Person is allocated 50% or more of Business Entity gains or losses or controls the managing director or member or general partner of such Business Entity; and (y) “Controlling” and “Controlled” have meanings correlative thereto.

“Base Salary” has the meaning set forth in Section 4.01.

“Bonus Amount” means the greater of (i) the Executive’s target annual bonus for the year during which Notice of Termination is given, or (ii) the average of the Executive’s actual annual bonus for the three years immediately preceding the year during which Notice of Termination is given (or such lesser number of years in which the Executive was employed by the Company or its Affiliate).

“Cause” means (a) theft or embezzlement by the Executive with respect to the Company or its Affiliates; (b) malfeasance or gross negligence in the performance of the Executive’s duties; (c) the Executive’s conviction of any felony or any crime involving moral turpitude; (d) willful or prolonged absence from work by the Executive (other than by reason of disability due to physical or mental illness) or failure, neglect or refusal by the Executive to perform his duties and responsibilities without the same being corrected within ten (10) days after being given written notice thereof; (e) continued and habitual use of alcohol by the Executive to an extent which materially impairs the Executive’s performance of his duties; (f) the Executive’s use of illegal drugs; or (h) the material breach by the Executive of any of the covenants contained in this Agreement.

“Code” means the U.S. Internal Revenue Code of 1986, as amended.

“Confidential Information” means information that is not generally known to the public and that was or is used, developed or obtained by the Company or its Affiliates in connection with their business. It shall not include information (a) required to be disclosed by court or administrative order or called for in a subpoena or discovery request regular on its face, (b) lawfully obtainable from other sources or which is in the public domain through no fault of the Executive; or (c) the disclosure of which is consented to in writing by the Company.

“Date of Termination” has the meaning set forth in Section 5.01.

“Employment Period” has the meaning set forth in Section 2.01.

“Good Reason” means, without the Executive’s written consent and subject to the timely notice requirement and the Company’s opportunity to cure set forth in Section 5.05 below, (a) the material diminution of any material duties or responsibilities of the Executive; (b) a material reduction in the Executive’s Base Salary; or (c) any material breach by the Company of the provisions contained in this Agreement.

“Intellectual Property” has the meaning set forth in Section 7.01.

“Notice of Termination” has the meaning set forth in Section 5.05.

“Noncompetition Period”has the meaning set forth in Section 9.01.

“Nonsolicitation Period” has the meaning set forth in Section 9.02.

“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, an estate, a trust, a joint venture, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof.

“Permanent Disability” means those circumstances where the Executive is unable to continue to perform the usual customary duties of his assigned job or as otherwise assigned in accordance with the provisions of this Agreement for a period of six (6) months in any twelve (12) month period because of physical, mental or emotional incapacity resulting from injury, sickness or disease. Any questions as to the existence of a Permanent Disability shall be determined by a qualified, independent physician selected by the Company and approved by the Executive (which approval shall not be unreasonably withheld). The determination of any such physician shall be final and conclusive for all purposes of this Agreement.

“Reimbursable Expenses” has the meaning set forth in Section 4.04.

“Start Date” has the meaning set forth in Section 2.01.

ARTICLE 2

EMPLOYMENT

SECTION 2.01. Employment. The Company shall employ the Executive, and the Executive shall accept employment with the Company, for the period beginning on the date hereof (the “Start Date”) and ending on the Date of Termination as provided in Section 5.01 (the “Employment Period”). If the Executive fails to satisfy the condition set forth in the preceding sentence, he shall forfeit all rights hereunder.

ARTICLE 3

POSITION AND DUTIES

SECTION 3.01. Position and Duties. During the Employment Period, the Executive shall serve as Chief Executive Officer, Global Mortgage Group of the Company and shall have such responsibilities, powers and duties as may from time to time be prescribed by the President of the Company; provided that such responsibilities, powers and duties are substantially consistent with those customarily assigned to individuals serving in such positions at comparable companies or as may be reasonably required by the conduct of the business of the Company. During the Employment Period the Executive shall devote substantially all of his working time and efforts to the business and affairs of the Company. The Executive shall not directly or indirectly render any services of a business, commercial or professional nature to any other person or for-profit organization not related to the business of the Company or its Affiliates, whether for compensation or otherwise, without prior written consent of the Company.

SECTION 3.02. Work Permits. The Executive shall cooperate in all reasonable respects with the Company to obtain, maintain and renew a suitable (for the purposes of the Executive’s contemplated employment by the Company) work permit by the Bermuda government authorities and any other permits required by any Bermuda government authority. The Company shall be responsible for permit fees, and all other expenses, including legal expenses, in connection with obtaining and maintaining such work permit.

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SECTION 3.03. Work Location. While employed by the Company hereunder, the Executive shall perform his duties (when not traveling or engaged elsewhere in the performance of his duties) at the offices of the Company in Bermuda. The Executive shall travel to such places on the business of the Company in such manner and on such occasions as the Company may from time to time reasonably require.

SECTION 3.04. Relocation. Upon the termination of Executive’s employment for any reason, the Company shall reimburse the Executive for all reasonable expenses incurred by him for the cost of relocating all of his household items to the United States and airfare for Executive and his family to return to the United States, in each case, subject to the Company’s requirements with respect to reporting and documentation of such expenses; provided, however, that any such expenses must be incurred by the Executive not later than the last day of the calendar year following the calendar year in which the Executive’s “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company occurs, and any such reimbursement shall be made promptly upon presentation by the Executive to the Company of the required documentation and, in all events, no later than the last day of the second calendar year following the calendar year in which the Executive’s “separation from service” with the Company occurs.

ARTICLE 4

BASE SALARY AND BENEFITS

SECTION 4.01. Base Salary. During the Employment Period, the Executive’s base salary will be $650,000 per annum (the “Base Salary”). The Base Salary will be payable monthly on the 15th day of each month, two weeks in arrears and two weeks in advance. Annually during the Employment Period the Company shall review with the Executive his job performance and compensation, and if deemed appropriate by the Board of Directors of the Company, in its discretion, the Executive’s Base Salary may be increased. Normal hours of employment are 8:30 a.m. to 5:00 p.m., Monday to Friday. The Executive’s salary has been computed to reflect that his regular duties are likely, from time to time, to require more than the normal hours per week and the Executive shall not be entitled to receive any additional remuneration for work outside normal hours.

SECTION 4.02. Bonuses. In addition to the Base Salary, the Executive shall be eligible to participate in an annual bonus plan on terms set forth from time to time by the Board of Directors of the Company. The Executive’s target annual bonus will be 100% of his Base Salary.

SECTION 4.03. Benefits. In addition to the Base Salary, and any bonuses payable to the Executive pursuant to this Agreement, the Executive shall be entitled to the following benefits during the Employment Period:

(a) such major medical, life insurance and disability insurance coverage as is, or may during the Employment Period, be provided generally for other senior executive officers of the Company as set forth from time to time in the applicable plan documents;

(b) in addition to the usual public holidays and eight (8) paid days off for sick leave, a maximum of five (5) weeks of paid vacation annually during the term of the Employment Period (Section 11 of the Bermuda Employment Act 2000 shall otherwise not apply to the Executive’s employment hereunder);

(c) benefits under any plan or arrangement available generally for the senior executive officers of the Company, subject to and consistent with the terms and conditions and overall administration of such plans as set forth from time to time in the applicable plan documents;

(d) payment by the Company of the reasonable cost of preparation of annual tax returns and associated tax planning on a basis no less favorable than such arrangements provided on the date hereof to similarly situated senior executives residing in Bermuda, and the cost paid by the Company under this Section 4.03(d) for one calendar year shall be paid by the Company promptly upon presentation by the Executive to the Company of the required documentation and, in all events, not later than the end of the following calendar year; and

(e) other fringe benefits customarily provided from time to time during the Employment Period to similarly situated senior executives residing in Bermuda.

SECTION 4.04. Expenses. The Company shall reimburse the Executive for all reasonable expenses incurred by him in the course of performing his duties under this Agreement which are consistent with the Company’s policies in effect from time

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to time with respect to travel, entertainment and other business expenses (“Reimbursable Expenses”),subject to the Company’s requirements with respect to reporting and documentation of expenses.

SECTION 4.05. Share-Based Awards. The Executive shall be eligible to participate in the Company’s Long Term Incentive and Share Award Plans (and any similar plan adopted by the Company) under which share-based awards may be granted, as determined by the Board of Directors of the Company in its discretion.

ARTICLE 5

TERM AND TERMINATION

SECTION 5.01. Term. The expected term of this Agreement is for at least three years from the Start Date.  Notwithstanding the foregoing, the Employment Period shall in all events end on the Date of Termination, whenever occurring.  For purposes of this Agreement, the “Date of Termination” shall mean the first to occur of the following:  (a) the six (6) month anniversary of the Company providing Notice of Termination (as defined below) without Cause to the Executive; (b) immediately upon the Company providing Notice of Termination for Cause to the Executive; (c) the six (6) month anniversary of the Executive providing Notice of Termination specifying his resignation for Good Reason to the Company; (d) the six (6) month anniversary of the Executive providing Notice of Termination by the Executive without Good Reason to the Company; (e) the fifth (5th) day following the Company providing Notice of Termination to the Executive as a result of the Executive’s Permanent Disability; and (f) the date of Executive’s death.  In the event that there are circumstances which would give rise to a termination by the Company for Cause, the Company may, in its sole and exclusive discretion, treat such termination as a termination without Cause. Upon termination of the Executive’s employment with the Company for any reason, the Executive shall resign from all positions and in all capacities with the Company and its Affiliates or from any other company or other Person with which the Executive is serving at the Company’s request.

SECTION 5.02 Resignation by the Executive Without Good Reason. If the Employment Period shall be terminated as a result of the Executive’s resignation or leaving of his employment, other than for Good Reason, the Executive shall continue to: (a) receive Base Salary and benefits set forth in Section 4.03 through the Date of Termination, except that any amount payable after the Executive’s “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company will be subject to Section 12.09 below; and (b) the Company will make a cash lump sum payment to the Executive equal to one half of the sum of (I) the Bonus Amount, and (II) a pro-rated portion of the Bonus Amount based on the number of days elapsed in the calendar year through the date Notice of Termination is given, which payment shall be made on the date that is sixty (60) days following the Date of Termination, and (c) receive reimbursement of all Reimbursable Expenses incurred by the Executive prior to the Date of Termination. The Executive’s entitlements under all other benefit plans and programs of the Company shall be as determined thereunder.

SECTION 5.03 Termination for Good Reason or Without Cause. If the Employment Period shall be terminated by the Executive for Good Reason or by the Company without Cause, the Executive shall continue to: (a) receive Base Salary through the six (6) month anniversary of the Date of Termination, such amount to be paid in accordance with the regular payroll practices of the Company (except that any amount otherwise payable after the Date of Termination and prior to the sixtieth (60^th) day following the Date of Termination shall instead be paid on such sixtieth (60^th) day), and except that any amount payable after the Executive’s “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company will be subject to Section 12.09 below; (b) receive an amount equal to the sum of (i) the Executive’s target annual bonus plus (ii) a pro-rated portion of the Executive’s target annual bonus based on the number of days elapsed in the calendar year through the date Notice of Termination is given, one half of which amount shall be paid in cash in a single lump sum on the date that is sixty (60) days following the Date of Termination and the remaining half of which shall be paid in accordance with the regular payroll practices of the Company (except that any amount otherwise payable after the Date of Termination and prior to the sixtieth (60^th) day following the Date of Termination shall instead be paid on such sixtieth (60^th) day); (c) receive benefits set forth in Section 4.03 above through the Date of Termination, except that any amount payable after the Executive’s “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company will be subject to Section 12.09 below, and (d) receive his major medical insurance coverage benefits from the Company’s plan in effect from time to time (provided the Executive continues to pay the portion of the premiums for such coverage that are charged to similarly situated active employees) for a period equal to the lesser of (i) six (6) months after the Date of Termination, and (ii) until the Executive is provided by another employer with benefits substantially comparable to the benefits provided by such plan; and (f) receive reimbursement for all Reimbursable Expenses incurred by the Executive prior to the Date of Termination. The Executive’s entitlements under all other benefit plans and programs of the Company shall be as determined thereunder. Notwithstanding the foregoing, the Executive shall be entitled to the amounts described above (other than Base Salary and

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benefits as set forth in Section 4.03 through the Date of Termination) only if (i) the Executive has entered into an irrevocable (except to the extent required by law, and to the extent required by law to be revocable, has not revoked) general release of claims, which, subject to Section 5.07 below, is reasonably satisfactory to the Company (“Release”), on or before the date that is fifty (50) days following the Date of Termination (but not prior to the Date of Termination), and (ii) the Executive has not breached and does not breach the provisions of Sections 6.01, 7.01, 8.01, 9.01, 9.02 or 11.01 of this Agreement.

SECTION 5.04 Termination for Other Reasons. If the Employment Period shall be terminated by the Company with Cause, as a result of the Executive’s Permanent Disability or upon the Executive’s death, the Executive (or his beneficiaries or estate, in the case of death) shall continue to (a) receive Base Salary and benefits set forth in Section 4.03 above through the Date of Termination, except that any amount payable after the Executive’s “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company will be subject to Section 12.09 below; and (b) in the case of termination due to the Executive’s Permanent Disability or death, receive his major medical insurance coverage benefits from the Company’s plan in effect at the time of such termination for a period equal to the lesser of (i) twelve (12) months after the Date of Termination, and (ii) until the Executive is provided by another employer with benefits substantially comparable to the benefits provided by such plan; and (d) receive reimbursement for all Reimbursable Expenses incurred by the Executive prior to the Date of Termination. The Executive’s entitlements under all other benefit plans and programs of the Company shall be as determined thereunder.

SECTION 5.05. Notice of Termination and Opportunity to Cure. Any termination by the Company for Permanent Disability or Cause or without Cause or by the Executive for Good Reason or without Good Reason shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the date the termination is to take effect (consistent with the terms of this Agreement), the specific termination provision in this Agreement relied upon and, for a termination for Permanent Disability or for Cause or for a resignation for Good Reason, shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of employment under the provision indicated. It shall be a condition precedent to the Executive’s right to terminate employment for Good Reason that (i) the Executive shall first have given the Company written notice that an event or condition constituting Good Reason has occurred within ninety (90) days after such occurrence, and any failure to give such written notice within such period will result in a waiver by the Executive of his right to terminate for Good Reason as a result of such event or condition, and (ii) a period of thirty (30) days from and after the giving of such written notice shall have elapsed without the Company having effectively cured or remedied such occurrence during such 30-day period, unless such occurrence cannot be cured or remedied within thirty (30) days, in which case the period for remedy or cure shall be extended for a reasonable time (not to exceed an additional fifteen (15) days) provided that the Company has made and continues to make a diligent effort to effect such remedy or cure.

SECTION 5.06. Garden Leave. Following any Notice of Termination, whether by the Company or the Executive and until the end of the Employment Period, the Company may direct, in its sole and exclusive discretion, that the Executive perform no duties and exercise no powers or authorities in connection with his employment, resign from any office with the Company and its Affiliates and not attend any premises of any of the Company and its Affiliates; provided, however, that, following any such direction, the Executive will continue to be required to comply with his other obligations under this Agreement and will continue to have a duty of loyalty to the Company as an employee (“Garden Leave”). Notwithstanding the above, the Company may at its discretion require the Executive to perform duties at any time during the Garden Leave, which duties may be withdrawn at any time at the Company’s discretion, and, during the Garden Leave, the Executive shall: (a) remain an employee of the Company and be bound by the terms of this Agreement; (b) not, without the prior written consent of the Company, attend his place of work or any other premises of any of the Company and its Affiliates or access the information technology systems of the Company and its Affiliates; (c) not, without the prior written consent of the Company, contact or deal with (or attempt to contact or deal with) any officer, employee, consultant, client, customer, investor, supplier, agent, distributor, shareholder, adviser or other business contact of any of the Company and its Affiliates; (d) promptly disclose in writing to the Company any attempt at contact with the Executive made by any such person or entity with whom the Executive has been required to have no contact pursuant to this Section 5.06; and (e) be ready and available to perform such duties as the Company may require, ensuring that the Company knows where and how he can be contacted and complying with any written requests to contact a specified employee of the Company at specified intervals.

SECTION 5.07 Release. In consideration of the mutual promises herein and the payments detailed in this Article 5, the Executive, on behalf of himself and his heirs and assigns, in a form reasonably satisfactory to the Company, shall, with respect to any termination of employment under Section 5.03, execute a Release which irrevocably and unconditionally releases and forever discharges, individually and collectively, the Company and its Affiliates, and each of their respective officers, directors,

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employees, shareholders, representatives, parent companies, subsidiaries, predecessors, successors, assigns, attorneys and all persons acting by, through or in concert with them, of and from any and all charges, claims, complaints, demands, liabilities or causes of action, known or unknown, that the Executive may have at the effective date of the Release or has ever had against any such Person. Notwithstanding any other provision hereof, the Executive shall not be required by any general release to release claims that the Executive may have against the Company that arise after the effective date of the Release, any rights the Executive may have to enforce Section 5.03 of this Agreement, or any rights of the Executive to be indemnified under the organizational documents of the Company and its Affiliates or under applicable law or pursuant to the Company’s directors’ and officers’ liability insurance policies.

ARTICLE 6

CONFIDENTIAL INFORMATION

SECTION 6.01. Nondisclosure and Nonuse of Confidential Information. The Executive will not disclose or use at any time during or after the Employment Period any Confidential Information of which the Executive is or becomes aware, whether or not such Confidential Information is developed by him, except to the extent that such disclosure or use is directly related to and required by the Executive’s performance of duties assigned to the Executive pursuant to this Agreement. Under all circumstances and at all times, the Executive will take all appropriate steps to safeguard Confidential Information in his possession and to protect it against disclosure, misuse, espionage, loss and theft.

SECTION 6.02. Defend Trade Secrets Act. Pursuant to 18 U.S.C. § 1833(b), the Executive understands that the Executive will not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret of the Company that (i) is made (x) in confidence to a Federal, State, or local government official, either directly or indirectly, or to the Executive’s attorney and (y) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. The Executive understands that if the Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, the Executive may disclose the trade secret to the Executive’s attorney and use the trade secret information in the court proceeding if the Executive (I) files any document containing the trade secret under seal, and (II) does not disclose the trade secret, except pursuant to court order. Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by such section. Further, nothing in this Agreement or any other agreement or arrangement with the Company or any of its Affiliates shall prohibit or restrict the Executive from making any disclosure of information or documents to any governmental agency or legislative body, any self-regulatory organization, the Legal Department of the Company, and/or pursuant to the whistleblower provisions of the Dodd-Frank Act or Sarbanes-Oxley Act.

ARTICLE 7

INTELLECTUAL PROPERTY

SECTION 7.01. Ownership of Intellectual Property. In the event that the Executive as part of his activities on behalf of the Company generates, authors or contributes to any invention, design, new development, device, product, method of process (whether or not patentable or reduced to practice or comprising Confidential Information), any copyrightable work (whether or not comprising Confidential Information) or any other form of Confidential Information relating directly or indirectly to the business of the Company as now or hereinafter conducted (collectively, “Intellectual Property”), the Executive acknowledges that such Intellectual Property is the sole and exclusive property of the Company and hereby assigns all right title and interest in and to such Intellectual Property to the Company. Any copyrightable work prepared in whole or in part by the Executive during the Employment Period will be deemed “a work made for hire” under Section 201(b) of the United States Copyright Act of 1976, as amended, and the Company will own all of the rights comprised in the copyright therein. The Executive will promptly and fully disclose all Intellectual Property and will cooperate with the Company to protect the Company’s interests in and rights to such Intellectual Property (including providing reasonable assistance in securing patent protection and copyright registrations and executing all documents as reasonably requested by the Company, whether such requests occur prior to or after termination of Executive’s employment hereunder).

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ARTICLE 8

DELIVERY OF MATERIALS UPON TERMINATION OF EMPLOYMENT

SECTION 8.01. Delivery of Materials upon Termination of Employment. As requested by the Company, from time to time and upon the termination of the Executive’s employment with the Company for any reason, the Executive will promptly deliver to the Company all property of the Company in the Executive’s possession or within his control, including, without limitation, all copies and embodiments, in whatever form or medium, of all Confidential Information or Intellectual Property in the Executive’s possession or within his control (including written records, notes, photographs, manuals, notebooks, documentation, program listings, flow charts, magnetic media, disks, diskettes, tapes and all other materials containing any Confidential Information or Intellectual Property), irrespective of the location or form of such property and, if requested by the Company, will provide the Company with written confirmation that all such property have been delivered to the Company.

ARTICLE 9

NONCOMPETITION AND NONSOLICITATION

SECTION 9.01. Noncompetition.The Executive acknowledges that during his employment with the Company, he will become familiar with trade secrets and other Confidential Information concerning the Company and its Affiliates and their respective predecessors, and that his services will be of special, unique and extraordinary value to the Company. In addition, the Executive hereby agrees that at any time during the Employment Period, and for a period ending one (1) year after the termination of the Executive's employment (the “Noncompetition Period”), he will not directly or indirectly own, manage, control, participate in, consult with, render services for or in any manner engage in any Restricted Business;

provided, however, that if the Executive’s termination of employment occurs as a result of the Executive’s resignation or leaving of his employment other than for Good Reason, except as provided in clause (Y) below, the Noncompetition Period shall continue beyond the Date of Termination only if (i) the Company pays the Executive, for each day during which the Noncompetition Period so continues (taking into account Section 9.04 below), an amount equal to 1/365^th of the sum of (A) the Executive’s annual Base Salary, plus (B) the Executive’s Bonus Amount, and (C) a pro-rated portion of the Executive’s Bonus Amount based on the number of days elapsed in the calendar year through the date Notice of Termination is given, such amount to be paid in accordance with the regular payroll practices of the Company (except that any amount otherwise payable after the Date of Termination and prior to the sixtieth (60^th) day following the Date of Termination shall instead be paid on such sixtieth (60^th) day); and (ii) the Executive shall continue to receive his major medical insurance coverage benefits from the Company’s plan in effect from time to time (provided the Executive continues to pay the portion of the premiums for such coverage that are charged to similarly situated active employees) for a period equal to the lesser of (x) the end of the Noncompetition Period, and (y) until the Executive is provided by another employer with benefits substantially comparable (with no pre-existing condition limitations) to the benefits provided by such plan; and provided further, however, that:

(X) the Company may elect, in its sole discretion, by written notice to the Executive given not more than ten (10) business days after the date Notice of Termination is given by the Executive without Good Reason, to not continue the Noncompetition Period beyond the Date of Termination or to reduce the Noncompetition Period under such circumstances so that it ends on the date set forth in such written notice (which shall not be later than twelve (12) months after the Date of Termination), in which case the Company’s obligation to make payments and provide benefits under this Section 9.01 shall end at the end of the Noncompetition Period, and

(Y) the Company’s requirement to make payments under this Section 9.01 as a condition to continuation of the Noncompetition Period shall apply only if the Executive has entered into a general release of claims reasonably satisfactory to the Company on or before the date that is fifty (50) days following the Date of Termination (but not prior to the Date of Termination) and does not revoke such release prior to the end of any applicable revocation period (it being understood that such general release will not require the Executive to release his rights under this Section 9.01 and will not contain any employment restrictions or non-solicitation obligations other than those set forth in this Agreement) and the Executive has not breached and does not breach the provisions of Sections 6.01, 7.01, 8.01, 9.01, 9.02 or 10.01 hereof.

“Restricted Business” means (i) any business competing with the mortgage insurance businesses of the Company or its Affiliates as such businesses exist or are in process as of the date of termination, within any geographical area in which the

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Company or its Affiliates engage or plan to engage in such businesses, and (ii) any business that is materially competitive with the businesses that (I) are at the time in question being conducted by the Company or its Affiliates with which the Executive was involved to a material extent in the twelve (12) months prior to termination of the Executive’s employment, or (II) were, during the Executive’s employment, either being conducted by, or being actively developed by, the Company or its Affiliates with which the Executive was involved to a material extent in the twelve (12) months prior to termination of Executive’s employment. It shall not be considered a violation of this Section 9.01 for the Executive to be a passive owner of not more than 2% of the outstanding stock of any class of a corporation which is publicly traded, so long as the Executive has no active participation in the business of such corporation.

SECTION 9.02. Nonsolicitation. The Executive acknowledges that during his employment with the Company, he will become familiar with trade secrets and other Confidential Information concerning the Company, its Affiliates and their respective predecessors, and that his services will be of special, unique and extraordinary value to the Company. The Executive hereby agrees that (a) during the Employment Period and for a period of one (1) year after the date of termination of employment (the “Nonsolicitation Period”) the Executive will not, directly or indirectly, induce or attempt to induce any Relevant Employee of the Company or its Affiliates to leave the employ of the Company or its Affiliates, or in any way interfere with the relationship between the Company or its Affiliates and any Relevant Employee thereof or otherwise employ or receive the services of any individual who was a Relevant Employee of the Company or its Affiliates at the Date of Termination or within the twelve-month period prior thereto, and (b) during the Nonsolicitation Period, the Executive will not induce or attempt to induce any Restricted Customer to cease doing business with the Company or its Affiliates. For purposes of this Agreement, a “Relevant Employee” shall mean a director, officer, underwriter or manager of the Company or its Affiliates, in each case with whom the Executive had material dealings at any time during the period of twelve (12) months prior to the Date of Termination. A “Restricted Customer” shall mean any firm, company or Person who was a customer, investor, supplier, client, insured, reinsured, reinsurer, broker, agent, licensee or other business relation of the Company or its Affiliates and with whom Executive had material dealings during the twelve (12) months prior to termination of the Executive’s employment.

SECTION 9.03. Enforcement. If, at the enforcement of Sections 9.01 or 9.02, a court holds that the duration or scope stated herein are unreasonable under circumstances then existing, the parties agree that the maximum duration and scope reasonable under such circumstances will be substituted for the stated duration or scope and that the court will be permitted to revise the restrictions contained in this Article 9 to cover the maximum duration and scope permitted by law.

SECTION 9.04 Coordination with Garden Leave. The lengths of the Noncompetition Period and the Nonsolicitation Period shall be reduced by any period that the Executive is required to remain away from the office during his notice period or not undertake his normal duties pursuant to Section 5.06 above.

ARTICLE 10

EQUITABLE RELIEF

SECTION 10.01. Injunctive or Other Equitable Relief. The Executive acknowledges that (a) the covenants contained herein are reasonable, (b) the Executive’s services are unique, and (c) a breach or threatened breach by him of any of his covenants and agreements with the Company and its Affiliates contained in Sections 6.01, 7.01, 8.01, 9.01 or 9.02 could cause irreparable harm to the Company or its Affiliates for which they would have no adequate remedy at law. Accordingly, and in addition to any remedies which the Company and its Affiliates may have at law, in the event of an actual or threatened breach by the Executive of his covenants and agreements contained in Sections 6.01, 7.01, 8.01, 9.01 or 9.02, the Company and its Affiliates shall have the absolute right, without the need to post a bond or any other type of security, to commence a lawsuit or other proceeding in any court of competent jurisdiction (the “Selected Court”) seeking injunctive or other equitable relief (an “Injunction Proceeding”). In furtherance thereof, the Executive expressly and irrevocably agrees that the Selected Court may exercise personal jurisdiction over him in connection with any Injunction Proceeding and further agrees not to assert that any court other than the Selected Court is a more suitable forum for an Injunction Proceeding.

ARTICLE 11

EXECUTIVE REPRESENTATIONS

SECTION 11.01. Executive Representations. The Executive hereby represents and warrants to the Company that (a) the execution, delivery and performance of this Agreement by the Executive does not and will not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which the Executive is a party or by

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which he is bound, (b) the Executive is not a party to or bound by any employment agreement, noncompetition agreement or confidentiality agreement with any other Person that affects his right or ability to perform the duties contemplated by this Agreement, , and (c) upon the execution and delivery of this Agreement by the Company, this Agreement will be the valid and binding obligation of the Executive, enforceable in accordance with its terms.

SECTION 11.02. Company Representations. The Company hereby represents and warrants to the Executive that (a) all acts required to be taken to authorize, deliver and perform this Agreement and the obligations of the Company provided for hereunder have been duly taken; and (b) upon the execution and delivery of this Agreement by the Company, this Agreement will be valid and binding obligation of the Company, enforceable in accordance with its terms.

ARTICLE 12

MISCELLANEOUS

SECTION 12.01. Remedies. The Company will have all rights and remedies set forth in this Agreement, all rights and remedies which the Company has been granted at any time under any other agreement or contract and all of the rights which the Company has under any law. The Company will be entitled to enforce such rights specifically, without posting a bond or other security, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. There are currently no disciplinary or grievance procedures in place, there is no collective agreement in place, and there is no probationary period.

SECTION 12.02. Consent to Amendments. The provisions of this Agreement may be amended or waived only by a written agreement executed and delivered by the Company and the Executive. No other course of dealing between the parties to this Agreement or any delay in exercising any rights hereunder will operate as a waiver of any rights of any such parties.

SECTION 12.03. Successors and Assigns. All covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto will bind and inure to the benefit of the respective successors and assigns of the parties hereto whether so expressed or not, provided that the Executive may not assign his rights or delegate his obligations under this Agreement without the written consent of the Company.

SECTION 12.04. Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

SECTION 12.05. Counterparts. This Agreement may be executed simultaneously in two counterparts, any one of which need not contain the signatures of more than one party, but all of which counterparts taken together will constitute one and the same agreement.

SECTION 12.06. Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.

SECTION 12.07. Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement will be in writing and shall be delivered personally by hand, by electronic transmission (with a copy following by hand or by overnight courier), by registered or certified mail, postage prepaid, return receipt requested, or by overnight courier service (charges prepaid). Communications delivered personally by hand shall be deemed received on the date when delivered personally to the recipient; communications sent by electronic means shall be deemed received one (1) business day after the sending thereof; communications sent by registered or certified mail shall be deemed received four (4) business days after the sending thereof; and communications delivered by overnight courier shall be deemed received one (1) business day after the date when sent to the recipient. Such notices, demands and other communications will be sent to the Executive and to the Company at the addresses set forth below.

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If to the Executive: To the last address delivered to the Company by the Executive in the manner set forth herein.    

If to the Company:    Arch Capital Group Ltd.
        Waterloo House

100 Pitts Bay Road

Hamilton HM 12, Bermuda

Attention: Secretary

Tel: (441) 278-9250

Fax: 441-278-9255

or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party.

SECTION 12.08. Withholding. The Company may withhold from any amounts payable under this Agreement such federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.

SECTION 12.09. 409A and 457A. This Section 12.09 shall apply to the Executive only if, and to the extent, he is subject to Section 409A or Section 457A of the Code. It is intended that this Agreement will comply with Sections 409A and 457A of the Code (and any regulations and guidelines issued thereunder), to the extent the Agreement is subject thereto, and the Agreement shall be interpreted on a basis consistent with such intent. If an amendment of the Agreement is necessary in order for it to comply with Section 409A or Section 457A, the parties hereto will negotiate in good faith to amend the Agreement in a manner that preserves the original intent of the parties to the extent reasonably possible. No action or failure to act, pursuant to this Section 12.09 shall subject the Company to any claim, liability, or expense, and the Company shall not have any obligation to indemnify or otherwise protect the Executive from the obligation to pay any taxes, interest or penalties pursuant to Section 409A or Section 457A of the Code.

Notwithstanding any provision to the contrary in this Agreement, if the Executive is deemed on the date of his “separation from service” (within the meaning of Treasury Regulation Section 1.409A-1(h)) to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B) of the Code, then with regard to any payment that is required to be delayed pursuant to Section 409A(a)(2)(B) of the Code (after taking into account the applicable provisions of Treasury Regulation Section 1.409A-1(b)(9)(iii)), the portion, if any, of such payment so required to be delayed shall not be made prior to the earlier of (i) the expiration of the six (6)-month period measured from the date of his “separation from service” or (ii) the date of his death (the “Delay Period”). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum, and any remaining payments due under this Agreement shall be paid in accordance with the normal payment dates specified for them herein. Whenever payments under this Agreement are to be made in installments, each such installment shall be deemed to be a separate payment for purposes of Section 409A of the Code. Notwithstanding any provision of this Agreement to the contrary, for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment that are considered deferred compensation under Section 409A, references to the Executive’s “termination of employment” (and corollary terms) with the Company shall be construed to refer to the Executive’s “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company. In no case will compliance with this Section by the Company constitute a breach of the Company’s obligations under this Agreement.

With respect to any reimbursement or in-kind benefit arrangements of the Company and its subsidiaries provided for herein that constitute deferred compensation for purposes of Section 409A, except as otherwise permitted by Section 409A, the following conditions shall be applicable: (i) the amount eligible for reimbursement, or in-kind benefits provided, under any such arrangement in one calendar year may not affect the amount eligible for reimbursement, or in-kind benefits to be provided, under such arrangement in any other calendar year (except that the health and dental plans may impose a limit on the amount that may be reimbursed or paid), (ii) any reimbursement must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred, and (iii) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

SECTION 12.10. Section 4999 of the Code. Anything in this Agreement or the Company’s Incentive Compensation Plan to the contrary notwithstanding, in the event it shall bedetermined that any payment, award, benefit or distribution (including, without limitation, the acceleration of any payment, award, distribution or benefit), by the Company or any of its

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affiliates to or for the benefit of the Executive (whether pursuant to the terms of this Agreement or otherwise) (a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Code or any corresponding provisions of state or local tax law (the “Excise Tax”), then such Payments shall either (a) be delivered in full, or (b) subject to, and in a manner consistent with the requirements of Section 409A of the Code, be reduced to the minimum extent necessary to ensure that no portion thereof will be subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state or local income and employment taxes and the Excise Tax, results in receipt by the Executive, on an after-tax basis, of the greatest amount of payments and benefits, notwithstanding that all or some portion of such payments and benefits may be subject to the Excise Tax. In the event that any Payments are to be reduced pursuant to this Section 12.10, then the reduction shall be applied as follows: (i) first, on a pro rata basis to the Executive’s cash severance payments under Section 5.03 above, and (ii) second, on a pro rata basis to Executive’s equity incentive awards. All determinations required to be made under this Article 12 shall be made by a nationally recognized accounting or consulting firm (other than the regular outside accounting firm retained by the Company) selected by the Company and agreed to by the Executive, which agreement shall not be unreasonably withheld (the “Accounting Firm”), which Accounting Firm shall provide detailed supporting calculations both to the Company and the Executive within 15 business days after the receipt of notice from the Company that the Executive has received a Payment, or such earlier time as is requested by the Company. Any determination by the Accounting Firm meeting the requirements of this Section 12.10 shall be binding upon the Company and the Executive. The fees and disbursements of the Accounting Firm shall be paid by the Company. If required, the Company shall enter into an engagement letter with the Accounting Firm containing reasonable and customary terms and provisions.

SECTION 12.11. No Third Party Beneficiary. This Agreement will not confer any rights or remedies upon any person other than the Company, the Executive and their respective heirs, executors, successors and assigns.

SECTION 12.12. Entire Agreement. This Agreement (including the documents referred to herein) constitutes the entire agreement among the parties and supersedes any prior understandings, agreements or representations by or among the parties, written or oral, that may have related in any way to the subject matter hereof, including, without limitation, the Employment Agreement, dated July 1, 2012, between Arch Reinsurance Ltd. and the Executive, which was transferred to the Company on November 1, 2013. This Agreement shall serve as a written statement of employment for purposes of Section 6 of the Bermuda Employment Act 2000.

SECTION 12.13. Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party. Any reference to any federal, state, local or foreign statute or law will be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The use of the word “including” in this Agreement means including without limitation and is intended by the parties to be by way of example rather than limitation.

SECTION 12.14. Survival. Sections 3.04, 5.03, 5.04, 6.01, 6.02, 7.01, 8.01 and Articles 9, 10, 11 and 12 will survive and continue in full force in accordance with their terms notwithstanding any termination of the Employment Period.

SECTION 12.15. GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT WILL BE GOVERNED BY THE LAW OF BERMUDA, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS, SAVE THAT WHERE PROVISIONS OF FOREIGN LAW APPLY IN THIS AGREEMENT, THEY WILL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH SUCH FOREIGN LAW.

SECTION 12.16. Arbitration. Save for where the Company chooses to exercise its rights as described in Section 10.01, in the event that a dispute or difference shall arise between the parties out of, in connection with, or concerning this Agreement, such dispute shall be referred to and determined by a sole arbitrator in a confidential private arbitration in accordance with the UNCITRAL rules as same are incorporated into the Bermuda International Conciliation and Arbitration Act 1986, except as they may be modified herein or by mutual agreement of the parties. Any such arbitration proceeding shall take place before a single arbitrator. The arbitrator shall be acceptable to both the Company and the Executive. However, if the parties cannot agree on an acceptable arbitrator, then the arbitrator is to be appointed by the Appointments’ Committee of the Chartered Institute of Arbitrators Bermuda Branch. The seat of arbitration shall be Bermuda and it shall be conducted in the English language. The parties shall bear their respective costs (including attorney’s fees) and shall split the fee of the arbitrators (50% paid by the Company and 50% by the Executive). Judgment upon the final award rendered by such arbitrator may be entered in any court having jurisdiction thereof. Each party agrees that it shall maintain confidentiality in respect to any arbitration between them (including any decision rendered in such arbitration) except as necessary in connection with an enforcement proceeding or as required by law.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written.

ARCH CAPITAL GROUP LTD.
By:	/s/ Marc Grandisson
	Name:	Marc Grandisson
	Title:	President & Chief Operating Officer
	/s/ Andrew Rippert
	Andrew Rippert

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EX-15

Exhibit 15

November 3, 2017

Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

Commissioners:

We are aware that our report dated November 3, 2017 on our review of interim financial information of Arch Capital Group Ltd. and its subsidiaries, which appears in this Quarterly Report on Form 10-Q, is incorporated by reference in the Registration Statement on Form S-3 (Registration No. 333-202440, Registration No. 333-202440-01 and Registration No. 333-202440-02) and in the Registration Statements on Forms S-8 (Registration No. 333-99974, Registration No. 333-86145, Registration No. 333-82772, Registration No. 333-211193, Registration No. 333-72182, Registration No. 333-98971, Registration No. 333-124422, Registration No. 333-142835, Registration No. 333-181308, and Registration No. 333-203993).

Very truly yours,

/s/ PricewaterhouseCoopers LLP

EX-31.1

Exhibit 31.1

Certification

of Chief Executive Officer

Pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002

I, Constantine Iordanou, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Arch Capital Group Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in the report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and to the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 3, 2017
By:	/s/ Constantine Iordanou
Name:	Constantine Iordanou
Title:	Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification

of Chief Financial Officer

Pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002

I, Mark D. Lyons, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Arch Capital Group Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in the report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and to the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 3, 2017
By:	/s/ Mark D. Lyons
Name:	Mark D. Lyons
Title:	Executive Vice President, Chief Financial Officer and Treasurer

EX-32.1

Exhibit 32.1

Certification Pursuant to Chapter 63, Title 18 United States Code §1350

As Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Arch Capital Group Ltd. (the “Company”) on Form 10-Q for the period ending September 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Constantine Iordanou, as Chief Executive Officer of the Company, certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; and

(2) the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	November 3, 2017
By:	/s/ Constantine Iordanou
Name:	Constantine Iordanou
Title:	Chief Executive Officer

A signed original of this written statement required by Section 906 or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Arch Capital Group Ltd. and will be retained by Arch Capital Group Ltd. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Certification Pursuant to Chapter 63, Title 18 United States Code §1350

As Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Arch Capital Group Ltd. (the “Company”) on Form 10-Q for the period ending September 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Mark D. Lyons, as Executive Vice President, Chief Financial Officer and Treasurer of the Company, certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; and

(2) the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	November 3, 2017
By:	/s/ Mark D. Lyons
Name:	Mark D. Lyons
Title:	Executive Vice President, Chief Financial Officer and Treasurer

A signed original of this written statement required by Section 906 or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Arch Capital Group Ltd. and will be retained by Arch Capital Group Ltd. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Oct. 31, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	ARCH CAPITAL GROUP LTD.
Entity Central Index Key	0000947484
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		130,874,024

XML

Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Investments:
Fixed maturities available for sale, at fair value (amortized cost: $13,722,581 and $13,522,671)	$ 13,792,903	$ 13,426,577
Short-term investments available for sale, at fair value (amortized cost: $1,645,873 and $611,878)	1,646,036	612,005
Collateral received under securities lending, at fair value (amortized cost: $543,243 and $762,554)	543,252	762,565
Equity securities available for sale, at fair value (cost: $401,674 and $475,085)	477,143	518,041
Other investments available for sale, at fair value (cost: $205,828 and $149,077)	260,339	167,970
Investments accounted for using the fair value option	4,249,634	3,421,220
Investments accounted for using the equity method	962,574	811,273
Total investments	21,931,881	19,719,651
Cash	862,361	842,942
Accrued investment income	101,104	124,483
Securities pledged under securities lending, at fair value (amortized cost: $529,700 and $746,409)	528,212	744,980
Premiums receivable	1,269,678	1,072,435
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses	2,506,015	2,114,138
Contractholder receivables	1,864,348	1,717,436
Ceded unearned premiums	947,135	859,567
Deferred acquisition costs	531,196	447,560
Receivable for securities sold	385,952	58,284
Goodwill and intangible assets	684,405	781,553
Other assets	1,012,510	889,080
Total assets	32,624,797	29,372,109
Liabilities
Reserve for losses and loss adjustment expenses	11,351,267	10,200,960
Unearned premiums	3,751,550	3,406,870
Reinsurance balances payable	352,006	300,407
Contractholder payables	1,864,348	1,717,436
Collateral held for insured obligations	345,726	301,406
Senior notes	1,732,726	1,732,258
Revolving credit agreement borrowings	826,242	756,650
Securities lending payable	543,243	762,554
Payable for securities purchased	1,091,464	76,183
Other liabilities	788,354	806,260
Total liabilities	22,646,926	20,060,984
Commitments and Contingencies
Redeemable noncontrolling interests	205,829	205,553
Shareholders' Equity
Non-cumulative preferred shares	772,555	772,555
Convertible non-voting common equivalent preferred shares	489,627	1,101,304
Common shares ($0.0033 par, shares issued: 182,924,882 and 174,644,101)	610	582
Additional paid-in capital	1,212,960	531,687
Retained earnings	8,359,354	7,996,701
Accumulated other comprehensive income (loss), net of deferred income tax	129,682	(114,541)
Common shares held in treasury, at cost (shares: 52,058,509 and 51,856,584)	(2,053,644)	(2,034,570)
Total shareholders' equity available to Arch	8,911,144	8,253,718
Non-redeemable noncontrolling interests	860,898	851,854
Total shareholders' equity	9,772,042	9,105,572
Total liabilities, noncontrolling interests and shareholders' equity	$ 32,624,797	$ 29,372,109

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Unaudited Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Fixed maturities available for sale, at amortized cost	$ 13,722,581	$ 13,522,671
Short-term investments available for sale, at amortized cost	1,645,873	611,878
Collateral received under securities lending, at amortized cost	543,243	762,554
Equity securities available for sale, at cost	401,674	475,085
Other investments available for sale, at cost	205,828	149,077
Securities pledged under securities lending, at amortized cost	$ 529,700	$ 746,409
Common shares, par value per share	$ 0.0033	$ 0.0033
Common shares issued (shares)	182,924,882	174,644,101
Common shares held in treasury (shares)	52,058,509	51,856,584

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Unaudited Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Revenues
Net premiums written	$ 1,325,403	$ 1,014,278	$ 3,850,358	$ 3,159,076
Change in unearned premiums	(63,517)	(55,875)	(230,581)	(243,109)
Net premiums earned	1,261,886	958,403	3,619,777	2,915,967
Net investment income	116,459	93,618	345,457	275,691
Net realized gains (losses)	66,275	125,105	122,163	230,647
Other-than-temporary impairment losses	(1,878)	(3,867)	(5,415)	(16,999)
Less investment impairments recognized in other comprehensive income, before taxes	0	0	0	150
Net impairment losses recognized in earnings	(1,878)	(3,867)	(5,415)	(16,849)
Other underwriting income	6,064	7,980	15,519	38,251
Equity in net income (loss) of investment funds accounted for using the equity method	31,090	16,662	111,884	32,054
Other income (loss)	(342)	(400)	(3,118)	(432)
Total revenues	1,479,554	1,197,501	4,206,267	3,475,329
Expenses
Losses and loss adjustment expenses	1,046,141	524,183	2,288,571	1,631,724
Acquisition expenses	193,854	161,267	566,579	501,782
Other operating expenses	170,127	153,286	514,827	460,748
Corporate expenses	17,098	18,485	69,766	45,068
Amortization of intangible assets	31,824	4,865	93,942	14,493
Interest expense	29,510	15,943	86,935	47,713
Net foreign exchange losses (gains)	28,028	2,621	86,975	1,525
Total expenses	1,516,582	880,650	3,707,595	2,703,053
Income (loss) before income taxes	(37,028)	316,851	498,672	772,276
Income tax expense	(8,189)	(13,231)	(70,755)	(43,672)
Net income (loss)	(45,217)	303,620	427,917	728,604
Net (income) loss attributable to noncontrolling interests	11,561	(50,748)	(23,279)	(109,879)
Net income (loss) available to Arch	(33,656)	252,872	404,638	618,725
Preferred dividends	(12,369)	(5,484)	(34,936)	(16,453)
Loss on redemption of preferred shares	(6,735)	0	(6,735)	0
Net income (loss) available to Arch common shareholders	$ (52,760)	$ 247,388	$ 362,967	$ 602,272
Net income per common share
Basic (per share)	$ (0.39)	$ 2.05	$ 2.70	$ 4.99
Diluted (per share)	$ (0.39)	$ 1.98	$ 2.61	$ 4.84
Weighted average common shares and common share equivalents outstanding
Basic (shares)	134,885,451	120,938,916	134,472,129	120,656,420
Diluted (shares)	134,885,451	124,931,653	139,222,324	124,528,174

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Unaudited Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Comprehensive Income
Net income (loss)	$ (45,217)	$ 303,620	$ 427,917	$ 728,604
Unrealized appreciation (decline) in value of available-for-sale investments:
Unrealized holding gains (losses) arising during period	66,462	16,281	260,223	251,722
Portion of other-than-temporary impairment losses recognized in other comprehensive income, net of deferred income tax	0	0	0	(150)
Reclassification of net realized (gains) losses, net of income taxes, included in net income (loss)	(23,912)	(54,992)	(46,180)	(109,309)
Foreign currency translation adjustments	8,280	(5,312)	29,701	(6,150)
Comprehensive income	5,613	259,597	671,661	864,717
Net (income) loss attributable to noncontrolling interests	11,561	(50,748)	(23,279)	(109,879)
Foreign currency translation adjustments attributable to noncontrolling interests	411	(59)	479	141
Comprehensive income available to Arch	$ 17,585	$ 208,790	$ 648,861	$ 754,979

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Unaudited Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands	Total	Non-cumulative preferred shares	Common shares	Additional paid-in capital	Retained earnings	Accumulated other comprehensive income (loss), net of deferred income tax	Unrealized appreciation (decline) in value of available-for-sale securities, net of deferred income tax	Foreign currency translation adjustments	Common shares held in treasury, at cost	Convertible non-voting common equivalent preferred shares
Cumulative effect of an accounting change					$ 0
Balance at beginning of year, as adjusted					7,332,032
Balance at beginning of year at Dec. 31, 2015		$ 325,000	$ 577	$ 467,339	7,332,032	$ (16,502)	$ 50,085	$ (66,587)	$ (1,941,904)	$ 0
Preferred shares issued		450,000
Preferred shares redeemed		0
Preferred shares converted to common shares				0						0
Common shares issued, net			5
Issue costs on preferred shares				(15,101)
Loss on redemption of preferred shares	$ 0			0	0
All other				63,966
Net income (loss)	728,604				728,604
Net (income) loss attributable to noncontrolling interests	(109,879)				(109,879)
Preferred share dividends	(16,453)				(16,453)
Unrealized holding gains (losses) arising during period, net of reclassification adjustment							142,413
Portion of other-than-temporary impairment losses recognized in other comprehensive income, net of deferred income tax	(150)						(150)
Foreign currency translation adjustments	(6,150)							(6,150)
Foreign currency translation adjustments attributable to noncontrolling interests								141
Shares repurchased for treasury									(89,955)
Balance at end of period at Sep. 30, 2016	7,313,983	775,000	582	516,204	7,934,304	119,752	192,348	(72,596)	(2,031,859)	0
Non-redeemable noncontrolling interests, end of period at Sep. 30, 2016	834,808
Total shareholders’ equity at Sep. 30, 2016	8,148,791
Loss on redemption of preferred shares	0
Net income (loss)	303,620
Net (income) loss attributable to noncontrolling interests	(50,748)
Preferred share dividends	(5,484)
Portion of other-than-temporary impairment losses recognized in other comprehensive income, net of deferred income tax	0
Foreign currency translation adjustments	(5,312)
Balance at end of period at Sep. 30, 2016	7,313,983	775,000	582	516,204	7,934,304	119,752	192,348	(72,596)	(2,031,859)	0
Non-redeemable noncontrolling interests, end of period at Sep. 30, 2016	834,808
Total shareholders’ equity at Sep. 30, 2016	8,148,791
Cumulative effect of an accounting change					(314)
Balance at beginning of year, as adjusted					7,996,387
Balance at beginning of year at Dec. 31, 2016	8,253,718	772,555	582	531,687	7,996,701	(114,541)	(27,641)	(86,900)	(2,034,570)	1,101,304
Preferred shares issued		230,000
Preferred shares redeemed		(230,000)
Preferred shares converted to common shares				611,653						(611,677)
Common shares issued, net			28
Issue costs on preferred shares				(7,946)
Loss on redemption of preferred shares	(6,735)			6,735	(6,735)
All other				70,831
Net income (loss)	427,917				427,917
Net (income) loss attributable to noncontrolling interests	(23,279)				(23,279)
Preferred share dividends	(34,936)				(34,936)
Unrealized holding gains (losses) arising during period, net of reclassification adjustment							214,043
Portion of other-than-temporary impairment losses recognized in other comprehensive income, net of deferred income tax	0						0
Foreign currency translation adjustments	29,701							29,701
Foreign currency translation adjustments attributable to noncontrolling interests								479
Shares repurchased for treasury									(19,074)
Balance at end of period at Sep. 30, 2017	8,911,144	772,555	610	1,212,960	8,359,354	129,682	186,402	(56,720)	(2,053,644)	489,627
Non-redeemable noncontrolling interests, end of period at Sep. 30, 2017	860,898
Total shareholders’ equity at Sep. 30, 2017	9,772,042
Loss on redemption of preferred shares	(6,735)
Net income (loss)	(45,217)
Net (income) loss attributable to noncontrolling interests	11,561
Preferred share dividends	(12,369)
Portion of other-than-temporary impairment losses recognized in other comprehensive income, net of deferred income tax	0
Foreign currency translation adjustments	8,280
Balance at end of period at Sep. 30, 2017	8,911,144	$ 772,555	$ 610	$ 1,212,960	$ 8,359,354	$ 129,682	$ 186,402	$ (56,720)	$ (2,053,644)	$ 489,627
Non-redeemable noncontrolling interests, end of period at Sep. 30, 2017	860,898
Total shareholders’ equity at Sep. 30, 2017	$ 9,772,042

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Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Operating Activities
Net income (loss)	$ 427,917	$ 728,604
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized (gains) losses	(141,944)	(262,112)
Net impairment losses recognized in earnings	5,415	16,849
Equity in net income or loss of investment funds accounted for using the equity method and other income or loss	(63,784)	8,157
Amortization of intangible assets	93,942	14,493
Share-based compensation	58,308	46,311
Changes in:
Reserve for losses and loss adjustment expenses, net of unpaid losses and loss adjustment expenses recoverable	602,652	277,277
Unearned premiums, net of ceded unearned premiums	230,581	243,109
Premiums receivable	(167,143)	(198,909)
Deferred acquisition costs	(73,631)	(40,906)
Reinsurance balances payable	37,528	49,198
Other items, net	71,293	155,068
Net Cash Provided By Operating Activities	1,081,134	1,037,139
Investing Activities
Purchases of fixed maturity investments	(28,079,129)	(27,840,555)
Purchases of equity securities	(667,135)	(377,767)
Purchases of other investments	(1,406,528)	(1,008,774)
Proceeds from sales of fixed maturity investments	27,629,474	26,731,924
Proceeds from sales of equity securities	751,873	464,904
Proceeds from sales, redemptions and maturities of other investments	938,581	879,330
Proceeds from redemptions and maturities of fixed maturity investments	747,621	540,823
Net settlements of derivative instruments	(20,952)	23,396
Net (purchases) sales of short-term investments	(964,653)	(604,162)
Change in cash collateral related to securities lending	148,692	(27,935)
Acquisitions, net of cash	(27,709)	(20,911)
Purchases of fixed assets	(16,862)	(11,565)
Other	86,145	(3,816)
Net Cash Provided By (Used For) Investing Activities	(880,582)	(1,255,108)
Financing Activities
Proceeds from issuance of preferred shares, net	222,054	434,899
Redemption of preferred shares	(230,000)	0
Purchases of common shares under share repurchase program	0	(75,256)
Proceeds from common shares issued, net	(7,484)	(3,785)
Proceeds from borrowings	238,915	46,000
Repayments of borrowings	(172,000)	(179,171)
Change in cash collateral related to securities lending	(148,692)	27,935
Dividends paid to redeemable noncontrolling interests	(13,491)	(13,491)
Other	(49,280)	33,113
Preferred dividends paid	(34,936)	(16,453)
Net Cash Provided By (Used For) Financing Activities	(194,914)	253,791
Effects of exchange rate changes on foreign currency cash	13,781	(10,332)
Increase (decrease) in cash	19,419	25,490
Cash beginning of year	842,942	553,326
Cash end of period	862,361	578,816
Income taxes paid	47,907	40,742
Interest paid	$ 64,613	$ 35,234

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General

9 Months Ended

Sep. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

General

General

Arch Capital Group Ltd. (“ACGL”) is a Bermuda public limited liability company which provides insurance, reinsurance and mortgage insurance on a worldwide basis through its wholly-owned subsidiaries. As used herein, the “Company” means ACGL and its subsidiaries. The Company’s consolidated financial statements include the results of Watford Holdings Ltd. and its wholly owned subsidiaries. See Note 3.

On December 31, 2016, the Company completed the acquisition of United Guaranty Corporation, a North Carolina corporation (“UGC”) pursuant to a stock purchase agreement with American International Group, Inc. (“AIG”). The acquisition of UGC (“UGC acquisition”) expanded the scale of Arch’s existing mortgage insurance businesses by combining UGC’s position as the market leader in the U.S. private mortgage insurance industry with Arch’s financial strength and history of innovation, further diversifying the Company’s business profile and customer base.

The interim consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). All significant intercompany transactions and balances have been eliminated in consolidation. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions. In the opinion of management, the accompanying unaudited interim consolidated financial statements reflect all adjustments (consisting of normally recurring accruals) necessary for a fair statement of results on an interim basis. The results of any interim period are not necessarily indicative of the results for a full year or any future periods.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted; however, management believes that the disclosures are adequate to make the information presented not misleading. This report should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (“2016 Form 10-K”), including the Company’s audited consolidated financial statements and related notes.

The Company has reclassified the presentation of certain prior year information to conform to the current presentation, including the presentation of ‘amortization of intangible assets’ on its consolidated statements of income to split out such item (previously reflected in acquisition expenses and/or other operating expenses). Such reclassifications had no effect on the Company’s net income, comprehensive income, shareholders’ equity or cash flows. Tabular amounts are in U.S. Dollars in thousands, except share amounts, unless otherwise noted.

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Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2017

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Recently Issued Accounting Standards Adopted

The Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standard Update (“ASU”) 2016-09, “Compensation - Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment Accounting,” effective January 1, 2017. This ASU was issued in the 2016 first quarter to improve and simplify the accounting for employee share-based payment transactions. This ASU provides simplifications with respect to income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows for these types of transactions. With respect to the forfeiture accounting policy election, the Company has elected to account for forfeitures as they occur, which did not result in a material cumulative effect adjustment. With respect to the change in presentation in the statement of cash flows related to excess tax benefits, the Company has applied the guidance prospectively and prior periods have not been adjusted.

Recently Issued Accounting Standards Not Yet Adopted

ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” was issued in the 2014 second quarter and updated through various ASUs in 2016. This ASU (and as updated in 2016) creates a new comprehensive revenue recognition standard that will serve as a single source of revenue guidance for all companies in all industries. The guidance applies to all companies that either enter into contracts with customers to transfer goods or services or enter into contracts for the transfer of non-financial assets, unless those contracts are within the scope of other standards, such as insurance contracts or financial instruments.The ASU also requires enhanced disclosures about revenue. The ASU is effective in the 2018 first quarter and the Company intends on adopting the ASU using the modified retrospective method, whereby the cumulative effect of adoption will be recognized as an adjustment to retained earnings at the date of initial application. The adoption of this ASU will not impact the Company's insurance premium revenues or revenues from its investment portfolio, which represent a substantial portion of consolidated revenues, but may have an impact on the Company's other revenues. Based on the Company’s evaluation of the impacted revenue streams, the ASU is not expected to have a material effect on the Company’s consolidated financial statements and the cumulative effect adjustment to retained earnings at the date of initial application is not expected to be material.

ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assetsand Financial Liabilities,” was issued in the 2016 first quarter to enhance the reporting model for financial instruments and to provide improved financial information to readers of the financial statements. Among other provisions focused on improving the recognition and measurement of financial instruments, the ASU requires that equity investments be measured at fair value on the balance sheet with changes in fair value reported in the income statement and that an exit price notion be used when measuring the fair value of financial instruments for disclosure purposes. The ASU is effective in the 2018 first quarter and, aside from limited situations, cannot be early adopted. The Company is currently assessing the impact the implementation of this ASU will have on its consolidated financial statements. The adoption of this ASU is not expected to have a material impact on the Company's financial position, cash flows, or total comprehensive income, but will have a material impact on the Company's results of operations as changes in fair value of equity instruments will be presented in net income rather than other comprehensive income.

ASU 2016-18, "Statement of Cash Flows (Topic 230) - Restricted Cash " was issued in the 2016 fourth quarter. The ASU requires that restricted cash and restricted cash equivalents be included with cash and cash equivalents in the reconciliation of beginning and ending cash on the statements of cash flows. As a result, transfers between cash and cash equivalents and restricted cash and restricted cash equivalents will no longer be presented on the statement of cash flows. The ASU is effective, with retrospective adoption, for interim and annual periods beginning after December 15, 2017, with early adoption permitted. The Company is currently assessing the impact the implementation of this ASU will have on its consolidated financial statements. The adoption of this ASU is not expected to have a material effect on the Company’s results of operations, financial position, comprehensive income or net cash provided from operating activities.

ASU 2017-08, “Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities,” was issued in the 2017 first quarter.The ASU amends the amortization period for certain purchased callable debt securities held at a premium by shortening the amortization period for the premium to the earliest call date. The ASU will be effective for the Company on January 1, 2019 and is required to be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company is currently assessing the impact the implementation of this ASU will have on its consolidated financial statements. The adoption of this ASU is not expected to have a material effect on the Company’s results of operations, financial position or cash flows.

ASU 2017-09, “Compensation - Stock Compensation (Topic 718) - Scope of Modification Accounting” was issued in the 2017 second quarter. The ASU provides updated guidance to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. The ASU is effective prospectively for all companies for annual periods beginning on or after December 15, 2017, with early adoption permitted. The adoption of this ASU is not expected to have a material effect on the Company’s results of operations, financial position or cash flows.

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Variable Interest Entities and Noncontrolling Interests

9 Months Ended

Sep. 30, 2017

Noncontrolling Interest [Abstract]

Variable Interest Entity and Noncontrolling Interests

Variable Interest Entities and Noncontrolling Interests

A variable interest entity (“VIE”) refers to an entity that has characteristics such as (i) insufficient equity at risk to allow the entity to finance its activities without additional financial support or (ii) instances where the equity investors, as a group, do not have characteristics of a controlling financial interest. The primary beneficiary of a VIE is defined as the variable interest holder that is determined to have the controlling financial interest as a result of having both (i) the power to direct the activities of a VIE that most significantly impact the economic performance of the VIE and (ii) the obligation to absorb losses or right to receive benefits from the VIE that could potentially be significant to the VIE. If a company is determined to be the primary beneficiary, it is required to consolidate the VIE in its financial statements.

Watford Holdings Ltd.

In March 2014, the Company invested $100.0 million and acquired approximately 11% of Watford Holdings Ltd.’s common equity and a warrant to purchase additional common equity. Watford Holdings Ltd. is the parent of Watford Re Ltd., a multi-line Bermuda reinsurance company (together with Watford Holdings Ltd., “Watford Re”). Watford Re is considered a VIE and the Company concluded that it is the primary beneficiary of Watford Re. As such, the results of Watford Re are included in the Company’s consolidated financial statements.

The Company does not guarantee or provide credit support for Watford Re, and the Company’s financial exposure to Watford Re is limited to its investment in Watford Re’s common and preferred shares and counterparty credit risk (mitigated by collateral) arising from reinsurance transactions.

The following table provides the carrying amount and balance sheet caption in which the assets and liabilities of Watford Re are reported:

	September 30,		December 31,
	2017		2016
Assets
Investments accounted for using the fair value option	$	2,457,365	$	1,857,623
Cash	57,151		74,893
Accrued investment income	13,718		17,017
Premiums receivable	209,985		189,911
Reinsurance recoverable on unpaid and paid losses and LAE	37,575		24,420
Ceded unearned premiums	23,538		12,145
Deferred acquisition costs	87,692		86,379
Receivable for securities sold	74,051		1,326
Goodwill and intangible assets	7,650		7,650
Other assets	132,796		111,386
Total assets of consolidated VIE	$	3,101,521	$	2,382,750
Liabilities
Reserves for losses and loss adjustment expenses	$	735,132	$	510,809
Unearned premiums	344,060		293,480
Reinsurance balances payable	22,487		12,289
Revolving credit agreement borrowings	426,242		256,650
Payable for securities purchased	211,065		42,922
Other liabilities	174,472		88,976
Total liabilities of consolidated VIE	$	1,913,458	$	1,205,126
Redeemable noncontrolling interests	$	220,529	$	220,253

For the nine months ended September 30, 2017, Watford Re generated $221.9 million of cash provided by operating activities, $394.4 million of cash used for investing activities and $152.5 million of cash provided by financing activities, compared to $207.0 million of cash provided by operating activities, $124.0 million of cash used for investing activities and $119.6 million of cash used for financing activities for the nine months ended September 30, 2016.

Non-redeemable noncontrolling interests

The Company accounts for the portion of Watford Re’s common equity attributable to third party investors in the shareholders’ equity section of its consolidated balance sheets. The noncontrolling ownership in Watford Re’s common shares was approximately 89% at September 30, 2017. The portion of Watford Re’s income or loss attributable to third party investors is recorded in the consolidated statements of income in ‘net (income) loss attributable to noncontrolling interests.’

The following table sets forth activity in the non-redeemable noncontrolling interests:

	September 30,
	2017			2016
Three Months Ended
Balance, beginning of period	$	877,456		$	788,589
Amounts attributable to noncontrolling interests	(16,147		)	46,160
Foreign currency translation adjustments attributable to noncontrolling interests	(411		)	59
Balance, end of period	$	860,898		$	834,808
Nine Months Ended
Balance, beginning of year	$	851,854		$	738,831
Amounts attributable to noncontrolling interests	9,523			96,118
Foreign currency translation adjustments attributable to noncontrolling interests	(479		)	(141		)
Balance, end of period	$	860,898		$	834,808

Redeemable noncontrolling interests

The Company accounts for redeemable noncontrolling interests in the mezzanine section of its consolidated balance sheets in accordance with applicable accounting guidance. Such redeemable noncontrolling interests relate to the 9,065,200 cumulative redeemable preference shares (“Watford Preference Shares”) issued in March 2014 with a par value of $0.01 per share and a liquidation preference of $25.00 per share. Preferred dividends, including the accretion of the discount and issuance costs, are included in ‘net (income) loss attributable to noncontrolling interests’ in the Company’s consolidated statements of income.

The following table sets forth activity in the redeemable non-controlling interests:

	September 30,
	2017		2016
Three Months Ended
Balance, beginning of period	$	205,736	$	205,366
Accretion of preference share issuance costs	93		93
Balance, end of period	$	205,829	$	205,459
Nine Months Ended
Balance, beginning of year	$	205,553	$	205,182
Accretion of preference share issuance costs	276		277
Balance, end of period	$	205,829	$	205,459

The portion of Watford Re’s income or loss attributable to third party investors, recorded in the Company’s consolidated statements of income in ‘net (income) loss attributable to noncontrolling interests,’ are summarized in the table below:

	September 30,
	2017			2016
Three Months Ended
Amounts attributable to non-redeemable noncontrolling interests	$	16,147		$	(46,160	)
Dividends attributable to redeemable noncontrolling interests	(4,586		)	(4,588		)
Net (income) loss attributable to noncontrolling interests	$	11,561		$	(50,748	)
Nine Months Ended
Amounts attributable to non-redeemable noncontrolling interests	$	(9,523	)	$	(96,118	)
Dividends attributable to redeemable noncontrolling interests	(13,756		)	(13,761		)
Net (income) loss attributable to noncontrolling interests	$	(23,279	)	$	(109,879	)

Bellemeade Re I and II

Upon closing of the UGC acquisition, the Company acquired the rights and obligations related to aggregate excess of loss reinsurance agreements with Bellemeade Re I Ltd. (“Bellemeade I”), entered into in July 2015, and with Bellemeade Re II Ltd. (“Bellemeade II”), entered into in May 2016 (the “Bellemeade Agreements”). Bellemeade I and Bellemeade II are special purpose reinsurance companies domiciled in Bermuda, each of which provided for up to approximately $300 million of aggregate excess of loss reinsurance coverage at inception for new delinquencies on portfolios of in-force policies issued.

As a result of the evaluation of the Bellemeade Agreements, the Company concluded that both Bellemeade I and Bellemeade II are VIEs. However, given that the ceding insurers do not have the unilateral power to direct those activities that are significant to the economic performance of Bellemeade I and Bellemeade II, the Company does not consolidate Bellemeade I and Bellemeade II in its consolidated financial statements.

The following table presents total assets of Bellemeade I and Bellemeade II as well as the Company’s maximum exposure to loss associated with these VIEs:

			Maximum Exposure to Loss
	Total VIE Assets		On-Balance Sheet			Off-Balance Sheet		Total
Bellemeade I	$	112,090	$	533		$	1,009	$	1,542
Bellemeade II	191,387		(53		)	746		693
Total	$	303,477	$	480		$	1,755	$	2,235

See note 18, “Subsequent Event.”

Irving Partners Limited Partnership

Upon closing of the UGC acquisition, the Company acquired a limited partnership interest in Irving Partners Limited Partnership (“Irving Partners”), which owns and operates an office building in Greensboro, North Carolina in which the Company is the main tenant. The Company concluded that Irving Partners is a VIE but that it is not the primary beneficiary. During the 2017 third quarter, the Company’s ownership in Irving Partners was sold to a third party for approximately $14.5 million.

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Earnings Per Common Share

9 Months Ended

Sep. 30, 2017

Earnings Per Share [Abstract]

Earnings Per Common Share

Earnings (Loss) Per Common Share

Due to the net loss recorded in the 2017 third quarter, diluted weighted average common shares and common share equivalents outstanding for the 2017 third quarter do not include the effect of 4.7 million otherwise dilutive securities since the inclusion of such securities is anti-dilutive to per share results. Since the Company reported net income for the other periods presented, the computation of diluted average shares outstanding includes dilutive securities for such periods.

The following table sets forth the computation of basic and diluted earnings (loss) per common share:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Numerator:
Net income (loss)	$	(45,217	)	$	303,620		$	427,917		$	728,604
Amounts attributable to noncontrolling interests	11,561			(50,748		)	(23,279		)	(109,879		)
Net income (loss) available to Arch	(33,656		)	252,872			404,638			618,725
Preferred dividends	(12,369		)	(5,484		)	(34,936		)	(16,453		)
Loss on redemption of preferred shares	(6,735		)	—			(6,735		)	—
Net income (loss) available to Arch common shareholders	$	(52,760	)	$	247,388		$	362,967		$	602,272
Denominator:
Weighted average common shares outstanding	129,211,251			120,938,916			124,526,611			120,656,420
Series D preferred shares (1)	5,674,200			—			9,945,518			—
Weighted average common shares and common share equivalents outstanding — basic	134,885,451			120,938,916			134,472,129			120,656,420
Effect of dilutive common share equivalents:
Nonvested restricted shares	—			1,313,025			1,459,879			1,295,825
Stock options (2)	—			2,679,712			3,290,316			2,575,929
Weighted average common shares and common share equivalents outstanding — diluted (3)	134,885,451			124,931,653			139,222,324			124,528,174
Earnings (loss) per common share:
Basic	$	(0.39	)	$	2.05		$	2.70		$	4.99
Diluted	$	(0.39	)	$	1.98		$	2.61		$	4.84

(1) Such shares are convertible non-voting common equivalent preferred shares issued in connection with the UGC acquisition.

(2) Certain stock options were not included in the computation of diluted earnings per share where the exercise price of the stock options exceeded the average market price and would have been anti-dilutive or where, when applying the treasury stock method to in-the-money options, the sum of the proceeds, including unrecognized compensation, exceeded the average market price and would have been anti-dilutive. For the 2017 third quarter and 2016 third quarter, the number of stock options excluded were nil and 334,203, respectively. For the nine months ended September 30, 2017 and 2016, the number of stock options excluded were 838,868 and 842,105, respectively.

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Segment Information

9 Months Ended

Sep. 30, 2017

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company classifies its businesses into three underwriting segments — insurance, reinsurance and mortgage — and two other operating segments — ‘other’ and corporate (non-underwriting). The Company determined its reportable segments using the management approach described in accounting guidance regarding disclosures about segments of an enterprise and related information. The accounting policies of the segments are the same as those used for the preparation of the Company’s consolidated financial statements. Intersegment business is allocated to the segment accountable for the underwriting results.

The Company’s insurance, reinsurance and mortgage segments each have managers who are responsible for the overall profitability of their respective segments and who are directly accountable to the Company’s chief operating decision makers, the Chairman and Chief Executive Officer, the President and Chief Operating Officer, and the Chief Financial Officer of ACGL. The chief operating decision makers do not assess performance, measure return on equity or make resource allocation decisions on a line of business basis. Management measures segment performance for its three underwriting segments based on underwriting income or loss. The Company does not manage its assets by underwriting segment, with the exception of goodwill and intangible assets, and, accordingly, investment income is not allocated to each underwriting segment.

The insurance segment consists of the Company’s insurance underwriting units which offer specialty product lines on a worldwide basis. Product lines include: construction and national accounts; excess and surplus casualty; lenders products; professional lines; programs; property, energy, marine and aviation; travel, accident and health; and other (consisting of alternative markets, excess workers' compensation and surety business).

The reinsurance segment consists of the Company’s reinsurance underwriting units which offer specialty product lines on a worldwide basis. Product lines include: casualty; marine and aviation; other specialty; property catastrophe; property excluding property catastrophe (losses on a single risk, both excess of loss and pro rata); and other (consisting of life reinsurance, casualty clash and other).

The mortgage segment includes the Company’s U.S. and international mortgage insurance and reinsurance operations as well as government sponsored enterprise (“GSE”) credit-risk sharing transactions. Arch Mortgage Insurance Company, United Guaranty Residential Insurance Company and United Guaranty Mortgage Indemnity Company (combined “Arch MI U.S.”) are approved as eligible mortgage insurers by Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”), each a GSE.

The corporate (non-underwriting) segment results include net investment income, other income (loss), corporate expenses, UGC transaction costs and other, interest expense, items related to the Company’s non-cumulative preferred shares, net realized gains or losses, net impairment losses included in earnings, equity in net income or loss of investment funds accounted for using the equity method, net foreign exchange gains or losses and income taxes. Such amounts exclude the results of the ‘other’ segment.

The ‘other’ segment includes the results of Watford Re (see Note 3). Watford Re has its own management and board of directors that is responsible for the overall profitability of the ‘other’ segment. For the ‘other’ segment, performance is measured based on net income or loss.

The following tables summarize the Company’s underwriting income or loss by segment, together with a reconciliation of underwriting income or loss to net income available to common shareholders:

	Three Months Ended
	September 30, 2017
	Insurance			Reinsurance			Mortgage			Sub-Total			Other			Total
Gross premiums written (1)	$	787,447		$	422,083		$	347,951		$	1,557,179		$	166,198		$	1,648,246
Premiums ceded	(222,516		)	(105,389		)	(57,900		)	(385,503		)	(12,471		)	(322,843		)
Net premiums written	564,931			316,694			290,051			1,171,676			153,727			1,325,403
Change in unearned premiums	(29,766		)	6,879			(15,533		)	(38,420		)	(25,097		)	(63,517		)
Net premiums earned	535,165			323,573			274,518			1,133,256			128,630			1,261,886
Other underwriting income (loss)	—			1,728			3,599			5,327			737			6,064
Losses and loss adjustment expenses	(568,795		)	(318,609		)	(35,156		)	(922,560		)	(123,581		)	(1,046,141		)
Acquisition expenses	(82,638		)	(57,340		)	(21,803		)	(161,781		)	(32,073		)	(193,854		)
Other operating expenses	(90,875		)	(36,214		)	(34,770		)	(161,859		)	(8,268		)	(170,127		)
Underwriting income (loss)	$	(207,143	)	$	(86,862	)	$	186,388		(107,617		)	(34,555		)	(142,172		)
Net investment income										94,127			22,332			116,459
Net realized gains (losses)										64,104			2,171			66,275
Net impairment losses recognized in earnings										(1,878		)	—			(1,878		)
Equity in net income (loss) of investment funds accounted for using the equity method										31,090			—			31,090
Other income (loss)										(342		)	—			(342		)
Corporate expenses (2)										(14,108		)	—			(14,108		)
UGC transaction costs and other (2)										(2,990		)	—			(2,990		)
Amortization of intangible assets										(31,824		)	—			(31,824		)
Interest expense										(26,264		)	(3,246		)	(29,510		)
Net foreign exchange gains (losses)										(27,785		)	(243		)	(28,028		)
Income (loss) before income taxes										(23,487		)	(13,541		)	(37,028		)
Income tax (expense) benefit										(8,168		)	(21		)	(8,189		)
Net income (loss)										(31,655		)	(13,562		)	(45,217		)
Dividends attributable to redeemable noncontrolling interests										—			(4,586		)	(4,586		)
Amounts attributable to nonredeemable noncontrolling interests										—			16,147			16,147
Net income (loss) available to Arch										(31,655		)	(2,001		)	(33,656		)
Preferred dividends										(12,369		)	—			(12,369		)
Loss on redemption of preferred shares										(6,735		)	—			(6,735		)
Net income (loss) available to Arch common shareholders										$	(50,759	)	$	(2,001	)	$	(52,760	)
Underwriting Ratios
Loss ratio	106.3		%	98.5		%	12.8		%	81.4		%	96.1		%	82.9		%
Acquisition expense ratio	15.4		%	17.7		%	7.9		%	14.3		%	24.9		%	15.4		%
Other operating expense ratio	17.0		%	11.2		%	12.7		%	14.3		%	6.4		%	13.5		%
Combined ratio	138.7		%	127.4		%	33.4		%	110.0		%	127.4		%	111.8		%
Goodwill and intangible assets	$	23,445		$	417		$	652,893		$	676,755		$	7,650		$	684,405

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

(2) Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘UGC transaction costs and other.’

	Three Months Ended
	September 30, 2016
	Insurance			Reinsurance			Mortgage			Sub-Total			Other			Total
Gross premiums written (1)	$	758,934		$	324,361		$	131,726		$	1,214,765		$	163,736		$	1,278,765
Premiums ceded	(217,446		)	(89,551		)	(51,182		)	(357,923		)	(6,300		)	(264,487		)
Net premiums written	541,488			234,810			80,544			856,842			157,436			1,014,278
Change in unearned premiums	(22,410		)	17,117			(3,582		)	(8,875		)	(47,000		)	(55,875		)
Net premiums earned	519,078			251,927			76,962			847,967			110,436			958,403
Other underwriting income (loss)	—			2,216			4,740			6,956			1,024			7,980
Losses and loss adjustment expenses	(332,845		)	(105,924		)	(11,107		)	(449,876		)	(74,307		)	(524,183		)
Acquisition expenses	(77,146		)	(50,192		)	(5,190		)	(132,528		)	(28,739		)	(161,267		)
Other operating expenses	(86,613		)	(35,389		)	(24,249		)	(146,251		)	(7,035		)	(153,286		)
Underwriting income (loss)	$	22,474		$	62,638		$	41,156		126,268			1,379			127,647
Net investment income										66,282			27,336			93,618
Net realized gains (losses)										95,946			29,159			125,105
Net impairment losses recognized in earnings										(3,867		)	—			(3,867		)
Equity in net income (loss) of investment funds accounted for using the equity method										16,662			—			16,662
Other income (loss)										(400		)	—			(400		)
Corporate expenses (2)										(11,343		)	—			(11,343		)
UGC transaction costs and other (2)										(7,142		)	—			(7,142		)
Amortization of intangible assets										(4,865		)	—			(4,865		)
Interest expense										(12,924		)	(3,019		)	(15,943		)
Net foreign exchange gains (losses)										(4,232		)	1,611			(2,621		)
Income (loss) before income taxes										260,385			56,466			316,851
Income tax (expense) benefit										(13,232		)	1			(13,231		)
Net income (loss)										247,153			56,467			303,620
Dividends attributable to redeemable noncontrolling interests										—			(4,588		)	(4,588		)
Amounts attributable to nonredeemable noncontrolling interests										—			(46,160		)	(46,160		)
Net income (loss) available to Arch										247,153			5,719			252,872
Preferred dividends										(5,484		)	—			(5,484		)
Net income (loss) available to Arch common shareholders										$	241,669		$	5,719		$	247,388
Underwriting Ratios
Loss ratio	64.1		%	42.0		%	14.4		%	53.1		%	67.3		%	54.7		%
Acquisition expense ratio	14.9		%	19.9		%	6.7		%	15.6		%	26.0		%	16.8		%
Other operating expense ratio	16.7		%	14.0		%	31.5		%	17.2		%	6.4		%	16.0		%
Combined ratio	95.7		%	75.9		%	52.6		%	85.9		%	99.7		%	87.5		%
Goodwill and intangible assets	$	26,367		$	1,228		$	55,696		$	83,291		$	7,650		$	90,941

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

(2) Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘UGC transaction costs and other.’

	Nine Months Ended
	September 30, 2017
	Insurance			Reinsurance			Mortgage			Sub-Total			Other			Total
Gross premiums written (1)	$	2,313,630		$	1,351,051		$	1,032,800		$	4,697,007		$	473,131		$	4,915,895
Premiums ceded	(704,057		)	(386,743		)	(194,139		)	(1,284,465		)	(35,315		)	(1,065,537		)
Net premiums written	1,609,573			964,308			838,661			3,412,542			437,816			3,850,358
Change in unearned premiums	(51,188		)	(81,182		)	(61,776		)	(194,146		)	(36,435		)	(230,581		)
Net premiums earned	1,558,385			883,126			776,885			3,218,396			401,381			3,619,777
Other underwriting income (loss)	—			1,143			11,999			13,142			2,377			15,519
Losses and loss adjustment expenses	(1,252,375		)	(631,669		)	(84,915		)	(1,968,959		)	(319,612		)	(2,288,571		)
Acquisition expenses	(236,378		)	(154,638		)	(76,235		)	(467,251		)	(99,328		)	(566,579		)
Other operating expenses	(271,268		)	(110,458		)	(108,790		)	(490,516		)	(24,311		)	(514,827		)
Underwriting income (loss)	$	(201,636	)	$	(12,496	)	$	518,944		304,812			(39,493		)	265,319
Net investment income										282,459			62,998			345,457
Net realized gains (losses)										110,662			11,501			122,163
Net impairment losses recognized in earnings										(5,415		)	—			(5,415		)
Equity in net income (loss) of investment funds accounted for using the equity method										111,884			—			111,884
Other income (loss)										(3,118		)	—			(3,118		)
Corporate expenses (2)										(48,517		)	—			(48,517		)
UGC transaction costs and other (2)										(21,249		)	—			(21,249		)
Amortization of intangible assets										(93,942		)	—			(93,942		)
Interest expense										(77,932		)	(9,003		)	(86,935		)
Net foreign exchange gains (losses)										(85,451		)	(1,524		)	(86,975		)
Income (loss) before income taxes										474,193			24,479			498,672
Income tax (expense) benefit										(70,734		)	(21		)	(70,755		)
Net income (loss)										403,459			24,458			427,917
Dividends attributable to redeemable noncontrolling interests										—			(13,756		)	(13,756		)
Amounts attributable to nonredeemable noncontrolling interests										—			(9,523		)	(9,523		)
Net income (loss) available to Arch										403,459			1,179			404,638
Preferred dividends										(34,936		)	—			(34,936		)
Loss on redemption of preferred shares										(6,735		)	—			(6,735		)
Net income (loss) available to Arch common shareholders										$	361,788		$	1,179		$	362,967
Underwriting Ratios
Loss ratio	80.4		%	71.5		%	10.9		%	61.2		%	79.6		%	63.2		%
Acquisition expense ratio	15.2		%	17.5		%	9.8		%	14.5		%	24.7		%	15.7		%
Other operating expense ratio	17.4		%	12.5		%	14.0		%	15.2		%	6.1		%	14.2		%
Combined ratio	113.0		%	101.5		%	34.7		%	90.9		%	110.4		%	93.1		%

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

(2) Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘UGC transaction costs and other.’

	Nine Months Ended
	September 30, 2016
	Insurance			Reinsurance			Mortgage			Sub-Total			Other			Total
Gross premiums written (1)	$	2,319,530		$	1,217,804		$	361,440		$	3,898,025		$	421,627		$	4,046,667
Premiums ceded	(713,110		)	(370,068		)	(62,918		)	(1,145,347		)	(15,229		)	(887,591		)
Net premiums written	1,606,420			847,736			298,522			2,752,678			406,398			3,159,076
Change in unearned premiums	(46,603		)	(43,345		)	(93,283		)	(183,231		)	(59,878		)	(243,109		)
Net premiums earned	1,559,817			804,391			205,239			2,569,447			346,520			2,915,967
Other underwriting income (loss)	—			22,659			12,670			35,329			2,922			38,251
Losses and loss adjustment expenses	(1,011,087		)	(363,613		)	(20,102		)	(1,394,802		)	(236,922		)	(1,631,724		)
Acquisition expenses	(228,806		)	(160,706		)	(16,947		)	(406,459		)	(95,323		)	(501,782		)
Other operating expenses	(263,111		)	(108,561		)	(70,590		)	(442,262		)	(18,486		)	(460,748		)
Underwriting income (loss)	$	56,813		$	194,170		$	110,270		361,253			(1,289		)	359,964
Net investment income										207,088			68,603			275,691
Net realized gains (losses)										168,735			61,912			230,647
Net impairment losses recognized in earnings										(16,849		)	—			(16,849		)
Equity in net income (loss) of investment funds accounted for using the equity method										32,054			—			32,054
Other income (loss)										(432		)	—			(432		)
Corporate expenses (2)										(37,926		)	—			(37,926		)
UGC transaction costs and other (2)										(7,142		)	—			(7,142		)
Amortization of intangible assets										(14,493		)	—			(14,493		)
Interest expense										(37,983		)	(9,730		)	(47,713		)
Net foreign exchange gains (losses)										(3,812		)	2,287			(1,525		)
Income (loss) before income taxes										650,493			121,783			772,276
Income tax (expense) benefit										(43,673		)	1			(43,672		)
Net income (loss)										606,820			121,784			728,604
Dividends attributable to redeemable noncontrolling interests										—			(13,761		)	(13,761		)
Amounts attributable to nonredeemable noncontrolling interests										—			(96,118		)	(96,118		)
Net income (loss) available to Arch										606,820			11,905			618,725
Preferred dividends										(16,453		)	—			(16,453		)
Net income (loss) available to Arch common shareholders										$	590,367		$	11,905		$	602,272
Underwriting Ratios
Loss ratio	64.8		%	45.2		%	9.8		%	54.3		%	68.4		%	56.0		%
Acquisition expense ratio	14.7		%	20.0		%	8.3		%	15.8		%	27.5		%	17.2		%
Other operating expense ratio	16.9		%	13.5		%	34.4		%	17.2		%	5.3		%	15.8		%
Combined ratio	96.4		%	78.7		%	52.5		%	87.3		%	101.2		%	89.0		%

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

(2) Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘UGC transaction costs and other.’

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Reserve for Losses and Loss Adjustment Expenses

9 Months Ended

Sep. 30, 2017

Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract]

Reserve for losses and loss adjustment expenses

Reserve for Losses and Loss Adjustment Expenses

The following table represents an analysis of losses and loss adjustment expenses and a reconciliation of the beginning and ending reserve for losses and loss adjustment expenses:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Reserve for losses and loss adjustment expenses at beginning of period	$	10,520,511		$	9,471,647		$	10,200,960		$	9,125,250
Unpaid losses and loss adjustment expenses recoverable and deferred charges	2,116,210			2,003,768			2,083,575			1,828,837
Net reserve for losses and loss adjustment expenses at beginning of period	8,404,301			7,467,879			8,117,385			7,296,413
Net incurred losses and loss adjustment expenses relating to losses occurring in:
Current year	1,092,175			598,940			2,487,212			1,848,299
Prior years	(45,232		)	(74,757		)	(197,839		)	(216,575		)
Discount and accretion on retroactive reinsurance	(802		)	—			(802		)	—
Total net incurred losses and loss adjustment expenses	1,046,141			524,183			2,288,571			1,631,724
Net foreign exchange losses (gains)	61,919			1,463			168,493			(13,270		)
Net paid losses and loss adjustment expenses relating to losses occurring in:
Current year	(167,450		)	(128,432		)	(282,952		)	(285,468		)
Prior years	(457,183		)	(304,673		)	(1,403,769		)	(1,068,979		)
Total net paid losses and loss adjustment expenses	(624,633		)	(433,105		)	(1,686,721		)	(1,354,447		)
Net reserve for losses and loss adjustment expenses at end of period	8,887,728			7,560,420			8,887,728			7,560,420
Unpaid losses and loss adjustment expenses recoverable and deferred charges	2,463,539			2,049,769			2,463,539			2,049,769
Reserve for losses and loss adjustment expenses at end of period	$	11,351,267		$	9,610,189		$	11,351,267		$	9,610,189

2017 Third Quarter Catastrophe Losses

The Company’s 2017 third quarter results reflect estimated net losses from current accident year catastrophic events of $347.8 million, net of reinsurance and reinstatement premiums, which consisted of $133.4 million from the reinsurance segment and $214.5 million from the insurance segment. Such amounts were primarily related to Hurricanes Harvey, Irma and Maria, along with the Mexican earthquakes and other more minor global events. In addition, estimated net losses from current accident year catastrophic events for the 2017 third quarter in the ‘other’ segment were $19.8 million.

Development on Prior Year Loss Reserves

2017 Third Quarter

During the 2017 third quarter, the Company recorded net favorable development on prior year loss reserves of $45.2 million, which consisted of $36.5 million from the reinsurance segment, $3.0 million from the insurance segment, $21.5 million from the mortgage segment and adverse development of $15.8 million from the ‘other’ segment.

The reinsurance segment’s net favorable development of $36.5 million, or 11.3 points, for the 2017 third quarter consisted of $16.9 million from short-tailed lines and $19.6 million from long-tailed and medium-tailed lines. Favorable development in short-tailed lines included $11.8 million from property catastrophe and property other than property catastrophe reserves, across most underwriting years (i.e., all premiums and losses attributable to contracts having an inception or renewal date within the given twelve-month period), reflecting lower levels of reported and paid claims activity than previously anticipated which led to decreases in certain loss ratio selections during the period. Favorable development in long-tailed and medium-tailed lines reflected reductions in casualty reserves of $13.4 million based on varying levels of reported and paid claims activity, primarily from the 2002 to 2009 underwriting years, and favorable development in marine reserves of $4.3 million across most underwriting years.

The insurance segment’s net favorable development of $3.0 million, or 0.6 points, for the 2017 third quarter consisted of $1.8 million of net favorable development in short-tailed lines and $1.2 million of net favorable development in long-tailed and medium-tailed lines. Net favorable development in short-tailed lines primarily resulted from property (including special risk other than marine) reserves from the 2011 to 2016 accident years (i.e., the year in which a loss occurred). Net favorable development in medium-tailed lines reflected $11.9 million from professional liability reserves across most accident years and in surety reserves with $4.2 million of favorable development. Such amounts were partially offset by $12.9 million of adverse development on a small number of programs in the 2014 to 2016 accident years.

The mortgage segment’s net favorable development was $21.5 million, or 7.8 points, for the 2017 third quarter. The 2017 third quarter development was primarily driven by continued lower than expected claim emergence across most origination years and also reflected $6.1 million related to second lien and other portfolios, primarily due to subrogation recoveries.

2016 Third Quarter

During the 2016 third quarter, the Company recorded net favorable development on prior year loss reserves of $74.8 million, which consisted of $59.5 million from the reinsurance segment, $13.7 million from the insurance segment, $2.5 million from the mortgage segment and adverse development of $0.9 million from the ‘other’ segment.

The reinsurance segment’s net favorable development of $59.5 million, or 23.6 points, for the 2016 third quarter consisted of $27.7 million from short-tailed lines and $31.8 million from long-tailed and medium-tailed lines. Favorable development in short-tailed lines included $23.2 million from property catastrophe and property other than property catastrophe reserves, across most underwriting years, reflecting lower levels of reported and paid claims activity than previously anticipated which led to decreases in certain loss ratio selections during the period. Favorable development in long-tailed lines reflected reductions in casualty reserves of $29.3 million based on varying levels of reported and paid claims activity, primarily from the 2002 to 2010 underwriting years and 2012 to 2013 underwriting years.

The insurance segment’s net favorable development of $13.7 million, or 2.6 points, for the 2016 third quarter consisted of $18.2 million of net favorable development in long-tailed lines, partially offset by $2.4 million of net adverse development in short-tailed lines and $2.0 million of net adverse development in medium-tailed lines. Net favorable development in long-tailed lines reflected net reductions in executive assurance reserves from the 2008 to 2015 accident years, and net reductions in casualty reserves from the 2007 and 2008 accident years. Net adverse development in short-tailed lines primarily resulted from property (including special risk other than marine) reserves from the 2015 accident year, primarily due to a small number of attritional losses. Net adverse development in medium-tailed lines primarily resulted from an increase in programs of $6.2 million stemming in part from terminated programs, partially offset by favorable development of $4.2 million in other medium-tailed lines, primarily in professional liability and surety.

The mortgage segment’s net favorable development was $2.5 million, or 3.2 points, for the 2016 third quarter. The 2016 third quarter development was primarily driven by lower than expected claim rates across most origination years.

Nine Months Ended September 30, 2017

During the nine months ended September 30, 2017, the Company recorded net favorable development on prior year loss reserves of $197.8 million, which consisted of $133.3 million from the reinsurance segment, $7.2 million from the insurance segment, $74.9 million from the mortgage segment and adverse development of $17.5 million from the ‘other’ segment.

The reinsurance segment’s net favorable development of $133.3 million, or 15.1 points, for the 2017 period consisted of $85.8 million from short-tailed lines and $47.5 million from long-tailed and medium-tailed lines. Favorable development in short-tailed lines included $62.7 million from property catastrophe and property other than property catastrophe reserves, across most underwriting years, reflecting lower levels of reported and paid claims activity than previously anticipated which led to decreases in certain loss ratio selections during the period. Favorable development in long-tailed and medium-tailed lines reflected reductions in casualty reserves of $28.0 million based on varying levels of reported and paid claims activity, primarily from the 2002 to 2013 underwriting years, and favorable development in marine reserves of $16.6 million across most underwriting years.

The insurance segment’s net favorable development of $7.2 million, or 0.5 points, for the 2017 period consisted of $9.0 million of net favorable development in short-tailed lines and $7.4 million of net favorable development in long-tailed lines, partially offset by $9.2 million of net adverse development in medium-tailed lines. Net favorable development in short-tailed lines primarily resulted from property (including special risk other than marine) reserves from the 2011 to 2016 accident years. Net favorable development in long-tailed lines reflected net reductions in executive assurance reserves from the 2008 to 2014 accident years and reductions in healthcare reserves across various accident years, partially offset by $17.2 million of adverse development on construction reserves across various accident years. Net adverse development in medium-tailed lines primarily resulted from an increase in programs of $39.3 million stemming in part from development on a small number of programs in the 2013 to 2015 accident years, partially offset by net favorable development of $30.1 million in other medium-tailed lines, primarily in professional liability and surety.

The mortgage segment’s net favorable development was $74.9 million, or 9.6 points, for the 2017 period. The development was primarily driven by continued lower than expected claim emergence across most origination years and also reflected $19.2 million related to second lien and other portfolios, primarily due to subrogation recoveries.

Nine Months Ended September 30, 2016

During the nine months ended September 30, 2016, the Company recorded net favorable development on prior year loss reserves of $216.6 million, which consisted of $176.7 million from the reinsurance segment, $24.8 million from the insurance segment, $16.3 million from the mortgage segment and adverse development of $1.2 million from the ‘other’ segment.

The reinsurance segment’s net favorable development of $176.7 million, or 22.0 points, for the 2016 period consisted of $113.1 million from short-tailed lines and $63.6 million from long-tailed and medium-tailed lines. Favorable development in short-tailed lines included $92.6 million from property catastrophe and property other than property catastrophe reserves, across most underwriting years. The net reduction of loss estimates for the reinsurance segment’s short-tailed lines primarily resulted from varying levels of reported and paid claims activity than previously anticipated which led to decreases in certain loss ratio selections during the period. Favorable development in long-tailed lines reflected reductions in casualty reserves of $66.4 million based on varying levels of reported and paid claims activity, primarily from the 2002 to 2013 underwriting years. Such amounts were partially offset by net adverse development on marine reserves, primarily from the 2002 and 2015 underwriting years, partially offset by favorable development from most other underwriting years.

The insurance segment’s net favorable development of $24.8 million, or 1.6 points, for the 2016 period consisted of $36.2 million of net favorable development in long-tailed lines and $7.7 million of net favorable development in short-tailed lines, partially offset by $19.1 million of net adverse development in medium-tailed lines. Net favorable development in long-tailed lines reflected net reductions in executive assurance reserves from the 2008 to 2009 accident years and 2011 to 2013 accident years, and net reductions in casualty reserves across most accident years, partially offset by a large energy casualty claim from the 2015 accident year. Net favorable development in short-tailed lines primarily resulted from reductions in property (including special risk other than marine) reserves from the 2009 to 2014 accident years, primarily due to varying levels of reported claims activity. Net adverse development in medium-tailed lines primarily resulted from an increase in programs of $28.6 million stemming in part from terminated programs, partially offset by favorable development of $9.5 million in other medium-tailed lines, primarily in professional liability and surety.

The mortgage segment’s net favorable development was $16.3 million, or 7.9 points, for the 2016 period. The development was primarily driven by lower than expected claim rates across most origination years.

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Investment Information

9 Months Ended

Sep. 30, 2017

Disclosure Investment Information [Abstract]

Investment Information

Investment Information

At September 30, 2017, total investable assets of $22.00 billion included $19.70 billion managed by the Company and $2.30 billion attributable to Watford Re.

Available For Sale Investments

The following table summarizes the fair value and cost or amortized cost of the Company’s investments classified as available for sale:

	Estimated Fair Value		Gross Unrealized Gains		Gross Unrealized Losses			Cost or Amortized Cost		OTTI Unrealized Losses (2)
September 30, 2017
Fixed maturities (1):
Corporate bonds	$	4,275,437	$	49,576	$	(22,303	)	$	4,248,164	$	(73	)
Mortgage backed securities	323,900		5,078		(2,540		)	321,362		(2,146		)
Municipal bonds	2,353,234		31,202		(7,614		)	2,329,646		—
Commercial mortgage backed securities	584,730		3,114		(4,377		)	585,993		—
U.S. government and government agencies	3,761,612		3,303		(20,246		)	3,778,555		—
Non-U.S. government securities	1,473,819		49,570		(21,647		)	1,445,896		—
Asset backed securities	1,544,919		9,053		(4,748		)	1,540,614		(22		)
Total	14,317,651		150,896		(83,475		)	14,250,230		(2,241		)
Equity securities	480,607		84,755		(7,873		)	403,725		—
Other investments	260,339		54,512		(1		)	205,828		—
Short-term investments	1,646,036		667		(504		)	1,645,873		—
Total	$	16,704,633	$	290,830	$	(91,853	)	$	16,505,656	$	(2,241	)
December 31, 2016
Fixed maturities (1):
Corporate bonds	$	4,392,373	$	27,606	$	(46,905	)	$	4,411,672	$	(2,285	)
Mortgage backed securities	490,093		4,794		(8,357		)	493,656		(3,323		)
Municipal bonds	3,713,434		8,554		(29,154		)	3,734,034		(201		)
Commercial mortgage backed securities	536,051		2,876		(6,508		)	539,683		—
U.S. government and government agencies	2,804,540		9,319		(24,437		)	2,819,658		—
Non-U.S. government securities	1,096,440		19,036		(56,872		)	1,134,276		—
Asset backed securities	1,123,987		6,897		(6,526		)	1,123,616		(22		)
Total	14,156,918		79,082		(178,759		)	14,256,595		(5,831		)
Equity securities	532,680		62,627		(17,517		)	487,570		—
Other investments	167,970		21,358		(2,465		)	149,077		—
Short-term investments	612,005		272		(145		)	611,878		—
Total	$	15,469,573	$	163,339	$	(198,886	)	$	15,505,120	$	(5,831	)

(1) In securities lending transactions, the Company receives collateral in excess of the fair value of the securities pledged. For purposes of this table, the Company has excluded the collateral received under securities lending, at fair value and included the securities pledged under securities lending, at fair value. See “—Securities Lending Agreements.”

(2) Represents the total other-than-temporary impairments (“OTTI”) recognized in accumulated other comprehensive income (“AOCI”). It does not include the change in fair value subsequent to the impairment measurement date. At September 30, 2017, the net unrealized gain related to securities for which a non-credit OTTI was recognized in AOCI was $0.9 million, compared to a net unrealized gain of $2.8 million at December 31, 2016.

The following table summarizes, for all available for sale securities in an unrealized loss position, the fair value and gross unrealized loss by length of time the security has been in a continual unrealized loss position:

	Less than 12 Months					12 Months or More					Total
	Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses
September 30, 2017
Fixed maturities (1):
Corporate bonds	$	1,173,096	$	(18,315	)	$	191,382	$	(3,988	)	$	1,364,478	$	(22,303	)
Mortgage backed securities	146,352		(2,477		)	1,511		(63		)	147,863		(2,540		)
Municipal bonds	745,410		(5,958		)	110,752		(1,656		)	856,162		(7,614		)
Commercial mortgage backed securities	282,901		(3,579		)	17,570		(798		)	300,471		(4,377		)
U.S. government and government agencies	3,083,239		(19,736		)	25,894		(510		)	3,109,133		(20,246		)
Non-U.S. government securities	1,149,528		(20,741		)	37,655		(906		)	1,187,183		(21,647		)
Asset backed securities	587,561		(4,404		)	22,051		(344		)	609,612		(4,748		)
Total	7,168,087		(75,210		)	406,815		(8,265		)	7,574,902		(83,475		)
Equity securities	170,937		(7,873		)	—		—			170,937		(7,873		)
Other investments	725		(1		)	—		—			725		(1		)
Short-term investments	110,444		(504		)	—		—			110,444		(504		)
Total	$	7,450,193	$	(83,588	)	$	406,815	$	(8,265	)	$	7,857,008	$	(91,853	)
December 31, 2016
Fixed maturities (1):
Corporate bonds	$	1,700,813	$	(43,011	)	$	46,902	$	(3,894	)	$	1,747,715	$	(46,905	)
Mortgage backed securities	402,699		(8,134		)	6,105		(223		)	408,804		(8,357		)
Municipal bonds	1,513,308		(28,504		)	29,636		(650		)	1,542,944		(29,154		)
Commercial mortgage backed securities	231,374		(6,331		)	5,635		(177		)	237,009		(6,508		)
U.S. government and government agencies	1,888,018		(24,437		)	—		—			1,888,018		(24,437		)
Non-U.S. government securities	807,598		(56,872		)	—		—			807,598		(56,872		)
Asset backed securities	627,557		(5,465		)	65,723		(1,061		)	693,280		(6,526		)
Total	7,171,367		(172,754		)	154,001		(6,005		)	7,325,368		(178,759		)
Equity securities	269,381		(17,517		)	—		—			269,381		(17,517		)
Other investments	39,299		(2,465		)	—		—			39,299		(2,465		)
Short-term investments	29,146		(145		)	—		—			29,146		(145		)
Total	$	7,509,193	$	(192,881	)	$	154,001	$	(6,005	)	$	7,663,194	$	(198,886	)

(1) In securities lending transactions, the Company receives collateral in excess of the fair value of the securities pledged. For purposes of this table, the Company has excluded the collateral received under securities lending, at fair value and included the securities pledged under securities lending, at fair value. See “—Securities Lending Agreements.”

At September 30, 2017, on a lot level basis, approximately 2,870 security lots out of a total of approximately 7,410 security lots were in an unrealized loss position and the largest single unrealized loss from a single lot in the Company’s fixed maturity portfolio was $1.6 million. At December 31, 2016, on a lot level basis, approximately 3,540 security lots out of a total of approximately 7,240 security lots were in an unrealized loss position and the largest single unrealized loss from a single lot in the Company’s fixed maturity portfolio was $4.6 million.

The contractual maturities of the Company’s fixed maturities are shown in the following table. Expected maturities, which are management’s best estimates, will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	September 30, 2017				December 31, 2016
Maturity	Estimated Fair Value		Amortized Cost		Estimated Fair Value		Amortized Cost
Due in one year or less	$	537,043	$	534,513	$	560,830	$	557,675
Due after one year through five years	7,547,002		7,508,674		6,158,148		6,211,099
Due after five years through 10 years	3,495,424		3,480,251		4,676,847		4,710,017
Due after 10 years	284,633		278,823		610,962		620,849
	11,864,102		11,802,261		12,006,787		12,099,640
Mortgage backed securities	323,900		321,362		490,093		493,656
Commercial mortgage backed securities	584,730		585,993		536,051		539,683
Asset backed securities	1,544,919		1,540,614		1,123,987		1,123,616
Total (1)	$	14,317,651	$	14,250,230	$	14,156,918	$	14,256,595

(1) In securities lending transactions, the Company receives collateral in excess of the fair value of the securities pledged. For purposes of this table, the Company has excluded the collateral received under securities lending, at fair value and included the securities pledged under securities lending, at fair value. See “—Securities Lending Agreements.”

Securities Lending Agreements

The Company enters into securities lending agreements with financial institutions to enhance investment income whereby it loans certain of its securities to third parties, primarily major brokerage firms, for short periods of time through a lending agent. The Company maintains legal control over the securities it lends, retains the earnings and cash flows associated with the loaned securities and receives a fee from the borrower for the temporary use of the securities. An indemnification agreement with the lending agent protects the Company in the event a borrower becomes insolvent or fails to return any of the securities on loan from the Company.

The Company receives collateral in the form of cash or securities. At September 30, 2017, the fair value of the cash collateral received on securities lending was $63.8 million and the fair value of security collateral received was $479.5 million. At December 31, 2016, the fair value of the cash collateral received on securities lending was $212.5 million, and the fair value of security collateral received was $550.1 million. Cash collateral is reinvested in short-term investments.

The Company’s securities lending transactions were accounted for as secured borrowings with significant investment categories as follows:

	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Less than 30 Days		30-90 Days		90 Days or More		Total
September 30, 2017
U.S. government and government agencies	$	424,838	$	8,186	$	74,930	$	—	$	507,954
Corporate bonds	31,305		—		—		—		31,305
Equity securities	3,984		—		—		—		3,984
Total	$	460,127	$	8,186	$	74,930	$	—	$	543,243
Gross amount of recognized liabilities for securities lending in offsetting disclosure in Note 9									$	—
Amounts related to securities lending not included in offsetting disclosure in Note 9									$	543,243
December 31, 2016
U.S. government and government agencies	$	556,015	$	31,244	$	126,093	$	5,140	$	718,492
Corporate bonds	29,078		—		—		—		29,078
Equity securities	14,984		—		—		—		14,984
Total	$	600,077	$	31,244	$	126,093	$	5,140	$	762,554
Gross amount of recognized liabilities for securities lending in offsetting disclosure in Note 9									$	—
Amounts related to securities lending not included in offsetting disclosure in Note 9									$	762,554

Other Investments

The following table summarizes the Company’s other investments, including available for sale and fair value option components:

	September 30, 2017		December 31, 2016
Available for sale:
Asian and emerging markets	$	123,225	$	84,778
Investment grade fixed income	53,325		33,923
Credit related funds	20,752		7,469
Other	63,037		41,800
Total available for sale	260,339		167,970
Fair value option:
Term loan investments (par value: $1,378,797 and $1,208,537)	1,387,663		1,190,799
Mezzanine debt funds	172,000		127,943
Credit related funds	194,200		218,298
Investment grade fixed income	95,151		75,468
Asian and emerging markets	300,552		178,568
Other (1)	147,639		129,717
Total fair value option	2,297,205		1,920,793
Total	$	2,557,544	$	2,088,763

(1) Includes fund investments with strategies in mortgage servicing rights, transportation, infrastructure and other.

Certain of the Company’s other investments are in investment funds for which the Company has the option to redeem at agreed upon values as described in each investment fund’s subscription agreement. Depending on the terms of the various subscription agreements, investments in investment funds may be redeemed daily, monthly, quarterly or on other terms. Two common redemption restrictions which may impact the Company’s ability to redeem these investment funds are gates and lockups. A gate is a suspension of redemptions which may be implemented by the general partner or investment manager of the fund in order to defer, in whole or in part, the redemption request in the event the aggregate amount of redemption requests exceeds a predetermined percentage of the investment fund’s net assets which may otherwise hinder the general partner or investment manager’s ability to liquidate holdings in an orderly fashion in order to generate the cash necessary to fund extraordinarily large redemption payouts. A lockup period is the initial amount of time an investor is contractually required to hold the security before having the ability to redeem. If the investment funds are eligible to be redeemed, the time to redeem such fund can take weeks or months following the notification.

Fair Value Option

The following table summarizes the Company’s assets and liabilities which are accounted for using the fair value option:

	September 30, 2017		December 31, 2016
Fixed maturities	$	1,508,204	$	1,099,116
Other investments	2,297,205		1,920,793
Short-term investments	349,540		373,669
Equity securities	94,685		27,642
Investments accounted for using the fair value option	$	4,249,634	$	3,421,220

Limited partnership interests

In the normal course of its activities, the Company invests in limited partnerships as part of its overall investment strategy. Such amounts are included in ‘investments accounted for using the equity method’ and ‘investments accounted for using the fair value option.’ The Company has determined that it is not required to consolidate these investments because it is not the primary beneficiary of the funds. The Company’s maximum exposure to loss with respect to these investments is limited to the investment carrying amounts reported in the Company’s consolidated balance sheet and any unfundedcommitment.

The following table summarizes investments in limited partnership interests where the Company has a variable interest by balance sheet line item:

	September 30, 2017		December 31, 2016
Investments accounted for using the equity method (1)	$	962,574	$	800,970
Investments accounted for using the fair value option (2)	109,157		90,804
Total	$	1,071,731	$	891,774

(1) Aggregate unfunded commitments were $850.4 million at September 30, 2017, compared to $776.6 million at December 31, 2016.

(2) Aggregate unfunded commitments were $162.3 million at September 30, 2017, compared to $16.7 million at December 31, 2016.

Net Investment Income

The components of net investment income were derived from the following sources:

	September 30,
	2017			2016
Three Months Ended
Fixed maturities	$	96,144		$	71,366
Equity securities	2,887			3,311
Short-term investments	2,957			1,703
Other (1)	37,957			37,466
Gross investment income	139,945			113,846
Investment expenses	(23,486		)	(20,228		)
Net investment income	$	116,459		$	93,618
Nine Months Ended
Fixed maturities	$	284,807		$	223,033
Equity securities	9,184			10,409
Short-term investments	6,732			3,015
Other (1)	111,613			98,089
Gross investment income	412,336			334,546
Investment expenses	(66,879		)	(58,855		)
Net investment income	$	345,457		$	275,691

(1) Includes income distributions from investment funds, term loan investments and other items.

Net Realized Gains (Losses)

Net realized gains (losses) were as follows, excluding other than-temporary impairment provision.

	September 30,
	2017			2016
Three Months Ended
Available for sale securities:
Gross gains on investment sales	$	66,565		$	84,451
Gross losses on investment sales	(39,015		)	(22,985		)
Change in fair value of assets and liabilities accounted for using the fair value option:
Fixed maturities	4,035			43,935
Other investments	24,264			46,428
Equity securities	10,230			(52		)
Short-term investments	(3,320		)	1,150
Derivative instruments (1)	4,298			(16,964		)
Other (2)	(782		)	(10,858		)
Net realized gains (losses)	$	66,275		$	125,105
Nine Months Ended
Available for sale securities:
Gross gains on investment sales	$	212,470		$	266,965
Gross losses on investment sales	(152,996		)	(129,409		)
Change in fair value of assets and liabilities accounted for using the fair value option:
Fixed maturities	34,232			62,234
Other investments	42,149			38,016
Equity securities	16,604			385
Short-term investments	12			107
Derivative instruments (1)	(9,653		)	24,102
Other (2)	(20,655		)	(31,753		)
Net realized gains (losses)	$	122,163		$	230,647

(1) See Note 9 for information on the Company’s derivative instruments.

(2) Includes the re-measurement of contingent consideration liability amounts.

Equity in Net Income (Loss) of Investment Funds Accounted for Using the Equity Method

The Company recorded $31.1 million of equity in net income related to investment funds accounted for using the equity method in the 2017 third quarter, compared to $16.7 million for the 2016 third quarter, and $111.9 million for the nine months ended September 30, 2017, compared to $32.1 million for the 2016 period. In applying the equity method, investments are initially recorded at cost and are subsequently adjusted based on the Company’s proportionate share of the net income or loss of the funds (which include changes in the market value of the underlying securities in the funds). Such investments are generally recorded on a one to three month lag based on the availability of reports from the investment funds.

Other-Than-Temporary Impairments

The Company performs quarterly reviews of its available for sale investments in order to determine whether declines in fair value below the amortized cost basis were considered other-than-temporary in accordance with applicable guidance.

The following table details the net impairment losses recognized in earnings by asset class:

	September 30,
	2017			2016
Three Months Ended
Fixed maturities:
Mortgage backed securities	$	(50	)	$	(233	)
Corporate bonds	(82		)	—
Non-U.S. government securities	(178		)	(545		)
U.S. government and government agencies	(426		)	—
Municipal bonds	(202		)	—
Total	(938		)	(778		)
Equity securities	(940		)	(557		)
Other investments	—			(2,532		)
Net impairment losses recognized in earnings	$	(1,878	)	$	(3,867	)
Nine Months Ended
Fixed maturities:
Mortgage backed securities	$	(1,461	)	$	(788	)
Corporate bonds	(1,484		)	(5,655		)
Non-U.S. government securities	(376		)	(777		)
Asset backed securities	—			(2,506		)
U.S. government and government agencies	(426		)	—
Municipal bonds	(375		)	—
Total	(4,122		)	(9,726		)
Equity securities	(1,126		)	(3,594		)
Other investments	(167		)	(3,529		)
Net impairment losses recognized in earnings	$	(5,415	)	$	(16,849	)

Net impairment losses recognized in earnings in the 2017 third quarter were primarily related to equities and on fixed maturities with foreign currency fluctuations. For the nine months ended September 30, 2017, net impairment losses recognized in earnings reflected the Company’s decision to liquidate a portfolio of mortgage backed securities in April 2017. The Company recorded impairment losses on securities in such portfolio that were in an unrealized loss position at March 31, 2017.

The Company believes that the $2.2 million of OTTI included in accumulated other comprehensive income at September 30, 2017 on the securities which were considered by the Company to be impaired was due to market and sector-related factors (i.e., not credit losses). At September 30, 2017, the Company did not intend to sell these securities, or any other securities which were in an unrealized loss position, and determined that it is more likely than not that the Company will not be required to sell such securities before recovery of their cost basis.

The following table provides a roll forward of the amount related to credit losses recognized in earnings for which a portion of an OTTI was recognized in accumulated other comprehensive income:

	September 30,
	2017			2016
Three Months Ended
Balance at start of period	$	4,437		$	14,847
Credit loss impairments recognized on securities not previously impaired	—			38
Credit loss impairments recognized on securities previously impaired	15			60
Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security	—			—
Reductions for securities sold during the period	(689		)	(1,166		)
Balance at end of period	$	3,763		$	13,779
Nine Months Ended
Balance at start of year	$	13,138		$	26,875
Credit loss impairments recognized on securities not previously impaired	31			1,388
Credit loss impairments recognized on securities previously impaired	210			582
Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security	—			—
Reductions for securities sold during the period	(9,616		)	(15,066		)
Balance at end of period	$	3,763		$	13,779

Restricted Assets

The Company is required to maintain assets on deposit, which primarily consist of fixed maturities, with various regulatory authorities to support its insurance and reinsurance operations. The Company’s insurance and reinsurance subsidiaries maintain assets in trust accounts as collateral for insurance and reinsurance transactions with affiliated companies and also have investments in segregated portfolios primarily to provide collateral or guarantees for letters of credit to third parties. See Note 10 for further details. The following table details the value of the Company’s restricted assets:

	September 30, 2017		December 31, 2016
Assets used for collateral or guarantees:
Affiliated transactions	$	4,264,131	$	3,871,971
Third party agreements	1,689,104		1,513,079
Deposits with U.S. regulatory authorities	618,136		472,890
Deposits with non-U.S. regulatory authorities	56,753		44,399
Total restricted assets	$	6,628,124	$	5,902,339

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Fair Value

9 Months Ended

Sep. 30, 2017

Fair Value Disclosures [Abstract]

Fair Value

Fair Value

Accounting guidance regarding fair value measurements addresses how companies should measure fair value when they are required to use a fair value measure for recognition or disclosure purposes under GAAP and provides a common definition of fair value to be used throughout GAAP. It defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly fashion between market participants at the measurement date. In addition, it establishes a three-level valuation hierarchy for the disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The level in the hierarchy within which a given fair value measurement falls is determined based on the lowest level input that is significant to the measurement (Level 1 being the highest priority and Level 3 being the lowest priority).

The levels in the hierarchy are defined as follows:

Level 1: Inputs to the valuation methodology are observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets

Level 2: Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument

Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement

Following is a description of the valuation methodologies used for securities measured at fair value, as well as the general classification of such securities pursuant to the valuation hierarchy. The Company reviews its securities measured at fair value and discusses the proper classification of such investments with investment advisers and others.

The Company determines the existence of an active market based on its judgment as to whether transactions for the financial instrument occur in such market with sufficient frequency and volume to provide reliable pricing information. The independent pricing sources obtain market quotations and actual transaction prices for securities that have quoted prices in active markets. The Company uses quoted values and other data provided by nationally recognized independent pricing sources as inputs into its process for determining fair values of its fixed maturity investments. To validate the techniques or models used by pricing sources, the Company's review process includes, but is not limited to: (i) quantitative analysis (e.g., comparing the quarterly return for each managed portfolio to its target benchmark, with significant differences identified and investigated); (ii) a review of the average number of prices obtained in the pricing process and the range of resulting fair values; (iii) initial and ongoing evaluation of methodologies used by outside parties to calculate fair value; (iv) a comparison of the fair value estimates to the Company’s knowledge of the current market; (v) a comparison of the pricing services' fair values to other pricing services' fair values for the same investments; and (vi) periodic back-testing, which includes randomly selecting purchased or sold securities and comparing the executed prices to the fair value estimates from the pricing service. A price source hierarchy was maintained in order to determine which price source would be used (i.e., a price obtained from a pricing service with more seniority in the hierarchy will be used over a less senior one in all cases). The hierarchy prioritizes pricing services based on availability and reliability and assigns the highest priority to index providers. Based on the above review, the Company will challenge any prices for a security or portfolio which are considered not to be representative of fair value. The Company did not adjust any of the prices obtained from the independent pricing sources at September 30, 2017.

In certain circumstances, when fair values are unavailable from these independent pricing sources, quotes are obtained directly from broker-dealers who are active in the corresponding markets. Such quotes are subject to the validation procedures noted above. Of the $21.14 billion of financial assets and liabilities measured at fair value at September 30, 2017, approximately $242.9 million, or 1.2%, were priced using non-binding broker-dealer quotes. Of the $19.10 billion of financial assets and liabilities measured at fair value at December 31, 2016, approximately $234.0 million, or 1.2%, were priced using non-binding broker-dealer quotes.

Fixed maturities

The Company uses the market approach valuation technique to estimate the fair value of its fixed maturity securities, when possible. The market approach includes obtaining prices from independent pricing services, such as index providers and pricing vendors, as well as to a lesser extent quotes from broker-dealers. The independent pricing sources obtain market quotations and actual transaction prices for securities that have quoted prices in active markets. Each source has its own proprietary method for determining the fair value of securities that are not actively traded. In general, these methods involve the use of “matrix pricing” in which the independent pricing source uses observable market inputs including, but not limited to, investment yields, credit risks and spreads, benchmarking of like securities, broker-dealer quotes, reported trades and sector groupings to determine a reasonable fair value.

The following describes the significant inputs generally used to determine the fair value of the Company’s fixed maturity securities by asset class:

•U.S. government and government agencies — valuations provided by independent pricing services, with all prices provided through index providers and pricing vendors. The Company determined that all U.S. Treasuries would be classified as Level 1 securities due to observed levels of trading activity, the high number of strongly correlated pricing quotes received on U.S. Treasuries and other factors. The fair values of U.S. government agency securities are generally determined using the spread above the risk-free yield curve. As the yields for the risk-free yield curve and the spreads for these securities are observable market inputs, the fair values of U.S. government agency securities are classified within Level 2.

•Corporate bonds — valuations provided by independent pricing services, substantially all through index providers and pricing vendors with a small amount through broker-dealers. The fair values of these securities are generally determined using the spread above the risk-free yield curve. These spreads are generally obtained from the new issue market, secondary trading and from broker-dealers who trade in the relevant security market. As the significant inputs used in the pricing process for corporate bonds are observable market inputs, the fair value of these securities are classified within Level 2. A small number of securities are included in Level 3 due to a low level of transparency on the inputs used in the pricing process.

•Mortgage-backed securities — valuations provided by independent pricing services, substantially all through pricing vendors and index providers with a small amount through broker-dealers. The fair values of these securities are generally determined through the use of pricing models (including Option Adjusted Spread) which use spreads to determine the expected average life of the securities. These spreads are generally obtained from the new issue market, secondary trading and from broker-dealers who trade in the relevant security market. The pricing services also review prepayment speeds and other indicators, when applicable. As the significant inputs used in the pricing process for mortgage-backed securities are observable market inputs, the fair value of these securities are classified within Level 2. A small number of securities are included in Level 3 due to a low level of transparency on the inputs used in the pricing process.

•Municipal bonds — valuations provided by independent pricing services, with all prices provided through index providers and pricing vendors. The fair values of these securities are generally determined using spreads obtained from broker-dealers who trade in the relevant security market, trade prices and the new issue market. As the significant inputs used in the pricing process for municipal bonds are observable market inputs, the fair value of these securities are classified within Level 2.

•Commercial mortgage-backed securities — valuations provided by independent pricing services, substantially all through index providers and pricing vendors with a small amount through broker-dealers. The fair values of these securities are generally determined through the use of pricing models which use spreads to determine the appropriate average life of the securities. These spreads are generally obtained from the new issue market, secondary trading and from broker-dealers who trade in the relevant security market. The pricing services also review prepayment speeds and other indicators, when applicable. As the significant inputs used in the pricing process for commercial mortgage-backed securities are observable market inputs, the fair value of these securities are classified within Level 2. A small number of securities are included in Level 3 due to a low level of transparency on the inputs used in the pricing process.

•Non-U.S. government securities — valuations provided by independent pricing services, with all prices provided through index providers and pricing vendors. The fair values of these securities are generally based on international indices or valuation models which include daily observed yield curves, cross-currency basis index spreads and country credit spreads. As the significant inputs used in the pricing process for non-U.S. government securities are observable market inputs, the fair value of these securities are classified within Level 2.

•Asset-backed securities — valuations provided by independent pricing services, substantially all through index providers and pricing vendors with a small amount through broker-dealers. The fair values of these securities are generally determined through the use of pricing models (including Option Adjusted Spread) which use spreads to determine the appropriate average life of the securities. These spreads are generally obtained from the new issue market, secondary trading and from broker-dealers who trade in the relevant security market. The pricing services also review prepayment speeds and other indicators, when applicable. As the significant inputs used in the pricing process for asset-backed securities are observable market inputs, the fair value of these securities are classified within Level 2. A small number of securities are included in Level 3 due to a low level of transparency on the inputs used in the pricing process.

During the 2017 third quarter, the Company transferred $17.6 million of fixed maturities from Level 2 to Level 3 based on a review of the pricing of such securities, as described above.

Equity securities

The Company determined that exchange-traded equity securities would be included in Level 1 as their fair values are based on quoted market prices in active markets. Other equity securities are included in Level 2 of the valuation hierarchy.

Other investments

The Company determined that exchange-traded investments in mutual funds would be included in Level 1 as their fair values are based on quoted market prices in active markets. Other investments also include term loan investments for which fair values are estimated by using quoted prices of term loan investments with similar characteristics, pricing models or matrix pricing. Such investments are generally classified within Level 2. The fair values for certain of the Company’s other investments are determined using net asset values as advised by external fund managers. The net asset value is based on the fund manager’s valuation of the underlying holdings in accordance with the fund’s governing documents. In accordance with applicable accounting guidance, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. A small number of securities are included in Level 3 due to the lack of an available independent price source for such securities. During the 2017 third quarter, the Company transferred $4.8 million of other investments from Level 2 to Level 3 based on a review of the pricing of such securities, as described above.

Derivative instruments

The Company’s futures contracts, foreign currency forward contracts, interest rate swaps and other derivatives trade in the over-the-counter derivative market. The Company uses the market approach valuation technique to estimate the fair value for these derivatives based on significant observable market inputs from third party pricing vendors, non-binding broker-dealer quotes and/or recent trading activity. As the significant inputs used in the pricing process for these derivative instruments are observable market inputs, the fair value of these securities are classified within Level 2.

Short-term investments

The Company determined that certain of its short-term investments held in highly liquid money market-type funds, Treasury bills and commercial paper would be included in Level 1 as their fair values are based on quoted market prices in active markets. The fair values of other short-term investments are generally determined using the spread above the risk-free yield curve and are classified within Level 2.

Contingent consideration liabilities

Contingent consideration liabilities (included in ‘other liabilities’ in the consolidated balance sheets) include amounts related to the acquisition of CMG Mortgage Insurance Company and its affiliated mortgage insurance companies and other acquisitions. Such amounts are remeasured at fair value at each balance sheet date with changes in fair value recognized in ‘net realized gains (losses).’ To determine the fair value of contingent consideration liabilities, the Company estimates future payments using an income approach based on modeled inputs which include a weighted average cost of capital. The Company determined that contingent consideration liabilities would be included within Level 3.

The following table presents the Company’s financial assets and liabilities measured at fair value by level at September 30, 2017:

				Estimated Fair Value Measurements Using:
	Estimated Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets measured at fair value (1):
Available for sale securities:
Fixed maturities:
Corporate bonds	$	4,275,437		$	—	$	4,263,446		$	11,991
Mortgage backed securities	323,900			—		323,496			404
Municipal bonds	2,353,234			—		2,353,234			—
Commercial mortgage backed securities	584,730			—		584,185			545
U.S. government and government agencies	3,761,612			3,687,126		74,486			—
Non-U.S. government securities	1,473,819			—		1,473,819			—
Asset backed securities	1,544,919			—		1,539,919			5,000
Total	14,317,651			3,687,126		10,612,585			17,940
Equity securities	480,607			473,908		6,699			—
Short-term investments	1,646,036			1,600,885		45,151			—
Other investments	84,671			83,254		1,417			—
Other investments measured at net asset value (2)	175,668
Total other investments	260,339			83,254		1,417			—
Derivative instruments (4)	33,141			—		33,141			—
Fair value option:
Corporate bonds	823,181			—		811,710			11,471
Non-U.S. government bonds	97,614			—		97,614			—
Mortgage backed securities	21,218			—		21,218			—
Municipal bonds	2,740			—		2,740			—
Commercial mortgage backed securities	12,539			—		12,539			—
Asset backed securities	63,437			—		63,437			—
U.S. government and government agencies	487,475			487,475		—			—
Short-term investments	349,540			343,620		5,920			—
Equity securities	94,685			59,332		35,353			—
Other investments	1,298,198			120,212		1,146,840			31,146
Other investments measured at net asset value (2)	999,007
Total	4,249,634			1,010,639		2,197,371			42,617
Total assets measured at fair value	$	20,987,408		$	6,855,812	$	12,896,364		$	60,557
Liabilities measured at fair value:
Contingent consideration liabilities	$	(59,248	)	$	—	$	—		$	(59,248	)
Securities sold but not yet purchased (3)	(72,682		)	—		(72,682		)	—
Derivative instruments (4)	(23,037		)	—		(23,037		)	—
Total liabilities measured at fair value	$	(154,967	)	$	—	$	(95,719	)	$	(59,248	)

(1) In securities lending transactions, the Company receives collateral in excess of the fair value of the securities pledged. For purposes of this table, the Company has excluded the collateral received under securities lending, at fair value and included the securities pledged under securities lending, at fair value. See Note 7, “Investment Information—Securities Lending Agreements.”

(2) In accordance with applicable accounting guidance, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets.

(3) Represents the Company’s obligations to deliver securities that it did not own at the time of sale. Such amounts are included in “other liabilities” on the Company’s consolidated balance sheets.

(4) See Note 9, “Derivative Instruments.”

The following table presents the Company’s financial assets and liabilities measured at fair value by level at December 31, 2016:

				Estimated Fair Value Measurements Using:
	Estimated Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets measured at fair value (1):
Available for sale securities:
Fixed maturities:
Corporate bonds	$	4,392,373		$	—	$	4,374,029		$	18,344
Mortgage backed securities	490,093			—		490,093			—
Municipal bonds	3,713,434			—		3,713,434			—
Commercial mortgage backed securities	536,051			—		536,051			—
U.S. government and government agencies	2,804,540			2,691,575		112,965			—
Non-U.S. government securities	1,096,440			—		1,096,440			—
Asset backed securities	1,123,987			—		1,112,698			11,289
Total	14,156,918			2,691,575		11,435,710			29,633
Equity securities	532,680			529,695		2,985			—
Short-term investments	612,005			608,862		3,143			—
Other investments	112,313			112,313		—			—
Other investments measured at net asset value (2)	55,657
Total other investments	167,970			112,313		—			—
Derivative instruments (4)	28,410			—		28,410			—
Fair value option:
Corporate bonds	790,935			—		790,935			—
Non-U.S. government bonds	61,747			—		61,747			—
Mortgage backed securities	18,624			—		18,624			—
Asset backed securities	30,324			—		30,324			—
U.S. government and government agencies	197,486			197,486		—			—
Short-term investments	373,669			309,127		64,542			—
Equity securities	27,642			25,328		2,314			—
Other investments	1,226,242			80,706		1,120,536			25,000
Other investments measured at net asset value (2)	694,551
Total	3,421,220			612,647		2,089,022			25,000
Total assets measured at fair value	$	18,919,203		$	4,555,092	$	13,559,270		$	54,633
Liabilities measured at fair value:
Contingent consideration liabilities	$	(122,350	)	$	—	$	—		$	(122,350	)
Securities sold but not yet purchased (3)	(33,157		)	—		(33,157		)	—
Derivative instruments (4)	(26,049		)	—		(26,049		)	—
Total liabilities measured at fair value	$	(181,556	)	$	—	$	(59,206	)	$	(122,350	)

(1) In securities lending transactions, the Company receives collateral in excess of the fair value of the securities pledged. For purposes of this table, the Company has excluded the collateral received under securities lending, at fair value and included the securities pledged under securities lending, at fair value. See Note 7, “Investment Information—Securities Lending Agreements.”

(2) In accordance with applicable accounting guidance, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets.

(3) Represents the Company’s obligations to deliver securities that it did not own at the time of sale. Such amounts are included in “other liabilities” on the Company’s consolidated balance sheets.

(4) See Note 9, “Derivative Instruments.”

The following table presents a reconciliation of the beginning and ending balances for all financial assets and liabilities measured at fair value on a recurring basis using Level 3 inputs:

	Assets													Liabilities
s	Available For Sale						Fair Value Option
	Structured Securities (1)			Corporate Bonds			Corporate Bonds		Other Investments		Total			Contingent Consideration Liabilities
Three Months Ended September 30, 2017
Balance at beginning of period	$	—		$	11,570		$	—	$	25,000	$	36,570		$	(57,246	)
Total gains or (losses) (realized/unrealized)
Included in earnings (2)	—			—			—		—		—			(2,002		)
Included in other comprehensive income	—			289			—		—		289			—
Purchases, issuances, sales and settlements
Purchases	—			—			—		1,348		1,348			—
Issuances	—			—			—		—		—			—
Sales	—			—			—		—		—			—
Settlements	—			—			—		—		—			—
Transfers in and/or out of Level 3	5,949			132			11,471		4,798		22,350			—
Balance at end of period	$	5,949		$	11,991		$	11,471	$	31,146	$	60,557		$	(59,248	)
Three Months Ended September 30, 2016
Balance at beginning of period	$	49,211		$	17,305		$	—	$	—	$	66,516		$	(111,670	)
Total gains or (losses) (realized/unrealized)
Included in earnings (2)	—			1,667			—		—		1,667			(4,795		)
Included in other comprehensive income	—			—			—		—		—			88
Purchases, issuances, sales and settlements
Purchases	—			—			—		—		—			—
Issuances	—			—			—		—		—			—
Sales	—			—			—		—		—			—
Settlements	(22,435		)	—			—		—		(22,435		)	—
Transfers in and/or out of Level 3	—			—			—		—		—			—
Balance at end of period	$	26,776		$	18,972		$	—	$	—	$	45,748		$	(116,377	)
Nine Months Ended September 30, 2017
Balance at beginning of year	$	11,289		$	18,344		$	—	$	25,000	$	54,633		$	(122,350	)
Total gains or (losses) (realized/unrealized)
Included in earnings (2)	3,779			893			—		—		4,672			(9,089		)
Included in other comprehensive income	—			289			—		—		289			—
Purchases, issuances, sales and settlements
Purchases	—			4,935			—		1,348		6,283			—
Issuances	—			—			—		—		—			—
Sales	(13,640		)	(12,602		)	—		—		(26,242		)	—
Settlements	(1,428		)	—			—		—		(1,428		)	72,191
Transfers in and/or out of Level 3	5,949			132			11,471		4,798		22,350			—
Balance at end of period	$	5,949		$	11,991		$	11,471	$	31,146	$	60,557		$	(59,248	)
Nine Months Ended September 30, 2016
Balance at beginning of year	$	57,500		$	16,368		$	—	$	—	$	73,868		$	(96,048	)
Total gains or (losses) (realized/unrealized)
Included in earnings (2)	(2,500		)	1,828			—		—		(672		)	(20,916		)
Included in other comprehensive income	—			—			—		—		—			51
Purchases, issuances, sales and settlements
Purchases	—			776			—		—		776			—
Issuances	—			—			—		—		—			—
Sales	—			—			—		—		—			—
Settlements	(28,224		)	—			—		—		(28,224		)	536
Transfers in and/or out of Level 3	—			—			—		—		—			—
Balance at end of period	$	26,776		$	18,972		$	—	$	—	$	45,748		$	(116,377	)

(1) Includes asset backed securities, mortgage backed securities and commercial mortgage backed securities.

(2) For the 2017 periods, gains or losses were included in net realized gains (losses). For the 2016 periods, losses on structured securities were included in net impairment losses recognized in earnings gains or losses while gains or losses on corporate bonds and contingent consideration liabilities were included in net realized gains (losses).

Financial Instruments Disclosed, But Not Carried, At Fair Value

The Company uses various financial instruments in the normal course of its business. The carrying values of cash, accrued investment income, receivable for securities sold, certain other assets, payable for securities purchased and certain other liabilities approximated their fair values at September 30, 2017, due to their respective short maturities. As these financial instruments are not actively traded, their respective fair values are classified within Level 2.

At September 30, 2017, the senior notes of ACGL were carried at their cost, net of debt issuance costs, of $297.0 million and had a fair value of $406.0 million, while the senior notes of Arch Capital Group (U.S.) Inc. (“Arch-U.S.”) were carried at their cost, net of debt issuance costs, of $494.6 million and had a fair value of $566.2 million. The senior notes of Arch Capital Finance LLC due in 2026 were carried at their cost, net of debt issuance costs, of $496.0 million and had a fair value of $519.8 million, while the senior notes due in 2046 were carried at their cost, net of debt issuance costs, of $445.1 million and had a fair value of $503.5 million. The fair values of the senior notes were obtained from a third party pricing service and are based on observable market inputs. As such, the fair values of the senior notes are classified within Level 2.

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Derivative Instruments

9 Months Ended

Sep. 30, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

The Company’s investment strategy allows for the use of derivative instruments. The Company’s derivative instruments are recorded on its consolidated balance sheets at fair value. The Company utilizes exchange traded U.S. Treasury note, Eurodollar and other futures contracts and commodity futures to manage portfolio duration or replicate investment positions in its portfolios and the Company routinely utilizes foreign currency forward contracts, currency options, index futures contracts and other derivatives as part of its total return objective. In addition, certain of the Company’s investments are managed in portfolios which incorporate the use of foreign currency forward contracts which are intended to provide an economic hedge against foreign currency movements. 

In addition, the Company purchases to-be-announced mortgage backed securities (“TBAs”) as part of its investment strategy. TBAs represent commitments to purchase a future issuance of agency mortgage backed securities. For the period between purchase of a TBA and issuance of the underlying security, the Company’s position is accounted for as a derivative. The Company purchases TBAs in both long and short positions to enhance investment performance and as part of its overall investment strategy.

The following table summarizes information on the fair values and notional values of the Company’s derivative instruments:

	Estimated Fair Value
	Asset Derivatives		Liability Derivatives			Notional Value (1)
September 30, 2017
Futures contracts (2)	$	5,351	$	(6,722	)	$	1,524,985
Foreign currency forward contracts (2)	19,376		(5,348		)	805,201
TBAs (3)	18,331		—			18,143
Other (2)	8,414		(10,967		)	2,032,922
Total	$	51,472	$	(23,037	)
December 31, 2016
Futures contracts (2)	$	360	$	(9,398	)	$	1,655,530
Foreign currency forward contracts (2)	9,354		(12,941		)	1,186,386
TBAs (3)	—		—			—
Other (2)	20,287		(3,710		)	1,014,863
Total	$	30,001	$	(26,049	)

(1) Represents the absolute notional value of all outstanding contracts, consisting of long and short positions.

(2) The fair value of asset derivatives are included in ‘other assets’ and the fair value of liability derivatives are included in ‘other liabilities.’

(3) The fair value of TBAs are included in ‘fixed maturities available for sale, at fair value.’

The Company did not hold any derivatives which were designated as hedging instruments at September 30, 2017 or December 31, 2016.

The Company’s derivative instruments can be traded under master netting agreements, which establish terms that apply to all derivative transactions with a counterparty. In the event of a bankruptcy or other stipulated event of default, such agreements provide that the non-defaulting party may elect to terminate all outstanding derivative transactions, in which case all individual derivative positions (loss or gain) with a counterparty are closed out and netted and replaced with a single amount, usually referred to as the termination amount, which is expressed in a single currency. The resulting single net amount, where positive, is payable to the party “in-the-money” regardless of whether or not it is the defaulting party, unless the parties have agreed that only the non-defaulting party is entitled to receive a termination payment where the net amount is positive and is in its favor. Contractual close-out netting reduces derivatives credit exposure from gross to net exposure.

At September 30, 2017, asset derivatives and liability derivatives of $49.4 million and $22.5 million, respectively, were subject to a master netting agreement, compared to $28.4 million and $26.0 million, respectively, at December 31, 2016. The remaining derivatives included in the preceding table were not subject to a master netting agreement.

All realized and unrealized contract gains and losses on the Company’s derivative instruments are reflected in net realized gains (losses) in the consolidated statements of income, as summarized in the following table:

Derivatives not designated as	September 30,
hedging instruments:	2017			2016
Three Months Ended
Net realized gains (losses):
Futures contracts	$	4,899		$	(15,368	)
Foreign currency forward contracts	(228		)	4,583
TBAs	122			(23		)
Other	(495		)	(6,156		)
Total	$	4,298		$	(16,964	)
Nine Months Ended
Net realized gains (losses):
Futures contracts	$	7,309		$	45,954
Foreign currency forward contracts	(12,266		)	(13,951		)
TBAs	143			311
Other	(4,839		)	(8,212		)
Total	$	(9,653	)	$	24,102

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Letter of Credit and Revolving Credit Facilities

ACGL repaid $100.0 million of borrowings under its unsecured revolving loan and letter of credit facility in the 2017 third quarter, offset by an increase in borrowings in the Company’s ‘other’ segment.

Investment Commitments

The Company’s investment commitments, which are primarily related to agreements entered into by the Company to invest in funds and separately managed accounts when called upon, were approximately $1.58 billion at September 30, 2017, compared to $1.29 billion at December 31, 2016.

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Share Transactions

9 Months Ended

Sep. 30, 2017

Stockholders' Equity Note [Abstract]

Share Transactions

Share Transactions

Share Repurchases

The board of directors of ACGL has authorized the investment in ACGL’s common shares through a share repurchase program. Since the inception of the share repurchase program, ACGL has repurchased approximately 125.2 million common shares for an aggregate purchase price of $3.68 billion. For the nine months ended September 30, 2017, the Company did not repurchase any shares under the share repurchase program, compared to 1.1 million common shares repurchased for the nine months ended September 30, 2016 with an aggregate purchase price of $75.3 million (no repurchases in the 2016 third quarter). At September 30, 2017, $446.5 million of share repurchases were available under the program, which may be effected from time to time in open market or privately negotiated transactions through December 31, 2019. The timing and amount of the repurchase transactions under this program will depend on a variety of factors, including market conditions and corporate and regulatory considerations.

Conversion of Convertible Non-Voting Common Equivalent Preferred Shares

On June 8, 2017, ACGL and AIG entered into Amendment No. 1 (the “Amendment”) to the Investor Rights Agreement (the “Investor Rights Agreement”) dated as of December 31, 2016 to amend the restrictions on transfers of the 1,276,282 shares of ACGL’s convertible non-voting common-equivalent preference shares owned by AIG (the “Convertible Preferred Shares”). The Convertible Preferred Shares were issued to AIG as part of the consideration in UGC acquisition. Pursuant to the certificate of designations for the Convertible Preferred Shares and in accordance with the terms and conditions set forth therein, each Convertible Preferred Share is convertible into ten common shares of ACGL.

Pursuant to the Amendment, ACGL permitted AIG to transfer: (i) 638,141 Convertible Preferred Shares from and after June 8, 2017, and up to an additional 95,721 of the Convertible Preferred Shares to the extent that the several underwriters exercise the option to purchase additional securities expected to be granted pursuant to an underwritten secondary offering of ACGL common shares issuable upon conversion of the Convertible Preferred Shares by AIG and (ii) any and all of the Convertible Preferred Shares from and after January 15, 2018, subject to certain exceptions, and in each case subject to the terms and conditions of the Investor Rights Agreement. All other terms of the Investor Rights Agreement remain in effect.

In June 2017, ACGL completed an underwritten public secondary offering of 7,088,620 common shares by AIG following transfer of 708,862 Convertible Preferred Shares. Proceeds from the sale of common shares pursuant to the public offering were received by AIG. At September 30, 2017, 567,420 Convertible Preferred Shares were outstanding.

Series F Preferred Shares

In August 2017, ACGL completed a $230 million underwritten public offering of 9.2 million depositary shares (the “Depositary Shares”), each of which represents a 1/1,000th interest in a share of its 5.45% Non-Cumulative Preferred Shares, Series F, have a $0.01 par value and $25,000 liquidation preference per share (equivalent to $25 liquidation preference per Depositary Share) (the “Series F Preferred Shares”). Each Depositary Share, evidenced by a depositary receipt, entitles the holder, through the depositary, to a proportional fractional interest in all rights and preferences of the Series F Preferred Shares represented thereby (including any dividend, liquidation, redemption and voting rights).

Holders of Series F Preferred Shares will be entitled to receive dividend payments only when, as and if declared by our board of directors or a duly authorized committee of the board. Any such dividends will be payable from, and including, the date of original issue on a noncumulative basis, quarterly in arrears on the last day of March, June, September and December of each year, at an annual rate of 5.45%. Dividends on the Series F Preferred Shares are not cumulative. The Company will be restricted from paying dividends on or repurchasing its common shares unless certain dividend payments are made on the Series F Preferred Shares.

Except in specified circumstances relating to certain tax or corporate events, the Series F Preferred Shares are not redeemable prior to August 17, 2022 (the fifth anniversary of the issue date). On and after that date, the Series F Preferred Shares will be redeemable at the Company’s option, in whole or in part, at a redemption price of $25,000 per share of the Series F Preferred Shares (equivalent to $25 per depositary share), plus any declared and unpaid dividends, without accumulation of any undeclared dividends to, but excluding, the redemption date. The Depositary Shares will be redeemed if and to the extent the related Series F Preferred Shares are redeemed by the Company. Neither the Depositary Shares nor the Series F Preferred Shares have a stated maturity, nor will they be subject to any sinking fund or mandatory redemption. The Series F Preferred Shares are not convertible into any other securities. The Series F Preferred Shares will not have voting rights, except under limited circumstances.

The net proceeds from the offering of $222.1 million and other available funds were used to redeem in part its outstanding 6.75% Series C Non-Cumulative Preferred Shares. The preferred shares were redeemed at a redemption price equal to $25 per share, plus all declared and unpaid dividends to (but excluding) the redemption date. In accordance with GAAP, following the redemption, original issuance costs related to such shares have been removed from additional paid-in capital and recorded as a “loss on redemption of preferred shares.” Such adjustment had no impact on total shareholders’ equity or cash flows.

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Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2017

Comprehensive Income Note Disclosure [Abstract]

Other Comprehensive Income (Loss)

Other Comprehensive Income (Loss)

The following tables present details about amounts reclassified from accumulated other comprehensive income and the tax effects allocated to each component of other comprehensive income (loss):

		Amounts Reclassified from AOCI
	Consolidated Statement of Income	Three Months Ended						Nine Months Ended
Details About	Line Item That Includes	September 30,						September 30,
AOCI Components	Reclassification	2017			2016			2017			2016
Unrealized appreciation on available-for-sale investments
	Net realized gains (losses)	$	27,550		$	61,464		$	59,474		$	137,555
	Other-than-temporary impairment losses	(1,878		)	(3,867		)	(5,415		)	(16,999		)
	Total before tax	25,672			57,597			54,059			120,556
	Income tax (expense) benefit	(1,760		)	(2,605		)	(7,879		)	(11,247		)
	Net of tax	$	23,912		$	54,992		$	46,180		$	109,309

	Before Tax Amount			Tax Expense (Benefit)			Net of Tax Amount
Three Months Ended September 30, 2017
Unrealized appreciation (decline) in value of investments:
Unrealized holding gains (losses) arising during period	$	69,330		$	2,868		$	66,462
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss)	—			—			—
Less reclassification of net realized gains (losses) included in net income	25,672			1,760			23,912
Foreign currency translation adjustments	8,590			310			8,280
Other comprehensive income (loss)	$	52,248		$	1,418		$	50,830
Three Months Ended September 30, 2016
Unrealized appreciation (decline) in value of investments:
Unrealized holding gains (losses) arising during period	$	11,692		$	(4,589	)	$	16,281
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss)	—			—			—
Less reclassification of net realized gains (losses) included in net income	57,597			2,605			54,992
Foreign currency translation adjustments	(5,407		)	(95		)	(5,312		)
Other comprehensive income (loss)	$	(51,312	)	$	(7,289	)	$	(44,023	)
Nine Months Ended September 30, 2017
Unrealized appreciation (decline) in value of investments:
Unrealized holding gains (losses) arising during period	$	288,813		$	28,590		$	260,223
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss)	—			—			—
Less reclassification of net realized gains (losses) included in net income	54,059			7,879			46,180
Foreign currency translation adjustments	30,264			563			29,701
Other comprehensive income (loss)	$	265,018		$	21,274		$	243,744
Nine Months Ended September 30, 2016
Unrealized appreciation (decline) in value of investments:
Unrealized holding gains (losses) arising during period	$	281,770		$	30,048		$	251,722
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss)	(150		)	—			(150		)
Less reclassification of net realized gains (losses) included in net income	120,556			11,247			109,309
Foreign currency translation adjustments	(5,733		)	417			(6,150		)
Other comprehensive income (loss)	$	155,331		$	19,218		$	136,113

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Guarantor Financial Information

9 Months Ended

Sep. 30, 2017

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Guarantor Financial Information

Guarantor Financial Information

The following tables present condensed financial information for ACGL, Arch-U.S., a 100% owned subsidiary of ACGL, and ACGL’s other subsidiaries.

		September 30, 2017
Condensed Consolidating Balance Sheet		ACGL (Parent Guarantor)		Arch-U.S. (Subsidiary Issuer)		Other ACGL Subsidiaries		Consolidating Adjustments and Eliminations			ACGL Consolidated
Assets
Total investments		$	402	$	69,671	$	21,876,508	$	(14,700	)	$	21,931,881
Cash		4,868		88,818		768,675		—			862,361
Investments in subsidiaries		9,214,178		4,028,493		—		(13,242,671		)	—
Due from subsidiaries and affiliates		81		117		1,923,941		(1,924,139		)	—
Premiums receivable		—		—		1,863,203		(593,525		)	1,269,678
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses		—		—		7,023,836		(4,517,821		)	2,506,015
Contractholder receivables		—		—		1,864,348		—			1,864,348
Ceded unearned premiums		—		—		2,240,129		(1,292,994		)	947,135
Deferred acquisition costs		—		—		677,567		(146,371		)	531,196
Goodwill and intangible assets		—		—		684,405		—			684,405
Other assets		13,357		59,734		2,146,993		(192,306		)	2,027,778
	Total assets	$	9,232,886	$	4,246,833	$	41,069,605	$	(21,924,527	)	$	32,624,797
Liabilities
Reserve for losses and loss adjustment expenses		$	—	$	—	$	15,836,263	$	(4,484,996	)	$	11,351,267
Unearned premiums		—		—		5,044,544		(1,292,994		)	3,751,550
Reinsurance balances payable		—		—		945,530		(593,524		)	352,006
Contractholder payables		—		—		1,864,348		—			1,864,348
Collateral held for insured obligations		—		—		345,726					345,726
Senior notes		297,030		494,596		941,100		—			1,732,726
Revolving credit agreement borrowings		—		—		826,242		—			826,242
Due to subsidiaries and affiliates		41		542,103		1,381,996		(1,924,140		)	—
Other liabilities		24,671		100,278		2,669,614		(371,502		)	2,423,061
	Total liabilities	321,742		1,136,977		29,855,363		(8,667,156		)	22,646,926
Redeemable noncontrolling interests		—		—		220,529		(14,700		)	205,829
Shareholders’ Equity
Total shareholders’ equity available to Arch		8,911,144		3,109,856		10,132,815		(13,242,671		)	8,911,144
Non-redeemable noncontrolling interests		—		—		860,898		—			860,898
	Total shareholders’ equity	8,911,144		3,109,856		10,993,713		(13,242,671		)	9,772,042
	Total liabilities, noncontrolling interests and shareholders’ equity	$	9,232,886	$	4,246,833	$	41,069,605	$	(21,924,527	)	$	32,624,797

		December 31, 2016
Condensed Consolidating Balance Sheet		ACGL (Parent Guarantor)		Arch-U.S. (Subsidiary Issuer)		Other ACGL Subsidiaries		Consolidating Adjustments and Eliminations			ACGL Consolidated
Assets
Total investments		$	2,612	$	41,672	$	19,690,067	$	(14,700	)	$	19,719,651
Cash		1,687		71,955		769,300		—			842,942
Investments in subsidiaries		8,660,586		3,716,681		—		(12,377,267		)	—
Due from subsidiaries and affiliates		14,297		51,298		1,866,681		(1,932,276		)	—
Premiums receivable		—		—		1,579,865		(507,430		)	1,072,435
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses		—		—		6,114,518		(4,000,380		)	2,114,138
Contractholder receivables		—		—		1,717,436		—			1,717,436
Ceded unearned premiums		—		—		1,985,311		(1,125,744		)	859,567
Deferred acquisition costs		—		—		577,461		(129,901		)	447,560
Goodwill and intangible assets		—		—		781,553		—			781,553
Other assets		15,725		49,244		1,901,786		(149,928		)	1,816,827
	Total assets	$	8,694,907	$	3,930,850	$	36,983,978	$	(20,237,626	)	$	29,372,109
Liabilities
Reserve for losses and loss adjustment expenses		$	—	$	—	$	14,164,191	$	(3,963,231	)	$	10,200,960
Unearned premiums		—		—		4,532,614		(1,125,744		)	3,406,870
Reinsurance balances payable		—		—		807,837		(507,430		)	300,407
Contractholder payables		—		—		1,717,436		—			1,717,436
Collateral held for insured obligations		—		—		301,406		—			301,406
Deposit accounting liabilities		—		—		22,150		—			22,150
Senior notes		296,957		494,525		940,776		—			1,732,258
Revolving credit agreement borrowings		100,000		—		656,650		—			756,650
Due to subsidiaries and affiliates		26,270		535,584		1,370,422		(1,932,276		)	—
Other liabilities		17,962		54,823		1,867,040		(316,978		)	1,622,847
	Total liabilities	441,189		1,084,932		26,380,522		(7,845,659		)	20,060,984
Redeemable noncontrolling interests		—		—		220,253		(14,700		)	205,553
Shareholders’ Equity
Total shareholders’ equity available to Arch		8,253,718		2,845,918		9,531,349		(12,377,267		)	8,253,718
Non-redeemable noncontrolling interests		—		—		851,854		—			851,854
	Total shareholders’ equity	8,253,718		2,845,918		10,383,203		(12,377,267		)	9,105,572
	Total liabilities, noncontrolling interests and shareholders’ equity	$	8,694,907	$	3,930,850	$	36,983,978	$	(20,237,626	)	$	29,372,109

		Three Months Ended September 30, 2017
Condensed Consolidating Statement of Income and Comprehensive Income		ACGL (Parent Guarantor)			Arch-U.S. (Subsidiary Issuer)			Other ACGL Subsidiaries			Consolidating Adjustments and Eliminations			ACGL Consolidated
Revenues
Net premiums earned		$	—		$	—		$	1,261,886		$	—		$	1,261,886
Net investment income		117			151			138,784			(22,593		)	116,459
Net realized gains (losses)		—			—			66,275			—			66,275
Net impairment losses recognized in earnings		—			—			(1,878		)	—			(1,878		)
Other underwriting income		—			—			6,064			—			6,064
Equity in net income (loss) of investment funds accounted for using the equity method		—			—			31,090			—			31,090
Other income (loss)		(102		)	—			(240		)	—			(342		)
	Total revenues	15			151			1,501,981			(22,593		)	1,479,554
Expenses
Losses and loss adjustment expenses		—			—			1,046,141			—			1,046,141
Acquisition expenses		—			—			193,854			—			193,854
Other operating expenses		—			—			170,127			—			170,127
Corporate expenses		14,576			410			2,112			—			17,098
Amortization of intangible assets		—			—			31,824			—			31,824
Interest expense		5,934			12,037			33,811			(22,272		)	29,510
Net foreign exchange (gains) losses		—			—			20,510			7,518			28,028
	Total expenses	20,510			12,447			1,498,379			(14,754		)	1,516,582
Income (loss) before income taxes		(20,495		)	(12,296		)	3,602			(7,839		)	(37,028		)
Income tax (expense) benefit		—			4,432			(12,621		)	—			(8,189		)
Income (loss) before equity in net income of subsidiaries		(20,495		)	(7,864		)	(9,019		)	(7,839		)	(45,217		)
Equity in net income (loss) of subsidiaries		(13,161		)	50,057			—			(36,896		)	—
Net income (loss)		(33,656		)	42,193			(9,019		)	(44,735		)	(45,217		)
Net (income) loss attributable to noncontrolling interests		—			—			11,238			323			11,561
Net income (loss) available to Arch		(33,656		)	42,193			2,219			(44,412		)	(33,656		)
Preferred dividends		(12,369		)	—			—			—			(12,369		)
Loss on redemption of preferred shares		(6,735		)	—			—			—			(6,735		)
Net income (loss) available to Arch common shareholders		$	(52,760	)	$	42,193		$	2,219		$	(44,412	)	$	(52,760	)
Comprehensive income (loss) available to Arch		$	17,585		$	47,676		$	45,936		$	(93,612	)	$	17,585

		Three Months Ended September 30, 2016
Condensed Consolidating Statement of Income and Comprehensive Income		ACGL (Parent Guarantor)			Arch-U.S. (Subsidiary Issuer)			Other ACGL Subsidiaries			Consolidating Adjustments and Eliminations			ACGL Consolidated
Revenues
Net premiums earned		$	—		$	—		$	958,403		$	—		$	958,403
Net investment income		6			803			99,654			(6,845		)	93,618
Net realized gains (losses)		—			—			125,105			—			125,105
Net impairment losses recognized in earnings		—			—			(3,867		)	—			(3,867		)
Other underwriting income		—			—			7,980			—			7,980
Equity in net income (loss) of investment funds accounted for using the equity method		—			—			16,662			—			16,662
Other income (loss)		71			—			(471		)	—			(400		)
	Total revenues	77			803			1,203,466			(6,845		)	1,197,501
Expenses
Losses and loss adjustment expenses		—			—			524,183			—			524,183
Acquisition expenses		—			—			161,267			—			161,267
Other operating expenses		—			—			153,286			—			153,286
Corporate expenses		18,488			608			(611		)	—			18,485
Amortization of intangible assets		—			—			4,865			—			4,865
Interest expense		5,948			6,627			9,890			(6,522		)	15,943
Net foreign exchange (gains) losses		—			—			2,723			(102		)	2,621
	Total expenses	24,436			7,235			855,603			(6,624		)	880,650
Income (loss) before income taxes		(24,359		)	(6,432		)	347,863			(221		)	316,851
Income tax (expense) benefit		—			2,116			(15,347		)	—			(13,231		)
Income (loss) before equity in net income of subsidiaries		(24,359		)	(4,316		)	332,516			(221		)	303,620
Equity in net income of subsidiaries		277,231			21,945			—			(299,176		)	—
Net income		252,872			17,629			332,516			(299,397		)	303,620
Net (income) loss attributable to noncontrolling interests		—			—			(51,071		)	323			(50,748		)
Net income available to Arch		252,872			17,629			281,445			(299,074		)	252,872
Preferred dividends		(5,484		)	—			—			—			(5,484		)
Net income available to Arch common shareholders		$	247,388		$	17,629		$	281,445		$	(299,074	)	$	247,388
Comprehensive income (loss) available to Arch		$	208,790		$	2,019		$	237,555		$	(239,574	)	$	208,790

		Nine Months Ended September 30, 2017
Condensed Consolidating Statement of Income and Comprehensive Income		ACGL (Parent Guarantor)			Arch-U.S. (Subsidiary Issuer)			Other ACGL Subsidiaries			Consolidating Adjustments and Eliminations			ACGL Consolidated
Revenues
Net premiums earned		$	—		$	—		$	3,619,777		$	—		$	3,619,777
Net investment income		123			1,151			410,392			(66,209		)	345,457
Net realized gains (losses)		—			—			122,163			—			122,163
Net impairment losses recognized in earnings		—			—			(5,415		)	—			(5,415		)
Other underwriting income		—			—			15,519			—			15,519
Equity in net income of investment funds accounted for using the equity method		—			—			111,884			—			111,884
Other income (loss)		(368		)	—			(2,750		)	—			(3,118		)
	Total revenues	(245		)	1,151			4,271,570			(66,209		)	4,206,267
Expenses
Losses and loss adjustment expenses		—			—			2,288,571			—			2,288,571
Acquisition expenses		—			—			566,579			—			566,579
Other operating expenses		—			—			514,827			—			514,827
Corporate expenses		53,639			3,727			12,400			—			69,766
Amortization of intangible assets		—			—			93,942			—			93,942
Interest expense		18,024			35,956			98,197			(65,242		)	86,935
Net foreign exchange losses (gains)		—			—			65,701			21,274			86,975
	Total expenses	71,663			39,683			3,640,217			(43,968		)	3,707,595
Income (loss) before income taxes		(71,908		)	(38,532		)	631,353			(22,241		)	498,672
Income tax (expense) benefit		—			13,374			(84,129		)	—			(70,755		)
Income (loss) before equity in net income of subsidiaries		(71,908		)	(25,158		)	547,224			(22,241		)	427,917
Equity in net income of subsidiaries		476,546			213,586			—			(690,132		)	—
Net income		404,638			188,428			547,224			(712,373		)	427,917
Amounts attributable to noncontrolling interests		—			—			(24,247		)	968			(23,279		)
Net income available to Arch		404,638			188,428			522,977			(711,405		)	404,638
Preferred dividends		(34,936		)	—			—			—			(34,936		)
Loss on redemption of preferred shares		(6,735		)	—			—			—			(6,735		)
Net income available to Arch common shareholders		$	362,967		$	188,428		$	522,977		$	(711,405	)	$	362,967
Comprehensive income (loss) available to Arch		$	648,861		$	240,759		$	745,856		$	(986,615	)	$	648,861

		Nine Months Ended September 30, 2016
Condensed Consolidating Statement of Income and Comprehensive Income		ACGL (Parent Guarantor)			Arch-U.S. (Subsidiary Issuer)			Other ACGL Subsidiaries			Consolidating Adjustments and Eliminations			ACGL Consolidated
Revenues
Net premiums earned		$	—		$	—		$	2,915,967		$	—		$	2,915,967
Net investment income		7			2,351			294,012			(20,679		)	275,691
Net realized gains (losses)		—			—			230,647			—			230,647
Net impairment losses recognized in earnings		—			—			(16,849		)	—			(16,849		)
Other underwriting income		—			—			54,749			(16,498		)	38,251
Equity in net income of investment funds accounted for using the equity method		—			—			32,054			—			32,054
Other income (loss)		270			—			(702		)	—			(432		)
	Total revenues	277			2,351			3,509,878			(37,177		)	3,475,329
Expenses
Losses and loss adjustment expenses		—			—			1,631,724			—			1,631,724
Acquisition expenses		—			—			501,782			—			501,782
Other operating expenses		—			—			460,748			—			460,748
Corporate expenses		45,284			1,549			(1,765		)	—			45,068
Amortization of intangible assets		—			—			14,493			—			14,493
Interest expense		17,811			19,946			46,169			(36,213		)	47,713
Net foreign exchange losses (gains)		—			—			5,093			(3,568		)	1,525
	Total expenses	63,095			21,495			2,658,244			(39,781		)	2,703,053
Income (loss) before income taxes		(62,818		)	(19,144		)	851,634			2,604			772,276
Income tax (expense) benefit		—			6,446			(50,118		)	—			(43,672		)
Income (loss) before equity in net income of subsidiaries		(62,818		)	(12,698		)	801,516			2,604			728,604
Equity in net income of subsidiaries		681,543			64,684			—			(746,227		)	—
Net income		618,725			51,986			801,516			(743,623		)	728,604
Amounts attributable to noncontrolling interests		—			—			(110,844		)	965			(109,879		)
Net income available to Arch		618,725			51,986			690,672			(742,658		)	618,725
Preferred dividends		(16,453		)	—			—			—			(16,453		)
Net income available to Arch common shareholders		$	602,272		$	51,986		$	690,672		$	(742,658	)	$	602,272
Comprehensive income (loss) available to Arch		$	754,979		$	89,204		$	830,348		$	(919,552	)	$	754,979

		Nine Months Ended September 30, 2017
Condensed Consolidating Statement of Cash Flows		ACGL (Parent Guarantor)			Arch-U.S. (Subsidiary Issuer)			Other ACGL Subsidiaries			Consolidating Adjustments and Eliminations			ACGL Consolidated
Operating Activities
	Net Cash Provided By (Used For) Operating Activities	$	130,715		$	70,761		$	1,464,701		$	(585,043	)	$	1,081,134
Investing Activities
Purchases of fixed maturity investments		—			—			(28,079,129		)	—			(28,079,129		)
Purchases of equity securities		—			—			(667,135		)	—			(667,135		)
Purchases of other investments		—			—			(1,406,528		)	—			(1,406,528		)
Proceeds from the sales of fixed maturity investments		—			—			27,629,474			—			27,629,474
Proceeds from the sales of equity securities		—			—			751,873			—			751,873
Proceeds from the sales, redemptions and maturities of other investments		—			—			938,581			—			938,581
Proceeds from redemptions and maturities of fixed maturity investments		—			—			747,621			—			747,621
Net settlements of derivative instruments		—			—			(20,952		)	—			(20,952		)
Net (purchases) sales of short-term investments		2,209			(27,998		)	(938,864		)	—			(964,653		)
Change in cash collateral related to securities lending		—			—			148,692			—			148,692
Contributions to subsidiaries		20,641			(72,900		)	(353,588		)	405,847			—
Issuance of intercompany loans		—			—			(47,000		)	47,000			—
Repayment of intercompany loans		—			47,000			—			(47,000		)	—
Acquisitions, net of cash		—			—			(27,709		)	—			(27,709		)
Purchases of fixed assets		(18		)	—			(16,844		)	—			(16,862		)
Other		—			—			106,786			(20,641		)	86,145
	Net Cash Provided By (Used For) Investing Activities	22,832			(53,898		)	(1,234,722		)	385,206			(880,582		)
Financing Activities
Proceeds from issuance of preferred shares, net		222,054			—			—			—			222,054
Redemption of preferred shares		(230,000		)	—			—			—			(230,000		)
Proceeds from common shares issued, net		(7,484		)	—			405,847			(405,847		)	(7,484		)
Proceeds from intercompany borrowings		—			—			47,000			(47,000		)	—
Proceeds from borrowings		—			—			238,915			—			238,915
Repayments of intercompany borrowings		—			—			(47,000		)	47,000			—
Repayments of borrowings		(100,000		)	—			(72,000		)	—			(172,000		)
Change in cash collateral related to securities lending		—			—			(148,692		)	—			(148,692		)
Dividends paid to redeemable noncontrolling interests		—			—			(14,447		)	956			(13,491		)
Dividends paid to parent (1)		—			—			(584,087		)	584,087			—
Other		—			—			(69,921		)	20,641			(49,280		)
Preferred dividends paid		(34,936		)	—			—			—			(34,936		)
	Net Cash Provided By (Used For) Financing Activities	(150,366		)	—			(244,385		)	199,837			(194,914		)
Effects of exchange rates changes on foreign currency cash		—			—			13,781			—			13,781
Increase (decrease) in cash		3,181			16,863			(625		)	—			19,419
Cash beginning of year		1,687			71,955			769,300			—			842,942
Cash end of period		$	4,868		$	88,818		$	768,675		$	—		$	862,361

(1)     Dividends received by parent are included in net cash provided by (used for) operating activities.

		Nine Months Ended September 30, 2016
Condensed Consolidating Statement of Cash Flows		ACGL (Parent Guarantor)			Arch-U.S. (Subsidiary Issuer)			Other ACGL Subsidiaries			Consolidating Adjustments and Eliminations			ACGL Consolidated
Operating Activities
	Net Cash Provided By (Used For) Operating Activities	$	94,250		$	14,448		$	1,096,443		$	(168,002	)	$	1,037,139
Investing Activities
Purchases of fixed maturity investments		—			—			(27,840,555		)	—			(27,840,555		)
Purchases of equity securities		—			—			(377,767		)	—			(377,767		)
Purchases of other investments		—			—			(1,008,774		)	—			(1,008,774		)
Proceeds from the sales of fixed maturity investments		—			—			26,731,924			—			26,731,924
Proceeds from the sales of equity securities		—			—			464,904			—			464,904
Proceeds from the sales, redemptions and maturities of other investments		—			—			879,330			—			879,330
Proceeds from redemptions and maturities of fixed maturity investments		—			41,500			499,323			—			540,823
Net settlements of derivative instruments		—			—			23,396			—			23,396
Net (purchases) sales of short-term investments		(436,830		)	(53,779		)	(113,553		)	—			(604,162		)
Change in cash collateral related to securities lending		—			—			(27,935		)	—			(27,935		)
Contributions to subsidiaries		(3,585		)	—			(9,247		)	12,832			—
Acquisitions, net of cash		—			—			(20,911		)	—			(20,911		)
Purchases of fixed assets		(8		)	—			(11,557		)	—			(11,565		)
Other		2,000			—			(5,816		)	—			(3,816		)
	Net Cash Provided By (Used For) Investing Activities	(438,423		)	(12,279		)	(817,238		)	12,832			(1,255,108		)
Financing Activities
Proceeds from issuance of preferred shares, net		434,899			—			—			—			434,899
Purchases of common shares under share repurchase program		(75,256		)	—			—			—			(75,256		)
Proceeds from common shares issued, net		(3,785		)	—			12,832			(12,832		)	(3,785		)
Proceeds from borrowings		—			—			46,000			—			46,000
Repayments of borrowings		—			—			(179,171		)	—			(179,171		)
Change in cash collateral related to securities lending		—			—			27,935			—			27,935
Dividends paid to redeemable noncontrolling interests		—			—			(14,448		)	957			(13,491		)
Dividends paid to parent (1)		—			—			(167,045		)	167,045			—
Other		—			200			32,913			—			33,113
Preferred dividends paid		(16,453		)	—			—			—			(16,453		)
	Net Cash Provided By (Used For) Financing Activities	339,405			200			(240,984		)	155,170			253,791
Effects of exchange rates changes on foreign currency cash		—			—			(10,332		)	—			(10,332		)
Increase (decrease) in cash		(4,768		)	2,369			27,889			—			25,490
Cash beginning of year		6,809			17,023			529,494			—			553,326
Cash end of period		$	2,041		$	19,392		$	557,383		$	—		$	578,816

(1)     Dividends received by parent are included in net cash provided by (used for) operating activities.

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Income Taxes

9 Months Ended

Sep. 30, 2017

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company’s income tax provision on income before income taxes resulted in an expense of 14.2% for the nine months ended September 30, 2017, compared to an expense of 5.7% for the 2016 period. The Company’s effective tax rate, which is based upon the expected annual effective tax rate, may fluctuate from period to period based on the relative mix of income or loss reported by jurisdiction and the varying tax rates in each jurisdiction. For interim reporting purposes, the Company has calculated its effective tax rate for the full year of 2017 by treating any excess tax benefits that arise from the accounting for stock based compensation as a discrete item. As such, this amount is not included when projecting the Company’s full year effective tax rate but rather is accounted for at the U.S. Federal statutory rate of 35% after applying the projected full year effective tax rate to actual nine-month results before the discrete item. The impact of the discrete item resulted in a benefit of 1.5% for the nine months ended September 30, 2017.

The Company had a net deferred tax asset of $248.3 million at September 30, 2017, compared to $221.2 million at December 31, 2016. In addition, the Company paid$47.9 million and $40.7 million of income taxes for the nine months ended September 30, 2017 and 2016, respectively.

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Legal Proceedings

9 Months Ended

Sep. 30, 2017

Disclosure Legal Proceedings [Abstract]

Legal Proceedings

Legal Proceedings

The Company, in common with the insurance industry in general, is subject to litigation and arbitration in the normal course of its business. As of September 30, 2017, the Company was not a party to any litigation or arbitration which is expected by management to have a material adverse effect on the Company’s results of operations and financial condition and liquidity.

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Transactions with Related Parties

9 Months Ended

Sep. 30, 2017

Related Party Transactions [Abstract]

Transactions with Related Parties

Transactions with Related Parties

Kewsong Lee, a director of ACGL, is a Managing Director and Deputy Chief Investment Officer for Corporate Private Equity of Carlyle Group LP (“Carlyle”). As part of its investment philosophy, the Company invests a portion of its investment portfolio in alternative investment funds. As of September 30, 2017, the total value of the Company’s investments in funds or other investments managed by Carlyle was approximately $248.5 million, and the Company had aggregate unfunded commitments to funds managed by Carlyle of $471.6 million. The Company may make additional commitments to funds managed by Carlyle from time to time. During the nine months ended September 30, 2017 and 2016, the Company made aggregate capital contributions to funds managed by Carlyle of $86.0 million and $50.1 million, respectively, and received aggregate cash distributions from funds managed by Carlyle of $48.7 million and $17.9 million, respectively. Effective November 2, 2017, Mr. Lee resigned from ACGL’s Board of Directors because of the expansion of his duties at Carlyle following his recent promotion to co-CEO effective January 1, 2018.

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Acquisition

9 Months Ended

Sep. 30, 2017

Business Combinations [Abstract]

Acquisition

Acquisition

On July 1, 2017, the Company completed its previously announced acquisition of AIG United Guaranty Insurance (Asia) Limited (renamed “Arch MI Asia Limited”) following the payment of $40.0 million to AIG. Arch MI Asia Limited compliments the Company’s existing private mortgage insurance businesses, which have operations in the United States, Europe and Australia.

The purchase price was allocated to the acquired assets and liabilities of Arch MI Asia Limited based on estimated fair values on the acquisition date. The Company recognized other intangible assets of $2.3 million and goodwill of $0.8 million. The goodwill balance is primarily attributed to Arch MI Asia Limited’s assembled workforce and access to the mortgage insurance market. None of the goodwill recognized is expected to be deductible for income tax purposes.

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Subsequent Event

9 Months Ended

Sep. 30, 2017

Subsequent Events [Abstract]

Subsequent Event

Subsequent Events

On October 25, 2017, the Company’s first-lien U.S. mortgage insurance subsidiaries entered into an aggregate excess of loss reinsurance agreement with Bellemeade Re 2017-1 Ltd. (“Bellemeade III”), a special purpose reinsurance company domiciled in Bermuda. The Bellemeade III agreement provides for up to $368.1 million of aggregate excess of loss reinsurance coverage at inception for new delinquencies on a portfolio of in-force policies issued between January 1, 2017 and June 30, 2017. For the coverage period, Bellemeade III will cover $368.1 million in excess of $165.7 million of aggregate losses. The coverage amount decreases over a ten-year period as the underlying covered mortgages amortize.

Bellemeade III financed the coverage through the issuance of mortgage insurance-linked notes in an aggregate amount of approximately $368.1 million to unrelated investors (the “Notes”). The maturity date of the Notes is October 25, 2027. The Notes will be redeemed prior to maturity upon the occurrence of a mandatory termination event or if the ceding insurers trigger a termination of the reinsurance agreement following the occurrence of an optional termination event. All of the proceeds paid to Bellemeade III from the sale of the Notes were deposited into a reinsurance trust for the sole benefit of the ceding insurers as security for Bellemeade III’s obligations. At all times, funds in the reinsurance trust account are required to be invested in high credit quality money market funds.

In October 2017, a series of wildfires burned across several California counties. With the information available, the Company has established a preliminary range of pre-tax losses of $30 million to $55 million for these wildfires, net of reinsurance and reinstatement premiums. At this time, there are significant uncertainties surrounding the numbers of claims and scope of damage for these wildfires. The Company’s preliminary estimate for the wildfires is based on currently available information derived from modeling techniques, industry assessments of exposure, preliminary claims information obtained from the Company’s clients and brokers to date and a review of in-force contracts. Actual losses from these wildfires may vary materially from the estimates due to the inherent uncertainties in making such determinations.

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General (Policies)

9 Months Ended

Sep. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of presentation

The interim consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). All significant intercompany transactions and balances have been eliminated in consolidation.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions. In the opinion of management, the accompanying unaudited interim consolidated financial statements reflect all adjustments (consisting of normally recurring accruals) necessary for a fair statement of results on an interim basis. The results of any interim period are not necessarily indicative of the results for a full year or any future periods.

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Variable Interest Entities and Noncontrolling Interests (Tables)

9 Months Ended

Sep. 30, 2017

Noncontrolling Interest [Abstract]

Carrying value of assets and liabilities of variable interest entity

The following table provides the carrying amount and balance sheet caption in which the assets and liabilities of Watford Re are reported:

	September 30,		December 31,
	2017		2016
Assets
Investments accounted for using the fair value option	$	2,457,365	$	1,857,623
Cash	57,151		74,893
Accrued investment income	13,718		17,017
Premiums receivable	209,985		189,911
Reinsurance recoverable on unpaid and paid losses and LAE	37,575		24,420
Ceded unearned premiums	23,538		12,145
Deferred acquisition costs	87,692		86,379
Receivable for securities sold	74,051		1,326
Goodwill and intangible assets	7,650		7,650
Other assets	132,796		111,386
Total assets of consolidated VIE	$	3,101,521	$	2,382,750
Liabilities
Reserves for losses and loss adjustment expenses	$	735,132	$	510,809
Unearned premiums	344,060		293,480
Reinsurance balances payable	22,487		12,289
Revolving credit agreement borrowings	426,242		256,650
Payable for securities purchased	211,065		42,922
Other liabilities	174,472		88,976
Total liabilities of consolidated VIE	$	1,913,458	$	1,205,126
Redeemable noncontrolling interests	$	220,529	$	220,253

Activity in non-redeemable noncontrolling interests

The following table sets forth activity in the non-redeemable noncontrolling interests:

	September 30,
	2017			2016
Three Months Ended
Balance, beginning of period	$	877,456		$	788,589
Amounts attributable to noncontrolling interests	(16,147		)	46,160
Foreign currency translation adjustments attributable to noncontrolling interests	(411		)	59
Balance, end of period	$	860,898		$	834,808
Nine Months Ended
Balance, beginning of year	$	851,854		$	738,831
Amounts attributable to noncontrolling interests	9,523			96,118
Foreign currency translation adjustments attributable to noncontrolling interests	(479		)	(141		)
Balance, end of period	$	860,898		$	834,808

Activity in redeemable noncontrolling interests

The following table sets forth activity in the redeemable non-controlling interests:

	September 30,
	2017		2016
Three Months Ended
Balance, beginning of period	$	205,736	$	205,366
Accretion of preference share issuance costs	93		93
Balance, end of period	$	205,829	$	205,459
Nine Months Ended
Balance, beginning of year	$	205,553	$	205,182
Accretion of preference share issuance costs	276		277
Balance, end of period	$	205,829	$	205,459

Portion of income or loss attributable to third party investors

The portion of Watford Re’s income or loss attributable to third party investors, recorded in the Company’s consolidated statements of income in ‘net (income) loss attributable to noncontrolling interests,’ are summarized in the table below:

	September 30,
	2017			2016
Three Months Ended
Amounts attributable to non-redeemable noncontrolling interests	$	16,147		$	(46,160	)
Dividends attributable to redeemable noncontrolling interests	(4,586		)	(4,588		)
Net (income) loss attributable to noncontrolling interests	$	11,561		$	(50,748	)
Nine Months Ended
Amounts attributable to non-redeemable noncontrolling interests	$	(9,523	)	$	(96,118	)
Dividends attributable to redeemable noncontrolling interests	(13,756		)	(13,761		)
Net (income) loss attributable to noncontrolling interests	$	(23,279	)	$	(109,879	)

Total assets and maximum exposure to loss associated with VIEs

The following table presents total assets of Bellemeade I and Bellemeade II as well as the Company’s maximum exposure to loss associated with these VIEs:

			Maximum Exposure to Loss
	Total VIE Assets		On-Balance Sheet			Off-Balance Sheet		Total
Bellemeade I	$	112,090	$	533		$	1,009	$	1,542
Bellemeade II	191,387		(53		)	746		693
Total	$	303,477	$	480		$	1,755	$	2,235

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Earnings Per Common Share (Tables)

9 Months Ended

Sep. 30, 2017

Earnings Per Share [Abstract]

Schedule of computation of basic and diluted earnings per common share

The following table sets forth the computation of basic and diluted earnings (loss) per common share:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Numerator:
Net income (loss)	$	(45,217	)	$	303,620		$	427,917		$	728,604
Amounts attributable to noncontrolling interests	11,561			(50,748		)	(23,279		)	(109,879		)
Net income (loss) available to Arch	(33,656		)	252,872			404,638			618,725
Preferred dividends	(12,369		)	(5,484		)	(34,936		)	(16,453		)
Loss on redemption of preferred shares	(6,735		)	—			(6,735		)	—
Net income (loss) available to Arch common shareholders	$	(52,760	)	$	247,388		$	362,967		$	602,272
Denominator:
Weighted average common shares outstanding	129,211,251			120,938,916			124,526,611			120,656,420
Series D preferred shares (1)	5,674,200			—			9,945,518			—
Weighted average common shares and common share equivalents outstanding — basic	134,885,451			120,938,916			134,472,129			120,656,420
Effect of dilutive common share equivalents:
Nonvested restricted shares	—			1,313,025			1,459,879			1,295,825
Stock options (2)	—			2,679,712			3,290,316			2,575,929
Weighted average common shares and common share equivalents outstanding — diluted (3)	134,885,451			124,931,653			139,222,324			124,528,174
Earnings (loss) per common share:
Basic	$	(0.39	)	$	2.05		$	2.70		$	4.99
Diluted	$	(0.39	)	$	1.98		$	2.61		$	4.84

(1) Such shares are convertible non-voting common equivalent preferred shares issued in connection with the UGC acquisition.

(2) Certain stock options were not included in the computation of diluted earnings per share where the exercise price of the stock options exceeded the average market price and would have been anti-dilutive or where, when applying the treasury stock method to in-the-money options, the sum of the proceeds, including unrecognized compensation, exceeded the average market price and would have been anti-dilutive. For the 2017 third quarter and 2016 third quarter, the number of stock options excluded were nil and 334,203, respectively. For the nine months ended September 30, 2017 and 2016, the number of stock options excluded were 838,868 and 842,105, respectively.

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2017

Segment Reporting [Abstract]

Analysis of underwriting income or loss by segment and reconciliation to net income available to common shareholders

The following tables summarize the Company’s underwriting income or loss by segment, together with a reconciliation of underwriting income or loss to net income available to common shareholders:

	Three Months Ended
	September 30, 2017
	Insurance			Reinsurance			Mortgage			Sub-Total			Other			Total
Gross premiums written (1)	$	787,447		$	422,083		$	347,951		$	1,557,179		$	166,198		$	1,648,246
Premiums ceded	(222,516		)	(105,389		)	(57,900		)	(385,503		)	(12,471		)	(322,843		)
Net premiums written	564,931			316,694			290,051			1,171,676			153,727			1,325,403
Change in unearned premiums	(29,766		)	6,879			(15,533		)	(38,420		)	(25,097		)	(63,517		)
Net premiums earned	535,165			323,573			274,518			1,133,256			128,630			1,261,886
Other underwriting income (loss)	—			1,728			3,599			5,327			737			6,064
Losses and loss adjustment expenses	(568,795		)	(318,609		)	(35,156		)	(922,560		)	(123,581		)	(1,046,141		)
Acquisition expenses	(82,638		)	(57,340		)	(21,803		)	(161,781		)	(32,073		)	(193,854		)
Other operating expenses	(90,875		)	(36,214		)	(34,770		)	(161,859		)	(8,268		)	(170,127		)
Underwriting income (loss)	$	(207,143	)	$	(86,862	)	$	186,388		(107,617		)	(34,555		)	(142,172		)
Net investment income										94,127			22,332			116,459
Net realized gains (losses)										64,104			2,171			66,275
Net impairment losses recognized in earnings										(1,878		)	—			(1,878		)
Equity in net income (loss) of investment funds accounted for using the equity method										31,090			—			31,090
Other income (loss)										(342		)	—			(342		)
Corporate expenses (2)										(14,108		)	—			(14,108		)
UGC transaction costs and other (2)										(2,990		)	—			(2,990		)
Amortization of intangible assets										(31,824		)	—			(31,824		)
Interest expense										(26,264		)	(3,246		)	(29,510		)
Net foreign exchange gains (losses)										(27,785		)	(243		)	(28,028		)
Income (loss) before income taxes										(23,487		)	(13,541		)	(37,028		)
Income tax (expense) benefit										(8,168		)	(21		)	(8,189		)
Net income (loss)										(31,655		)	(13,562		)	(45,217		)
Dividends attributable to redeemable noncontrolling interests										—			(4,586		)	(4,586		)
Amounts attributable to nonredeemable noncontrolling interests										—			16,147			16,147
Net income (loss) available to Arch										(31,655		)	(2,001		)	(33,656		)
Preferred dividends										(12,369		)	—			(12,369		)
Loss on redemption of preferred shares										(6,735		)	—			(6,735		)
Net income (loss) available to Arch common shareholders										$	(50,759	)	$	(2,001	)	$	(52,760	)
Underwriting Ratios
Loss ratio	106.3		%	98.5		%	12.8		%	81.4		%	96.1		%	82.9		%
Acquisition expense ratio	15.4		%	17.7		%	7.9		%	14.3		%	24.9		%	15.4		%
Other operating expense ratio	17.0		%	11.2		%	12.7		%	14.3		%	6.4		%	13.5		%
Combined ratio	138.7		%	127.4		%	33.4		%	110.0		%	127.4		%	111.8		%
Goodwill and intangible assets	$	23,445		$	417		$	652,893		$	676,755		$	7,650		$	684,405

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

(2) Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘UGC transaction costs and other.’

	Three Months Ended
	September 30, 2016
	Insurance			Reinsurance			Mortgage			Sub-Total			Other			Total
Gross premiums written (1)	$	758,934		$	324,361		$	131,726		$	1,214,765		$	163,736		$	1,278,765
Premiums ceded	(217,446		)	(89,551		)	(51,182		)	(357,923		)	(6,300		)	(264,487		)
Net premiums written	541,488			234,810			80,544			856,842			157,436			1,014,278
Change in unearned premiums	(22,410		)	17,117			(3,582		)	(8,875		)	(47,000		)	(55,875		)
Net premiums earned	519,078			251,927			76,962			847,967			110,436			958,403
Other underwriting income (loss)	—			2,216			4,740			6,956			1,024			7,980
Losses and loss adjustment expenses	(332,845		)	(105,924		)	(11,107		)	(449,876		)	(74,307		)	(524,183		)
Acquisition expenses	(77,146		)	(50,192		)	(5,190		)	(132,528		)	(28,739		)	(161,267		)
Other operating expenses	(86,613		)	(35,389		)	(24,249		)	(146,251		)	(7,035		)	(153,286		)
Underwriting income (loss)	$	22,474		$	62,638		$	41,156		126,268			1,379			127,647
Net investment income										66,282			27,336			93,618
Net realized gains (losses)										95,946			29,159			125,105
Net impairment losses recognized in earnings										(3,867		)	—			(3,867		)
Equity in net income (loss) of investment funds accounted for using the equity method										16,662			—			16,662
Other income (loss)										(400		)	—			(400		)
Corporate expenses (2)										(11,343		)	—			(11,343		)
UGC transaction costs and other (2)										(7,142		)	—			(7,142		)
Amortization of intangible assets										(4,865		)	—			(4,865		)
Interest expense										(12,924		)	(3,019		)	(15,943		)
Net foreign exchange gains (losses)										(4,232		)	1,611			(2,621		)
Income (loss) before income taxes										260,385			56,466			316,851
Income tax (expense) benefit										(13,232		)	1			(13,231		)
Net income (loss)										247,153			56,467			303,620
Dividends attributable to redeemable noncontrolling interests										—			(4,588		)	(4,588		)
Amounts attributable to nonredeemable noncontrolling interests										—			(46,160		)	(46,160		)
Net income (loss) available to Arch										247,153			5,719			252,872
Preferred dividends										(5,484		)	—			(5,484		)
Net income (loss) available to Arch common shareholders										$	241,669		$	5,719		$	247,388
Underwriting Ratios
Loss ratio	64.1		%	42.0		%	14.4		%	53.1		%	67.3		%	54.7		%
Acquisition expense ratio	14.9		%	19.9		%	6.7		%	15.6		%	26.0		%	16.8		%
Other operating expense ratio	16.7		%	14.0		%	31.5		%	17.2		%	6.4		%	16.0		%
Combined ratio	95.7		%	75.9		%	52.6		%	85.9		%	99.7		%	87.5		%
Goodwill and intangible assets	$	26,367		$	1,228		$	55,696		$	83,291		$	7,650		$	90,941

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

(2) Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘UGC transaction costs and other.’

	Nine Months Ended
	September 30, 2017
	Insurance			Reinsurance			Mortgage			Sub-Total			Other			Total
Gross premiums written (1)	$	2,313,630		$	1,351,051		$	1,032,800		$	4,697,007		$	473,131		$	4,915,895
Premiums ceded	(704,057		)	(386,743		)	(194,139		)	(1,284,465		)	(35,315		)	(1,065,537		)
Net premiums written	1,609,573			964,308			838,661			3,412,542			437,816			3,850,358
Change in unearned premiums	(51,188		)	(81,182		)	(61,776		)	(194,146		)	(36,435		)	(230,581		)
Net premiums earned	1,558,385			883,126			776,885			3,218,396			401,381			3,619,777
Other underwriting income (loss)	—			1,143			11,999			13,142			2,377			15,519
Losses and loss adjustment expenses	(1,252,375		)	(631,669		)	(84,915		)	(1,968,959		)	(319,612		)	(2,288,571		)
Acquisition expenses	(236,378		)	(154,638		)	(76,235		)	(467,251		)	(99,328		)	(566,579		)
Other operating expenses	(271,268		)	(110,458		)	(108,790		)	(490,516		)	(24,311		)	(514,827		)
Underwriting income (loss)	$	(201,636	)	$	(12,496	)	$	518,944		304,812			(39,493		)	265,319
Net investment income										282,459			62,998			345,457
Net realized gains (losses)										110,662			11,501			122,163
Net impairment losses recognized in earnings										(5,415		)	—			(5,415		)
Equity in net income (loss) of investment funds accounted for using the equity method										111,884			—			111,884
Other income (loss)										(3,118		)	—			(3,118		)
Corporate expenses (2)										(48,517		)	—			(48,517		)
UGC transaction costs and other (2)										(21,249		)	—			(21,249		)
Amortization of intangible assets										(93,942		)	—			(93,942		)
Interest expense										(77,932		)	(9,003		)	(86,935		)
Net foreign exchange gains (losses)										(85,451		)	(1,524		)	(86,975		)
Income (loss) before income taxes										474,193			24,479			498,672
Income tax (expense) benefit										(70,734		)	(21		)	(70,755		)
Net income (loss)										403,459			24,458			427,917
Dividends attributable to redeemable noncontrolling interests										—			(13,756		)	(13,756		)
Amounts attributable to nonredeemable noncontrolling interests										—			(9,523		)	(9,523		)
Net income (loss) available to Arch										403,459			1,179			404,638
Preferred dividends										(34,936		)	—			(34,936		)
Loss on redemption of preferred shares										(6,735		)	—			(6,735		)
Net income (loss) available to Arch common shareholders										$	361,788		$	1,179		$	362,967
Underwriting Ratios
Loss ratio	80.4		%	71.5		%	10.9		%	61.2		%	79.6		%	63.2		%
Acquisition expense ratio	15.2		%	17.5		%	9.8		%	14.5		%	24.7		%	15.7		%
Other operating expense ratio	17.4		%	12.5		%	14.0		%	15.2		%	6.1		%	14.2		%
Combined ratio	113.0		%	101.5		%	34.7		%	90.9		%	110.4		%	93.1		%

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

(2) Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘UGC transaction costs and other.’

	Nine Months Ended
	September 30, 2016
	Insurance			Reinsurance			Mortgage			Sub-Total			Other			Total
Gross premiums written (1)	$	2,319,530		$	1,217,804		$	361,440		$	3,898,025		$	421,627		$	4,046,667
Premiums ceded	(713,110		)	(370,068		)	(62,918		)	(1,145,347		)	(15,229		)	(887,591		)
Net premiums written	1,606,420			847,736			298,522			2,752,678			406,398			3,159,076
Change in unearned premiums	(46,603		)	(43,345		)	(93,283		)	(183,231		)	(59,878		)	(243,109		)
Net premiums earned	1,559,817			804,391			205,239			2,569,447			346,520			2,915,967
Other underwriting income (loss)	—			22,659			12,670			35,329			2,922			38,251
Losses and loss adjustment expenses	(1,011,087		)	(363,613		)	(20,102		)	(1,394,802		)	(236,922		)	(1,631,724		)
Acquisition expenses	(228,806		)	(160,706		)	(16,947		)	(406,459		)	(95,323		)	(501,782		)
Other operating expenses	(263,111		)	(108,561		)	(70,590		)	(442,262		)	(18,486		)	(460,748		)
Underwriting income (loss)	$	56,813		$	194,170		$	110,270		361,253			(1,289		)	359,964
Net investment income										207,088			68,603			275,691
Net realized gains (losses)										168,735			61,912			230,647
Net impairment losses recognized in earnings										(16,849		)	—			(16,849		)
Equity in net income (loss) of investment funds accounted for using the equity method										32,054			—			32,054
Other income (loss)										(432		)	—			(432		)
Corporate expenses (2)										(37,926		)	—			(37,926		)
UGC transaction costs and other (2)										(7,142		)	—			(7,142		)
Amortization of intangible assets										(14,493		)	—			(14,493		)
Interest expense										(37,983		)	(9,730		)	(47,713		)
Net foreign exchange gains (losses)										(3,812		)	2,287			(1,525		)
Income (loss) before income taxes										650,493			121,783			772,276
Income tax (expense) benefit										(43,673		)	1			(43,672		)
Net income (loss)										606,820			121,784			728,604
Dividends attributable to redeemable noncontrolling interests										—			(13,761		)	(13,761		)
Amounts attributable to nonredeemable noncontrolling interests										—			(96,118		)	(96,118		)
Net income (loss) available to Arch										606,820			11,905			618,725
Preferred dividends										(16,453		)	—			(16,453		)
Net income (loss) available to Arch common shareholders										$	590,367		$	11,905		$	602,272
Underwriting Ratios
Loss ratio	64.8		%	45.2		%	9.8		%	54.3		%	68.4		%	56.0		%
Acquisition expense ratio	14.7		%	20.0		%	8.3		%	15.8		%	27.5		%	17.2		%
Other operating expense ratio	16.9		%	13.5		%	34.4		%	17.2		%	5.3		%	15.8		%
Combined ratio	96.4		%	78.7		%	52.5		%	87.3		%	101.2		%	89.0		%

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

(2) Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘UGC transaction costs and other.’

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Reserve for Losses and Loss Adjustment Expenses (Tables)

9 Months Ended

Sep. 30, 2017

Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract]

Analysis of losses and loss adjustment expenses and reconciliation of beginning and ending reserve balances

The following table represents an analysis of losses and loss adjustment expenses and a reconciliation of the beginning and ending reserve for losses and loss adjustment expenses:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Reserve for losses and loss adjustment expenses at beginning of period	$	10,520,511		$	9,471,647		$	10,200,960		$	9,125,250
Unpaid losses and loss adjustment expenses recoverable and deferred charges	2,116,210			2,003,768			2,083,575			1,828,837
Net reserve for losses and loss adjustment expenses at beginning of period	8,404,301			7,467,879			8,117,385			7,296,413
Net incurred losses and loss adjustment expenses relating to losses occurring in:
Current year	1,092,175			598,940			2,487,212			1,848,299
Prior years	(45,232		)	(74,757		)	(197,839		)	(216,575		)
Discount and accretion on retroactive reinsurance	(802		)	—			(802		)	—
Total net incurred losses and loss adjustment expenses	1,046,141			524,183			2,288,571			1,631,724
Net foreign exchange losses (gains)	61,919			1,463			168,493			(13,270		)
Net paid losses and loss adjustment expenses relating to losses occurring in:
Current year	(167,450		)	(128,432		)	(282,952		)	(285,468		)
Prior years	(457,183		)	(304,673		)	(1,403,769		)	(1,068,979		)
Total net paid losses and loss adjustment expenses	(624,633		)	(433,105		)	(1,686,721		)	(1,354,447		)
Net reserve for losses and loss adjustment expenses at end of period	8,887,728			7,560,420			8,887,728			7,560,420
Unpaid losses and loss adjustment expenses recoverable and deferred charges	2,463,539			2,049,769			2,463,539			2,049,769
Reserve for losses and loss adjustment expenses at end of period	$	11,351,267		$	9,610,189		$	11,351,267		$	9,610,189

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Investment Information (Tables)

9 Months Ended

Sep. 30, 2017

Disclosure Investment Information [Abstract]

Summary of fair value and cost or amortized cost of available for sale securities

The following table summarizes the fair value and cost or amortized cost of the Company’s investments classified as available for sale:

	Estimated Fair Value		Gross Unrealized Gains		Gross Unrealized Losses			Cost or Amortized Cost		OTTI Unrealized Losses (2)
September 30, 2017
Fixed maturities (1):
Corporate bonds	$	4,275,437	$	49,576	$	(22,303	)	$	4,248,164	$	(73	)
Mortgage backed securities	323,900		5,078		(2,540		)	321,362		(2,146		)
Municipal bonds	2,353,234		31,202		(7,614		)	2,329,646		—
Commercial mortgage backed securities	584,730		3,114		(4,377		)	585,993		—
U.S. government and government agencies	3,761,612		3,303		(20,246		)	3,778,555		—
Non-U.S. government securities	1,473,819		49,570		(21,647		)	1,445,896		—
Asset backed securities	1,544,919		9,053		(4,748		)	1,540,614		(22		)
Total	14,317,651		150,896		(83,475		)	14,250,230		(2,241		)
Equity securities	480,607		84,755		(7,873		)	403,725		—
Other investments	260,339		54,512		(1		)	205,828		—
Short-term investments	1,646,036		667		(504		)	1,645,873		—
Total	$	16,704,633	$	290,830	$	(91,853	)	$	16,505,656	$	(2,241	)
December 31, 2016
Fixed maturities (1):
Corporate bonds	$	4,392,373	$	27,606	$	(46,905	)	$	4,411,672	$	(2,285	)
Mortgage backed securities	490,093		4,794		(8,357		)	493,656		(3,323		)
Municipal bonds	3,713,434		8,554		(29,154		)	3,734,034		(201		)
Commercial mortgage backed securities	536,051		2,876		(6,508		)	539,683		—
U.S. government and government agencies	2,804,540		9,319		(24,437		)	2,819,658		—
Non-U.S. government securities	1,096,440		19,036		(56,872		)	1,134,276		—
Asset backed securities	1,123,987		6,897		(6,526		)	1,123,616		(22		)
Total	14,156,918		79,082		(178,759		)	14,256,595		(5,831		)
Equity securities	532,680		62,627		(17,517		)	487,570		—
Other investments	167,970		21,358		(2,465		)	149,077		—
Short-term investments	612,005		272		(145		)	611,878		—
Total	$	15,469,573	$	163,339	$	(198,886	)	$	15,505,120	$	(5,831	)

(1) In securities lending transactions, the Company receives collateral in excess of the fair value of the securities pledged. For purposes of this table, the Company has excluded the collateral received under securities lending, at fair value and included the securities pledged under securities lending, at fair value. See “—Securities Lending Agreements.”

(2) Represents the total other-than-temporary impairments (“OTTI”) recognized in accumulated other comprehensive income (“AOCI”). It does not include the change in fair value subsequent to the impairment measurement date. At September 30, 2017, the net unrealized gain related to securities for which a non-credit OTTI was recognized in AOCI was $0.9 million, compared to a net unrealized gain of $2.8 million at December 31, 2016.

Summary of available for sale securities in a continual unrealized loss position

The following table summarizes, for all available for sale securities in an unrealized loss position, the fair value and gross unrealized loss by length of time the security has been in a continual unrealized loss position:

	Less than 12 Months					12 Months or More					Total
	Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses
September 30, 2017
Fixed maturities (1):
Corporate bonds	$	1,173,096	$	(18,315	)	$	191,382	$	(3,988	)	$	1,364,478	$	(22,303	)
Mortgage backed securities	146,352		(2,477		)	1,511		(63		)	147,863		(2,540		)
Municipal bonds	745,410		(5,958		)	110,752		(1,656		)	856,162		(7,614		)
Commercial mortgage backed securities	282,901		(3,579		)	17,570		(798		)	300,471		(4,377		)
U.S. government and government agencies	3,083,239		(19,736		)	25,894		(510		)	3,109,133		(20,246		)
Non-U.S. government securities	1,149,528		(20,741		)	37,655		(906		)	1,187,183		(21,647		)
Asset backed securities	587,561		(4,404		)	22,051		(344		)	609,612		(4,748		)
Total	7,168,087		(75,210		)	406,815		(8,265		)	7,574,902		(83,475		)
Equity securities	170,937		(7,873		)	—		—			170,937		(7,873		)
Other investments	725		(1		)	—		—			725		(1		)
Short-term investments	110,444		(504		)	—		—			110,444		(504		)
Total	$	7,450,193	$	(83,588	)	$	406,815	$	(8,265	)	$	7,857,008	$	(91,853	)
December 31, 2016
Fixed maturities (1):
Corporate bonds	$	1,700,813	$	(43,011	)	$	46,902	$	(3,894	)	$	1,747,715	$	(46,905	)
Mortgage backed securities	402,699		(8,134		)	6,105		(223		)	408,804		(8,357		)
Municipal bonds	1,513,308		(28,504		)	29,636		(650		)	1,542,944		(29,154		)
Commercial mortgage backed securities	231,374		(6,331		)	5,635		(177		)	237,009		(6,508		)
U.S. government and government agencies	1,888,018		(24,437		)	—		—			1,888,018		(24,437		)
Non-U.S. government securities	807,598		(56,872		)	—		—			807,598		(56,872		)
Asset backed securities	627,557		(5,465		)	65,723		(1,061		)	693,280		(6,526		)
Total	7,171,367		(172,754		)	154,001		(6,005		)	7,325,368		(178,759		)
Equity securities	269,381		(17,517		)	—		—			269,381		(17,517		)
Other investments	39,299		(2,465		)	—		—			39,299		(2,465		)
Short-term investments	29,146		(145		)	—		—			29,146		(145		)
Total	$	7,509,193	$	(192,881	)	$	154,001	$	(6,005	)	$	7,663,194	$	(198,886	)

(1) In securities lending transactions, the Company receives collateral in excess of the fair value of the securities pledged. For purposes of this table, the Company has excluded the collateral received under securities lending, at fair value and included the securities pledged under securities lending, at fair value. See “—Securities Lending Agreements.”

Contractual maturities of the Company's fixed maturities and fixed maturities pledged under securities lending arrangements

The contractual maturities of the Company’s fixed maturities are shown in the following table. Expected maturities, which are management’s best estimates, will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	September 30, 2017				December 31, 2016
Maturity	Estimated Fair Value		Amortized Cost		Estimated Fair Value		Amortized Cost
Due in one year or less	$	537,043	$	534,513	$	560,830	$	557,675
Due after one year through five years	7,547,002		7,508,674		6,158,148		6,211,099
Due after five years through 10 years	3,495,424		3,480,251		4,676,847		4,710,017
Due after 10 years	284,633		278,823		610,962		620,849
	11,864,102		11,802,261		12,006,787		12,099,640
Mortgage backed securities	323,900		321,362		490,093		493,656
Commercial mortgage backed securities	584,730		585,993		536,051		539,683
Asset backed securities	1,544,919		1,540,614		1,123,987		1,123,616
Total (1)	$	14,317,651	$	14,250,230	$	14,156,918	$	14,256,595

(1) In securities lending transactions, the Company receives collateral in excess of the fair value of the securities pledged. For purposes of this table, the Company has excluded the collateral received under securities lending, at fair value and included the securities pledged under securities lending, at fair value. See “—Securities Lending Agreements.”

Securities lending transactions accounted for as secured borrowings, by significant investment category

The Company’s securities lending transactions were accounted for as secured borrowings with significant investment categories as follows:

	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Less than 30 Days		30-90 Days		90 Days or More		Total
September 30, 2017
U.S. government and government agencies	$	424,838	$	8,186	$	74,930	$	—	$	507,954
Corporate bonds	31,305		—		—		—		31,305
Equity securities	3,984		—		—		—		3,984
Total	$	460,127	$	8,186	$	74,930	$	—	$	543,243
Gross amount of recognized liabilities for securities lending in offsetting disclosure in Note 9									$	—
Amounts related to securities lending not included in offsetting disclosure in Note 9									$	543,243
December 31, 2016
U.S. government and government agencies	$	556,015	$	31,244	$	126,093	$	5,140	$	718,492
Corporate bonds	29,078		—		—		—		29,078
Equity securities	14,984		—		—		—		14,984
Total	$	600,077	$	31,244	$	126,093	$	5,140	$	762,554
Gross amount of recognized liabilities for securities lending in offsetting disclosure in Note 9									$	—
Amounts related to securities lending not included in offsetting disclosure in Note 9									$	762,554

Summary of other investments, including available for sale and fair value option components

The following table summarizes the Company’s other investments, including available for sale and fair value option components:

	September 30, 2017		December 31, 2016
Available for sale:
Asian and emerging markets	$	123,225	$	84,778
Investment grade fixed income	53,325		33,923
Credit related funds	20,752		7,469
Other	63,037		41,800
Total available for sale	260,339		167,970
Fair value option:
Term loan investments (par value: $1,378,797 and $1,208,537)	1,387,663		1,190,799
Mezzanine debt funds	172,000		127,943
Credit related funds	194,200		218,298
Investment grade fixed income	95,151		75,468
Asian and emerging markets	300,552		178,568
Other (1)	147,639		129,717
Total fair value option	2,297,205		1,920,793
Total	$	2,557,544	$	2,088,763

(1) Includes fund investments with strategies in mortgage servicing rights, transportation, infrastructure and other.

Summary of assets and liabilities accounted for using the fair value option

The following table summarizes the Company’s assets and liabilities which are accounted for using the fair value option:

	September 30, 2017		December 31, 2016
Fixed maturities	$	1,508,204	$	1,099,116
Other investments	2,297,205		1,920,793
Short-term investments	349,540		373,669
Equity securities	94,685		27,642
Investments accounted for using the fair value option	$	4,249,634	$	3,421,220

Summary of investments in limited partnership interests where the Company has a variable interest

The following table summarizes investments in limited partnership interests where the Company has a variable interest by balance sheet line item:

	September 30, 2017		December 31, 2016
Investments accounted for using the equity method (1)	$	962,574	$	800,970
Investments accounted for using the fair value option (2)	109,157		90,804
Total	$	1,071,731	$	891,774

(1) Aggregate unfunded commitments were $850.4 million at September 30, 2017, compared to $776.6 million at December 31, 2016.

(2) Aggregate unfunded commitments were $162.3 million at September 30, 2017, compared to $16.7 million at December 31, 2016.

Components of net investment income

The components of net investment income were derived from the following sources:

	September 30,
	2017			2016
Three Months Ended
Fixed maturities	$	96,144		$	71,366
Equity securities	2,887			3,311
Short-term investments	2,957			1,703
Other (1)	37,957			37,466
Gross investment income	139,945			113,846
Investment expenses	(23,486		)	(20,228		)
Net investment income	$	116,459		$	93,618
Nine Months Ended
Fixed maturities	$	284,807		$	223,033
Equity securities	9,184			10,409
Short-term investments	6,732			3,015
Other (1)	111,613			98,089
Gross investment income	412,336			334,546
Investment expenses	(66,879		)	(58,855		)
Net investment income	$	345,457		$	275,691

(1) Includes income distributions from investment funds, term loan investments and other items.

Summary of net realized gains (losses), excluding other-than-temporary impairment provisions

Net realized gains (losses) were as follows, excluding other than-temporary impairment provision.

	September 30,
	2017			2016
Three Months Ended
Available for sale securities:
Gross gains on investment sales	$	66,565		$	84,451
Gross losses on investment sales	(39,015		)	(22,985		)
Change in fair value of assets and liabilities accounted for using the fair value option:
Fixed maturities	4,035			43,935
Other investments	24,264			46,428
Equity securities	10,230			(52		)
Short-term investments	(3,320		)	1,150
Derivative instruments (1)	4,298			(16,964		)
Other (2)	(782		)	(10,858		)
Net realized gains (losses)	$	66,275		$	125,105
Nine Months Ended
Available for sale securities:
Gross gains on investment sales	$	212,470		$	266,965
Gross losses on investment sales	(152,996		)	(129,409		)
Change in fair value of assets and liabilities accounted for using the fair value option:
Fixed maturities	34,232			62,234
Other investments	42,149			38,016
Equity securities	16,604			385
Short-term investments	12			107
Derivative instruments (1)	(9,653		)	24,102
Other (2)	(20,655		)	(31,753		)
Net realized gains (losses)	$	122,163		$	230,647

(1) See Note 9 for information on the Company’s derivative instruments.

(2) Includes the re-measurement of contingent consideration liability amounts.

Summary of OTTI recognized in earnings by asset class

The following table details the net impairment losses recognized in earnings by asset class:

	September 30,
	2017			2016
Three Months Ended
Fixed maturities:
Mortgage backed securities	$	(50	)	$	(233	)
Corporate bonds	(82		)	—
Non-U.S. government securities	(178		)	(545		)
U.S. government and government agencies	(426		)	—
Municipal bonds	(202		)	—
Total	(938		)	(778		)
Equity securities	(940		)	(557		)
Other investments	—			(2,532		)
Net impairment losses recognized in earnings	$	(1,878	)	$	(3,867	)
Nine Months Ended
Fixed maturities:
Mortgage backed securities	$	(1,461	)	$	(788	)
Corporate bonds	(1,484		)	(5,655		)
Non-U.S. government securities	(376		)	(777		)
Asset backed securities	—			(2,506		)
U.S. government and government agencies	(426		)	—
Municipal bonds	(375		)	—
Total	(4,122		)	(9,726		)
Equity securities	(1,126		)	(3,594		)
Other investments	(167		)	(3,529		)
Net impairment losses recognized in earnings	$	(5,415	)	$	(16,849	)

Rollforward of the amount related to credit losses recognized in earnings for which a portion was recognized in AOCI

The following table provides a roll forward of the amount related to credit losses recognized in earnings for which a portion of an OTTI was recognized in accumulated other comprehensive income:

	September 30,
	2017			2016
Three Months Ended
Balance at start of period	$	4,437		$	14,847
Credit loss impairments recognized on securities not previously impaired	—			38
Credit loss impairments recognized on securities previously impaired	15			60
Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security	—			—
Reductions for securities sold during the period	(689		)	(1,166		)
Balance at end of period	$	3,763		$	13,779
Nine Months Ended
Balance at start of year	$	13,138		$	26,875
Credit loss impairments recognized on securities not previously impaired	31			1,388
Credit loss impairments recognized on securities previously impaired	210			582
Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security	—			—
Reductions for securities sold during the period	(9,616		)	(15,066		)
Balance at end of period	$	3,763		$	13,779

Summary of restricted assets

The following table details the value of the Company’s restricted assets:

	September 30, 2017		December 31, 2016
Assets used for collateral or guarantees:
Affiliated transactions	$	4,264,131	$	3,871,971
Third party agreements	1,689,104		1,513,079
Deposits with U.S. regulatory authorities	618,136		472,890
Deposits with non-U.S. regulatory authorities	56,753		44,399
Total restricted assets	$	6,628,124	$	5,902,339

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Fair Value (Tables)

9 Months Ended

Sep. 30, 2017

Fair Value Disclosures [Abstract]

Fair value hierarchy

The following table presents the Company’s financial assets and liabilities measured at fair value by level at September 30, 2017:

				Estimated Fair Value Measurements Using:
	Estimated Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets measured at fair value (1):
Available for sale securities:
Fixed maturities:
Corporate bonds	$	4,275,437		$	—	$	4,263,446		$	11,991
Mortgage backed securities	323,900			—		323,496			404
Municipal bonds	2,353,234			—		2,353,234			—
Commercial mortgage backed securities	584,730			—		584,185			545
U.S. government and government agencies	3,761,612			3,687,126		74,486			—
Non-U.S. government securities	1,473,819			—		1,473,819			—
Asset backed securities	1,544,919			—		1,539,919			5,000
Total	14,317,651			3,687,126		10,612,585			17,940
Equity securities	480,607			473,908		6,699			—
Short-term investments	1,646,036			1,600,885		45,151			—
Other investments	84,671			83,254		1,417			—
Other investments measured at net asset value (2)	175,668
Total other investments	260,339			83,254		1,417			—
Derivative instruments (4)	33,141			—		33,141			—
Fair value option:
Corporate bonds	823,181			—		811,710			11,471
Non-U.S. government bonds	97,614			—		97,614			—
Mortgage backed securities	21,218			—		21,218			—
Municipal bonds	2,740			—		2,740			—
Commercial mortgage backed securities	12,539			—		12,539			—
Asset backed securities	63,437			—		63,437			—
U.S. government and government agencies	487,475			487,475		—			—
Short-term investments	349,540			343,620		5,920			—
Equity securities	94,685			59,332		35,353			—
Other investments	1,298,198			120,212		1,146,840			31,146
Other investments measured at net asset value (2)	999,007
Total	4,249,634			1,010,639		2,197,371			42,617
Total assets measured at fair value	$	20,987,408		$	6,855,812	$	12,896,364		$	60,557
Liabilities measured at fair value:
Contingent consideration liabilities	$	(59,248	)	$	—	$	—		$	(59,248	)
Securities sold but not yet purchased (3)	(72,682		)	—		(72,682		)	—
Derivative instruments (4)	(23,037		)	—		(23,037		)	—
Total liabilities measured at fair value	$	(154,967	)	$	—	$	(95,719	)	$	(59,248	)

(1) In securities lending transactions, the Company receives collateral in excess of the fair value of the securities pledged. For purposes of this table, the Company has excluded the collateral received under securities lending, at fair value and included the securities pledged under securities lending, at fair value. See Note 7, “Investment Information—Securities Lending Agreements.”

(2) In accordance with applicable accounting guidance, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets.

(3) Represents the Company’s obligations to deliver securities that it did not own at the time of sale. Such amounts are included in “other liabilities” on the Company’s consolidated balance sheets.

(4) See Note 9, “Derivative Instruments.”

The following table presents the Company’s financial assets and liabilities measured at fair value by level at December 31, 2016:

				Estimated Fair Value Measurements Using:
	Estimated Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets measured at fair value (1):
Available for sale securities:
Fixed maturities:
Corporate bonds	$	4,392,373		$	—	$	4,374,029		$	18,344
Mortgage backed securities	490,093			—		490,093			—
Municipal bonds	3,713,434			—		3,713,434			—
Commercial mortgage backed securities	536,051			—		536,051			—
U.S. government and government agencies	2,804,540			2,691,575		112,965			—
Non-U.S. government securities	1,096,440			—		1,096,440			—
Asset backed securities	1,123,987			—		1,112,698			11,289
Total	14,156,918			2,691,575		11,435,710			29,633
Equity securities	532,680			529,695		2,985			—
Short-term investments	612,005			608,862		3,143			—
Other investments	112,313			112,313		—			—
Other investments measured at net asset value (2)	55,657
Total other investments	167,970			112,313		—			—
Derivative instruments (4)	28,410			—		28,410			—
Fair value option:
Corporate bonds	790,935			—		790,935			—
Non-U.S. government bonds	61,747			—		61,747			—
Mortgage backed securities	18,624			—		18,624			—
Asset backed securities	30,324			—		30,324			—
U.S. government and government agencies	197,486			197,486		—			—
Short-term investments	373,669			309,127		64,542			—
Equity securities	27,642			25,328		2,314			—
Other investments	1,226,242			80,706		1,120,536			25,000
Other investments measured at net asset value (2)	694,551
Total	3,421,220			612,647		2,089,022			25,000
Total assets measured at fair value	$	18,919,203		$	4,555,092	$	13,559,270		$	54,633
Liabilities measured at fair value:
Contingent consideration liabilities	$	(122,350	)	$	—	$	—		$	(122,350	)
Securities sold but not yet purchased (3)	(33,157		)	—		(33,157		)	—
Derivative instruments (4)	(26,049		)	—		(26,049		)	—
Total liabilities measured at fair value	$	(181,556	)	$	—	$	(59,206	)	$	(122,350	)

(1) In securities lending transactions, the Company receives collateral in excess of the fair value of the securities pledged. For purposes of this table, the Company has excluded the collateral received under securities lending, at fair value and included the securities pledged under securities lending, at fair value. See Note 7, “Investment Information—Securities Lending Agreements.”

(2) In accordance with applicable accounting guidance, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets.

(3) Represents the Company’s obligations to deliver securities that it did not own at the time of sale. Such amounts are included in “other liabilities” on the Company’s consolidated balance sheets.

(4) See Note 9, “Derivative Instruments.”

Rollforward of Level 3 investments

The following table presents a reconciliation of the beginning and ending balances for all financial assets and liabilities measured at fair value on a recurring basis using Level 3 inputs:

	Assets													Liabilities
s	Available For Sale						Fair Value Option
	Structured Securities (1)			Corporate Bonds			Corporate Bonds		Other Investments		Total			Contingent Consideration Liabilities
Three Months Ended September 30, 2017
Balance at beginning of period	$	—		$	11,570		$	—	$	25,000	$	36,570		$	(57,246	)
Total gains or (losses) (realized/unrealized)
Included in earnings (2)	—			—			—		—		—			(2,002		)
Included in other comprehensive income	—			289			—		—		289			—
Purchases, issuances, sales and settlements
Purchases	—			—			—		1,348		1,348			—
Issuances	—			—			—		—		—			—
Sales	—			—			—		—		—			—
Settlements	—			—			—		—		—			—
Transfers in and/or out of Level 3	5,949			132			11,471		4,798		22,350			—
Balance at end of period	$	5,949		$	11,991		$	11,471	$	31,146	$	60,557		$	(59,248	)
Three Months Ended September 30, 2016
Balance at beginning of period	$	49,211		$	17,305		$	—	$	—	$	66,516		$	(111,670	)
Total gains or (losses) (realized/unrealized)
Included in earnings (2)	—			1,667			—		—		1,667			(4,795		)
Included in other comprehensive income	—			—			—		—		—			88
Purchases, issuances, sales and settlements
Purchases	—			—			—		—		—			—
Issuances	—			—			—		—		—			—
Sales	—			—			—		—		—			—
Settlements	(22,435		)	—			—		—		(22,435		)	—
Transfers in and/or out of Level 3	—			—			—		—		—			—
Balance at end of period	$	26,776		$	18,972		$	—	$	—	$	45,748		$	(116,377	)
Nine Months Ended September 30, 2017
Balance at beginning of year	$	11,289		$	18,344		$	—	$	25,000	$	54,633		$	(122,350	)
Total gains or (losses) (realized/unrealized)
Included in earnings (2)	3,779			893			—		—		4,672			(9,089		)
Included in other comprehensive income	—			289			—		—		289			—
Purchases, issuances, sales and settlements
Purchases	—			4,935			—		1,348		6,283			—
Issuances	—			—			—		—		—			—
Sales	(13,640		)	(12,602		)	—		—		(26,242		)	—
Settlements	(1,428		)	—			—		—		(1,428		)	72,191
Transfers in and/or out of Level 3	5,949			132			11,471		4,798		22,350			—
Balance at end of period	$	5,949		$	11,991		$	11,471	$	31,146	$	60,557		$	(59,248	)
Nine Months Ended September 30, 2016
Balance at beginning of year	$	57,500		$	16,368		$	—	$	—	$	73,868		$	(96,048	)
Total gains or (losses) (realized/unrealized)
Included in earnings (2)	(2,500		)	1,828			—		—		(672		)	(20,916		)
Included in other comprehensive income	—			—			—		—		—			51
Purchases, issuances, sales and settlements
Purchases	—			776			—		—		776			—
Issuances	—			—			—		—		—			—
Sales	—			—			—		—		—			—
Settlements	(28,224		)	—			—		—		(28,224		)	536
Transfers in and/or out of Level 3	—			—			—		—		—			—
Balance at end of period	$	26,776		$	18,972		$	—	$	—	$	45,748		$	(116,377	)

(1) Includes asset backed securities, mortgage backed securities and commercial mortgage backed securities.

(2) For the 2017 periods, gains or losses were included in net realized gains (losses). For the 2016 periods, losses on structured securities were included in net impairment losses recognized in earnings gains or losses while gains or losses on corporate bonds and contingent consideration liabilities were included in net realized gains (losses).

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Derivative Instruments (Tables)

9 Months Ended

Sep. 30, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair value and notional amount of derivatives

The following table summarizes information on the fair values and notional values of the Company’s derivative instruments:

	Estimated Fair Value
	Asset Derivatives		Liability Derivatives			Notional Value (1)
September 30, 2017
Futures contracts (2)	$	5,351	$	(6,722	)	$	1,524,985
Foreign currency forward contracts (2)	19,376		(5,348		)	805,201
TBAs (3)	18,331		—			18,143
Other (2)	8,414		(10,967		)	2,032,922
Total	$	51,472	$	(23,037	)
December 31, 2016
Futures contracts (2)	$	360	$	(9,398	)	$	1,655,530
Foreign currency forward contracts (2)	9,354		(12,941		)	1,186,386
TBAs (3)	—		—			—
Other (2)	20,287		(3,710		)	1,014,863
Total	$	30,001	$	(26,049	)

(1) Represents the absolute notional value of all outstanding contracts, consisting of long and short positions.

(2) The fair value of asset derivatives are included in ‘other assets’ and the fair value of liability derivatives are included in ‘other liabilities.’

(3) The fair value of TBAs are included in ‘fixed maturities available for sale, at fair value.’

Summary of net realized gains (losses) recorded in the consolidated statements of income

All realized and unrealized contract gains and losses on the Company’s derivative instruments are reflected in net realized gains (losses) in the consolidated statements of income, as summarized in the following table:

Derivatives not designated as	September 30,
hedging instruments:	2017			2016
Three Months Ended
Net realized gains (losses):
Futures contracts	$	4,899		$	(15,368	)
Foreign currency forward contracts	(228		)	4,583
TBAs	122			(23		)
Other	(495		)	(6,156		)
Total	$	4,298		$	(16,964	)
Nine Months Ended
Net realized gains (losses):
Futures contracts	$	7,309		$	45,954
Foreign currency forward contracts	(12,266		)	(13,951		)
TBAs	143			311
Other	(4,839		)	(8,212		)
Total	$	(9,653	)	$	24,102

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Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2017

Comprehensive Income Note Disclosure [Abstract]

Details about amounts reclassified from AOCI

The following tables present details about amounts reclassified from accumulated other comprehensive income and the tax effects allocated to each component of other comprehensive income (loss):

		Amounts Reclassified from AOCI
	Consolidated Statement of Income	Three Months Ended						Nine Months Ended
Details About	Line Item That Includes	September 30,						September 30,
AOCI Components	Reclassification	2017			2016			2017			2016
Unrealized appreciation on available-for-sale investments
	Net realized gains (losses)	$	27,550		$	61,464		$	59,474		$	137,555
	Other-than-temporary impairment losses	(1,878		)	(3,867		)	(5,415		)	(16,999		)
	Total before tax	25,672			57,597			54,059			120,556
	Income tax (expense) benefit	(1,760		)	(2,605		)	(7,879		)	(11,247		)
	Net of tax	$	23,912		$	54,992		$	46,180		$	109,309

Schedule of comprehensive income (loss)

	Before Tax Amount			Tax Expense (Benefit)			Net of Tax Amount
Three Months Ended September 30, 2017
Unrealized appreciation (decline) in value of investments:
Unrealized holding gains (losses) arising during period	$	69,330		$	2,868		$	66,462
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss)	—			—			—
Less reclassification of net realized gains (losses) included in net income	25,672			1,760			23,912
Foreign currency translation adjustments	8,590			310			8,280
Other comprehensive income (loss)	$	52,248		$	1,418		$	50,830
Three Months Ended September 30, 2016
Unrealized appreciation (decline) in value of investments:
Unrealized holding gains (losses) arising during period	$	11,692		$	(4,589	)	$	16,281
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss)	—			—			—
Less reclassification of net realized gains (losses) included in net income	57,597			2,605			54,992
Foreign currency translation adjustments	(5,407		)	(95		)	(5,312		)
Other comprehensive income (loss)	$	(51,312	)	$	(7,289	)	$	(44,023	)
Nine Months Ended September 30, 2017
Unrealized appreciation (decline) in value of investments:
Unrealized holding gains (losses) arising during period	$	288,813		$	28,590		$	260,223
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss)	—			—			—
Less reclassification of net realized gains (losses) included in net income	54,059			7,879			46,180
Foreign currency translation adjustments	30,264			563			29,701
Other comprehensive income (loss)	$	265,018		$	21,274		$	243,744
Nine Months Ended September 30, 2016
Unrealized appreciation (decline) in value of investments:
Unrealized holding gains (losses) arising during period	$	281,770		$	30,048		$	251,722
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss)	(150		)	—			(150		)
Less reclassification of net realized gains (losses) included in net income	120,556			11,247			109,309
Foreign currency translation adjustments	(5,733		)	417			(6,150		)
Other comprehensive income (loss)	$	155,331		$	19,218		$	136,113

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Guarantor Financial Information (Tables)

9 Months Ended

Sep. 30, 2017

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed consolidating balance sheet

		September 30, 2017
Condensed Consolidating Balance Sheet		ACGL (Parent Guarantor)		Arch-U.S. (Subsidiary Issuer)		Other ACGL Subsidiaries		Consolidating Adjustments and Eliminations			ACGL Consolidated
Assets
Total investments		$	402	$	69,671	$	21,876,508	$	(14,700	)	$	21,931,881
Cash		4,868		88,818		768,675		—			862,361
Investments in subsidiaries		9,214,178		4,028,493		—		(13,242,671		)	—
Due from subsidiaries and affiliates		81		117		1,923,941		(1,924,139		)	—
Premiums receivable		—		—		1,863,203		(593,525		)	1,269,678
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses		—		—		7,023,836		(4,517,821		)	2,506,015
Contractholder receivables		—		—		1,864,348		—			1,864,348
Ceded unearned premiums		—		—		2,240,129		(1,292,994		)	947,135
Deferred acquisition costs		—		—		677,567		(146,371		)	531,196
Goodwill and intangible assets		—		—		684,405		—			684,405
Other assets		13,357		59,734		2,146,993		(192,306		)	2,027,778
	Total assets	$	9,232,886	$	4,246,833	$	41,069,605	$	(21,924,527	)	$	32,624,797
Liabilities
Reserve for losses and loss adjustment expenses		$	—	$	—	$	15,836,263	$	(4,484,996	)	$	11,351,267
Unearned premiums		—		—		5,044,544		(1,292,994		)	3,751,550
Reinsurance balances payable		—		—		945,530		(593,524		)	352,006
Contractholder payables		—		—		1,864,348		—			1,864,348
Collateral held for insured obligations		—		—		345,726					345,726
Senior notes		297,030		494,596		941,100		—			1,732,726
Revolving credit agreement borrowings		—		—		826,242		—			826,242
Due to subsidiaries and affiliates		41		542,103		1,381,996		(1,924,140		)	—
Other liabilities		24,671		100,278		2,669,614		(371,502		)	2,423,061
	Total liabilities	321,742		1,136,977		29,855,363		(8,667,156		)	22,646,926
Redeemable noncontrolling interests		—		—		220,529		(14,700		)	205,829
Shareholders’ Equity
Total shareholders’ equity available to Arch		8,911,144		3,109,856		10,132,815		(13,242,671		)	8,911,144
Non-redeemable noncontrolling interests		—		—		860,898		—			860,898
	Total shareholders’ equity	8,911,144		3,109,856		10,993,713		(13,242,671		)	9,772,042
	Total liabilities, noncontrolling interests and shareholders’ equity	$	9,232,886	$	4,246,833	$	41,069,605	$	(21,924,527	)	$	32,624,797

		December 31, 2016
Condensed Consolidating Balance Sheet		ACGL (Parent Guarantor)		Arch-U.S. (Subsidiary Issuer)		Other ACGL Subsidiaries		Consolidating Adjustments and Eliminations			ACGL Consolidated
Assets
Total investments		$	2,612	$	41,672	$	19,690,067	$	(14,700	)	$	19,719,651
Cash		1,687		71,955		769,300		—			842,942
Investments in subsidiaries		8,660,586		3,716,681		—		(12,377,267		)	—
Due from subsidiaries and affiliates		14,297		51,298		1,866,681		(1,932,276		)	—
Premiums receivable		—		—		1,579,865		(507,430		)	1,072,435
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses		—		—		6,114,518		(4,000,380		)	2,114,138
Contractholder receivables		—		—		1,717,436		—			1,717,436
Ceded unearned premiums		—		—		1,985,311		(1,125,744		)	859,567
Deferred acquisition costs		—		—		577,461		(129,901		)	447,560
Goodwill and intangible assets		—		—		781,553		—			781,553
Other assets		15,725		49,244		1,901,786		(149,928		)	1,816,827
	Total assets	$	8,694,907	$	3,930,850	$	36,983,978	$	(20,237,626	)	$	29,372,109
Liabilities
Reserve for losses and loss adjustment expenses		$	—	$	—	$	14,164,191	$	(3,963,231	)	$	10,200,960
Unearned premiums		—		—		4,532,614		(1,125,744		)	3,406,870
Reinsurance balances payable		—		—		807,837		(507,430		)	300,407
Contractholder payables		—		—		1,717,436		—			1,717,436
Collateral held for insured obligations		—		—		301,406		—			301,406
Deposit accounting liabilities		—		—		22,150		—			22,150
Senior notes		296,957		494,525		940,776		—			1,732,258
Revolving credit agreement borrowings		100,000		—		656,650		—			756,650
Due to subsidiaries and affiliates		26,270		535,584		1,370,422		(1,932,276		)	—
Other liabilities		17,962		54,823		1,867,040		(316,978		)	1,622,847
	Total liabilities	441,189		1,084,932		26,380,522		(7,845,659		)	20,060,984
Redeemable noncontrolling interests		—		—		220,253		(14,700		)	205,553
Shareholders’ Equity
Total shareholders’ equity available to Arch		8,253,718		2,845,918		9,531,349		(12,377,267		)	8,253,718
Non-redeemable noncontrolling interests		—		—		851,854		—			851,854
	Total shareholders’ equity	8,253,718		2,845,918		10,383,203		(12,377,267		)	9,105,572
	Total liabilities, noncontrolling interests and shareholders’ equity	$	8,694,907	$	3,930,850	$	36,983,978	$	(20,237,626	)	$	29,372,109

Condensed consolidating statement of income and comprehensive income

		Three Months Ended September 30, 2017
Condensed Consolidating Statement of Income and Comprehensive Income		ACGL (Parent Guarantor)			Arch-U.S. (Subsidiary Issuer)			Other ACGL Subsidiaries			Consolidating Adjustments and Eliminations			ACGL Consolidated
Revenues
Net premiums earned		$	—		$	—		$	1,261,886		$	—		$	1,261,886
Net investment income		117			151			138,784			(22,593		)	116,459
Net realized gains (losses)		—			—			66,275			—			66,275
Net impairment losses recognized in earnings		—			—			(1,878		)	—			(1,878		)
Other underwriting income		—			—			6,064			—			6,064
Equity in net income (loss) of investment funds accounted for using the equity method		—			—			31,090			—			31,090
Other income (loss)		(102		)	—			(240		)	—			(342		)
	Total revenues	15			151			1,501,981			(22,593		)	1,479,554
Expenses
Losses and loss adjustment expenses		—			—			1,046,141			—			1,046,141
Acquisition expenses		—			—			193,854			—			193,854
Other operating expenses		—			—			170,127			—			170,127
Corporate expenses		14,576			410			2,112			—			17,098
Amortization of intangible assets		—			—			31,824			—			31,824
Interest expense		5,934			12,037			33,811			(22,272		)	29,510
Net foreign exchange (gains) losses		—			—			20,510			7,518			28,028
	Total expenses	20,510			12,447			1,498,379			(14,754		)	1,516,582
Income (loss) before income taxes		(20,495		)	(12,296		)	3,602			(7,839		)	(37,028		)
Income tax (expense) benefit		—			4,432			(12,621		)	—			(8,189		)
Income (loss) before equity in net income of subsidiaries		(20,495		)	(7,864		)	(9,019		)	(7,839		)	(45,217		)
Equity in net income (loss) of subsidiaries		(13,161		)	50,057			—			(36,896		)	—
Net income (loss)		(33,656		)	42,193			(9,019		)	(44,735		)	(45,217		)
Net (income) loss attributable to noncontrolling interests		—			—			11,238			323			11,561
Net income (loss) available to Arch		(33,656		)	42,193			2,219			(44,412		)	(33,656		)
Preferred dividends		(12,369		)	—			—			—			(12,369		)
Loss on redemption of preferred shares		(6,735		)	—			—			—			(6,735		)
Net income (loss) available to Arch common shareholders		$	(52,760	)	$	42,193		$	2,219		$	(44,412	)	$	(52,760	)
Comprehensive income (loss) available to Arch		$	17,585		$	47,676		$	45,936		$	(93,612	)	$	17,585

		Three Months Ended September 30, 2016
Condensed Consolidating Statement of Income and Comprehensive Income		ACGL (Parent Guarantor)			Arch-U.S. (Subsidiary Issuer)			Other ACGL Subsidiaries			Consolidating Adjustments and Eliminations			ACGL Consolidated
Revenues
Net premiums earned		$	—		$	—		$	958,403		$	—		$	958,403
Net investment income		6			803			99,654			(6,845		)	93,618
Net realized gains (losses)		—			—			125,105			—			125,105
Net impairment losses recognized in earnings		—			—			(3,867		)	—			(3,867		)
Other underwriting income		—			—			7,980			—			7,980
Equity in net income (loss) of investment funds accounted for using the equity method		—			—			16,662			—			16,662
Other income (loss)		71			—			(471		)	—			(400		)
	Total revenues	77			803			1,203,466			(6,845		)	1,197,501
Expenses
Losses and loss adjustment expenses		—			—			524,183			—			524,183
Acquisition expenses		—			—			161,267			—			161,267
Other operating expenses		—			—			153,286			—			153,286
Corporate expenses		18,488			608			(611		)	—			18,485
Amortization of intangible assets		—			—			4,865			—			4,865
Interest expense		5,948			6,627			9,890			(6,522		)	15,943
Net foreign exchange (gains) losses		—			—			2,723			(102		)	2,621
	Total expenses	24,436			7,235			855,603			(6,624		)	880,650
Income (loss) before income taxes		(24,359		)	(6,432		)	347,863			(221		)	316,851
Income tax (expense) benefit		—			2,116			(15,347		)	—			(13,231		)
Income (loss) before equity in net income of subsidiaries		(24,359		)	(4,316		)	332,516			(221		)	303,620
Equity in net income of subsidiaries		277,231			21,945			—			(299,176		)	—
Net income		252,872			17,629			332,516			(299,397		)	303,620
Net (income) loss attributable to noncontrolling interests		—			—			(51,071		)	323			(50,748		)
Net income available to Arch		252,872			17,629			281,445			(299,074		)	252,872
Preferred dividends		(5,484		)	—			—			—			(5,484		)
Net income available to Arch common shareholders		$	247,388		$	17,629		$	281,445		$	(299,074	)	$	247,388
Comprehensive income (loss) available to Arch		$	208,790		$	2,019		$	237,555		$	(239,574	)	$	208,790

		Nine Months Ended September 30, 2017
Condensed Consolidating Statement of Income and Comprehensive Income		ACGL (Parent Guarantor)			Arch-U.S. (Subsidiary Issuer)			Other ACGL Subsidiaries			Consolidating Adjustments and Eliminations			ACGL Consolidated
Revenues
Net premiums earned		$	—		$	—		$	3,619,777		$	—		$	3,619,777
Net investment income		123			1,151			410,392			(66,209		)	345,457
Net realized gains (losses)		—			—			122,163			—			122,163
Net impairment losses recognized in earnings		—			—			(5,415		)	—			(5,415		)
Other underwriting income		—			—			15,519			—			15,519
Equity in net income of investment funds accounted for using the equity method		—			—			111,884			—			111,884
Other income (loss)		(368		)	—			(2,750		)	—			(3,118		)
	Total revenues	(245		)	1,151			4,271,570			(66,209		)	4,206,267
Expenses
Losses and loss adjustment expenses		—			—			2,288,571			—			2,288,571
Acquisition expenses		—			—			566,579			—			566,579
Other operating expenses		—			—			514,827			—			514,827
Corporate expenses		53,639			3,727			12,400			—			69,766
Amortization of intangible assets		—			—			93,942			—			93,942
Interest expense		18,024			35,956			98,197			(65,242		)	86,935
Net foreign exchange losses (gains)		—			—			65,701			21,274			86,975
	Total expenses	71,663			39,683			3,640,217			(43,968		)	3,707,595
Income (loss) before income taxes		(71,908		)	(38,532		)	631,353			(22,241		)	498,672
Income tax (expense) benefit		—			13,374			(84,129		)	—			(70,755		)
Income (loss) before equity in net income of subsidiaries		(71,908		)	(25,158		)	547,224			(22,241		)	427,917
Equity in net income of subsidiaries		476,546			213,586			—			(690,132		)	—
Net income		404,638			188,428			547,224			(712,373		)	427,917
Amounts attributable to noncontrolling interests		—			—			(24,247		)	968			(23,279		)
Net income available to Arch		404,638			188,428			522,977			(711,405		)	404,638
Preferred dividends		(34,936		)	—			—			—			(34,936		)
Loss on redemption of preferred shares		(6,735		)	—			—			—			(6,735		)
Net income available to Arch common shareholders		$	362,967		$	188,428		$	522,977		$	(711,405	)	$	362,967
Comprehensive income (loss) available to Arch		$	648,861		$	240,759		$	745,856		$	(986,615	)	$	648,861

		Nine Months Ended September 30, 2016
Condensed Consolidating Statement of Income and Comprehensive Income		ACGL (Parent Guarantor)			Arch-U.S. (Subsidiary Issuer)			Other ACGL Subsidiaries			Consolidating Adjustments and Eliminations			ACGL Consolidated
Revenues
Net premiums earned		$	—		$	—		$	2,915,967		$	—		$	2,915,967
Net investment income		7			2,351			294,012			(20,679		)	275,691
Net realized gains (losses)		—			—			230,647			—			230,647
Net impairment losses recognized in earnings		—			—			(16,849		)	—			(16,849		)
Other underwriting income		—			—			54,749			(16,498		)	38,251
Equity in net income of investment funds accounted for using the equity method		—			—			32,054			—			32,054
Other income (loss)		270			—			(702		)	—			(432		)
	Total revenues	277			2,351			3,509,878			(37,177		)	3,475,329
Expenses
Losses and loss adjustment expenses		—			—			1,631,724			—			1,631,724
Acquisition expenses		—			—			501,782			—			501,782
Other operating expenses		—			—			460,748			—			460,748
Corporate expenses		45,284			1,549			(1,765		)	—			45,068
Amortization of intangible assets		—			—			14,493			—			14,493
Interest expense		17,811			19,946			46,169			(36,213		)	47,713
Net foreign exchange losses (gains)		—			—			5,093			(3,568		)	1,525
	Total expenses	63,095			21,495			2,658,244			(39,781		)	2,703,053
Income (loss) before income taxes		(62,818		)	(19,144		)	851,634			2,604			772,276
Income tax (expense) benefit		—			6,446			(50,118		)	—			(43,672		)
Income (loss) before equity in net income of subsidiaries		(62,818		)	(12,698		)	801,516			2,604			728,604
Equity in net income of subsidiaries		681,543			64,684			—			(746,227		)	—
Net income		618,725			51,986			801,516			(743,623		)	728,604
Amounts attributable to noncontrolling interests		—			—			(110,844		)	965			(109,879		)
Net income available to Arch		618,725			51,986			690,672			(742,658		)	618,725
Preferred dividends		(16,453		)	—			—			—			(16,453		)
Net income available to Arch common shareholders		$	602,272		$	51,986		$	690,672		$	(742,658	)	$	602,272
Comprehensive income (loss) available to Arch		$	754,979		$	89,204		$	830,348		$	(919,552	)	$	754,979

Condensed consolidating statement of cash flows

		Nine Months Ended September 30, 2017
Condensed Consolidating Statement of Cash Flows		ACGL (Parent Guarantor)			Arch-U.S. (Subsidiary Issuer)			Other ACGL Subsidiaries			Consolidating Adjustments and Eliminations			ACGL Consolidated
Operating Activities
	Net Cash Provided By (Used For) Operating Activities	$	130,715		$	70,761		$	1,464,701		$	(585,043	)	$	1,081,134
Investing Activities
Purchases of fixed maturity investments		—			—			(28,079,129		)	—			(28,079,129		)
Purchases of equity securities		—			—			(667,135		)	—			(667,135		)
Purchases of other investments		—			—			(1,406,528		)	—			(1,406,528		)
Proceeds from the sales of fixed maturity investments		—			—			27,629,474			—			27,629,474
Proceeds from the sales of equity securities		—			—			751,873			—			751,873
Proceeds from the sales, redemptions and maturities of other investments		—			—			938,581			—			938,581
Proceeds from redemptions and maturities of fixed maturity investments		—			—			747,621			—			747,621
Net settlements of derivative instruments		—			—			(20,952		)	—			(20,952		)
Net (purchases) sales of short-term investments		2,209			(27,998		)	(938,864		)	—			(964,653		)
Change in cash collateral related to securities lending		—			—			148,692			—			148,692
Contributions to subsidiaries		20,641			(72,900		)	(353,588		)	405,847			—
Issuance of intercompany loans		—			—			(47,000		)	47,000			—
Repayment of intercompany loans		—			47,000			—			(47,000		)	—
Acquisitions, net of cash		—			—			(27,709		)	—			(27,709		)
Purchases of fixed assets		(18		)	—			(16,844		)	—			(16,862		)
Other		—			—			106,786			(20,641		)	86,145
	Net Cash Provided By (Used For) Investing Activities	22,832			(53,898		)	(1,234,722		)	385,206			(880,582		)
Financing Activities
Proceeds from issuance of preferred shares, net		222,054			—			—			—			222,054
Redemption of preferred shares		(230,000		)	—			—			—			(230,000		)
Proceeds from common shares issued, net		(7,484		)	—			405,847			(405,847		)	(7,484		)
Proceeds from intercompany borrowings		—			—			47,000			(47,000		)	—
Proceeds from borrowings		—			—			238,915			—			238,915
Repayments of intercompany borrowings		—			—			(47,000		)	47,000			—
Repayments of borrowings		(100,000		)	—			(72,000		)	—			(172,000		)
Change in cash collateral related to securities lending		—			—			(148,692		)	—			(148,692		)
Dividends paid to redeemable noncontrolling interests		—			—			(14,447		)	956			(13,491		)
Dividends paid to parent (1)		—			—			(584,087		)	584,087			—
Other		—			—			(69,921		)	20,641			(49,280		)
Preferred dividends paid		(34,936		)	—			—			—			(34,936		)
	Net Cash Provided By (Used For) Financing Activities	(150,366		)	—			(244,385		)	199,837			(194,914		)
Effects of exchange rates changes on foreign currency cash		—			—			13,781			—			13,781
Increase (decrease) in cash		3,181			16,863			(625		)	—			19,419
Cash beginning of year		1,687			71,955			769,300			—			842,942
Cash end of period		$	4,868		$	88,818		$	768,675		$	—		$	862,361

(1)     Dividends received by parent are included in net cash provided by (used for) operating activities.

		Nine Months Ended September 30, 2016
Condensed Consolidating Statement of Cash Flows		ACGL (Parent Guarantor)			Arch-U.S. (Subsidiary Issuer)			Other ACGL Subsidiaries			Consolidating Adjustments and Eliminations			ACGL Consolidated
Operating Activities
	Net Cash Provided By (Used For) Operating Activities	$	94,250		$	14,448		$	1,096,443		$	(168,002	)	$	1,037,139
Investing Activities
Purchases of fixed maturity investments		—			—			(27,840,555		)	—			(27,840,555		)
Purchases of equity securities		—			—			(377,767		)	—			(377,767		)
Purchases of other investments		—			—			(1,008,774		)	—			(1,008,774		)
Proceeds from the sales of fixed maturity investments		—			—			26,731,924			—			26,731,924
Proceeds from the sales of equity securities		—			—			464,904			—			464,904
Proceeds from the sales, redemptions and maturities of other investments		—			—			879,330			—			879,330
Proceeds from redemptions and maturities of fixed maturity investments		—			41,500			499,323			—			540,823
Net settlements of derivative instruments		—			—			23,396			—			23,396
Net (purchases) sales of short-term investments		(436,830		)	(53,779		)	(113,553		)	—			(604,162		)
Change in cash collateral related to securities lending		—			—			(27,935		)	—			(27,935		)
Contributions to subsidiaries		(3,585		)	—			(9,247		)	12,832			—
Acquisitions, net of cash		—			—			(20,911		)	—			(20,911		)
Purchases of fixed assets		(8		)	—			(11,557		)	—			(11,565		)
Other		2,000			—			(5,816		)	—			(3,816		)
	Net Cash Provided By (Used For) Investing Activities	(438,423		)	(12,279		)	(817,238		)	12,832			(1,255,108		)
Financing Activities
Proceeds from issuance of preferred shares, net		434,899			—			—			—			434,899
Purchases of common shares under share repurchase program		(75,256		)	—			—			—			(75,256		)
Proceeds from common shares issued, net		(3,785		)	—			12,832			(12,832		)	(3,785		)
Proceeds from borrowings		—			—			46,000			—			46,000
Repayments of borrowings		—			—			(179,171		)	—			(179,171		)
Change in cash collateral related to securities lending		—			—			27,935			—			27,935
Dividends paid to redeemable noncontrolling interests		—			—			(14,448		)	957			(13,491		)
Dividends paid to parent (1)		—			—			(167,045		)	167,045			—
Other		—			200			32,913			—			33,113
Preferred dividends paid		(16,453		)	—			—			—			(16,453		)
	Net Cash Provided By (Used For) Financing Activities	339,405			200			(240,984		)	155,170			253,791
Effects of exchange rates changes on foreign currency cash		—			—			(10,332		)	—			(10,332		)
Increase (decrease) in cash		(4,768		)	2,369			27,889			—			25,490
Cash beginning of year		6,809			17,023			529,494			—			553,326
Cash end of period		$	2,041		$	19,392		$	557,383		$	—		$	578,816

(1)     Dividends received by parent are included in net cash provided by (used for) operating activities.

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Variable Interest Entities and Noncontrolling Interests - Carrying amount of assets and liabilities of variable interest entity (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Jun. 30, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2015
Variable Interest Entity [Line Items]
Investments accounted for using the fair value option	$ 4,249,634		$ 3,421,220
Cash	862,361		842,942	$ 578,816		$ 553,326
Accrued investment income	101,104		124,483
Premiums receivable	1,269,678		1,072,435
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses	2,506,015		2,114,138
Ceded unearned premiums	947,135		859,567
Deferred acquisition costs	531,196		447,560
Receivable for securities sold	385,952		58,284
Goodwill and intangible assets	684,405		781,553	90,941
Other assets	1,012,510		889,080
Total assets of consolidated VIE	32,624,797		29,372,109
Reserve for losses and loss adjustment expenses	11,351,267	$ 10,520,511	10,200,960	9,610,189	$ 9,471,647	9,125,250
Unearned premiums	3,751,550		3,406,870
Reinsurance balances payable	352,006		300,407
Revolving credit agreement borrowings	826,242		756,650
Payable for securities purchased	1,091,464		76,183
Other liabilities	788,354		806,260
Total liabilities of consolidated VIE	22,646,926		20,060,984
Redeemable noncontrolling interests	205,829		205,553
Watford Re
Variable Interest Entity [Line Items]
Redeemable noncontrolling interests	205,829	$ 205,736	205,553	$ 205,459	$ 205,366	$ 205,182
Variable Interest Entity, Primary Beneficiary | Watford Re
Variable Interest Entity [Line Items]
Investments accounted for using the fair value option	2,457,365		1,857,623
Cash	57,151		74,893
Accrued investment income	13,718		17,017
Premiums receivable	209,985		189,911
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses	37,575		24,420
Ceded unearned premiums	23,538		12,145
Deferred acquisition costs	87,692		86,379
Receivable for securities sold	74,051		1,326
Goodwill and intangible assets	7,650		7,650
Other assets	132,796		111,386
Total assets of consolidated VIE	3,101,521		2,382,750
Reserve for losses and loss adjustment expenses	735,132		510,809
Unearned premiums	344,060		293,480
Reinsurance balances payable	22,487		12,289
Revolving credit agreement borrowings	426,242		256,650
Payable for securities purchased	211,065		42,922
Other liabilities	174,472		88,976
Total liabilities of consolidated VIE	1,913,458		1,205,126
Redeemable noncontrolling interests	$ 220,529		$ 220,253

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Variable Interest Entities and Noncontrolling Interests - Variable interest entity (Details) - USD ($) $ in Thousands	1 Months Ended	9 Months Ended
	Mar. 31, 2014	Sep. 30, 2017	Sep. 30, 2016
Variable Interest Entity [Line Items]
Net cash provided by operating activities		$ 1,081,134	$ 1,037,139
Net cash used for investing activities		(880,582)	(1,255,108)
Net cash used for financing activities		(194,914)	253,791
Variable Interest Entity, Primary Beneficiary | Watford Holdings Ltd
Variable Interest Entity [Line Items]
Initial investment contribution amount	$ 100,000
Ownership percentage	11.00%
Variable Interest Entity, Primary Beneficiary | Watford Re
Variable Interest Entity [Line Items]
Net cash provided by operating activities		221,900	207,000
Net cash used for investing activities		(394,400)	(124,000)
Net cash used for financing activities		$ 152,500	$ (119,600)

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Variable Interest Entities and Noncontrolling Interests - Non-redeemable noncontrolling interests (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Noncontrolling Interest [Line Items]
Non-redeemable noncontrolling interests, beginning of period			$ 851,854
Amounts attributable to noncontrolling interests	$ (16,147)	$ 46,160	9,523	$ 96,118
Non-redeemable noncontrolling interests, end of period	860,898	834,808	860,898	834,808
Watford Re
Noncontrolling Interest [Line Items]
Non-redeemable noncontrolling interests, beginning of period	877,456	788,589	851,854	738,831
Amounts attributable to noncontrolling interests	(16,147)	46,160	9,523	96,118
Foreign currency translation adjustments attributable to noncontrolling interests	(411)	59	(479)	(141)
Non-redeemable noncontrolling interests, end of period	$ 860,898	$ 834,808	$ 860,898	$ 834,808
Common shares | Watford Re
Noncontrolling Interest [Line Items]
Noncontrolling interest, ownership percentage by noncontrolling owners	89.00%		89.00%

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Variable Interest Entities and Noncontrolling Interests - Redeemable noncontrolling interests (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Redeemable Noncontrolling Interest [Line Items]
Redeemable noncontrolling interests, beginning of period			$ 205,553
Redeemable noncontrolling interests, end of period	$ 205,829		205,829
Watford Re
Redeemable Noncontrolling Interest [Line Items]
Redeemable noncontrolling interests, beginning of period	205,736	$ 205,366	205,553	$ 205,182
Accretion of preference share issuance costs	93	93	276	277
Redeemable noncontrolling interests, end of period	$ 205,829	$ 205,459	$ 205,829	$ 205,459
Cumulative redeemable preference shares | Watford Re
Redeemable Noncontrolling Interest [Line Items]
Preference shares, number of shares issued	9,065,200		9,065,200
Par value per share	$ 0.01		$ 0.01
Liquidation preference per share	$ 25.00		$ 25.00

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Variable Interest Entities and Noncontrolling Interests - Income or loss attributable to third party investors (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Noncontrolling Interest [Abstract]
Amounts attributable to non-redeemable noncontrolling interests	$ 16,147	$ (46,160)	$ (9,523)	$ (96,118)
Dividends attributable to redeemable noncontrolling interests	(4,586)	(4,588)	(13,756)	(13,761)
Net (income) loss attributable to noncontrolling interests	$ 11,561	$ (50,748)	$ (23,279)	$ (109,879)

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Variable Interest Entities and Noncontrolling Interests - Other variable interest entity disclosures (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Variable Interest Entity [Line Items]
Maximum Exposure to Loss	$ 1,071,731	$ 891,774
Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Total VIE Assets	303,477
Maximum Exposure to Loss	2,235
Variable Interest Entity, Not Primary Beneficiary | On-Balance Sheet
Variable Interest Entity [Line Items]
Maximum Exposure to Loss	480
Variable Interest Entity, Not Primary Beneficiary | Off-Balance Sheet
Variable Interest Entity [Line Items]
Maximum Exposure to Loss	1,755
Variable Interest Entity, Not Primary Beneficiary | Bellemeade I
Variable Interest Entity [Line Items]
Aggregate excess of loss reinsurance agreement	300,000
Total VIE Assets	112,090
Maximum Exposure to Loss	1,542
Variable Interest Entity, Not Primary Beneficiary | Bellemeade I | On-Balance Sheet
Variable Interest Entity [Line Items]
Maximum Exposure to Loss	533
Variable Interest Entity, Not Primary Beneficiary | Bellemeade I | Off-Balance Sheet
Variable Interest Entity [Line Items]
Maximum Exposure to Loss	1,009
Variable Interest Entity, Not Primary Beneficiary | Bellemeade II
Variable Interest Entity [Line Items]
Aggregate excess of loss reinsurance agreement	300,000
Total VIE Assets	191,387
Maximum Exposure to Loss	693
Variable Interest Entity, Not Primary Beneficiary | Bellemeade II | On-Balance Sheet
Variable Interest Entity [Line Items]
Maximum Exposure to Loss	(53)
Variable Interest Entity, Not Primary Beneficiary | Bellemeade II | Off-Balance Sheet
Variable Interest Entity [Line Items]
Maximum Exposure to Loss	746
Variable Interest Entity, Not Primary Beneficiary | Irving Partners
Variable Interest Entity [Line Items]
Proceeds from sale of limited partnership investment	$ 14,500

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Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Numerator:
Net income (loss)		$ (45,217)	$ 303,620	$ 427,917	$ 728,604
Net (income) loss attributable to noncontrolling interests		11,561	(50,748)	(23,279)	(109,879)
Net income available to Arch		(33,656)	252,872	404,638	618,725
Preferred dividends		(12,369)	(5,484)	(34,936)	(16,453)
Loss on redemption of preferred shares		(6,735)	0	(6,735)	0
Net income (loss) available to Arch common shareholders		$ (52,760)	$ 247,388	$ 362,967	$ 602,272
Denominator:
Weighted average common shares outstanding		129,211,251	120,938,916	124,526,611	120,656,420
Series D preferred shares		5,674,200	0	9,945,518	0
Weighted average common shares outstanding — basic		134,885,451	120,938,916	134,472,129	120,656,420
Effect of dilutive common share equivalents:
Nonvested restricted shares		0	1,313,025	1,459,879	1,295,825
Stock options	[1]	0	2,679,712	3,290,316	2,575,929
Weighted average common shares and common share equivalents outstanding — diluted		134,885,451	124,931,653	139,222,324	124,528,174
Earnings per common share:
Basic (per share)		$ (0.39)	$ 2.05	$ 2.70	$ 4.99
Diluted (per share)		$ (0.39)	$ 1.98	$ 2.61	$ 4.84
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per common share (shares)		4,700,000
Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per common share (shares)		0	334,203	838,868	842,105

[1] Certain stock options were not included in the computation of diluted earnings per share where the exercise price of the stock options exceeded the average market price and would have been anti-dilutive or where, when applying the treasury stock method to in-the-money options, the sum of the proceeds, including unrecognized compensation, exceeded the average market price and would have been anti-dilutive. For the 2017 third quarter and 2016 third quarter, the number of stock options excluded were nil and 334,203, respectively. For the nine months ended September 30, 2017 and 2016, the number of stock options excluded were 838,868 and 842,105, respectively.

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Segment Information - Summary of underwriting income or loss by segment (Details) - USD ($) $ in Thousands		3 Months Ended			9 Months Ended
		Sep. 30, 2017		Sep. 30, 2016	Sep. 30, 2017		Sep. 30, 2016	Dec. 31, 2016
Segment Reporting Information [Line Items]
Gross premiums written		$ 1,648,246		$ 1,278,765	$ 4,915,895		$ 4,046,667
Premiums ceded		(322,843)		(264,487)	(1,065,537)		(887,591)
Net premiums written		1,325,403		1,014,278	3,850,358		3,159,076
Change in unearned premiums		(63,517)		(55,875)	(230,581)		(243,109)
Net premiums earned		1,261,886		958,403	3,619,777		2,915,967
Other underwriting income		6,064		7,980	15,519		38,251
Losses and loss adjustment expenses		(1,046,141)		(524,183)	(2,288,571)		(1,631,724)
Acquisition expenses, net		(193,854)		(161,267)	(566,579)		(501,782)
Other operating expenses		(170,127)		(153,286)	(514,827)		(460,748)
Underwriting income (loss)		(142,172)		127,647	265,319		359,964
Net investment income		116,459		93,618	345,457		275,691
Net realized gains (losses)		66,275		125,105	122,163		230,647
Net impairment losses recognized in earnings		(1,878)		(3,867)	(5,415)		(16,849)
Equity in net income (loss) of investment funds accounted for using the equity method		31,090		16,662	111,884		32,054
Other income (loss)		(342)		(400)	(3,118)		(432)
Corporate expenses		(14,108)	[1]	(11,343)	(48,517)		(37,926)
UGC transaction costs and other		(2,990)	[1]	(7,142)	(21,249)	[1]	(7,142)
Amortization of intangible assets		(31,824)		(4,865)	(93,942)		(14,493)
Interest expense		(29,510)		(15,943)	(86,935)		(47,713)
Net foreign exchange gains (losses)		(28,028)		(2,621)	(86,975)		(1,525)
Income (loss) before income taxes		(37,028)		316,851	498,672		772,276
Income tax expense		(8,189)		(13,231)	(70,755)		(43,672)
Net income (loss)		(45,217)		303,620	427,917		728,604
Dividends attributable to redeemable noncontrolling interests		(4,586)		(4,588)	(13,756)		(13,761)
Amounts attributable to non-redeemable noncontrolling interests		16,147		(46,160)	(9,523)		(96,118)
Net income (loss) available to Arch		(33,656)		252,872	404,638		618,725
Preferred dividends		(12,369)		(5,484)	(34,936)		(16,453)
Loss on redemption of preferred shares		(6,735)		0	(6,735)		0
Net income (loss) available to Arch common shareholders		$ (52,760)		$ 247,388	$ 362,967		$ 602,272
Underwriting Ratios
Loss ratio		82.90%		54.70%	63.20%		56.00%
Acquisition expense ratio		15.40%		16.80%	15.70%		17.20%
Other operating expense ratio		13.50%		16.00%	14.20%		15.80%
Combined ratio		111.80%		87.50%	93.10%		89.00%
Goodwill and intangible assets		$ 684,405		$ 90,941	$ 684,405		$ 90,941	$ 781,553
Other
Segment Reporting Information [Line Items]
Gross premiums written	[2]	166,198		163,736	473,131		421,627
Premiums ceded		(12,471)		(6,300)	(35,315)		(15,229)
Net premiums written		153,727		157,436	437,816		406,398
Change in unearned premiums		(25,097)		(47,000)	(36,435)		(59,878)
Net premiums earned		128,630		110,436	401,381		346,520
Other underwriting income		737		1,024	2,377		2,922
Losses and loss adjustment expenses		(123,581)		(74,307)	(319,612)		(236,922)
Acquisition expenses, net		(32,073)		(28,739)	(99,328)		(95,323)
Other operating expenses		(8,268)		(7,035)	(24,311)		(18,486)
Underwriting income (loss)		(34,555)		1,379	(39,493)		(1,289)
Net investment income		22,332		27,336	62,998		68,603
Net realized gains (losses)		2,171		29,159	11,501		61,912
Net impairment losses recognized in earnings		0		0	0		0
Equity in net income (loss) of investment funds accounted for using the equity method		0		0	0		0
Other income (loss)		0		0	0		0
Corporate expenses		0	[1]	0	0		0
UGC transaction costs and other		0	[1]	0	0	[1]	0
Amortization of intangible assets		0		0	0		0
Interest expense		(3,246)		(3,019)	(9,003)		(9,730)
Net foreign exchange gains (losses)		(243)		1,611	(1,524)		2,287
Income (loss) before income taxes		(13,541)		56,466	24,479		121,783
Income tax expense		(21)		1	(21)		1
Net income (loss)		(13,562)		56,467	24,458		121,784
Dividends attributable to redeemable noncontrolling interests		(4,586)		(4,588)	(13,756)		(13,761)
Amounts attributable to non-redeemable noncontrolling interests		16,147		(46,160)	(9,523)		(96,118)
Net income (loss) available to Arch		(2,001)		5,719	1,179		11,905
Preferred dividends		0		0	0		0
Loss on redemption of preferred shares		0			0
Net income (loss) available to Arch common shareholders		$ (2,001)		$ 5,719	$ 1,179		$ 11,905
Underwriting Ratios
Loss ratio		96.10%		67.30%	79.60%		68.40%
Acquisition expense ratio		24.90%		26.00%	24.70%		27.50%
Other operating expense ratio		6.40%		6.40%	6.10%		5.30%
Combined ratio		127.40%		99.70%	110.40%		101.20%
Goodwill and intangible assets		$ 7,650		$ 7,650	$ 7,650		$ 7,650
Sub-Total
Segment Reporting Information [Line Items]
Gross premiums written	[2]	1,557,179		1,214,765	4,697,007		3,898,025
Premiums ceded		(385,503)		(357,923)	(1,284,465)		(1,145,347)
Net premiums written		1,171,676		856,842	3,412,542		2,752,678
Change in unearned premiums		(38,420)		(8,875)	(194,146)		(183,231)
Net premiums earned		1,133,256		847,967	3,218,396		2,569,447
Other underwriting income		5,327		6,956	13,142		35,329
Losses and loss adjustment expenses		(922,560)		(449,876)	(1,968,959)		(1,394,802)
Acquisition expenses, net		(161,781)		(132,528)	(467,251)		(406,459)
Other operating expenses		(161,859)		(146,251)	(490,516)		(442,262)
Underwriting income (loss)		(107,617)		126,268	304,812		361,253
Net investment income		94,127		66,282	282,459		207,088
Net realized gains (losses)		64,104		95,946	110,662		168,735
Net impairment losses recognized in earnings		(1,878)		(3,867)	(5,415)		(16,849)
Equity in net income (loss) of investment funds accounted for using the equity method		31,090		16,662	111,884		32,054
Other income (loss)		(342)		(400)	(3,118)		(432)
Corporate expenses		(14,108)	[1]	(11,343)	(48,517)		(37,926)
UGC transaction costs and other		(2,990)	[1]	(7,142)	(21,249)	[1]	(7,142)
Amortization of intangible assets		(31,824)		(4,865)	(93,942)		(14,493)
Interest expense		(26,264)		(12,924)	(77,932)		(37,983)
Net foreign exchange gains (losses)		(27,785)		(4,232)	(85,451)		(3,812)
Income (loss) before income taxes		(23,487)		260,385	474,193		650,493
Income tax expense		(8,168)		(13,232)	(70,734)		(43,673)
Net income (loss)		(31,655)		247,153	403,459		606,820
Dividends attributable to redeemable noncontrolling interests		0		0	0		0
Amounts attributable to non-redeemable noncontrolling interests		0		0	0		0
Net income (loss) available to Arch		(31,655)		247,153	403,459		606,820
Preferred dividends		(12,369)		(5,484)	(34,936)		(16,453)
Loss on redemption of preferred shares		(6,735)			(6,735)
Net income (loss) available to Arch common shareholders		$ (50,759)		$ 241,669	$ 361,788		$ 590,367
Underwriting Ratios
Loss ratio		81.40%		53.10%	61.20%		54.30%
Acquisition expense ratio		14.30%		15.60%	14.50%		15.80%
Other operating expense ratio		14.30%		17.20%	15.20%		17.20%
Combined ratio		110.00%		85.90%	90.90%		87.30%
Goodwill and intangible assets		$ 676,755		$ 83,291	$ 676,755		$ 83,291
Sub-Total | Insurance
Segment Reporting Information [Line Items]
Gross premiums written	[2]	787,447		758,934	2,313,630		2,319,530
Premiums ceded		(222,516)		(217,446)	(704,057)		(713,110)
Net premiums written		564,931		541,488	1,609,573		1,606,420
Change in unearned premiums		(29,766)		(22,410)	(51,188)		(46,603)
Net premiums earned		535,165		519,078	1,558,385		1,559,817
Other underwriting income		0		0	0		0
Losses and loss adjustment expenses		(568,795)		(332,845)	(1,252,375)		(1,011,087)
Acquisition expenses, net		(82,638)		(77,146)	(236,378)		(228,806)
Other operating expenses		(90,875)		(86,613)	(271,268)		(263,111)
Underwriting income (loss)		$ (207,143)		$ 22,474	$ (201,636)		$ 56,813
Underwriting Ratios
Loss ratio		106.30%		64.10%	80.40%		64.80%
Acquisition expense ratio		15.40%		14.90%	15.20%		14.70%
Other operating expense ratio		17.00%		16.70%	17.40%		16.90%
Combined ratio		138.70%		95.70%	113.00%		96.40%
Goodwill and intangible assets		$ 23,445		$ 26,367	$ 23,445		$ 26,367
Sub-Total | Reinsurance
Segment Reporting Information [Line Items]
Gross premiums written	[2]	422,083		324,361	1,351,051		1,217,804
Premiums ceded		(105,389)		(89,551)	(386,743)		(370,068)
Net premiums written		316,694		234,810	964,308		847,736
Change in unearned premiums		6,879		17,117	(81,182)		(43,345)
Net premiums earned		323,573		251,927	883,126		804,391
Other underwriting income		1,728		2,216	1,143		22,659
Losses and loss adjustment expenses		(318,609)		(105,924)	(631,669)		(363,613)
Acquisition expenses, net		(57,340)		(50,192)	(154,638)		(160,706)
Other operating expenses		(36,214)		(35,389)	(110,458)		(108,561)
Underwriting income (loss)		$ (86,862)		$ 62,638	$ (12,496)		$ 194,170
Underwriting Ratios
Loss ratio		98.50%		42.00%	71.50%		45.20%
Acquisition expense ratio		17.70%		19.90%	17.50%		20.00%
Other operating expense ratio		11.20%		14.00%	12.50%		13.50%
Combined ratio		127.40%		75.90%	101.50%		78.70%
Goodwill and intangible assets		$ 417		$ 1,228	$ 417		$ 1,228
Sub-Total | Mortgage
Segment Reporting Information [Line Items]
Gross premiums written	[2]	347,951		131,726	1,032,800		361,440
Premiums ceded		(57,900)		(51,182)	(194,139)		(62,918)
Net premiums written		290,051		80,544	838,661		298,522
Change in unearned premiums		(15,533)		(3,582)	(61,776)		(93,283)
Net premiums earned		274,518		76,962	776,885		205,239
Other underwriting income		3,599		4,740	11,999		12,670
Losses and loss adjustment expenses		(35,156)		(11,107)	(84,915)		(20,102)
Acquisition expenses, net		(21,803)		(5,190)	(76,235)		(16,947)
Other operating expenses		(34,770)		(24,249)	(108,790)		(70,590)
Underwriting income (loss)		$ 186,388		$ 41,156	$ 518,944		$ 110,270
Underwriting Ratios
Loss ratio		12.80%		14.40%	10.90%		9.80%
Acquisition expense ratio		7.90%		6.70%	9.80%		8.30%
Other operating expense ratio		12.70%		31.50%	14.00%		34.40%
Combined ratio		33.40%		52.60%	34.70%		52.50%
Goodwill and intangible assets		$ 652,893		$ 55,696	$ 652,893		$ 55,696

[1] Certain expenses have been excluded from ‘corporate expenses’ and reflected in ‘UGC transaction costs and other.’

[2] Certain amounts included in the gross premiums written of each segment are related to intersegment transactions. Accordingly, the sum of gross premiums written for each segment does not agree to the total gross premiums written as shown in the table above due to the elimination of intersegment transactions in the total.

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Segment Information - Narrative (Details)	9 Months Ended
	Sep. 30, 2017 segment
Underwriting segments
Segment Reporting Information [Line Items]
Number of segments	3
Other
Segment Reporting Information [Line Items]
Number of segments	2

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Reserve for Losses and Loss Adjustment Expenses - Reconciliation of beginning and ending balances of losses and loss adjustment reserves(Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract]
Reserve for losses and loss adjustment expenses at beginning of period	$ 10,520,511	$ 9,471,647	$ 10,200,960	$ 9,125,250
Unpaid losses and loss adjustment expenses recoverable and deferred charges	2,116,210	2,003,768	2,083,575	1,828,837
Net reserve for losses and loss adjustment expenses at beginning of period	8,404,301	7,467,879	8,117,385	7,296,413
Net incurred losses and loss adjustment expenses relating to losses occurring in:
Current year	1,092,175	598,940	2,487,212	1,848,299
Prior years	(45,232)	(74,757)	(197,839)	(216,575)
Discount accretion on retroactive reinsurance	(802)	0	(802)	0
Total net incurred losses and loss adjustment expenses	1,046,141	524,183	2,288,571	1,631,724
Net foreign exchange losses (gains)	61,919	1,463	168,493	(13,270)
Net paid losses and loss adjustment expenses relating to losses occurring in:
Current year	(167,450)	(128,432)	(282,952)	(285,468)
Prior years	(457,183)	(304,673)	(1,403,769)	(1,068,979)
Total net paid losses and loss adjustment expenses	(624,633)	(433,105)	(1,686,721)	(1,354,447)
Net reserve for losses and loss adjustment expenses at end of period	8,887,728	7,560,420	8,887,728	7,560,420
Unpaid losses and loss adjustment expenses recoverable and deferred charges	2,463,539	2,049,769	2,463,539	2,049,769
Reserve for losses and loss adjustment expenses at end of period	$ 11,351,267	$ 9,610,189	$ 11,351,267	$ 9,610,189

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Reserve for Losses and Loss Adjustment Expenses - Catastrophe losses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Current year	$ 1,092,175	$ 598,940	$ 2,487,212	$ 1,848,299
Catastrophe losses
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Current year	347,800
Underwriting segments | Reinsurance | Catastrophe losses
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Current year	133,400
Underwriting segments | Insurance | Catastrophe losses
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Current year	214,500
Underwriting segments | Other | Catastrophe losses
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Current year	$ 19,800

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Reserve for Losses and Loss Adjustment Expenses - Prior year development (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Prior years	$ (45,232)	$ (74,757)	$ (197,839)	$ (216,575)
Underwriting segments | Reinsurance
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Prior years	$ (36,500)	$ (59,500)	$ (133,300)	$ (176,700)
Percentage of prior year development	11.30%	23.60%	15.10%	22.00%
Underwriting segments | Reinsurance | Short Tailed Lines
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Prior years	$ (16,900)	$ (27,700)	$ (85,800)	$ (113,100)
Underwriting segments | Reinsurance | Short Tailed Lines | Property Catastrophe And Property Other Than Property Catastrophe
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Prior years	(11,800)	(23,200)	(62,700)	(92,600)
Underwriting segments | Reinsurance | Medium Tailed And Long Tailed Lines
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Prior years	(19,600)	(31,800)	(47,500)	(63,600)
Underwriting segments | Reinsurance | Medium Tailed And Long Tailed Lines | Casualty
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Prior years		(29,300)	(28,000)
Underwriting segments | Reinsurance | Medium Tailed And Long Tailed Lines | Casualty | 2002-2009
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Prior years	(13,400)
Underwriting segments | Reinsurance | Medium Tailed And Long Tailed Lines | Marine And Aviation
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Prior years	(4,300)		(16,600)
Underwriting segments | Reinsurance | Long Tailed Lines | Casualty
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Prior years				(66,400)
Underwriting segments | Insurance
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Prior years	$ (3,000)	$ (13,700)	$ (7,200)	$ (24,800)
Percentage of prior year development	0.60%	2.60%	0.50%	1.60%
Underwriting segments | Insurance | Short Tailed Lines
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Prior years	$ (1,800)	$ 2,400	$ (9,000)	$ (7,700)
Underwriting segments | Insurance | Medium Tailed Lines
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Prior years		2,000	9,200	19,100
Underwriting segments | Insurance | Medium Tailed Lines | Professional lines
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Prior years	(11,900)
Underwriting segments | Insurance | Medium Tailed Lines | Surety
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Prior years	(4,200)
Underwriting segments | Insurance | Medium Tailed Lines | Programs
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Prior years	12,900	6,200	39,300	28,600
Underwriting segments | Insurance | Medium Tailed Lines | Other product lines
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Prior years		(4,200)	(30,100)	(9,500)
Underwriting segments | Insurance | Medium Tailed Lines | Construction
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Prior years			17,200
Underwriting segments | Insurance | Medium Tailed And Long Tailed Lines
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Prior years	(1,200)
Underwriting segments | Insurance | Long Tailed Lines
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Prior years		(18,200)	(7,400)	(36,200)
Underwriting segments | Mortgage
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Prior years	$ (21,500)	$ (2,500)	$ (74,900)	$ (16,300)
Percentage of prior year development	7.80%	3.20%	9.60%	7.90%
Underwriting segments | Mortgage | Most origination years
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Prior years	$ (6,100)
Underwriting segments | Mortgage | Other product lines
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Prior years			$ (19,200)
Underwriting segments | Other
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items]
Prior years	$ 15,800	$ 900	$ 17,500	$ 1,200

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Investment Information - Summary of available for sale securities (Details) - USD ($) $ in Thousands		9 Months Ended	12 Months Ended
		Sep. 30, 2017	Dec. 31, 2016
Available for sale securities:
Estimated Fair Value		$ 16,704,633	$ 15,469,573
Gross Unrealized Gains		290,830	163,339
Gross Unrealized Losses		(91,853)	(198,886)
Cost or Amortized Cost		16,505,656	15,505,120
OTTI Unrealized Losses	[1]	(2,241)	(5,831)
Fixed maturities
Available for sale securities:
Estimated Fair Value		14,317,651	14,156,918
Gross Unrealized Gains	[2]	150,896	79,082
Gross Unrealized Losses	[2]	(83,475)	(178,759)
Cost or Amortized Cost	[2]	14,250,230	14,256,595
OTTI Unrealized Losses	[1],[2]	(2,241)	(5,831)
Fixed maturities | Corporate bonds
Available for sale securities:
Estimated Fair Value		4,275,437	4,392,373
Gross Unrealized Gains	[2]	49,576	27,606
Gross Unrealized Losses	[2]	(22,303)	(46,905)
Cost or Amortized Cost	[2]	4,248,164	4,411,672
OTTI Unrealized Losses	[1],[2]	(73)	(2,285)
Fixed maturities | Mortgage backed securities
Available for sale securities:
Estimated Fair Value		323,900	490,093
Gross Unrealized Gains	[2]	5,078	4,794
Gross Unrealized Losses	[2]	(2,540)	(8,357)
Cost or Amortized Cost	[2]	321,362	493,656
OTTI Unrealized Losses	[1],[2]	(2,146)	(3,323)
Fixed maturities | Municipal bonds
Available for sale securities:
Estimated Fair Value		2,353,234	3,713,434
Gross Unrealized Gains	[2]	31,202	8,554
Gross Unrealized Losses	[2]	(7,614)	(29,154)
Cost or Amortized Cost	[2]	2,329,646	3,734,034
OTTI Unrealized Losses	[1],[2]	0	(201)
Fixed maturities | Commercial mortgage backed securities
Available for sale securities:
Estimated Fair Value		584,730	536,051
Gross Unrealized Gains	[2]	3,114	2,876
Gross Unrealized Losses	[2]	(4,377)	(6,508)
Cost or Amortized Cost	[2]	585,993	539,683
OTTI Unrealized Losses	[1],[2]	0	0
Fixed maturities | US government and government agencies
Available for sale securities:
Estimated Fair Value		3,761,612	2,804,540
Gross Unrealized Gains	[2]	3,303	9,319
Gross Unrealized Losses	[2]	(20,246)	(24,437)
Cost or Amortized Cost	[2]	3,778,555	2,819,658
OTTI Unrealized Losses	[1],[2]	0	0
Fixed maturities | Non-US government securities
Available for sale securities:
Estimated Fair Value		1,473,819	1,096,440
Gross Unrealized Gains	[2]	49,570	19,036
Gross Unrealized Losses	[2]	(21,647)	(56,872)
Cost or Amortized Cost	[2]	1,445,896	1,134,276
OTTI Unrealized Losses	[1],[2]	0	0
Fixed maturities | Asset backed securities
Available for sale securities:
Estimated Fair Value		1,544,919	1,123,987
Gross Unrealized Gains	[2]	9,053	6,897
Gross Unrealized Losses	[2]	(4,748)	(6,526)
Cost or Amortized Cost	[2]	1,540,614	1,123,616
OTTI Unrealized Losses	[1],[2]	(22)	(22)
Equity securities
Available for sale securities:
Estimated Fair Value		480,607	532,680
Gross Unrealized Gains		84,755	62,627
Gross Unrealized Losses		(7,873)	(17,517)
Cost or Amortized Cost		403,725	487,570
OTTI Unrealized Losses	[1]	0	0
Other investments
Available for sale securities:
Estimated Fair Value		260,339	167,970
Gross Unrealized Gains		54,512	21,358
Gross Unrealized Losses		(1)	(2,465)
Cost or Amortized Cost		205,828	149,077
OTTI Unrealized Losses	[1]	0	0
Short-term investments
Available for sale securities:
Estimated Fair Value		1,646,036	612,005
Gross Unrealized Gains		667	272
Gross Unrealized Losses		(504)	(145)
Cost or Amortized Cost		1,645,873	611,878
OTTI Unrealized Losses	[1]	$ 0	$ 0

[1] Represents the total other-than-temporary impairments (“OTTI”) recognized in accumulated other comprehensive income (“AOCI”). It does not include the change in fair value subsequent to the impairment measurement date. At September 30, 2017, the net unrealized gain related to securities for which a non-credit OTTI was recognized in AOCI was $0.9 million, compared to a net unrealized gain of $2.8 million at December 31, 2016.

[2] In securities lending transactions, the Company receives collateral in excess of the fair value of the securities pledged. For purposes of this table, the Company has excluded the collateral received under securities lending, at fair value and included the securities pledged under securities lending, at fair value. See “—Securities Lending Agreements.”

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Investment Information - Aging of available for sale securities in an unrealized loss position (Details) - USD ($) $ in Thousands		Sep. 30, 2017	Dec. 31, 2016
Available for sale securities:
Estimated Fair Value - Less than 12 Months		$ 7,450,193	$ 7,509,193
Gross Unrealized Losses - Less than 12 Months		(83,588)	(192,881)
Estimated Fair Value - 12 Months or More		406,815	154,001
Gross Unrealized Losses - 12 Months or More		(8,265)	(6,005)
Estimated Fair Value - Total		7,857,008	7,663,194
Gross Unrealized Losses - Total		(91,853)	(198,886)
Fixed maturities
Available for sale securities:
Estimated Fair Value - Less than 12 Months	[1]	7,168,087	7,171,367
Gross Unrealized Losses - Less than 12 Months	[1]	(75,210)	(172,754)
Estimated Fair Value - 12 Months or More	[1]	406,815	154,001
Gross Unrealized Losses - 12 Months or More	[1]	(8,265)	(6,005)
Estimated Fair Value - Total	[1]	7,574,902	7,325,368
Gross Unrealized Losses - Total	[1]	(83,475)	(178,759)
Fixed maturities | Corporate bonds
Available for sale securities:
Estimated Fair Value - Less than 12 Months	[1]	1,173,096	1,700,813
Gross Unrealized Losses - Less than 12 Months	[1]	(18,315)	(43,011)
Estimated Fair Value - 12 Months or More	[1]	191,382	46,902
Gross Unrealized Losses - 12 Months or More	[1]	(3,988)	(3,894)
Estimated Fair Value - Total	[1]	1,364,478	1,747,715
Gross Unrealized Losses - Total	[1]	(22,303)	(46,905)
Fixed maturities | Mortgage backed securities
Available for sale securities:
Estimated Fair Value - Less than 12 Months	[1]	146,352	402,699
Gross Unrealized Losses - Less than 12 Months	[1]	(2,477)	(8,134)
Estimated Fair Value - 12 Months or More	[1]	1,511	6,105
Gross Unrealized Losses - 12 Months or More	[1]	(63)	(223)
Estimated Fair Value - Total	[1]	147,863	408,804
Gross Unrealized Losses - Total	[1]	(2,540)	(8,357)
Fixed maturities | Municipal bonds
Available for sale securities:
Estimated Fair Value - Less than 12 Months	[1]	745,410	1,513,308
Gross Unrealized Losses - Less than 12 Months	[1]	(5,958)	(28,504)
Estimated Fair Value - 12 Months or More	[1]	110,752	29,636
Gross Unrealized Losses - 12 Months or More	[1]	(1,656)	(650)
Estimated Fair Value - Total	[1]	856,162	1,542,944
Gross Unrealized Losses - Total	[1]	(7,614)	(29,154)
Fixed maturities | Commercial mortgage backed securities
Available for sale securities:
Estimated Fair Value - Less than 12 Months	[1]	282,901	231,374
Gross Unrealized Losses - Less than 12 Months	[1]	(3,579)	(6,331)
Estimated Fair Value - 12 Months or More	[1]	17,570	5,635
Gross Unrealized Losses - 12 Months or More	[1]	(798)	(177)
Estimated Fair Value - Total	[1]	300,471	237,009
Gross Unrealized Losses - Total	[1]	(4,377)	(6,508)
Fixed maturities | US government and government agencies
Available for sale securities:
Estimated Fair Value - Less than 12 Months	[1]	3,083,239	1,888,018
Gross Unrealized Losses - Less than 12 Months	[1]	(19,736)	(24,437)
Estimated Fair Value - 12 Months or More	[1]	25,894	0
Gross Unrealized Losses - 12 Months or More	[1]	(510)	0
Estimated Fair Value - Total	[1]	3,109,133	1,888,018
Gross Unrealized Losses - Total	[1]	(20,246)	(24,437)
Fixed maturities | Non-US government securities
Available for sale securities:
Estimated Fair Value - Less than 12 Months	[1]	1,149,528	807,598
Gross Unrealized Losses - Less than 12 Months	[1]	(20,741)	(56,872)
Estimated Fair Value - 12 Months or More	[1]	37,655	0
Gross Unrealized Losses - 12 Months or More	[1]	(906)	0
Estimated Fair Value - Total	[1]	1,187,183	807,598
Gross Unrealized Losses - Total	[1]	(21,647)	(56,872)
Fixed maturities | Asset backed securities
Available for sale securities:
Estimated Fair Value - Less than 12 Months	[1]	587,561	627,557
Gross Unrealized Losses - Less than 12 Months	[1]	(4,404)	(5,465)
Estimated Fair Value - 12 Months or More	[1]	22,051	65,723
Gross Unrealized Losses - 12 Months or More	[1]	(344)	(1,061)
Estimated Fair Value - Total	[1]	609,612	693,280
Gross Unrealized Losses - Total	[1]	(4,748)	(6,526)
Equity securities
Available for sale securities:
Estimated Fair Value - Less than 12 Months		170,937	269,381
Gross Unrealized Losses - Less than 12 Months		(7,873)	(17,517)
Estimated Fair Value - 12 Months or More		0	0
Gross Unrealized Losses - 12 Months or More		0	0
Estimated Fair Value - Total		170,937	269,381
Gross Unrealized Losses - Total		(7,873)	(17,517)
Other investments
Available for sale securities:
Estimated Fair Value - Less than 12 Months		725	39,299
Gross Unrealized Losses - Less than 12 Months		(1)	(2,465)
Estimated Fair Value - 12 Months or More		0	0
Gross Unrealized Losses - 12 Months or More		0	0
Estimated Fair Value - Total		725	39,299
Gross Unrealized Losses - Total		(1)	(2,465)
Short-term investments
Available for sale securities:
Estimated Fair Value - Less than 12 Months		110,444	29,146
Gross Unrealized Losses - Less than 12 Months		(504)	(145)
Estimated Fair Value - 12 Months or More		0	0
Gross Unrealized Losses - 12 Months or More		0	0
Estimated Fair Value - Total		110,444	29,146
Gross Unrealized Losses - Total		$ (504)	$ (145)

[1] In securities lending transactions, the Company receives collateral in excess of the fair value of the securities pledged. For purposes of this table, the Company has excluded the collateral received under securities lending, at fair value and included the securities pledged under securities lending, at fair value. See “—Securities Lending Agreements.”

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Investment Information - Maturity profile of available for sale securities) (Details) - USD ($) $ in Thousands		Sep. 30, 2017	Dec. 31, 2016
Estimated Fair Value:
Estimated fair value		$ 13,792,903	$ 13,426,577
Amortized Cost:
Amortized cost		13,722,581	13,522,671
Fixed maturities
Estimated Fair Value:
Due in one year or less		537,043	560,830
Due after one year through five years		7,547,002	6,158,148
Due after five years through 10 years		3,495,424	4,676,847
Due after 10 years		284,633	610,962
Single maturity date		11,864,102	12,006,787
Estimated fair value	[1]	14,317,651	14,156,918
Amortized Cost:
Due in one year or less		534,513	557,675
Due after one year through five years		7,508,674	6,211,099
Due after five years through 10 years		3,480,251	4,710,017
Due after 10 years		278,823	620,849
Single maturity date		11,802,261	12,099,640
Amortized cost	[1]	14,250,230	14,256,595
Fixed maturities | Mortgage backed securities
Estimated Fair Value:
Securities without single maturity date		323,900	490,093
Amortized Cost:
Securities without single maturity date		321,362	493,656
Fixed maturities | Commercial mortgage backed securities
Estimated Fair Value:
Securities without single maturity date		584,730	536,051
Amortized Cost:
Securities without single maturity date		585,993	539,683
Fixed maturities | Asset backed securities
Estimated Fair Value:
Securities without single maturity date		1,544,919	1,123,987
Amortized Cost:
Securities without single maturity date		$ 1,540,614	$ 1,123,616

[1] In securities lending transactions, the Company receives collateral in excess of the fair value of the securities pledged. For purposes of this table, the Company has excluded the collateral received under securities lending, at fair value and included the securities pledged under securities lending, at fair value. See “—Securities Lending Agreements.”

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Investment Information - Securities lending agreements (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Disclosure Investment Information [Abstract]
Fair value of cash collateral received on securities lending	$ 63,800	$ 212,500
Fair value of non-cash collateral received on securities lending	479,500	550,100
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Securities lending payable	543,243	762,554
Gross amount of recognized liabilities for securities lending in offsetting disclosure in Note 9	0	0
Amounts related to securities lending not included in offsetting disclosure in Note 9	543,243	762,554
US government and government agencies
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Securities lending payable	507,954	718,492
Corporate bonds
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Securities lending payable	31,305	29,078
Equity securities
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Securities lending payable	3,984	14,984
Overnight and continuous
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Securities lending payable	460,127	600,077
Overnight and continuous | US government and government agencies
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Securities lending payable	424,838	556,015
Overnight and continuous | Corporate bonds
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Securities lending payable	31,305	29,078
Overnight and continuous | Equity securities
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Securities lending payable	3,984	14,984
Less than 30 days
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Securities lending payable	8,186	31,244
Less than 30 days | US government and government agencies
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Securities lending payable	8,186	31,244
Less than 30 days | Corporate bonds
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Securities lending payable	0	0
Less than 30 days | Equity securities
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Securities lending payable	0	0
30 - 90 days
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Securities lending payable	74,930	126,093
30 - 90 days | US government and government agencies
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Securities lending payable	74,930	126,093
30 - 90 days | Corporate bonds
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Securities lending payable	0	0
30 - 90 days | Equity securities
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Securities lending payable	0	0
90 days or more
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Securities lending payable	0	5,140
90 days or more | US government and government agencies
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Securities lending payable	0	5,140
90 days or more | Corporate bonds
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Securities lending payable	0	0
90 days or more | Equity securities
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Securities lending payable	$ 0	$ 0

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Investment Information - Other investments (Details) - USD ($) $ in Thousands		Sep. 30, 2017	Dec. 31, 2016
Schedule Of Other Investments [Line Items]
Other investments and fair value option investments		$ 2,557,544	$ 2,088,763
Available for sale
Schedule Of Other Investments [Line Items]
Other investments and fair value option investments		260,339	167,970
Available for sale | Asian and emerging markets
Schedule Of Other Investments [Line Items]
Other investments and fair value option investments		123,225	84,778
Available for sale | Investment grade fixed income
Schedule Of Other Investments [Line Items]
Other investments and fair value option investments		53,325	33,923
Available for sale | Credit related funds
Schedule Of Other Investments [Line Items]
Other investments and fair value option investments		20,752	7,469
Available for sale | Other
Schedule Of Other Investments [Line Items]
Other investments and fair value option investments		63,037	41,800
Fair value option
Schedule Of Other Investments [Line Items]
Other investments and fair value option investments		2,297,205	1,920,793
Fair value option | Term loan investments
Schedule Of Other Investments [Line Items]
Other investments and fair value option investments		1,387,663	1,190,799
Other investments par		1,378,797	1,208,537
Fair value option | Mezzanine debt funds
Schedule Of Other Investments [Line Items]
Other investments and fair value option investments		172,000	127,943
Fair value option | Asian and emerging markets
Schedule Of Other Investments [Line Items]
Other investments and fair value option investments		300,552	178,568
Fair value option | Investment grade fixed income
Schedule Of Other Investments [Line Items]
Other investments and fair value option investments		95,151	75,468
Fair value option | Credit related funds
Schedule Of Other Investments [Line Items]
Other investments and fair value option investments		194,200	218,298
Fair value option | Other
Schedule Of Other Investments [Line Items]
Other investments and fair value option investments	[1]	$ 147,639	$ 129,717

[1] Includes fund investments with strategies in mortgage servicing rights, transportation, infrastructure and other.

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Investment Information - Fair value option (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Fair Value, Option, Quantitative Disclosures [Line Items]
Investments accounted for using the fair value option	$ 4,249,634	$ 3,421,220
Fixed maturities
Fair Value, Option, Quantitative Disclosures [Line Items]
Investments accounted for using the fair value option	1,508,204	1,099,116
Other investments
Fair Value, Option, Quantitative Disclosures [Line Items]
Investments accounted for using the fair value option	2,297,205	1,920,793
Short-term investments
Fair Value, Option, Quantitative Disclosures [Line Items]
Investments accounted for using the fair value option	349,540	373,669
Equity securities
Fair Value, Option, Quantitative Disclosures [Line Items]
Investments accounted for using the fair value option	$ 94,685	$ 27,642

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Investment Information - Limited partnership interests (Details) - USD ($) $ in Thousands		Sep. 30, 2017	Dec. 31, 2016
Schedule of Equity Method Investments [Line Items]
Maximum Exposure to Loss		$ 1,071,731	$ 891,774
Aggregate unfunded commitments		1,580,000	1,290,000
Equity method investments
Schedule of Equity Method Investments [Line Items]
Maximum Exposure to Loss	[1]	962,574	800,970
Aggregate unfunded commitments		850,400	776,600
Fair value option
Schedule of Equity Method Investments [Line Items]
Maximum Exposure to Loss	[2]	109,157	90,804
Aggregate unfunded commitments		$ 162,300	$ 16,700

[1] Aggregate unfunded commitments were $850.4 million at September 30, 2017, compared to $776.6 million at December 31, 2016.

[2] Aggregate unfunded commitments were $162.3 million at September 30, 2017, compared to $16.7 million at December 31, 2016.

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Investment Information - Net investment income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Net investment income:
Gross investment income	$ 139,945	$ 113,846	$ 412,336	$ 334,546
Investment expenses	(23,486)	(20,228)	(66,879)	(58,855)
Net investment income	116,459	93,618	345,457	275,691
Fixed maturities
Net investment income:
Gross investment income	96,144	71,366	284,807	223,033
Equity securities (dividends)
Net investment income:
Gross investment income	2,887	3,311	9,184	10,409
Short-term investments
Net investment income:
Gross investment income	2,957	1,703	6,732	3,015
Other
Net investment income:
Gross investment income	$ 37,957	$ 37,466	$ 111,613	$ 98,089

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Investment Information - Net realized gains and losses (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Net realized gains and losses:
Available for sale securities, gross gains on investment sales		$ 66,565	$ 84,451	$ 212,470	$ 266,965
Available for sale securities, gross losses on investment sales		(39,015)	(22,985)	(152,996)	(129,409)
Derivative instruments	[1]	4,298	(16,964)	(9,653)	24,102
Other	[2]	(782)	(10,858)	(20,655)	(31,753)
Net realized gains (losses)		66,275	125,105	122,163	230,647
Fixed maturities
Net realized gains and losses:
Change in fair value of assets and liabilities accounted for using the fair value option		4,035	43,935	34,232	62,234
Other investments
Net realized gains and losses:
Change in fair value of assets and liabilities accounted for using the fair value option		24,264	46,428	42,149	38,016
Equity securities
Net realized gains and losses:
Change in fair value of assets and liabilities accounted for using the fair value option		10,230	(52)	16,604	385
Short-term investments
Net realized gains and losses:
Change in fair value of assets and liabilities accounted for using the fair value option		$ (3,320)	$ 1,150	$ 12	$ 107

[1] See Note 9 for information on the Company’s derivative instruments.

[2] Includes the re-measurement of contingent consideration liability amounts.

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Investment Information - Other than temporary impairments recognized in earnings (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Net impairment losses recognized in earnings	$ (1,878)	$ (3,867)	$ (5,415)	$ (16,849)
Fixed maturities
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Net impairment losses recognized in earnings	(938)	(778)	(4,122)	(9,726)
Fixed maturities | Mortgage backed securities
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Net impairment losses recognized in earnings	(50)	(233)	(1,461)	(788)
Fixed maturities | Corporate bonds
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Net impairment losses recognized in earnings	(82)	0	(1,484)	(5,655)
Fixed maturities | Non-US government securities
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Net impairment losses recognized in earnings	(178)	(545)	(376)	(777)
Fixed maturities | Asset backed securities
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Net impairment losses recognized in earnings			0	(2,506)
Fixed maturities | US government and government agencies
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Net impairment losses recognized in earnings	(426)	0	(426)	0
Fixed maturities | Municipal bonds
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Net impairment losses recognized in earnings	(202)	0	(375)	0
Equity securities
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Net impairment losses recognized in earnings	(940)	(557)	(1,126)	(3,594)
Other investments
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Net impairment losses recognized in earnings	$ 0	$ (2,532)	$ (167)	$ (3,529)

XML

Investment Information - Other than temporary impairments rollforward (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Rollforward:
Balance at start of period	$ 4,437	$ 14,847	$ 13,138	$ 26,875
Credit loss impairments recognized on securities not previously impaired	0	38	31	1,388
Credit loss impairments recognized on securities previously impaired	15	60	210	582
Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security	0	0	0	0
Reductions for securities sold during the period	(689)	(1,166)	(9,616)	(15,066)
Balance at end of period	$ 3,763	$ 13,779	$ 3,763	$ 13,779

XML

Investment Information - Restricted assets (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Restricted Assets [Line Items]
Restricted assets	$ 6,628,124	$ 5,902,339
Collateral or guarantees - affiliated transactions
Restricted Assets [Line Items]
Restricted assets	4,264,131	3,871,971
Collateral or guarantees - third party agreements
Restricted Assets [Line Items]
Restricted assets	1,689,104	1,513,079
Deposits with US regulatory authorities
Restricted Assets [Line Items]
Restricted assets	618,136	472,890
Deposits with non-US regulatory authorities
Restricted Assets [Line Items]
Restricted assets	$ 56,753	$ 44,399

XML

Investment Information - Narrative (Details) $ in Thousands		3 Months Ended		9 Months Ended		12 Months Ended
		Sep. 30, 2017 USD ($) lots	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($) lots	Sep. 30, 2016 USD ($)	Dec. 31, 2016 USD ($) lots
Narrative items:
Investable assets		$ 22,000,000		$ 22,000,000
Equity in net income (loss) of investment funds accounted for using the equity method		31,090	$ 16,662	111,884	$ 32,054
OTTI unrealized (losses) gains at current fair value		$ 900		$ 900		$ 2,800
Continuous unrealized loss, qualitative disclosures:
Number of positions in an unrealized loss position (lots) | lots		2,870		2,870		3,540
Total number of positions (lots) | lots		7,410		7,410		7,240
Largest single loss		$ 1,600		$ 1,600		$ 4,600
OTTI unrealized losses (gains)	[1]			$ 2,241		$ 5,831
Minimum
Narrative items:
Time lag for reporting				1 month
Maximum
Narrative items:
Time lag for reporting				3 months
Underwriting segments
Narrative items:
Investable assets		19,700,000		$ 19,700,000
Equity in net income (loss) of investment funds accounted for using the equity method		31,090	16,662	111,884	32,054
Other
Narrative items:
Investable assets		2,300,000		2,300,000
Equity in net income (loss) of investment funds accounted for using the equity method		$ 0	$ 0	$ 0	$ 0

[1] Represents the total other-than-temporary impairments (“OTTI”) recognized in accumulated other comprehensive income (“AOCI”). It does not include the change in fair value subsequent to the impairment measurement date. At September 30, 2017, the net unrealized gain related to securities for which a non-credit OTTI was recognized in AOCI was $0.9 million, compared to a net unrealized gain of $2.8 million at December 31, 2016.

XML

Fair Value - Fair Value Hierarchy (Details) - Recurring - USD ($) $ in Thousands		Sep. 30, 2017	Dec. 31, 2016
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		$ 6,855,812	$ 4,555,092
Liabilities measured at fair value		0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Contingent consideration liability
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities measured at fair value		0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Securities sold but not yet purchased
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities measured at fair value	[1]	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Derivative instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities measured at fair value		0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed maturities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[2]	3,687,126	2,691,575
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed maturities | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[2]	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed maturities | Mortgage backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[2]	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed maturities | Municipal bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[2]	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed maturities | Commercial mortgage backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[2]	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed maturities | US government and government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[2]	3,687,126	2,691,575
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed maturities | Non-US government securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[2]	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fixed maturities | Asset backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[2]	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		473,908	529,695
Quoted Prices in Active Markets for Identical Assets (Level 1) | Short-term investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		1,600,885	608,862
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		83,254	112,313
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other investments at fair value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		83,254	112,313
Quoted Prices in Active Markets for Identical Assets (Level 1) | Derivative instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair value option
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		1,010,639	612,647
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair value option | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair value option | Mortgage backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair value option | Municipal bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair value option | Commercial mortgage backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair value option | US government and government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		487,475	197,486
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair value option | Non-US government securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair value option | Asset backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair value option | Short-term investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		343,620	309,127
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair value option | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		59,332	25,328
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair value option | Other investments fair value option
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		120,212	80,706
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		12,896,364	13,559,270
Liabilities measured at fair value		(95,719)	(59,206)
Significant Other Observable Inputs (Level 2) | Contingent consideration liability
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities measured at fair value		0	0
Significant Other Observable Inputs (Level 2) | Securities sold but not yet purchased
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities measured at fair value	[1]	(72,682)	(33,157)
Significant Other Observable Inputs (Level 2) | Derivative instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities measured at fair value		(23,037)	(26,049)
Significant Other Observable Inputs (Level 2) | Fixed maturities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[2]	10,612,585	11,435,710
Significant Other Observable Inputs (Level 2) | Fixed maturities | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[2]	4,263,446	4,374,029
Significant Other Observable Inputs (Level 2) | Fixed maturities | Mortgage backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[2]	323,496	490,093
Significant Other Observable Inputs (Level 2) | Fixed maturities | Municipal bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[2]	2,353,234	3,713,434
Significant Other Observable Inputs (Level 2) | Fixed maturities | Commercial mortgage backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[2]	584,185	536,051
Significant Other Observable Inputs (Level 2) | Fixed maturities | US government and government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[2]	74,486	112,965
Significant Other Observable Inputs (Level 2) | Fixed maturities | Non-US government securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[2]	1,473,819	1,096,440
Significant Other Observable Inputs (Level 2) | Fixed maturities | Asset backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[2]	1,539,919	1,112,698
Significant Other Observable Inputs (Level 2) | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		6,699	2,985
Significant Other Observable Inputs (Level 2) | Short-term investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		45,151	3,143
Significant Other Observable Inputs (Level 2) | Other investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		1,417	0
Significant Other Observable Inputs (Level 2) | Other investments at fair value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		1,417	0
Significant Other Observable Inputs (Level 2) | Derivative instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		33,141	28,410
Significant Other Observable Inputs (Level 2) | Fair value option
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		2,197,371	2,089,022
Significant Other Observable Inputs (Level 2) | Fair value option | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		811,710	790,935
Significant Other Observable Inputs (Level 2) | Fair value option | Mortgage backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		21,218	18,624
Significant Other Observable Inputs (Level 2) | Fair value option | Municipal bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		2,740
Significant Other Observable Inputs (Level 2) | Fair value option | Commercial mortgage backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		12,539
Significant Other Observable Inputs (Level 2) | Fair value option | US government and government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0	0
Significant Other Observable Inputs (Level 2) | Fair value option | Non-US government securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		97,614	61,747
Significant Other Observable Inputs (Level 2) | Fair value option | Asset backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		63,437	30,324
Significant Other Observable Inputs (Level 2) | Fair value option | Short-term investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		5,920	64,542
Significant Other Observable Inputs (Level 2) | Fair value option | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		35,353	2,314
Significant Other Observable Inputs (Level 2) | Fair value option | Other investments fair value option
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		1,146,840	1,120,536
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		60,557	54,633
Liabilities measured at fair value		(59,248)	(122,350)
Significant Unobservable Inputs (Level 3) | Contingent consideration liability
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities measured at fair value		(59,248)	(122,350)
Significant Unobservable Inputs (Level 3) | Securities sold but not yet purchased
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities measured at fair value	[1]	0	0
Significant Unobservable Inputs (Level 3) | Derivative instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities measured at fair value		0	0
Significant Unobservable Inputs (Level 3) | Fixed maturities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[2]	17,940	29,633
Significant Unobservable Inputs (Level 3) | Fixed maturities | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[2]	11,991	18,344
Significant Unobservable Inputs (Level 3) | Fixed maturities | Mortgage backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[2]	404	0
Significant Unobservable Inputs (Level 3) | Fixed maturities | Municipal bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[2]	0	0
Significant Unobservable Inputs (Level 3) | Fixed maturities | Commercial mortgage backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[2]	545	0
Significant Unobservable Inputs (Level 3) | Fixed maturities | US government and government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[2]	0	0
Significant Unobservable Inputs (Level 3) | Fixed maturities | Non-US government securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[2]	0	0
Significant Unobservable Inputs (Level 3) | Fixed maturities | Asset backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[2]	5,000	11,289
Significant Unobservable Inputs (Level 3) | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0	0
Significant Unobservable Inputs (Level 3) | Short-term investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0	0
Significant Unobservable Inputs (Level 3) | Other investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0	0
Significant Unobservable Inputs (Level 3) | Other investments at fair value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0	0
Significant Unobservable Inputs (Level 3) | Derivative instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0	0
Significant Unobservable Inputs (Level 3) | Fair value option
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		42,617	25,000
Significant Unobservable Inputs (Level 3) | Fair value option | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		11,471	0
Significant Unobservable Inputs (Level 3) | Fair value option | Mortgage backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0	0
Significant Unobservable Inputs (Level 3) | Fair value option | Municipal bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0
Significant Unobservable Inputs (Level 3) | Fair value option | Commercial mortgage backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0
Significant Unobservable Inputs (Level 3) | Fair value option | US government and government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0	0
Significant Unobservable Inputs (Level 3) | Fair value option | Non-US government securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0	0
Significant Unobservable Inputs (Level 3) | Fair value option | Asset backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0	0
Significant Unobservable Inputs (Level 3) | Fair value option | Short-term investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0	0
Significant Unobservable Inputs (Level 3) | Fair value option | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0	0
Significant Unobservable Inputs (Level 3) | Fair value option | Other investments fair value option
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		31,146	25,000
Estimated Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		20,987,408	18,919,203
Liabilities measured at fair value		(154,967)	(181,556)
Estimated Fair Value | Contingent consideration liability
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities measured at fair value		(59,248)	(122,350)
Estimated Fair Value | Securities sold but not yet purchased
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities measured at fair value	[1]	(72,682)	(33,157)
Estimated Fair Value | Derivative instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities measured at fair value		(23,037)	(26,049)
Estimated Fair Value | Fixed maturities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		14,317,651	14,156,918
Estimated Fair Value | Fixed maturities | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		4,275,437	4,392,373
Estimated Fair Value | Fixed maturities | Mortgage backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		323,900	490,093
Estimated Fair Value | Fixed maturities | Municipal bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		2,353,234	3,713,434
Estimated Fair Value | Fixed maturities | Commercial mortgage backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		584,730	536,051
Estimated Fair Value | Fixed maturities | US government and government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		3,761,612	2,804,540
Estimated Fair Value | Fixed maturities | Non-US government securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		1,473,819	1,096,440
Estimated Fair Value | Fixed maturities | Asset backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		1,544,919	1,123,987
Estimated Fair Value | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		480,607	532,680
Estimated Fair Value | Short-term investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		1,646,036	612,005
Estimated Fair Value | Other investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		260,339	167,970
Estimated Fair Value | Other investments at fair value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		84,671	112,313
Estimated Fair Value | Other investments measured at net asset value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[3]	175,668	55,657
Estimated Fair Value | Derivative instruments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		33,141	28,410
Estimated Fair Value | Fair value option
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		4,249,634	3,421,220
Estimated Fair Value | Fair value option | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		823,181	790,935
Estimated Fair Value | Fair value option | Mortgage backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		21,218	18,624
Estimated Fair Value | Fair value option | Municipal bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		2,740
Estimated Fair Value | Fair value option | Commercial mortgage backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		12,539
Estimated Fair Value | Fair value option | US government and government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		487,475	197,486
Estimated Fair Value | Fair value option | Non-US government securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		97,614	61,747
Estimated Fair Value | Fair value option | Asset backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		63,437	30,324
Estimated Fair Value | Fair value option | Short-term investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		349,540	373,669
Estimated Fair Value | Fair value option | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		94,685	27,642
Estimated Fair Value | Fair value option | Other investments fair value option
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		1,298,198	1,226,242
Estimated Fair Value | Fair value option | Other investments measured at net asset value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	[3]	$ 999,007	$ 694,551

[1] Represents the Company’s obligations to deliver securities that it did not own at the time of sale. Such amounts are included in “other liabilities” on the Company’s consolidated balance sheets.

[2] In securities lending transactions, the Company receives collateral in excess of the fair value of the securities pledged. For purposes of this table, the Company has excluded the collateral received under securities lending, at fair value and included the securities pledged under securities lending, at fair value. See Note 7, “Investment Information—Securities Lending Agreements.”

[3] In accordance with applicable accounting guidance, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets.

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Fair Value - Rollforward of Level 3 assets and liabilities (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of period		$ 36,570	$ 66,516	$ 54,633	$ 73,868
Total gains or (losses) (realized/unrealized) - included in earnings		0	1,667	4,672	(672)
Total gains or (losses) (realized/unrealized) - included in other comprehensive income		289	0	289	0
Purchases, issuances, sales and settlements
Purchases		1,348	0	6,283	776
Issuances		0	0	0	0
Sales		0	0	(26,242)	0
Settlements		0	(22,435)	(1,428)	(28,224)
Transfers in and/or out of Level 3		22,350	0	22,350	0
Balance at end of period		60,557	45,748	60,557	45,748
Contingent consideration liability
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of period		(57,246)	(111,670)	(122,350)	(96,048)
Total gains or (losses) (realized/unrealized) - included in earnings		(2,002)	(4,795)	(9,089)	(20,916)
Total gains or (losses) (realized/unrealized) - included in other comprehensive income		0	88	0	51
Purchases, issuances, sales and settlements
Purchases		0	0	0	0
Issuances		0	0	0	0
Sales		0	0	0	0
Settlements		0	0	(72,191)	536
Transfers in and/or out of Level 3		0	0	0	0
Balance at end of period		(59,248)	(116,377)	(59,248)	(116,377)
Available for sale | Asset backed securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of period	[1]	0	49,211	11,289	57,500
Total gains or (losses) (realized/unrealized) - included in earnings	[1]	0	0	3,779	(2,500)
Total gains or (losses) (realized/unrealized) - included in other comprehensive income	[1]	0	0	0	0
Purchases, issuances, sales and settlements
Purchases	[1]	0	0	0	0
Issuances	[1]	0	0	0	0
Sales	[1]	0	0	(13,640)	0
Settlements	[1]	0	(22,435)	(1,428)	(28,224)
Transfers in and/or out of Level 3	[1]	5,949	0	5,949	0
Balance at end of period	[1]	5,949	26,776	5,949	26,776
Available for sale | Corporate bonds
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of period		11,570	17,305	18,344	16,368
Total gains or (losses) (realized/unrealized) - included in earnings		0	1,667	893	1,828
Total gains or (losses) (realized/unrealized) - included in other comprehensive income		289	0	289	0
Purchases, issuances, sales and settlements
Purchases		0	0	4,935	776
Issuances		0	0	0	0
Sales		0	0	(12,602)	0
Settlements		0	0	0	0
Transfers in and/or out of Level 3		132	0	132	0
Balance at end of period		11,991	18,972	11,991	18,972
Fair value option | Corporate bonds
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of period		0	0	0	0
Total gains or (losses) (realized/unrealized) - included in earnings		0	0	0	0
Total gains or (losses) (realized/unrealized) - included in other comprehensive income		0	0	0	0
Purchases, issuances, sales and settlements
Purchases		0	0	0	0
Issuances		0	0	0	0
Sales		0	0	0	0
Settlements		0	0	0	0
Transfers in and/or out of Level 3		11,471	0	11,471	0
Balance at end of period		11,471	0	11,471	0
Fair value option | Other investments
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of period		25,000	0	25,000	0
Total gains or (losses) (realized/unrealized) - included in earnings		0	0	0	0
Total gains or (losses) (realized/unrealized) - included in other comprehensive income		0	0	0	0
Purchases, issuances, sales and settlements
Purchases		1,348	0	1,348	0
Issuances		0	0	0	0
Sales		0	0	0	0
Settlements		0	0	0	0
Transfers in and/or out of Level 3		4,798	0	4,798	0
Balance at end of period		$ 31,146	$ 0	$ 31,146	$ 0

[1] Includes asset backed securities, mortgage backed securities and commercial mortgage backed securities.

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Fair Value - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Fair Value Disclosures [Abstract]
Total assets and liabilities measured at fair value	$ 21,140,000	$ 19,100,000
Total assets and liabilities measured at fair value priced using non-binding broker quotes	$ 242,900	$ 234,000
Total assets and liabilities measured at fair value priced using non-binding broker quotes (percentage)	1.20%	1.20%
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior notes	$ 1,732,726	$ 1,732,258
Reportable Legal Entities | ACGL (Parent Guarantor)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior notes	297,030	296,957
Estimated fair value of senior notes	406,000
Reportable Legal Entities | Arch-U.S. (Subsidiary Issuer)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior notes	494,596	$ 494,525
Estimated fair value of senior notes	566,200
Fixed maturities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Transfers into Level 3	17,600
Other investments
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Transfers into Level 3	4,800
Unsecured debt | Notes due 2026
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior notes	496,000
Estimated fair value of senior notes	519,800
Unsecured debt | Notes due 2046
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior notes	445,100
Estimated fair value of senior notes	$ 503,500

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Derivative Instruments (Details) - USD ($) $ in Thousands		3 Months Ended			9 Months Ended
		Sep. 30, 2017		Sep. 30, 2016	Sep. 30, 2017		Sep. 30, 2016	Dec. 31, 2016
Derivative offsetting [Abstract]
Derivative assets subject to master netting agreements		$ 49,400			$ 49,400			$ 28,400
Derivative liabilities subject to master netting agreements		22,500			22,500			26,000
Net realized gains (losses) on derivative instruments
Net realized gains (losses) on derivative instruments	[1]	4,298		$ (16,964)	(9,653)		$ 24,102
Not Designated as Hedging Instrument [Member]
Derivative [Line Items]
Asset derivatives - fair value		51,472			51,472			30,001
Liability derivatives - fair value		(23,037)			(23,037)			(26,049)
Net realized gains (losses) on derivative instruments
Net realized gains (losses) on derivative instruments		4,298		(16,964)	(9,653)		24,102
Not Designated as Hedging Instrument [Member] | Futures contracts
Derivative [Line Items]
Net derivatives - notional value	[2],[3]	1,524,985			1,524,985			1,655,530
Net realized gains (losses) on derivative instruments
Net realized gains (losses) on derivative instruments		4,899		(15,368)	7,309		45,954
Not Designated as Hedging Instrument [Member] | Futures contracts | Other assets
Derivative [Line Items]
Asset derivatives - fair value		5,351	[3]		5,351	[3]		360
Not Designated as Hedging Instrument [Member] | Futures contracts | Other liabilities
Derivative [Line Items]
Liability derivatives - fair value	[3]	(6,722)			(6,722)			(9,398)
Not Designated as Hedging Instrument [Member] | Foreign currency forward contracts
Derivative [Line Items]
Net derivatives - notional value	[2],[3]	805,201			805,201			1,186,386
Net realized gains (losses) on derivative instruments
Net realized gains (losses) on derivative instruments		(228)		4,583	(12,266)		(13,951)
Not Designated as Hedging Instrument [Member] | Foreign currency forward contracts | Other assets
Derivative [Line Items]
Asset derivatives - fair value	[3]	19,376			19,376			9,354
Not Designated as Hedging Instrument [Member] | Foreign currency forward contracts | Other liabilities
Derivative [Line Items]
Liability derivatives - fair value	[3]	(5,348)			(5,348)			(12,941)
Not Designated as Hedging Instrument [Member] | TBAs
Derivative [Line Items]
Net derivatives - notional value	[2],[4]	18,143			18,143			0
Net realized gains (losses) on derivative instruments
Net realized gains (losses) on derivative instruments		122		(23)	143		311
Not Designated as Hedging Instrument [Member] | TBAs | Fixed maturities available for sale
Derivative [Line Items]
Asset derivatives - fair value		18,331	[4]		18,331	[4]		0
Liability derivatives - fair value	[4]	0			0			0
Not Designated as Hedging Instrument [Member] | Other
Derivative [Line Items]
Net derivatives - notional value	[2],[3]	2,032,922			2,032,922			1,014,863
Net realized gains (losses) on derivative instruments
Net realized gains (losses) on derivative instruments		(495)		$ (6,156)	(4,839)		$ (8,212)
Not Designated as Hedging Instrument [Member] | Other | Other assets
Derivative [Line Items]
Asset derivatives - fair value	[3]	8,414			8,414			20,287
Not Designated as Hedging Instrument [Member] | Other | Other liabilities
Derivative [Line Items]
Liability derivatives - fair value	[3]	$ (10,967)			$ (10,967)			$ (3,710)

[1] See Note 9 for information on the Company’s derivative instruments.

[2] Represents the absolute notional value of all outstanding contracts, consisting of long and short positions.

[3] The fair value of asset derivatives are included in ‘other assets’ and the fair value of liability derivatives are included in ‘other liabilities.’

[4] The fair value of TBAs are included in ‘fixed maturities available for sale, at fair value.’

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Commitments and Contingencies (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
Repayments of borrowings	$ 100,000	$ 172,000	$ 179,171
Investment commitments	$ 1,580,000	$ 1,580,000		$ 1,290,000

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Share Transactions - Share repurchases (Details) - Common shares - USD ($) shares in Millions, $ in Millions	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Class of Stock [Line Items]
Cumulative number of shares acquired since inception of share repurchase program	125.2
Aggregate purchase price of shares acquired since inception of share repurchase program	$ 3,680.0
Treasury stock, shares acquired (shares)		1.1
Treasury stock, value of shares acquired		$ 75.3
Remaining authorized repurchase amount	$ 446.5

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Share Transactions - Conversion of Non-voting common equivalent preferred shares (Details) - shares	1 Months Ended
	Jun. 30, 2017	Sep. 30, 2017	Jun. 08, 2017
Class of Stock [Line Items]
Number of convertible shares transferred	708,862
Number of common shares issued on conversion	7,088,620
Shares transferred
Class of Stock [Line Items]
Number of convertible shares transferred		638,141
Underwriter option
Class of Stock [Line Items]
Number of convertible shares transferred		95,721
AIG
Class of Stock [Line Items]
Preferred shares		567,420	1,276,282

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Share Transactions - Series F Preferred Shares (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions	1 Months Ended	9 Months Ended
	Aug. 31, 2017	Sep. 30, 2017	Sep. 30, 2016
Class of Stock [Line Items]
Proceeds from issuance of preferred shares, net		$ 222,054	$ 434,899
Series C Preferred Shares
Class of Stock [Line Items]
Dividend rate percentage	6.75%
Redemption price per share	$ 25.00
Series F Preferred Shares
Class of Stock [Line Items]
Preferred stock value outstanding	$ 230,000
Number of shares outstanding	9.2
Proportionate interest per depositary share	0.10%
Dividend rate percentage	5.45%
Par value per share	$ 0.01
Liquidation preference per share	25,000
Redemption price per share	$ 25,000
Proceeds from issuance of preferred shares, net	$ 222,100
Depositary share equivalent
Class of Stock [Line Items]
Liquidation preference per share	$ 25
Redemption price per share	$ 25

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Other Comprehensive Income (Loss) - Amounts reclassified from accumulated other comprehensive income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Other-than-temporary impairment losses	$ (1,878)	$ (3,867)	$ (5,415)	$ (16,999)
Income (loss) before income taxes	(37,028)	316,851	498,672	772,276
Income tax expense	(8,189)	(13,231)	(70,755)	(43,672)
Net of tax	(33,656)	252,872	404,638	618,725
Reclassification out of accumulated other comprehensive income | Unrealized appreciation on available-for-sale investments
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net realized gains (losses)	27,550	61,464	59,474	137,555
Other-than-temporary impairment losses	(1,878)	(3,867)	(5,415)	(16,999)
Income (loss) before income taxes	25,672	57,597	54,059	120,556
Income tax expense	(1,760)	(2,605)	(7,879)	(11,247)
Net of tax	$ 23,912	$ 54,992	$ 46,180	$ 109,309

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Other Comprehensive Income (Loss) - Components of other comprehensive income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Before tax amount:
Unrealized holding gains (losses) arising during period, before tax	$ 69,330	$ 11,692	$ 288,813	$ 281,770
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss), before tax	0	0	0	(150)
Less reclassification of net realized gains included in net income, before tax	25,672	57,597	54,059	120,556
Foreign currency translation adjustments, before tax	8,590	(5,407)	30,264	(5,733)
Other comprehensive income (loss), before tax	52,248	(51,312)	265,018	155,331
Tax expense (benefit):
Unrealized holding gains (losses) arising during period, tax	2,868	(4,589)	28,590	30,048
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss), tax	0	0	0	0
Less reclassification of net realized gains included in net income, tax	1,760	2,605	7,879	11,247
Foreign currency translation adjustments, tax	310	(95)	563	417
Other comprehensive income (loss), tax	1,418	(7,289)	21,274	19,218
Net of tax amount:
Unrealized holding gains (losses) arising during period, net of tax	66,462	16,281	260,223	251,722
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss), net of tax	0	0	0	(150)
Less reclassification of net realized gains included in net income, net of tax	23,912	54,992	46,180	109,309
Foreign currency translation adjustments, net of tax	8,280	(5,312)	29,701	(6,150)
Net current period other comprehensive income (loss)	$ 50,830	$ (44,023)	$ 243,744	$ 136,113

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Guarantor Financial Information - Condensed consolidating balance sheet (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Jun. 30, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2015
Assets
Total investments	$ 21,931,881		$ 19,719,651
Cash	862,361		842,942	$ 578,816		$ 553,326
Investments in subsidiaries	0		0
Due from subsidiaries and affiliates	0		0
Premiums receivable	1,269,678		1,072,435
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses	2,506,015		2,114,138
Contractholder receivables	1,864,348		1,717,436
Ceded unearned premiums	947,135		859,567
Deferred acquisition costs	531,196		447,560
Goodwill and intangible assets	684,405		781,553	90,941
Other assets	2,027,778		1,816,827
Total assets	32,624,797		29,372,109
Liabilities
Reserve for losses and loss adjustment expenses	11,351,267	$ 10,520,511	10,200,960	9,610,189	$ 9,471,647	9,125,250
Unearned premiums	3,751,550		3,406,870
Reinsurance balances payable	352,006		300,407
Contractholder payables	1,864,348		1,717,436
Collateral held for insured obligations	345,726		301,406
Deposit accounting liabilities			22,150
Senior notes	1,732,726		1,732,258
Revolving credit agreement borrowings	826,242		756,650
Due to subsidiaries and affiliates	0		0
Other liabilities	2,423,061		1,622,847
Total liabilities	22,646,926		20,060,984
Redeemable noncontrolling interests	205,829		205,553
Shareholders' Equity
Total shareholders’ equity available to Arch	8,911,144		8,253,718	7,313,983
Non-redeemable noncontrolling interests	860,898		851,854	834,808
Total shareholders’ equity	9,772,042		9,105,572	8,148,791
Total liabilities, noncontrolling interests and shareholders’ equity	32,624,797		29,372,109
Reportable Legal Entities | ACGL (Parent Guarantor)
Assets
Total investments	402		2,612
Cash	4,868		1,687	2,041		6,809
Investments in subsidiaries	9,214,178		8,660,586
Due from subsidiaries and affiliates	81		14,297
Premiums receivable	0		0
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses	0		0
Contractholder receivables	0		0
Ceded unearned premiums	0		0
Deferred acquisition costs	0		0
Goodwill and intangible assets	0		0
Other assets	13,357		15,725
Total assets	9,232,886		8,694,907
Liabilities
Reserve for losses and loss adjustment expenses	0		0
Unearned premiums	0		0
Reinsurance balances payable	0		0
Contractholder payables	0		0
Collateral held for insured obligations	0		0
Deposit accounting liabilities			0
Senior notes	297,030		296,957
Revolving credit agreement borrowings	0		100,000
Due to subsidiaries and affiliates	41		26,270
Other liabilities	24,671		17,962
Total liabilities	321,742		441,189
Redeemable noncontrolling interests	0		0
Shareholders' Equity
Total shareholders’ equity available to Arch	8,911,144		8,253,718
Non-redeemable noncontrolling interests	0		0
Total shareholders’ equity	8,911,144		8,253,718
Total liabilities, noncontrolling interests and shareholders’ equity	9,232,886		8,694,907
Reportable Legal Entities | Arch-U.S. (Subsidiary Issuer)
Assets
Total investments	69,671		41,672
Cash	88,818		71,955	19,392		17,023
Investments in subsidiaries	4,028,493		3,716,681
Due from subsidiaries and affiliates	117		51,298
Premiums receivable	0		0
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses	0		0
Contractholder receivables	0		0
Ceded unearned premiums	0		0
Deferred acquisition costs	0		0
Goodwill and intangible assets	0		0
Other assets	59,734		49,244
Total assets	4,246,833		3,930,850
Liabilities
Reserve for losses and loss adjustment expenses	0		0
Unearned premiums	0		0
Reinsurance balances payable	0		0
Contractholder payables	0		0
Collateral held for insured obligations	0		0
Deposit accounting liabilities			0
Senior notes	494,596		494,525
Revolving credit agreement borrowings	0		0
Due to subsidiaries and affiliates	542,103		535,584
Other liabilities	100,278		54,823
Total liabilities	1,136,977		1,084,932
Redeemable noncontrolling interests	0		0
Shareholders' Equity
Total shareholders’ equity available to Arch	3,109,856		2,845,918
Non-redeemable noncontrolling interests	0		0
Total shareholders’ equity	3,109,856		2,845,918
Total liabilities, noncontrolling interests and shareholders’ equity	$ 4,246,833		3,930,850
Percentage Ownership of Subsidiary	100.00%
Reportable Legal Entities | Other ACGL Subsidiaries
Assets
Total investments	$ 21,876,508		19,690,067
Cash	768,675		769,300	557,383		529,494
Investments in subsidiaries	0		0
Due from subsidiaries and affiliates	1,923,941		1,866,681
Premiums receivable	1,863,203		1,579,865
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses	7,023,836		6,114,518
Contractholder receivables	1,864,348		1,717,436
Ceded unearned premiums	2,240,129		1,985,311
Deferred acquisition costs	677,567		577,461
Goodwill and intangible assets	684,405		781,553
Other assets	2,146,993		1,901,786
Total assets	41,069,605		36,983,978
Liabilities
Reserve for losses and loss adjustment expenses	15,836,263		14,164,191
Unearned premiums	5,044,544		4,532,614
Reinsurance balances payable	945,530		807,837
Contractholder payables	1,864,348		1,717,436
Collateral held for insured obligations	345,726		301,406
Deposit accounting liabilities			22,150
Senior notes	941,100		940,776
Revolving credit agreement borrowings	826,242		656,650
Due to subsidiaries and affiliates	1,381,996		1,370,422
Other liabilities	2,669,614		1,867,040
Total liabilities	29,855,363		26,380,522
Redeemable noncontrolling interests	220,529		220,253
Shareholders' Equity
Total shareholders’ equity available to Arch	10,132,815		9,531,349
Non-redeemable noncontrolling interests	860,898		851,854
Total shareholders’ equity	10,993,713		10,383,203
Total liabilities, noncontrolling interests and shareholders’ equity	41,069,605		36,983,978
Consolidating Adjustments and Eliminations
Assets
Total investments	(14,700)		(14,700)
Cash	0		0	$ 0		$ 0
Investments in subsidiaries	(13,242,671)		(12,377,267)
Due from subsidiaries and affiliates	(1,924,139)		(1,932,276)
Premiums receivable	(593,525)		(507,430)
Reinsurance recoverable on unpaid and paid losses and loss adjustment expenses	(4,517,821)		(4,000,380)
Contractholder receivables	0		0
Ceded unearned premiums	(1,292,994)		(1,125,744)
Deferred acquisition costs	(146,371)		(129,901)
Goodwill and intangible assets	0		0
Other assets	(192,306)		(149,928)
Total assets	(21,924,527)		(20,237,626)
Liabilities
Reserve for losses and loss adjustment expenses	(4,484,996)		(3,963,231)
Unearned premiums	(1,292,994)		(1,125,744)
Reinsurance balances payable	(593,524)		(507,430)
Contractholder payables	0		0
Collateral held for insured obligations			0
Deposit accounting liabilities			0
Senior notes	0		0
Revolving credit agreement borrowings	0		0
Due to subsidiaries and affiliates	(1,924,140)		(1,932,276)
Other liabilities	(371,502)		(316,978)
Total liabilities	(8,667,156)		(7,845,659)
Redeemable noncontrolling interests	(14,700)		(14,700)
Shareholders' Equity
Total shareholders’ equity available to Arch	(13,242,671)		(12,377,267)
Non-redeemable noncontrolling interests	0		0
Total shareholders’ equity	(13,242,671)		(12,377,267)
Total liabilities, noncontrolling interests and shareholders’ equity	$ (21,924,527)		$ (20,237,626)

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Guarantor Financial Information - Condensed consolidating statement of income and comprehensive income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Revenues
Net premiums earned	$ 1,261,886	$ 958,403	$ 3,619,777	$ 2,915,967
Net investment income	116,459	93,618	345,457	275,691
Net realized gains (losses)	66,275	125,105	122,163	230,647
Net impairment losses recognized in earnings	(1,878)	(3,867)	(5,415)	(16,849)
Other underwriting income	6,064	7,980	15,519	38,251
Equity in net income (loss) of investment funds accounted for using the equity method	31,090	16,662	111,884	32,054
Other income (loss)	(342)	(400)	(3,118)	(432)
Total revenues	1,479,554	1,197,501	4,206,267	3,475,329
Expenses
Losses and loss adjustment expenses	1,046,141	524,183	2,288,571	1,631,724
Acquisition expenses	193,854	161,267	566,579	501,782
Other operating expenses	170,127	153,286	514,827	460,748
Corporate expenses	17,098	18,485	69,766	45,068
Amortization of intangible assets	31,824	4,865	93,942	14,493
Interest expense	29,510	15,943	86,935	47,713
Net foreign exchange (gains) losses	28,028	2,621	86,975	1,525
Total expenses	1,516,582	880,650	3,707,595	2,703,053
Income (loss) before income taxes	(37,028)	316,851	498,672	772,276
Income tax (expense) benefit	(8,189)	(13,231)	(70,755)	(43,672)
Income (loss) before equity in net income of subsidiaries	(45,217)	303,620	427,917	728,604
Equity in net income of subsidiaries	0	0	0	0
Net income (loss)	(45,217)	303,620	427,917	728,604
Net (income) loss attributable to noncontrolling interests	11,561	(50,748)	(23,279)	(109,879)
Net income available to Arch	(33,656)	252,872	404,638	618,725
Preferred dividends	(12,369)	(5,484)	(34,936)	(16,453)
Loss on redemption of preferred shares	(6,735)	0	(6,735)	0
Net income (loss) available to Arch common shareholders	(52,760)	247,388	362,967	602,272
Comprehensive income (loss) available to Arch	17,585	208,790	648,861	754,979
Reportable Legal Entities | ACGL (Parent Guarantor)
Revenues
Net premiums earned	0	0	0	0
Net investment income	117	6	123	7
Net realized gains (losses)	0	0	0	0
Net impairment losses recognized in earnings	0	0	0	0
Other underwriting income	0	0	0	0
Equity in net income (loss) of investment funds accounted for using the equity method	0	0	0	0
Other income (loss)	(102)	71	(368)	270
Total revenues	15	77	(245)	277
Expenses
Losses and loss adjustment expenses	0	0	0	0
Acquisition expenses	0	0	0	0
Other operating expenses	0	0	0	0
Corporate expenses	14,576	18,488	53,639	45,284
Amortization of intangible assets	0	0	0	0
Interest expense	5,934	5,948	18,024	17,811
Net foreign exchange (gains) losses	0	0	0	0
Total expenses	20,510	24,436	71,663	63,095
Income (loss) before income taxes	(20,495)	(24,359)	(71,908)	(62,818)
Income tax (expense) benefit	0	0	0	0
Income (loss) before equity in net income of subsidiaries	(20,495)	(24,359)	(71,908)	(62,818)
Equity in net income of subsidiaries	(13,161)	277,231	476,546	681,543
Net income (loss)	(33,656)	252,872	404,638	618,725
Net (income) loss attributable to noncontrolling interests	0	0	0	0
Net income available to Arch	(33,656)	252,872	404,638	618,725
Preferred dividends	(12,369)	(5,484)	(34,936)	(16,453)
Loss on redemption of preferred shares	(6,735)		(6,735)
Net income (loss) available to Arch common shareholders	(52,760)	247,388	362,967	602,272
Comprehensive income (loss) available to Arch	17,585	208,790	648,861	754,979
Reportable Legal Entities | Arch-U.S. (Subsidiary Issuer)
Revenues
Net premiums earned	0	0	0	0
Net investment income	151	803	1,151	2,351
Net realized gains (losses)	0	0	0	0
Net impairment losses recognized in earnings	0	0	0	0
Other underwriting income	0	0	0	0
Equity in net income (loss) of investment funds accounted for using the equity method	0	0	0	0
Other income (loss)	0	0	0	0
Total revenues	151	803	1,151	2,351
Expenses
Losses and loss adjustment expenses	0	0	0	0
Acquisition expenses	0	0	0	0
Other operating expenses	0	0	0	0
Corporate expenses	410	608	3,727	1,549
Amortization of intangible assets	0	0	0	0
Interest expense	12,037	6,627	35,956	19,946
Net foreign exchange (gains) losses	0	0	0	0
Total expenses	12,447	7,235	39,683	21,495
Income (loss) before income taxes	(12,296)	(6,432)	(38,532)	(19,144)
Income tax (expense) benefit	4,432	2,116	13,374	6,446
Income (loss) before equity in net income of subsidiaries	(7,864)	(4,316)	(25,158)	(12,698)
Equity in net income of subsidiaries	50,057	21,945	213,586	64,684
Net income (loss)	42,193	17,629	188,428	51,986
Net (income) loss attributable to noncontrolling interests	0	0	0	0
Net income available to Arch	42,193	17,629	188,428	51,986
Preferred dividends	0	0	0	0
Loss on redemption of preferred shares	0		0
Net income (loss) available to Arch common shareholders	42,193	17,629	188,428	51,986
Comprehensive income (loss) available to Arch	47,676	2,019	240,759	89,204
Reportable Legal Entities | Other ACGL Subsidiaries
Revenues
Net premiums earned	1,261,886	958,403	3,619,777	2,915,967
Net investment income	138,784	99,654	410,392	294,012
Net realized gains (losses)	66,275	125,105	122,163	230,647
Net impairment losses recognized in earnings	(1,878)	(3,867)	(5,415)	(16,849)
Other underwriting income	6,064	7,980	15,519	54,749
Equity in net income (loss) of investment funds accounted for using the equity method	31,090	16,662	111,884	32,054
Other income (loss)	(240)	(471)	(2,750)	(702)
Total revenues	1,501,981	1,203,466	4,271,570	3,509,878
Expenses
Losses and loss adjustment expenses	1,046,141	524,183	2,288,571	1,631,724
Acquisition expenses	193,854	161,267	566,579	501,782
Other operating expenses	170,127	153,286	514,827	460,748
Corporate expenses	2,112	(611)	12,400	(1,765)
Amortization of intangible assets	31,824	4,865	93,942	14,493
Interest expense	33,811	9,890	98,197	46,169
Net foreign exchange (gains) losses	20,510	2,723	65,701	5,093
Total expenses	1,498,379	855,603	3,640,217	2,658,244
Income (loss) before income taxes	3,602	347,863	631,353	851,634
Income tax (expense) benefit	(12,621)	(15,347)	(84,129)	(50,118)
Income (loss) before equity in net income of subsidiaries	(9,019)	332,516	547,224	801,516
Equity in net income of subsidiaries	0	0	0	0
Net income (loss)	(9,019)	332,516	547,224	801,516
Net (income) loss attributable to noncontrolling interests	11,238	(51,071)	(24,247)	(110,844)
Net income available to Arch	2,219	281,445	522,977	690,672
Preferred dividends	0	0	0	0
Loss on redemption of preferred shares	0		0
Net income (loss) available to Arch common shareholders	2,219	281,445	522,977	690,672
Comprehensive income (loss) available to Arch	45,936	237,555	745,856	830,348
Consolidating Adjustments and Eliminations
Revenues
Net premiums earned	0	0	0	0
Net investment income	(22,593)	(6,845)	(66,209)	(20,679)
Net realized gains (losses)	0	0	0	0
Net impairment losses recognized in earnings	0	0	0	0
Other underwriting income	0	0	0	(16,498)
Equity in net income (loss) of investment funds accounted for using the equity method	0	0	0	0
Other income (loss)	0	0	0	0
Total revenues	(22,593)	(6,845)	(66,209)	(37,177)
Expenses
Losses and loss adjustment expenses	0	0	0	0
Acquisition expenses	0	0	0	0
Other operating expenses	0	0	0	0
Corporate expenses	0	0	0	0
Amortization of intangible assets	0	0	0	0
Interest expense	(22,272)	(6,522)	(65,242)	(36,213)
Net foreign exchange (gains) losses	7,518	(102)	21,274	(3,568)
Total expenses	(14,754)	(6,624)	(43,968)	(39,781)
Income (loss) before income taxes	(7,839)	(221)	(22,241)	2,604
Income tax (expense) benefit	0	0	0	0
Income (loss) before equity in net income of subsidiaries	(7,839)	(221)	(22,241)	2,604
Equity in net income of subsidiaries	(36,896)	(299,176)	(690,132)	(746,227)
Net income (loss)	(44,735)	(299,397)	(712,373)	(743,623)
Net (income) loss attributable to noncontrolling interests	323	323	968	965
Net income available to Arch	(44,412)	(299,074)	(711,405)	(742,658)
Preferred dividends	0	0	0	0
Loss on redemption of preferred shares	0		0
Net income (loss) available to Arch common shareholders	(44,412)	(299,074)	(711,405)	(742,658)
Comprehensive income (loss) available to Arch	$ (93,612)	$ (239,574)	$ (986,615)	$ (919,552)

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Guarantor Financial Information - Condensed consolidating statement of cash flows (Details) - USD ($) $ in Thousands		3 Months Ended	9 Months Ended
		Sep. 30, 2017	Sep. 30, 2017	Sep. 30, 2016
Operating Activities
Net Cash Provided by (Used in) Operating Activities			$ 1,081,134	$ 1,037,139
Investing Activities
Purchases of fixed maturity investments			(28,079,129)	(27,840,555)
Purchases of equity securities			(667,135)	(377,767)
Purchases of other investments			(1,406,528)	(1,008,774)
Proceeds from sales of fixed maturity investments			27,629,474	26,731,924
Proceeds from sales of equity securities			751,873	464,904
Proceeds from sales, redemptions and maturities of other investments			938,581	879,330
Proceeds from redemptions and maturities of fixed maturity investments			747,621	540,823
Net settlements of derivative instruments			(20,952)	23,396
Net (purchases) sales of short-term investments			(964,653)	(604,162)
Change in cash collateral related to securities lending			148,692	(27,935)
Contributions to subsidiaries			0	0
Issuance of intercompany loans			0
Repayment of intercompany loans			0
Acquisitions, net of cash			(27,709)	(20,911)
Purchases of fixed assets			(16,862)	(11,565)
Other			86,145	(3,816)
Net Cash Provided By (Used For) Investing Activities			(880,582)	(1,255,108)
Financing Activities
Proceeds from issuance of preferred shares, net			222,054	434,899
Redemption of preferred shares			(230,000)	0
Purchases of common shares under share repurchase program			0	(75,256)
Proceeds from common shares issued, net			(7,484)	(3,785)
Proceeds from intercompany borrowings			0
Proceeds from borrowings			238,915	46,000
Repayments of Intercompany Debt Financing Activities			0
Repayments of borrowings		$ (100,000)	(172,000)	(179,171)
Change in cash collateral related to securities lending			(148,692)	27,935
Dividends paid to redeemable noncontrolling interests			(13,491)	(13,491)
Dividends paid to parent	[1]		0	0
Other			(49,280)	33,113
Preferred dividends paid			(34,936)	(16,453)
Net Cash Provided By (Used For) Financing Activities			(194,914)	253,791
Effects of exchange rate changes on foreign currency cash			13,781	(10,332)
Increase (decrease) in cash			19,419	25,490
Cash beginning of year			842,942	553,326
Cash end of period		862,361	862,361	578,816
Reportable Legal Entities | ACGL (Parent Guarantor)
Operating Activities
Net Cash Provided by (Used in) Operating Activities			130,715	94,250
Investing Activities
Purchases of fixed maturity investments			0	0
Purchases of equity securities			0	0
Purchases of other investments			0	0
Proceeds from sales of fixed maturity investments			0	0
Proceeds from sales of equity securities			0	0
Proceeds from sales, redemptions and maturities of other investments			0	0
Proceeds from redemptions and maturities of fixed maturity investments			0	0
Net settlements of derivative instruments			0	0
Net (purchases) sales of short-term investments			2,209	(436,830)
Change in cash collateral related to securities lending			0	0
Contributions to subsidiaries			20,641	(3,585)
Issuance of intercompany loans			0
Repayment of intercompany loans			0
Acquisitions, net of cash			0	0
Purchases of fixed assets			(18)	(8)
Other			0	2,000
Net Cash Provided By (Used For) Investing Activities			22,832	(438,423)
Financing Activities
Proceeds from issuance of preferred shares, net			222,054	434,899
Redemption of preferred shares			(230,000)
Purchases of common shares under share repurchase program				(75,256)
Proceeds from common shares issued, net			(7,484)	(3,785)
Proceeds from intercompany borrowings			0
Proceeds from borrowings			0	0
Repayments of Intercompany Debt Financing Activities			0
Repayments of borrowings			(100,000)	0
Change in cash collateral related to securities lending			0	0
Dividends paid to redeemable noncontrolling interests			0	0
Dividends paid to parent	[1]		0	0
Other			0	0
Preferred dividends paid			(34,936)	(16,453)
Net Cash Provided By (Used For) Financing Activities			(150,366)	339,405
Effects of exchange rate changes on foreign currency cash			0	0
Increase (decrease) in cash			3,181	(4,768)
Cash beginning of year			1,687	6,809
Cash end of period		4,868	4,868	2,041
Reportable Legal Entities | Arch-U.S. (Subsidiary Issuer)
Operating Activities
Net Cash Provided by (Used in) Operating Activities			70,761	14,448
Investing Activities
Purchases of fixed maturity investments			0	0
Purchases of equity securities			0	0
Purchases of other investments			0	0
Proceeds from sales of fixed maturity investments			0	0
Proceeds from sales of equity securities			0	0
Proceeds from sales, redemptions and maturities of other investments			0	0
Proceeds from redemptions and maturities of fixed maturity investments			0	41,500
Net settlements of derivative instruments			0	0
Net (purchases) sales of short-term investments			(27,998)	(53,779)
Change in cash collateral related to securities lending			0	0
Contributions to subsidiaries			(72,900)	0
Issuance of intercompany loans			0
Repayment of intercompany loans			47,000
Acquisitions, net of cash			0	0
Purchases of fixed assets			0	0
Other			0	0
Net Cash Provided By (Used For) Investing Activities			(53,898)	(12,279)
Financing Activities
Proceeds from issuance of preferred shares, net			0	0
Redemption of preferred shares			0
Purchases of common shares under share repurchase program				0
Proceeds from common shares issued, net			0	0
Proceeds from intercompany borrowings			0
Proceeds from borrowings			0	0
Repayments of Intercompany Debt Financing Activities			0
Repayments of borrowings			0	0
Change in cash collateral related to securities lending			0	0
Dividends paid to redeemable noncontrolling interests			0	0
Dividends paid to parent	[1]		0	0
Other			0	200
Preferred dividends paid			0	0
Net Cash Provided By (Used For) Financing Activities			0	200
Effects of exchange rate changes on foreign currency cash			0	0
Increase (decrease) in cash			16,863	2,369
Cash beginning of year			71,955	17,023
Cash end of period		88,818	88,818	19,392
Reportable Legal Entities | Other ACGL Subsidiaries
Operating Activities
Net Cash Provided by (Used in) Operating Activities			1,464,701	1,096,443
Investing Activities
Purchases of fixed maturity investments			(28,079,129)	(27,840,555)
Purchases of equity securities			(667,135)	(377,767)
Purchases of other investments			(1,406,528)	(1,008,774)
Proceeds from sales of fixed maturity investments			27,629,474	26,731,924
Proceeds from sales of equity securities			751,873	464,904
Proceeds from sales, redemptions and maturities of other investments			938,581	879,330
Proceeds from redemptions and maturities of fixed maturity investments			747,621	499,323
Net settlements of derivative instruments			(20,952)	23,396
Net (purchases) sales of short-term investments			(938,864)	(113,553)
Change in cash collateral related to securities lending			148,692	(27,935)
Contributions to subsidiaries			(353,588)	(9,247)
Issuance of intercompany loans			(47,000)
Repayment of intercompany loans			0
Acquisitions, net of cash			(27,709)	(20,911)
Purchases of fixed assets			(16,844)	(11,557)
Other			106,786	(5,816)
Net Cash Provided By (Used For) Investing Activities			(1,234,722)	(817,238)
Financing Activities
Proceeds from issuance of preferred shares, net			0	0
Redemption of preferred shares			0
Purchases of common shares under share repurchase program				0
Proceeds from common shares issued, net			405,847	12,832
Proceeds from intercompany borrowings			47,000
Proceeds from borrowings			238,915	46,000
Repayments of Intercompany Debt Financing Activities			(47,000)
Repayments of borrowings			(72,000)	(179,171)
Change in cash collateral related to securities lending			(148,692)	27,935
Dividends paid to redeemable noncontrolling interests			(14,447)	(14,448)
Dividends paid to parent	[1]		(584,087)	(167,045)
Other			(69,921)	32,913
Preferred dividends paid			0	0
Net Cash Provided By (Used For) Financing Activities			(244,385)	(240,984)
Effects of exchange rate changes on foreign currency cash			13,781	(10,332)
Increase (decrease) in cash			(625)	27,889
Cash beginning of year			769,300	529,494
Cash end of period		768,675	768,675	557,383
Consolidating Adjustments and Eliminations
Operating Activities
Net Cash Provided by (Used in) Operating Activities			(585,043)	(168,002)
Investing Activities
Purchases of fixed maturity investments			0	0
Purchases of equity securities			0	0
Purchases of other investments			0	0
Proceeds from sales of fixed maturity investments			0	0
Proceeds from sales of equity securities			0	0
Proceeds from sales, redemptions and maturities of other investments			0	0
Proceeds from redemptions and maturities of fixed maturity investments			0	0
Net settlements of derivative instruments			0	0
Net (purchases) sales of short-term investments			0	0
Change in cash collateral related to securities lending			0	0
Contributions to subsidiaries			405,847	12,832
Issuance of intercompany loans			47,000
Repayment of intercompany loans			(47,000)
Acquisitions, net of cash			0	0
Purchases of fixed assets			0	0
Other			(20,641)	0
Net Cash Provided By (Used For) Investing Activities			385,206	12,832
Financing Activities
Proceeds from issuance of preferred shares, net			0	0
Redemption of preferred shares			0
Purchases of common shares under share repurchase program				0
Proceeds from common shares issued, net			(405,847)	(12,832)
Proceeds from intercompany borrowings			(47,000)
Proceeds from borrowings			0	0
Repayments of Intercompany Debt Financing Activities			47,000
Repayments of borrowings			0	0
Change in cash collateral related to securities lending			0	0
Dividends paid to redeemable noncontrolling interests			956	957
Dividends paid to parent	[1]		584,087	167,045
Other			20,641	0
Preferred dividends paid			0	0
Net Cash Provided By (Used For) Financing Activities			199,837	155,170
Effects of exchange rate changes on foreign currency cash			0	0
Increase (decrease) in cash			0	0
Cash beginning of year			0	0
Cash end of period		$ 0	$ 0	$ 0

[1] Dividends received by parent are included in net cash provided by (used for) operating activities

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Income Taxes (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Effective tax rate on income before income taxes (percentage)	14.20%	5.70%
Statutory federal tax rate	35.00%
Tax benefit on share-based compensation	1.50%
Net deferred tax assets	$ 248.3		$ 221.2
Income taxes paid	$ 47.9	$ 40.7

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Transactions with Related Parties (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Related Party Transaction [Line Items]
Investment commitments	$ 1,580,000		$ 1,290,000
Purchases of other investments	1,406,528	$ 1,008,774
Common director | The Carlyle Group
Related Party Transaction [Line Items]
Investments, value	248,500
Unfunded commitments	471,600
Purchases of other investments	86,000	50,100
Aggregate cash distributions received	$ 48,700	$ 17,900

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Acquisition (Details) - AIG United Guaranty Insurance (Asia) Limited $ in Millions	Jul. 01, 2017 USD ($)
Business Acquisition [Line Items]
Payment to acquire businesses	$ 40.0
Intangible assets acquired	2.3
Goodwill	$ 0.8

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Subsequent Event (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Oct. 31, 2017	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Oct. 25, 2017
Subsequent Event [Line Items]
Incurred claims		$ 1,092,175	$ 598,940	$ 2,487,212	$ 1,848,299
Subsequent event | Variable Interest Entity, Not Primary Beneficiary | Bellemeade Re 2017-1 Ltd
Subsequent Event [Line Items]
Aggregate excess of loss reinsurance agreement						$ 368,100
Aggregate losses						165,700
Mortgage insurance-linked notes issued						$ 368,100
Subsequent event | California Wildfires [Member] | Minimum
Subsequent Event [Line Items]
Incurred claims	$ 30,000
Subsequent event | California Wildfires [Member] | Maximum
Subsequent Event [Line Items]
Incurred claims	$ 55,000