Subsequent Events

9 Months Ended

Sep. 30, 2019

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Bellemeade Re 2019-4 Ltd.

In October 2019, the Company’s first-lien U.S. mortgage insurance subsidiaries entered into an aggregate excess of loss reinsurance agreement with Bellemeade Re 2019-4 Ltd. (“Bellemeade 2019-4”), a special purpose reinsurance company domiciled in Bermuda. The Bellemeade 2019-4 agreement provides for up to $577.3 million of aggregate excess of loss reinsurance coverage at inception in excess of $162.4 million of aggregate losses for new delinquencies on a portfolio of in-force policies issued in the first half of 2019. The coverage

amount decreases over a ten-year period as the underlying covered mortgages amortize.

Bellemeade 2019-4 financed the coverage through the issuance of mortgage insurance-linked notes in an aggregate amount of approximately $577.3 million to unrelated investors (the “Notes”). The maturity date of the Notes is October 25, 2029. 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 2019-4 from the sale of the Notes were deposited into a reinsurance trust as security for Bellemeade 2019-4’s obligations. At all times, funds in the reinsurance trust account are required to be invested in high credit quality money market funds.

Catastrophic Events

In the 2019 fourth quarter, Typhoon Hagibis, the ongoing wildfires in California and other catastrophic events may have an impact on the Company’s financial results. It is too early to reasonably estimate losses for these events given the significant uncertainties and the early stage of the damage assessment process, among other factors.

Share Repurchases

At September 30, 2019, approximately $160.9 million of share repurchases were available under Arch Capital’s share repurchase program. From October 1 through October 31, 2019, the Company did not repurchase any common shares. On November 8, 2019, the board of directors of ACGL increased the aggregate purchase amount authorized under the share repurchase program to $1.0 billion. Repurchases under this authorization may be effected from time to time in open market or privately negotiated transactions through December 31, 2021. The timing and amount of the repurchase transactions under this authorization will depend on a variety of factors, including market conditions and corporate and regulatory considerations.