Arch Capital Group Ltd - 4.55% PRF PERPETUAL USD 25 - Ser G 1/1,000th Int

Exceptional profitability & underwriting performance (good): - After-tax operating income: $910m ($2.67/share); annualized operating return on average common equity: 16%. - 3Q overall ex-cat accident-year combined ratio: 81.2%, +70 bps worse YoY (i.e., slightly less favorable vs last year), but still strong. - Favorable prior-year development: $179m pre-tax (~4.5 points of combined ratio), helped results in all three segments, mainly short-tail P&C and mortgage cure activity. - Cat losses (net): $234m in the quarter (includes Iran conflict-related losses).

Capital returns are heavy and likely to continue (good/surprising): - Share buybacks: ~$1.4bn spent in the quarter, repurchasing 14.8m shares; ~$100m more in October (through last night). - 9M 2026 buybacks: returned about 109% of net income via repurchases (very high payout). - Book value per share: essentially flat in the quarter; tangible book value ex-AOCI up ~15% YoY. - Management expects that, given strong capital and a harder-to-grow environment, they are “in a position” to return even more capital forward—but not at the expense of good investment opportunities.

Segment results & premium growth mixed (good + some negative mix): - Insurance: $108m underwriting income, combined ratio 94.4%; current accident-year ex-cat combined ratio 89.2%. - Gross written +7.8%; net written +2.7% YoY (helped by a new captive program in alternative markets and marine war risk tied to Iran conflict). - YTD (9 months): gross +4.2%, net +1.6% after planned reduction in middle-market program business. - Reinsurance: $393m underwriting income, combined ratio 78.3% aided by light cat activity; but gross premiums ~-8% YoY due to abundant capacity and reduced participation. - Mortgage insurance: $201m underwriting income; demand constrained by rates >7%, but portfolio quality strong (delinquency 2.2% at Sept 30; persistency ~80%). - Investment income: $451m pre-tax for the quarter; equity method investment contributed strongly ($224m to pre-tax net income).