Arch Capital Group Ltd. Announces Preliminary Loss Estimate From Storm Sandy

Arch Capital Group Ltd. [NASDAQ: ACGL] today announced that its preliminary estimate of losses relating to Storm Sandy ranges between $170 million and $240 million, net of reinsurance and the effects of reinstatement premiums. This preliminary loss estimate is based on projected industry insured losses ranging from $20 billion to $25 billion. The losses from the storm are currently estimated to arise approximately 40% in our insurance operations and 60% in our reinsurance operations.

Due to the unusual nature of the storm, including its broad scope, the number of insureds affected, the complexity of issues contributing to the losses and the preliminary nature of available information, there is substantial uncertainty regarding total covered losses for the insurance industry and the assumptions underlying the Company’s estimates relating to the event. The Company’s preliminary estimates for the storm are 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. The Company’s actual losses from this event may vary materially from the estimates due to the inherent uncertainties in making such determinations resulting from several factors, including the preliminary nature of available information, the potential inaccuracies and inadequacies in the data provided by clients and brokers, the modeling techniques and the application of such techniques, the contingent nature of business interruption exposures, the effects of any resultant demand surge on claims activity and attendant coverage issues. In addition, actual losses may increase if the Company’s reinsurers fail to meet their obligations to the Company or the reinsurance protections purchased by the Company are exhausted or are otherwise unavailable.

Arch Capital Group Ltd., a Bermuda-based company with approximately $5.75 billion in capital at September 30, 2012, provides insurance and reinsurance on a worldwide basis through its wholly owned subsidiaries.

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