A.M. Best Co. has affirmed the financial strength rating (FSR) of A+ (Superior) and the issuer credit ratings (ICR) of “aa-” of Arch Reinsurance Ltd. (Arch) (Bermuda) and its strategic affiliates. A.M. Best also has assigned an FSR of A+ (Superior) and an ICR of “aa-” to Arch Insurance Canada Ltd. (Canada), which was converted from a branch company to an operating subsidiary in late 2012. Concurrently, A.M. Best has affirmed the ICR of “bbb+” of Arch Capital Group (US) Inc. (Delaware), as well as the ICR of “a-” and all debt ratings of the ultimate holding company, Arch Capital Group Ltd (Bermuda) [NASDAQ: ACGL]. The outlook for all ratings is stable. (See below for a detailed listing of the companies and ratings.) The affirmations reflect Arch’s continued superior operating performance amidst challenging market conditions, consistently excellent capitalization and demonstrated enterprise risk management. Arch maintains a very strong underwriting culture and focuses on actively managing the cycle by being adaptive to varied market conditions. As industry investment yields continue to be at record lows, underwriting profitability is vital. The company is capable of writing a broad range of property/casualty insurance and reinsurance on a worldwide basis and focuses on specialty lines. Overall operating results have been strong since Arch’s inception and certain metrics have exceeded most peers in the sector. Typically, Arch has had a smaller share of major industry losses, as was the case in 2011 when numerous global catastrophes struck. Recently, with Hurricane Sandy inflicting approximately $25 billion of insured losses, Arch’s current loss estimates are in line with its expected market share and very manageable. As a result, Arch has historically reported stable and consistent financial results with lower levels of volatility than many of its peers. Furthermore, Arch has a prudent investment portfolio and conservative reserving philosophy, which helps maintain a strong balance sheet.