Arch Capital Group Ltd. · NASDAQ:ACGL

Arch Capital — KBW Mortgage Fireside Chat (June 2020)

11 slides from Arch Capital's conference presentation, June 2020

  1. Slide 1: Investor Presentation: KBW Mortgage Fireside Chat

    Investor Presentation KBW Mortgage Fireside Chat June 2020 © 2020 Arch Capital Group Ltd. All rights reserved.

  2. Slide 2: Informational Statements

    Informational Click Statements to edit Master title style The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward looking statements. This presentation or any other written or oral statements made by or on behalf of Arch Capital Group Ltd. and its subsidiaries may i

  3. Slide 3: Mortgage Insurance Industry is better positioned

    Mortgage Insurance Industry is better positioned  Mortgage underwriting box has remained tight post Global Financial Crisis.  2/3 of Mortgages underwritten in 2007 are not eligible for PMI post 2009.  Credit quality of borrowers was very good before entering this recession.  Government support f

  4. Slide 4: Housing Markets in Past Recessions

    Housing Markets in Past Recessions Of the past five recessions, only one resulted in negative home price growth. Conditions in housing markets are much more favorable today than they were before the last crisis. U.S. Annual Home Price Growth (Gray Bars Indicate Recessions) 20% 15% 10% 5% 0% -5% -10%

  5. Slide 5: Home Prices More Appropriately Valued Today

    Home Prices More Appropriately Valued Today Today, home prices approximate their fair value based on household incomes, compared with significant overvaluation in 2006 and 2007. Nationwide Over/(Under) Valuation of Home Prices Relative to Household Income Source: Company Reports, FHFA In addition to

  6. Slide 6: Unprecedented Government Stimulus

    Unprecedented Government Stimulus CARES Act provides $2.3 trillion of support. Breakdown of CARES Act Spending Potential direct support for borrowers includes:  Economic Impact Payments of $1,200 per eligible adult plus $500 child  Bonus unemployment benefit of $600 per week  Additional 13 weeks

  7. Slide 7: Industry Forbearance Trends (MBA)

    Industry Forbearance Trends (MBA) Forbearances continue to rise, but rate of increase has slowed. Percent of Servicing Portfolio Volume in Forbearance by Investor Type over Time “Of the borrowers under forbearance who have an enterprise backed mortgage, about one-third are continuing to make their p

  8. Slide 8: Arch MI US DQ Rate

    Arch MI US DQ Rate Increase in delinquency rate has been less severe than increase in unemployment. Arch MI US DQ Rate 5.0% 4.5% 4.0% 3.93% 3.5% Elevated due to hurricanes 3.0% 2.5% 2.57% 2.0% 2.25% 2.23% 2.02% 1.98% 1.98% 1.5% 1.70% 1.60% 1.60% 1.65% 1.54% 1.45% 1.48% 1.54% 1.42% 1.0% 0.5% 0.0% 12/

  9. Slide 9: Arch MI US – Strong PMIERs Capital Position

    Arch MI US – Strong PMIERs Capital Position Arch MI US PMIERs Capital as of March 31, 2020 – DQ Rate to exhaust excess Incremental Avg. Net RIF Incremental Pro Forma # of Pro Forma DQ Rate Required PMIERs Excess Incremental # of DQs at DQ Rate at per Performing Required DQs at required to exhaust As

  10. Slide 10: Arch MI US – Bellemeade Reinsurance Coverage by Vintage

    Arch MI US – Bellemeade Reinsurance Coverage by Vintage As of March 31, 2020 ($ in millions) Est Bellemeade Coverage as % of Bellemeade Vintage Gross RIF Est. RIF Ceded to QS RIF net of QS 1 RIF Reference Pool 2010 and prior 3,763 0 3,763 85% 3,200 2011 422 0 422 35% 148 2012 1,604 0 1,604 35% 558 2

  11. Slide 11: Arch MI US – Bellemeade Reinsurance Coverage by Deal

    Arch MI US – Bellemeade Reinsurance Coverage by Deal March 31, 2020 ($ in millions) Bellemeade Re Insurance-Linked Notes Key Metrics (1) 2017-1 2018-1 2018-2 2018-3 2019-1 2019-2 2019-3 2019-4 Total Coverage dates for policies issued between 1/17-6/17 7/17-12/17 4/13-12/15 1/18-6/18 2005-2008 (2) 7/

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