Arch Capital Group Ltd. Expands Underwriting Platform.

Lloyd's Managing Agent and Syndicate Planned

Arch Re Europe Launched

HAMILTON, Bermuda -- Arch Capital Group Ltd. (Nasdaq: ACGL) today announced that the Company has received approval in principle from the Lloyd's Franchise Board and the Financial Services Authority to establish a new managing agent and syndicate at Lloyd's. The syndicate is expected to begin underwriting during the first half of 2009, subject to obtaining requisite approvals. The syndicate will enhance the Company's underwriting platform by providing the Company with access to Lloyd's extensive distribution network and worldwide licenses. Management for the new managing agent will be provided by the Company's existing senior team located in London, and the syndicate will be supported by a corporate member that is wholly owned by the Company.

In addition, the Company announced that it recently established Arch Reinsurance Europe Underwriting Ltd. ("Arch Re Europe"), based in Dublin, Ireland, and its branch office located in Zurich, Switzerland. Arch Re Europe will complement the existing property and casualty treaty capabilities within the Company's reinsurance group, while providing greater accessibility to brokers in Europe. Under the recent European Union ("EU") Reinsurance Directive, Arch Re Europe will be able to operate in all EU member states under a single regulatory framework. Arch Re Europe has been rated "A" (Strong) by Standard & Poor's.

Arch Capital Group Ltd., a Bermuda-based company with over $3.9 billion in capital at September 30, 2008, provides insurance and reinsurance on a worldwide basis through its wholly owned subsidiaries.

Cautionary Note Regarding Forward-Looking Statements 

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forwardlooking statements. This release or any other written or oral statements made by or on behalf of Arch Capital Group Ltd. and its subsidiaries may include forwardlooking statements, which reflect our current views with respect to future events and financial performance. All statements other than statements of historical fact included in or incorporated by reference in this release are forwardlooking statements.

Forwardlooking statements can generally be identified by the use of forwardlooking terminology such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe" or "continue" or their negative or variations or similar terminology. Forwardlooking statements involve our current assessment of risks and uncertainties. Actual events and results may differ materially from those expressed or implied in these statements. A non-exclusive list of the important factors that could cause actual results to differ materially from those in such forward-looking statements includes the following: adverse general economic and market conditions; increased competition; pricing and policy term trends; fluctuations in the actions of rating agencies and our ability to maintain and improve our ratings; investment performance; the loss of key personnel; the adequacy of our loss reserves, severity and/or frequency of losses, greater than expected loss ratios and adverse development on claim and/or claim expense liabilities; greater frequency or severity of unpredictable natural and man-made catastrophic events; the impact of acts of terrorism and acts of war; changes in regulations and/or tax laws in the United States or elsewhere; our ability to successfully integrate, establish and maintain operating procedures as well as integrate the businesses we have acquired or may acquire into the existing operations; changes in accounting principles or policies; material differences between actual and expected assessments for guaranty funds and mandatory pooling arrangements; availability and cost to us of reinsurance to manage our gross and net exposures; the failure of others to meet their obligations to us; and other factors identified in our filings with the U.S. Securities and Exchange Commission.

The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included herein or elsewhere. All subsequent written and oral forwardlooking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. We undertake no obligation to publicly update or revise any forwardlooking statement, whether as a result of new information, future events or otherwise.