Arch Capital Group Ltd.

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Good day, ladies and gentlemen, and welcome to the 3Q 2025 Arch Capital Earnings Conference Call. At this time, all participants are in the listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this conference call is being recorded. Before the company gets started with its update, management wants to first remind everyone that certain statements in yesterday's press release and discussed on this call may constitute forward-looking statements under the federal securities laws. These statements are based upon management's current assessments and assumptions and are subject to a number of risks and uncertainties. Consequently, actual results may differ materially from those expressed or implied. For more information on the risks and other factors that may affect future performance, investors should review periodic reports that are filed by the company with the SEC from time to time, including our annual report on Form 10-K for the 2024 fiscal year. Additionally, certain statements contained in the call that are not based on historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The company intends the forward-looking statements in the call to be subject to the safe harbor created thereby. Management also will make reference to certain non-GAAP measures of financial performance. The reconciliation to GAAP for non-GAAP financial measures can be found in the company's current report on Form 8K furnished to the SEC yesterday. It contains the company's earnings press release and is available on the company's website at www.archgroup.com and on the SEC website at www.sec.gov. And I would like to introduce your host for today's conference, Mr. Nicolas Papadopoulos and Mr. François Morin. Sirs, you may begin.

Good morning and welcome to ARCH's third quarter earnings call. We delivered record results in the quarter with over $1 billion of after-tax operating income and over $1.3 billion of net income, both up 37 percent year-over-year. After-tax operating earnings per share of $2.77, another record, represented an 18.5 percent annualized operating return on average common equity. These results reinforce the strengths of our diversified platform, which enables our underwriters to pursue opportunities and deploy capital across the enterprise. Meaningful contributions from all three segments, combined with solid investment returns, push year-to-date book value per share growth to 17.3%. Our quarterly consolidated combined ratio of 79.8% reflects excellent underwriting and low-cat activity in the quarter. Big picture of nine months combined ratio of 83.6%, which include the impact of California wildfires and severe convective storms, highlight the strong underwriting performance across our businesses. Now some comments about market conditions. As you have heard on other calls, competition is generally increasing. As SACO managers, we lean into the strengths of our brand, including underwriting discipline and using risk-based pricing tools to generate profitable business. We deploy capital into businesses we believe will generate superior risk-adjusted returns. However, given relatively weaker market pricing and an attractive entry point for our stock, we repurchase $732 million of shares in the quarter. Critically, our strong balance sheet and strong capital-generating capabilities permit us to both invest in our business and return capital to investors. Our objective is clear throughout the cycle to maximize return for our shareholders over the long term. Importantly, I want to emphasize that we are actively looking to deploy as much capital as possible towards attractive underwriting opportunities. Our playbook remains consistent. allocate capital to attractive opportunities that meet our risk-adjusted target returns, pursue profitable growth while prioritizing renewals that meet our return thresholds, and take full advantage of our operating flexibility across insurance, reinsurance, and mortgage. Over time, this playbook has been key in enabling us to deliver consistently strong returns without regard to market cycles. I will now provide some color from our reporting segment, starting with our property and casualty insurance group. Underwriting income for the quarter was $129 million, up 8% year-over-year, on nearly $2 billion of net premium return. Our combined ratio was 93.4%, with a current accident share XCAT combined ratio of 91.3%, reflecting the strong underlying margins of our insurance portfolio. A distinguishing strength of our insurance segment is its breadth across specialty lines, areas where our team applied deep knowledge and experience to drive better risk selection. Successfully navigating a transitioning market demands that our underwriters employ the capabilities and experience they have developed to leverage our differentiated offerings and market leadership position as we look to drive profitable returns. When compared to the third quarter last year, we grew net return premium in North America over liability occurrence by 17 percent, supported by growth in middle market and double-digit rate increase in ENS casualty. Net return premium in our North America property and short-tail book increased 15 percent. Growth in middle market and middle property more than offset declines in excess and surplus property. International premium volume was essentially flat. A strategic element of our insurance growth is our middle market business in North America, which was significantly enhanced through the mid-corp and entertainment acquisition last year. As discussed previously, the acquired business provides a significant platform from which we intend to build further scale in the middle market sectors. Importantly, it is already driving growth and yielding tangible returns. At the outset, we set three integration priorities for the acquired business. Roll over the portfolio, remediate less attractive areas, and separate from legacy systems. We have completed the portfolio rollover. Remediation and separation are on target. Even though there is still work to do, we remain excited about this opportunity, which has been well received by our distribution partners. Next to reinsurance, which delivered another strong quarter with a record of $482 million of underwriting income, the 76.1% combined ratio was a significant improvement over last year's CalHeavy third quarter and illustrates our ability to generate attractive underwriting returns. Net premium returns were $1.7 billion, down roughly 11% year-over-year. reflecting current pricing conditions in short-tail and property CAT lines and increased retention by students. The diversity of our reinsurance platform means we aren't overly concentrated in any one line. For example, property CAT, which has been a hot topic of recent industry conferences, represents only 14% of reinsurance total net premium return for the training 12 months ended September 30th. Our diversified reinsurance platform, supported by strong partnership with our broker and ceiling company across multiple lines and geographies, further enhances our ability to navigate a competitive environment. We continue to lack our prospects in most lines of business, and with improving condition in casualty lines, our agility and ability to create opportunities is an advantage for us in this market. Moving to mortgage, which continues to operate exceptionally well, generating $260 million of underwriting income for the quarter. The segment remains on pace to deliver approximately $1 billion of underwriting income for the year and is a steady diversifying contributor to Arches earnings. While mortgage originations remain modest due to affordability challenge, our high-quality in-force portfolio continue to outperform expectations. We are well positioned to support first-time homebuyers when the U.S. housing market eventually expands. The broader mortgage insurance market remains healthy, with disciplined underwriting and stable pricing. Now turning to investments, where strong earnings and cash flow go investable assets to $46.7 billion this quarter, with net investment income of $408 million, a quarterly record for ARCH. We continue to position the portfolio to remain conservative in the current environment with an eye towards generating reliable and sustainable earnings and cash flows for the group. To conclude my opening remarks, I want to emphasize that we manage ARCH with a long-term lens. That was true in the past, it is true today, and it will be true tomorrow. Market cycles span years, not quarters, and in a transitioning environment, Our focus remains on producing superior returns and profitable growth. Our ability to remain successful is rooted in our differentiated customer experience, superior risk-based pricing, and the creativity of our underwriting teams, which are empowered and incentivized to generate profitable business aligned with shareholder value. Today, we are well positioned to outperform in an increasingly competitive market. Our strong capital position gives us the flexibility to invest in the most attractive risk-adjusted opportunities, whether in the business or by returning capital to shareholders. This transitioning market is a moment to lean into our strengths with confidence and clarity. I now turn the call over to Francois before returning to answer your questions.