Arch Capital Group Ltd. (NASDAQ:ACGL) Q3 2020 Earnings Conference Call - Final Transcript

Oct 30, 2020 • 11:00 am ET

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Arch Capital Group Ltd. (NASDAQ:ACGL) Q3 2020 Earnings Conference Call - Final Transcript

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Presentation
Executive
Francois Morin

within the insurance segment, which increased its writings in an improving marketplace.

On the capital front, the increased interest expense this quarter was mainly the result of the issuance of the $1 billion senior notes we issued in June 2020. So far, we have been able to fund our recent growth with our existing capital base, and our balance sheet remains strong with a debt plus preferred leverage ratio of 23.1% that remains well within the reasonable range.

As for our U.S. MI operations, the mortgage insurance linked notes market has recovered to a great extent from the lows we saw at the onset of the pandemic. Earlier this week, we priced our third Bellemeade transaction of the year at terms that are getting closer to what we saw in 2019 both in structure and price. Our latest transaction will provide 6.5% of in coverage in excess of a 2.5% attachment point both expressed as a percentage of the risk in-force. Including this transaction, the Bellemeade structures currently provide approximately $3.9 billion of aggregate reinsurance coverage. The fact that this market has recovered as extensively as it has in just over six months with investors more and more comfortable with the exposure they are assuming is quite telling and provides support to our current assessment of the health of the U.S. housing market.

With these introductory comments, we are now prepared to take your questions.