Issuer:

Arch Capital Group Ltd.

Security:

6.75% Non-Cumulative Preferred Shares, Series C (“Series C Non-Cumulative Preferred Shares”)

Security Type:

SEC Registered

Anticipated Ratings (Moody’s / S&P / Fitch):*

Baa2 / BBB / BBB

Size:

13,000,000 shares

Over Allotment Amount:

None

Trade Date:

March 26, 2012

Settlement Date:

April 2, 2012 (T+5)

Maturity:

Perpetual

Liquidation Preference:

$25.00 per share

Dividend Payment Dates:

Holders of Series C Non-Cumulative Preferred Shares will be entitled to receive dividend payments only when, as and if declared by our board of directors or a duly authorized committee of the board. Any such dividends will be payable from, and including, the date of original issue on a non-cumulative basis, quarterly in arrears on the last day of March, June, September and December of each year, commencing on June 30, 2012

Dividend Rate:

6.75% of the $25.00 per share liquidation preference per annum (equivalent to $1.6875 per share), when, as and if declared by the board of directors, on a non-cumulative basis. If declared, the dividend payable on the period from April 2, 2012 to June 30, 2012 would be $0.4125 per preferred share.

Optional Redemption:

Except in specified circumstances relating to certain tax or corporate events as described in the preliminary prospectus supplement, the Series C Non-Cumulative Preferred Shares are not redeemable prior to April 2, 2017. On and after that date, the Series C Non-Cumulative Preferred Shares will be redeemable at Arch Capital Group’s option, in whole or in part, at a redemption price of $25.00 per Series C Non-Cumulative Preferred Share, plus any declared and unpaid dividends, without accumulation of any undeclared dividends to, but excluding, the redemption date.

Public Offering Price:

$25.00 per share; $325,000,000.00 total

Underwriting Discounts:

$0.7875 per Series C Non-Cumulative Preferred Share for retail orders: $5,143,824 total; and $0.50 per Series C Non-Cumulative Preferred Share for institutional orders: $3,234,080 total

Net Proceeds to the Issuer, before expenses:

$316,622,096

Use of Proceeds:

Arch will use the net proceeds of this offering to redeem all of its outstanding Series A Non-Cumulative Preferred Shares and Series B Non-Cumulative Preferred Shares.

Expected Listing:

Arch intends to apply to have the Series C Non-Cumulative Preferred Shares approved for listing on the NYSE under the symbol “ARHPrC”. If the application is approved, trading in the Series C Preferred Shares is expected to commence within 30 days after the initial delivery.

CUSIP / ISIN:

G0450A204 / BMG0450A2044

Joint Book-Running Managers:

Wells Fargo Securities, LLC

Merrill Lynch, Pierce, Fenner & Smith

Incorporated

Morgan Stanley & Co. LLC

UBS Securities LLC

Senior Co-Managers:

Barclays Capital Inc.
J.P. Morgan Securities LLC

Co-Managers:

BNY Mellon Capital Markets, LLC
Credit Suisse Securities (USA) LLC
Deutsche Bank Securities Inc.
U.S. Bancorp Investments, Inc.

Certain U.S. Tax Considerations:

As described in the preliminary prospectus supplement, the issuer believes that it is not a ‘‘passive foreign investment company’’ (‘‘PFIC’’), and the issuer will use reasonable best efforts to cause it and each of its non-U.S. insurance subsidiaries not to constitute a PFIC. If, contrary to the issuer’s expectations, it determines that it is treated as a PFIC for any taxable year, the issuer will provide each U.S. Holder (as defined in the preliminary prospectus supplement) with all necessary information to make a qualified electing fund election.  Each U.S. Holder who is considering an investment in the preferred shares should consult its tax advisor as to the effects of the rules regarding such election.