Exhibit 12.1
Arch Capital Group Ltd. and Subsidiaries
Computation of Ratio of Earnings to Fixed Charges and Preference Dividends
(in thousands, except ratios)
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| Years Ended December 31, |
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| 2011 |
| 2010 |
| 2009 |
| 2008 |
| 2007 |
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Income before income taxes |
| $ | 427,012 |
| $ | 850,456 |
| $ | 897,653 |
| $ | 304,505 |
| $ | 873,544 |
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Equity in net (income) loss of investees |
| 71,100 |
| (56,035 | ) | (183,038 | ) | 166,326 |
| (8,877 | ) | |||||
Fixed charges |
| 37,166 |
| 35,018 |
| 30,074 |
| 29,673 |
| 27,032 |
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Income available for fixed charges |
| $ | 535,278 |
| $ | 829,439 |
| $ | 744,689 |
| $ | 500,504 |
| $ | 891,699 |
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Fixed charges: |
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Interest and amortization on indebtedness |
| 31,691 |
| 30,007 |
| 24,440 |
| 23,838 |
| 22,093 |
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Estimate of interest component within rental expense net of sublease (income) (1) |
| 5,475 |
| 5,011 |
| 5,634 |
| 5,835 |
| 4,939 |
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Total fixed charges |
| 37,166 |
| 35,018 |
| 30,074 |
| 29,673 |
| 27,032 |
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Preference dividends |
| 25,844 |
| 25,844 |
| 25,844 |
| 25,844 |
| 25,844 |
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Total fixed charges and preference dividends |
| 63,010 |
| 60,862 |
| 55,918 |
| 55,517 |
| 52,876 |
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Ratio of earnings to fixed charges |
| 14.4 |
| 23.7 |
| 24.8 |
| 16.9 |
| 33.0 |
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Ratio of earnings to fixed charges and preference dividends |
| 8.5 |
| 13.6 |
| 13.3 |
| 9.0 |
| 16.9 |
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(1) Represents a reasonable approximation of the interest cost component of rental expense net of sublease (income) incurred by the Company.