Exhibit 12
| Arch Capital Group Ltd. and Subsidiaries | |||||||||||||||||||||||
| Computation of Ratio of Earnings to Fixed Charges and Preference Dividends | |||||||||||||||||||||||
| (in thousands, except ratios) | |||||||||||||||||||||||
| Nine Months Ended September 30, | Year Ended December 31, | ||||||||||||||||||||||
| 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||||
| Income before income taxes | $ | 498,672 | $ | 855,552 | $ | 567,194 | $ | 844,247 | $ | 734,770 | $ | 586,368 | |||||||||||
| Equity in net income or loss of investees | (63,785 | ) | 4,844 | 3,458 | (947 | ) | 52,238 | (43,632 | ) | ||||||||||||||
| Fixed charges | 109,218 | 93,573 | 73,065 | 67,767 | 33,304 | 34,223 | |||||||||||||||||
| Watford preference dividends (1) | (14,448 | ) | (19,264 | ) | (19,264 | ) | (14,448 | ) | — | — | |||||||||||||
| Income available for fixed charges | $ | 529,657 | $ | 934,705 | $ | 624,453 | $ | 896,619 | $ | 820,312 | $ | 576,959 | |||||||||||
| Fixed charges: | |||||||||||||||||||||||
| Interest and amortization on indebtedness | 86,935 | 66,252 | 45,874 | 45,634 | 27,060 | 28,525 | |||||||||||||||||
| Watford preference dividends (1) | 14,448 | 19,264 | 19,264 | 14,448 | — | — | |||||||||||||||||
| Estimate of interest component within rental expense, net of sublease income (2) | 7,835 | 8,057 | 7,927 | 7,685 | 6,244 | 5,698 | |||||||||||||||||
| Total fixed charges | 109,218 | 93,573 | 73,065 | 67,767 | 33,304 | 34,223 | |||||||||||||||||
| Preference dividends (3) | 34,936 | 28,070 | 21,938 | 21,938 | 21,938 | 25,079 | |||||||||||||||||
| Total fixed charges and preference dividends | $ | 144,154 | $ | 121,643 | $ | 95,003 | $ | 89,705 | $ | 55,242 | $ | 59,302 | |||||||||||
| Ratio of earnings to fixed charges | 4.8 | 10.0 | 8.5 | 13.2 | 24.6 | 16.9 | |||||||||||||||||
| Ratio of earnings to fixed charges and preference dividends | 3.7 | 7.7 | 6.6 | 10.0 | 14.8 | 9.7 | |||||||||||||||||
| (1) | Dividends attributable to preference shares issued by Watford Holdings Ltd. |
| (2) | Represents a reasonable approximation of the interest cost component of rental expense, net of sublease income, incurred by the Company. |
| (3) | Dividends attributable to preference shares issued by ACGL. |