Exhibit 99.1
CONTACTS:         Robert Clements and Peter Appel
                  Arch Capital Group Ltd.
                  (203) 862-4300

                             ARCH CAPITAL GROUP LTD.
                TO ACQUIRE AMERICAN INDEPENDENT INSURANCE COMPANY

         GREENWICH, CONNECTICUT, JANUARY 3, 2001 - Arch Capital Group Ltd.
[NASDAQ: ACGL] today announced that it has entered into a definitive
reorganization agreement pursuant to which the Company will acquire all of
the common stock of one of its current investee companies, American
Independent Insurance Company. American Independent is a privately held
insurer which underwrites private passenger automobile liability and physical
damage insurance primarily in the Commonwealth of Pennsylvania.

         The reorganization transaction is contingent on obtaining applicable
regulatory approvals, expiration of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act, obtaining certain third party
consents, and other customary closing conditions.

         Peter Appel, President and Chief Executive Officer of the Company,
said, "We are very pleased to be acquiring American Independent. American
Independent is led by a strong management team that we believe is in a position
to capitalize on profitable growth opportunities in a market that it understands
very well."

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

         The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. This release or any other written or
oral statements made by or on behalf of the Company may include forward-looking
statements which reflect the Company's current views with respect to future
events and financial performance. All statements other than statements of
historical fact included in this release are forward-looking statements.
Forward-looking statements involve the Company's current



assessment of risks and uncertainties, including statements regarding the
completion of the proposed acquisition, expected benefits and anticipated
future financial results. Actual events and results may differ materially
from those expressed or implied in these statements. In addition to risks and
uncertainties related to the Company's business described in filings by the
Company with the Securities Exchange Commission, the transactions described
in this release are subject to various risks and uncertainties including, but
not limited to, the risks that the conditions to closing will not be
satisfied as well as risks relating to the successful integration of American
Independent's business. The foregoing review of important factors should not
be construed as exhaustive and should be read in conjunction with other
cautionary statements that are included herein or elsewhere. The Company
undertakes no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise.

                                     # # #





                                       2