QUOTE AND NEWS
SeekingAlpha  Sep 11  Comment 
By Stephen Simpson, CFA: Arch Capital (NASDAQ:ACGL) is often lauded as a well-run insurance and reinsurance company and a good stock to own for those seeking more defensive exposure to insurance. Interestingly, while Arch Capital may be labeled as...
SeekingAlpha  Aug 1  Comment 
Arch Capital Group (NASDAQ:ACGL) Q2 2014 Earnings Call August 01, 2014 11:00 am ET Executives Constantine P. Iordanou - Chairman, Chief Executive Officer, President, Member of Executive Committee, Member of Finance & Investment...
Insurance Journal  Aug 1  Comment 
Arch Capital Group Ltd. reported that net income available to Arch common shareholders for the 2014 second quarter was $202.5 million, or $1.48 per share, compared to $171.5 million, or $1.26 per share, for the 2013 second quarter. The Company...
Benzinga  Jul 14  Comment 
Arch Capital Group Ltd. (NASDAQ: ACGL) today announced that Louis J. Paglia and Eugene S. Sunshine have been appointed to the Company's Board of Directors. Mr. Paglia founded Customer Choice LLC in April 2010, a data analytics company serving...
Insurance Journal  Jul 7  Comment 
The Bermuda-based Arch Capital Group Ltd. (ACGL) has announced promotions in the reinsurance group “to support the recent expansion of the Company’s mortgage insurance and reinsurance operations.” Marc Grandisson was recently named to the...
SeekingAlpha  May 3  Comment 
Arch Capital Group Ltd. (ACGL) Q1 2014 Results Earnings Conference Call May 02, 2014 11:00 AM ET Executives Dinos Iordanou - Chairman, President and CEO Mark Lyons - Executive Vice President and CFO Analysts Amit Kumar -...
Market Intelligence Center  Apr 29  Comment 
After closing Monday at $57.09, Arch Capital Group Ltd (ACGL) presents an attractive opportunity to get a 2.06% return in just 144 days, which is an annualized return of 5.22% (for comparison purposes only). To enter this trade, sell one Sep. '14...
DailyFinance  Apr 1  Comment 
Arch Capital Group Ltd. [Nasdaq:ACGL] announced today that Watford Re Ltd., a newly-formed multi-line Bermuda reinsurance company, launched operations with $1.133 billion of capital. Arch Underwriters Ltd., a subsidiary of...
Insurance Journal  Mar 21  Comment 
A.M. Best has affirmed the financial strength rating (FSR) of ‘A+’ (Superior) and the issuer credit ratings (ICR) of “aa-” of Bermuda-based Arch Reinsurance Ltd. and its strategic affiliates. Best also affirmed the ICR of “bbb+” of...
SeekingAlpha  Mar 18  Comment 
By Stephen Simpson, CFA: I've never made any secrets of the respect I have for Arch Capital (ACGL) management. Many company executives talk about the importance of creating shareholder value and making decisions to maximize value, but it is my...




 

Arch Capital Group Ltd. (NASDAQ:ACGL) writes major insurance policies for businesses and sells reinsurance to other insurance companies. The company targets insurance policies that have an anticipated minimum return (ROE) of 15%,[1] which is problematic in economic downturns as companies become more price sensitive. This ROE litmus test means that Arch first evaluates a projected combined ratio for a potential policy, and from that ratio Arch attaches a projected net income to the policy. If this is below what is needed to generate a 15% ROE, then Arch does not write the policy.

Like other insurance companies, Arch invests the premiums it collects to earn income. Its portfolio consists solely of fixed income securities rated in the range of AAA to AA, with virtually no investment in hedge funds or private equity.[2] Importantly, its portfolio of investments holds no collateralized debt obligations (CDOs) or loan obligations (CLOs). This conservative investment strategy stands in stark contrast to the investments of many other insurance companies, most notably AIG, whose well-publicized write-offs were centered on collateralized debt obligations (CDOs). [3]

Corporate Overview

This piece was cogent, well-wrtietn, and pithy.

Ah yes, nceily put, everyone.

Competition

Competitors are insurance subsidiaries of global conglomerates or independent companies. As defined by Arch Capital Group, its competitors in insurance are: [4]


In response to price competition from larger insurers and subsidiary companies, Arch is aggressively shifting its strategy toward opening smaller insurance policies with businesses in a diverse set of specialty markets, where it can offer a higher level of expertise than many of its larger competitors. [5]

The company also faces competition from emerging alternatives to insurance, such as catastrophe bonds and alternatives to traditional reinsurance such as finite reinsurance products.

References

  1. ACGL. ACGL Annual Report 2007, To Our Shareholders Letter, Pg 1.
  2. ACGL. Annual Report 2007, Cash Flow, Investable Assets and Investment Income, Pg 2.
  3. WSJ. AIG reports $5.36 billion quarterly net loss.
  4. ACGL. Annual Report 2007, Pg 23.
  5. ACGL. Annual Report 2007, Market Positions and Strategic Principles, Pg 2.
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