QUOTE AND NEWS
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...
SeekingAlpha  Feb 18  Comment 
By Ashleigh Rogers: One of the best compliments that one can give an insurance company is that it's boring. In the world of insurance, boring and staid are good and exciting is bad. Boring implies that a company is sticking to what works, writing...
SeekingAlpha  Feb 12  Comment 
Arch Capital Group (ACGL) Q4 2013 Earnings Call February 12, 2014 11:00 am ET Executives Constantine P. Iordanou - Chairman, Chief Executive Officer, President, Member of Executive Committee, Member of Finance & Investment Committee...
StreetInsider.com  Feb 11  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Earnings/Arch+Capital+Group+Ltd+%28ACGL%29+Tops+Q4+EPS+by+16c/9154130.html for the full story.
Insurance Journal  Jan 31  Comment 
The Bermuda-based Arch Capital Group Ltd. (ACGL) announced that its “U.S.-based subsidiaries (Arch U.S. MI) have completed the acquisition of CMG Mortgage Insurance Company (CMG MI) and the mortgage insurance operating platform of PMI Mortgage...
SeekingAlpha  Dec 9  Comment 
By Stephen Simpson, CFA: When investors look at high-quality insurance names like Arch Capital (ACGL), RenRe (RNR), and W.R. Berkley (WRB), they shouldn't expect to find big bargains very often. These companies have all shown themselves to be...
StreetInsider.com  Oct 28  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Earnings/Arch+Capital+Group+Ltd+%28ACGL%29+Tops+Q3+EPS+by+18c/8817280.html for the full story.




 

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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