Benzinga  Sep 27  Comment 
Barclays analyst Jay Gelb believes Arch Capital Group Ltd. (NASDAQ: ACGL) is the best managed insurance company with solid track record of growth in book value per share. That alone did not merit the shares to be upgraded or target price...
Benzinga  Sep 15  Comment 
Barclays’ Jay Gelb believes the good news associated with the expected accretion from the United Guaranty acquisition is already priced into Arch Capital Group Ltd. (NASDAQ: ACGL)'s share price. Gelb downgraded the rating on the company from...
Benzinga  Sep 7  Comment 
  Facebook Inc (NASDAQ: FB) shares gained 1.4 percent to touch a new 52-week high of $131.51. Morgan Stanley raised the price target for Facebook from $150 to $160. Las Vegas Sands Corp. (NYSE: LVS) shares reached a new 52-week high...
Benzinga  Sep 7  Comment 
Goldman Sachs has upgraded Arch Capital Group Ltd. (NASDAQ: ACGL) to Neutral from Sell, as it is convinced "management is willing to ramp up its sub-scale mortgage operations faster than previously expected" with the acquisition of American...
Financial Times  Aug 24  Comment 
Arch Capital’s purchase of UGC underlines industry’s renaissance
Clusterstock  Aug 15  Comment 
(Reuters) - American International Group Inc is nearing a deal to sell its mortgage-guaranty unit to Arch Capital Group Ltd for about $3.4 billion, the Wall Street Journal reported on Monday, citing people familiar with the matter. The...


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.


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.


  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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