QUOTE AND NEWS
Market Intelligence Center  Aug 28  Comment 
Option-trade picking algorithms patented by MarketIntelligenceCenter.com found a trading opportunity with Arch Capital Group Ltd (ACGL) that should provide a 2.38% return in just 112 days. Sell one Dec. '15 call at the $65.00 level for each 100...
Market Intelligence Center  Aug 3  Comment 
The patented option trade-picking algorithms behind MarketIntelligenceCenter.com's Artificial Intelligence Center have selected a covered call trade on Arch Capital Group Ltd (ACGL) that includes 4.34% downside protection. Sell one contract of the...
Benzinga  Jul 8  Comment 
In a report published Wednesday, Goldman Sachs analyst Michael Nannizzi raised his Property & Casualty Insurance coverage to "Neutral" from "Cautious" as more M&A transactions are "likely." "M&A is not only a risk, but a function of challenging...
Benzinga  Jun 18  Comment 
Analysts at BMO Capital downgraded Arch Capital Group Ltd. (NASDAQ: ACGL) from Outperform to Market Perform. Arch Capital Group shares have gained 14.87 percent over the past 52 weeks, while the S&P 500 index has surged 7.19 percent in the same...
Market Intelligence Center  Jun 4  Comment 
Option-trade picking algorithms patented by MarketIntelligenceCenter.com found a trading opportunity with Arch Capital Group Ltd (ACGL) that should provide a 2.65% return in just 106 days. Sell one Sep. '15 call at the $65.00 level for each 100...
Insurance Journal  May 7  Comment 
AXIS Capital Holdings Ltd. climbed in New York trading on Wednesday after “Insurance Insider” reported that the company, which has agreed to merge with PartnerRe Ltd., could draw a bid from Arch Capital Group Ltd. AXIS could attract an offer...
Market Intelligence Center  May 6  Comment 
After Tuesday’s trading in Arch Capital Group Ltd (ACGL) the algorithms behind MarketIntelligenceCenter.com's Artifical Intelligence Center picked out a trade that offers a 3.70% or 5.97% (for comparison purposes only), while providing 5.86%...




 

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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