Arch Capital (NASDAQ:ACGL) has been one of my favorite insurance companies for a long time, and I greatly admire the company's focus and discipline when it comes to underwriting and capital management. Arch Capital has shown time and again that it will prioritize/deprioritize business units as expected returns dictate and will expand/shrink the business in conjunction with its view of the landscape. I believe that will be a critical differentiating factor as the property & casualty insurance and reinsurance sectors go through what could prove to be a multi-year process of too much capital and weak pricing.
I've generally believed that investors can do better holding somewhat
overvalued shares of great companies than cheap shares of lesser
companies, and I still believe that about Arch Capital. I can't really
get comfortable with Arch Capital as a great idea for new money given
the valuation, but I wouldn't recommend investors flee the shares if
they already own them.
Read more here:
Arch Capital's Superior Model Continuing To Pay Off