ACGL - Arch Capital: Solid Underwriting Drives A Strong Q1

2024-05-01 03:22:23 ET

Summary

• Arch Capital reported solid Q1 results, with adjusted EPS beating expectations and net premiums written rising by 19.3%.
• The company's insurance unit saw growth in written premiums but a decrease in underwriting income due to the Baltimore bridge collapse.
• Arch's reinsurance unit experienced strong growth in premiums and underwriting income, with a decrease in the combined ratio, aided by higher prices.
• Its Allianz unit acquisition should help further diversify the business and reduce hurricane risk.

Shares of Arch Capital ( ACGL ) have been a solid performer over the past year, rising 20%, just below the S&P 500’s 23% gain. Monday after the bell, Arch reported solid Q1 results. Given its large reinsurance exposure, Q1 is typically relatively strong, but results should be supportive of shares in my view, I last covered Arch in November , rating shares a buy, and since then, shares have risen 7%. While a strong absolute return, this has lagged the market’s ~13.5% rally. I see ongoing upside in this well-run insurer and would remain a buyer....

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