Fundamentals snapshot
ACGL · NMS · Financial Services · Insurance - Diversified
Current price
$101.70
52-week range
$82.45 - $105.09
Market cap
$35.53B
One-glance verdict
We don't put a cash-flow fair value on banks and insurers. For these companies the reported 'cash flow' is really just money moving between loans, deposits and trades — not the leftover profit the owners could actually pocket — so the usual method would print a misleading number.
Balance sheet
Net cash $892.00M. Interest coverage shows how many times profit covers the interest bill.
What stands out
What this company does
Arch Capital Group is a specialty insurance company that primarily sells reinsurance (insurance for other insurance companies) and mortgage insurance. This means it gets paid to help other insurers cover massive claims like from a hurricane, and it also protects lenders if a homeowner can't pay their mortgage. The company makes money by collecting payments (called premiums) for these policies and investing that cash until it's needed to pay out future claims.
Arch Capital Group was founded in 1995 and is based in Bermuda. A major turning point was in 2001, following the September 11th attacks, when the company raised significant funds to provide insurance and reinsurance (insurance for insurance companies) in a market that desperately needed it. Over the years, Arch has grown by both expanding its existing businesses and buying other companies. A key acquisition was the purchase of United Guaranty in 2016, which made Arch a leading mortgage insurer.
Think of Arch Capital as a financial safety net for big, unusual, and complex risks. Instead of selling insurance directly to individuals for things like a personal car, Arch focuses on specialized insurance for businesses, provides backup insurance for other insurance companies, and insures mortgage loans for lenders. They operate worldwide and sell their products through independent agents and brokers rather than directly to the end customer.
This is Arch's specialty insurance business for companies. It covers unique and complex risks that a standard insurance policy might not, such as insurance for construction projects, commercial vehicles, and professional liability (protection against lawsuits for mistakes). This segment provides customized risk solutions for a wide range of industries across North America, Europe, and Australia. This part of the company grows by finding niche markets where its expertise allows it to price risks effectively.
This segment acts as an insurer for other insurance companies. An insurance company might buy reinsurance to protect itself from very large losses, like those from a major hurricane. Arch's Reinsurance division takes on a portion of that risk in exchange for a fee, covering everything from property damage after a catastrophe to marine and aviation risks. This business is important because it allows Arch to deploy its capital (money available for investment) into markets where prices can become very attractive, especially after large industry-wide loss events.
This part of the business focuses on the housing market. When a person buys a home with a small down payment, the lender often requires mortgage insurance to protect itself in case the borrower can't make their payments. Arch provides this insurance to lenders, primarily in the United States and Australia. This segment also offers other services to the housing finance industry, helping to manage the risk of mortgage loans. This business provides a different stream of income that is tied to the health of the housing market rather than the catastrophic events that can affect the other segments.
Management's strategy focuses on being highly selective and disciplined in the risks they take on. They aim to operate in specialty markets where their expertise gives them an edge, allowing them to price policies more accurately than competitors in more generic markets. The company follows a 'cycle management' approach, which means they write more business when prices are high and pull back when prices are too low to be profitable. They are also focused on expanding their global reinsurance business and developing a broader platform for their mortgage insurance services.
Price history
Earnings history
Click any quarter to read the call summary and what the numbers say.
Is it cheap or expensive?
For a bank or insurer, the "free cash flow" shown on its statements is mostly money flowing through loans, deposits and trades — not the leftover profit the owners could actually keep, which is what this kind of valuation needs. Running that through the usual method would spit out a meaningless number, so we leave the cash-flow fair value out here rather than show you something misleading.
Is it drowning in debt?
Net cash $892.0M - more cash than debt. Interest coverage 34.6x.
Arch Capital Group Ltd.'s profit covers its interest bill about 34.6 times over. which is stronger than every peer shown here.
Total debt $2.73B Interest coverage 34.64x This is the baseline the peer rows are being compared against.
Total debt $3.10B Interest coverage 18.97x -45% vs ACGL Carries about 1.8x less debt cushion than ACGL.
Total debt $4.38B Interest coverage 14.27x -59% vs ACGL Carries about 2.4x less debt cushion than ACGL.
Total debt $3.59B Interest coverage 13.50x -61% vs ACGL Carries about 2.6x less debt cushion than ACGL.
Total debt $2.33B Interest coverage 34.21x -1% vs ACGL Has roughly the same debt cushion as ACGL.
Total debt $1.49B Interest coverage 19.24x -44% vs ACGL Carries about 1.8x less debt cushion than ACGL.
What you should know
The numbers
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What you should know