NU Online News Service, July 29, 11:43 a.m. EDT

Standard & Poor's has raised Arch Capital Group's operatinginsurance and reinsurance companies' financial strength ratings toA-plus from A, reflecting the group's "strong management andwell-conceived corporate strategy," according to the ratingagency.

New York-based S&P said Arch, based in Bermuda, has"executed a consistent strategy based on active cycle management,strong underwriting discipline, and strong enterprise riskmanagement which resulted in a large and well-diversified franchiseby product, client, and segment."

S&P also said Arch has consistent and strong underwritingand operating results that are "better and less volatile than thoseof some other Bermuda-based reinsurance/insurance companies."

Potential pricing and reserving risks associated with thecompany's long-tail casualty writings--particularly given thecompetitive pricing in that segment--and negative inflation effectspartially offset the positive factors for the company, S&Psaid.

Earlier this week, Arch reported 2010 second quarter net income of more than$243 million, a 54 percent, or $85 million, increase over the 2009second quarter.

S&P also raised Arch's counterparty credit rating to A-minusfrom BBB-plus.