Standard & Poor's has raised Arch Capital Group's operating insurance and reinsurance companies' financial strength ratings to A-plus from A, reflecting the group's "strong management and well-conceived corporate strategy," according to the rating agency.
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 risk management which resulted in a large and well-diversified franchise by product, client, and segment."
S&P also said Arch has consistent and strong underwriting and operating results that are "better and less volatile than those of some other Bermuda-based reinsurance/insurance companies."
Potential pricing and reserving risks associated with the company's long-tail casualty writings--particularly given the competitive pricing in that segment--and negative inflation effects partially offset the positive factors for the company, S&P said.
Earlier this week, Arch reported 2010 second quarter net income of more than $243 million, a 54 percent, or $85 million, increase over the 2009 second quarter.
S&P also raised Arch's counterparty credit rating to A-minus from BBB-plus.
