67 WALL STREET, New York - June 10, 2013 - The Wall Street Transcript has just published its Insurance Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Low Profitability and Low Interest Rates - Commercial Line Brokers and Underwriters - Consolidation Trends - Emerging Market Expansion - Analysis Of Personal, Commercial & Reinsurance Subsectors
Companies include: Arch Capital Group Ltd. (ACGL) and many more.
In the following excerpt from the Insurance Report, the Director, Chairman, President and CEO of Arch Capital Group Ltd. (ACGL) discusses company strategy and the outlook for this vital industry:
TWST: What are the industry-specific or company-specific metrics you believe are most meaningful in measuring your business performance that investors in the company should analyze?
Mr. Iordanou: For insurance companies, our ability to grow tangible book value per share is the critical measure, and returns on equity, of course, which aids that process is also very important. And I think if you look at us as a company, we have done extremely well in both categories over the last 11 years since the recapitalization of the company after September 11 of 2001. Our book value per share growth has compounded at 18.1% annually, which is something that we are very proud of.
TWST: Do you think the investment community has a good understanding of Arch Capital's story and value proposition? And what complexities or nuances about the company can you shed some light on for us?
Mr. Iordanou: It's an interesting question. I think that our investors know us well and most have been with us for many years. They understand not only our philosophy, but also what we are about. The biggest misunderstanding about Arch is a lot of investors only know us a little bit. We're more a specialty insurer, with about 60% of our revenue coming from insurance and approximately 40% of our revenue coming from the reinsurance operations.
The other area that I think people who have not followed us since the beginning is that our mix of business has changed significantly as we follow lines of business that give us better returns. Today the company is approximately 45% property lines, about 25% longer tail lines, and the rest of it is in medium tail lines of business such as small account professional liability. Back in 2002, we were 80% longer tail lines of business.
The other area that I would point out is that our business over the years has shifted toward small- and medium-size accounts, whereas in the early years we had more of a large account orientation, with more than 50% of our revenue coming from larger accounts...
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.