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Fitch Ratings affirms Arch Capital Group Ltd.'s IDR at 'A-'.

Chicago: Fitch Ratings, a nationally recognized statistical rating organization (NRSRO) designated by the U.S. Securities and Exchange Commission, affirmed Arch Capital Group Ltd.'s (ACGL) Issuer Default Rating (IDR) at 'A-' and the ratings on ACGL's senior unsecured notes and preferred shares at 'BBB+' and 'BBB', respectively.

The Rating Outlook is Stable. Additionally, Fitch has affirmed the Insurer Financial Strength (IFS) ratings of ACGL's various primary insurance and reinsurance operating subsidiaries at 'A+'. Fitch's affirmation of ACGL's ratings reflects the company's strong and diversified business profile, reasonable financial leverage, strong fixed-charge coverage and very strong profitability. These favorable factors are partially offset by potential risks associated with the U.S. mortgage insurance (USMI) operations, which Fitch views as having a lower IFS credit profile. The ratings also reflect Fitch's negative sector outlooks on U.S. property/casualty (P/C) insurance and global reinsurance.

Fitch believes that ACGL has a strong business profile in P/C insurance, reinsurance and mortgage lines with a broad product portfolio that provides diversified sources of revenues and earnings. Fitch views this favorably as it allows the company flexibility to emphasize various products when market conditions are favorable and reduces the company's dependency on any single product line. This mix compares with a GPW split of 60%, 30% and 10%, respectively, in 2016, as the company further expanded and diversified into the USMI business with the acquisition of United Guaranty Corporation (UGC) from American International Group, Inc. (AIG) on Dec. 31, 2016, creating the leading provider of USMI.

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Publication:Daily the Pak Banker (Lahore, Pakistan)
Date:Oct 18, 2018
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