Barclays on U.S. Insurance/Non-Life: ACGL and PRE Reserve Reviews Show Redundancies
Tweet
Share
E-mailGet Alerts ACGL Hot Sheet
Price: $99.39 +0.08%
Rating Summary:
11 Buy, 14 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
11 Buy, 14 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Join SI Premium – FREE
Barclays on U.S. Insurance/Non-Life: ACGL and PRE Reserve Reviews Show Redundancies
Barclays analyst, Jay Gelb, said, "Arch Capital Group's (Nasdaq: ACGL) gross ultimate loss reserves are redundant by $86-$497 million (+2% to +9% of total reserves), while PartnerRe's (NYSE: PRE) gross ultimate loss reserves are redundant by $119-$608 million (+2% to +8% of total reserves), based on our
estimates. This analysis is based on ACGL and PRE's global loss reserve data as of year-end 2010. ACGL's reserve redundancy increased modestly from year-end 2009, while PRE's remained mostly unchanged."
"Based on the selected method, ACGL's reserves appear to be redundant by 5% as of YE 2010, versus 3% for YE 2009. Increased redundancies in other property lines accounted for most of the change year-over-year. We view ACGL as one of the best managed P&C franchises in Bermuda, with a balanced presence in both primary commercial insurance and reinsurance. ACGL shares are attractively valued, in our view, at 1.05x 2Q11 BV, below its historical average."
"PartnerRe's estimated reserve redundancy appears to be 5% as of YE 2010 based on the selected method. This redundancy is driven by PRE's non-U.S. casualty, non U.S. non-proportional motor and U.S. casualty businesses. PRE has a strong global reinsurance franchise, although recent results have been challenged by large catastrophe losses. PRE trades at 0.67 x BV, which is near its historical low, although in line with Bermuda reinsurance peers."
Barclays analyst, Jay Gelb, said, "Arch Capital Group's (Nasdaq: ACGL) gross ultimate loss reserves are redundant by $86-$497 million (+2% to +9% of total reserves), while PartnerRe's (NYSE: PRE) gross ultimate loss reserves are redundant by $119-$608 million (+2% to +8% of total reserves), based on our
estimates. This analysis is based on ACGL and PRE's global loss reserve data as of year-end 2010. ACGL's reserve redundancy increased modestly from year-end 2009, while PRE's remained mostly unchanged."
"Based on the selected method, ACGL's reserves appear to be redundant by 5% as of YE 2010, versus 3% for YE 2009. Increased redundancies in other property lines accounted for most of the change year-over-year. We view ACGL as one of the best managed P&C franchises in Bermuda, with a balanced presence in both primary commercial insurance and reinsurance. ACGL shares are attractively valued, in our view, at 1.05x 2Q11 BV, below its historical average."
"PartnerRe's estimated reserve redundancy appears to be 5% as of YE 2010 based on the selected method. This redundancy is driven by PRE's non-U.S. casualty, non U.S. non-proportional motor and U.S. casualty businesses. PRE has a strong global reinsurance franchise, although recent results have been challenged by large catastrophe losses. PRE trades at 0.67 x BV, which is near its historical low, although in line with Bermuda reinsurance peers."
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Prenetics’ IM8 Announces Two-Time Golden Globe-Nominated Actress and Producer Lily Collins as IM8 Global Ambassador and Shareholder in Multi-Year Partnership
- Mizuho Reiterates Outperform Rating on Broadcom Limited (AVGO) Into EPS
- Benchmark Reiterates Buy Rating on Rank One Computing (ROC)
Create E-mail Alert Related Categories
Analyst CommentsRelated Entities
BarclaysSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
