Arch CEO: Mergers are good for business
NEW YORK (Bloomberg) — Arch Capital Group Ltd chief executive officer Dinos Iordanou said consolidation in the reinsurance market is good for business.
The deals will eliminate some “desperate competitors” who used tactics that have pressured revenue, Iordanou said yesterday on a conference call after the Bermuda-based company reported fourth-quarter profit that beat analysts’ estimates.
“You’re creating larger enterprises and hopefully more responsible enterprises from a pricing and risk-taking point of view,” he said.
Reinsurers and speciality commercial-coverage providers have rushed to combine as hedge funds and other investors enter the market. Since the start of this year, XL Group Plc agreed to buy Catlin Group Ltd, and Axis Capital Holdings Ltd and PartnerRe Ltd announced a plan to merge. Arch would consider a deal if the right one comes along, Iordanou said.
Fourth-quarter net income climbed to $209.7 million, or $1.60 a share, from $156 million, or $1.14, a year earlier, Arch said late on Tuesday in a statement. Operating profit was $1.15 a share, beating the $1.03 average estimate of 17 analysts surveyed by Bloomberg.
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