12:27 PM EDT, 06/04/2024 (MT Newswires) -- Arch Capital Group ( ACGL ) has been executing "cycle management" better than its peers, and is expected to continue to do so, BofA Securities said in a note Tuesday.

Analysts, including Joshua Shanker, said that the insurance company has positioned itself such that it can cycle manage among several non-correlated pools of risk, allowing it to engage or disengage from business to underwrite depending on market conditions.

Most commercial insurance carriers aim to underwrite the most attractive lines of business, while withdrawing from the least attractive ones. This is called cycle management. However, Arch Capital Group's ( ACGL ) ability to do so is more "pronounced than peers," the analysts added.

The company's net favorable loss reserve development has lately been waning, but the brokerage still thinks its reserve position is stronger than peers with its significant growth during the "hard" market pricing years.

"Commercial insurance underwriting tends to have a transparent market pricing system disintermediated by brokers who stand closer to the customer than the carrier, making it difficult for the carrier to outperform, yet Arch has consistently delivered that outperformance," the analysts said.

The firm is changing earnings per share outlook for 2024, 2025 and 2026 to $8.70, $9.65 and $10.15 from from $9, $9.40, $9.80, respectively.

BofA Securities adjusted its price objective for Arch Capital ( ACGL ) to $119 from $109, while keeping buy rating.

Price: 100.22, Change: -1.48, Percent Change: -1.46