Argo Group Reports Fourth Quarter and Full Year 2022 Results
Argo Group International Holdings, Ltd. (NYSE: ARGO) (“Argo” or the “company”) announced financial results for the three months and year ended December 31, 2022.
“2022 was a transformative year for the said Argo Executive Chairman and Chief Executive Officer, Thomas A. Bradley. “The strategic actions we have taken strengthened Argo and better position it to deliver strong returns moving forward. The Argo of today is markedly different from the Argo of only two years ago. We have streamlined the company to focus on our most profitable business lines, achieved targeted expense reductions, and continued to de-risk the balance sheet. At the same time, we have remained nimble in the marketplace responding to the needs of customers and business partners. We are excited about our next chapter as part of Brookfield Reinsurance. We believe the merger transaction that we announced on February 8, 2023, will enhance our opportunities for growth, and scale Argo into a market leading specialty insurer with capabilities across admitted and E&S markets. Lastly, I want to thank our leadership team and employees for their dedication over the past year as we worked through the strategic alternatives review process.”
View the Full 4th Quarter Release
Argo Group Announces Closing of Lloyd’s Syndicate 1200 Transaction
Argo Group International Holdings, Ltd. announced the completion of its previously announced sale of Argo Underwriting Agency Limited and its Lloyd’s Syndicate 1200 to Westfield.
“We are pleased to complete this transaction,” said Thomas A. Bradley, Argo’s executive chairman and chief executive officer. “We thank our Lloyd’s team members for their work and dedication to our business over the years, and we are confident they will have a bright future ahead with Westfield.”
Goldman Sachs & Co. LLC served as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel to Argo.
Argo Group Appoints Jessica Snyder as President, U.S. Insurance
Argo Group International Holdings, Ltd. (NYSE: ARGO), an underwriter of specialty insurance, announced Jessica Snyder has been appointed to serve as president, U.S. insurance, effective immediately. Snyder will report to Tom Bradley, Argo’s executive chairman and chief executive officer.
“Jessica has extensive executive experience in the property and casualty insurance industry that will serve Argo well as we continue to invest in the U.S. business and accelerate profitable growth,” said Bradley. “She also has a proven track record of leading transformational growth strategies. We are confident she is a strong leader to help drive our U.S. business into the future.”
With almost 30 years of industry experience, Snyder joins Argo from GuideOne Insurance where she most recently served as its president and chief executive officer from 2017 through 2022. During her time at GuideOne, Snyder led the company’s restructuring to a mutual holding company, expanded its niche commercial and excess and surplus insurance product lines, reconfigured its reinsurance program, and strengthened the leadership team and board with experienced executives. Her efforts resulted in the resurgence of GuideOne, delivering profitable growth and diversified revenue streams.
“Argo is a dynamic company with a clear and proven strategic vision for driving results across the specialty insurance industry. I am excited to join the organization as the company continues to focus and fortify its operating model and pursue a profitable growth strategy,” said Snyder.
Prior to GuideOne, Snyder has had a distinguished career, holding multiple leadership positions in the property and casualty industry. She served as senior vice president of commercial and specialty lines at State Auto Insurance. She also served as senior vice president, chief operating officer and chief financial officer at Rockhill Insurance Group, and as chief financial officer at Citizens Property Insurance.
Snyder has a Bachelor of Science in accounting from University of Wisconsin and a Master of Business Administration degree in finance from the University of Florida.
Argo Group Reports First Quarter 2022 Results
Continued Strategic Growth: Net earned premium increased 3.1% in the first quarter 2022; strong net earned premium growth in our ongoing business[1] of approximately 20.8%
Disciplined Expense Focus: Expense ratio of 36.0% for the first quarter 2022 improved 1.8 percentage points from the first quarter 2021, driven by reduced General and Administrative expenses
Improved Underwriting Performance: Combined ratio of 95.0% for the first quarter 2022 improved 8.8 percentage points from the first quarter 2021, driven by improvement in both the loss and expense ratio
Reduced Catastrophe Losses: Total catastrophe losses of $8.7 million for the first quarter 2022 decreased $38.8 million from the first quarter 2021
Syndicate 1200 Loss Portfolio Transfer (“LPT”): Agreement on LPT transaction for Syndicate 1200’s reserves for the 2018 and 2019 Years of Account
Argo Group International Holdings, Ltd. announced financial results for the three months ended March 31, 2022. Argo reported a net loss attributable to common shareholders of $3.6 million or $0.11 per diluted common share, for the first quarter 2022, compared to net income attributable to common shareholders of $27.2 million or $0.78 per diluted common share for the first quarter 2021. Annualized return on average common shareholders’ equity was (0.9%) in the first quarter 2022, compared to 6.4% in the prior year first quarter. Operating income in the first quarter 2022 was $43.4 million or $1.24 per diluted common share, compared to $15.5 million or $0.44 per diluted common share for the first quarter 2021. Annualized operating return on average common shareholders’ equity was 11.4% in the first quarter 2022, compared to 3.7% in the prior year first quarter.
“We continue to execute on our strategic priorities of improving underwriting margins, reducing volatility and managing expenses,” said Argo Executive Chairman and Interim Chief Executive Officer Thomas A. Bradley. “The success of these efforts is reflected in the results and provides a strong start to the year.
“We are pleased to report operating income of $43.4 million, and an operating return on equity of 11.4% for the first quarter 2022. The loss ratio was solid at 59%, our catastrophe losses were significantly lower than a year ago, and the expense ratio of 36% improved nearly two percentage points from the prior year first quarter.
“Looking forward, we are pleased with the opportunities for growth across our ongoing businesses and remain confident in achieving our 2022 financial objectives.”
[1] Ongoing business does not include the businesses the Company is exiting, plan to exit or have sold, including sales of Ariel Re in November 2020, Contract Binding P&C in October 2021, U.S. Specialty Property in December 2021, Argo Seguros Brasil in February 2022 and businesses in Italy, Malta, London Property D&F and North American Binders business in Syndicate 1200, and the U.S. grocery business.
View the Full 1st Quarter Release
Argo Group Reports 2021 Fourth Quarter and Full Year Results
Continued Strategic Growth: Net earned premium increased 4.2% in the fourth quarter of 2021; Strong net earned premium growth in our ongoing business[1] of approximately 19.6%, supported by favorable market conditions
Expense Ratio Improvement: Expense ratio of 35.3% for the fourth quarter of 2021 improved 2.9 points from the fourth quarter of 2020 and full year 2021 expense ratio of 36.8% improved 0.7 points compared to the same period in 2020
Reduced Catastrophe Losses: Total catastrophe losses of $6.8 million for the fourth quarter of 2021, down from $51.0 million in the fourth quarter of 2020 and full year 2021 catastrophe losses of $92.7 million, down from $179.2 million in 2020
Improved Results in International Operations: Combined ratio improved 40.9 points to 76.5% for the fourth quarter of 2021 from the fourth quarter of 2020 and full year 2021 combined ratio of 97.2% improved 19.9 points compared to the same period in 2020
Argo Group International Holdings, Ltd. (NYSE: ARGO) (“Argo” or the “Company”) announced financial results for the three months and year ended December 31, 2021. On February 8, 2022, the Company reported that its results for the quarter ended December 31, 2021, would be negatively affected by adverse prior year reserve development and non-operating charges.
Argo reported a fourth quarter 2021 net loss attributable to common shareholders of $118.8 million or $3.41 per diluted common share, compared to a net loss attributable to common shareholders of $3.5 million or $0.10 per diluted common share for the 2020 fourth quarter. For the year ended 2021, Argo reported a net loss attributable to common shareholders of $4.7 million or $0.13 per diluted common share, compared to a net loss attributable to common shareholders of $58.7 million or $1.70 per diluted common share in 2020.
The operating loss in the fourth quarter of 2021 was $61.8 million or $1.77 per diluted common share, compared to an operating loss of $8.9 million or $0.26 per diluted common share for the 2020 fourth quarter. Operating income in 2021 was $41.5 million or $1.19 per diluted common share, compared to an operating loss of $10.0 million or $0.29 per diluted common share in 2020.
“Our strategic priorities of pursuing profitable growth, reducing volatility, and disciplined expense management are evident in our 2021 current accident year underwriting results,” said Argo Group Chief Executive Officer Kevin Rehnberg. “We remain encouraged by the continued growth and underlying strength of our ongoing business.”
[1] Ongoing business does not include the businesses the Company is exiting, plan to exit or have sold, including sales of Ariel Re in November 2020, Contract Binding P&C in October 2021, U.S. Specialty Property in December 2021, Argo Seguros Brasil in February 2022 and businesses in Italy, Malta, London Property D&F and North American Binders business in Syndicate 1200, and the U.S. grocery business.
View the Full 4th Quarter Release
Argo Group Announces Closing of Argo Seguros Brasil S.A. Sale to Spice Private Equity Ltd.
Argo Group International Holdings, Ltd., an underwriter of specialty insurance products, announced the completion of the sale of Argo Seguros Brasil S.A. to Spice Private Equity Ltd.
“The closing of this transaction is another definitive step as Argo evolves as a specialty insurer focused on US-based insurance risks,” said Andy Borst, Interim President of International Operations. “I wish the team in Brazil the best of luck in the future.”
The terms of the transaction were not disclosed.
Argo Group Comments on Preliminary Fourth Quarter 2021 Financial Results
Argo Group International Holdings, Ltd. (“Argo”) (NYSE: ARGO), announced today that its results for the fourth quarter of 2021, which ended December 31, 2021, will be negatively affected by adverse prior year reserve development and non-operating charges, summarized in more detail below.
Items affecting the fourth quarter 2021 financial results include:
Argo expects net adverse prior year reserve development to be in the range of $130 million to $140 million for the 2021 fourth quarter. Prior year adverse development was the result of the recently concluded fourth quarter 2021 reserve review. The largest reserve increases were related to construction defect claims within Argo’s U.S. Operations, in addition to reserve increases in the Run-off segment. The prior year reserve increase for construction defect primarily related to the 2017 and prior underwriting years in business lines that have either been significantly remediated or discontinued.
Additionally, several non-operating charges are anticipated to be reflected in Argo’s fourth quarter 2021 results:
As part of an ongoing strategic review and recent operating results, an impairment of goodwill and intangible assets is expected to be in the range of $40 million to $45 million related to Argo’s Syndicate 1200 business unit, and
Non-operating expense charges expected to be in the range of $20 million to $25 million primarily related to the reduction in Argo’s real estate footprint in the UK and the impairment of certain information technology assets.
FOURTH QUARTER 2021 EARNINGS RELEASE AND CONFERENCE CALL
Argo will release its fourth quarter results after the close of business on Tuesday, February 22, 2022 and will host a conference call for investors and analysts at 10 a.m. EST on Wednesday, February 23, 2022.
Argo Group Announced the Sale of ArgoGlobal SE
Argo Group International Holdings Ltd. (NYSE: ARGO), an underwriter of specialty insurance, announced an agreement to sell its Malta business operations, ArgoGlobal Holdings (Malta) Ltd. and its subsidiaries, to Riverstone Holdings Limited (part of the RiverStone International group), an industry-leading acquirer and reinsurer of legacy and discontinued insurance businesses. Closing of the transaction is subject to regulatory approval and is expected to occur during the first half of 2022.
“This sale supports our strategy to focus on U.S.-based specialty insurance risks,” said Andy Borst, interim president of international operations. ArgoGlobal SE business was primarily focused on insuring risks in Europe and has not been actively underwriting business since 2020.
“We are delighted to have executed a second legacy transaction with the Argo Group, which strengthens our important business relationship,” said Luke Tanzer, RiverStone International’s CEO. “We look forward to working closely with Argo through the completion phase and to continue to service ArgoGlobal SE policyholders and claimants to the high standards currently provided.”
The terms of the agreement were not disclosed.
Brendan Keating and Mark Farina to Co-lead Argo Surety
Argo Group International Holdings Ltd. (NYSE: ARGO), an underwriter of specialty insurance, announced Brendan Keating and Mark Farina have been appointed to co-lead Argo Surety, effective immediately. Keating and Farina will report to Gary Grose, president of Commercial Specialty.
“As chief operations officer for Surety, Brendan has demonstrated his leadership abilities and deep understanding of the business,” said Grose. “He is the driving force behind many of the team’s growth initiatives, and we are certain he will continue this momentum.
“Mark helped establish this business, and as chief underwriting officer, he provides the leadership required to ensure our clients receive competitive rates, quick responses, and a thoughtful underwriting approach to serve each unique surety need.”
Keating got his start in the surety business working in several underwriting roles at Zurich before joining Argo 10 years ago. During his time at Argo, he has progressively advanced through several underwriting and leadership roles. He has Bachelor of Business Administration and Master of Business Administration degrees from Saint Bonaventure University.
With more than 35 years in the surety business, Farina joined Argo Group in 2008 initially as vice president and then promoted to chief underwriting officer for Argo Surety. Prior to that Farina served in numerous roles at Travelers Insurance and Chubb. He has a Bachelor of Arts from Ithaca College.
Josh Betz formerly led Argo Surety, and will be leaving the Company.
Argo Group to Sell Contract Binding P&C Renewal Rights to Mesa Underwriters Specialty Insurance Company
Argo Group International Holdings Ltd. (NYSE: ARGO), an underwriter of specialty insurance, announced an agreement to sell the renewal rights of its contract binding property and casualty business to Mesa Underwriters Specialty Insurance Company (MUSIC), the excess and surplus lines subsidiary of Selective Insurance Group Inc. (NASDAQ: SIGI).
“This transaction supports the company’s strategy to simplify the business,” said Marsh Duncan, Argo Group, president, excess and surplus. “We are pleased to have reached an agreement that provides a smooth transition for our brokers and insureds.”
As a part of the transaction, the Argo contract binding team will have the option to join MUSIC and continue to serve this market. Argo Group will continue to honor and service all policies currently in force.
“Expanding our contract binding book of business is a natural evolution of our growth strategy, further ensuring MUSIC’s continued success,” said Jeff Kamrowski, executive vice president, MUSIC. “We are dedicated to our specialty insurance customers and are excited for the opportunity to offer our customized insurance solutions, stellar customer service, and superior claims handling to new contract binding accounts at renewal. This opportunity and trust that Argo places in MUSIC underscores our strong reputation and solid performance in the marketplace.”
The terms of this transaction were not disclosed.