Cover - USD ($) $ in Millions	12 Months Ended
Cover - USD ($) $ in Millions	Dec. 31, 2019	Feb. 26, 2020	Jun. 28, 2019
Document Information [Line Items]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2019
Document Transition Report	false
Entity File Number	1-15259
Entity Registrant Name	ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
Entity Incorporation, State or Country Code	D0
Entity Tax Identification Number	98-0214719
Entity Address, Address Line One	110 Pitts Bay Road
Entity Address, City or Town	Pembroke
Entity Address, Postal Zip Code	HM08
Entity Address, Country	BM
City Area Code	441
Local Phone Number	296-5858
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float			$ 2,436.5
Entity Common Stock, Shares Outstanding		34,501,906
Documents Incorporated by Reference	Part III of this report incorporates by reference specific portions of the Registrant's Proxy Statement relating to the 2020 Annual General Meeting of Shareholders.
Entity Central Index Key	0001091748
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Amendment Flag	false
Common Shares [Member]
Document Information [Line Items]
Title of 12(b) Security	Common Stock, par value of $1.00 per share
Trading Symbol	ARGO
Security Exchange Name	NYSE
Guarantee of Argo Group U.S., Inc. 6.500% Senior Notes due 2042
Document Information [Line Items]
Title of 12(b) Security	Argo Group U.S., Inc. 6.500% Senior Notes due 2042 and the Guarantee with respects thereto
Trading Symbol	ARGD
Security Exchange Name	NYSE

Consolidated Balance Sheets - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Investments:
Fixed maturities available-for-sale, at fair value (cost: 2019 - $3,605.0; 2018 - $3,529.1)	$ 3,633.5	$ 3,460.4
Equity securities, at fair value (cost: 2019 - $122.8; 2018 - $310.6)	124.4	354.5
Other investments (cost: 2019 - $482.5; 2018 - $482.0)	496.5	489.8
Short-term investments, at fair value (cost: 2019 - $844.8; 2018 - $482.3)	845.0	482.3
Total investments	5,099.4	4,787.0
Cash	137.8	139.2
Accrued investment income	25.7	27.2
Premiums receivable	688.2	649.9
Reinsurance recoverables	3,104.6	2,688.3
Goodwill	161.4	177.0
Intangible assets, net of accumulated amortization	91.8	93.5
Current income taxes receivable, net	0.0	8.2
Deferred tax asset, net	6.1	0.0
Deferred acquisition costs, net	160.2	167.3
Ceded unearned premiums	545.0	457.7
Operating leases right-of-use assets	91.8
Other assets	387.1	362.9
Assets held for sale	15.4	0.0
Total assets	10,514.5	9,558.2
Liabilities and Shareholders' Equity
Reserves for losses and loss adjustment expenses	5,157.6	4,654.6
Unearned premiums	1,410.9	1,300.9
Accrued underwriting expenses and other liabilities	226.0	261.9
Ceded reinsurance payable, net	1,203.1	970.5
Funds held	50.6	37.2
Senior unsecured fixed rate notes	140.0	139.8
Other indebtedness	181.3	183.4
Junior subordinated debentures	257.4	257.0
Current income taxes payable, net	0.8	0.0
Deferred tax liabilities, net	0.0	6.2
Operating lease liabilities	105.7
Total liabilities	8,733.4	7,811.5
Commitments and contingencies (Note 17)
Shareholders' equity:
Common shares - $1.00 par, 500,000,000 shares authorized; 45,698,470 and 45,276,999 shares issued at December 31, 2019 and December 31, 2018, respectively	45.7	45.3
Additional paid-in capital	1,376.6	1,372.0
Treasury shares (11,315,889 shares at December 31, 2019 and December 31, 2018, respectively)	(455.1)	(455.1)
Retained earnings	811.1	862.6
Accumulated other comprehensive income (loss), net of taxes	2.8	(78.1)
Total shareholders' equity	1,781.1	1,746.7
Total liabilities and shareholders' equity	$ 10,514.5	$ 9,558.2

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Available-for-sale cost	$ 3,605.0	$ 3,529.1
Equity securities cost	122.8	310.6
Other investments cost	482.5	482.0
Short-term investments, Cost	$ 844.8	$ 482.3
Common shares, par value (in dollars per share)	$ 1.00	$ 1.00
Common shares, shares authorized (in shares)	500,000,000	500,000,000
Common shares, shares issued (in shares)	45,698,470	45,276,999
Treasury shares (in shares)	11,315,889	11,315,889

Consolidated Statements of (Loss) Income - USD ($)	12 Months Ended
Consolidated Statements of (Loss) Income - USD ($)	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Premiums and other revenue:
Earned premiums	$ 1,729,500,000	$ 1,731,700,000	$ 1,572,300,000
Net investment income	151,100,000	133,100,000	140,000,000.0
Fee and other income	9,100,000	9,000,000.0	22,500,000
Net realized investment gains (losses):
Net realized investment gains	120,800,000	33,100,000	39,300,000
Change in fair value of equity securities	(40,800,000)	(105,100,000)	0
Net realized investment gains (losses)	80,000,000.0	(72,000,000.0)	39,300,000
Total revenue	1,969,700,000	1,801,800,000	1,774,100,000
Expenses:
Losses and loss adjustment expenses	1,220,700,000	1,040,800,000	1,050,200,000
Underwriting, acquisition and insurance expenses	665,800,000	654,700,000	635,400,000
Other corporate expenses	37,600,000	0	0
Interest expense	33,600,000	31,600,000	27,700,000
Fee and other expense	5,800,000	7,100,000	14,600,000
Foreign currency exchange (gains) loss	(9,600,000)	(100,000)	6,300,000
Impairment of goodwill	15,600,000	0	0
Total expenses	1,969,500,000	1,734,100,000	1,734,200,000
Income before income taxes	200,000	67,700,000	39,900,000
Income tax provision (benefit)	8,600,000	4,100,000	(10,400,000)
Net (loss) income	$ (8,400,000)	$ 63,600,000	$ 50,300,000
Net (loss) income per common share:
Basic (in dollars per share)	$ (0.25)	$ 1.87	$ 1.46
Diluted (in dollars per share)	(0.25)	1.83	1.42
Dividend declared per common share (in dollars per share)	$ 1.24	$ 1.08	$ 0.94
Weighted average common shares:
Basic (in shares)	34,205,954	33,922,009	34,457,098
Diluted (in shares)	34,205,954	34,678,781	35,371,644
Net realized investment gains (losses) before other-than-temporary impairment losses	$ 100,300,000	$ (64,400,000)	$ 41,800,000
Other-than-temporary impairment losses recognized in earnings:
Other-than-temporary impairment losses on fixed maturities	(20,300,000)	(6,600,000)	(800,000)
Other-than-temporary impairment losses on equity securities	0	0	(1,700,000)
Other-than-temporary impairment losses on other invested assets	0	(1,000,000.0)	0
Impairment losses recognized in earnings	$ (20,300,000)	$ (7,600,000)	$ (2,500,000)

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Statement of Comprehensive Income [Abstract]
Net (loss) income	$ (8.4)	$ 63.6	$ 50.3
Other comprehensive income (loss):
Foreign currency translation adjustments	(0.2)	(3.4)	(1.4)
Defined benefit pension plans:
Net (loss) gain arising during the year	(1.8)	1.2	1.2
Unrealized gains (losses) on securities:
Gains (losses) arising during the year	88.0	(93.9)	105.7
Reclassification adjustment for losses (gains) included in net income	9.9	5.4	(41.6)
Other comprehensive income (loss) before tax	95.9	(90.7)	63.9
Defined benefit pension plans:
Net (loss) gain arising during the year	(0.4)	0.2	0.4
Unrealized gain (losses) on securities:
Gain (losses) arising during the year	14.2	(13.5)	28.0
Reclassification adjustment for losses (gains) included in net income	1.2	0.5	(13.4)
Income tax provision (benefit) related to other comprehensive income	15.0	(12.8)	15.0
Other comprehensive income (loss), net of tax	80.9	(77.9)	48.9
Comprehensive income (loss)	$ 72.5	$ (14.3)	$ 99.2

Consolidated Statements of Shareholders' Equity - USD ($) $ in Millions	Total	Common Shares [Member]	Additional Paid-In Capital [Member]	Treasury Shares [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Beginning Balance at Dec. 31, 2016	$ 1,792.7	$ 40.0	$ 1,123.3	$ (378.2)	$ 959.9	$ 47.7
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	50.3				50.3
Other comprehensive income - change in fair value of fixed maturities, net of taxes	49.5					49.5
Other comprehensive loss, net - other	(0.6)					(0.6)
Repurchase of common shares	(45.2)			(45.2)
Activity under stock incentive plans	12.4	0.4	12.0
Retirement of common shares (tax payments on equity compensation)	(8.2)	(0.1)	(8.1)
Employee stock purchase plan	2.0	0.1	1.9
Cash dividend declared - common shares	(33.2)				(33.2)
Ending Balance at Dec. 31, 2017	1,819.7	40.4	1,129.1	(423.4)	977.0	96.6
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	63.6				63.6
Other comprehensive income - change in fair value of fixed maturities, net of taxes	(75.5)					(75.5)
Other comprehensive loss, net - other	(2.4)					(2.4)
Repurchase of common shares	(31.7)			(31.7)
Activity under stock incentive plans	15.9	0.6	15.3
Retirement of common shares (tax payments on equity compensation)	(7.4)	(0.1)	(7.3)
Employee stock purchase plan	2.0		2.0
Stock Dividend	0.0	4.4	232.9		(237.3)
Cash dividend declared - common shares	(37.5)				(37.5)
Ending Balance at Dec. 31, 2018	1,746.7	45.3	1,372.0	(455.1)	862.6	(78.1)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	(8.4)				(8.4)
Other comprehensive income - change in fair value of fixed maturities, net of taxes	82.5					82.5
Other comprehensive loss, net - other	(1.6)					(1.6)
Activity under stock incentive plans	16.3	0.6	15.7
Retirement of common shares (tax payments on equity compensation)	(13.8)	(0.2)	(13.6)
Employee stock purchase plan	2.5		2.5
Cash dividend declared - common shares	(43.1)				(43.1)
Ending Balance at Dec. 31, 2019	$ 1,781.1	$ 45.7	$ 1,376.6	$ (455.1)	$ 811.1	$ 2.8

Consolidated Statements of Shareholders' Equity (Parenthetical)	12 Months Ended
	Dec. 31, 2018 $ / shares shares	Dec. 31, 2017 $ / shares shares
Statement of Stockholders' Equity [Abstract]
Common shares repurchased (in shares) \| shares	530,882	756,252
Repurchase of common shares, weighted average price (in dollars per share)	$ 59.83	$ 59.76
Stock dividend declared, percent	15.00%
Cash dividend declared - common shares, per share (in dollars per share)	$ 1.08	$ 0.94

Consolidated Statements of Cash Flows - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash flows from operating activities:
Net (loss) income	$ (8.4)	$ 63.6	$ 50.3
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Amortization and depreciation	27.3	31.9	33.8
Share-based payments expense	16.9	18.3	12.3
Deferred income tax benefit, net	(26.5)	(12.6)	(17.9)
Net realized investment (gains) loss	(80.0)	72.0	(39.3)
Undistributed earnings from alternative investment portfolio	(19.9)	(19.8)	(49.5)
Loss on disposals of long-lived assets, net	7.2	0.3	2.1
Impairment of goodwill	15.6	0.0	0.0
Change in:
Accrued investment income	1.5	(3.5)	(2.7)
Receivables	(460.4)	(557.5)	(602.7)
Deferred acquisition costs	7.0	(7.3)	(11.5)
Ceded unearned premiums	(87.8)	(47.6)	(4.2)
Reserves for losses and loss adjustment expenses	509.0	338.3	653.9
Unearned premiums	111.7	76.4	85.5
Ceded reinsurance payable and funds held	246.5	226.5	88.8
Income taxes	8.9	(6.1)	(8.9)
Accrued underwriting expenses and other liabilities	(5.4)	110.2	(23.5)
Other, net	(79.9)	18.2	(1.5)
Cash provided by operating activities	183.3	301.3	165.0
Cash flows from investing activities:
Sales of fixed maturity investments	1,394.3	1,259.1	1,433.3
Maturities and mandatory calls of fixed maturity investments	522.2	418.6	678.3
Sales of equity securities	374.7	238.9	201.1
Sales of other investments	83.1	101.8	95.5
Purchases of fixed maturity investments	(1,859.1)	(1,936.0)	(2,464.1)
Purchases of equity securities	(61.2)	(170.5)	(157.7)
Purchases of other investments	(63.7)	(42.6)	(39.0)
Change in foreign regulatory deposits and voluntary pools	0.0	13.0	(7.2)
Change in short-term investments	(490.4)	(132.2)	306.7
Settlements of foreign currency exchange forward contracts	0.3	(1.5)	(2.9)
Acquisition of Maybrooke, net of cash acquired	0.0	0.0	(105.2)
Cash acquired with acquisition of Ariscom	0.0	15.6	0.0
Purchases of fixed assets	(29.9)	(32.2)	(30.6)
Other, net	(13.1)	(0.3)	(29.5)
Cash used in investing activities	(142.8)	(268.3)	(121.3)
Cash flows from financing activities:
Additional long-term borrowings	0.0	0.0	125.0
Payment on note payable	(0.6)	0.0	0.0
Activity under stock incentive plans	1.9	1.6	1.4
Repurchase of Company's common shares	0.0	(31.7)	(45.2)
Payment of cash dividends to common shareholders	(43.1)	(37.5)	(33.2)
Cash (used in) provided by financing activities	(41.8)	(67.6)	48.0
Effect of exchange rate changes on cash	(0.1)	(2.8)	(1.1)
Change in cash	(1.4)	(37.4)	90.6
Cash, beginning of year	139.2	176.6	86.0
Cash, end of period	$ 137.8	$ 139.2	$ 176.6

Business and Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Business and Significant Accounting Policies

Business

Argo Group International Holdings, Ltd. (“Argo Group,” “we” or the “Company”) is an international underwriter of specialty insurance and reinsurance products in the property and casualty market. Argo Group U.S., Inc. (“Argo Group U.S.”) is a subsidiary of Argo Financial Holding (Ireland) UC (“Argo Ireland”). Argo Underwriting Agency Limited (“Syndicate 1200”) is a subsidiary of Argo International Holdings, Ltd. Argo Re, Ltd. (“Argo Re”), a Bermuda based company, is the parent of both Argo Ireland and Argo International Holdings, Ltd. Argo Re is directly owned by Argo Group.

We conduct our ongoing business through two primary segments-U.S. Operations and International Operations. In addition to these main business segments, we have a Run-off Lines segment for certain products we no longer underwrite.

U.S. Operations is comprised of the Excess and Surplus Lines businesses focusing on the U.S.-based risks that the standard, admitted insurance market is unwilling or unable to write, and through other specialized admitted and non-admitted business distributed through retail, wholesale, and managing general brokers/agents in the specialty insurance market. Excess and Surplus Lines products are underwritten by Colony Insurance Company (“Colony”). The other U.S. specialized admitted and non-admitted businesses consist of the following operations: Argo Insurance, Rockwood Casualty Insurance Company (“Rockwood”), Argo Pro, Argo Surety, U.S. Specialty Programs, Inland Marine, Argo Cyber and Trident Insurance Services.

International Operations is comprised of the Lloyd’s Syndicate platform (Syndicate 1200 and Syndicate 1910), Argo Insurance Bermuda, Continental Europe and Latin America. Syndicate 1200 and Syndicate 1910 insurance and reinsurance products are underwritten by Argo Underwriting Agency Limited based in London, under the Lloyd’s of London (“Lloyd’s”) global franchise. The additional International Operations business include Argo Insurance Bermuda, ArgoGlobal SE in Malta, ArgoGlobal Assicurazioni S.p.A in Italy, and Argo Seguros in Brazil. These businesses provide a broad range of commercial property, casualty, professional liability and specialty coverages in a number of countries and jurisdictions outside the United States.

Our Run-off Lines segment includes liabilities associated with other liability policies that were issued in the 1960s, 1970s and into the 1980s, as well as the former risk-management business and other business no longer underwritten.

Basis of Presentation and Use of Estimates

The consolidated financial statements of Argo Group and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. The major estimates reflected in our consolidated financial statements include, but are not limited to, reserves for losses and loss adjustment expenses; reinsurance recoverables, including the reinsurance recoverables allowance for doubtful accounts; estimates of written and earned premiums; reinsurance premium receivable; fair value of investments and assessment of potential impairment; valuation of goodwill and other intangibles and our deferred tax asset valuation allowance. Actual results could differ from those estimates.

Specifically, estimates for reserves for losses and loss adjustment expenses are based upon past claim experience modified for current trends as well as prevailing economic, legal and social conditions. Although management believes that amounts included in the accompanying consolidated financial statements are reasonable, such estimates may be more or less than the amounts ultimately paid when the claims are settled. The estimates are continually reviewed and any changes are reflected in current operating results. Further, the nature of loss exposures involves significant variability due to the nature of the long-tailed payments on certain claims. As such, losses and loss adjustment expenses could vary significantly from the recorded amounts.

The consolidated financial statements include the accounts and operations of Argo Group and its subsidiaries. All material intercompany accounts and transactions have been eliminated. Certain amounts in prior years’ financial statements have been reclassified to conform to the current presentation. Amounts related to trade capital providers, who are third-party capital participants that provide underwriting capital to both Syndicate 1200 and Syndicate 1910, are included in the balance sheet. Trade capital providers participate on a quota share basis, assuming 100% of their contractual participation in the underwriting syndicate results and with such results settled on a year of account basis.

We have evaluated our investment in our eleven statutory trusts (collectively, the “Trusts”) and one charitable foundation (the “Foundation”) under the Financial Accounting Standards Board’s (“FASB’s”) provisions for consolidation of variable interest entities under Accounting Standards Codification (“ASC”) Topic 810-10, “Consolidation,” as amended. We determined that the Trusts and the Foundation are variable interest entities due to the fact that the Trusts and the Foundation do not have sufficient equity to finance their activities without additional subordinate financial support from other parties. We do not have any power to direct the activities that impact the Trusts’ or the Foundation’s economic performance. We are not entitled to receive a majority of the residual returns of the Trusts. Additionally, we are not responsible for absorbing the majority of the expected losses of the Trusts; therefore, we are not the primary beneficiary and, accordingly, the Trusts are not included in our consolidated financial statements. The expenses and donations of the charitable foundation in Bermuda are paid by Argo Group and have been included in the consolidated results.

We have used a series of special purpose reinsurance companies to provide reinsurance coverage through a series of transactions, including insurance-linked securities. Under the provisions of ASC Topic 810-10, these reinsurance companies are variable interest entities. However, we do not have a variable interest in these entities, and therefore are not required to consolidate them in our consolidated financial statements.

Stock Dividends

On February 20, 2018, our Board of Directors (the “Board”) declared a 15% stock dividend, payable on March 21, 2018, to shareholders of record at the close of business on March 7, 2018. As a result of the stock dividend, 4,397,520 additional shares were issued. Cash was paid in lieu of fractional shares of our common shares. Excluding repurchased shares, all references to common shares and related per share amounts in this document and related disclosures have been adjusted to reflect the stock dividend for all periods presented.

Cash

Cash consists of cash deposited in banks, generally in concentration and operating accounts. Interest-bearing cash accounts are classified as short-term investments.

Investments

Investments in fixed maturities at December 31, 2019 and 2018 include bonds and structured securities. Equity securities include common stocks, preferred stocks and mutual funds. Other investments consist of foreign regulatory deposits, hedge funds, private equity funds, private equity direct investments, and voluntary pools. Short-term investments consist of money market funds, certificates of deposit, bonds, sovereign debt and interest-bearing cash accounts. Investments maturing in less than one year are classified as short-term investments in our consolidated financial statements.

The amortized cost of fixed maturity securities is adjusted for amortization of premiums and accretion of discounts. This amortization or accretion is included in “Net investment income” in our Consolidated Statements of (Loss) Income.

For the structured securities portion of the fixed maturity securities portfolio, we recognize income using a constant effective yield based on anticipated prepayments and the estimated economic life of the securities. Premium or discount on high investment grade securities (rated AA or higher) is amortized into income using the retrospective method. Premium or discount on lower grade securities (rated less than AA) is amortized into income using the prospective method.

Our investments in fixed maturities are considered available-for-sale and are carried at fair value. As available-for-sale investments, changes in the fair value fixed maturities are not recognized in income during the period, but rather are recognized as a separate component of shareholders’ equity until realized. Fair value of these investments is estimated using prices obtained from third-party pricing services, where available. For securities where we were unable to obtain fair values from a pricing service or broker, fair values were estimated using information obtained from investment advisors. We performed several processes to ascertain the reasonableness of these investment values by i) obtaining and reviewing internal control reports for our service providers that obtain fair values from third-party pricing services, ii) discussing with our investment managers their process for reviewing and validating pricing obtained from outside services and obtaining values for all securities from our investment managers and iii) comparing the security pricing received from the investment managers with the prices used in the consolidated financial statements and obtaining additional information for variances that exceeded a certain threshold. As of December 31, 2019, investments reported at fair value for which we did not receive a fair value from a pricing service or broker accounted for less than 1% of our investment portfolio. The actual value at which such securities could be sold or settled with willing buyer or seller may differ from such estimated fair values depending on a number of factors including, but not limited to, current and future economic conditions, the quantity sold or settled, the presence of an active market and the availability of a willing buyer or seller. The cost of securities sold is based on the specific identification method.

Our investments in equity securities are reported at fair value. Beginning with the adoption of Accounting Standards Update (“ASU”) 2016-01, effective January 1, 2018, changes in the fair value of equity securities are now included in “Net realized investment (gains) losses” in our consolidated statements of income. See “Recently Issued Accounting Pronouncements” below for further information about ASU 2016-001 and the related impact on our consolidated financial statements.

Changes in the value of other investments consisting of hedge funds, private equity funds, private equity direct investments and voluntary pools are principally recognized to income during the period using the equity method of accounting. Our foreign regulatory deposits are assets held in trust in jurisdictions where there is a legal and regulatory requirement to maintain funds locally in order to protect policyholders. Lloyd’s is the appointed investment manager for the funds. The underlying assets are invested in government securities, agency securities and corporate bonds whose values are obtained from Lloyd’s. Foreign currency future contracts held by us are valued by our counterparties using market driven foreign currency exchanges rates.

We regularly evaluate our fixed maturity investments for other-than-temporary impairment. If the decline in the fair value of the investment is believed to be “other-than-temporary,” the carrying value of the fixed maturity investment is written down and recorded as a realized loss in our Consolidated Statements of Income. When evaluating for impairment of our fixed maturity investments, a credit loss is generally based on the present value of expected cash flows of the security as compared to the amortized book value. Factors included in this evaluation can also include, but are not limited to, the credit default rate, which includes loan-to-value ratios and credit scores of borrowers. We also recognize other-than-temporary losses on our fixed maturity securities that we intend to sell.

All investment balances include amounts relating to trade capital providers. The results of operations and other comprehensive income exclude amounts relating to trade capital providers. Trade capital providers’ participation in the syndicate results are included in reinsurance recoverable for ceded losses and reinsurance payable for ceded premiums.

Receivables

Premiums receivable, representing amounts due from insureds, are presented net of an allowance for doubtful accounts. The allowances for doubtful accounts were $7.3 million and $4.0 million at December 31, 2019 and 2018, respectively. Premiums receivable include amounts relating to the trade capital providers’ quota share.

Reinsurance recoverables represent amounts of paid losses and loss adjustment expenses, case reserves and incurred but not reported (“IBNR”) amounts ceded to reinsurers under reinsurance treaties. Reinsurance recoverables also reflect amounts that are due from trade capital providers. Reinsurance recoverables are presented in our consolidated balance sheets net of an allowance for doubtful accounts of $1.1 million and $1.8 million at December 31, 2019 and 2018, respectively (see Note 4, “Reinsurance” for related disclosures).

An estimate of amounts that are likely to be charged off is established as an allowance for doubtful accounts as of the balance sheet date. Our estimate includes specific insured and reinsurance balances that are considered probable to be charged off after all collection efforts have ceased and in accordance with historical write-off trends based on aging categories. Premiums receivable and reinsurance recoverables on paid losses written off, net of recoveries against the allowance for doubtful accounts or directly to the income statement are as follows:



	For the Years Ended December 31,
(in millions)	2019		2018		2017
Premiums receivable	$	1.5	$	2.1	$	1.5
Reinsurance recoverables	0.6		—		—
Net written off	$	2.1	$	2.1	$	1.5

Recoveries occur when subsequent collection or litigation results in the receipt of amounts previously written off. Amounts recovered are applied against the bad debt expense account.

Earned Premiums

Premium revenue is generally recognized ratably over the policy period. Premiums that have yet to be earned are reported as “unearned premiums” in our consolidated balance sheets.

Unearned premium balances include cessions to reinsurers including trade capital providers, while the earned premium recognized in our consolidated statements of income (loss) excludes amounts relating to trade capital providers. The trade capital providers’ quota share amount is included in “ceded reinsurance payable, net”.

Assumed reinstatement premiums that reinstate coverage are written and earned at the time the associated loss event occurs. The original premium is earned over the remaining exposure period of the contract. Reinstatement premiums are estimated based upon contract terms for reported losses and estimated for incurred but not reported losses.

Retrospectively Rated Policies

We have written a number of workers compensation, property and other liability policies that are retrospectively rated. Under this type of policy, the policyholder or coverholder may be entitled, subsequent to coverage expiration, to a refund or may owe additional premiums based on the amount of losses incurred under the policy. The retrospective premium adjustments on certain policies are limited to a minimum or maximum premium adjustment, which is calculated as a percentage of the standard amount of premium charged during the life of the policy. Accrued retrospectively rated premiums have been determined based on estimated ultimate loss experience of the individual policyholder accounts. The estimated liability for return of premiums under retrospectively rated policies is included in “Unearned premiums” in our consolidated balance sheets and was $5.4 million and $6.9 million at December 31, 2019 and 2018, respectively. The estimated amount included in premiums receivables for additional premiums due under retrospectively rated policies was $0.3 million and $0.4 million at December 31, 2019 and 2018, respectively.

Deferred Acquisition Costs

Policy acquisition costs, which include commissions, premium taxes, fees and certain other costs of underwriting policies, are deferred, when such class of policies are profitable, and amortized over the same period in which the related premiums are earned. To qualify for capitalization, the policy acquisition cost must be directly related to the successful acquisition of an insurance contract. Anticipated investment income is considered in determining whether the deferred acquisition costs are recoverable and whether a premium deficiency exists. We continually review the methods of making such estimates and establishing the deferred costs with any adjustments made in the accounting period in which the adjustment arose.

The 2019 and 2018 net amortization of policy acquisition costs will not equal the change in our consolidated balance sheets as the trade capital providers’ share is not reflected in our consolidated statements of income (loss) and differences arise from foreign currency exchange rates applied to deferred acquisition costs which are treated as a nonmonetary asset.

Reserves for Losses and Loss Adjustment Expenses

Liabilities for unpaid losses and loss adjustment expenses include the accumulation of individual case estimates for claims reported as well as estimates of IBNR claims and estimates of claim settlement expenses. Reinsurance recoverables on unpaid claims and claim expenses represent estimates of the portion of such liabilities that will be recoverable from reinsurers. Amounts recoverable from reinsurers are recognized as assets at the same time and in a manner consistent with the unpaid claims liabilities associated with the reinsurance policy.

Reinsurance

In the normal course of business, our insurance and reinsurance subsidiaries cede risks above certain retention levels to other insurance companies. Reinsurance recoverables include claims we paid and estimates of unpaid losses and loss adjustment expenses that are subject to reimbursement under reinsurance and retrocessional contracts. The method for determining reinsurance recoverables for unpaid losses and loss adjustment expenses involves reviewing actuarial estimates of gross unpaid losses and loss adjustment expenses to determine our ability to cede unpaid losses and loss adjustment expenses under our existing reinsurance contracts. This method is continually reviewed and updated and any resulting adjustments are reflected in earnings in the period identified. Reinsurance premiums, commissions and expense reimbursements are accounted for on a basis consistent with those used in accounting for the original policies issued and the term of the reinsurance contracts. Amounts recoverable from reinsurers for losses and loss adjustment expenses for which our insurance and reinsurance subsidiaries have not been relieved of their legal obligations to the policyholder are reported as assets.

Goodwill and Intangible Assets

Goodwill and intangible assets are allocated to the segment in which the results of operations for the acquired company are reported (see Note 18, “Segment Information” for further discussion). Intangible assets with a finite life are amortized over the estimated useful life of the asset. Goodwill and intangible assets with an indefinite useful life are not amortized. Goodwill and intangible assets are tested for impairment on an annual basis or more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable.

We perform our annual goodwill impairment test on the first day of the fourth quarter of each year, October 1, of each year. In conjunction with our annual test, the fair value of each reporting unit exceeded its carrying value, except for our European reporting unit. As a result of this testing, we determined that the goodwill of the European reporting unit, which is included in our International Operations segment, was fully impaired and recorded a pre-tax charge of $15.6 million. Our European reporting unit was adversely impacted by a continuing soft market. Additionally, we incurred higher than expected losses and loss adjustment expenses due to adverse prior accident year loss reserve development resulting from the receipt of new information in the second half of 2019 relating to claims trends across various lines of business, coupled with increased current accident year losses and loss adjustment expenses as a result of these claim trends. Using these facts and trends, we calculated the discounted cash flows for the European reporting unit, which resulted in the indication that the carrying value of the reporting unit exceeded its fair value, resulting in the impairment.

As a result of the reviews performed on each of our reporting units for each of the years ended December 31, 2018 and 2017, we determined that the estimated fair value exceeded the respective carrying value of our reporting units for those years and goodwill was not impaired.

Other indefinite-lived intangible assets and intangible assets with finite lives were also reviewed for impairment as of October 1 of each year. As a result of the reviews performed on each of the entity’s reporting units for the three years ended December 31, 2019, 2018 and 2017, the Company determined that the other indefinite-lived intangible assets and finite-lived intangible assets were not impaired.

The following table presents our intangible assets and accumulated amortization at December 31:



	December 31,
	2019				2018
(in millions)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Lloyd's capacity	$	89.0	n/a		$	89.0	n/a
Distribution network	50.2		48.2		50.2		47.0
Other	8.1		7.3		8.1		6.8
	$	147.3	$	55.5	$	147.3	$	53.8

The remaining weighted average useful life by category at December 31, 2019 was 5.0 years for the distribution network and 5.0 years for other. The remaining weighted average useful life for all assets that have not yet been fully amortized was 5.0 years at December 31, 2019.

During the years ended December 31, 2019, 2018 and 2017, amortization expense was $1.7 million, $3.3 million and $5.9 million, respectively, and is included in “underwriting, acquisition and insurance expenses” in our consolidated statements of income (loss).

The estimated amortization expense for the years ended December 31, 2020, 2021 and 2022 is $1.3 million, $1.3 million and $0.1 million, respectively. As of December 31, 2019, we have no estimated amortization expense after the year ended December 31, 2022.

Property and Equipment

Property and equipment used in operations, including certain costs incurred to develop or obtain computer software for internal use, are capitalized and carried at cost less accumulated depreciation and are reported in “other assets” in our consolidated balance sheets. Depreciation is calculated using a straight-line method over the estimated useful lives of the assets, generally three to thirty-nine years. The accumulated depreciation for property and equipment was $153.2 million and $146.0 million at December 31, 2019 and 2018, respectively. The net book value of our property and equipment at December 31, 2019 and 2018 was $140.4 million and $154.8 million, respectively. The depreciation expense for the years ended December 31, 2019, 2018 and 2017 was $24.4 million, $24.5 million and $24.1 million, respectively.

Assets Held for Sale

In December 2019, we entered into a series of agreements with a real estate firm to market and sell four company owned condominiums. We anticipate the properties to be sold in the second half of 2020.

We have classified the properties as “Assets held for sale” in our Consolidated Balance Sheet as of December 31, 2019. We have recorded the properties at their fair market value as of December 31, 2019 based on independent real estate appraisals. As a result of the reclassification to “Assets held for sale,” we recorded a pre-tax loss of $3.7 million, which is included in “Other corporate expenses” in our Consolidated Statements of (Loss) Income for the year ended December 31, 2019. These assets and the related pre-tax loss are reported as part of our Corporate and Other reporting segment in Note 18, “Segment Information”.

Derivative Instruments

We enter into short-term, currency spot and forward contracts to manage operational currency exposure on our Canadian dollar (“CAD”) investment portfolio and certain catastrophic events, minimize negative impacts to investment portfolio returns, and gain exposure to a total return strategy which invests in multiple currencies. The forward contracts are typically thirty to ninety days and are renewed as management deems necessary to accomplish the objectives of the contracts. These foreign currency forward contracts are carried at fair value in our Consolidated Balance Sheets in “Other assets” at December 31, 2019 and 2018, respectively. The realized and unrealized gains and losses are included in “Net realized investment and other gains (losses) in our Consolidated Statements of Income. The forwards contracts are not designated as hedges for accounting purposes.

Share-Based Payments

Compensation expense for share-based payments is recognized based on the measurement-date fair value for awards that will settle in shares. Awards that are expected to be settled in cash are accounted for as liability awards, resulting in the fair value of the award being measured at each reporting date until the award is exercised, forfeited or expires unexercised. Compensation expense for awards that are settled in equity are recognized on a straight line pro rata basis over the vesting period, adjusted for expected forfeitures. See Note 13, “Share-based Compensation” for related disclosures.

Foreign Currency Exchange Gain (Loss)

The U.S. dollar is the functional currency of all but three of our foreign operations. Monetary assets and liabilities in foreign operations that are denominated in foreign currencies are revalued at the exchange rates in effect at the balance sheet date. The resulting gains and losses from changes in the foreign exchange rates are reflected in net income. Revenues and expenses denominated in foreign currencies are translated at the prevailing exchange rate during the period with the resulting foreign exchange gains and losses included in net income for the period. In the case of our foreign currency denominated available-for-sale investments, the change in exchange rates between the local currency and our functional currency at each balance sheet date represents an unrealized appreciation or depreciation in value of these securities and is included as a component of accumulated other comprehensive income (loss).

Translation gains and losses related to our operations in Brazil, Malta and Italy are recorded as a component of shareholders’ equity in our consolidated balance sheets. At December 31, 2019 and 2018, the foreign currency translation adjustments were a loss of $22.6 million and $22.4 million, respectively.

Income Taxes

On December 22, 2017, the Tax Cuts and Jobs Act (“TCJA”) was enacted in the United States. Among many changes resulting from TCJA, the new law (i) reduces the corporate tax rate to 21% effective January 1, 2018, (ii) eliminates the corporate alternative minimum tax for tax years beginning after December 31, 2017, (iii) allows businesses to immediately expense, for tax purposes, the cost of new investments in certain qualified depreciable assets, (iv) modifies the computation of loss reserve discounting for tax purposes, (v) modifies the recognition of income rules by requiring the recognition of income for certain items no later than the tax year in which an item is taken into account as income on an applicable financial statement and (vi) significantly modifies the United States international tax system.

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in net income in the period in which the change is enacted.

We recognize potential accrued interest and penalties within our global operations in “interest expense” and “underwriting, acquisition and insurance expenses,” respectively, in our consolidated statements of income (loss) related to unrecognized tax benefits.

Supplemental Cash Flow Information

Interest paid and income taxes paid (recovered) were as follows:



	For the Years Ended December 31,
(in millions)	2019			2018		2017
Senior unsecured fixed rate notes	$	9.3		$	9.3	$	9.3
Junior subordinated debentures	16.2			15.5		12.6
Other indebtedness	7.6			6.5		4.9
Revolving credit facility	—			—		0.3
Total interest paid	$	33.1		$	31.3	$	27.1

Income taxes paid	24.0			24.8		16.5
Income taxes recovered	(0.1		)	—		(2.5		)
Income taxes paid, net	$	23.9		$	24.8	$	14.0

Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, “Leases” (Topic 842). ASU 2016-02 requires organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Additionally, the ASU modifies current guidance for lessors’ accounting. In July 2018, the FASB issued ASU 2018-11, “Leases: Targeted Improvements” (Topic 842), which provides for an alternative transition method by allowing entities to initially apply the new leases standard at the adoption date (such as January 1, 2019) and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption (comparative periods presented in the financial statements will continue to be in accordance with current GAAP (Topic 840, Leases). The standard was effective for annual and interim periods beginning after December 15, 2018, with earlier application permitted.

We have entered into operating leases for office space and certain other assets. We adopted the new standard on the effective date of January 1, 2019. We applied the following practical expedients:


•	We have elected to adopt this standard using the option transition method, which allows companies to continue applying the guidance under the lease standard in effect at that time in the comparative periods presented in the consolidated financial statements. The adoption of the standard had no effect on our consolidated shareholders’ equity. Prior periods were not restated.


•	We have elected the “package of practical expedients,” which permits us not to reassess under the new standard our prior conclusion about lease identification, lease classification and initial direct costs.


•	Where we are the lessor, we have elected the practical expedient which permits us to not separate non-lease components from the associated lease components if the non-lease components otherwise would be accounted for in accordance with the new revenue standard.

For the majority of our asset classes, we elected not to separate lease and non-lease components. As a result, our right-of-use assets and lease liabilities represent base rent components of our leases. We have elected to not apply the practical expedient which allows the use of hindsight in determining the lease term and in assessing impairment of the entity’s right-of-use assets. The remaining practical expedients did not specifically apply to our lease population as of the adoption date.

Please see Note 4 - “Leases” for further discussion on the impact of the adoption of this standard.

Investments

12 Months Ended

Dec. 31, 2019

Investments, Debt and Equity Securities [Abstract]

Investments

Included in “total investments” in our consolidated balance sheets at December 31, 2019 and 2018 is $158.6 million and $133.4 million, respectively, of assets managed on behalf of the trade capital providers, who are third-party participants that provide underwriting capital to the operations of Syndicates 1200 and 1910.

Fixed Maturities

The amortized cost, gross unrealized gains, gross unrealized losses and fair value in fixed maturity investments were as follows:



December 31, 2019
(in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Fixed maturities
U.S. Governments	$	353.5	$	2.3	$	1.2	$	354.6
Foreign Governments	244.8		4.6		0.7		248.7
Obligations of states and political subdivisions	145.8		6.9		0.1		152.6
Corporate bonds	1,777.4		37.7		34.7		1,780.4
Commercial mortgage-backed securities	213.5		4.6		1.1		217.0
Residential mortgage-backed securities	479.1		10.4		0.6		488.9
Asset-backed securities	164.2		1.5		0.2		165.5
Collateralized loan obligations	226.7		0.5		1.4		225.8
Total fixed maturities	$	3,605.0	$	68.5	$	40.0	$	3,633.5



December 31, 2018
(in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Fixed maturities
U.S. Governments	$	240.9	$	0.2	$	4.9	$	236.2
Foreign Governments	224.1		0.5		7.8		216.8
Obligations of states and political subdivisions	236.7		4.3		1.2		239.8
Corporate bonds	1,808.7		7.5		58.7		1,757.5
Commercial mortgage-backed securities	205.3		0.7		3.2		202.8
Residential mortgage-backed securities	413.1		3.4		5.7		410.8
Asset-backed securities	173.6		0.4		1.2		172.8
Collateralized loan obligations	226.7		0.5		3.5		223.7
Total fixed maturities	$	3,529.1	$	17.5	$	86.2	$	3,460.4

Contractual Maturity

The amortized cost and fair values of fixed maturity investments as of December 31, 2019, by contractual maturity, were as follows:



(in millions)	Amortized Cost		Fair Value
Due in one year or less	$	294.2	$	294.8
Due after one year through five years	1,495.0		1,491.0
Due after five years through ten years	653.2		666.6
Thereafter	79.1		83.9
Structured securities	1,083.5		1,097.2
Total	$	3,605.0	$	3,633.5

The expected maturities may differ from the contractual maturities because debtors may have the right to call or prepay obligations.

Other Invested Assets

Details regarding the carrying value and unfunded investment commitments of the other invested assets portfolio as of December 31, 2019 and 2018 were as follows:



December 31, 2019
(in millions)	Carrying Value		Unfunded Commitments
Investment Type
Hedge funds	$	109.5
Private equity	268.1		110.0
Long only funds	114.6
Other	4.3
Total other investments	$	496.5	$	110.0



December 31, 2018
(in millions)	Carrying Value		Unfunded Commitments
Investment Type
Hedge funds	$	120.6	$	—
Private equity	211.8		120.5
Long only funds	153.0		—
Other	4.4		—
Total other invested assets	$	489.8	$	120.5

The following describes each investment type:


•	Hedge funds: Hedge funds include funds that primarily buy and sell stocks including short sales, multi-strategy credit, relative value credit and distressed credit.


•	Private equity: Private equity includes buyout funds, real asset/infrastructure funds, credit special situations funds, mezzanine lending funds and direct investments and strategic non-controlling minority investments in private companies that are principally accounted for using the equity method of accounting.


•	Long only funds: Our long only funds include a fund that primarily owns international stocks and funds that primarily own investment-grade corporate and sovereign fixed income securities.


•	Other: Other includes participation in investment pools.

Unrealized Losses and Other-than-temporary Impairments

An aging of unrealized losses on our investments in fixed maturities is presented below:



December 31, 2019	Less Than One Year				One Year or Greater				Total
(in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Fixed maturities
U.S. Governments	$	114.6	$	1.1	$	17.0	$	0.1	$	131.6	$	1.2
Foreign Governments	117.6		0.7		5.1		—		122.7		0.7
Obligations of states and political subdivisions	0.7		—		2.1		0.1		2.8		0.1
Corporate bonds	249.4		18.9		63.6		15.8		313.0		34.7
Commercial mortgage-backed securities	74.8		1.1		4.9		—		79.7		1.1
Residential mortgage-backed securities	66.9		0.3		25.2		0.3		92.1		0.6
Asset-backed securities	22.5		0.1		18.9		0.1		41.4		0.2
Collateralized loan obligations	54.7		0.8		116.7		0.6		171.4		1.4
Total fixed maturities	$	701.2	$	23.0	$	253.5	$	17.0	$	954.7	$	40.0



December 31, 2018	Less Than One Year				One Year or Greater				Total
(in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Fixed maturities
U.S. Governments	$	28.2	$	0.2	$	173.0	$	4.7	$	201.2	$	4.9
Foreign Governments	73.4		3.6		125.0		4.2		198.4		7.8
Obligations of states and political subdivisions	53.3		0.6		25.3		0.6		78.6		1.2
Corporate bonds	964.3		45.7		440.8		13.0		1,405.1		58.7
Commercial mortgage-backed securities	48.5		0.6		90.6		2.6		139.1		3.2
Residential mortgage-backed securities	63.5		0.7		176.1		5.0		239.6		5.7
Asset-backed securities	73.6		0.6		64.2		0.6		137.8		1.2
Collateralized loan obligations	209.5		3.3		10.3		0.2		219.8		3.5
Total fixed maturities	$	1,514.3	$	55.3	$	1,105.3	$	30.9	$	2,619.6	$	86.2

We regularly evaluate our investments for other-than-temporary impairment. For fixed maturity securities, the evaluation for a credit loss is generally based on the present value of expected cash flows of the security as compared to the amortized book value. For structured securities, frequency and severity of loss inputs are used in projecting future cash flows of the securities. Loss frequency is measured as the credit default rate, which includes such factors as loan-to-value ratios and credit scores of borrowers. We also recognize other-than-temporary losses on fixed maturity securities that we intend to sell. Effective January 1, 2018, the Company adopted ASU 2016-1. As a result, changes in the fair value of equity securities are recognized in net realized investment gains\(losses) in the Consolidated Statement of Income.

We hold a total of 6,069 securities, of which 909 were in an unrealized loss position for less than one year and 330 were in an unrealized loss position for a period one year or greater as of December 31, 2019. Unrealized losses greater than twelve months on fixed maturities were the result of a number of factors, including increased credit spreads, foreign currency fluctuations and higher market yields relative to the date the securities were purchased, and for structured securities, by the performance of the underlying collateral, as well. In considering whether an investment is other-than-temporarily impaired or not, we also considered that we do not intend to sell the investments and it is unlikely that we will be required to sell the investments before recovery of their amortized cost bases, which may be maturity. We do not consider these investments to be other-than-temporarily impaired at December 31, 2019.

We recognized other-than-temporary losses on our fixed maturities and equity portfolios as follows:



	For the Years Ended December 31,
(in millions)	2019			2018			2017
Other-than-temporary impairment:
Foreign governments	$	(2.0	)	$	—		$	—
Obligations of states and political subdivisions	(0.1		)	—			(0.1		)
Corporate bonds	(18.2		)	(6.6		)	(0.7		)
Equity securities	—			—			(1.7		)
Other invested assets	—			(1.0		)	—
Other-than-temporary impairment losses	$	(20.3	)	$	(7.6	)	$	(2.5	)

Net Investment Income

Investment income and expenses were as follows:



	For the Years Ended December 31,
(in millions)	2019			2018			2017
Investment income:
Interest on fixed maturities	$	129.5		$	115.0		$	97.1
Dividends on equity securities	11.1			12.5			13.9
Income on alternative investments	22.4			19.8			49.5
Income on short-term and other investments	8.9			9.5			7.7
Investment income	171.9			156.8			168.2
Investment expenses	(20.8		)	(23.7		)	(28.2		)
Net investment income	$	151.1		$	133.1		$	140.0

Net Realized Investment Gains and Losses

The following table presents our gross realized investment gains (losses):



	For the Years Ended December 31,
(in millions)	2019			2018			2017
Realized gains on fixed maturities and other
Fixed maturities	$	22.2		$	17.7		$	25.7
Other investments	33.0			41.4			25.7
Other assets and short-term investments	—			0.2			0.7
	55.2			59.3			52.1
Realized losses on fixed maturities and other
Fixed maturities	(11.7		)	(16.0		)	(20.0		)
Other investments	(31.3		)	(39.5		)	(36.2		)
Short-term investments	—			(0.5		)	(0.2		)
Other-than-temporary impairment losses on fixed maturities	(20.3		)	(6.6		)	(0.8		)
Other-than-temporary impairment losses on other assets	—			(1.0		)	—
	(63.3		)	(63.6		)	(57.2		)
Equity securities ⁽¹⁾
Net realized gains on equity securities	128.9			37.4			46.1
Other-than-temporary impairment losses on equity securities	—			—			(1.7		)
Change in unrealized (losses) on equity securities held at the end of the period	(40.8		)	(105.1		)	—
Net realized gains (losses) on equity securities	88.1			(67.7		)	44.4
Net realized investment gains (losses) before income taxes	80.0			(72.0		)	39.3
Income tax provision	(16.2		)	(11.2		)	(12.0		)
Net realized investment gains (losses) net of income taxes	$	63.8		$	(83.2	)	$	27.3

⁽¹⁾Effective January 1, 2018, we adopted ASU 2016-1. As a result, unrealized gains (losses) at the date of adoption have been reclassified from accumulated other comprehensive income to retained earnings. Additionally, all changes in the fair value of equity securities are recognized in net realized investment gains (losses). Prior periods have not been restated to conform to the current presentation. See “Recently Issued Accounting Pronouncements.”

The cost of securities sold is based on the specific identification method.

Changes in unrealized appreciation (depreciation) related to investments are summarized as follows:



	For the Years Ended December 31,
(in millions)	2019			2018			2017
Change in unrealized gains (losses)
Fixed maturities	$	93.3		$	(88.1	)	$	25.4
Equity securities	—			—			36.6
Other investments	4.4			0.1			2.1
Other and short-term investments	0.2			(0.5		)	—
Net unrealized investment gains (losses) before income taxes	97.9			(88.5		)	64.1
Income tax (provision) benefit	(15.4		)	13.0			(14.6		)
Net unrealized investment gains (losses), net of income taxes	$	82.5		$	(75.5	)	$	49.5

Foreign Currency Exchange Forward Contracts

We entered into foreign currency exchange forward contracts to manage operational currency exposure on our Canadian dollar (“CAD”) investment portfolio and certain catastrophic events, minimize negative impacts to investment portfolio returns, and gain exposure to a total return strategy which invests in multiple currencies. The currency forward contracts are carried at fair value in our consolidated balance sheets in “other assets” at December 31, 2019 and 2018. The gains and losses are included in “net realized investment and other gains” in our consolidated statements of income.

The fair value of our foreign currency exchange forward contracts as of December 31 was as follows:



(in millions)	December 31, 2019			December 31, 2018
Operational currency exposure	$	(0.8	)	$	4.4
Asset manager investment exposure	(0.3		)	(0.3		)
Total return strategy	2.2			(1.5		)
Total	$	1.1		$	2.6

The following table presents our gross investment realized gains and losses on our foreign currency exchange forward contracts:



	For the Years Ended December 31,
(in millions)	2019			2018			2017
Realized gains
Operational currency exposure	5.7			9.7			12.4
Asset manager investment exposure	2.7			5.8			1.5
Total return strategy	22.5			26.7			10.4
Gross realized investment gains	30.9			42.2			24.3
Realized losses
Operational currency exposure	(10.6		)	(7.9		)	(13.8		)
Asset manager investment exposure	(0.8		)	(3.0		)	(11.3		)
Total return strategy	(17.6		)	(28.6		)	(7.6		)
Gross realized investment losses	(29.0		)	(39.5		)	(32.7		)
Net realized investment gains (losses) on foreign currency exchange forward contracts	$	1.9		$	2.7		$	(8.4	)

Regulatory Deposits, Pledged Securities and Letters of Credit

We are required to maintain assets on deposit with various regulatory authorities to support our insurance and reinsurance operations. We maintain assets pledged as collateral in support of irrevocable letters of credit issued under the terms of certain reinsurance agreements for reported loss and loss expense reserves. The following table presents our components of restricted assets at December 31:



(in millions)	December 31, 2019		December 31, 2018
Securities on deposit for regulatory and other purposes	$	192.5	$	172.6
Securities pledged as collateral for letters of credit and other	169.9		120.9
Securities and cash on deposit supporting Lloyd’s business	412.8		376.8
Total restricted investments	$	775.2	$	670.3

Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability, or in the absence of a principal market, the most advantageous market. Market participants are buyers and sellers in the principal (or most advantageous) market that are independent, knowledgeable, able to transact for the asset or liability and willing to transfer the asset or liability.

Valuation techniques consistent with the market and income approach are used to measure fair value. The inputs of these valuation techniques are categorized into three levels.


•	Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that can be accessed at the reporting date. We define actively traded as a security that has traded in the past seven days. We receive one quote per instrument for Level 1 inputs.


•	Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. We receive one quote per instrument for Level 2 inputs.


•	Level 3 inputs are unobservable inputs. Unobservable inputs reflect our own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances.

We receive fair value prices from third-party pricing services and our outside investment managers. These prices are determined using observable market information such as dealer quotes, market spreads, cash flows, yield curves, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the security’s terms and conditions, among other things. We have reviewed the processes used by the third-party providers for pricing the securities, and have determined that these processes result in fair values consistent with GAAP requirements. In addition, we review these prices for reasonableness, and have not adjusted any prices received from the third-party providers as of December 31, 2019 and 2018. A description of the valuation techniques we use to measure assets at fair value is as follows:

Fixed Maturities (Available-for-Sale) Levels 1 and 2:


•	United States Treasury securities are typically valued using Level 1 inputs. For these securities, we obtain fair value measurements from third-party pricing services using quoted prices (unadjusted) in active markets at the reporting date.

•

United States Government agencies, non-U.S. Government securities, obligations of states and political subdivisions, credit securities and foreign denominated government and credit securities are reported at fair value using Level 2 inputs. For these securities, we obtain fair value measurements from third-party pricing services. Observable data may include dealer quotes, market spreads, yield curves, live trading levels, trade execution data, credit information and the security’s terms and conditions, among other things.

•

Asset and mortgage-backed securities and collateralized loan obligations are reported at fair value using Level 2 inputs. For these securities, we obtain fair value measurements from third-party pricing services. Observable data may include dealer quotes, market spreads, cash flows, yield curves, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the security’s terms and conditions, among other things.

Fixed Maturities Level 3:


•	We own term loans that are valued using unobservable inputs.

Equity Securities Level 1: Equity securities are principally reported at fair value using Level 1 inputs. For these securities, we obtain fair value measurements from a third-party pricing service using quoted prices (unadjusted) in active markets at the reporting date.

Equity Securities Level 3: We own certain equity securities that are reported at fair value using Level 3 inputs. The valuation techniques for these securities include the following:


•	Fair value measurements for an investment in an equity fund obtained by applying final prices provided by the administrator of the fund, which is based upon certain estimates and assumptions.


•	Fair value measurements from a broker and an independent valuation service, both based upon estimates and assumptions.

Other Investments Level 2: Foreign regulatory deposits are assets held in trust in jurisdictions where there is a legal and regulatory requirement to maintain funds locally in order to protect policyholders. Lloyd’s is the appointed investment manager for the funds. These assets are invested in short-term government securities, agency securities and corporate bonds and are valued using Level 2 inputs based upon values obtained from Lloyd’s.

Short-term Investments: Short-term investments are principally reported at fair value using Level 1 inputs, with the exception of short-term corporate and governmental bonds reported at fair value using Level 2 inputs as described in the fixed maturities section above. Values for the investments categorized as Level 1 are obtained from various financial institutions as of the reporting date.

Based on an analysis of the inputs, our financial assets measured at fair value on a recurring basis have been categorized as follows:



			Fair Value Measurements at Reporting Date Using
(in millions)	December 31, 2019		Level 1 ^(a)		Level 2 ^(b)		Level 3 ^(c)
Fixed maturities
U.S. Governments	$	354.6	$	349.1	$	5.5	$	—
Foreign Governments	248.7		—		248.7		—
Obligations of states and political subdivisions	152.6		—		152.6		—
Corporate bonds	1,780.4		—		1,773.0		7.4
Commercial mortgage-backed securities	217.0		—		217.0		—
Residential mortgage-backed securities	488.9		—		488.9		—
Asset-backed securities	165.5		—		165.5		—
Collateralized loan obligations	225.8		—		225.8		—
Total fixed maturities	3,633.5		349.1		3,277.0		7.4
Equity securities	124.4		117.8		—		6.6
Other investments	400.2		—		400.2		—
Short-term investments	845.0		823.5		21.5		—
	$	5,003.1	$	1,290.4	$	3,698.7	$	14.0

^(a) Quoted prices in active markets for identical asset

^(b) Significant other observable inputs

^(c) Significant unobservable inputs



			Fair Value Measurements at Reporting Date Using
(in millions)	December 31, 2018		Level 1 ^(a)		Level 2 ^(b)		Level 3 ^(c)
Fixed maturities
U.S. Governments	$	236.2	$	226.7	$	9.5	$	—
Foreign Governments	216.8		—		216.8		—
Obligations of states and political subdivisions	239.8		—		239.8		—
Corporate bonds	1,757.5		—		1,755.3		2.2
Commercial mortgage-backed securities	202.8		—		202.8		—
Residential mortgage-backed securities	410.8		—		410.8		—
Asset-backed securities	172.8		—		172.8		—
Collateralized loan obligations	223.7		—		223.7		—
Total fixed maturities	3,460.4		226.7		3,231.5		2.2
Equity securities	354.5		346.3		—		8.2
Other investments	114.4		—		114.4		—
Short-term investments	482.3		453.9		28.4		—
	$	4,411.6	$	1,026.9	$	3,374.3	$	10.4

^(a) Quoted prices in active markets for identical asset

^(b) Significant other observable inputs

^(c) Significant unobservable inputs

The fair value measurements in the tables above do not equal “total investments” on our consolidated balance sheets as they exclude certain other investments that are accounted for under the equity-method of accounting.

A reconciliation of the beginning and ending balances for the investments categorized as Level 3 are as follows:

Fair Value Measurements Using Observable Inputs (Level 3)



(in millions)	Credit Financial			Equity Securities			Total
Beginning balance, January 1, 2019	$	2.2		$	8.2		$	10.4
Transfers into Level 3	3.5			—			3.5
Transfers out of Level 3	—			—			—
Total gains or losses (realized/unrealized):
Included in net income	(0.4		)	(1.6		)	(2.0		)
Included in other comprehensive income	0.6			—			0.6
Purchases, issuances, sales, and settlements:
Purchases	1.9			—			1.9
Issuances	—			—			—
Sales	(0.4		)	—			(0.4		)
Settlements	—			—			—
Ending balance, Ending balance, December 31, 2019	$	7.4		$	6.6		$	14.0
Amount of total gains or losses for the year included in net income attributable to the change in unrealized gains or losses relating to assets still held at December 31, 2019	$	—		$	—		$	—



(in millions)	Credit Financial		Equity Securities			Total
Beginning balance, January 1, 2018	$	1.9	$	2.3		$	4.2
Transfers into Level 3	—		—			—
Transfers out of Level 3	—		—			—
Total gains or losses (realized/unrealized):
Included in net income	—		0.2			0.2
Included in other comprehensive loss	0.3		—			0.3
Purchases, issuances, sales, and settlements:
Purchases	—		7.3			7.3
Issuances	—		—			—
Sales	—		(1.6		)	(1.6		)
Settlements	—		—			—
Ending balance, Ending balance, December 31, 2018	$	2.2	$	8.2		$	10.4
Amount of total gains or losses for the year included in net income attributable to the change in unrealized gains or losses relating to assets still held at December 31, 2018	$	—	$	—		$	—

At December 31, 2019 and 2018, we did not have any financial assets or financial liabilities measured at fair value on a nonrecurring basis or any financial liabilities on a recurring basis.

Leases

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Leases

We adopted ASU 2016-02, “Leases” on January 1, 2019, which resulted in the recognition of operating leases on the balance sheet beginning in 2019 and forward. See “Recently Issued Accounting Pronouncements,” for additional information on the adoption of the ASU.

We determine if a contract contains a lease at inception and recognize operating lease right-of-use assets and operating lease liabilities based on the present value of the future minimum lease payments at the commencement date. As our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at the commencement date to determine the present value of future payments. Lease agreements have lease and non-lease components. We account for these components separately, therefore our operating lease right-of-use asset and operating lease liabilities represent base rent only. Lease expense is recognized on a straight-line basis over the lease term. Renewal options are evaluated prior to the expiration date, and record upon exercise.

Our operating lease obligations are for office facilities, corporate housing and equipment. Our leases have remaining lease terms ranging between less than 1 year to 14 years, some of which include options to extend the leases. Expenses associated with leases totaled $23.4 million for the year ended December 31, 2019, as compared to $20.6 million for the year ended December 31, 2018. The components of lease expense and other lease information as of and during the year ended December 31, 2019, are as follows:



	December 31,
(in millions)	2019
Operating leases right-of-use assets	$	91.8
Operating lease liabilities	105.7

Operating lease weighted-average remaining lease term	9.91
Operating lease weighted-average discount rate	3.86		%



	For the Year Ended December 31,
(in millions)	2019
Operating lease costs	$	19.3
Variable lease costs	4.5
Sublease income	(0.4		)
Total lease costs	$	23.4

Operating cash flows from operating leases (fixed payments)	$	17.5
Operating cash flows from operating leases (liability reduction)	$	18.3

Our finance leases and short-term leases as of December 31, 2019 were not material.

In December 2019, we re-assessed three real estate leases and based on current facts and circumstances, determined that the leases were terminated. Termination of these leases did not have a material impact on the Consolidated Statement of Income (Loss) for the year ended December 31, 2019. Impact to the Consolidated Balance Sheet was a reduction to the right of use asset and to the lease liability in the amount of $4.2 million.

In December 2019, we sold our corporate aircraft for $15.5 million and as a result, terminated the related lease. As a result of this termination, we recorded a realized loss on the sale of the corporate aircraft of $2.8 million. Impact to the consolidated balance sheet was a reduction to the right of use asset and to the lease liability in the amount of $10.9 million.

Future minimum lease payments under operating leases as of December 31, 2019 and December 31, 2018 were as follows:



	December 31,
(in millions)	2019			2018
2020	15.1			18.7
2021	14.5			18.6
2022	13.0			17.5
2023	10.6			14.7
2024	9.6			12.3
Thereafter	67.5			80.1
Total future minimum lease payments	$	130.3		$	161.9

Future lease obligations	—
Less imputed interest	(24.6		)	N/A
Total operating lease liability	$	105.7		N/A

We have certain investment properties that we lease to independent, third parties. These properties consist of an office building that is currently leased through August 2026 and three condominiums that are leased on a short-term basis. The carrying value of the office building is included in “Other assets” on our consolidated balance sheet. The condominiums were placed for sale in December 2019. The carrying value of these condominiums are included in the “Assets held for Sale” on our consolidated balance sheet. Income for these leased properties was $2.8 million for each of the years ended December 31, 2019 and 2018. Income for these leased properties is included in “fee and other income” on our consolidated statements of income (loss).

Reinsurance

12 Months Ended

Dec. 31, 2019

Insurance [Abstract]

Reinsurance

We reinsure certain risks with other insurance companies. Such arrangements serve to limit our maximum loss on certain individual risks as well as on catastrophes and large or unusually hazardous risks. We are liable to our insureds for reinsurance ceded in the event our reinsurers do not meet their obligations. Thus, a credit exposure exists with respect to reinsurance ceded to the extent that any reinsurer is unable or unwilling to meet the obligations assumed under the reinsurance contracts. Our allowance for uncollectible reinsurance balances receivable on paid losses and incurred claims was $1.1 million and $1.8 million as of December 31, 2019 and 2018, respectively. Under certain reinsurance agreements, collateral, including letters of credit, is held to secure performance of reinsurers in meeting their obligations. The amount of such collateral was $1,184.7 million and $944.0 million at December 31, 2019 and 2018, respectively. The collateral we hold does not apply to our entire outstanding reinsurance recoverable. Rather, collateral is provided on an individual contract basis as appropriate. For each individual reinsurer, the collateral held may exceed or fall below the total outstanding recoverable from that individual reinsurer.

The long-term nature of the reinsurance contracts creates a credit risk to us over time arising from potentially uncollectible reinsurance. To mitigate that counterparty risk, we evaluate our reinsurers to assess their financial condition. The factors that underlie these reviews include a financial risk assessment as well as an internal assessment of the capitalization and the operational risk of the reinsurer. As a result of these reviews, we may make changes to the approved markets that are used in both our treaty and facultative reinsurance programs.

Estimated losses recoverable from reinsurers and the ceded portion of unearned premiums are reported as assets in our consolidated balance sheets. Included in “reinsurance recoverables” are paid loss recoverables of $669.7 million and $596.6 million as of December 31, 2019 and 2018, respectively. “Earned premiums” and “losses and loss adjustment expenses” are reported net of reinsurance in our consolidated statements of income (loss).

Losses and loss adjustment expenses of $1,220.7 million, $1,040.8 million and $1,050.2 million for the years ended December 31, 2019, 2018 and 2017, respectively, are net of amounts ceded to reinsurers of $1,031.1 million, $888.9 million and $992.6 million, respectively.

We are required to accept certain assigned risks and other legally mandated reinsurance obligations. Prior to the mid-1980s, we assumed various forms of casualty reinsurance for which we continue to maintain reserves for losses and loss adjustment expenses (see Note 6, “Run-off Lines”). For such assumed reinsurance transactions, we engage in various monitoring steps that are common with assumed reinsurance such as ongoing claims reviews. We currently assume property related reinsurance primarily through our subsidiaries, Argo Re and Ariel Re, and casualty related reinsurance primarily through Syndicate 1200.

Premiums were as follows:



	For the Years Ended December 31,
(in millions)	2019			2018			2017
Direct written premiums	$	2,509.5		$	2,293.8		$	2,029.2
Reinsurance ceded to other companies	(1,374.8		)	(1,189.7		)	(1,043.7		)
Reinsurance assumed from other companies	619.7			661.4			668.0
Net written premiums	$	1,754.4		$	1,765.5		$	1,653.5
Direct earned premiums	$	2,411.5		$	2,201.9		$	1,912.2
Reinsurance ceded to other companies	(1,286.0		)	(1,137.9		)	(1,033.6		)
Reinsurance assumed from other companies	604.0			667.7			693.7
Net earned premiums	$	1,729.5		$	1,731.7		$	1,572.3
Percentage of reinsurance assumed to net earned premiums	34.9		%	38.6		%	44.1		%

Reserves for Losses and Loss Adjustment Expenses

12 Months Ended

Dec. 31, 2019

Insurance [Abstract]

Reserves for Losses and Loss Adjustment Expenses

The following table provides a reconciliation of reserves for losses and loss adjustment expenses (“LAE”):



	For the Years Ended December 31,
(in millions)	2019			2018			2017
Net reserves beginning of the year	$	2,562.9		$	2,488.0		$	2,180.2
Net Maybrooke reserves acquired	—			—			131.8
Net reserves acquired	—			43.4			—
Add:
Losses and LAE incurred during current calendar year, net of reinsurance:
Current accident year	1,082.6			1,058.8			1,058.4
Prior accident years	138.1			(18.0		)	(8.2		)
Losses and LAE incurred during calendar year, net of reinsurance	1,220.7			1,040.8			1,050.2
Deduct:
Losses and LAE payments made during current calendar year, net of reinsurance:
Current accident year	224.3			273.3			289.6
Prior accident years	806.0			665.6			599.8
Losses and LAE payments made during current calendar year, net of reinsurance:	1,030.3			938.9			889.4
Change in participation interest ⁽¹⁾	(14.4		)	(25.5		)	(23.2		)
Foreign exchange adjustments	(16.2		)	(44.9		)	38.4
Net reserves - end of period	2,722.7			2,562.9			2,488.0
Add:
Reinsurance recoverables on unpaid losses and LAE, end of period	2,434.9			2,091.7			1,713.0
Gross reserves - end of period	$	5,157.6		$	4,654.6		$	4,201.0

⁽¹⁾Amount represents (decrease) increase in reserves due to change in our Syndicate 1200 and Syndicate 1910 participation.

Reserves for losses and LAE represent the estimated indemnity cost and related adjustment expenses necessary to investigate and settle claims. Such estimates are based upon individual case estimates for reported claims, estimates from ceding companies for reinsurance assumed and actuarial estimates for losses that have been incurred but not yet reported to the insurer. Any change in probable ultimate liabilities is reflected in current operating results.

The impact from the unfavorable (favorable) development of prior accident years’ losses and LAE reserves on each reporting segment is presented below:



	For the Years Ended December 31,
(in millions)	2019		2018			2017
U.S. Operations	$	15.7	$	(20.8	)	$	(38.7	)
International Operations	110.4		(9.5		)	13.2
Run-off Lines	12.0		12.3			17.3
Total unfavorable (favorable) prior-year development	$	138.1	$	(18.0	)	$	(8.2	)

The following describes the primary factors behind each segment’s prior accident year reserve development for the years ended December 31, 2019, 2018 and 2017:

Year ended December 31, 2019:

•

U.S. Operations: Unfavorable development in professional, property and liability lines partially offset by favorable development in specialty lines. The unfavorable professional lines development was driven by movements on individual large management liability claims primarily impacting accident years 2015 through 2017. The unfavorable property development was primarily driven by large excess claims resulting from the 2017 and 2018 catastrophe events. The unfavorable liability lines development was driven by actual loss activity greater than expected. The three most recent accident years showed unfavorable development partially offset by favorable development on older years. The favorable specialty lines development was driven by favorable experience in the surety business across multiple accident years.

•

International Operations: Unfavorable development was primarily concentrated in liability and professional lines. The charges impacted our Bermuda casualty and professional divisions, and our Syndicate 1200 and European operations. The charges in our Bermuda business stemmed from public utility business in our casualty division, which we previously exited, as well as updated estimates on a number of other casualty and professional claims based on new information received in the last three quarters of 2019. As it relates to Syndicate 1200, the adverse development generally related to businesses that we have previously exited or where aggressive remedial underwriting actions have been taken. As it relates to Europe, the adverse development primarily related to certain cover-holders whose contracts were previously terminated or where aggressive remedial underwriting actions have been taken as well as unexpected movements in large professional liability losses. This unfavorable development was primarily due to obtaining additional information on several individual claims, including investigations regarding causes of the incidents leading to the losses, reports provided by outside counsel, audits of the underlying losses and recent court decisions, settlements and jury awards. The result was an increase in the number of claims with the potential for underlying losses to reach our attachment point, particularly within our Bermuda Operations. Adverse development in Syndicate 1200 related to large claims involving the marine and energy and liability divisions. Losses on small and medium enterprise package business were also higher than expected. The unfavorable development during the year was also attributable to the results of ongoing audits, underwriting reviews, and updates from third-party cover-holders, which included the identification of differences from original expectations with regard to the classes written, the distribution of writings by geography, and the rates charged by the cover-holders.


•	Run-off Lines: Unfavorable development in asbestos and environmental and other run-off segments partially offset by favorable development in risk management workers compensation. The change in asbestos was driven by assumed business where accounts are staying open longer than expected. The change in environmental was driven by individual claims on direct business.

Year ended December 31, 2018:


•	U.S. Operations: Favorable development in general liability and surety lines, partially offset by unfavorable development in commercial multi-peril lines.


•	International Operations: Favorable development in property partially offset by unfavorable development within specialty and liability lines.


•	Run-off Lines: Unfavorable development in liability lines as well as asbestos and environmental.

Year ended December 31, 2017:


•	U.S. Operations: Favorable development in our general liability, workers compensation, surety and commercial automobile lines.


•	International Operations: Unfavorable development in the property and liability lines, primarily due to the first quarter 2017 Ogden rate change and claims from Hurricane Matthew. Partially offsetting this unfavorable development was favorable development on the property reinsurance lines.


•	Run-off Lines: Unfavorable development on prior accident years driven by our asbestos exposure due to increasing defense costs and an increase in the time claims remain open, and in other run-off lines, partially offset by favorable development in the run-off risk-management lines.

In the opinion of management, our reserves represent the best estimate of our ultimate liabilities, based on currently known facts, current law, current technology and assumptions considered reasonable where facts are not known. Due to the significant uncertainties and related management judgments, there can be no assurance that future favorable or unfavorable loss development, which may be material, will not occur.

Short-Duration Contract Disclosures

Our basis for disaggregating short-duration contracts is by each of our two ongoing reporting segments, U.S. Operations and International Operations, further disaggregated within each segment by our operating divisions and the primary insurance and reinsurance lines of business we write. We have chosen to disaggregate the data in this way so as to not obscure useful information by otherwise aggregating items with significantly different characteristics. See Note 18, “Segment Information,” for additional information regarding our two ongoing reporting segments.

Operating Divisions

Our U.S. Operations reporting segment is comprised of two primary operating divisions, Excess and Surplus Lines and Specialty Admitted, while International Operations’ primary operating divisions are Syndicate 1200, Reinsurance, Argo Insurance Bermuda and Europe. Each of these operating divisions are further described below.

Excess and Surplus Lines

The Excess and Surplus Lines division focuses on U.S.-based risks that the standard (admitted) market is unwilling or unable to underwrite. The standard market’s limited appetite for such coverage is often driven by the insured’s unique risk characteristics, the perils involved, the nature of the business, and/or the insured’s loss experience. We are often able to underwrite these risks with more flexible policy terms through our Excess and Surplus Lines division. We underwrite this business on both an admitted and non-admitted basis.

Specialty Admitted

This Specialty Admitted division provides coverages designed to meet the specialized insurance needs of U.S.-based businesses within certain well-defined markets. It targets business classes and industries with distinct risk profiles that can benefit from specially designed insurance programs, tailored loss control and expert claims handling. This division serves its targeted niche markets with a narrowly focused underwriting profile and specialized knowledge of the businesses it serves.

Argo Insurance Bermuda

Argo Insurance Bermuda offers casualty, property and professional lines, which serves the needs of global clients by providing the following coverages: property, general and products liability, directors and officers liability, errors and omissions liability and employment practices liability.

Reinsurance

The Reinsurance division operates in two areas - treaty property and specialty. This business is focused on mainly North American commercial properties and writes on both a primary and excess basis. Business is written on an open market basis through retail and wholesale brokers. Treaty property reinsurance is predominantly catastrophe-focused. Specialty reinsurance encompasses marine, energy, aviation, terrorism and property. This reinsurance portfolio is focused on treaties where high-quality exposure and experience data allow our underwriters to quantify the risk.

Syndicate 1200

The Syndicate 1200 division is focused on underwriting worldwide property, specialty and non-U.S. liability insurance through Argo Underwriting Agency, Ltd. on behalf of Lloyd’s Syndicate 1200 within the Lloyd’s of London global franchise.

Europe

The Europe division underwrites professional liability, surety, and property and casualty business in continental Europe and is a specialty underwriter of property, marine, accident & health and liability insurance with a focus on Italy and Southern Europe.

Lines of Business

We use an underwriting committee structure to monitor and evaluate the operating performance of our lines of business. The underwriting committees are organized to allow products or coverages with similar characteristics to be managed and evaluated in distinct groups. Using this approach, our insurance business is categorized into underwriting groups, which are Liability, Professional, Property and Specialty. Noted below are descriptions of the types of characteristics considered to disaggregate our business into these groups, as well as other qualitative factors to consider when using the information contained in the following incurred and paid claims development tables.

Liability

Our Liability business generally covers exposures where most claims are reported without a significant time lag between the event that gives rise to a claim and the date the claim is reported to us. However, since facts and information are frequently not complete at the time claims are reported to us, and because protracted litigation is sometimes involved, it can be several years before the ultimate value of these claims is determined. In our Argo Bermuda Insurance division, much of the business covers higher layers, potentially increasing the time it takes to fully determine our exposure.

Professional

Much of our Professional business is written on a claims-made basis resulting in coverage only for claims that are reported to us during the year in which the policy is effective, thus reducing the number of claims that will become known to us after the end of the policy expiration date. However, facts and information are frequently not complete at the time claims are reported to us, and protracted litigation is sometimes involved. It can be several years before the ultimate value of these claims is determined. In our Argo Bermuda Insurance division, much of the business covers higher layers, potentially increasing the time it takes to fully determine our exposure.

Property

Property losses are generally reported within a short period of time from the date of loss, and in most instances, property claims are settled and paid within a relatively short timeframe. However, Property can be impacted by catastrophe losses which can be more complex than non-catastrophe Property claims due to factors such as difficulty accessing impacted areas and other physical, legal and regulatory impediments potentially extending the period of time it takes to settle and pay claims. The impacts of catastrophe losses can be more significant in our Reinsurance and Syndicate 1200 divisions.

Specialty

Specialty lines losses are generally reported within a short period of time from the date of loss, and in most instances, Specialty lines claims are settled and paid within a relatively short timeframe. However, Specialty lines can be impacted by larger losses where facts and information are frequently not complete at the time claims are reported to us. These large losses can be more complex than smaller Specialty claims due to factors such as difficulty determining actual damages and other physical, legal and regulatory impediments potentially extending the period of time it takes to settle and pay claims.

Descriptions of the primary types of coverages included in the significant lines of business for each operating division, as disclosed in the following tables, are noted below:

Excess and Surplus Lines


•	Liability: primary and excess specialty casualty, contract liability, commercial multi-peril, product liability, environmental liability, and auto liability

Specialty Admitted


•	Liability: workers compensation, general liability, auto liability, and various public entity liability risks


•	Professional: management liability and errors and omissions liability


•	Specialty: surety and inland marine

Argo Insurance Bermuda


•	Liability: long-tail excess casualty and general liability

Reinsurance


•	Property: property catastrophe reinsurance and excess property direct and facultative insurance

Syndicate 1200


•	Liability: general liability, international casualty and motor treaties


•	Professional: professional indemnity, directors and officer’s liability, and medical malpractice


•	Property: direct and facultative excess insurance, North American and international binders, and residential collateral protection for lending institutions


•	Specialty: personal accident, aviation, cargo, yachts, and onshore and offshore marine

Europe


•	Professional: directors and officer’s liability, professional indemnity and cyber

Run-off Lines Segment

We have a Run-off Lines segment for certain products that we no longer underwrite, including asbestos and environmental claims. We have excluded the Run-off Lines segment from the following disaggregated short-duration contract disclosures due to its insignificance to our consolidated financial position and results of operations, both quantitatively and qualitatively. Gross reserves for losses and LAE in Run-off Lines account for less than 5% of our consolidated gross reserves for losses and LAE, and are primarily related to accident years prior to the mid-1990s. As such, claims development tables for the most recent ten accident years would not provide meaningful information to users of our financial statements, as the majority of the remaining reserves for losses and LAE would be for accident years not separately presented. See Note 6, “Run-off Lines,” for further information on this segment, including discussion of prior accidents years’ development.

Accident Years Presented

Based on the previous operating structure and management of our business prior to calendar year 2011, we did not track ultimate claims and claim adjustment expenses by accident year at a level of detail consistent with the current segmentation of our business, including our operating divisions, with the exception of the business in Syndicate 1200. As a result, it is impracticable to obtain the information necessary to provide historical ultimate claims and claim adjustment expense estimates prior to December 31, 2011 in the following incurred and paid claims development tables for all disaggregation categories except those associated with Syndicate 1200.

Syndicate 1200 ultimate claims and claim adjustment expenses are provided beginning with accident year 2010 due to the retroactive whole account quota share contract we entered into on December 31, 2012. As a result of this transaction, reserves for losses and LAE prior to accident year 2010 were legally transferred to another syndicate within the Lloyd’s market. Under this quota share contract, we did not retain any direct indemnity or credit risk for the reserves prior to accident year 2010.

Prior to the acquisition of Ariel Re in February 2017, Ariel Re’s ultimate claims and claim adjustment expense data was not historically available by accident years and line of business. As a result, it is not practical, nor would it be consistent to provide information for calendar years 2016 and prior by accident year at our line of business level. Beginning with the 2017 calendar year, we began accumulating such claims information by accident year and line of business, and have included such in the tabular disclosures below for the Reinsurance operating division, Property line of business disaggregation category. Accordingly, calendar years prior to 2017 for the aforementioned tabular disclosures relate only to our Reinsurance business prior to the acquisition of Ariel Re.

We formed ArgoGlobal SE in the fourth quarter of 2011. Beginning with the 2012 calendar year, we began accumulating such claims information by accident year and line of business, and have included such in the tabular disclosures below for the Europe operating division, Professional line of business disaggregation category.

Foreign Currency

Portions of the business we write in the Syndicate 1200, Argo Bermuda Insurance, Reinsurance and Europe divisions are denominated in foreign currencies. We have used the December 31, 2019 balance sheet foreign exchange rates to recast the incurred and paid claims information for all periods presented in the following claims development tables in order to eliminate the effects of changes in foreign currency translation rates.

Reserves for IBNR Claims

Reserves for IBNR claims are based on the estimated ultimate cost of settling claims, including the effects of inflation and other social and economic factors, using past experience adjusted for current trends and any other factors that would modify past experience. We use a variety of statistical and actuarial techniques to analyze current claims costs, including frequency and severity data and prevailing economic, social and legal factors. Each such method has its own set of assumptions and outputs, and each has strengths and weaknesses in different areas. Since no single estimation method is superior to another method in all situations, the methods and assumptions used to project loss reserves will vary by coverage and product. We use what we believe to be the most appropriate set of actuarial methods and assumptions for each product line grouping and coverage. While the loss projection methods may vary by product line and coverage, the general approach for calculating IBNR remains the same: ultimate losses are forecasted first, and that amount is reduced by the amount of cumulative paid claims and case reserves. Reserves established in prior years are adjusted as loss experience develops and new information becomes available. Adjustments to previously estimated reserves are reflected in the results of operations in the year in which they are made.

As described above, various actuarial methods are used to determine the reserves for losses and LAE recorded in our consolidated balance sheets. Weightings of methods at a detailed level may change from evaluation to evaluation based on a number of observations, measures, and time elements. There were no significant changes to the methods and assumptions underlying our consolidated reserve estimations and selections as of December 31, 2019.

Incurred & Paid Claims Development Disclosures

The following tables provide information about incurred and cumulative paid losses and allocated loss adjustment expenses (“ALAE”), net of reinsurance. The following tables also include IBNR reserves plus expected development on reported claims and the cumulative number of reported claims as of December 31, 2019.



Reporting Segment: U.S. Operations Operating Division: Excess and Surplus Lines Line of Business: Liability (in millions, except number of claims reported)
	Incurred Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
	2011 ⁽¹⁾		2012 ⁽¹⁾		2013 ⁽¹⁾		2014 ⁽¹⁾		2015 ⁽¹⁾		2016 ⁽¹⁾		2017 ⁽¹⁾		2018 ⁽¹⁾		2019
2011	$	202.9	$	206.0	$	205.8	$	200.0	$	193.5	$	192.8	$	189.0	$	187.8	$	185.8
2012			189.6		196.0		189.7		183.6		184.4		182.1		182.3		181.0
2013					217.9		222.6		224.3		227.2		220.4		216.0		214.3
2014							213.0		215.2		213.2		211.9		212.3		210.0
2015									232.5		237.1		228.6		226.4		224.8
2016											246.4		250.6		243.1		248.3
2017													253.3		244.3		249.0
2018															278.8		269.5
2019																	269.8
															Total		$	2,052.5

	Cumulative Paid Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
	2011 ⁽¹⁾		2012 ⁽¹⁾		2013 ⁽¹⁾		2014 ⁽¹⁾		2015 ⁽¹⁾		2016 ⁽¹⁾		2017 ⁽¹⁾		2018 ⁽¹⁾		2019
2011	$	17.6	$	53.8	$	91.0	$	122.9	$	146.6	$	162.4	$	170.0	$	174.4	$	177.5
2012			17.2		52.8		89.1		120.8		142.4		157.5		163.4		170.3
2013					17.6		60.2		100.4		135.2		163.7		179.6		192.2
2014							15.0		52.2		95.9		131.6		154.5		172.8
2015									16.5		51.9		91.4		131.5		162.8
2016											17.4		52.8		95.5		149.5
2017													11.5		38.7		88.0
2018															15.0		47.0
2019																	14.9
															Total		$	1,175.0
Outstanding liabilities for unpaid losses and ALAE prior to 2011, net of reinsurance																	35.5
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance																	$	913.0



	As of December 31, 2019
Accident Year	Incurred Losses & ALAE, Net of Reinsurance		IBNR & Expected Development on Reported Claims		Cumulative Number of Reported Claims ⁽²⁾
2011	$	185.8	$	3.9	8,490
2012	181.0		5.8		7,453
2013	214.3		11.4		7,397
2014	210.0		19.0		6,684
2015	224.8		32.5		6,306
2016	248.3		59.7		6,038
2017	249.0		92.5		6,251
2018	269.5		163.8		5,852
2019	269.8		207.5		4,199


⁽¹⁾	Information presented for calendar years prior to 2019 is required supplementary information and is unaudited.


⁽²⁾	The cumulative number of reported claims is measured by individual claimant at a coverage level. Reported occurrences that do not result in a liability are included as reported claims.



Reporting Segment: U.S. Operations Operating Division: Specialty Admitted Line of Business: Liability (in millions, except number of claims reported)
	Incurred Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
	2011 ⁽¹⁾		2012 ⁽¹⁾		2013 ⁽¹⁾		2014 ⁽¹⁾		2015 ⁽¹⁾		2016 ⁽¹⁾		2017 ⁽¹⁾		2018 ⁽¹⁾		2019
2011	$	140.3	$	155.1	$	159.0	$	157.5	$	158.2	$	154.0	$	153.7	$	154.0	$	151.6
2012			140.3		146.3		149.7		153.3		151.5		147.7		146.7		146.2
2013					126.6		133.2		136.7		133.2		131.1		130.6		128.9
2014							115.6		121.9		116.9		114.5		111.5		111.9
2015									107.3		106.7		101.7		102.3		103.1
2016											96.1		99.9		99.3		104.7
2017													121.5		129.5		135.3
2018															147.3		160.9
2019																	151.3
															Total		$	1,193.9

	Cumulative Paid Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
	2011 ⁽¹⁾		2012 ⁽¹⁾		2013 ⁽¹⁾		2014 ⁽¹⁾		2015 ⁽¹⁾		2016 ⁽¹⁾		2017 ⁽¹⁾		2018 ⁽¹⁾		2019
2011	$	23.2	$	57.5	$	85.9	$	111.3	$	126.1	$	135.1	$	139.8	$	143.1	$	144.0
2012			20.1		51.0		80.7		105.8		120.8		127.9		131.9		135.0
2013					18.9		49.4		74.0		93.6		102.8		109.7		114.7
2014							17.4		38.8		58.7		75.3		86.1		93.5
2015									17.2		35.0		48.8		64.2		73.6
2016											11.1		31.7		48.6		67.6
2017													16.3		44.4		70.9
2018															19.4		51.9
2019																	17.5
															Total		$	768.7
Outstanding liabilities for unpaid losses and ALAE prior to 2011, net of reinsurance																	42.3
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance																	$	467.5



	As of December 31, 2019
Accident Year	Incurred Losses & ALAE, Net of Reinsurance		IBNR & Expected Development on Reported Claims		Cumulative Number of Reported Claims ⁽²⁾
2011	$	151.6	$	4.4	28,181
2012	146.2		5.1		23,657
2013	128.9		7.0		18,975
2014	111.9		10.1		16,346
2015	103.1		14.2		14,622
2016	104.7		15.1		11,802
2017	135.3		37.2		13,473
2018	160.9		54.6		15,267
2019	151.3		89.4		12,867


⁽¹⁾	Information presented for calendar years prior to 2019 is required supplementary information and is unaudited.


⁽²⁾	The cumulative number of reported claims is measured by individual claimant at a coverage level. Reported occurrences that do not result in a liability are included as reported claims.



Reporting Segment: U.S. Operations Operating Division: Specialty Admitted Line of Business: Professional (in millions, except number of claims reported)
	Incurred Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
	2011 ⁽¹⁾		2012 ⁽¹⁾		2013 ⁽¹⁾		2014 ⁽¹⁾		2015 ⁽¹⁾		2016 ⁽¹⁾		2017 ⁽¹⁾		2018 ⁽¹⁾		2019
2011	$	—	$	35.0	$	35.0	$	32.5	$	28.2	$	26.9	$	26.6	$	26.0	$	25.8
2012			27.8		28.3		28.6		25.8		24.0		24.5		24.9		24.6
2013					20.9		21.5		21.1		19.0		19.8		19.5		18.3
2014							22.4		22.4		26.0		33.7		36.2		35.4
2015									29.9		29.5		33.2		34.0		37.1
2016											44.2		44.8		45.1		42.9
2017													60.1		61.8		78.3
2018															70.8		73.2
2019																	94.4
															Total		$	430.0

	Cumulative Paid Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
	2011 ⁽¹⁾		2012 ⁽¹⁾		2013 ⁽¹⁾		2014 ⁽¹⁾		2015 ⁽¹⁾		2016 ⁽¹⁾		2017 ⁽¹⁾		2018 ⁽¹⁾		2019
2011	$	—	$	11.8	$	17.8	$	22.0	$	24.0	$	25.4	$	25.7	$	25.7	$	25.7
2012			2.3		8.6		16.9		19.9		21.4		22.6		23.5		24.2
2013					1.9		6.3		10.9		14.2		17.6		17.5		17.9
2014							2.3		5.4		15.1		24.1		25.5		32.3
2015									1.8		8.3		15.6		20.8		26.2
2016											2.4		11.9		24.6		28.9
2017													3.5		24.9		38.0
2018															4.5		16.7
2019																	4.9
															Total		$	214.8
Outstanding liabilities for unpaid losses and ALAE prior to 2011, net of reinsurance																	1.7
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance																	$	216.9



	As of December 31, 2019
Accident Year	Incurred Losses & ALAE, Net of Reinsurance		IBNR & Expected Development on Reported Claims		Cumulative Number of Reported Claims ⁽²⁾
2011	$	25.8	$	0.1	820
2012	24.6		0.2		641
2013	18.3		0.3		622
2014	35.4		0.6		1,044
2015	37.1		1.4		1,840
2016	42.9		7.8		3,238
2017	78.3		7.0		3,724
2018	73.2		39.7		4,224
2019	94.4		75.3		4,432


⁽¹⁾	Information presented for calendar years prior to 2019 is required supplementary information and is unaudited.


⁽²⁾	The cumulative number of reported claims is measured by individual claimant at a coverage level. Reported occurrences that do not result in a liability are included as reported claims.



Reporting Segment: U.S. Operations Operating Division: Specialty Admitted Line of Business: Specialty (in millions, except number of claims reported)
	Incurred Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
	2011 ⁽¹⁾		2012 ⁽¹⁾		2013 ⁽¹⁾		2014 ⁽¹⁾		2015 ⁽¹⁾		2016 ⁽¹⁾		2017 ⁽¹⁾		2018 ⁽¹⁾		2019
2011	$	0.2	$	3.9	$	3.4	$	3.4	$	3.6	$	2.6	$	2.0	$	1.7	$	1.7
2012			7.5		6.7		4.9		4.3		4.0		3.9		3.5		3.6
2013					10.0		8.6		4.6		2.5		1.7		0.9		0.9
2014							13.1		13.1		8.9		6.0		4.8		4.7
2015									14.8		14.3		9.5		5.5		1.2
2016											15.0		15.0		11.2		6.2
2017													16.2		16.2		7.6
2018															20.9		17.4
2019																	22.8
															Total		$	66.1

	Cumulative Paid Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
	2011 ⁽¹⁾		2012 ⁽¹⁾		2013 ⁽¹⁾		2014 ⁽¹⁾		2015 ⁽¹⁾		2016 ⁽¹⁾		2017 ⁽¹⁾		2018 ⁽¹⁾		2019
2011	$	—	$	1.6	$	1.4	$	1.3	$	1.2	$	1.7	$	1.7	$	1.7	$	1.7
2012			3.6		3.3		3.3		3.3		3.3		3.4		3.3		3.4
2013					0.4		0.9		0.9		0.9		0.9		0.9		0.9
2014							1.1		3.3		4.0		4.0		4.1		4.1
2015									0.2		0.1		0.2		0.3		0.3
2016											1.3		1.6		2.2		2.2
2017													0.3		0.1		—
2018																	0.7
2019																	0.7
															Total		$	14.0
Outstanding liabilities for unpaid losses and ALAE prior to 2011, net of reinsurance																	0.6
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance																	$	52.7



	As of December 31, 2019
Accident Year	Incurred Losses & ALAE, Net of Reinsurance		IBNR & Expected Development on Reported Claims		Cumulative Number of Reported Claims ⁽²⁾
2011	$	1.7	$	—	80
2012	3.6		0.2		129
2013	0.9		—		50
2014	4.7		0.6		50
2015	1.2		0.9		24
2016	6.2		1.0		57
2017	7.6		7.6		96
2018	17.4		15.3		114
2019	22.8		22.1		122


⁽¹⁾	Information presented for calendar years prior to 2019 is required supplementary information and is unaudited.


⁽²⁾	The cumulative number of reported claims is measured by individual claimant at a coverage level. Reported occurrences that do not result in a liability are included as reported claims.



Reporting Segment: International Operations Operating Division: Reinsurance Line of Business: Property (in millions, except number of claims reported)
	Incurred Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
	2011 ⁽¹⁾		2012 ⁽¹⁾		2013 ⁽¹⁾		2014 ⁽¹⁾		2015 ⁽¹⁾		2016 ⁽¹⁾		2017 ⁽¹⁾		2018 ⁽¹⁾		2019
2011	$	126.1	$	104.7	$	106.7	$	104.6	$	103.9	$	103.7	$	131.7	$	138.3	$	140.5
2012			47.1		51.3		50.3		51.6		46.4		62.7		66.9		69.3
2013					31.9		33.3		32.8		31.1		32.7		32.1		31.6
2014							26.5		26.5		24.2		35.3		38.1		39.9
2015									27.1		23.4		159.5		155.1		150.2
2016											43.5		48.5		41.1		58.4
2017													157.7		158.0		165.1
2018															68.0		82.7
2019																	61.2
															Total		$	798.9

	Cumulative Paid Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
	2011 ⁽¹⁾		2012 ⁽¹⁾		2013 ⁽¹⁾		2014 ⁽¹⁾		2015 ⁽¹⁾		2016 ⁽¹⁾		2017 ⁽¹⁾		2018 ⁽¹⁾		2019
2011	$	41.6	$	67.0	$	87.8	$	95.3	$	97.4	$	98.6	$	126.8	$	133.6	$	137.4
2012			12.4		31.1		40.5		49.6		44.0		58.7		64.6		68.1
2013					4.1		16.5		26.3		28.7		30.7		30.8		30.8
2014							2.8		12.6		18.3		36.4		37.0		39.5
2015									4.2		11.0		135.4		142.5		145.9
2016											13.5		27.1		31.1		51.6
2017													84.2		139.6		164.0
2018															24.6		71.5
2019																	8.1
															Total		$	716.9
Outstanding liabilities for unpaid losses and ALAE prior to 2011, net of reinsurance																	3.7
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance																	$	85.7



	As of December 31, 2019
Accident Year	Incurred Losses & ALAE, Net of Reinsurance		IBNR & Expected Development on Reported Claims			Cumulative Number of Reported Claims ⁽²⁾
2011	$	140.5	$	0.3		460
2012	69.3		—			278
2013	31.6		0.2			222
2014	39.9		0.1			221
2015	150.2		1.3			220
2016	58.4		4.9			384
2017	165.1		(14.5		)	813
2018	82.7		(11.6		)	645
2019	61.2		43.0			133


⁽¹⁾	Information presented for calendar years prior to 2019 is required supplementary information and is unaudited.


⁽²⁾	The cumulative number of reported claims is measured by individual claimant at a coverage level. Reported occurrences that do not result in a liability are included as reported claims.



Reporting Segment: International Operations Operating Division: Argo Insurance Bermuda Line of Business: Liability (in millions, except number of claims reported)
	Incurred Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
	2011 ⁽¹⁾		2012 ⁽¹⁾		2013 ⁽¹⁾		2014 ⁽¹⁾		2015 ⁽¹⁾		2016 ⁽¹⁾		2017 ⁽¹⁾		2018 ⁽¹⁾		2019
2011	$	6.6	$	6.6	$	6.6	$	4.4	$	2.2	$	1.6	$	1.0	$	—	$	—
2012			7.4		7.4		7.4		5.6		4.4		1.7		—		0.6
2013					8.5		8.5		8.5		8.5		4.9		2.2		5.3
2014							9.8		9.8		9.8		6.2		1.5		2.3
2015									11.3		14.3		24.8		35.4		45.4
2016											13.9		14.0		14.0		6.6
2017													17.1		17.3		26.9
2018															8.9		32.0
2019																	13.3
															Total		$	132.4

	Cumulative Paid Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
	2011 ⁽¹⁾		2012 ⁽¹⁾		2013 ⁽¹⁾		2014 ⁽¹⁾		2015 ⁽¹⁾		2016 ⁽¹⁾		2017 ⁽¹⁾		2018 ⁽¹⁾		2019
2011	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
2012			—		—		—		—		—		—		—		—
2013					—		—		—		—		2.3		2.3		2.3
2014							—		—		0.1		0.1		1.2		1.2
2015									—		—		16.1		20.3		26.6
2016											—		—		—		0.1
2017													—		3.3		3.4
2018															—		13.8
2019																	—
															Total		$	47.4
Outstanding liabilities for unpaid losses and ALAE prior to 2011, net of reinsurance																	—
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance																	$	85.0



	As of December 31, 2019
Accident Year	Incurred Losses & ALAE, Net of Reinsurance		IBNR & Expected Development on Reported Claims		Cumulative Number of Reported Claims ⁽²⁾
2011	$	—	$	—	1,425
2012	0.6		0.6		1,385
2013	5.3		1.9		1,194
2014	2.3		0.3		1,338
2015	45.4		6.7		1,583
2016	6.6		6.5		1,907
2017	26.9		4.6		2,035
2018	32.0		13.7		982
2019	13.3		13.3		907


⁽¹⁾	Information presented for calendar years prior to 2019 is required supplementary information and is unaudited.


⁽²⁾	The cumulative number of reported claims is measured by individual claimant at a coverage level. Reported occurrences that do not result in a liability are included as reported claims.



Reporting Segment: International Operations Operating Division: Syndicate 1200 Line of Business: Liability (in millions, except number of claims reported)
	Incurred Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
	2010 ⁽¹⁾		2011 ⁽¹⁾		2012 ⁽¹⁾		2013 ⁽¹⁾		2014 ⁽¹⁾		2015 ⁽¹⁾		2016 ⁽¹⁾		2017 ⁽¹⁾		2018 ⁽¹⁾		2019
2010	$	5.8	$	4.9	$	4.5	$	6.2	$	6.0	$	5.9	$	5.8	$	5.9	$	5.8	$	6.2
2011			8.2		8.7		11.0		11.1		10.4		10.2		10.7		10.9		11.5
2012					8.6		10.7		14.9		14.2		13.8		14.5		15.0		15.6
2013							22.6		26.7		26.2		24.3		24.2		25.0		26.4
2014									36.9		35.9		33.3		32.2		33.5		35.6
2015											34.1		29.1		28.8		29.1		32.9
2016													25.2		26.2		25.8		28.3
2017															24.4		23.2		26.7
2018																	21.4		19.9
2019																			16.5
																	Total		$	219.6

	Cumulative Paid Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
	2010 ⁽¹⁾		2011 ⁽¹⁾		2012 ⁽¹⁾		2013 ⁽¹⁾		2014 ⁽¹⁾		2015 ⁽¹⁾		2016 ⁽¹⁾		2017 ⁽¹⁾		2018 ⁽¹⁾		2019
2010	$	—	$	0.2	$	0.6	$	1.1	$	2.0	$	2.8	$	3.8	$	4.1	$	4.4	$	5.1
2011			0.2		0.8		1.7		3.4		5.5		7.0		7.9		8.8		9.8
2012					0.4		1.2		2.5		5.7		8.2		10.0		11.8		12.8
2013							1.5		3.2		7.0		11.3		15.6		19.7		22.5
2014									1.9		4.5		9.8		13.6		20.1		24.6
2015											0.8		5.1		7.3		12.2		17.5
2016													1.8		5.7		10.5		15.1
2017															1.9		6.6		11.0
2018																	2.3		6.6
2019																			1.3
																	Total		$	126.3
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance																			$	93.3



	As of December 31, 2019
Accident Year	Incurred Losses & ALAE, Net of Reinsurance		IBNR & Expected Development on Reported Claims
2010	$	6.2	$	0.1
2011	11.5		0.5
2012	15.6		0.6
2013	26.4		1.5
2014	35.6		3.7
2015	32.9		6.5
2016	28.3		7.1
2017	26.7		11.9
2018	19.9		12.0
2019	16.5		13.6


⁽¹⁾	Information presented for calendar years prior to 2019 is required supplementary information and is unaudited.



Reporting Segment: International Operations Operating Division: Syndicate 1200 Line of Business: Professional (in millions, except number of claims reported)
	Incurred Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
	2010 ⁽¹⁾		2011 ⁽¹⁾		2012 ⁽¹⁾		2013 ⁽¹⁾		2014 ⁽¹⁾		2015 ⁽¹⁾		2016 ⁽¹⁾		2017 ⁽¹⁾		2018 ⁽¹⁾		2019
2010	$	15.6	$	12.8	$	12.7	$	11.2	$	10.1	$	9.4	$	9.5	$	9.5	$	9.8	$	10.0
2011			19.1		21.0		18.5		15.5		14.6		14.7		15.1		15.7		16.2
2012					13.5		13.5		13.7		13.6		13.7		14.6		15.1		16.0
2013							21.9		21.8		21.9		21.5		21.7		22.5		23.9
2014									33.8		35.0		35.1		38.1		40.0		41.9
2015											36.8		36.1		37.3		37.4		40.8
2016													31.8		26.0		25.5		30.9
2017															23.6		21.1		24.4
2018																	20.1		17.0
2019																			22.4
																	Total		$	243.5

	Cumulative Paid Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
	2010 ⁽¹⁾		2011 ⁽¹⁾		2012 ⁽¹⁾		2013 ⁽¹⁾		2014 ⁽¹⁾		2015 ⁽¹⁾		2016 ⁽¹⁾		2017 ⁽¹⁾		2018 ⁽¹⁾		2019
2010	$	0.1	$	1.0	$	2.0	$	3.0	$	3.8	$	5.1	$	6.5	$	6.8	$	7.7	$	7.9
2011			1.0		2.5		4.2		6.6		8.3		10.6		11.4		12.8		13.5
2012					0.6		1.8		4.3		5.8		8.2		9.5		11.2		12.5
2013							1.7		3.7		7.1		11.6		15.4		17.7		20.1
2014									1.6		6.3		14.6		23.6		27.8		32.3
2015											2.2		8.3		14.8		19.6		24.9
2016													2.1		5.8		10.6		17.2
2017															1.2		5.0		9.6
2018																	1.0		4.8
2019																			2.5
																	Total		$	145.3
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance																			$	98.2



	As of December 31, 2019
Accident Year	Incurred Losses & ALAE, Net of Reinsurance		IBNR & Expected Development on Reported Claims
2010	$	10.0	$	0.2
2011	16.2		0.7
2012	16.0		0.8
2013	23.9		2.1
2014	41.9		4.9
2015	40.8		8.6
2016	30.9		8.0
2017	24.4		11.3
2018	17.0		10.6
2019	22.4		18.6


⁽¹⁾	Information presented for calendar years prior to 2019 is required supplementary information and is unaudited.



Reporting Segment: International Operations Operating Division: Syndicate 1200 Line of Business: Property (in millions, except number of claims reported)
	Incurred Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
	2010 ⁽¹⁾		2011 ⁽¹⁾		2012 ⁽¹⁾		2013 ⁽¹⁾		2014 ⁽¹⁾		2015 ⁽¹⁾		2016 ⁽¹⁾		2017 ⁽¹⁾		2018 ⁽¹⁾		2019
2010	$	50.7	$	58.2	$	54.8	$	54.3	$	51.6	$	51.3	$	50.8	$	51.5	$	51.2	$	51.1
2011			108.5		113.8		108.0		95.2		93.3		92.7		92.8		92.2		91.9
2012					88.9		88.7		93.0		92.1		91.0		90.9		90.1		89.6
2013							83.4		79.3		78.3		76.9		76.7		75.7		74.6
2014									69.8		64.2		65.7		66.3		65.6		63.6
2015											55.9		66.3		73.6		74.2		72.9
2016													70.6		86.4		91.6		90.7
2017															84.9		91.4		96.1
2018																	62.2		61.9
2019																			42.8
																	Total		$	735.2

	Cumulative Paid Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
	2010 ⁽¹⁾		2011 ⁽¹⁾		2012 ⁽¹⁾		2013 ⁽¹⁾		2014 ⁽¹⁾		2015 ⁽¹⁾		2016 ⁽¹⁾		2017 ⁽¹⁾		2018 ⁽¹⁾		2019
2010	$	1.8	$	19.6	$	28.1	$	33.9	$	35.9	$	40.1	$	41.6	$	42.7	$	43.4	$	43.4
2011			23.5		47.3		62.0		73.8		79.6		81.3		82.9		82.6		82.0
2012					29.6		47.8		63.0		74.1		76.4		77.6		77.8		77.7
2013							44.5		56.8		69.3		73.5		74.3		73.5		72.5
2014									29.5		51.5		57.6		60.1		60.0		58.0
2015											22.9		42.8		52.7		59.1		58.6
2016													38.9		63.9		78.6		80.0
2017															29.3		62.4		71.5
2018																	30.2		53.1
2019																			20.5
																	Total		$	617.3
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance																			$	117.9



	As of December 31, 2019
Accident Year	Incurred Losses & ALAE, Net of Reinsurance		IBNR & Expected Development on Reported Claims
2010	$	51.1	$	—
2011	91.9		—
2012	89.6		—
2013	74.6		—
2014	63.6		—
2015	72.9		—
2016	90.7		—
2017	96.1		3.0
2018	61.9		6.2
2019	42.8		21.4


⁽¹⁾	Information presented for calendar years prior to 2019 is required supplementary information and is unaudited.



Reporting Segment: International Operations Operating Division: Syndicate 1200 Line of Business: Specialty (in millions, except number of claims reported)
	Incurred Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
	2010 ⁽¹⁾		2011 ⁽¹⁾		2012 ⁽¹⁾		2013 ⁽¹⁾		2014 ⁽¹⁾		2015 ⁽¹⁾		2016 ⁽¹⁾		2017 ⁽¹⁾		2018 ⁽¹⁾		2019
2010	$	12.9	$	15.8	$	13.6	$	13.1	$	12.1	$	12.1	$	12.1	$	12.1	$	12.0	$	12.0
2011			38.5		40.2		38.9		34.2		33.3		33.4		33.2		32.9		32.8
2012					52.6		56.4		60.8		59.3		59.1		58.9		58.3		58.0
2013							75.8		81.3		82.7		82.3		82.0		81.7		80.7
2014									92.1		98.6		99.9		101.4		100.8		99.1
2015											89.7		87.8		93.8		95.3		95.0
2016													85.5		83.9		87.2		89.5
2017															79.6		76.0		85.9
2018																	64.7		69.8
2019																			77.5
																	Total		$	700.3

	Cumulative Paid Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
	2010 ⁽¹⁾		2011 ⁽¹⁾		2012 ⁽¹⁾		2013 ⁽¹⁾		2014 ⁽¹⁾		2015 ⁽¹⁾		2016 ⁽¹⁾		2017 ⁽¹⁾		2018 ⁽¹⁾		2019
2010	$	1.9	$	8.6	$	8.9	$	9.3	$	9.0	$	9.7	$	10.0	$	10.1	$	10.2	$	10.3
2011			11.5		19.6		23.7		27.2		28.6		29.2		29.6		29.5		29.3
2012					17.9		27.5		39.0		45.8		48.8		49.9		50.2		50.2
2013							31.0		52.5		68.9		76.3		78.3		78.6		78.3
2014									37.8		71.5		82.7		89.0		90.4		89.4
2015											31.0		54.0		66.0		73.9		75.5
2016													37.2		58.6		68.3		75.2
2017															19.8		42.2		57.1
2018																	18.7		49.3
2019																			29.6
																	Total		$	544.2
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance																			$	156.1



	As of December 31, 2019
Accident Year	Incurred Losses & ALAE, Net of Reinsurance		IBNR & Expected Development on Reported Claims
2010	$	12.0	$	—
2011	32.8		—
2012	58.0		—
2013	80.7		—
2014	99.1		—
2015	95.0		—
2016	89.5		2.2
2017	85.9		7.1
2018	69.8		17.5
2019	77.5		44.7


⁽¹⁾	Information presented for calendar years prior to 2019 is required supplementary information and is unaudited



Reporting Segment: International Operations Operating Division: Europe Line of Business: Professional (in millions, except number of claims reported)

Accident Year
	2012 ⁽¹⁾		2013 ⁽¹⁾		2014 ⁽¹⁾		2015 ⁽¹⁾		2016 ⁽¹⁾		2017 ⁽¹⁾		2018 ⁽¹⁾		2019
2012	$	0.1	$	0.1	$	—	$	0.1	$	0.1	$	0.1	$	0.2	$	0.1
2013			0.8		0.7		0.5		0.4		0.5		0.6		0.4
2014					0.7		0.6		0.5		0.7		0.7		6.7
2015							2.6		2.1		2.9		18.4		21.1
2016									0.9		1.1		1.1		0.8
2017											5.6		6.1		13.5
2018													45.5		56.6
2019															71.7
													Total		$	170.9


Accident Year
	2012 ⁽¹⁾		2013 ⁽¹⁾		2014 ⁽¹⁾		2015 ⁽¹⁾		2016 ⁽¹⁾		2017 ⁽¹⁾		2018 ⁽¹⁾		2019
2012	$	—	$	—	$	—	$	—	$	—	$	—	$	0.1	$	—
2013			—		—		0.5		0.4		0.5		0.5		0.2
2014					—		—		—		0.1		0.1		0.1
2015							—		—		—		0.1		2.3
2016									—		—		0.3		0.1
2017											1.0		2.0		6.8
2018													9.8		17.2
2019															1.2
													Total		$	27.9
Outstanding liabilities for unpaid losses and ALAE prior to 2012, net of reinsurance															—
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance															$	143.0



	As of December 31, 2019
Accident Year	Incurred Losses & ALAE, Net of Reinsurance		IBNR & Expected Development on Reported Claims			Cumulative Number of Reported Claims ⁽²⁾
2012	$	0.1	$	0.1		3
2013	0.4		0.2			22
2014	6.7		6.6			19
2015	21.1		18.8			36
2016	0.8		0.7			63
2017	13.5		(10.4		)	91
2018	56.6		7.6			143
2019	71.7		69.3			101


⁽¹⁾	Information presented for calendar years prior to 2019 is required supplementary information and is unaudited.


⁽²⁾	The cumulative number of reported claims is measured by individual claimant at a coverage level. Reported occurrences that do not result in a liability are included as reported claims.

Syndicate 1200 Claim Frequency Information

Cumulative claim frequency information has been excluded from the Syndicate 1200 Liability, Professional, Property and Specialty incurred and paid claims development tables above due to the impracticality of obtaining such information at the level required for meaningful disaggregated disclosure.

Syndicate 1200 measures claim frequency based on the number of reported claims by individual claimant at a coverage level for non-bordereau reporting, which is consistent with market practices for insurance business sourced through open market channels. For claims reported on a bordereau for business sourced through channels such as Lloyd’s authorized coverholders, which constitutes approximately half of the business written in Syndicate 1200, the number of reported claims is measured by bordereau report at a coverage level. This method of tracking and analyzing bordereau-reported claims is consistent with common industry practice within the Lloyd’s market. The information for both bordereau and non-bordereau claims may be pooled dependent on the class of business and analyzed in the aggregate to determine the ultimate cost of settling the claims by line of business and Lloyd’s year of account. Due to our methodology of establishing ultimate liabilities for Syndicate 1200 claims, there is not a reasonable way to disaggregate the IBNR reserves and expected development on reported claims between bordereau and non-bordereau business for separate disclosure.

The reconciliation of the net incurred and paid development tables to the liability for unpaid losses and LAE in our consolidated balance sheets is as follows:



(in millions)	As of December 31, 2019
Liabilities for unpaid losses and ALAE:
US Operations:
Excess and Surplus Lines - Liability	$	913.0
Commercial Specialty - Liability	467.5
Commercial Specialty - Professional	216.9
Commercial Specialty - Specialty	52.7
International Operations:
Reinsurance - Property	85.7
Argo Insurance Bermuda- Liability	85.0
Syndicate 1200 - Liability	93.3
Syndicate 1200 - Professional	98.2
Syndicate 1200 - Property	117.9
Syndicate 1200 - Specialty	156.1
Europe - Professional	143.0
Run-off Lines	173.3
Other lines	75.7
Total liabilities for unpaid losses and ALAE, net of reinsurance	2,678.3

Reinsurance recoverables on unpaid losses and LAE:
US Operations:
Excess and Surplus Lines - Liability	385.5
Commercial Specialty - Liability	332.2
Commercial Specialty - Professional	175.1
Commercial Specialty - Specialty	29.0
International Operations:
Reinsurance - Property	418.2
Argo Insurance Bermuda- Liability	175.4
Syndicate 1200 - Liability	58.3
Syndicate 1200 - Professional	79.9
Syndicate 1200 - Property	117.0
Syndicate 1200 - Specialty	112.0
Europe - Professional	7.8
Run-off Lines	85.1
Other lines	459.4
Total reinsurance recoverables on unpaid losses and LAE	2,434.9

Unallocated loss adjustment expenses	62.3
Unamortized reserve discount	(17.9		)
Gross liability for unpaid losses and LAE	$	5,157.6

Other lines in the table above is comprised of lines of business and operating divisions within our two ongoing reporting segments which are not individually significant for separate disaggregated disclosure.

Claims Duration

The following table provides supplementary unaudited information about the annual percentage payout of incurred losses and ALAE, net of reinsurance, as of December 31, 2019:



	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance ⁽¹⁾
	Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9
U.S. Operations:
Excess and Surplus Lines - Liability	7.6%	16.8%	20.5%	18.6%	12.6%	8.3%	5.3%	3.4%	2.2%
Specialty Admitted - Liability	14.1%	21.3%	18.4%	16.4%	9.3%	6.3%	4.2%	2.8%	1.9%
Specialty Admitted- Professional	7.7%	25.2%	26.3%	16.9%	10.3%	5.8%	3.2%	1.8%	1.1%
Specialty Admitted - Specialty	35.8%	32.5%	17.6%	7.3%	3.5%	1.7%	0.8%	0.4%	0.2%
International Operations:
Reinsurance - Property	22.5%	22.7%	29.4%	14.2%	4.4%	2.3%	1.3%	0.8%	0.6%
Argo Insurance Bermuda - Liability	3.7%	16.8%	17.4%	15.7%	14.1%	7.7%	7.0%	2.0%	5.5%
Europe Professional	4.6%	10.7%	14.5%	15.5%	11.8%	9.8%	8.7%	N/A	N/A
Syndicate 1200 - Liability	3.7%	7.8%	9.5%	12.3%	14.7%	11.7%	10.6%	8.4%	6.4%
Syndicate 1200 - Professional	4.6%	10.7%	14.5%	15.5%	11.8%	9.8%	8.7%	6.7%	5.0%
Syndicate 1200 - Property	41.5%	29.6%	15.7%	8.4%	2.4%	1.2%	0.6%	0.3%	0.2%
Syndicate 1200 - Specialty	37.2%	30.9%	16.6%	9.4%	3.4%	1.4%	0.6%	0.2%	0.1%

⁽¹⁾ The average annual percentage payout is calculated from a paid losses and ALAE development pattern based on an actuarial analysis of the paid losses and ALAE movements by accident year for each disaggregation category. The paid losses and ALAE development pattern provides the expected percentage of ultimate losses and ALAE to be paid in each year. The pattern considers all accident years included in the claims development tables.

Information About Amounts Reported at Present Value

We discount certain workers compensation liabilities for unpaid losses and LAE within our U.S. Operations and Run-off Lines segments. The discounted U.S. Operations liabilities relate to all non-ALAE workers compensation liabilities within one of our insurance subsidiaries. In Run-off Lines, we discount certain pension-type liabilities for unpaid losses and LAE. The following tables provide information about these discounted liabilities for unpaid losses and LAE:



	Carrying Amount of
	Reserves for Losses & LAE						Aggregate Amount of Discount
	As of December 31,						As of December 31,
(in millions, except discount percentages)	2019		2018		2017		2019		2018		2017
U.S. Operations:
Specialty Admitted - Liability	$	153.1	$	140.8	$	126.7	$	13.0	$	11.9	$	10.6
Run-off Lines	148.9		163.1		175.5		4.9		5.0		7.0
Total	$	302.0	$	303.9	$	302.2	$	17.9	$	16.9	$	17.6



	Interest Accretion⁽¹⁾						Discount Rate
	For the Years Ended December 31,						As of December 31,
	2019		2018		2017		2019	2018	2017
U.S. Operations:
Specialty Admitted - Liability	$	1.3	$	1.3	$	1.9	2.25%	2.25%	2.25%
Run-off Lines	0.2		2.1		2.1		3.50%	3.50%	3.50%
Total	$	1.5	$	3.4	$	4.0

⁽¹⁾Interest accretion is recorded in the line item “Losses and loss adjustment expenses” in our Consolidated Statements of (Loss) Income.

Run-off Lines

12 Months Ended

Dec. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

Run-off Lines

We have discontinued active underwriting of certain lines of business, including those lines that were previously recorded in Argo Group’s risk-management segment. All current activity within these lines is related to the management of claims and other administrative functions. Also included in Run-off Lines are other liability reserves, which include exposure to claims for asbestos and environmental liabilities written in past years. The other liability reserves are often characterized by long elapsed periods between the occurrence of a claim and ultimate payment to resolve the claim. We use a specialized staff dedicated to administer and settle these claims.

The following table presents our gross reserves for Run-off Lines as of December 31:



	December 31,
(in millions)	2019		2018
Asbestos and Environmental:
Reinsurance assumed	$	26.7	$	27.7
Other	25.9		27.1
Total Asbestos and Environmental	52.6		54.8
Risk-management	188.1		197.0
Run-off reinsurance lines	0.5		1.6
Other run-off lines	12.3		12.2
Gross reserves - Run-off Lines	$	253.5	$	265.6

We have received asbestos and environmental liability claims arising from other liability coverage primarily written in the 1960s, 1970s and into the early 1980s. Asbestos and environmental claims originate from policies directly underwritten by us and from reinsurance assumed during this period, including a portion assumed from the London market. The following table represents the total gross reserves for our asbestos exposure:



	December 31,
(in millions)	2019		2018		2017
Direct written
Case reserves	$	2.7	$	2.7	$	2.1
Unallocated loss adjustment expense ("ULAE")	0.5		0.5		0.5
Incurred but not reported ("IBNR")	16.1		19.1		18.8
Total direct written reserves	19.3		22.3		21.4
Assumed domestic
Case reserves	9.1		8.7		9.8
ULAE	0.8		0.8		0.8
IBNR	11.2		12.0		13.7
Total assumed domestic reserves	21.1		21.5		24.3
Assumed London
Case reserves	1.3		1.5		2.3
ULAE	—		—		—
IBNR	1.1		1.5		0.6
Total assumed London reserves	2.4		3.0		2.9
Total asbestos reserves	$	42.8	$	46.8	$	48.6

The following table presents our underwriting losses for Run-off Lines:



	For the Years Ended December 31,
(in millions)	2019			2018			2017
Asbestos and Environmental:
Reinsurance assumed	$	(4.4	)	$	(3.9	)	$	(8.7	)
Other	(3.8		)	(4.1		)	(6.7		)
Total Asbestos and Environmental	(8.3		)	(8.0		)	(15.4		)
Risk-management	(4.9		)	(2.6		)	(8.8		)
Run-off reinsurance lines	0.7			—			(0.1		)
Other run-off lines	(1.7		)	(5.3		)	(1.4		)
Total underwriting loss - Run-off Lines	$	(14.2	)	$	(15.9	)	$	(25.7	)

Reserves for asbestos and environmental claims cannot be estimated with traditional loss reserving techniques that rely on historical accident year loss development factors. The uncertainty in the asbestos and environmental reserves estimates arises from several factors including lack of actuarially credible historical data, inapplicability of standard actuarial projection techniques, uncertainty with regards to claim costs, coverage interpretations and judicial, statutory and regulatory provisions under which the claims may be ultimately resolved. It is impossible to predict how the courts will interpret coverage issues and these resolutions may have a material impact on the ultimate resolution of the asbestos and environmental liabilities. We use a variety of estimation methods to calculate reserves as a whole; however, reserves for asbestos and environmental claims were determined using a variety of methods which rely on historical claim reporting and average claim cost information. We apply greatest weight to the method that projects future calendar period claims and average claim costs because it best captures the unique claim characteristics of our underlying exposures. Although management has recorded its best estimate of loss reserves, due to the uncertainties of estimation of liability that may arise as discussed herein, further deterioration of claims could occur in the future.

Please see Note 5, “Reserves for Losses and Loss Adjustment Expenses” for further discussion.

Junior Subordinated Debentures

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Junior Subordinated Debentures

Through a series of trusts, that are wholly-owned subsidiaries (non-consolidated), we issued debt. The debentures are variable with the rate being reset quarterly and subject to certain interest rate ceilings. Interest payments are payable quarterly. The debentures are all unsecured and are subordinated to other indebtedness. At December 31, 2019 and 2018, all debentures were eligible for redemption subject to certain terms and conditions at a price equal to 100% of the principal plus accrued and unpaid interest.

A summary of our outstanding junior subordinated debentures is presented below:

December 31, 2019

(in millions)

Issue Date

Trust Preferred Pools

Maturity

Rate Structure

Interest Rate at
December 31, 2019

Amount

Argo Group

5/15/2003

PXRE Capital Statutory Trust II

5/15/2033

3M LIBOR + 4.10%

6.01%

$

18.1

11/6/2003

PXRE Capital Trust VI

9/30/2033

3M LIBOR + 3.90%

5.84%

10.3

Argo Group US

5/15/2003

Argonaut Group Statutory Trust I

5/15/2033

3M LIBOR + 4.10%

6.01%

15.5

12/16/2003

Argonaut Group Statutory Trust III

1/8/2034

3M LIBOR + 4.10%

6.09%

12.3

4/29/2004

Argonaut Group Statutory Trust IV

4/29/2034

3M LIBOR + 3.85%

5.76%

13.4

5/26/2004

Argonaut Group Statutory Trust V

5/24/2034

3M LIBOR + 3.85%

5.76%

12.3

5/12/2004

Argonaut Group Statutory Trust VI

5/12/2034

3M LIBOR + 3.80%

5.70%

13.4

9/17/2004

Argonaut Group Statutory Trust VII

12/15/2034

3M LIBOR + 3.60%

5.49%

15.5

9/22/2004

Argonaut Group Statutory Trust VIII

9/22/2034

3M LIBOR + 3.55%

5.48%

15.5

10/22/2004

Argonaut Group Statutory Trust IX

12/15/2034

3M LIBOR + 3.60%

5.49%

15.5

9/14/2005

Argonaut Group Statutory Trust X

9/15/2035

3M LIBOR + 3.40%

5.29%

30.9

Total Outstanding

$

172.7

December 31, 2018

(in millions)

Issue Date

Trust Preferred Pools

Maturity

Rate Structure

Interest Rate at
December 31, 2018

Amount

Argo Group

5/15/2003

PXRE Capital Statutory Trust II

5/15/2033

3M LIBOR + 4.10%

6.72%

$

18.1

11/6/2003

PXRE Capital Trust VI

9/30/2033

3M LIBOR + 3.90%

6.70%

10.3

Argo Group US

5/15/2003

Argonaut Group Statutory Trust I

5/15/2033

3M LIBOR + 4.10%

6.72%

15.5

12/16/2003

Argonaut Group Statutory Trust III

1/8/2034

3M LIBOR + 4.10%

6.54%

12.3

4/29/2004

Argonaut Group Statutory Trust IV

4/29/2034

3M LIBOR + 3.85%

6.47%

13.4

5/26/2004

Argonaut Group Statutory Trust V

5/24/2034

3M LIBOR + 3.85%

6.54%

12.3

5/12/2004

Argonaut Group Statutory Trust VI

5/12/2034

3M LIBOR + 3.80%

6.59%

13.4

9/17/2004

Argonaut Group Statutory Trust VII

12/15/2034

3M LIBOR + 3.60%

6.39%

15.5

9/22/2004

Argonaut Group Statutory Trust VIII

9/22/2034

3M LIBOR + 3.55%

6.37%

15.5

10/22/2004

Argonaut Group Statutory Trust IX

12/15/2034

3M LIBOR + 3.60%

6.39%

15.5

9/14/2005

Argonaut Group Statutory Trust X

9/15/2035

3M LIBOR + 3.40%

6.19%

30.9

Total Outstanding

$

172.7

Junior Subordinated Debentures from Maybrooke Acquisition

Unsecured junior subordinated debentures with a principal balance of $91.8 million were assumed through the acquisition of Maybrooke (“the acquired debt”). As part of the ongoing liquidation of the Maybrooke holding company, which began subsequent to our acquisition in 2018, the acquired debt was ultimately assigned to Argo Re and is carried on our consolidated balance sheet at $84.7 million, which represents the debt’s fair value at the date of acquisition plus accumulated accretion of discount to par value, as required by accounting for business combinations under ASC 805 . At December 31, 2019, the acquired debt was eligible for redemption at par. Interest accrues on the acquired debt based on a variable rate, which is reset quarterly. Interest payments are payable quarterly.

A summary of the terms of the acquired debt outstanding is presented below:

December 31, 2019

(in millions)

Issue Date

Maturity

Rate Structure

Interest Rate at
December 31, 2019

Principal at
December 31, 2019

Carrying Value at
December 31, 2019

9/15/2007

9/15/2037

3 month LIBOR + 3.15%

5.04

%

$

91.8

$

84.7

December 31, 2018

(in millions)

Issue Date

Maturity

Rate Structure

Interest Rate at
December 31, 2018

Principal at
December 31, 2018

Carrying Value at
December 31, 2018

9/15/2007

9/15/2037

3 month LIBOR + 3.15%

5.94

%

$

91.8

$

84.3

Other Indebtedness

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Other Indebtedness

Our consolidated balance sheets include various long-term debt instruments under the caption “other indebtedness,” as detailed in the table below. Information regarding the terms and principal amounts of each of these debt instruments is also provided.



(in millions)	December 31,
Debt Type	2019		2018
Floating rate loan stock	$	56.3	$	57.8
Term loan	125.0		125.0
Other debt	—		0.6
Total other indebtedness	$	181.3	$	183.4

Floating Rate Loan Stock

This unsecured debt was assumed through the acquisition of Argo Underwriting Agency, Ltd. At December 31, 2019 and 2018, all notes were eligible for redemption subject to certain terms and conditions at a price equal to 100% of the principal plus accrued and unpaid interest. Interest on the U.S. dollar and euro notes is due semiannually and quarterly, respectively. A summary of the notes outstanding at December 31, 2019 and 2018 is presented below:

December 31, 2019

(in millions)

Currency

Issue Date

Maturity

Rate Structure

Interest Rate at
December 31, 2019

Amount

U.S. Dollar

12/8/2004

11/15/2034

6 month LIBOR + 4.2%

6.41%

$

6.5

U.S. Dollar

10/31/2006

1/15/2036

6 month LIBOR + 4.0%

6.21%

10.0

Total U.S. Dollar notes

16.5

Euro

9/6/2005

8/22/2035

3 month LIBOR + 4.0%

3.58%

13.3

Euro

10/31/2006

11/22/2036

3 month LIBOR + 4.0%

3.58%

11.6

Euro

6/8/2007

9/15/2037

3 month LIBOR + 3.9%

3.47%

14.9

Total Euro notes

39.8

Total notes outstanding

$

56.3

December 31, 2018

(in millions)

Currency

Issue Date

Maturity

Rate Structure

Interest Rate at
December 31, 2018

Amount

U.S. Dollar

12/8/2004

11/15/2034

6 month LIBOR + 4.2%

6.72%

$

6.5

U.S. Dollar

10/31/2006

1/15/2036

6 month LIBOR + 4.0%

6.52%

10.0

Total U.S. Dollar notes

16.5

Euro

9/6/2005

8/22/2035

3 month LIBOR + 4.0%

3.68%

13.8

Euro

10/31/2006

11/22/2036

3 month LIBOR + 4.0%

3.68%

12.0

Euro

6/8/2007

9/15/2037

3 month LIBOR + 3.9%

3.59%

15.5

Total Euro notes

41.3

Total notes outstanding

$

57.8

No principal payments have been made since the acquisition of Argo Underwriting Agency, Ltd. The floating rate loan stock denominated in euros fluctuates due to foreign currency translation. The outstanding balance on these loans was $39.8 million and $41.3 million as of December 31, 2019 and 2018, respectively. The foreign currency translation adjustment is recorded in our consolidated statements of income (loss).

Borrowing Under Revolving Credit Facility

On November 2, 2018, each of Argo Group, Argo Group U.S., Inc., Argo International Holdings Limited, and Argo Underwriting Agency Limited (the “Borrowers”) entered into a new $325 million credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent. The Credit Agreement replaced the prior $325 million Credit Agreement (the “Prior Agreement”), dated as of March 3, 2017. In connection with the consummation of the Credit Agreement, Argo Group borrowed $125 million as a term loan due on November 2, 2021, which amount was used on November 2, 2018 to pay off in its entirety the $125 million of borrowings previously outstanding under the Prior Agreement. In addition, the Credit Agreement provides for a $200 million revolving credit facility, and the commitments thereunder shall expire on November 2, 2023 unless extended in accordance with the terms of the Credit Agreement. Interest accrues based on a variable rate, which resets and is payable based on reset options selected by Argo Group pursuant to the terms of the Credit Agreement.

A summary of the terms of the outstanding balance at December 31, 2019 and December 31, 2018 is presented below:

December 31, 2019



(in millions)
Issue Date	Maturity	Rate Structure	Interest Rate at December 31, 2019	Amount
11/2/2018	11/2/2021	3 month LIBOR + 1.25%	3.18%	$	125.0

December 31, 2018



(in millions)
Issue Date	Maturity	Rate Structure	Interest Rate at December 31, 2018	Amount
11/2/2018	11/2/2021	3 month LIBOR + 1.25%	3.86%	$	125.0

Borrowings under the Credit Agreement may be used for general corporate purposes, including working capital, permitted acquisitions and letters of credit, and each of the Borrowers has agreed to be jointly and severally liable for the obligations of the other Borrowers under the Credit Agreement.

The Credit Agreement contains customary events of default. If an event of default occurs and is continuing, the Borrowers could be required immediately to repay all amounts outstanding under the Credit Agreement. Lenders holding at least a majority of the loans and commitments under the Credit Agreement could elect to accelerate the maturity of the loans and/or terminate the commitments under the Credit Agreement upon the occurrence and during the continuation of an event of default.

Included in the Credit Agreement is a provision that allows up to $200.0 million of the revolving credit facility to be used for LOCs, subject to availability. At December 31, 2019 and 2018, there were no borrowings outstanding and $70.5 million and $0.5 million of LOCs, respectively, issued against the Credit Facility.

Other Debt

Argo Re has entered into two secured, bilateral committed letter of credit facilities with commercial banks to issue LOCs in support of its non-admitted reinsurance obligations. These facilities have a term of one year and include customary conditions and event of default provisions. The availability of letters of credit under these secured facilities are subject to a borrowing base requirement, determined on the basis of specified percentages of the market value of eligible categories of securities pledged to the lender. Argo Re has also used LOCs issued from commercial banks on a secured, uncommitted basis in order to satisfy these requirements.

Effective December 31, 2019, reinsurance LOCs totaling $139.9 million were outstanding, of which $121.1 million were issued against the secured bilateral LOC facilities and $18.8 million were issued by a commercial bank on an uncommitted basis. Collateral with a market value of $169.9 million was pledged to these banks as security against these LOCs. See Note 2, “Investments,” for additional information.

Argo Group has entered into a LOC facility with a commercial bank to issue LOCs in favor of Lloyd’s to support its Funds at Lloyd’s requirements. This facility has a term of one year, is unsecured, and includes customary conditions and event of default provisions. At December 31, 2019 and December 31, 2018, an LOC in the amount of £23.3 million was issued in favor of Lloyd’s, which allowed the Company to reduce its other collateral pledged to Lloyd’s by a comparable amount. See Note 2, “Investments,” for additional information.

As part of the ARIS Title Insurance Corporation (“ARIS”) acquisition, we assumed a note payable with a variable interest rate of 2.00% above 30-day LIBOR, with quarterly resets and subject to certain interest rate ceilings. The note payable matured on April 1, 2019 and was paid in full.

Disclosures about Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Disclosures about Fair Value of Financial Instruments

Cash. The carrying amount approximates fair value.

Investment securities and short-term investments. See Note 2, “Investments,” for additional information.

Premiums receivable and reinsurance recoverables on paid losses. The carrying value of current receivables and reinsurance recoverables on paid losses approximates fair value.

Debt. At December 31, 2019 and 2018, the fair value of our debt instruments is determined using both Level 1 and Level 2 inputs, as previously defined in Note 2, “Investments”.

We receive fair value prices from third-party pricing services for our financial instruments as well as for similar financial instruments. These prices are determined using observable market information such as publicly traded quoted prices, and trading prices for similar financial instruments actively being traded in the current market. We have reviewed the processes used by the third-party providers for pricing the securities and have determined that these processes result in fair values consistent with GAAP requirements. In addition, we review these prices for reasonableness, and have not adjusted any prices received from the third-party providers as of December 31, 2019 and December 31, 2018. A description of the valuation techniques we use to measure these liabilities at fair value is as follows:

Senior Unsecured Fixed Rate Notes Level 1:


•	Our senior unsecured fixed rate notes are valued using Level 1 inputs. For these securities, we obtain fair value measurements from a third-party pricing service using quoted prices (unadjusted) in active markets at the reporting date.

Junior Subordinated Debentures and Floating Rate Loan Stock Level 2:


•	Our trust preferred debentures, subordinated debentures and floating rate loan stock are typically valued using Level 2 inputs. For these securities, we obtain fair value measurements from a third-party pricing service using quoted prices for similar securities being traded in active markets at the reporting date, as our specific debt instruments are more infrequently traded.

A summary of our financial instruments whose carrying value did not equal fair value is shown below:



	December 31,
	2019				2018
(in millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Junior subordinated debentures:
Trust preferred debentures	$	172.7	$	174.0	$	172.7	$	163.2
Subordinated debentures	84.7		92.5		84.3		85.0
Total junior subordinated debentures	257.4		266.5		257.0		248.2
Senior unsecured fixed rate notes	140.0		144.2		139.8		139.5
Floating rate loan stock	56.3		56.8		57.8		54.5

Based on an analysis of the inputs, our financial instruments measured at fair value on a recurring basis have been categorized as follows:



			Fair Value Measurements at Reporting Date Using
(in millions)	December 31, 2019		Level 1 (a)		Level 2 (b)		Level 3 (c)
Junior subordinated debentures:
Trust preferred debentures	$	174.0	$	—	$	174.0	$	—
Subordinated debentures	92.5		—		92.5		—
Total junior subordinated debentures	266.5		—		266.5		—
Senior unsecured fixed rate notes	144.2		144.2		—		—
Floating rate loan stock	56.8		—		56.8		—
	467.5		144.2		323.3		—


^(a)	Quoted prices in active markets for identical assets


^(b)	Significant other observable inputs


^(c)	Significant unobservable inputs



			Fair Value Measurements at Reporting Date Using
(in millions)	December 31, 2018		Level 1 (a)		Level 2 (b)		Level 3 (c)
Junior subordinated debentures:
Trust preferred debentures	$	163.2	$	—	$	163.2	$	—
Subordinated debentures	85.0		—		85.0		—
Total junior subordinated debentures	248.2		—		248.2		—
Senior unsecured fixed rate notes	139.5		139.5		—		—
Floating rate loan stock	54.5		—		54.5		—
	442.2		139.5		302.7		—


^(a)	Quoted prices in active markets for identical assets


^(b)	Significant other observable inputs

^(c)

Significant unobservable inputs

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Shareholders' Equity	12 Months Ended
Shareholders' Equity	Dec. 31, 2019
Equity [Abstract]
Shareholders' Equity	Shareholders’ Equity On February 20, 2018, our Board declared a 15% stock dividend, payable on March 21, 2018, to shareholders of record at the close of business on March 7, 2018. As a result of the stock dividend, 4,397,520 additional shares were issued. Cash was paid in lieu of fractional shares of our common shares. Excluding repurchased shares, all references to common shares and related per share amounts in this document and related disclosures have been adjusted to reflect the stock dividend for all periods presented. During 2019, our Board declared quarterly cash dividends totaling $1.24 on each share of common stock outstanding to our shareholders of record. For the year ended December 31, 2019, we paid cash dividends totaling $43.1 million to our shareholders. During 2018, our Board declared quarterly cash dividends totaling $1.08 on each share of common stock outstanding. For the year ended December 31, 2018, we paid cash dividends totaling $37.5 million to our shareholders. During 2017, our Board declared quarterly cash dividends totaling $0.94 on each share of common stock outstanding. For the year ended December 31, 2017, we paid cash dividends totaling $33.2 million to our shareholders. We are authorized to issue 30 million shares of $1.00 par value preferred shares. As of December 31, 2019 and 2018, no preferred shares were issued and outstanding. On May 3, 2016, our Board authorized the repurchase of up to $150.0 million of our common shares (“2016 Repurchase Authorization”). The 2016 Repurchase Authorization supersedes all the previous Repurchase Authorizations. As of December 31, 2019, availability under the 2016 Repurchase Authorization for future repurchases of our common shares was $53.3 million. For the year ended December 31, 2019, we did not repurchase any common shares. For the year ended December 31, 2018, we repurchased 530,882 common shares for $31.7 million.

Accumulated Other Comprehensive Income (Loss)

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

A summary of changes in accumulated other comprehensive income (loss), net of taxes (where applicable) by component is presented below:



(in millions)	Foreign Currency Translation Adjustments			Unrealized Holding Gains on Securities			Defined Benefit Pension Plans			Total
Balance, January 1, 2018	$	(19.0	)	$	121.9		$	(6.3	)	$	96.6
Other comprehensive (loss) income before reclassifications	(3.4		)	(80.4		)	1.0			(82.8		)
Amounts reclassified from accumulated other comprehensive income	—			4.9			—			4.9
Net current-period other comprehensive (loss) income	(3.4		)	(75.5		)	1.0			(77.9		)
Cumulative effect of adoption of ASU 2016-01	—			(117.5		)	—			(117.5		)
Cumulative effect of adoption of ASU 2018-02	—			22.1			(1.4		)	20.7
Balance, December 31, 2018	(22.4		)	(49.0		)	(6.7		)	(78.1		)
Other comprehensive (loss) income before reclassifications	(0.2		)	73.8			(1.4		)	72.2
Amounts reclassified from accumulated other comprehensive income	—			8.7			—			8.7
Net current-period other comprehensive (loss) income	(0.2		)	82.5			(1.4		)	80.9
Balance, December 31, 2019	$	(22.6	)	$	33.5		$	(8.1	)	$	2.8

The amounts reclassified from accumulated other comprehensive income (loss) shown in the above table have been included in the following captions in our consolidated statements of income (loss):



	For the Years Ended December 31,
(in millions)	2019			2018			2017
Unrealized gains and losses on securities:
Net realized investment loss (gains)	$	9.9		$	5.4		$	(41.6	)
(Benefit) provision for income taxes	(1.2		)	(0.5		)	13.4
Net of taxes	$	8.7		$	4.9		$	(28.2	)

Net (Loss) Income Per Common Share

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

Net (Loss) Income Per Common Share

The following table presents the calculation of net income per common share on a basic and diluted basis:



	For the Years Ended December 31,
(in millions, except number of shares and per share amounts)	2019			2018		2017
Net (loss) income	$	(8.4	)	$	63.6	$	50.3
Weighted average common shares outstanding - basic	34,205,954			33,922,009		34,457,098
Effect of dilutive securities:
Equity compensation awards	—			756,772		914,546
Weighted average common shares outstanding - diluted	34,205,954			34,678,781		35,371,644
Net (loss) income per common share:
Basic	$	(0.25	)	$	1.87	$	1.46
Diluted	$	(0.25	)	$	1.83	$	1.42

Excluded from the weighted average common shares outstanding calculation at December 31, 2019, 2018 and 2017 are 11,315,889 shares, 11,315,889 shares and 10,785,007 shares, respectively, which are held as treasury shares. The shares are excluded as of their repurchase date. For the year ended December 31, 2019, 587,462 shares were not included in the calculation of diluted net income per common share as these instruments were anti-dilutive. In 2018 and 2017, there were no anti-dilutive shares of common stock to be excluded from the computation of diluted net income per common share.

Share-based Compensation

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Share-based Compensation

The fair value method of accounting is used for equity-based compensation plans. Under the fair value method, compensation cost is measured based on the fair value of the award at the measurement date and recognized over the requisite service period. We use the Black-Scholes model to estimate the fair values on the measurement date for share options and share appreciation rights (“SARs”). The Black-Scholes model uses several assumptions to value a share award. The volatility assumption is based on the historical change in our stock price over the previous five years preceding the measurement date. The risk-free rate of return assumption is based on the five-year U.S. Treasury constant maturity rate on the measurement date. The expected award life is based upon the average holding period over the history of the incentive plan. The expected dividend yield is based on our history and expected dividend payouts.

The following table summarizes the assumptions we used:



	For the Years Ended December 31,
	2019	2018	2017
Risk-free rate of return	1.66% to 2.23%	2.61% to 2.96%	1.83% to 2.22%
Expected dividend yields	1.76% to 1.83%	1.71% to 1.87%	1.63% to 1.72%
Expected award life (years)	4.49 to 4.50	4.48 to 4.49	4.48 to 4.49
Expected volatility	18.18% to 19.15%	17.82% to 18.44%	18.13% to 18.70%

In 2018, all outstanding awards were adjusted to reflect the 15% stock dividend, resulting in a 15% increase to the number of awards outstanding and an 13.04% reduction in exercise price.

We estimate forfeitures based on historical forfeitures patterns, thereby recognizing expense only for those awards that are expected to vest. The estimate of forfeitures is adjusted as actual forfeitures differ from our estimate, resulting in recognition of compensation expense only for those awards that actually vest.

The compensation expense recognized under all our share-based payment plans was $16.9 million ($15.5 million, net of tax), $18.3 million ($16.5 million, net of tax) and $12.3 million ($10.3 million, net of tax) for the years ended December 31, 2019, 2018 and 2017, respectively. The compensation expense is included in “underwriting, acquisition and insurance expenses” in our consolidated statements of income (loss).

We present all tax benefits resulting from the exercise of stock options and vesting of non-vested shares as cash flows from operating activities. Excess tax benefits are realized tax benefits from tax deductions for exercised options and vested shares in excess of the deferred tax asset attributable to stock compensation costs for such options. Such tax benefits and cash flows were immaterial for all reporting periods.

Argo Group’s 2019 Omnibus Incentive Plan

In May 2019, our shareholders approved the 2019 Omnibus Incentive Plan (the “2019 Plan”), which provides equity-based and cash-based performance-related incentives to key employees, non-employee directors and other service providers. The intent of the 2019 Plan is to encourage and provide for the acquisition of an ownership interest in Argo Group, enabling us to attract and retain qualified and competent persons to serve as members of our management team and the Board of Directors. The 2019 Plan authorizes 1,885,000 shares of common stock to be granted as equity-based awards. No further grants will be made under any prior plan; however, any awards under a prior plan that are outstanding as of the effective date shall remain subject to the terms and conditions of, and be governed by, such prior plan.

Awards granted under the 2019 Plan may be in the form of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards, other stock-based awards or other cash-based awards. Awards may be granted either alone or in addition to or in tandem with other awards authorized under the 2019 Plan. Awards that are settled in stock will count as one share for the purposes of reducing the share reserve under the 2019 Plan. Shares issued under this plan may be shares that are authorized and unissued or shares that we reacquired, including shares purchased on the open market.

Stock options and stock appreciation rights are required to have an exercise price that is not less than the fair market value on the date of grant. The term of these awards is not to exceed ten years.

A summary of restricted share activity as of December 31, 2019 and changes during the year then ended is as follows:



	Shares		Weighted-Average Grant Date Fair Value
Outstanding at January 1, 2019	897,005		$	46.82
Granted	219,202		$	68.50
Vested and issued	(486,239	)	$	40.32
Expired or forfeited	(158,697	)	$	57.96
Outstanding at December 31, 2019	471,271		$	60.09

As of December 31, 2019, there was $18.1 million of total unrecognized compensation cost related to restricted share compensation arrangements granted by Argo Group. The weighted-average period over which this unrecognized expense is expected to be recognized is 2.0 years. The total fair value of shares vested during the year ended December 31, 2019 was $19.5 million.

A summary of stock-settled SARs activity as of December 31, 2019 and changes during the year then ended is as follows:



	Shares		Weighted-Average Exercise Price
Outstanding at January 1, 2019	810,759		$	33.89
Exercised	(178,224	)	$	34.74
Expired or forfeited	(7,167	)	$	37.85
Outstanding at December 31, 2019	625,368		$	33.60

As of December 31, 2019, all stock-settled SARS are fully vested. Upon exercise of the stock-settled SARs, the employee is entitled to receive shares of our common stock equal to the appreciation of the stock as compared to the exercise price. For the year ended December 31, 2019, 178,224 stock-settled SARs were exercised resulting in 69,498 shares being issued. Aggregate intrinsic value of the stock-settled SARs at December 31, 2019 was $20.1 million. The remaining weighted average contractual term at December 31, 2019 was 1.43 years.

A summary of cash-settled SARs activity as of December 31, 2019 and changes during the year then ended is as follows:



	Shares		Weighted-Average Exercise Price
Outstanding at January 1, 2019	58,428		$	30.71
Exercised	(52,298	)	$	30.39
Expired or forfeited	(1,193	)	$	19.37
Outstanding at December 31, 2019	4,937		$	36.80

As of December 31, 2019, all the cash-settled SARs are fully vested. Upon exercise of the cash-settled SARs, the employee is entitled to receive cash payment for the appreciation in the value of our common stock over the exercise price. We account for the cash-settled SARs as liability awards, which require the awards to be revalued at each reporting period. For the year ended December 31, 2019, 52,298 cash-settled SARs were exercised resulting in $2.2 million in cash payments. Aggregate intrinsic value of the cash-settled SARs at December 31, 2019 was $0.1 million. The liability for cash-settled SARs was $0.1 million and $2.1 million at December 31, 2019 and 2018, respectively.

Included in the total shares outstanding at December 31, 2019 are 179,580 restricted shares whose vesting is contingent on the employee meeting defined performance conditions. Employees have a specified time period in which to meet the performance condition (typically one year) and forfeit the grant (on a pro rata basis) if the performance conditions are not met in the specified time frame. We evaluate the likelihood of the employee completing the performance condition and include this estimate in the determination of the forfeiture factor for the grants.

Employees Share Purchase Plans

We have established an employee stock purchase plan for eligible employees (Argo Group’s 2007 Employee Share Purchase Plan). Under this plan, newly issued shares of our common stock may be purchased over an offering period of three months at 85% of the lower of the market value on the first day of the offering period or on the designated purchase date at the end of the offering period. We have also established a “Save As You Earn Plan” for our United Kingdom employees. Under this plan, newly issued shares of our common stock may be purchased over an offering period of three or five years at 85% of the market value of the common shares on the first day of the offering period. Expense recognized under these plans for the years ended December 31, 2019, 2018 and 2017 was $0.5 million, $0.4 million and $0.4 million, respectively.

Underwriting, Acquisition and Insurance Expenses & Other Corporate Expenses

12 Months Ended

Dec. 31, 2019

Underwriting Acquisition And Insurance Expenses [Abstract]

Underwriting, Acquisition and Insurance Expenses & Other Corporate Expenses

Underwriting, Acquisition and Insurance Expenses

Underwriting, acquisition and insurance expenses were as follows:



	For the Years Ended December 31,
(in millions)	2019		2018			2017
Commissions	$	241.3	$	280.4		$	255.9
General expenses	379.1		351.7			359.1
Premium taxes, boards and bureaus	33.0		32.5			32.3
	653.4		664.6			647.3
Net deferral of policy acquisition costs	12.4		(9.9		)	(11.9		)
Total underwriting, acquisition and insurance expenses	$	665.8	$	654.7		$	635.4

Other Corporate Expenses

During the year ended December 31, 2019, we incurred substantial non-recurring costs associated with a number of activities that began with first quarter proxy solicitation efforts and shareholder engagement. The costs associated with these and other activities, which included responding to a subpoena from the U.S. Securities and Exchange Commission (“the SEC”), a separation agreement with our former CEO, and exiting certain contractual obligations related to sponsorships, aviation and other corporate assets are recorded in the line item “Other corporate expenses” in the Company’s Consolidated Statements of (Loss) Income. For the year ended December 31, 2019, other corporate expenses were $37.6 million. There were no comparable costs incurred during the year ended December 31, 2018.

Please see Note 1, “Business and Significant Accounting Policies - Property & Equipment” and Note 3, “Leases” for further discussion related to the disposals of long-lived assets.

Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

We are incorporated under the laws of Bermuda and, under current Bermuda law, are not obligated to pay any taxes in Bermuda based upon income or capital gains. We have received an undertaking from the Supervisor of Insurance in Bermuda pursuant to the provisions of the Exempted Undertakings Tax Protection Act, 2011, which exempts us from any Bermuda taxes computed on profits, income or any capital asset, gain or appreciation or any tax in the nature of estate duty or inheritance tax, at least until the year 2035.

We do not consider ourselves to be engaged in a trade or business in the United States or the United Kingdom and, accordingly, do not expect to be subject to direct United States or United Kingdom income taxation.

We have subsidiaries based in the United Kingdom that are subject to the tax laws of that country. Under current law, these subsidiaries are taxed at the applicable corporate tax rates. Eight of the United Kingdom subsidiaries are deemed to be engaged in business in the United States, and therefore, are subject to United States corporate tax in respect of a proportion of their United States underwriting business only. As such, these subsidiaries are now subject to the minimum BEAT computation imposed by the TCJA on this underwriting business. Relief, exclusive of any BEAT, is available against the United Kingdom tax liabilities in respect of overseas taxes paid that arise from the underwriting business. Our United Kingdom subsidiaries file separate United Kingdom income tax returns.

We have subsidiaries based in the United States that are subject to United States tax laws. Under current law, these subsidiaries are taxed at the applicable corporate tax rates. Our United States subsidiaries generally file a consolidated United States federal income tax return.

We also have operations in Belgium, Brazil, France, Ireland, Italy, Malta, Spain, and Switzerland, which also are subject to income taxes imposed by the jurisdiction in which they operate. We have operations in Barbados and the United Arab Emirates, which are not subject to income tax under the laws of those countries.

On December 22, 2017, the TCJA was signed into law making significant changes to the Internal Revenue Code. The Company provided its best estimate of the impact of the TCJA at December 31, 2017 and during 2018 completed its analysis as provided by SAB 118.

The following table presents the components of income tax provision (benefit) included in the amounts reported in our consolidated financial statements:



	For the Years Ended December 31,
(in millions)	2019			2018			2017
Current income tax provision (benefit) related to:
United States	$	36.5		$	13.4		$	(0.3	)
United Kingdom	(1.5		)	3.2			7.6
Other jurisdictions	0.1			0.1			0.2
Total current income tax provision	35.1			16.7			7.5
Deferred income tax provision (benefit) related to:
United States	(19.3		)	(13.8		)	(0.3		)
United Kingdom	(7.2		)	1.1			(17.6		)
Other jurisdictions	—			0.1			—
Total deferred income tax (benefit)	(26.5		)	(12.6		)	(17.9		)
Income tax provision (benefit)	$	8.6		$	4.1		$	(10.4	)

Our expected income tax provision (benefit) computed on pre-tax income (loss) at the weighted average tax rate has been calculated as the sum of the pre-tax income (loss) in each jurisdiction multiplied by that jurisdiction’s applicable statutory tax rate. For the years ended December 31, 2019, 2018 and 2017, pre-tax income (loss) attributable to our operations and the operations’ effective tax rates were as follows:



(in millions)	2019							2018							2017
	Pre-Tax Income (Loss)				Effective Tax Rate			Pre-Tax Income (Loss)				Effective Tax Rate			Pre-Tax Income (Loss)				Effective Tax Rate
Bermuda	$	(34.8	)		—	%		$	26.0			—	%		$	30.2			—	%
United States	85.2				19.7	%		13.9				(5.5	)%		67.5				(0.9	)%
United Kingdom	(46.1		)		17.9	%		25.0				18.8	%		(53.8		)		18.7	%
Belgium	—			(1)	15.8	%		—			(1)	—	%	(2)	0.1				75.0	%
Brazil	5.2				—	%		(0.5		)		—	%		0.8				—	%
United Arab Emirates	0.4				—	%		0.8				—	%		0.2				—	%
Ireland	(0.1		)		—	%		(0.2		)		—	%		(0.2		)		—	%
Italy	(7.4		)		—	%		0.9				—	%		—				—	%
Malta	(2.0		)		—	%		1.7				—	%		0.3				—	%
Luxembourg	—				—	%		—			(1)	—	%		(5.2		)		—	%
Switzerland	(0.2		)		(0.2	)%		0.1				18.4	%		—			(1)	21.1	%
Pre-tax income	$	0.2			—	%	(2)	$	67.7			6.1	%		$	39.9			(26.1	)%

⁽¹⁾ Pre-tax income for the respective year was less than $0.1 million.

⁽²⁾Not Meaningful.

Our effective tax rate may vary significantly from period to period depending on the jurisdiction generating the pre-tax income (loss) and its corresponding statutory tax rate. The geographic distribution of pre-tax income (loss) can fluctuate significantly between periods given the inherent nature of our business. A reconciliation of the difference between the provision for income taxes and the expected tax provision (benefit) at the weighted average tax rate is as follows:



	For the Years Ended December 31,
(in millions)	2019			2018			2017
Income tax provision (benefit) at expected rate	$	9.0		$	8.2		$	12.7
Tax effect of:
Nontaxable investment income	(1.2		)	(1.9		)	(4.7		)
Foreign exchange adjustments	(0.1		)	(0.6		)	2.1
Impairment of goodwill	2.9			—			—
Withholding taxes	0.2			0.4			0.4
Change in valuation allowance	(1.1		)	(1.5		)	(0.9		)
Impact of change in tax rate related to TCJA	—			(1.6		)	(20.2		)
Other	(1.1		)	1.1			0.2
Income tax provision (benefit)	$	8.6		$	4.1		$	(10.4	)

The net deferred tax asset (liability) comprises the tax effects of temporary differences related to the following assets and liabilities:



	December 31,
(in millions)	2019				2018
Deferred tax assets:
Losses and loss adjustment expense reserve discounting	$	22.8			$	19.3
Unearned premiums	25.3				23.2
Net operating loss carryforwards	30.6				31.6
Investment in limited partnership interests	7.1				12.0
Unrealized losses on fixed maturities and other investment securities	—				9.0
Investment	2.4				1.3
Right of use assets	14.5				—
Accrued bonus	2.2				4.5
Stock option expense	1.1				1.7
United Kingdom underwriting results	5.9				—
Other	5.7				6.3
Deferred tax assets, gross	117.6				108.9
Deferred tax liabilities:
Unrealized gains on equity securities	(3.0		)		(13.1		)
Unrealized gains on fixed maturities and other investment securities	(5.3		)		—
Unrealized gains on limited partnership interests	(15.6		)		(17.3		)
Depreciable fixed assets	(22.4		)		(27.0		)
Deferred acquisition costs	(18.6		)		(18.1		)
Lease liability	(14.0		)		—
TCJA reserve transitional liability	(3.2		)		(4.5		)
United Kingdom underwriting results	—				(0.6		)
Other	(0.6		)		(4.6		)
Deferred tax liabilities, gross	(82.7		)		(85.2		)
Deferred tax assets, net before valuation allowance	$	34.9			$	23.7
Valuation allowance	(28.8		)		(29.9		)
Deferred tax asset (liabilities), net	$	6.1			$	(6.2	)
Net deferred tax assets (liabilities) - Other jurisdictions	$	6.1			$	(0.6	)
Net deferred tax liabilities - United States	—			⁽¹⁾	(5.6		)
Deferred tax asset (liabilities), net	$	6.1			$	(6.2	)

⁽¹⁾Net deferred tax liability for the respective year was less than $0.1 million.

Our gross deferred tax assets are supported by taxes paid in previous periods, reversal of taxable temporary differences and recognition of future taxable income. Management regularly evaluates the recoverability of the deferred tax assets and makes any necessary adjustments to them based upon any changes in management’s expectations of future taxable income. Realization of deferred tax assets is dependent upon our generation of future taxable income sufficient to recover tax benefits that cannot be recovered from taxes paid in the carryback period, generally for our U.S. property and casualty insurers two years for net operating losses and for all our U.S. subsidiaries three years for capital losses. If a company determines that any of its deferred tax assets will not result in future tax benefits, a valuation allowance must be established for the portion of these assets that are not expected to be realized. The net change in valuation allowance for deferred tax assets was a decrease of $1.1 million in 2019, relating to the following: Internal Revenue Code Section 382 limited net operating loss carryforwards within the United States, cumulative losses incurred since inception, and valuation allowances acquired through or related to acquisitions. Based upon a review of our available evidence, both positive and negative discussed above, our management concluded that it is more-likely-than-not that the other deferred tax assets will be realized.

For tax return purposes, as of December 31, 2019, we had NOL carryforwards in Brazil, Italy, Malta, and the United States. The amount and timing of realizing the benefits of NOL carryforwards depend on future taxable income and limitations imposed by tax laws. Only a portion of the United States NOL carryforwards has been recognized as mentioned above in the consolidated financial statements and is included in net deferred tax liabilities. The NOL amounts by jurisdiction and year of expiration are as follows:



(in millions)	December 31, 2019		Expiration
Net operating loss carryforwards by jurisdiction:
Brazil	$	4.3	Indefinite
Italy	45.9		Indefinite
Malta	8.2		Indefinite
United States	46.1		2025 - 2037

For any uncertain tax positions not meeting the “more-likely-than-not” recognition threshold, accounting standards require recognition, measurement and disclosure in a company’s financial statements. We had no material unrecognized tax benefits as of December 31, 2019, 2018 and 2017. Our United States subsidiaries are no longer subject to U.S. federal and state income tax examinations by tax authorities for years before 2014. Our United Kingdom subsidiaries are no longer subject to United Kingdom income tax examinations by Her Majesty’s Revenue and Customs for years before 2016.

Pension Benefits and Savings Plans	12 Months Ended
Pension Benefits and Savings Plans	Dec. 31, 2019
Retirement Benefits [Abstract]
Pension Benefits and Savings Plans	Pension Benefits and Savings Plans Argo Group U.S. sponsors a qualified defined benefit plan and non-qualified unfunded supplemental defined benefit plans, all of which were curtailed effective February 2004. As of December 31, 2019 and 2018, the qualified pension plan was underfunded by $3.7 million and $3.5 million, respectively. The non-qualified pension plans were unfunded by $2.0 million at December 31, 2019 and 2018, respectively. Underfunded and unfunded amounts are included in “other liabilities” in our consolidated balance sheets. Based on the current funding status of the pension plan, effects of the curtailment and expected changes in pension plan asset values and pension obligations, we do not believe any significant funding of the pension plan will be required during the year ending December 31, 2020. Net periodic benefit costs were $0.3 million for the year ended December 31, 2019. Net periodic benefit cost were minimal for the year ended December 31, 2018 and $0.2 million for the year ended December 31, 2017. Substantially all of our employees are either eligible or mandated by applicable laws to participate in employee savings plans. Under these plans, a percentage of an employee’s pay may be or is mandated based on applicable laws to be contributed to various savings alternatives. The plans also call for our contributions under several formulae. Charges to income related to our contributions were $8.9 million, $7.9 million and $7.0 million in 2019, 2018 and 2017, respectively.

Commitments and Contingencies	12 Months Ended
Commitments and Contingencies	Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Argo Group’s subsidiaries are parties to legal actions incidental to their business. Management believes that the resolution of these matters will not materially affect our financial condition or results of operations. We have contractual commitments to invest up to $110.0 million related to our limited partnership investments at December 31, 2019. These commitments will be funded as required by the partnership agreements which can be called to be fulfilled at any time, not to exceed twelve years.

Segment Information

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Segment Information

We are primarily engaged in underwriting property and casualty insurance and reinsurance. We have two ongoing reporting segments: U.S. Operations and International Operations. Additionally, we have a Run-off Lines segment for certain products that we no longer underwrite.

We consider many factors, including the nature of each segment’s insurance and reinsurance products, production sources, distribution strategies and the regulatory environment, in determining how to aggregate reporting segments. Transactions between segments are reported in the segment that initiated the transaction.

In evaluating the operating performance of our segments, we focus on core underwriting and investing results before the consideration of realized gains or losses from the sales of investments. Realized investment gains are reported as a component of the Corporate and Other segment, as decisions regarding the acquisition and disposal of securities reside with the corporate investment function and are not under the control of the individual business segments. Identifiable assets by segment are those assets used in the operation of each segment.

Revenue and income before income taxes for each segment were as follows:



	For the Years Ended December 31,
(in millions)	2019		2018			2017
Revenue:
Earned premiums
U.S. Operations	$	1,119.7	$	1,078.9		$	936.6
International Operations	609.6		652.5			635.8
Run-off Lines	0.2		0.3			(0.1		)
Total earned premiums	1,729.5		1,731.7			1,572.3
Net investment income
U.S. Operations	100.0		82.9			87.2
International Operations	44.2		32.9			32.7
Run-off Lines	5.7		8.1			9.3
Corporate and Other	1.2		9.2			10.8
Total net investment income	151.1		133.1			140.0
Fee and other income	9.1		9.0			22.5
Net realized investment gains (losses)	80.0		(72.0		)	39.3
Total revenue	$	1,969.7	$	1,801.8		$	1,774.1



	For the Years Ended December 31,
(in millions)	2019			2018			2017
(Loss) Income before income taxes
U.S. Operations	$	139.1		$	161.4		$	169.4
International Operations	(137.0		)	32.9			(86.7		)
Run-off Lines	(9.8		)	(9.3		)	(17.9		)
Total segment (loss) income before taxes	(7.7		)	185.0			64.8
Corporate and Other	(44.1		)	(45.4		)	(57.9		)
Net realized investment and other gain (losses)	80.0			(72.0		)	39.3
Foreign currency exchange gains	9.6			0.1			(6.3		)
Other corporate expenses	(37.6		)	—			—
Total income before income taxes	$	0.2		$	67.7		$	39.9

The table below presents earned premiums by geographic location. For this disclosure, we determine geographic location by the country of domicile of our subsidiaries that underwrite the business and not by the location of insureds or reinsureds from whom the business was generated.



	For the Years Ended December 31,
(in millions)	2019		2018		2017
United States	$	1,115.6	$	1,073.1	$	930.8
United Kingdom	391.5		455.8		489.3
Bermuda	80.7		85.4		92.1
Malta	85.0		61.0		11.1
All other jurisdictions	56.7		56.4		49.0
Total earned premiums	$	1,729.5	$	1,731.7	$	1,572.3

The following table represents identifiable assets:



	December 31,
(in millions)	2019		2018
U.S. Operations	$	5,009.0	$	4,707.8
International Operations	5,002.4		3,984.7
Run-off Lines	356.9		444.8
Corporate and Other	146.2		420.9
Total	$	10,514.5	$	9,558.2

Included in total assets at December 31, 2019 and 2018 are $916.3 million and $880.4 million, respectively, in assets associated with trade capital providers.

The following table represents goodwill and intangible assets, net of accumulated amortization, as of December 31, 2019:



	Goodwill				Intangible Assets, Net of Accumulated Amortization
(in millions)	2019		2018		2019		2018
U.S. Operations	$	123.5	$	123.5	$	—	$	0.5
International Operations	37.9		53.5		91.8		93.0
Total	$	161.4	$	177.0	$	91.8	$	93.5

Statutory Accounting Principles

12 Months Ended

Dec. 31, 2019

Statutory Accounting Principles [Abstract]

Statutory Accounting Principles

Financial Information

The statutory capital and surplus for our principal operating subsidiaries was as follows:



Statutory capital and surplus ⁽¹⁾	December 31,
(in millions)	2019		2018
Bermuda	$	1,460.8	$	1,450.0
United Kingdom ⁽²⁾	443.1		357.3
United States	1,051.4		1,003.8

⁽¹⁾ Such amounts include ownership interests in affiliate insurance and reinsurance subsidiaries.

⁽²⁾Capital on deposit with Lloyd’s in U.S. dollars

The statutory net income (loss) for our principal operating subsidiaries was as follows:



Statutory net income (loss) ⁽¹⁾	For the Years Ended December 31,
(in millions)	2019			2018			2017
Bermuda	$	7.1		$	47.4		$	55.1
United Kingdom ⁽²⁾	(15.1		)	(9.5		)	(95.5		)
United States	196.1			110.8			57.0

⁽¹⁾ Such amounts include ownership interests in affiliate insurance and reinsurance subsidiaries.

⁽²⁾ In U.S. dollars

Dividends

As an insurance and reinsurance holding company, we are largely dependent on dividends and other permitted payments from our insurance and reinsurance subsidiaries to pay cash dividends to our shareholders, for debt service and for our operating expenses. The ability of our insurance and reinsurance subsidiaries to pay dividends to us is subject to certain restrictions imposed by the jurisdictions of domicile that regulate our insurance and reinsurance subsidiaries and each jurisdiction has calculations for the amount of dividends that an insurance and reinsurance company can pay without the approval of the insurance regulator.

The payment of dividends to our shareholders is governed by the Bermuda Companies Act of 1981, as amended, which permits the payment of dividends so long as (i) we are not, or would not be after the payment, unable to pay our liabilities as they become due and (ii) the realizable value of our assets is in excess of our liabilities after taking such payment into account. In light of these restrictions, we have no material restrictions on dividend payments that may be made to our shareholders at December 31, 2019.

Argo Re is the direct subsidiary of Argo Group, and therefore, has direct dividend paying capabilities to the parent.

As of December 31, 2019, Argo Re’s solvency and liquidity margins and statutory capital and surplus were in excess of the minimum levels required by the Insurance Act. As of December 31, 2019 and 2018, the minimum statutory capital and surplus required to be maintained by Argo Re was $242.9 million and $320.4 million, respectively.

Argo Re is generally prohibited from declaring or paying, in any financial year, dividends of more than 25% of its total statutory capital and surplus (as shown on its previous financial year’s statutory balance sheet) unless it files (at least seven days before payment of such dividends) with the Bermuda Monetary Authority (“BMA”) an affidavit signed by at least two directors (one of whom must be a Bermuda resident director if any of the insurer’s directors are resident in Bermuda) and the principal representative stating that it will continue to meet its solvency margin and minimum liquidity ratio. Argo Re may not reduce its total statutory capital by 15% or more, as set out in its previous year’s financial statements, unless it has received the prior approval of the BMA. Based on these regulatory restrictions, the maximum amount available for payment of dividends to Argo Group by Argo Re during 2019 without prior regulatory approval is $365.2 million.

In 2019 and 2018, Argo Re paid a cash dividend of $52.1 million and $36.5 million, respectively, to Argo Group. The proceeds of the dividends were used to repay intercompany balances related primarily to the funding of dividend and interest payments and other corporate expenses. In 2017, Argo Re did not pay a dividend to Argo Group.

Our U.S. insurance subsidiaries file financial statements prepared in accordance with statutory accounting principles prescribed or permitted by insurance regulatory authorities of the state in which they are underwriting business. The differences between statutory-based financial statements and financial statements prepared in accordance with GAAP vary between jurisdictions. The principal differences are that for statutory-based financial statements, deferred policy acquisition costs are not recognized, a portion of the deferred federal income tax asset is non-admitted, bonds are generally carried at amortized cost, certain assets are non-admitted and charged directly to surplus, a collectability allowance related to reinsurance recoverables is charged directly to surplus and outstanding losses and unearned premium are presented net of reinsurance.

As an intermediate insurance holding company, Argo Group U.S. is largely dependent on dividends and other permitted payments from its insurance subsidiaries to service its debt, fund operating expenses and pay dividends to Argo Ireland. Various state insurance laws restrict the amount that may be transferred to Argo Group U.S. from its subsidiaries in the form of dividends without prior approval of regulatory authorities. In addition, that portion of the insurance subsidiaries’ net equity that results from the difference between statutory insurance principles and GAAP would not be available for dividends.

In December 2019, Argo Group U.S. received an ordinary dividend in the amount of $30.0 million in cash from Rockwood. In December 2019, Argo Group U.S. received an ordinary dividend in the amount of $50.0 million in cash from Argonaut Insurance Company. In December 2018, Argo Group U.S. received an ordinary dividend in the amount of $20.0 million in cash from Rockwood. Argo Group U.S. did not receive dividends from its subsidiaries in 2017.

Argonaut Insurance Company is a direct subsidiary of Argo Group U.S. and is regulated by the Illinois Division of Insurance. During 2020, Argonaut Insurance Company may be permitted to pay dividends of up to $110.2 million without approval from the Illinois Division of Insurance. Rockwood, a direct subsidiary of Argo Group U.S., is regulated by the Pennsylvania Department of Insurance. Rockwood may be permitted to pay dividends of up to $13.0 million without approval from the Pennsylvania Department of Insurance during 2020. Each department of insurance may require prior approval for the payment of all dividends, based on business and regulatory conditions of the insurance companies.

Argo Underwriting Agency Ltd. (“AUA”) is our wholly-owned subsidiary through which we conduct the operations of Syndicates 1200 and 1910. Dividend payments from AUA to the immediate parent are not restricted by regulatory authority. Dividend payments will be subject to the earnings, operations, financial condition, capital and general business requirements of AUA.

During 2018 we realigned out internal ownership structure so that Ariel Corporate Member Ltd. (“ACML”) became a direct subsidiary of AUA. Prior to 2018, ACML had been a subsidiary of Maybrooke Holdings, S.A.

Certain assets of our subsidiaries are pledged to regulatory agencies, serve as collateral for letters of credit or are assigned as the assets of the trade capital providers of our Lloyd’s syndicate, and therefore, are not available funds that may be paid up as dividends to Argo Group. See Note 2, “Investments” and Note 18, “Segment Information” for further discussion.

Insurance Assessments	12 Months Ended
Insurance Assessments	Dec. 31, 2019
Insurance [Abstract]
Insurance Assessments	Insurance Assessments We are required to participate in statutorily created insolvency guarantee, weather-related loss protection associations, and second-injury funds in all states in the U.S. where we are authorized to transact business. These associations were formed for the purpose of paying the claims of insolvent companies. We are assessed a pro-rata share of such claims based upon our premium writings, subject to a maximum annual assessment per line of insurance. Certain of these assessments can be recovered through premium tax offsets or policy surcharges. We do not believe that assessments on current insolvencies will have a material impact on our financial condition or results of operations. We have accrued assessments of $6.9 million and $6.4 million at December 31, 2019 and 2018, respectively.

Transactions with Related Parties	12 Months Ended
Transactions with Related Parties	Dec. 31, 2019
Related Party Transactions [Abstract]
Transactions with Related Parties	Transactions with Related Parties In 2013, our Surety unit received a submission through its established broker network to issue approximately $13 million of surety bonds on behalf of Kinetica Partners, LLC (“Kinetica”) in connection with a Gulf of Mexico pipeline project. Mr. Gary Woods, Chairman of our Board of Directors, is also the Chairman of the Board of Directors of Kinetica, and beneficially owns 10% of Kinetica through a family trust. The submission was underwritten, priced and bound in the ordinary course of business by the Surety unit. The terms and conditions of the surety bonds that were issued and the premium charged to Kinetica for issuance of the bonds, were consistent with those routinely applied and charged for similarly situated risks bound for unrelated third-parties. As of December 31, 2019, the surety bonds were still outstanding. Per the Surety unit’s standard requirements in connection with the issuance of surety bonds, Kinetica and Mr. Woods, in his personal capacity, among others, executed our Surety unit’s standard form of indemnity agreement holding our Surety unit harmless against any and all losses and expenses incurred resulting from the issuance of the surety bonds.

Unaudited Quarterly Financial Data

12 Months Ended

Dec. 31, 2019

Quarterly Financial Information Disclosure [Abstract]

Unaudited Quarterly Financial Data

The following tables represent unaudited quarterly financial data for the years ended December 31, 2019 and 2018. In the opinion of management, all adjustments necessary to present fairly the results of operations for such periods have been made.



(in millions, except per share amounts)	1st Quarter		2nd Quarter			3rd Quarter			4th Quarter			Year
2019
Earned premiums	$	420.5	$	431.7		$	451.5		$	425.8		$	1,729.5
Losses and loss adjustment expenses	237.9		284.8			338.8			359.2			1,220.7
Underwriting, acquisition and insurance expenses ⁽²⁾	160.2		161.4			164.0			180.2			665.8
Underwriting income (loss)	22.4		(14.5		)	(51.3		)	(113.6		)	(157.0		)
Net income (loss) before income taxes	100.1		29.6			(26.2		)	(103.3		)	0.2
Net income (loss)	91.2		28.8			(25.1		)	(103.3		)	(8.4		)
Net income (loss) per common share:
Basic ⁽¹⁾	$	2.68	$	0.84		$	(0.73	)	$	(3.01	)	$	(0.25	)
Diluted ⁽¹⁾	$	2.63	$	0.83		$	(0.73	)	$	(3.01	)	$	(0.25	)
Dividends per common share	$	0.31	$	0.31		$	0.31		$	0.31		$	1.24

⁽¹⁾ Basic and diluted net income per common share are computed independently for each quarter and full year based on the respective average number of common shares outstanding; therefore, the sum of the quarterly net income per common share data may not equal the net income per common share for the year.

⁽²⁾Other corporate expenses of $0.5 million, $7.5 million, and $3.7 million in the first, second and third quarters of 2019, respectively, have been reclassified to conform to the presentation of “Other corporate expenses” as a separate line item on our Consolidated Statements of (Loss) Income.



(in millions, except per share amounts)	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter			Year
2018
Earned premiums	$	414.7	$	417.7	$	446.9	$	452.4		$	1,731.7
Losses and loss adjustment expenses	237.2		245.5		277.5		280.6			1,040.8
Underwriting, acquisition and insurance expenses	160.2		156.8		168.0		169.7			654.7
Underwriting income	17.3		15.4		1.4		2.1			36.2
Net income (loss) before income taxes	25.0		57.1		45.3		(59.7		)	67.7
Net income (loss)	24.8		41.8		40.6		(43.6		)	63.6
Net income (loss) per common share ⁽²⁾:
Basic ⁽¹⁾	$	0.73	$	1.23	$	1.20	$	(1.29	)	$	1.87
Diluted ⁽¹⁾	$	0.71	$	1.20	$	1.17	$	(1.29	)	$	1.83
Dividends per common share ⁽²⁾	$	0.27	$	0.27	$	0.27	$	0.27		$	1.08

⁽¹⁾ Basic and diluted net income per common share are computed independently for each quarter and full year based on the respective average number of common shares outstanding; therefore, the sum of the quarterly net income per common share data may not equal the net income per common share for the year.

⁽²⁾On February 20, 2018, our Board declared at 15% stock dividend, payable on March 21, 2018, to shareholders of record at the close of business on March 7, 2018. The net income (loss) per common share and dividends declared per share have been adjusted to reflect the effect of the stock dividend.

Senior Unsecured Fixed Rate Notes

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Senior Unsecured Fixed Rate Notes

In September 2012, Argo Group (the “Parent Guarantor”), through its subsidiary Argo Group U.S. (the “Subsidiary Issuer”), issued $143,750,000 aggregate principal amount of the Subsidiary Issuer’s 6.5% Senior Notes due September 15, 2042 (the “Notes”). The Notes are unsecured and unsubordinated obligations of the Subsidiary Issuer and rank equally in right of payment with all of the Subsidiary Issuer’s other unsecured and unsubordinated debt. The Notes are guaranteed on a full and unconditional senior unsecured basis by the Parent Guarantor. The Notes may be redeemed, for cash, in whole or in part, on or after September 15, 2017, at the Subsidiary Issuer’s option, at any time and from time to time, prior to maturity at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued but unpaid interest on the principal amount being redeemed to, but not including, the redemption date.

In accordance with ASU 2015-3, “Simplifying the Presentation of Debt Issuance Costs” (Topic 835), we present the unamortized debt issuance costs in the balance sheet as a direct deduction from the carrying value of the debt liability. At December 31, 2019 and 2018, the Notes consisted of the following:



(in millions)	December 31, 2019			December 31, 2018
Senior unsecured fixed rate notes
Principal	$	143.8		$	143.8
Less: unamortized debt issuance costs	(3.8		)	(4.0		)
Senior unsecured fixed rate notes, less unamortized debt issuance costs	$	140.0		$	139.8

In accordance with Article 10 of SEC Regulation S-X, we have elected to present condensed consolidating financial information in lieu of separate financial statements for the Subsidiary Issuer. The following tables present condensed consolidating financial information at December 31, 2019 and 2018 and for the three years ended December 31, 2019, 2018 and 2017 of the Parent Guarantor and the Subsidiary Issuer. The Subsidiary Issuer is an indirect wholly-owned subsidiary of the Parent Guarantor. Investments in subsidiaries are accounted for by the Parent Guarantor under the equity method for purposes of the supplemental consolidating presentation. Earnings of subsidiaries are reflected in the Parent Guarantor’s investment accounts and earnings.

The Parent Guarantor fully and unconditionally guarantees certain of the debt of the Subsidiary Issuer. Condensed consolidating financial information of the Subsidiary Issuer is presented on a consolidated basis and consists principally of the net assets, results of operations and cash flows of operating insurance company subsidiaries.

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2019

(in millions)



	Argo Group International Holdings, Ltd (Parent Guarantor)		Argo Group U.S., Inc. and Subsidiaries (Subsidiary Issuer)			Other Subsidiaries and Eliminations ⁽¹⁾			Consolidating Adjustments ⁽²⁾			Total
Assets
Investments	$	0.6	$	3,405.6		$	1,693.2		$	—		$	5,099.4
Cash	1.9		31.6			104.3			—			137.8
Accrued investment income	—		18.2			7.5			—			25.7
Premiums receivable	—		231.3			456.9			—			688.2
Reinsurance recoverables	—		1,689.4			1,415.2			—			3,104.6
Goodwill and other intangible assets, net	40.6		123.4			89.2			—			253.2
Deferred tax assets, net	—		0.4			5.7			—			6.1
Deferred acquisition costs, net	—		88.4			71.8			—			160.2
Ceded unearned premiums	—		306.4			238.6			—			545.0
Operating lease right-of-use assets	7.1		59.6			25.1			—			91.8
Other assets	7.8		165.8			213.5			—			387.1
Assets held for sale	—		15.4			—			—			15.4
Intercompany note receivable	—		56.7			(56.7		)	—			—
Investments in subsidiaries	1,916.7		—			—			(1,916.7		)	—
Total assets	$	1,974.7	$	6,192.2		$	4,264.3		$	(1,916.7	)	$	10,514.5
Liabilities and Shareholders' Equity
Reserves for losses and loss adjustment expenses	$	—	$	3,037.5		$	2,120.1		$	—		$	5,157.6
Unearned premiums	—		899.8			511.1			—			1,410.9
Funds held and ceded reinsurance payable, net	—		645.9			607.8			—			1,253.7
Debt	153.4		284.3			141.0			—			578.7
Current income taxes payable, net	—		8.2			(7.4		)	—			0.8
Accrued underwriting expenses and other liabilities	13.6		87.6			124.8			—			226.0
Operating lease liabilities	7.3		68.9			29.5			—			105.7
Due to (from) affiliates	19.3		(13.4		)	13.4			(19.3		)	—
Total liabilities	193.6		5,018.8			3,540.3			(19.3		)	8,733.4
Total shareholders' equity	1,781.1		1,173.4			724.0			(1,897.4		)	1,781.1
Total liabilities and shareholders' equity	$	1,974.7	$	6,192.2		$	4,264.3		$	(1,916.7	)	$	10,514.5


⁽¹⁾	Includes all other subsidiaries of Argo Group and all intercompany eliminations.


⁽²⁾	Includes all Argo Group parent company eliminations.

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2018

(in millions)



	Argo Group International Holdings, Ltd (Parent Guarantor)		Argo Group U.S., Inc. and Subsidiaries (Subsidiary Issuer)		Other Subsidiaries and Eliminations ⁽¹⁾			Consolidating Adjustments ⁽²⁾			Total
Assets
Investments	$	3.8	$	3,175.9	$	1,607.3		$	—		$	4,787.0
Cash	1.7		31.7		105.8			—			139.2
Accrued investment income	—		20.3		6.9			—			27.2
Premiums receivable	—		229.5		420.4			—			649.9
Reinsurance recoverables	—		1,635.2		1,053.1			—			2,688.3
Goodwill and other intangible assets, net	41.9		123.8		104.8			—			270.5
Current income taxes receivable, net	—		9.1		(0.9		)	—			8.2
Deferred acquisition costs, net	—		86.2		81.1			—			167.3
Ceded unearned premiums	—		250.4		207.3			—			457.7
Other assets	15.7		165.3		181.9			—			362.9
Intercompany note receivable	—		53.7		(53.7		)	—			—
Investments in subsidiaries	1,852.7		—		—			(1,852.7		)	—
Total assets	$	1,915.8	$	5,781.1	$	3,714.0		$	(1,852.7	)	$	9,558.2
Liabilities and Shareholders' Equity
Reserves for losses and loss adjustment expenses	$	—	$	2,771.4	$	1,883.2		$	—		$	4,654.6
Unearned premiums	—		797.4		503.5			—			1,300.9
Funds held and ceded reinsurance payable, net	—		739.3		268.4			—			1,007.7
Debt	153.4		284.7		142.1			—			580.2
Deferred tax liabilities, net	—		5.6		0.6			—			6.2
Accrued underwriting expenses and other liabilities	7.2		112.4		142.3			—			261.9
Due to (from) affiliates	8.5		2.0		(2.0		)	(8.5		)	—
Intercompany note payable	—		19.1		(19.1		)	—			—
Total liabilities	169.1		4,731.9		2,919.0			(8.5		)	7,811.5
Total shareholders' equity	1,746.7		1,049.2		795.0			(1,844.2		)	1,746.7
Total liabilities and shareholders' equity	$	1,915.8	$	5,781.1	$	3,714.0		$	(1,852.7	)	$	9,558.2


⁽¹⁾	Includes all other subsidiaries of Argo Group and all intercompany eliminations.


⁽²⁾	Includes all Argo Group parent company eliminations.

CONDENSED CONSOLIDATING STATEMENT OF INCOME (LOSS)

FOR THE YEAR ENDED DECEMBER 31, 2019

(in millions)



	Argo Group International Holdings, Ltd (Parent Guarantor)			Argo Group U.S., Inc. and Subsidiaries (Subsidiary Issuer)		Other Subsidiaries and Eliminations ⁽¹⁾			Consolidating Adjustments ⁽²⁾			Total
Premiums and other revenue:
Earned premiums	$	—		$	1,043.9	$	685.6		$	—		$	1,729.5
Net investment income	49.2			103.3		50.7			(52.1		)	151.1
Fee and other income	—			3.2		5.9			—			9.1
Net realized investment (losses) gains	(0.1		)	80.9		(0.8		)	—			80.0
Total revenue	49.1			1,231.3		741.4			(52.1		)	1,969.7
Expenses:
Losses and loss adjustment expenses	—			696.8		523.9			—			1,220.7
Underwriting, acquisition and insurance expenses	1.3			415.2		249.3			—			665.8
Other corporate expenses	26.8			10.8		—			—			37.6
Interest expense	6.6			18.4		8.6			—			33.6
Fee and other expense	—			4.2		1.6			—			5.8
Foreign currency exchange losses (gains)	—			0.7		(10.3		)	—			(9.6		)
Impairment of goodwill	—			—		15.6			—			15.6
Total expenses	34.7			1,146.1		788.7			—			1,969.5
Income (loss) before income taxes	14.4			85.2		(47.3		)	(52.1		)	0.2
Provision (benefit) for income taxes	—			16.8		(8.2		)	—			8.6
Net income (loss) before equity in earnings of subsidiaries	14.4			68.4		(39.1		)	(52.1		)	(8.4		)
Equity in undistributed earnings of subsidiaries	(22.8		)	—		—			22.8			—
Net (loss) income	$	(8.4	)	$	68.4	$	(39.1	)	$	(29.3	)	$	(8.4	)


⁽¹⁾	Includes all other subsidiaries of Argo Group and all intercompany eliminations.


⁽²⁾	Includes all Argo Group parent company eliminations.

CONDENSED CONSOLIDATING STATEMENT OF INCOME

FOR THE YEAR ENDED DECEMBER 31, 2018

(in millions)



	Argo Group International Holdings, Ltd (Parent Guarantor)		Argo Group U.S., Inc. and Subsidiaries (Subsidiary Issuer)			Other Subsidiaries and Eliminations ⁽¹⁾			Consolidating Adjustments ⁽²⁾			Total
Premiums and other revenue:
Earned premiums	$	—	$	861.9		$	869.8		$	—		$	1,731.7
Net investment income	33.8		79.4			56.4			(36.5		)	133.1
Fee and other income	—		4.4			4.6			—			9.0
Net realized investment gains (losses)	2.5		(51.3		)	(20.5		)	(2.7		)	(72.0		)
Total revenue	36.3		894.4			910.3			(39.2		)	1,801.8
Expenses:
Losses and loss adjustment expenses	—		523.7			517.1			—			1,040.8
Underwriting, acquisition and insurance expenses	11.3		333.6			309.8			—			654.7
Interest expense	6.2		18.2			7.2			—			31.6
Fee and other expense	—		5.3			1.8			—			7.1
Foreign currency exchange losses (gains)	—		0.2			(0.3		)	—			(0.1		)
Total expenses	17.5		881.0			835.6			—			1,734.1
Income before income taxes	18.8		13.4			74.7			(39.2		)	67.7
Provision for income taxes	—		(0.8		)	4.9			—			4.1
Net income before equity in earnings of subsidiaries	18.8		14.2			69.8			(39.2		)	63.6
Equity in undistributed earnings of subsidiaries	44.8		—			—			(44.8		)	—
Net income	$	63.6	$	14.2		$	69.8		$	(84.0	)	$	63.6


⁽¹⁾	Includes all other subsidiaries of Argo Group and all intercompany eliminations.


⁽²⁾	Includes all Argo Group parent company eliminations.

CONDENSED CONSOLIDATING STATEMENT OF INCOME

FOR THE YEAR ENDED DECEMBER 31, 2017

(in millions)



	Argo Group International Holdings, Ltd (Parent Guarantor)			Argo Group U.S., Inc. and Subsidiaries (Subsidiary Issuer)			Other Subsidiaries and Eliminations ⁽¹⁾			Consolidating Adjustments ⁽²⁾			Total
Premiums and other revenue:
Earned premiums	$	—		$	555.9		$	1,016.4		$	—		$	1,572.3
Net investment (expense) income	(4.5		)	87.5			57.0			—			140.0
Fee and other income	—			18.8			3.7			—			22.5
Net realized investment gains (losses)	0.4			40.8			(1.9		)	—			39.3
Total revenue	(4.1		)	703.0			1,075.2			—			1,774.1
Expenses:
Losses and loss adjustment expenses	—			337.9			712.3			—			1,050.2
Underwriting, acquisition and insurance expenses	14.3			266.6			354.5			—			635.4
Interest expense	4.3			17.2			6.2			—			27.7
Fee and other expense	—			12.4			2.2			—			14.6
Foreign currency exchange losses	0.1			0.1			6.1			—			6.3
Total expenses	18.7			634.2			1,081.3			—			1,734.2
(Loss) income before income taxes	(22.8		)	68.8			(6.1		)	—			39.9
Benefit for income taxes	—			(0.6		)	(9.8		)	—			(10.4		)
Net (loss) income before equity in earnings of subsidiaries	(22.8		)	69.4			3.7			—			50.3
Equity in undistributed earnings of subsidiaries	73.1			—			—			(73.1		)	—
Net income	$	50.3		$	69.4		$	3.7		$	(73.1	)	$	50.3


⁽¹⁾	Includes all other subsidiaries of Argo Group and all intercompany eliminations.


⁽²⁾	Includes all Argo Group parent company eliminations.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR YEAR ENDED DECEMBER 31, 2019

(in millions)



	Argo Group International Holdings, Ltd (Parent Guarantor)			Argo Group U.S., Inc. and Subsidiaries (Subsidiary Issuer)			Other Subsidiaries and Eliminations ⁽¹⁾			Consolidating Adjustments ⁽²⁾		Total
Net cash flows from operating activities	$	38.4		$	124.3		$	20.6		$	—	$	183.3
Cash flows from investing activities:
Proceeds from sales of investments	—			1,297.3			554.8			—		1,852.1
Maturities and mandatory calls of fixed maturity investments	—			292.8			229.4			—		522.2
Purchases of investments	—			(1,303.8		)	(680.2		)	—		(1,984.0		)
Change in short-term investments and foreign regulatory deposits	3.2			(351.4		)	(142.2		)	—		(490.4		)
Settlements of foreign currency exchange forward contracts	(0.2		)	1.8			(1.3		)	—		0.3
Purchases of fixed assets and other, net	—			(41.4		)	(1.6		)	—		(43.0		)
Cash provided by (used in) investing activities	3.0			(104.7		)	(41.1		)	—		(142.8		)
Cash flows from financing activities:
Payment on the intercompany note	—			(19.1		)	19.1			—		—
Payment on note payable	—			(0.6		)	—			—		(0.6		)
Activity under stock incentive plans	1.9			—			—			—		1.9
Repurchase of Company's common shares	—			—			—			—		—
Payment of cash dividend to common shareholders	(43.1		)	—			—			—		(43.1		)
Cash (used in) provided by financing activities	(41.2		)	(19.7		)	19.1			—		(41.8		)
Effect of exchange rate changes on cash	—			—			(0.1		)	—		(0.1		)
Change in cash	0.2			(0.1		)	(1.5		)	—		(1.4		)
Cash, beginning of year	1.7			31.7			105.8			—		139.2
Cash, end of period	$	1.9		$	31.6		$	104.3		$	—	$	137.8


⁽¹⁾	Includes all other subsidiaries of Argo Group and all intercompany eliminations.


⁽²⁾	Includes all Argo Group parent company eliminations.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR YEAR ENDED DECEMBER 31, 2018

(in millions)



	Argo Group International Holdings, Ltd (Parent Guarantor)			Argo Group U.S., Inc. and Subsidiaries (Subsidiary Issuer)			Other Subsidiaries and Eliminations ⁽¹⁾			Consolidating Adjustments ⁽²⁾		Total
Net cash flows from operating activities	$	72.4		$	182.4		$	46.5		$	—	$	301.3
Cash flows from investing activities:
Proceeds from sales of investments	—			1,067.7			532.1			—		1,599.8
Maturities and mandatory calls of fixed maturity investments	—			344.9			73.7			—		418.6
Purchases of investments	—			(1,508.3		)	(640.8		)	—		(2,149.1		)
Change in short-term investments and foreign regulatory deposits	(3.4		)	(105.0		)	(10.8		)	—		(119.2		)
Settlements of foreign currency exchange forward contracts	(0.5		)	2.2			(3.2		)	—		(1.5		)
Cash acquired with acquisition of Ariscom	—			—			15.6			—		15.6
Purchases of fixed assets and other, net	(0.1		)	(19.0		)	(13.4		)	—		(32.5		)
Cash (used in) provided by investing activities	(4.0		)	(217.5		)	(46.8		)	—		(268.3		)
Cash flows from financing activities:
Borrowing under the intercompany note	—			19.0			(19.0		)	—		—
Activity under stock incentive plans	1.6			—			—			—		1.6
Repurchase of Company's common shares	(31.7		)	—			—			—		(31.7		)
Payment of cash dividend to common shareholders	(37.5		)	—			—			—		(37.5		)
Cash (used in) provided by financing activities	(67.6		)	19.0			(19.0		)	—		(67.6		)
Effect of exchange rate changes on cash	—			—			(2.8		)	—		(2.8		)
Change in cash	0.8			(16.1		)	(22.1		)	—		(37.4		)
Cash, beginning of year	0.9			47.8			127.9			—		176.6
Cash, end of period	$	1.7		31.7			105.8			—		139.2


⁽¹⁾	Includes all other subsidiaries of Argo Group and all intercompany eliminations.


⁽²⁾	Includes all Argo Group parent company eliminations.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR YEAR ENDED DECEMBER 31, 2017

(in millions)



	Argo Group International Holdings, Ltd (Parent Guarantor)			Argo Group U.S., Inc. and Subsidiaries (Subsidiary Issuer)			Other Subsidiaries and Eliminations ⁽¹⁾			Consolidating Adjustments ⁽²⁾			Total
Net cash flows from operating activities	$	20.8		$	149.5		$	(5.3	)	$	—		$	165.0
Cash flows from investing activities:
Proceeds from sales of investments	—			809.5			920.4			—			1,729.9
Maturities and mandatory calls of fixed maturity investments	—			483.1			195.2			—			678.3
Purchases of investments	—			(1,495.6		)	(1,165.2		)	—			(2,660.8		)
Change in short-term investments and foreign regulatory deposits	1.5			67.1			230.9			—			299.5
Settlements of foreign currency exchange forward contracts	0.9			(8.2		)	4.4			—			(2.9		)
Acquisition of subsidiaries, net of cash	(235.3		)	—			130.1			—			(105.2		)
Issuance of intercompany note, net	—			—			(120.0		)	120.0			—
Purchases of fixed assets and other, net	(0.1		)	(26.2		)	(33.8		)	—			(60.1		)
Cash (used in) provided by investing activities	(233.0		)	(170.3		)	162.0			120.0			(121.3		)
Cash flows from financing activities:
Additional long-term borrowings	125.0			—			—			—			125.0
Borrowing under the intercompany note	120.0			60.0			(60.0		)	(120.0		)	—
Activity under stock incentive plans	1.4			—			—			—			1.4
Repurchase of Company's common shares	(0.1		)	(45.1		)	—			—			(45.2		)
Payment of cash dividend to common shareholders	(33.2		)	—			—			—			(33.2		)
Cash provided by (used in) financing activities	213.1			14.9			(60.0		)	(120.0		)	48.0
Effect of exchange rate changes on cash	—			—			(1.1		)	—			(1.1		)
Change in cash	0.9			(5.9		)	95.6			—			90.6
Cash, beginning of year	—			53.7			32.3			—			86.0
Cash, end of year	$	0.9		$	47.8		$	127.9		$	—		$	176.6


⁽¹⁾	Includes all other subsidiaries of Argo Group and all intercompany eliminations.

⁽²⁾

Includes all Argo Group parent company eliminations.

Subsequent Event	12 Months Ended
Subsequent Event	Dec. 31, 2019
Subsequent Events [Abstract]
Subsequent Event	Subsequent Event On February 6, 2020, we announced that we had reached an agreement to sell our Trident Public Risk Solutions (“Trident”) brand and underwriting platform to Paragon Insurance Holdings, LLC (“Paragon”). Trident is one of the business units within our U.S. Operations reporting segment. The transaction is expected to close in the first half of 2020 for a sales price of approximately $43 million in cash. We expect to recognize a pre-tax gain of approximately $37 million during the period the transaction closes. Paragon will continue to write business on Argo paper through a managing general agency agreement for the next four years, as we will retain Trident’s claims operations and provide claims services to Paragon for the public entity business.

Schedule II Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2019

Condensed Financial Information Disclosure [Abstract]

Schedule II Condensed Financial Information of Registrant

SCHEDULE II

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

(in millions)



BALANCE SHEETS	December 31,
	2019		2018
Assets
Short-term investments	$	0.6	$	3.8
Investment in subsidiaries	1,916.7		1,852.7
Cash	1.9		1.7
Goodwill and other intangible assets, net	40.6		41.9
Operating lease right-of-use assets	7.1		—
Other assets	7.8		15.7
Total assets	$	1,974.7	$	1,915.8



Liabilities and Shareholders' Equity
Junior subordinated debentures	$	28.4	$	28.4
Other indebtedness	125.0		125.0
Accrued underwriting expenses and other liabilities	13.6		7.2
Operating lease liabilities	7.3		—
Due to subsidiaries	19.3		8.5
Total liabilities	193.6		169.1
Shareholders' equity	1,781.1		1,746.7
Total liabilities and shareholders' equity	$	1,974.7	$	1,915.8



STATEMENTS OF (LOSS) INCOME	For the Years Ended December 31,
	2019			2018		2017
Revenue:
Net investment income (expense) ⁽¹⁾	$	49.2		$	33.8	$	(4.5	)
Net realized investment (loss) gains	(0.1		)	2.5		0.4
Total revenue	49.1			36.3		(4.1		)
Expenses:
Interest expense	6.6			6.2		4.3
Operating expenses	1.3			11.3		14.3
Other corporate expenses	26.8			—		—
Foreign currency exchange loss	—			—		0.1
Total expenses	34.7			17.5		18.7
Net income before equity in earnings of subsidiaries ⁽²⁾	14.4			18.8		(22.8		)
Equity in undistributed earnings of subsidiaries	(22.8		)	44.8		73.1
Net (loss) income	$	(8.4	)	$	63.6	$	50.3


⁽¹⁾	For the year ended December 31, 2019 and 2018, net investment income includes intercompany dividends of $52.1 million and $36.5 million, respectively.


⁽²⁾	Argo Group is not subject to taxation.

ARGO GROUP INTERNATIONAL HOLDINGS, LTD.

SCHEDULE II

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

(in millions)



STATEMENTS OF CASH FLOWS	For the Years Ended December 31,
	2019			2018			2017
Cash flows from operating activities:
Net (loss) income	$	(8.4	)	$	63.6		$	50.3
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Amortization and depreciation	1.3			1.4			1.3
Share-based payments expense	8.1			7.0			3.3
Net realized investment and other gains	0.1			(2.5		)	(0.4		)
Undistributed earnings of subsidiaries	22.8			(44.8		)	(73.1		)
Change in:
Prepaid assets	2.5			(2.3		)	(0.3		)
Accrued underwriting expenses	7.3			(4.4		)	(2.3		)
Due to subsidiaries	16.8			57.6			48.1
Other, net	(12.1		)	(3.2		)	(6.1		)
Cash provided by operating activities	38.4			72.4			20.8
Cash flows from investing activities:
Change in short-term investments	3.2			(3.4		)	1.5
Settlements of foreign currency exchange forward contracts	(0.2		)	(0.5		)	0.9
Acquisition of subsidiaries, net of cash	—			—			(235.3		)
Purchases of fixed assets and other, net	—			(0.1		)	(0.1		)
Cash provided by (used in) investing activities	3.0			(4.0		)	(233.0		)
Cash flows from financing activities:
Additional borrowings	—			—			125.0
Borrowings under intercompany note payable, net	—			—			120.0
Activity under stock incentive plans	1.9			1.6			1.4
Repurchase of Company's common shares	—			(31.7		)	(0.1		)
Payment of cash dividend to common shareholders	(43.1		)	(37.5		)	(33.2		)
Cash (used in) provided by financing activities	(41.2		)	(67.6		)	213.1
Change in cash	0.2			0.8			0.9
Cash, beginning of year	1.7			0.9			—
Cash, end of year	$	1.9		$	1.7		$	0.9

Schedule III Supplemental Insurance Information

12 Months Ended

Dec. 31, 2019

SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Abstract]

Schedule III Supplemental Insurance Information

SCHEDULE III

SUPPLEMENTAL INSURANCE INFORMATION

FOR THE YEARS ENDED DECEMBER 31, 2019, 2018 AND 2017

(in millions)



Segment	DAC (a)		Reserves for Losses and Loss Adjustment Expenses (b)		UPR (c)		Premium Revenue (d)			Net Investment Income (l)		Loss & LAE (e)		Amortization (Deferral) DAC (f) (2)			Other Operating Expenses (3)		Net Premiums Written (g)
Year Ended December 31, 2019
U.S. Operations	89.7		2,775.1		896.1		1,119.7			100.0		690.4		(2.5		)	366.2		1,166.1
International Operations	70.5		2,129.0		514.7		609.6			44.2		518.3		14.9			265.1		588.1
Run-off Lines	—		253.5		0.1		0.2			5.7		12.0		—			2.4		0.2
Corporate and Other	—		—		—		—			1.2		—		—			44.5		—
Total	$	160.2	$	5,157.6	$	1,410.9	$	1,729.5		$	151.1	$	1,220.7	$	12.4		$	678.2	$	1,754.4
Year Ended December 31, 2018
U.S. Operations	87.2		2,498.9		793.3		1,078.9			82.9		628.2		(6.4		)	361.2		1,125.7
International Operations	80.1		1,890.1		507.6		652.5			32.9		400.3		(3.5		)	249.3		639.5
Run-off Lines	—		265.6		—		0.3			8.1		12.3		—			3.9		0.3
Corporate and Other	—		—		—		—			9.2		—		—			50.2		—
Total	$	167.3	$	4,654.6	$	1,300.9	$	1,731.7		$	133.1	$	1,040.8	$	(9.9	)	$	664.6	$	1,765.5
Year Ended December 31, 2017
U.S. Operations	80.8		2,196.1		695.1		936.6			87.2		528.1		(17.3		)	336.4		1,031.8
International Operations	79.6		1,723.0		512.6		635.8			32.7		504.8		5.4			236.8		621.7
Run-off Lines	—		281.9		—		(0.1		)	9.3		17.3		—			8.3		—
Corporate and Other	—		—		—		—			10.8		—		—			65.8		—
Total	$	160.4	$	4,201.0	$	1,207.7	$	1,572.3		$	140.0	$	1,050.2	$	(11.9	)	$	647.3	$	1,653.5

^(a)Deferred policy acquisition costs.

^(b) Future policy benefits, losses, claims and loss expenses.

^(c) Unearned premiums.

^(d)Premium revenue, net (premiums earned).

^(e)Benefits, claims, losses and settlement expenses.

^(f)Amortization (deferral) of deferred policy acquisition costs.

^(g) Premiums written, net.

⁽¹⁾ Net investment income allocated based upon each segment’s share of investable funds.

⁽²⁾The amortization (deferral) of DAC will not equal the change in the balance sheet. See Note 1, “Business and Significant Accounting Policies” for further discussion.

⁽³⁾Other insurance expenses allocated based on specific identification, where possible, and related activities.

Schedule V Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2019

SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]

Schedule V Valuation and Qualifying Accounts

SCHEDULE V

VALUATION AND QUALIFYING ACCOUNTS

(in millions)



	Balance at Beginning of Year		Charged to Cost and Expense			Capital Loss Carryforward		Net Operating Loss Carryforward		Charged to Other Accounts		Deductions		Balance at End of Year
Year Ended December 31, 2019
Deducted from assets:
Valuation allowance for deferred tax asset	$	29.9	$	(1.1	)	$	—			$	—	$	—	$	28.8
Year Ended December 31, 2018
Deducted from assets:
Valuation allowance for deferred tax asset	$	20.1	$	(1.5	)	$	—	$	11.3	$	—	$	—	$	29.9
Year Ended December 31, 2017
Deducted from assets:
Valuation allowance for deferred tax asset	$	23.5	$	(6.2	)	$	—	$	2.7	$	0.1	$	—	$	20.1

Schedule VI Supplemental Information for Property-Casualty Insurance Companies

12 Months Ended

Dec. 31, 2019

SEC Schedule, 12-18, Supplemental Information, Property-Casualty Insurance Underwriters [Abstract]

Schedule VI Supplemental Information for Property-Casualty Insurance Companies

SCHEDULE VI

SUPPLEMENTAL INFORMATION FOR PROPERTY-CASUALTY INSURANCE COMPANIES

(in millions)



	For the Years Ended December 31,
	2019		2018			2017
Deferred acquisition costs	$	160.2	$	167.3		$	160.4
Reserves for losses and loss adjustment expenses	$	5,157.6	$	4,654.6		$	4,201.0
Unamortized discount in reserves for losses	$	17.9	$	16.9		$	17.6
Unearned premiums	$	1,410.9	$	1,300.9		$	1,207.7
Premiums earned	$	1,729.5	$	1,731.7		$	1,572.3
Net investment income	$	151.1	$	133.1		$	140.0
Losses and loss adjustment expenses incurred:
Current year	$	1,082.6	$	1,058.8		$	1,058.4
Prior years	138.1		(18.0		)	(8.2		)
Losses and loss adjustment expenses incurred	$	1,220.7	$	1,040.8		$	1,050.2
Amortization (deferral) of policy acquisition costs ⁽¹⁾	$	12.4	$	(9.9	)	$	(11.9	)
Paid losses and loss adjustment expenses, net of reinsurance	$	1,030.3	$	938.9		$	889.4
Gross premiums written	$	3,129.2	$	2,955.2		$	2,697.2

⁽¹⁾The amortization (deferral) of policy acquisition costs will not equal the change in the balance sheet. For further discussion, see Note 1, “Business and Significant Accounting Policies.”

Business and Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Business

Argo Group International Holdings, Ltd. (“Argo Group,” “we” or the “Company”) is an international underwriter of specialty insurance and reinsurance products in the property and casualty market. Argo Group U.S., Inc. (“Argo Group U.S.”) is a subsidiary of Argo Financial Holding (Ireland) UC (“Argo Ireland”). Argo Underwriting Agency Limited (“Syndicate 1200”) is a subsidiary of Argo International Holdings, Ltd. Argo Re, Ltd. (“Argo Re”), a Bermuda based company, is the parent of both Argo Ireland and Argo International Holdings, Ltd. Argo Re is directly owned by Argo Group.

We conduct our ongoing business through two primary segments-U.S. Operations and International Operations. In addition to these main business segments, we have a Run-off Lines segment for certain products we no longer underwrite.

U.S. Operations is comprised of the Excess and Surplus Lines businesses focusing on the U.S.-based risks that the standard, admitted insurance market is unwilling or unable to write, and through other specialized admitted and non-admitted business distributed through retail, wholesale, and managing general brokers/agents in the specialty insurance market. Excess and Surplus Lines products are underwritten by Colony Insurance Company (“Colony”). The other U.S. specialized admitted and non-admitted businesses consist of the following operations: Argo Insurance, Rockwood Casualty Insurance Company (“Rockwood”), Argo Pro, Argo Surety, U.S. Specialty Programs, Inland Marine, Argo Cyber and Trident Insurance Services.

International Operations is comprised of the Lloyd’s Syndicate platform (Syndicate 1200 and Syndicate 1910), Argo Insurance Bermuda, Continental Europe and Latin America. Syndicate 1200 and Syndicate 1910 insurance and reinsurance products are underwritten by Argo Underwriting Agency Limited based in London, under the Lloyd’s of London (“Lloyd’s”) global franchise. The additional International Operations business include Argo Insurance Bermuda, ArgoGlobal SE in Malta, ArgoGlobal Assicurazioni S.p.A in Italy, and Argo Seguros in Brazil. These businesses provide a broad range of commercial property, casualty, professional liability and specialty coverages in a number of countries and jurisdictions outside the United States.

Our Run-off Lines segment includes liabilities associated with other liability policies that were issued in the 1960s, 1970s and into the 1980s, as well as the former risk-management business and other business no longer underwritten.

Basis of Presentation and Use of Estimates

The consolidated financial statements of Argo Group and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. The major estimates reflected in our consolidated financial statements include, but are not limited to, reserves for losses and loss adjustment expenses; reinsurance recoverables, including the reinsurance recoverables allowance for doubtful accounts; estimates of written and earned premiums; reinsurance premium receivable; fair value of investments and assessment of potential impairment; valuation of goodwill and other intangibles and our deferred tax asset valuation allowance. Actual results could differ from those estimates.

Specifically, estimates for reserves for losses and loss adjustment expenses are based upon past claim experience modified for current trends as well as prevailing economic, legal and social conditions. Although management believes that amounts included in the accompanying consolidated financial statements are reasonable, such estimates may be more or less than the amounts ultimately paid when the claims are settled. The estimates are continually reviewed and any changes are reflected in current operating results. Further, the nature of loss exposures involves significant variability due to the nature of the long-tailed payments on certain claims. As such, losses and loss adjustment expenses could vary significantly from the recorded amounts.

The consolidated financial statements include the accounts and operations of Argo Group and its subsidiaries. All material intercompany accounts and transactions have been eliminated. Certain amounts in prior years’ financial statements have been reclassified to conform to the current presentation. Amounts related to trade capital providers, who are third-party capital participants that provide underwriting capital to both Syndicate 1200 and Syndicate 1910, are included in the balance sheet. Trade capital providers participate on a quota share basis, assuming 100% of their contractual participation in the underwriting syndicate results and with such results settled on a year of account basis.

We have evaluated our investment in our eleven statutory trusts (collectively, the “Trusts”) and one charitable foundation (the “Foundation”) under the Financial Accounting Standards Board’s (“FASB’s”) provisions for consolidation of variable interest entities under Accounting Standards Codification (“ASC”) Topic 810-10, “Consolidation,” as amended. We determined that the Trusts and the Foundation are variable interest entities due to the fact that the Trusts and the Foundation do not have sufficient equity to finance their activities without additional subordinate financial support from other parties. We do not have any power to direct the activities that impact the Trusts’ or the Foundation’s economic performance. We are not entitled to receive a majority of the residual returns of the Trusts. Additionally, we are not responsible for absorbing the majority of the expected losses of the Trusts; therefore, we are not the primary beneficiary and, accordingly, the Trusts are not included in our consolidated financial statements. The expenses and donations of the charitable foundation in Bermuda are paid by Argo Group and have been included in the consolidated results.

We have used a series of special purpose reinsurance companies to provide reinsurance coverage through a series of transactions, including insurance-linked securities. Under the provisions of ASC Topic 810-10, these reinsurance companies are variable interest entities. However, we do not have a variable interest in these entities, and therefore are not required to consolidate them in our consolidated financial statements.

Stock Dividend

Stock Dividends

On February 20, 2018, our Board of Directors (the “Board”) declared a 15% stock dividend, payable on March 21, 2018, to shareholders of record at the close of business on March 7, 2018. As a result of the stock dividend, 4,397,520 additional shares were issued. Cash was paid in lieu of fractional shares of our common shares. Excluding repurchased shares, all references to common shares and related per share amounts in this document and related disclosures have been adjusted to reflect the stock dividend for all periods presented