Bermuda
|
001-15259
|
98-0214719
|
||
(State or other jurisdiction
of incorporation) |
(Commission
File Number) |
(I.R.S. Employer
Identification No.) |
90 Pitts Bay Road
Pembroke HM 08 Bermuda |
P.O. Box HM 1282
Hamilton HM FX Bermuda |
(Address, Including Zip Code,
of Principal Executive Offices) |
(Mailing Address)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange
on which registered
|
||
Common Stock, par value of $1.00 per share
|
ARGO
|
New York Stock Exchange
|
||
Guarantee of Argo Group U.S., Inc. 6.500% Senior Notes due 2042
|
ARGD
|
New York Stock Exchange
|
||
Depositary Shares, Each Representing a 1/1,000th Interest in a 7.00% Resettable Fixed Rate Preference Share, Series A, Par Value $1.00 Per Share
|
ARGOPrA
|
New York Stock Exchange
|
Item 2.02.
|
Results of Operations and Financial Condition.
|
Item 9.01.
|
Financial Statements and Exhibits.
|
No.
|
|
Exhibit
|
|
||
104
|
|
Cover Page Interactive Data File (embedded within the Inline XBRL document)
|
Dated: August 2, 2021
|
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
|
|
By:
|
/s/ Scott Kirk
|
|
Name: Scott Kirk
|
||
Title: Chief Financial Officer
|
•
|
Underwriting Results: Improved underwriting
margins and reduced catastrophe losses resulted in a combined ratio of 95.4%, Argo's best quarterly combined ratio in more than two years.
|
•
|
Accelerating Growth: Strong growth in both
U.S. and International after adjusting for recent business exits and underwriting actions; market conditions remain favorable for continued growth.
|
•
|
Return on Equity: Annualized return on
average common shareholders' equity was 15.6% in the second quarter; annualized operating return on average common shareholders' equity was 13.1%.
|
$ in millions
|
Three Months Ended
June 30,
|
Q/Q
|
|
Six Months Ended
June 30,
|
Y/Y
|
|
|||||||||||||||
Consolidated
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
|||||||||||||||
Gross written premiums
|
$
|
815.3
|
$
|
799.6
|
2.0
|
%
|
$
|
1,571.8
|
$
|
1,625.5
|
-3.3
|
%
|
|||||||||
Net written premiums
|
493.3
|
456.1
|
8.2
|
%
|
914.6
|
836.6
|
9.3
|
%
|
|||||||||||||
Earned premiums
|
470.3
|
433.4
|
8.5
|
%
|
936.4
|
868.4
|
7.8
|
%
|
|||||||||||||
Underwriting income (loss)
|
$
|
21.4
|
$
|
0.4
|
NM
|
$
|
3.5
|
$
|
(13.6
|
)
|
NM
|
||||||||||
Net investment income
|
52.7
|
1.4
|
NM
|
97.1
|
37.0
|
162.4
|
%
|
||||||||||||||
Net income (loss) attributable
to common shareholders
|
$
|
67.1
|
$
|
(5.4
|
)
|
NM
|
$
|
94.3
|
$
|
(30.1
|
)
|
NM
|
|||||||||
Operating income (loss)
|
$
|
56.1
|
$
|
(3.6
|
)
|
NM
|
$
|
71.6
|
$
|
8.9
|
704.5
|
%
|
|||||||||
Loss ratio
|
57.7
|
%
|
63.0
|
%
|
-5.3 pts
|
61.9
|
%
|
63.8
|
%
|
-1.9 pts
|
|||||||||||
Acquisition expense ratio
|
17.4
|
%
|
16.1
|
%
|
1.3 pts
|
17.2
|
%
|
16.2
|
%
|
1 pts
|
|||||||||||
General and administrative expense ratio
|
20.3
|
%
|
20.8
|
%
|
-0.5 pts
|
20.6
|
%
|
21.6
|
%
|
-1 pts
|
|||||||||||
Expense ratio
|
37.7
|
%
|
36.9
|
%
|
0.8 pts
|
37.8
|
%
|
37.8
|
%
|
0 pts
|
|||||||||||
Combined ratio
|
95.4
|
%
|
99.9
|
%
|
-4.5 pts
|
99.7
|
%
|
101.6
|
%
|
-1.9 pts
|
|||||||||||
CAY ex-CAT loss ratio
|
55.6
|
%
|
56.2
|
%
|
-0.6 pts
|
55.6
|
%
|
56.7
|
%
|
-1.1 pts
|
•
|
Gross written premiums increased 2.0% to $815.3 million during the second quarter of 2021. Premium growth of 6.8% in U.S. Operations was
partially offset by a 5.4% decline in International Operations. Adjusting for the sale of Ariel Re in November 2020 and planned or executed exits of business in Italy, Malta and the U.S. grocery business, underlying premiums grew
approximately 14% during the second quarter of 2021. In the U.S., premium growth in strategic growth areas was up 25%, while overall growth was tempered by business exits and re-underwriting actions in certain underperforming businesses
and property lines. The decline in International premiums was due to the sale of Ariel Re in November 2020 and planned exits of business in Italy and Malta, largely offset by growth in Syndicate 1200 reflecting continued rate increases
and an increase in Argo's participation in Syndicate 1200's capacity. Pricing increases were in the high single digits on average across Argo, with the range varying by business line.
|
•
|
The combined ratio was 95.4% during the second quarter of 2021 compared to 99.9% in the prior year quarter. The improved combined ratio was
driven by lower losses related to COVID-19 and natural catastrophes, as well as an improved current accident year, ex-catastrophe ("CAY ex-CAT") loss ratio.
|
•
|
Total catastrophe losses in the second quarter of 2021 were $11.1 million or 2.4 points on the loss ratio. Natural catastrophes accounted for
$6.5 million and losses related to the COVID-19 pandemic were $4.6 million. Catastrophe losses in the second quarter of 2020 were $27.9 million or 6.4 points on the loss ratio and included $17.4 million related to the COVID-19 pandemic.
|
•
|
Net favorable reserve development for the 2021 second quarter was $1.2 million, or 0.3 points on the loss ratio, and was recognized in both
U.S. and International Operations. Net reserve development of $1.8 million added 0.4 points to the loss ratio in the second quarter of 2020.
|
•
|
The CAY ex-CAT loss ratio for the 2021 second quarter of 55.6% compares to 56.2% in the prior year second quarter. In the U.S., the CAY
ex-CAT loss ratio increased compared to the second quarter of 2020 as the prior year quarter benefited from a reduction in claims frequency due to the broader economic slowdown. The improvement in the CAY ex-CAT loss ratio was driven by
International Operations and is primarily the result of continued remediation efforts and rate increases earning through the results.
|
•
|
The expense ratio in the second quarter of 2021 was 37.7% and was up 0.8 points from the prior year quarter driven by the increase in the
acquisition expense ratio. The acquisition expense ratio of 17.4% increased 1.3 points compared to the prior year second quarter as a higher ratio in the U.S. was partially offset by an improvement in International. The general and
administrative expense ratio of 20.3% improved 0.5 points compared to the prior year second quarter.
|
•
|
The CAY ex-CAT combined ratio was 93.3% in the second quarter of 2021, compared to 93.1% in the prior year second quarter.
|
•
|
Net investment income was $52.7 million in the 2021 second quarter compared to $1.4 million in the prior year second quarter. Investment
income from alternative investments was $29.9 million in the second quarter of 2021 and included gains from both private equity and hedge fund investments. Results for the prior year second quarter included losses from alternative
investments of $23.4 million as a result of significant financial market volatility. Net investment income excluding alternatives was $22.8 million in the second quarter of 2021 and decreased 8.0% from the prior year quarter due
primarily to lower interest rates.
|
•
|
Net income attributable to common shareholders was $67.1 million or $1.92 per diluted share, compared to a net loss attributable to common
shareholders of $5.4 million or $(0.16) per diluted share for the 2020 second quarter. The 2021 second quarter result benefited from $24.7 million of pre-tax realized investment gains compared to $17.9 million in the prior year quarter.
The current quarter included a benefit of $20.3 million from the change in fair value of equity securities in addition to net investment realized gains of $15.5 million. These realized gains were partially offset by an $11.5 million net
charge due to an amendment to the transaction and other related agreements associated with the sale of Trident. The second quarter of 2021 included $10.8 million of non-operating expenses compared to $3.5 million in the prior year
quarter. The total in the second quarter of 2021 included approximately $7 million of expenses related to certain office closures. The prior year second quarter included a $31.8 million gain related to the sale of Trident and a positive
change in the fair value of equity securities, partially offset by net realized investment losses and credit losses on fixed maturity securities. Annualized return on average common shareholders' equity was 15.6% in the second quarter
of 2021 compared to -1.3% in the prior year quarter.
|
•
|
Operating income was $56.1 million or $1.60 per diluted share in the second quarter of 2021, compared to an operating loss of $3.6 million or
$(0.10) per diluted share in the prior year quarter. The primary drivers of the increased operating income were improved underwriting and investment income in the second quarter of 2021. Annualized operating return on average common
shareholders' equity was 13.1% in the second quarter of 2021 compared to -0.9% in the prior year quarter.
|
$ in millions
|
Three Months Ended
June 30,
|
Q/Q
|
|
Six Months Ended
June 30,
|
Y/Y
|
|
|||||||||||||||
U.S. Operations
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
|||||||||||||||
Gross written premiums
|
$
|
513.0
|
$
|
480.2
|
6.8
|
%
|
$
|
1,002.4
|
$
|
956.7
|
4.8
|
%
|
|||||||||
Net written premiums
|
317.2
|
303.6
|
4.5
|
%
|
610.2
|
573.0
|
6.5
|
%
|
|||||||||||||
Earned premiums
|
314.5
|
301.6
|
4.3
|
%
|
628.9
|
604.1
|
4.1
|
%
|
|||||||||||||
Losses and loss adjustment
expenses
|
183.6
|
171.2
|
7.2
|
%
|
379.2
|
360.8
|
5.1
|
%
|
|||||||||||||
Acquisition expenses
|
50.3
|
42.7
|
17.8
|
%
|
100.6
|
84.5
|
19.1
|
%
|
|||||||||||||
General and administrative
expenses
|
55.7
|
52.9
|
5.3
|
%
|
112.9
|
107.2
|
5.3
|
%
|
|||||||||||||
Underwriting income
|
$
|
24.9
|
$
|
34.8
|
-28.4
|
%
|
$
|
36.2
|
$
|
51.6
|
-29.8
|
%
|
|||||||||
Loss ratio
|
58.3
|
%
|
56.8
|
%
|
1.5 pts
|
60.3
|
%
|
59.8
|
%
|
0.5 pts
|
|||||||||||
Acquisition expense ratio
|
16.0
|
%
|
14.2
|
%
|
1.8 pts
|
16.0
|
%
|
14.0
|
%
|
2 pts
|
|||||||||||
General and administrative expense ratio
|
17.7
|
%
|
17.5
|
%
|
0.2 pts
|
17.9
|
%
|
17.7
|
%
|
0.2 pts
|
|||||||||||
Expense ratio
|
33.7
|
%
|
31.7
|
%
|
2 pts
|
33.9
|
%
|
31.7
|
%
|
2.2 pts
|
|||||||||||
Combined ratio
|
92.0
|
%
|
88.5
|
%
|
3.5 pts
|
94.2
|
%
|
91.5
|
%
|
2.7 pts
|
|||||||||||
CAY ex-CAT loss ratio
|
57.9
|
%
|
54.9
|
%
|
3 pts
|
56.8
|
%
|
56.7
|
%
|
0.1 pts
|
•
|
In our U.S. Operations, gross written premiums increased 6.8% compared to the 2020 second quarter due to growth in Liability and Professional
lines, while premiums in Property lines declined. Growth in the period was driven by strategic focus businesses that include Argo Pro, Casualty, Construction, Environmental, Inland Marine and Surety. These businesses, which represent
more than 60% of U.S. Operations gross written premiums, in total were up approximately 25% during the quarter. Offsetting this growth was the impact of planned reductions in Property lines and other re-underwriting actions, including
the exit of our grocery and restaurant business. Rates on average were up in the mid to high single digits, with pricing increases remaining stable in most of our strategic focus businesses.
|
•
|
The loss ratio for the second quarter of 2021 was 58.3% compared to 56.8% in the prior year second quarter. The loss ratio increased compared
to the second quarter of 2020 as the prior year quarter benefited from a reduction in claims frequency due to the broader economic slowdown. The loss ratio also benefited from a 1.5 point reduction in catastrophe losses compared to the
prior year second quarter.
|
•
|
Net favorable prior-year reserve development in the second quarter of 2021 was $0.5 million compared to $0.6 million of favorable development
in the prior year second quarter.
|
•
|
Catastrophe losses of $2.0 million totaled 0.6 points compared to $6.5 million or 2.1 points in the prior year second quarter and were
primarily related to smaller weather events in the current quarter.
|
•
|
The acquisition expense ratio for the second quarter of 2021 was 16.0%, an increase of 1.8 points compared to the 2020 second quarter but
in-line with the result for the first quarter of 2021. The increase was primarily driven by changes in business mix.
|
•
|
The general and administrative expense ratio was 17.7% in the second quarter of 2021 and was up slightly from the prior year quarter.
|
$ in millions
|
Three Months Ended
June 30,
|
Q/Q
|
|
Six Months Ended
June 30,
|
Y/Y
|
|
|||||||||||||||
International Operations
|
2021
|
2020
|
Change
|
2021
|
2020
|
Change
|
|||||||||||||||
Gross written premiums
|
$
|
302.1
|
$
|
319.3
|
-5.4
|
%
|
$
|
569.0
|
$
|
668.5
|
-14.9
|
%
|
|||||||||
Net written premiums
|
175.9
|
152.4
|
15.4
|
%
|
304.0
|
263.3
|
15.5
|
%
|
|||||||||||||
Earned premiums
|
155.7
|
131.8
|
18.1
|
%
|
307.2
|
264.1
|
16.3
|
%
|
|||||||||||||
Losses and loss adjustment
expenses
|
86.8
|
101.1
|
-14.1
|
%
|
197.4
|
192.6
|
2.5
|
%
|
|||||||||||||
Acquisition expenses
|
31.3
|
27.2
|
15.1
|
%
|
60.3
|
56.7
|
6.3
|
%
|
|||||||||||||
General and administrative
expenses |
30.1
|
30.4
|
-1.0
|
%
|
63.8
|
61.2
|
4.2
|
%
|
|||||||||||||
Underwriting income (loss)
|
$
|
7.5
|
$
|
(26.9
|
)
|
NM
|
$
|
(14.3
|
)
|
$
|
(46.4
|
)
|
NM
|
||||||||
Loss ratio
|
55.7
|
%
|
76.7
|
%
|
-21 pts
|
64.3
|
%
|
72.9
|
%
|
-8.6 pts
|
|||||||||||
Acquisition expense ratio
|
20.1
|
%
|
20.6
|
%
|
-0.5 pts
|
19.6
|
%
|
21.5
|
%
|
-1.9 pts
|
|||||||||||
General and administrative expense ratio
|
19.3
|
%
|
23.1
|
%
|
-3.8 pts
|
20.8
|
%
|
23.2
|
%
|
-2.4 pts
|
|||||||||||
Expense Ratio
|
39.4
|
%
|
43.7
|
%
|
-4.3 pts
|
40.4
|
%
|
44.7
|
%
|
-4.3 pts
|
|||||||||||
Combined ratio
|
95.1
|
%
|
120.4
|
%
|
-25.3 pts
|
104.7
|
%
|
117.6
|
%
|
-12.9 pts
|
|||||||||||
CAY ex-CAT loss ratio
|
51.0
|
%
|
59.3
|
%
|
-8.3 pts
|
53.3
|
%
|
57.0
|
%
|
-3.7 pts
|
•
|
In our International Operations, gross written premiums declined 5.4% in the second quarter of 2021 as top line results were impacted by
previously announced business exits, with the largest decrease being from Property lines. Excluding the impact of business exits, gross written premiums would have been up approximately 23% primarily due to higher rates and increased
participation in Syndicate 1200's capacity. Rate increases remained strong across most lines of business and averaged approximately 10% during the 2021 second quarter, mainly attributable to Liability lines.
|
•
|
Net written and earned premium in the second quarter of 2021 increased 15.4% and 18.1%, respectively, compared to the 2020 second quarter.
The increase was related to growth at Syndicate 1200 due to increased participation in the Syndicate results and rate increases achieved over the last several quarters, in addition to changes in ceded reinsurance due to the impact of
business exits.
|
•
|
The loss ratio for the second quarter of 2021 was 55.7% compared to 76.7% in the prior year second quarter. The improvement in the loss ratio
is primarily the result of continued remediation efforts and rate increases earning through results. The loss ratio in the current quarter also benefited from a reduction in catastrophe losses compared to the second quarter of 2020.
|
•
|
Catastrophe losses totaled 5.9 points in the second quarter of 2021, attributed to natural catastrophes and losses related to COVID-19.
|
•
|
The CAY ex-CAT loss ratio was 51.0% in the second quarter of 2021 compared to 59.3% in the prior year second quarter. The improvement
reflects the benefit of pricing and underwriting actions, as well as a fewer number of large losses compared to the prior year quarter.
|
•
|
Net favorable prior year reserve development in the second quarter of 2021 was $1.9 million or 1.2 points on the loss ratio, compared to
modest reserve strengthening in prior year second quarter.
|
•
|
The acquisition ratio improved 0.5 points to 20.1% during the quarter with the improvement driven by actions to remove certain high-cost
delegated authority arrangements.
|
•
|
The general and administrative expense ratio of 19.3% improved 3.8 points from the prior year second quarter and is attributable largely to
growth in earned premiums.
|
•
|
Book value per common share was $50.34 at June 30, 2021, compared to $48.23 at March 31, 2021. Including dividends paid, book value per
common share increased 5.0% relative to March 31, 2021 due to strong retained earnings and modest net unrealized gains on fixed income securities.
|
|
June 30,
|
December 31,
|
|||||
|
2021
|
2020
|
|||||
|
(unaudited)
|
||||||
Assets
|
|||||||
Total investments
|
$
|
5,185.9
|
$
|
5,255.8
|
|||
Cash
|
190.7
|
148.8
|
|||||
Accrued investment income
|
20.8
|
21.8
|
|||||
Receivables
|
3,541.6
|
3,688.8
|
|||||
Goodwill and intangible assets
|
207.8
|
207.8
|
|||||
Deferred acquisition costs, net
|
168.2
|
163.6
|
|||||
Ceded unearned premiums
|
591.0
|
575.1
|
|||||
Other assets
|
462.3
|
404.1
|
|||||
Total assets
|
$
|
10,368.3
|
$
|
10,465.8
|
|||
Liabilities and Shareholders' Equity
|
|||||||
Reserves for losses and loss adjustment expenses
|
$
|
5,238.6
|
$
|
5,406.0
|
|||
Unearned premiums
|
1,473.7
|
1,464.8
|
|||||
Ceded reinsurance payable, net
|
920.2
|
950.4
|
|||||
Senior unsecured fixed rate notes
|
140.2
|
140.2
|
|||||
Other indebtedness
|
60.4
|
60.7
|
|||||
Junior subordinated debentures
|
258.0
|
257.8
|
|||||
Other liabilities
|
379.3
|
328.1
|
|||||
Total liabilities
|
8,470.4
|
8,608.0
|
|||||
Preferred shares
|
144.0
|
144.0
|
|||||
Common shareholders’ equity
|
1,753.9
|
1,713.8
|
|||||
Total shareholders' equity
|
1,897.9
|
1,857.8
|
|||||
Total liabilities and shareholders' equity
|
$
|
10,368.3
|
$
|
10,465.8
|
|||
Book value per common share
|
$
|
50.34
|
$
|
49.40
|
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||
|
2021
|
2020
|
2021
|
2020
|
|||||||||||
Gross written premiums
|
$
|
815.3
|
$
|
799.6
|
$
|
1,571.8
|
$
|
1,625.5
|
|||||||
Net written premiums
|
493.3
|
456.1
|
914.6
|
836.6
|
|||||||||||
Earned premiums
|
470.3
|
433.4
|
936.4
|
868.4
|
|||||||||||
Net investment income
|
52.7
|
1.4
|
97.1
|
37.0
|
|||||||||||
Net realized investment gains (losses)
|
24.7
|
17.9
|
37.8
|
(18.3
|
)
|
||||||||||
Total revenue
|
547.7
|
452.7
|
1,071.3
|
887.1
|
|||||||||||
Losses and loss adjustment expenses
|
271.6
|
273.2
|
579.2
|
554.1
|
|||||||||||
Acquisition expenses
|
81.7
|
69.6
|
160.9
|
141.0
|
|||||||||||
General and administrative expenses
|
95.6
|
90.2
|
192.8
|
186.9
|
|||||||||||
Non-operating expenses
|
10.8
|
3.5
|
12.7
|
6.8
|
|||||||||||
Interest expense
|
5.7
|
7.0
|
10.8
|
14.8
|
|||||||||||
Fee and other (income) expense, net
|
(0.8
|
)
|
(1.0
|
)
|
(0.7
|
)
|
(1.9
|
)
|
|||||||
Foreign currency exchange losses
|
4.4
|
4.3
|
5.7
|
5.2
|
|||||||||||
Total expenses
|
469.0
|
446.8
|
961.4
|
906.9
|
|||||||||||
Income (loss) before income taxes
|
78.7
|
5.9
|
109.9
|
(19.8
|
)
|
||||||||||
Income tax provision
|
8.9
|
11.3
|
10.3
|
10.3
|
|||||||||||
Net income (loss)
|
$
|
69.8
|
$
|
(5.4
|
)
|
$
|
99.6
|
$
|
(30.1
|
)
|
|||||
Dividends on preferred shares
|
|
2.7
|
—
|
5.3
|
—
|
||||||||||
Net income (loss) attributable to common
shareholders
|
$
|
67.1
|
$
|
(5.4
|
)
|
$
|
94.3
|
$
|
(30.1
|
)
|
|||||
Net income (loss) per common share (basic)
|
$
|
1.93
|
$
|
(0.16
|
)
|
$
|
2.72
|
$
|
(0.87
|
)
|
|||||
Net income (loss) per common share (diluted)
|
$
|
1.92
|
$
|
(0.16
|
)
|
$
|
2.70
|
$
|
(0.87
|
)
|
|||||
Weighted average common shares:
|
|||||||||||||||
Basic
|
34.8
|
34.6
|
34.8
|
34.6
|
|||||||||||
Diluted
|
35.0
|
34.6
|
35.0
|
34.6
|
|||||||||||
Loss ratio
|
57.7
|
%
|
63.0
|
%
|
61.9
|
%
|
63.8
|
%
|
|||||||
Acquisition expense ratio
|
17.4
|
%
|
16.1
|
%
|
17.2
|
%
|
16.2
|
%
|
|||||||
General and administrative expense ratio
|
20.3
|
%
|
20.8
|
%
|
20.6
|
%
|
21.6
|
%
|
|||||||
Expense ratio
|
37.7
|
%
|
36.9
|
%
|
37.8
|
%
|
37.8
|
%
|
|||||||
GAAP combined ratio
|
95.4
|
%
|
99.9
|
%
|
99.7
|
%
|
101.6
|
%
|
|||||||
CAY ex-CAT combined ratio
|
93.3
|
%
|
93.1
|
%
|
93.4
|
%
|
94.5
|
%
|
|
Three Months Ended
|
Six months ended
|
|||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||
|
2021
|
2020
|
2021
|
2020
|
|||||||||||
U.S. Operations
|
|||||||||||||||
Gross written premiums
|
$
|
513.0
|
$
|
480.2
|
$
|
1,002.4
|
$
|
956.7
|
|||||||
Net written premiums
|
317.2
|
303.6
|
610.2
|
573.0
|
|||||||||||
Earned premiums
|
314.5
|
301.6
|
628.9
|
604.1
|
|||||||||||
Underwriting income
|
24.9
|
34.8
|
36.2
|
51.6
|
|||||||||||
Net investment income
|
33.7
|
0.8
|
62.5
|
26.0
|
|||||||||||
Interest expense
|
(3.5
|
)
|
(4.2
|
)
|
(7.1
|
)
|
(9.1
|
)
|
|||||||
Fee income (expense), net
|
(0.6
|
)
|
(0.2
|
)
|
(0.5
|
)
|
(0.4
|
)
|
|||||||
Operating income before taxes
|
$
|
54.5
|
$
|
31.2
|
$
|
91.1
|
$
|
68.1
|
|||||||
Loss ratio
|
58.3
|
%
|
56.8
|
%
|
60.3
|
%
|
59.8
|
%
|
|||||||
Acquisition expense ratio
|
16.0
|
%
|
14.2
|
%
|
16.0
|
%
|
14.0
|
%
|
|||||||
General and administrative expense ratio
|
17.7
|
%
|
17.5
|
%
|
17.9
|
%
|
17.7
|
%
|
|||||||
Expense Ratio
|
33.7
|
%
|
31.7
|
%
|
33.9
|
%
|
31.7
|
%
|
|||||||
GAAP combined ratio
|
92.0
|
%
|
88.5
|
%
|
94.2
|
%
|
91.5
|
%
|
|||||||
CAY ex-CAT combined ratio
|
91.6
|
%
|
86.6
|
%
|
90.7
|
%
|
88.4
|
%
|
|||||||
International Operations
|
|||||||||||||||
Gross written premiums
|
$
|
302.1
|
$
|
319.3
|
$
|
569.0
|
$
|
668.5
|
|||||||
Net written premiums
|
175.9
|
152.4
|
304.0
|
263.3
|
|||||||||||
Earned premiums
|
155.7
|
131.8
|
307.2
|
264.1
|
|||||||||||
Underwriting income (loss)
|
7.5
|
(26.9
|
)
|
(14.3
|
)
|
(46.4
|
)
|
||||||||
Net investment income
|
13.9
|
0.5
|
25.9
|
9.1
|
|||||||||||
Interest expense
|
(1.5
|
)
|
(2.0
|
)
|
(2.9
|
)
|
(4.3
|
)
|
|||||||
Fee income (expense), net
|
0.9
|
0.9
|
0.5
|
1.8
|
|||||||||||
Operating income (loss) before taxes
|
$
|
20.8
|
$
|
(27.5
|
)
|
$
|
9.2
|
$
|
(39.8
|
)
|
|||||
Loss ratio
|
55.7
|
%
|
76.7
|
%
|
64.3
|
%
|
72.9
|
%
|
|||||||
Acquisition expense ratio
|
20.1
|
%
|
20.6
|
%
|
19.6
|
%
|
21.5
|
%
|
|||||||
General and administrative expense ratio
|
19.3
|
%
|
23.1
|
%
|
20.8
|
%
|
23.2
|
%
|
|||||||
Expense Ratio
|
39.4
|
%
|
43.7
|
%
|
40.4
|
%
|
44.7
|
%
|
|||||||
GAAP combined ratio
|
95.1
|
%
|
120.4
|
%
|
104.7
|
%
|
117.6
|
%
|
|||||||
CAY ex-CAT combined ratio
|
90.4
|
%
|
103.0
|
%
|
93.7
|
%
|
101.7
|
%
|
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||
|
2021
|
2020
|
2021
|
2020
|
|||||||||||
U.S. Operations
|
|||||||||||||||
Loss ratio
|
58.3
|
%
|
56.8
|
%
|
60.3
|
%
|
59.8
|
%
|
|||||||
Prior accident year loss reserve development
|
0.2
|
%
|
0.2
|
%
|
0.1
|
%
|
(0.5
|
)%
|
|||||||
Catastrophe losses
|
(0.6
|
)%
|
(2.1
|
)%
|
(3.6
|
)%
|
(2.6
|
)%
|
|||||||
CAY ex-CAT loss ratio
|
57.9
|
%
|
54.9
|
%
|
56.8
|
%
|
56.7
|
%
|
|||||||
International Operations
|
|||||||||||||||
Loss ratio
|
55.7
|
%
|
76.7
|
%
|
64.3
|
%
|
72.9
|
%
|
|||||||
Prior accident year loss reserve development
|
1.2
|
%
|
(1.2
|
)%
|
0.6
|
%
|
(0.4
|
)%
|
|||||||
Catastrophe losses
|
(5.9
|
)%
|
(16.2
|
)%
|
(11.6
|
)%
|
(15.5
|
)%
|
|||||||
CAY ex-CAT loss ratio
|
51.0
|
%
|
59.3
|
%
|
53.3
|
%
|
57.0
|
%
|
|||||||
Consolidated
|
|||||||||||||||
Loss ratio
|
57.7
|
%
|
63.0
|
%
|
61.9
|
%
|
63.8
|
%
|
|||||||
Prior accident year loss reserve development
|
0.3
|
%
|
(0.4
|
)%
|
—
|
%
|
(0.5
|
)%
|
|||||||
Catastrophe losses
|
(2.4
|
)%
|
(6.4
|
)%
|
(6.3
|
)%
|
(6.6
|
)%
|
|||||||
CAY ex-CAT loss ratio
|
55.6
|
%
|
56.2
|
%
|
55.6
|
%
|
56.7
|
%
|
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||
June 30,
|
June 30,
|
||||||||||||||
2021
|
2020
|
2021
|
2020
|
||||||||||||
Net Prior-Year Reserve Development
|
|||||||||||||||
(Favorable)/Unfavorable
|
|||||||||||||||
U.S. Operations
|
$
|
(0.5
|
)
|
$
|
(0.6
|
)
|
$
|
(0.9
|
)
|
$
|
2.7
|
||||
International Operations
|
(1.9
|
)
|
1.5
|
(1.9
|
)
|
1.1
|
|||||||||
Run-off Lines
|
1.2
|
0.9
|
2.6
|
0.7
|
|||||||||||
Total net prior-year reserve development
|
$
|
(1.2
|
)
|
$
|
1.8
|
$
|
(0.2
|
)
|
$
|
4.5
|
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||
June 30,
|
June 30,
|
||||||||||||||
2021
|
2020
|
2021
|
2020
|
||||||||||||
Catastrophe & COVID-19 Losses
|
|||||||||||||||
Catastrophe losses
|
|||||||||||||||
U.S. Operations
|
$
|
2.0
|
$
|
5.5
|
$
|
22.9
|
$
|
7.5
|
|||||||
International Operations
|
4.5
|
5.0
|
26.7
|
5.9
|
|||||||||||
Total catastrophe losses
|
6.5
|
10.5
|
49.6
|
13.4
|
|||||||||||
COVID-19 losses
|
|||||||||||||||
U.S. Operations
|
—
|
1.0
|
—
|
8.5
|
|||||||||||
International Operations
|
4.6
|
16.4
|
9.0
|
35.1
|
|||||||||||
Total COVID-19 losses
|
4.6
|
17.4
|
9.0
|
43.6
|
|||||||||||
Catastrophe & COVID-19 losses
|
|||||||||||||||
U.S. Operations
|
2.0
|
6.5
|
22.9
|
16.0
|
|||||||||||
International Operations
|
9.1
|
21.4
|
35.7
|
41.0
|
|||||||||||
Total catastrophe & COVID-19 losses
|
$
|
11.1
|
$
|
27.9
|
$
|
58.6
|
$
|
57.0
|
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||
|
2021
|
2020
|
2021
|
2020
|
|||||||||||
Net income (loss)
|
$
|
69.8
|
$
|
(5.4
|
)
|
$
|
99.6
|
$
|
(30.1
|
)
|
|||||
Add (deduct):
|
|||||||||||||||
Income tax provision
|
8.9
|
11.3
|
10.3
|
10.3
|
|||||||||||
Net investment income
|
(52.7
|
)
|
(1.4
|
)
|
(97.1
|
)
|
(37.0
|
)
|
|||||||
Net realized investment (gains) losses
|
(24.7
|
)
|
(17.9
|
)
|
(37.8
|
)
|
18.3
|
||||||||
Interest expense
|
5.7
|
7.0
|
10.8
|
14.8
|
|||||||||||
Fee and other (income) expense, net
|
(0.8
|
)
|
(1.0
|
)
|
(0.7
|
)
|
(1.9
|
)
|
|||||||
Foreign currency exchange losses
|
4.4
|
4.3
|
5.7
|
5.2
|
|||||||||||
Non-operating expenses
|
10.8
|
3.5
|
12.7
|
6.8
|
|||||||||||
Underwriting income (loss)
|
$
|
21.4
|
$
|
0.4
|
$
|
3.5
|
$
|
(13.6
|
)
|
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||
|
2021
|
2020
|
2021
|
2020
|
|||||||||||
Net income (loss), as reported
|
$
|
69.8
|
$
|
(5.4
|
)
|
$
|
99.6
|
$
|
(30.1
|
)
|
|||||
Income tax provision
|
8.9
|
11.3
|
10.3
|
10.3
|
|||||||||||
Net income (loss), before taxes
|
78.7
|
5.9
|
109.9
|
(19.8
|
)
|
||||||||||
Add (deduct):
|
|||||||||||||||
Net realized investment (gains) losses
|
(24.7
|
)
|
(17.9
|
)
|
(37.8
|
)
|
18.3
|
||||||||
Foreign currency exchange losses
|
4.4
|
4.3
|
5.7
|
5.2
|
|||||||||||
Non-operating expenses
|
10.8
|
3.5
|
12.7
|
6.8
|
|||||||||||
Operating income before taxes and preferred share
dividends
|
69.2
|
(4.2
|
)
|
90.5
|
10.5
|
||||||||||
Income tax provision, at assumed rate (1)
|
10.4
|
(0.6
|
)
|
13.6
|
1.6
|
||||||||||
Preferred share dividends
|
2.7
|
—
|
5.3
|
—
|
|||||||||||
Operating income (loss)
|
$
|
56.1
|
$
|
(3.6
|
)
|
$
|
71.6
|
$
|
8.9
|
||||||
Operating income (loss) per common share (diluted)
|
$
|
1.60
|
$
|
(0.10
|
)
|
$
|
2.05
|
$
|
0.26
|
||||||
Weighted average common shares, diluted
|
35.0
|
34.6
|
35.0
|
34.6
|
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||
|
2021
|
2020
|
2021
|
2020
|
|||||||||||
Operating income (loss) before income taxes:
|
|||||||||||||||
U.S. Operations
|
$
|
54.5
|
$
|
31.2
|
$
|
91.1
|
$
|
68.1
|
|||||||
International Operations
|
20.8
|
(27.5
|
)
|
9.2
|
(39.8
|
)
|
|||||||||
Run-off Lines
|
(0.1
|
)
|
(1.3
|
)
|
(0.9
|
)
|
(0.8
|
)
|
|||||||
Corporate and Other
|
(6.0
|
)
|
(6.6
|
)
|
(8.9
|
)
|
(17.0
|
)
|
|||||||
Total operating income (loss) before income taxes
|
69.2
|
(4.2
|
)
|
90.5
|
10.5
|
||||||||||
Net realized investment gains (losses)
|
24.7
|
17.9
|
37.8
|
(18.3
|
)
|
||||||||||
Foreign currency exchange (losses) gains
|
(4.4
|
)
|
(4.3
|
)
|
(5.7
|
)
|
(5.2
|
)
|
|||||||
Non-operating expenses
|
(10.8
|
)
|
(3.5
|
)
|
(12.7
|
)
|
(6.8
|
)
|
|||||||
Income (loss) before income taxes
|
78.7
|
5.9
|
109.9
|
(19.8
|
)
|
||||||||||
Income tax provision
|
8.9
|
11.3
|
10.3
|
10.3
|
|||||||||||
Net income (loss)
|
$
|
69.8
|
$
|
(5.4
|
)
|
$
|
99.6
|
$
|
(30.1
|
)
|
U.S. Operations
|
Three months ended June 30, 2021
|
Three months ended June 30, 2020
|
|||||||||||||||||||||
Gross
Written
|
Net
Written
|
Net
Earned
|
Gross
Written
|
Net
Written
|
Net
Earned
|
||||||||||||||||||
Property
|
$
|
72.8
|
$
|
33.7
|
$
|
38.3
|
$
|
81.5
|
$
|
47.1
|
$
|
41.3
|
|||||||||||
Liability
|
265.0
|
159.7
|
165.4
|
242.9
|
159.4
|
169.9
|
|||||||||||||||||
Professional
|
120.2
|
81.1
|
74.7
|
103.8
|
63.3
|
58.6
|
|||||||||||||||||
Specialty
|
55.0
|
42.7
|
36.1
|
52.0
|
33.8
|
31.8
|
|||||||||||||||||
Total
|
$
|
513.0
|
$
|
317.2
|
$
|
314.5
|
$
|
480.2
|
$
|
303.6
|
$
|
301.6
|
Six months ended June 30, 2021
|
Six months ended June 30, 2020
|
||||||||||||||||||||||
Gross
Written
|
Net
Written
|
Net
Earned
|
Gross
Written
|
Net
Written
|
Net
Earned
|
||||||||||||||||||
Property
|
$
|
129.7
|
$
|
54.4
|
$
|
80.8
|
$
|
146.7
|
$
|
62.2
|
$
|
80.7
|
|||||||||||
Liability
|
531.5
|
322.3
|
331.1
|
512.8
|
322.1
|
342.2
|
|||||||||||||||||
Professional
|
232.2
|
153.3
|
146.4
|
201.0
|
121.9
|
114.1
|
|||||||||||||||||
Specialty
|
109.0
|
80.2
|
70.6
|
96.2
|
66.8
|
67.1
|
|||||||||||||||||
Total
|
$
|
1,002.4
|
$
|
610.2
|
$
|
628.9
|
$
|
956.7
|
$
|
573.0
|
$
|
604.1
|
International Operations
|
Three months ended June 30, 2021
|
Three months ended June 30, 2020
|
|||||||||||||||||||||
Gross
Written
|
Net
Written
|
Net
Earned
|
Gross
Written
|
Net
Written
|
Net
Earned
|
||||||||||||||||||
Property
|
$
|
81.1
|
$
|
28.6
|
$
|
33.8
|
$
|
132.3
|
$
|
50.0
|
$
|
35.6
|
|||||||||||
Liability
|
65.5
|
38.3
|
35.5
|
56.4
|
31.7
|
26.3
|
|||||||||||||||||
Professional
|
53.1
|
40.2
|
36.3
|
51.3
|
25.8
|
29.4
|
|||||||||||||||||
Specialty
|
102.4
|
68.8
|
50.1
|
79.3
|
44.9
|
40.5
|
|||||||||||||||||
Total
|
$
|
302.1
|
$
|
175.9
|
$
|
155.7
|
$
|
319.3
|
$
|
152.4
|
$
|
131.8
|
Six months ended June 30, 2021
|
Six months ended June 30, 2020
|
||||||||||||||||||||||
Gross
Written |
Net
Written
|
Net
Earned
|
Gross
Written
|
Net
Written
|
Net
Earned
|
||||||||||||||||||
Property
|
$
|
160.5
|
$
|
48.5
|
$
|
75.9
|
$
|
255.5
|
$
|
62.7
|
$
|
71.3
|
|||||||||||
Liability
|
122.8
|
69.0
|
65.7
|
112.4
|
49.1
|
46.3
|
|||||||||||||||||
Professional
|
106.2
|
67.6
|
69.5
|
107.0
|
50.3
|
58.1
|
|||||||||||||||||
Specialty
|
179.5
|
118.9
|
96.1
|
193.6
|
101.2
|
88.4
|
|||||||||||||||||
Total
|
$
|
569.0
|
$
|
304.0
|
$
|
307.2
|
$
|
668.5
|
$
|
263.3
|
$
|
264.1
|
Consolidated
|
Three months ended June 30, 2021
|
Three months ended June 30, 2020
|
|||||||||||||||||||||
Gross
Written
|
Net
Written
|
Net
Earned
|
Gross
Written
|
Net
Written
|
Net
Earned
|
||||||||||||||||||
Property
|
153.9
|
$
|
62.3
|
$
|
72.1
|
$
|
213.8
|
$
|
97.1
|
$
|
76.9
|
||||||||||||
Liability
|
330.7
|
198.2
|
201.0
|
299.4
|
191.2
|
196.2
|
|||||||||||||||||
Professional
|
173.3
|
121.3
|
111.0
|
155.1
|
89.1
|
88.0
|
|||||||||||||||||
Specialty
|
157.4
|
111.5
|
86.2
|
131.3
|
78.7
|
72.3
|
|||||||||||||||||
Total
|
815.3
|
$
|
493.3
|
$
|
470.3
|
$
|
799.6
|
$
|
456.1
|
$
|
433.4
|
Six months ended June 30, 2021
|
Six months ended June 30, 2020
|
||||||||||||||||||||||
Gross
Written
|
Net
Written
|
Net
Earned
|
Gross
Written |
Net
Written
|
Net
Earned
|
||||||||||||||||||
Property
|
$
|
290.2
|
$
|
102.9
|
$
|
156.7
|
$
|
402.2
|
$
|
124.9
|
$
|
152.0
|
|||||||||||
Liability
|
654.7
|
391.7
|
397.1
|
625.5
|
371.5
|
388.7
|
|||||||||||||||||
Professional
|
338.4
|
220.9
|
215.9
|
308.0
|
172.2
|
172.2
|
|||||||||||||||||
Specialty
|
288.5
|
199.1
|
166.7
|
289.8
|
168.0
|
155.5
|
|||||||||||||||||
Total
|
$
|
1,571.8
|
$
|
914.6
|
$
|
936.4
|
$
|
1,625.5
|
$
|
836.6
|
$
|
868.4
|
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||
|
2021
|
2020
|
2021
|
2020
|
|||||||||||
Net Investment Income
|
|||||||||||||||
Net investment income, excluding alternative investments
|
$
|
22.8
|
$
|
24.8
|
$
|
46.5
|
$
|
57.9
|
|||||||
Alternative investments
|
29.9
|
(23.4
|
)
|
50.6
|
(20.9
|
)
|
|||||||||
Total net investment income
|
$
|
52.7
|
$
|
1.4
|
$
|
97.1
|
$
|
37.0
|
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||
|
June 30,
|
June 30,
|
|||||||||||||
|
2021
|
2020
|
2021
|
2020
|
|||||||||||
Net Realized Investment Gains (Losses)
|
|||||||||||||||
Net realized investment (losses) gains
|
$
|
15.5
|
$
|
(21.2
|
)
|
$
|
14.2
|
$
|
6.6
|
||||||
Change in fair value of equity securities
|
20.3
|
15.1
|
35.8
|
(24.2
|
)
|
||||||||||
Credit gains (losses) on fixed maturity securities
|
0.4
|
(7.8
|
)
|
(0.7
|
)
|
(32.5
|
)
|
||||||||
Gain (loss) on sale of Trident assets
|
(11.5
|
)
|
31.8
|
(11.5
|
)
|
31.8
|
|||||||||
Total net realized investments gains (losses)
|
$
|
24.7
|
$
|
17.9
|
$
|
37.8
|
$
|
(18.3
|
)
|
|
June 30,
|
December 31,
|
|||||
|
2021
|
2020
|
|||||
U.S. Governments and government agencies
|
$
|
357.8
|
$
|
399.8
|
|||
States and political subdivisions
|
192.5
|
170.4
|
|||||
Foreign governments
|
212.7
|
294.8
|
|||||
Corporate – Financial
|
924.6
|
917.8
|
|||||
Corporate – Industrial
|
845.1
|
826.6
|
|||||
Corporate – Utilities
|
224.5
|
237.4
|
|||||
Asset-backed securities
|
123.3
|
122.8
|
|||||
Collateralized loan obligations
|
306.9
|
289.6
|
|||||
Mortgage-backed securities – Agency
|
484.1
|
453.4
|
|||||
Mortgage-backed securities – Commercial
|
351.1
|
339.7
|
|||||
Mortgage-backed securities – Residential
|
35.1
|
54.8
|
|||||
Total fixed maturities
|
4,057.7
|
4,107.1
|
|||||
Common stocks
|
184.3
|
175.1
|
|||||
Preferred stocks
|
1.4
|
1.6
|
|||||
Total equity securities available for sale
|
185.7
|
176.7
|
|||||
Private equity
|
243.0
|
211.4
|
|||||
Hedge fund
|
99.4
|
111.2
|
|||||
Overseas deposits
|
65.1
|
102.1
|
|||||
Other
|
4.8
|
4.7
|
|||||
Total other investments
|
412.3
|
429.4
|
|||||
Short term investments and cash equivalents
|
530.2
|
542.6
|
|||||
Cash
|
190.7
|
148.8
|
|||||
Total cash and invested assets
|
$
|
5,376.6
|
$
|
5,404.6
|
|
June 30,
|
December 31,
|
|||||
|
2021
|
2020
|
|||||
U.S. Governments and government agencies
|
$
|
841.9
|
$
|
853.2
|
|||
AAA
|
801.8
|
899.1
|
|||||
AA
|
380.8
|
382.0
|
|||||
A
|
866.4
|
869.9
|
|||||
BBB
|
818.2
|
739.4
|
|||||
BB
|
194.8
|
209.5
|
|||||
B
|
82.0
|
77.9
|
|||||
Lower than B
|
25.9
|
24.8
|
|||||
Not rated
|
45.9
|
51.3
|
|||||
Total fixed maturities
|
$
|
4,057.7
|
$
|
4,107.1
|
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||
June 30,
|
June 30,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
|||||||||||
Net income (loss) attributable to common
shareholders
|
$
|
67.1
|
$
|
(5.4
|
)
|
$
|
94.3
|
$
|
(30.1
|
)
|
|||||
Operating income (loss) (1)
|
56.1
|
(3.6
|
)
|
71.6
|
8.9
|
||||||||||
Common Shareholders' Equity - Beginning of period
|
$
|
1,677.0
|
$
|
1,613.5
|
$
|
1,713.8
|
$
|
1,763.7
|
|||||||
Common Shareholders' Equity - End of period
|
1,753.9
|
1,707.7
|
1,753.9
|
1,707.7
|
|||||||||||
Average Common Shareholders' Equity
|
$
|
1,715.5
|
$
|
1,660.6
|
$
|
1,733.9
|
$
|
1,735.7
|
|||||||
Common shares outstanding - End of period
|
34.843
|
34.645
|
34.843
|
34.645
|
|||||||||||
Book value per common share
|
$
|
50.34
|
$
|
49.29
|
$
|
50.34
|
$
|
49.29
|
|||||||
Cash dividends paid per common share during 2021
|
0.31
|
0.62
|
|||||||||||||
Book value per common share, June 30, 2021 -
including cash dividends paid
|
$
|
50.65
|
$
|
50.96
|
|||||||||||
Book value per common share, prior period (2)
|
$
|
48.23
|
$
|
49.40
|
|||||||||||
Change in book value per common share during 2021
|
4.4
|
%
|
1.9
|
%
|
|||||||||||
Change in book value per common share including
cash dividends paid, during 2021 (2)
|
5.0
|
%
|
3.2
|
%
|
|||||||||||
Annualized return on average common
shareholders' equity
|
15.6
|
%
|
(1.3
|
)%
|
10.9
|
%
|
(3.5
|
)%
|
|||||||
Annualized operating return on average common shareholders' equity
|
13.1
|
%
|
(0.9
|
)%
|
8.3
|
%
|
1.0
|
%
|
Brett Shirreffs
|
David Snowden
|
Head of Investor Relations
|
Senior Vice President, Communications
|
212.607.8830
|
210.321.2104
|
brett.shirreffs@argogroupus.com
|
david.snowden@argogroupus.com
|