PROTECT THE VALUE OF YOUR INVESTMENT: VOTE THE ENCLOSED BLUE PROXY CARD “FOR” ARGO’S HIGHLY QUALIFIED DIRECTOR NOMINEES
October 31, 2022
Dear Fellow Shareholders,
Argo has made significant progress in repositioning the Company under the leadership of your Board of Directors and management team. As a result of these actions, Argo is now a focused pure-play U.S. specialty insurer with over $2 billion in premium and renewed momentum. We are now better positioned to drive our business strategies and evaluate further strategic opportunities to create shareholder value as a streamlined company. Our Board is committed to maximizing shareholder value and is actively exploring strategic alternatives, including a sale of the Company, for the benefit of all Argo shareholders.
We need your support at the Company’s upcoming annual general meeting of shareholders. Despite all of the recent actions to position Argo for success, one of our shareholders, Capital Returns Master, Ltd., has initiated a proxy contest to replace two of Argo’s directors with its own candidates. If successful, we believe this would result in a loss of superior talent and experience on the Board at a critical juncture for the Company and a degradation in the quality of Board dialogue, representing significant risks to your investment.
Argo’s Board and executive leadership have been unified and unwavering in our commitment to acting in the best interests of our shareholders. We encourage you to vote as soon as possible “FOR” ALL seven of Argo’s highly qualified director nominees: Bernard Bailey, Thomas Bradley, Dymphna Lehane, Samuel Liss, Carol McFate, J. Daniel Plants and Al-Noor Ramji. You can vote online, by telephone or by signing, dating and returning the enclosed BLUE proxy card in the postage-paid envelope provided.
ARGO’S BOARD AND MANAGEMENT TEAM HAVE SUCCESSFULLY TRANSFORMED THE COMPANY INTO A FOCUSED PURE-PLAY U.S. SPECIALTY INSURER
We believe Argo’s share price has not reflected the true value of our business. As such, our Board and management team have taken numerous concrete steps to transform many aspects of the franchise, positioning Argo to deliver growth and increased profitability for the benefit of all shareholders. This effort has been further advanced by the Board’s ongoing strategic review process, which is exploring a range of options to maximize value for Argo shareholders, including a potential sale of the Company, with the assistance of leading independent financial and legal advisors.
The transformational steps taken include:
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Streamlining Argo’s portfolio to focus on its most profitable business lines. Over the past two years, Argo has announced significant divestitures to exit international businesses, including businesses in Italy, Brazil, Malta and most recently the United Kingdom, in order to focus on its most attractive business lines. These divestitures followed a comprehensive analysis of our underwriting results and competitive position in all markets where we operate.
In streamlining our portfolio to focus on our most profitable and scalable businesses, we have achieved a compounded annual growth rate of 10.9% between 2019 and 2021 for our ongoing businesses. We have also reduced catastrophe and liability exposure, with catastrophe losses of $2.5 million in the second quarter of fiscal 2022, marking the fifth consecutive quarter of year-over-year improvement and Argo’s lowest level since 2019. These actions give us confidence in our go-forward business strategy and the long-term potential of Argo’s businesses.
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Undertaking two major strategic transactions. In the past three months, Argo has announced two major transactions as we explore a range of options to maximize shareholder value. These transactions will result in the transfer of approximately $954 million1 in net reserves:
1) Argo’s entry into a Loss Portfolio Transfer (LPT) transaction with Enstar Group Limited for ~$746 million. The LPT covers a majority of Argo’s U.S. Casualty insurance reserves, including