|
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: May 2, 2022
|
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
|
||
By:
|
/s/ Scott Kirk
|
||
Name: Scott Kirk
|
|||
Title: Chief Financial Officer
|
•
|
Continued Strategic Growth: Net earned premium increased 3.1% in the first quarter 2022; strong net earned premium growth in our ongoing business1 of approximately 20.8%
|
•
|
Disciplined Expense Focus: Expense ratio of 36.0% for the first quarter 2022 improved 1.8 percentage points from the first quarter 2021, driven by reduced General and Administrative expenses
|
•
|
Improved Underwriting Performance: Combined ratio of 95.0% for the first quarter 2022 improved 8.8 percentage points from the first quarter 2021, driven by improvement in both the loss and expense
ratio
|
•
|
Reduced Catastrophe Losses: Total
catastrophe losses of $8.7 million for the first quarter 2022 decreased $38.8 million from the first quarter 2021
|
•
|
Syndicate 1200 Loss Portfolio Transfer ("LPT"): Agreement
on LPT transaction for Syndicate 1200's reserves for the 2018 and 2019 Years of Account
|
$ in millions
|
Three Months Ended
March 31,
|
Y/Y
|
|
|||||||||
Consolidated
|
2022
|
2021
|
|
Change | ||||||||
Gross written premiums
|
$
|
720.6
|
$
|
756.5
|
-4.7
|
%
|
||||||
Net written premiums
|
440.5
|
421.3
|
4.6
|
%
|
||||||||
Earned premiums
|
480.6
|
466.1
|
3.1
|
%
|
||||||||
Underwriting income (loss)
|
$
|
24.1
|
$
|
(17.9
|
)
|
NM
|
||||||
Net investment income
|
37.7
|
44.4
|
-15.1
|
%
|
||||||||
Net income (loss) attributable to common shareholders
|
$
|
(3.6
|
)
|
$
|
27.2
|
NM
|
||||||
Operating income
|
$
|
43.4
|
$
|
15.5
|
180.0
|
%
|
||||||
Loss ratio
|
59.0
|
%
|
66.0
|
%
|
-7.0 pts
|
|||||||
Acquisition expense ratio
|
17.2
|
%
|
17.0
|
%
|
0.2 pts
|
|||||||
General and administrative expense ratio
|
18.8
|
%
|
20.8
|
%
|
-2.0 pts
|
|||||||
Expense ratio
|
36.0
|
%
|
37.8
|
%
|
-1.8 pts
|
|||||||
Combined ratio
|
95.0
|
%
|
103.8
|
%
|
-8.8 pts
|
|||||||
CAY ex-CAT loss ratio
|
56.5
|
%
|
55.6
|
%
|
0.9 pts
|
•
|
Gross written premium in the first quarter 2022 of $720.6 million decreased 4.7% from $756.5 million in first quarter 2021. The decrease in
gross written premiums in the first quarter 2022 when compared to the first quarter 2021 is attributable to the businesses the Company is exiting, planning to exit or has exited. Within the Company's ongoing business, gross written
premium grew approximately 6.9% during the first quarter 2022 compared to
the first quarter 2021.
|
•
|
The retention ratio, calculated as net written premium divided by gross written premium, increased 5.4 percentage points to 61.1% in the first
quarter 2022 compared to the first quarter 2021. The increase in the retention ratio primarily reflects business mix shifts toward higher premium retention lines.
|
•
|
The combined ratio was 95.0% during the first quarter 2022, compared to 103.8% in the first quarter 2021. This improvement of 8.8 percentage
points was driven by reduced catastrophe ("CAT") losses and a lower expense ratio.
|
•
|
Total catastrophe losses in the first quarter 2022 were $8.7 million or 1.8 percentage points on the loss ratio. In comparison, catastrophe
losses in the prior year first quarter were $47.5 million or 10.2 percentage points on the loss ratio.
|
•
|
Net adverse prior year reserve development for the first quarter 2022 was $3.4 million, or 0.7 percentage points on the loss ratio. In the prior year first quarter, net adverse prior year reserve development was $1.0 million.
|
•
|
The current accident year ("CAY") ex-CAT loss ratio was 56.5% in the first quarter 2022, compared to 55.6% in the prior year first quarter.
|
•
|
The expense ratio in the first quarter 2022 was 36.0%, an improvement of 1.8 percentage points from the first quarter 2021. This reduction was
driven by an improvement of 2.0 percentage points in the general and administrative ratio, partially offset by a slight increase in the acquisition expense ratio of 0.2 percentage points compared to the first quarter 2021. The improvement
in the general and administrative ratio reflects continued execution of our expense reduction initiatives, primarily driven by a $6.9 million decrease in general and administrative expenses in addition to growth in net earned premium in
the first quarter 2022 compared to the first quarter 2021.
|
•
|
The CAY ex-CAT combined ratio was 92.5% in the first quarter 2022, compared to 93.4% in the prior year first quarter.
|
•
|
Net investment income of $37.7 million in the first quarter 2022 decreased $6.7 million compared to the prior year first quarter. This
reduction was driven by a $7.1 million decrease in investment income from alternative investments in the first quarter 2022 when compared to the first quarter 2021.
|
•
|
Pre-tax net realized investment and other losses were $34.5 million in the first quarter 2022, compared to $13.1 million of pre-tax net
realized investment gains in the prior year first quarter. The increase in net realized investment and other losses is primarily attributable to Argo Seguros Brasil, where previously unrealized foreign exchange losses included in
accumulated other comprehensive income ("AOCI") were realized in the quarter due to the sale of the business in February 2022.
|
•
|
The first quarter 2022 included $7.4 million of non-operating expenses, which were mainly attributable to non-operating advisory fees.
|
•
|
The effective tax rate, calculated as the income tax provision divided by income before income taxes, for the first quarter 2022 was 109.7%,
compared to 4.3% in the first quarter 2021. The increase in the effective tax rate for the current quarter results primarily from the tax treatment of foreign exchange losses associated with the sale of Argo Seguros Brasil.
|
•
|
Net loss attributable to common shareholders was $3.6 million, or $0.11 per diluted share, for the first quarter 2022, compared to net income
attributable to common shareholders of $27.2 million, or $0.78 per diluted share, for the first quarter 2021. Annualized return on average common shareholders' equity was (0.9%) in the first quarter 2022, compared to 6.4% in the prior
year first quarter.
|
•
|
Operating income was $43.4 million or $1.24 per diluted share in the first quarter 2022, compared to $15.5 million or $0.44 per diluted share
in the prior year first quarter. Annualized operating return on average common shareholders' equity was 11.4% in the first quarter 2022, compared to 3.7% in the prior year first quarter.
|
$ in millions
|
Three Months Ended
March 31,
|
Y/Y
|
|
|||||||||
U.S. Operations
|
2022
|
2021
|
|
Change | ||||||||
Gross written premiums
|
$
|
475.2
|
$
|
489.4
|
-2.9
|
%
|
||||||
Net written premiums
|
312.9
|
293.0
|
6.8
|
%
|
||||||||
Earned premiums
|
336.4
|
314.4
|
7.0
|
%
|
||||||||
Losses and loss adjustment expenses
|
206.2
|
195.6
|
5.4
|
%
|
||||||||
Acquisition expenses
|
57.5
|
50.3
|
14.3
|
%
|
||||||||
General and administrative expenses
|
50.2
|
57.2
|
-12.2
|
%
|
||||||||
Underwriting income
|
$
|
22.5
|
$
|
11.3
|
99.1
|
%
|
||||||
Loss ratio
|
61.3
|
%
|
62.2
|
%
|
-0.9 pts
|
|||||||
Acquisition expense ratio
|
17.1
|
%
|
16.0
|
%
|
1.1 pts
|
|||||||
General and administrative expense ratio
|
14.9
|
%
|
18.2
|
%
|
-3.3 pts
|
|||||||
Expense ratio
|
32.0
|
%
|
34.2
|
%
|
-2.2 pts
|
|||||||
Combined ratio
|
93.3
|
%
|
96.4
|
%
|
-3.1 pts
|
|||||||
CAY ex-CAT loss ratio
|
58.6
|
%
|
55.7
|
%
|
2.9 pts
|
•
|
U.S. Operations gross written premium decreased 2.9% in the first quarter 2022, compared to the first quarter 2021. Gross written premium in
the U.S. ongoing business2 grew approximately 5.1% during the first quarter 2022 compared to the prior year first quarter. Rates on average were up in the mid-single digits in the
first quarter 2022.
|
•
|
The loss ratio for the first quarter 2022 was 61.3%, down from 62.2% in the prior year first quarter. The improvement in the loss ratio was
primarily driven by lower catastrophe losses, partially offset by an increase in the CAY ex-CAT loss ratio.
|
•
|
Net unfavorable prior-year reserve development in the first quarter 2022 was $5.0 million or 1.5 percentage points on the loss ratio, compared
to $0.4 million of favorable development in the prior year first quarter. The adverse development in the first quarter 2022 is primarily attributable to incurred development on a small number of claims in businesses that we have exited.
|
•
|
Catastrophe losses were $4.0 million, or 1.2 percentage points on the loss ratio, in the first quarter 2022, compared to $20.9 million or 6.6
percentage points on the loss ratio in the prior year first quarter.
|
•
|
The CAY ex-CAT loss ratio was 58.6% in the first quarter 2022, compared to 55.7% in the prior year first quarter. The change in the CAY ex-CAT
loss ratio is primarily driven by frequency benefits associated with the COVID-19 pandemic included in the first quarter 2021. The CAY ex-CAT loss ratio for the first quarter 2022 is in line with the CAY ex-CAT loss ratio for the full
year 2021.
|
•
|
The expense ratio in the first quarter 2022 was 32.0%, an improvement of 2.2 percentage points from the first quarter 2021. This reduction was
driven by an improvement of 3.3 percentage points in the general and administrative expense ratio, partially offset by an increase of 1.1 percentage points in the acquisition expense ratio. The improvement in the general and
administrative expense ratio was driven by a $7.0 million decrease in general and administrative expenses combined with a 7.0% increase in net earned premium in the first quarter 2022.
|
$ in millions
|
Three Months Ended
March 31,
|
Y/Y
|
|
|||||||||
International Operations
|
2022
|
2021
|
|
Change | ||||||||
Gross written premiums
|
$
|
245.4
|
$
|
266.9
|
-8.1
|
%
|
||||||
Net written premiums
|
127.6
|
128.1
|
-0.4
|
%
|
||||||||
Earned premiums
|
144.2
|
151.5
|
-4.8
|
%
|
||||||||
Losses and loss adjustment expenses
|
76.0
|
110.6
|
-31.3
|
%
|
||||||||
Acquisition expenses
|
25.1
|
29.0
|
-13.4
|
%
|
||||||||
General and administrative expenses
|
29.8
|
33.7
|
-11.6
|
%
|
||||||||
Underwriting income (loss)
|
$
|
13.3
|
$
|
(21.8
|
)
|
NM
|
||||||
Loss ratio
|
52.7
|
%
|
73.0
|
%
|
-20.3 pts
|
|||||||
Acquisition expense ratio
|
17.4
|
%
|
19.1
|
%
|
-1.7 pts
|
|||||||
General and administrative expense ratio
|
20.7
|
%
|
22.3
|
%
|
-1.6 pts
|
|||||||
Expense Ratio
|
38.1
|
%
|
41.4
|
%
|
-3.3 pts
|
|||||||
Combined ratio
|
90.8
|
%
|
114.4
|
%
|
-23.6 pts
|
|||||||
CAY ex-CAT loss ratio
|
51.5
|
%
|
55.4
|
%
|
-3.9 pts
|
•
|
International Operations gross written premium decreased 8.1% in the first quarter 2022 compared to the first quarter 2021. Gross written
premium in the International ongoing business3 increased approximately 11.0% in the first quarter 2022 compared to the prior year first quarter. Rates on average were up in the
low-double digits in the first quarter 2022.
|
•
|
The loss ratio for the first quarter 2022 was 52.7%, an improvement of 20.3 percentage points compared to the prior year first quarter. This
reduction is primarily the result of lower catastrophe losses compared to the first quarter 2021.
|
•
|
Net favorable prior year reserve development in the first quarter 2022 was $3.0 million or 2.1 percentage points on the loss ratio compared to
$0.0 million of prior year reserve development in the first quarter 2021.
|
•
|
Argo's managing agent has approved entering into a LPT relating to the 2018 and 2019 Years of Account for Syndicate 1200.
|
•
|
Catastrophe losses were $4.7 million, or 3.3 percentage points on the loss ratio in the first quarter 2022. The first quarter 2021 included
$26.6 million of catastrophe losses or 17.6 percentage points on the loss ratio. The first quarter 2021 was impacted by catastrophe losses from winter storm Uri and included $4.4 million of losses related to the COVID-19 pandemic.
|
•
|
The CAY ex-CAT loss ratio was 51.5% in the first quarter 2022 compared to 55.4% in the prior year first quarter. The reduction in the CAY
ex-CAT loss ratio is due to a combination of underwriting actions and achieved rate increases earning through the results.
|
•
|
The expense ratio in the first quarter 2022 was 38.1%, an improvement of 3.3 percentage points from the first quarter 2021. This reduction in
the expense ratio is attributable to an improvement in both the acquisition and general and administrative expense ratio.
|
•
|
Book value per common share was $41.97 as of March 31, 2022, compared to $45.62 on December 31, 2021. The decrease in book value per common
share is largely attributable to the movement in AOCI in the quarter.
|
•
|
Accumulated other comprehensive income was ($134.9) million as of March 31, 2022, compared to ($22.7) million on December 31, 2021. The change
in AOCI was driven by the movement in unrealized investment losses in the quarter, which were $143.6 million, or $4.11 per common share.
|
•
|
Book value per common share, excluding AOCI, was $45.84 as of March 31, 2022, a decrease of 0.9% from $46.27 at December 31, 2021.
|
|
March 31,
|
December 31,
|
||||||
|
2022
|
2021
|
||||||
|
(unaudited)
|
|||||||
Assets
|
||||||||
Total investments
|
$
|
5,071.5
|
$
|
5,322.6
|
||||
Cash
|
154.0
|
146.1
|
||||||
Accrued investment income
|
22.1
|
20.9
|
||||||
Receivables
|
3,507.2
|
3,615.0
|
||||||
Goodwill and intangible assets
|
164.6
|
164.6
|
||||||
Deferred acquisition costs, net
|
174.6
|
168.0
|
||||||
Ceded unearned premiums
|
494.9
|
506.7
|
||||||
Other assets
|
392.1
|
373.9
|
||||||
Total assets
|
$
|
9,981.0
|
$
|
10,317.8
|
||||
Liabilities and Shareholders' Equity
|
||||||||
Reserves for losses and loss adjustment expenses
|
$
|
5,648.1
|
$
|
5,595.0
|
||||
Unearned premiums
|
1,386.0
|
1,466.8
|
||||||
Ceded reinsurance payable, net
|
577.9
|
724.4
|
||||||
Senior unsecured fixed rate notes
|
140.4
|
140.3
|
||||||
Other indebtedness
|
57.3
|
57.0
|
||||||
Junior subordinated debentures
|
258.3
|
258.2
|
||||||
Other liabilities
|
302.2
|
340.9
|
||||||
Total liabilities
|
8,370.2
|
8,582.6
|
||||||
Preferred shares
|
144.0
|
144.0
|
||||||
Common shares
|
46.3
|
46.2
|
||||||
Additional paid-in capital
|
1,388.5
|
1,386.4
|
||||||
Treasury shares
|
(455.1
|
)
|
(455.1
|
)
|
||||
Retained earnings
|
622.0
|
636.4
|
||||||
Accumulated other comprehensive income, net of taxes
|
(134.9
|
)
|
(22.7
|
)
|
||||
Total shareholders' equity
|
1,610.8
|
1,735.2
|
||||||
Total liabilities and shareholders' equity
|
$
|
9,981.0
|
$
|
10,317.8
|
||||
Book value per common share
|
$
|
41.97
|
$
|
45.62
|
||||
Tangible book value per common share
|
$
|
37.26
|
$
|
40.90
|
||||
Book value per common share excluding AOCI, net of tax
|
$
|
45.84
|
$
|
46.27
|
||||
Tangible book value per common share excluding AOCI, net of tax
|
$
|
41.13
|
$
|
41.55
|
|
Three Months Ended
|
|||||||
|
March 31,
|
|||||||
|
2022
|
2021
|
||||||
Gross written premiums
|
$
|
720.6
|
$
|
756.5
|
||||
Net written premiums
|
440.5
|
421.3
|
||||||
Earned premiums
|
480.6
|
466.1
|
||||||
Net investment income
|
37.7
|
44.4
|
||||||
Net realized investment and other gains (losses):
|
||||||||
Net realized investment and other gains (losses)
|
(40.2
|
)
|
(1.3
|
)
|
||||
Change in fair value recognized
|
6.7
|
15.5
|
||||||
Change in allowance for credit losses on fixed maturity securities
|
(1.0
|
)
|
(1.1
|
)
|
||||
Net realized investment and other gains (losses)
|
(34.5
|
)
|
13.1
|
|||||
Total revenue
|
483.8
|
523.6
|
||||||
Losses and loss adjustment expenses
|
283.6
|
307.6
|
||||||
Acquisition expenses
|
82.6
|
79.2
|
||||||
General and administrative expenses
|
90.3
|
97.2
|
||||||
Non-operating expenses
|
7.4
|
1.9
|
||||||
Interest expense
|
5.8
|
5.1
|
||||||
Fee and other (income) expense, net
|
(0.8
|
)
|
0.1
|
|||||
Foreign currency exchange losses
|
2.9
|
1.3
|
||||||
Total expenses
|
471.8
|
492.4
|
||||||
Income before income taxes
|
12.0
|
31.2
|
||||||
Income tax provision
|
13.0
|
1.4
|
||||||
Net income (loss)
|
$
|
(1.0
|
)
|
$
|
29.8
|
|||
Dividends on preferred shares
|
2.6
|
2.6
|
||||||
Net income (loss) attributable to common shareholders
|
$
|
(3.6
|
)
|
$
|
27.2
|
|||
Net income (loss) per common share (basic)
|
$
|
(0.11
|
)
|
$
|
0.78
|
|||
Net income (loss) per common share (diluted)
|
$
|
(0.11
|
)
|
$
|
0.78
|
|||
Weighted average common shares:
|
||||||||
Basic
|
34.9
|
34.7
|
||||||
Diluted
|
34.9
|
34.9
|
||||||
Loss ratio
|
59.0
|
%
|
66.0
|
%
|
||||
Acquisition expense ratio
|
17.2
|
%
|
17.0
|
%
|
||||
General and administrative expense ratio
|
18.8
|
%
|
20.8
|
%
|
||||
Expense ratio
|
36.0
|
%
|
37.8
|
%
|
||||
GAAP combined ratio
|
95.0
|
%
|
103.8
|
%
|
||||
CAY ex-CAT combined ratio
|
92.5
|
%
|
93.4
|
%
|
|
Three months ended
|
|||||||
|
March 31,
|
|||||||
|
2022
|
2021
|
||||||
U.S. Operations
|
||||||||
Gross written premiums
|
$
|
475.2
|
$
|
489.4
|
||||
Net written premiums
|
312.9
|
293.0
|
||||||
Earned premiums
|
336.4
|
314.4
|
||||||
Underwriting income (loss)
|
22.5
|
11.3
|
||||||
Net investment income
|
25.6
|
28.8
|
||||||
Interest expense
|
(3.9
|
)
|
(3.6
|
)
|
||||
Fee income (expense), net
|
—
|
0.1
|
||||||
Operating income (loss) before taxes
|
$
|
44.2
|
$
|
36.6
|
||||
Loss ratio
|
61.3
|
%
|
62.2
|
%
|
||||
Acquisition expense ratio
|
17.1
|
%
|
16.0
|
%
|
||||
General and administrative expense ratio
|
14.9
|
%
|
18.2
|
%
|
||||
Expense Ratio
|
32.0
|
%
|
34.2
|
%
|
||||
GAAP combined ratio
|
93.3
|
%
|
96.4
|
%
|
||||
CAY ex-CAT combined ratio
|
90.6
|
%
|
89.9
|
%
|
||||
International Operations
|
||||||||
Gross written premiums
|
$
|
245.4
|
$
|
266.9
|
||||
Net written premiums
|
127.6
|
128.1
|
||||||
Earned premiums
|
144.2
|
151.5
|
||||||
Underwriting income (loss)
|
13.3
|
(21.8
|
)
|
|||||
Net investment income
|
11.4
|
12.0
|
||||||
Interest expense
|
(1.7
|
)
|
(1.4
|
)
|
||||
Fee income (expense), net
|
0.8
|
(0.4
|
)
|
|||||
Operating income (loss) before taxes
|
$
|
23.8
|
$
|
(11.6
|
)
|
|||
Loss ratio
|
52.7
|
%
|
73.0
|
%
|
||||
Acquisition expense ratio
|
17.4
|
%
|
19.1
|
%
|
||||
General and administrative expense ratio
|
20.7
|
%
|
22.3
|
%
|
||||
Expense Ratio
|
38.1
|
%
|
41.4
|
%
|
||||
GAAP combined ratio
|
90.8
|
%
|
114.4
|
%
|
||||
CAY ex-CAT combined ratio
|
89.6
|
%
|
96.8
|
%
|
|
Three Months Ended
|
|||||||
|
March 31,
|
|||||||
|
2022
|
2021
|
||||||
U.S. Operations
|
||||||||
Loss ratio
|
61.3
|
%
|
62.2
|
%
|
||||
Prior accident year loss reserve development
|
(1.5
|
)%
|
0.1
|
%
|
||||
Catastrophe losses
|
(1.2
|
)%
|
(6.6
|
)%
|
||||
CAY ex-CAT loss ratio
|
58.6
|
%
|
55.7
|
%
|
||||
International Operations
|
||||||||
Loss ratio
|
52.7
|
%
|
73.0
|
%
|
||||
Prior accident year loss reserve development
|
2.1
|
%
|
—
|
%
|
||||
Catastrophe losses
|
(3.3
|
)%
|
(17.6
|
)%
|
||||
CAY ex-CAT loss ratio
|
51.5
|
%
|
55.4
|
%
|
||||
Consolidated
|
||||||||
Loss ratio
|
59.0
|
%
|
66.0
|
%
|
||||
Prior accident year loss reserve development
|
(0.7
|
)%
|
(0.2
|
)%
|
||||
Catastrophe losses
|
(1.8
|
)%
|
(10.2
|
)%
|
||||
CAY ex-CAT loss ratio
|
56.5
|
%
|
55.6
|
%
|
|
Three Months Ended
|
|||||||
March 31,
|
||||||||
2022
|
2021
|
|||||||
Net Prior-Year Reserve Development
|
||||||||
(Favorable)/Unfavorable
|
||||||||
U.S. Operations
|
$
|
5.0
|
$
|
(0.4
|
)
|
|||
International Operations
|
(3.0
|
)
|
—
|
|||||
Run-off Lines
|
1.4
|
1.4
|
||||||
Total net prior-year reserve development
|
$
|
3.4
|
$
|
1.0
|
|
Three Months Ended
|
|||||||
March 31,
|
||||||||
2022
|
2021
|
|||||||
Catastrophe & COVID-19 Losses
|
||||||||
Catastrophe losses
|
||||||||
U.S. Operations
|
$
|
4.0
|
$
|
20.9
|
||||
International Operations
|
4.7
|
22.2
|
||||||
Total catastrophe losses
|
8.7
|
43.1
|
||||||
COVID-19 losses
|
||||||||
U.S. Operations
|
—
|
—
|
||||||
International Operations
|
—
|
4.4
|
||||||
Total COVID-19 losses
|
—
|
4.4
|
||||||
Catastrophe & COVID-19 losses
|
||||||||
U.S. Operations
|
4.0
|
20.9
|
||||||
International Operations
|
4.7
|
26.6
|
||||||
Total catastrophe & COVID-19 losses
|
$
|
8.7
|
$
|
47.5
|
|
Three Months Ended
|
|||||||
|
March 31,
|
|||||||
|
2022
|
2021
|
||||||
Net income (loss)
|
$
|
(1.0
|
)
|
$
|
29.8
|
|||
Add (deduct):
|
||||||||
Income tax provision
|
13.0
|
1.4
|
||||||
Net investment income
|
(37.7
|
)
|
(44.4
|
)
|
||||
Net realized investment and other (gains) losses
|
34.5
|
(13.1
|
)
|
|||||
Interest expense
|
5.8
|
5.1
|
||||||
Fee and other (income) expense, net
|
(0.8
|
)
|
0.1
|
|||||
Foreign currency exchange losses
|
2.9
|
1.3
|
||||||
Non-operating expenses
|
7.4
|
1.9
|
||||||
Underwriting income (loss)
|
$
|
24.1
|
$
|
(17.9
|
)
|
|
Three Months Ended
|
|||||||
|
March 31,
|
|||||||
|
2022
|
2021
|
||||||
Net income (loss), as reported
|
$
|
(1.0
|
)
|
$
|
29.8
|
|||
Income tax provision
|
13.0
|
1.4
|
||||||
Net income (loss), before taxes
|
12.0
|
31.2
|
||||||
Add (deduct):
|
||||||||
Net realized investment and other (gains) losses
|
34.5
|
(13.1
|
)
|
|||||
Foreign currency exchange losses
|
2.9
|
1.3
|
||||||
Non-operating expenses
|
7.4
|
1.9
|
||||||
Operating income before taxes and preferred share dividends
|
56.8
|
21.3
|
||||||
Income tax provision, at assumed rate (1)
|
10.8
|
3.2
|
||||||
Preferred share dividends
|
2.6
|
2.6
|
||||||
Operating income (loss)
|
$
|
43.4
|
$
|
15.5
|
||||
Operating income (loss) per common share (diluted)
|
$
|
1.24
|
$
|
0.44
|
||||
Weighted average common shares, diluted
|
35.1
|
34.9
|
|
Three Months Ended
|
|||||||
|
March 31,
|
|||||||
|
2022
|
2021
|
||||||
Operating income (loss) before income taxes:
|
||||||||
U.S. Operations
|
$
|
44.2
|
$
|
36.6
|
||||
International Operations
|
23.8
|
(11.6
|
)
|
|||||
Run-off Lines
|
(1.0
|
)
|
(0.8
|
)
|
||||
Corporate and Other
|
(10.2
|
)
|
(2.9
|
)
|
||||
Total operating income (loss) before income taxes
|
56.8
|
21.3
|
||||||
Net realized investment and other gains (losses)
|
(34.5
|
)
|
13.1
|
|||||
Foreign currency exchange (losses) gains
|
(2.9
|
)
|
(1.3
|
)
|
||||
Non-operating expenses
|
(7.4
|
)
|
(1.9
|
)
|
||||
Income before income taxes
|
12.0
|
31.2
|
||||||
Income tax provision
|
13.0
|
1.4
|
||||||
Net income (loss)
|
$
|
(1.0
|
)
|
$
|
29.8
|
U.S. Operations
|
Three months ended March 31, 2022
|
Three months ended March 31, 2021
|
||||||||||||||||||||||
Gross
Written
|
Net
Written
|
Net
Earned
|
Gross
Written
|
Net
Written
|
Net
Earned
|
|||||||||||||||||||
Property
|
$
|
44.4
|
$
|
26.8
|
$
|
40.5
|
$
|
56.9
|
$
|
20.7
|
$
|
42.5
|
||||||||||||
Liability
|
270.6
|
170.0
|
170.4
|
266.5
|
162.6
|
165.7
|
||||||||||||||||||
Professional
|
101.3
|
69.4
|
84.5
|
112.0
|
72.2
|
71.7
|
||||||||||||||||||
Specialty
|
58.9
|
46.7
|
41.0
|
54.0
|
37.5
|
34.5
|
||||||||||||||||||
Total
|
$
|
475.2
|
$
|
312.9
|
$
|
336.4
|
$
|
489.4
|
$
|
293.0
|
$
|
314.4
|
International Operations
|
Three months ended March 31, 2022
|
Three months ended March 31, 2021
|
||||||||||||||||||||||
Gross
Written
|
Net
Written
|
Net
Earned
|
Gross
Written
|
Net
Written
|
Net
Earned
|
|||||||||||||||||||
Property
|
$
|
52.1
|
$
|
10.0
|
$
|
29.4
|
$
|
79.4
|
$
|
19.9
|
$
|
42.1
|
||||||||||||
Liability
|
49.4
|
28.2
|
35.6
|
57.3
|
30.7
|
30.2
|
||||||||||||||||||
Professional
|
48.1
|
28.0
|
31.8
|
53.1
|
27.4
|
33.2
|
||||||||||||||||||
Specialty
|
95.8
|
61.4
|
47.4
|
77.1
|
50.1
|
46.0
|
||||||||||||||||||
Total
|
$
|
245.4
|
$
|
127.6
|
$
|
144.2
|
$
|
266.9
|
$
|
128.1
|
$
|
151.5
|
Consolidated
|
Three months ended March 31, 2022
|
Three months ended March 31, 2021
|
||||||||||||||||||||||
Gross
Written
|
Net
Written
|
Net
Earned
|
Gross
Written
|
Net
Written
|
Net
Earned
|
|||||||||||||||||||
Property
|
$
|
96.5
|
$
|
36.8
|
$
|
69.9
|
$
|
136.3
|
$
|
40.6
|
$
|
84.6
|
||||||||||||
Liability
|
320.0
|
198.2
|
206.0
|
324.0
|
193.5
|
196.1
|
||||||||||||||||||
Professional
|
149.4
|
97.4
|
116.3
|
165.1
|
99.6
|
104.9
|
||||||||||||||||||
Specialty
|
154.7
|
108.1
|
88.4
|
131.1
|
87.6
|
80.5
|
||||||||||||||||||
Total
|
$
|
720.6
|
$
|
440.5
|
$
|
480.6
|
$
|
756.5
|
$
|
421.3
|
$
|
466.1
|
|
Three Months Ended
|
|||||||
|
March 31,
|
|||||||
|
2022
|
2021
|
||||||
Net Investment Income
|
||||||||
Net investment income, excluding alternative investments
|
$
|
24.1
|
$
|
23.7
|
||||
Alternative investments
|
13.6
|
20.7
|
||||||
Total net investment income
|
$
|
37.7
|
$
|
44.4
|
|
Three Months Ended
|
|||||||
|
March 31,
|
|||||||
|
2022
|
2021
|
||||||
Net Realized Investment and Other Gains (Losses)
|
||||||||
Net realized investment (losses) gains
|
$
|
(11.7
|
)
|
$
|
(1.3
|
)
|
||
Change in fair value recognized
|
6.7
|
15.5
|
||||||
Change in allowance for credit losses on fixed maturity securities
|
(1.0
|
)
|
(1.1
|
)
|
||||
Foreign exchange translation losses realized on the sale of Argo Seguros Brasil
|
(28.5
|
)
|
—
|
|||||
Total net realized investments and other gains (losses)
|
$
|
(34.5
|
)
|
$
|
13.1
|
|
March 31,
|
December 31,
|
||||||
|
2022
|
2021
|
||||||
U.S. Governments and government agencies
|
$
|
479.4
|
$
|
425.0
|
||||
States and political subdivisions
|
166.6
|
171.3
|
||||||
Foreign governments
|
207.5
|
232.8
|
||||||
Corporate – Financial
|
957.2
|
986.9
|
||||||
Corporate – Industrial
|
840.7
|
850.6
|
||||||
Corporate – Utilities
|
132.5
|
145.8
|
||||||
Asset-backed securities
|
200.5
|
173.6
|
||||||
Collateralized loan obligations
|
328.5
|
336.1
|
||||||
Mortgage-backed securities – Agency
|
408.9
|
457.2
|
||||||
Mortgage-backed securities – Commercial
|
400.2
|
418.7
|
||||||
Mortgage-backed securities – Residential
|
21.9
|
25.3
|
||||||
Total fixed maturities
|
4,143.9
|
4,223.3
|
||||||
Common stocks
|
53.9
|
55.6
|
||||||
Preferred stocks
|
0.1
|
0.7
|
||||||
Total equity securities available for sale
|
54.0
|
56.3
|
||||||
Private equity
|
259.6
|
248.9
|
||||||
Hedge fund
|
58.1
|
58.6
|
||||||
Overseas deposits
|
83.6
|
74.9
|
||||||
Commercial Mortgage Loans
|
46.5
|
—
|
||||||
Other
|
4.7
|
4.8
|
||||||
Total other investments
|
452.5
|
387.2
|
||||||
Short term investments and cash equivalents
|
421.1
|
655.8
|
||||||
Cash
|
154.0
|
146.1
|
||||||
Total cash and invested assets
|
$
|
5,225.5
|
$
|
5,468.7
|
|
March 31,
|
December 31,
|
||||||
|
2022
|
2021
|
||||||
U.S. Governments and government agencies
|
$
|
888.3
|
$
|
882.1
|
||||
AAA
|
774.6
|
788.6
|
||||||
AA
|
370.5
|
390.9
|
||||||
A
|
907.9
|
894.2
|
||||||
BBB
|
798.9
|
820.5
|
||||||
BB
|
136.5
|
174.2
|
||||||
B
|
63.0
|
71.3
|
||||||
Lower than B
|
20.3
|
22.5
|
||||||
Not rated
|
183.9
|
179.0
|
||||||
Total fixed maturities
|
$
|
4,143.9
|
$
|
4,223.3
|
March 31,
|
December 31,
|
|||||||
2022
|
2021
|
|||||||
Common shareholders' equity
|
$
|
1,466.8
|
$
|
1,591.2
|
||||
Less: Accumulated other comprehensive income (AOCI), net of taxes
|
(134.9
|
)
|
(22.7
|
)
|
||||
Common shareholders' equity excluding AOCI, net of tax
|
$
|
1,601.7
|
$
|
1,613.9
|
||||
Common shareholders' equity
|
$
|
1,466.8
|
$
|
1,591.2
|
||||
Less: Goodwill and intangible assets
|
164.6
|
164.6
|
||||||
Tangible common shareholders' equity
|
1,302.2
|
1,426.6
|
||||||
Less: AOCI, net of tax
|
(134.9
|
)
|
(22.7
|
)
|
||||
Tangible common shareholders' equity excluding AOCI, net of tax
|
$
|
1,437.1
|
$
|
1,449.3
|
||||
Common shares outstanding - end of period
|
34.945
|
34.877
|
||||||
Book value per common share
|
$
|
41.97
|
$
|
45.62
|
||||
Tangible book value per common share
|
$
|
37.26
|
$
|
40.90
|
||||
Book value per common share excluding AOCI, net of tax
|
$
|
45.84
|
$
|
46.27
|
||||
Tangible book value per common share excluding AOCI, net of tax
|
$
|
41.13
|
$
|
41.55
|
|
Three Months Ended
|
|||||||
March 31,
|
||||||||
|
2022
|
2021
|
||||||
Net income (loss) attributable to common shareholders
|
$
|
(3.6
|
)
|
$
|
27.2
|
|||
Operating income (loss) (1)
|
43.4
|
15.5
|
||||||
Common Shareholders' Equity - Beginning of period
|
$
|
1,591.2
|
$
|
1,713.8
|
||||
Common Shareholders' Equity - End of period
|
1,466.8
|
1,677.0
|
||||||
Average Common Shareholders' Equity
|
$
|
1,529.0
|
$
|
1,695.4
|
||||
Common shares outstanding - End of period
|
34.945
|
34.769
|
||||||
Book value per common share
|
$
|
41.97
|
$
|
48.23
|
||||
Cash dividends paid per common share during 2022
|
0.31
|
|||||||
Book value per common share, March 31, 2022 - including cash dividends paid
|
$
|
42.28
|
||||||
Book value per common share, prior period (2)
|
$
|
45.62
|
||||||
Change in book value per common share during 2022
|
(8.0
|
)%
|
||||||
Change in book value per common share including cash dividends paid, during 2022 (2)
|
(7.3
|
)%
|
||||||
Annualized return on average common shareholders' equity
|
(0.9
|
)%
|
6.4
|
%
|
||||
Annualized operating return on average common shareholders' equity
|
11.4
|
%
|
3.7
|
%
|
Contact:
|
|
|
|
Andrew Hersom
|
David Snowden
|
Head of Investor Relations
|
Senior Vice President, Communications
|
860.970.5845
|
210.321.2104
|
andrew.hersom@argogroupus.com
|
david.snowden@argogroupus.com
|
|
|
Gregory Charpentier
|
|
AVP, Investor Relations and Corporate Finance
|
|
978.387.4150 | |
gregory.charpentier@argogroupus.com |