Argo Group enjoys over 270% surge in one key metric

Figures are released for first quarter of 2019

Argo Group enjoys over 270% surge in one key metric

Insurance News

By Terry Gangcuangco

It’s the turn of Argo Group International Holdings, Ltd. to report its financial results for the first quarter of 2019, and one key metric has posted a surge of more than 270%.

For the three months ended March 31, the specialty insurer saw its net income per diluted share rise 270.4% from $0.71 in the same period in 2018 to $2.63 this time around. Net income in the first quarter jumped to $91.2 million from $24.8 million previously.

Gross written premium (GWP), meanwhile, improved 7.1% to $760.8 million. Broken down, this figure was a combination of the $410.7 million in GWP from Argo’s US operations and the $350.1 million recorded internationally. Both units registered increases in GWP.

As for underwriting income, the US and international camps told different stories. The latter was hit with a multi-million reduction – from last year’s $15.8 million to $9.2 million in 2019 – while the US operations enjoyed a 55% jump to $24.8 million from the previous underwriting income of $16 million.

“The $6.6 million decline in underwriting results was due primarily to the decline in net earned premiums, as a result of increased reinsurance and use of third-party capital, the quarter-over-quarter increase in catastrophe-related losses of $1.5 million, and the unfavorable change in net prior-year reserve development of $3.6 million,” said Argo about the international operations.

Meanwhile the group’s adjusted operating income went up 12.6% to $41.1 million while its combined ratio for the period stood at 94.8%.

“Our strong first quarter 2019 results demonstrate our focus on delivering value to shareholders,” commented chief executive Mark E. Watson III. “Our annualized ROE (return on equity) of 20.1% in the first quarter is an outstanding achievement. The 9.1% annualized operating ROE for the quarter, a 100 basis point improvement year-over-year, reflects strong momentum toward our run rate objective of 10%.

“In addition, book value per share increased 8% from the beginning of the year. These results were enabled by a 7.1% increase in gross written premium, with a 10.2% rise in the US operations, an improvement in our expense ratio, and a 26.6% increase in our underwriting income.”

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