Argo Group reports $103.3m loss
Argo Group International Holdings Ltd made a $103.3 million loss in the fourth quarter, which resulted in a $8.4 million loss for the full year.
For the quarter it was equivalent to a loss of $3.01 per share. The GAAP combined ratio was 126.7 per cent for the final three months of 2019, and 109.1 per cent for the year.
In the same quarter in 2018, Argo made a loss of $43.6 million, while finishing with a full-year profit of $63.6 million.
Kevin Rehnberg, who was confirmed as Argo’s new chief executive officer this month, said: “We believe our organisation has great potential, but our results for 2019 are not indicative of our future direction.
“Immediately upon my appointment as interim-CEO in November, we started a review process of all of Argo’s operations. That review process is ongoing. The company has a strong foundation of specialty insurance and reinsurance businesses, focused largely on the most attractive specialty market — US domiciled risks.
“The core of this foundation is not going to change, but it can certainly be enhanced. Some of our businesses are performing very well today, while others are not meeting return expectations. We are acting swiftly to address areas where the available return prospects are not achievable in the near term and do not fit our focused strategic direction.”
It has been a testing 12 months for the Bermudian-based re/insurer. It endured a bruising proxy battle, an SEC investigation and the sudden and immediate resignation of Mark Watson as CEO in November.
Chairman Gary Woods will retire at Argo’s annual meeting on April 16, and is set to be replaced by chairman-elect Thomas Bradley.
For the past year, activist shareholder Voce Capital Management has been calling for changes to the board. The San-Francisco hedge fund has jointly agreed with Argo on board nominees Bernard Bailey and Fred Donner ahead of the annual meeting.
Carol McFate, also championed by Voce, joined the board earlier this month.
Argo’s gross written premiums increased from $702 million to $712.8 million for the quarter, which ended on December 31.
Mr Rehnberg said: “Going forward, we are insisting upon a culture of results and accountability, as well as a set of operating principles that will help us to be a more focused and efficient organisation.
“We are eliminating unnecessary spending and will deploy capital more strategically going forward. We believe Argo has an excellent specialty platform and world-class talent.
“We intend to work together to aggressively pursue our financial targets and deliver an improving return on equity over the near and long term. We look forward to sharing more about this strategy on our earnings call tomorrow and throughout the rest of the year.”
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