Argo Group reports Q1 net income of $32.7 million
Bermuda-based Argo Group International Holdings, Ltd reported increases in both gross premiums written and net income for the first quarter of 2013.
The company posted a net income of $32.7 million or $1.28 per diluted share compared to $19.6 million or $0.74 per diluted share in the first quarter of 2013.
Gross premiums written for the company climbed 10.6 percent to $438.2 million — up $41.9 million over the first quarter of last year.
“Catastrophe losses, net of reinsurance and estimated reinstatement premiums, were $1.9 million in the first quarter 2013 compared to $4.0 million in the same period in 2012. Favourable prior year loss development was $4.5 million compared to $3.3 million for the three months ended March 31, 2012. Included in underwriting expenses was a non-cash equity-based compensation charge of $6.5 million, compared to $1.0 million in the first quarter of 2012, reflecting the increase in the company’s stock price during the quarter,” the earnings report stated.
The combined ratio was 99.4 percent compared to 103.4 percent in the first quarter of 2012.
“I’m pleased with our first quarter performance,” Argo Group CEO Mark Watson said. “We generated solid top-line growth in a modestly improving pricing environment, and generated an underwriting profit in each of our four business segments. I am optimistic about the outlook for the remainder of 2013.”
The company’s operating income was $20.0 million or $0.78 per diluted share — narrowly missing Wall Street estimates. The four analysts polled by Yahoo Finance estimated earnings of $0.81 per share. By comparison, the first quarter of 2012 produced a net operating income after tax of $14.3 million or $0.54 per diluted share.
Book value per share increased 3.2 percent in the quarter to $62.67 and increased 8.2 percent over the year prior.
During the quarter, Argo Group repurchased $12.3 million or 325,825 shares of its common stock at an average share price of $37.31, representing 1.3 percent of net shares outstanding at December 31, 2012.
Net investment income for the three months ended March 31, 2013 $27.9 million compared to $31.4 million for the first three months of 2012.
The company reported a net realised investment gain of $9.5 million versus $13.1 million for the same period in 2012.
At March 31, 2013, the investment portfolio totalled $4.1 billion with a net pre-tax unrealised gain of approximately $328.5 million.