Argo Group International Holdings Ltd. expects to pay out between $50 million and $70 million in claims as a result of the impact caused by Hurricanes Gustav and Ike.

Of that estimate, which includes reinstatement premiums and is on a pre-tax basis, approximately 85 percent was attributable to the company's primary insurance operations, with the balance coming from its reinsurance segment.

Argo's estimate of hurricane losses is based on claims received to date; policy level reviews; data and discussions with distribution partners; and the company's internal and external modelling resources.

Its estimates are preliminary and dependent on broad assumptions about coverage, liability, reinsurance and modelling, with the actual ultimate net losses attributable to the two events possibly differing materially from Argo's preliminary estimates.

In addition, for the third quarter of 2008, Argo expects to report a net pre-tax realised investment loss and other than temporary impairment charge of $18.4 million, of which about $3.7 million is from sales of fixed maturity obligations issued by Washington Mutual Inc. and around $13 million is related to the company's investment in the fixed maturity obligations of Lehman Brothers Holdings Inc.

As a result of recent market conditions, Argo Group estimates the decline in unrealised gain of its investment portfolio between June 30, 2008 and September 30, 2008 will be approximately $64 million pre-tax, which is less than 1.6 percent of the value of the total portfolio at the end of September.