Argo Group International Holdings Ltd. maintained its profits for the second quarter, despite suffering $16.4 million of pre-tax storm losses.

The international specialty re/insurer saw its net income rise to $23 million, or 75 cents per share, in the second quarter of 2008 from $21 million, or 95 cents per share, during the same period last year.

It also concluded its cash buyout of Heritage Underwriting Agency plc. during the same period.

Gross premiums written were similarly up at $397.6 million for the quarter compared to $276.8 million during the corresponding time in 2007.

Over the first six months of 2008, gross premiums written increased to $744.2 million, $74.3 million of which was attributed to Heritage, from $563.5 million during the first half of last year.

Argo Group president and chief executive officer, Mark Watson III, said: "Early in the second quarter we completed a significant transaction in the acquisition of Heritage Underwriting Agency, a leading Lloyd's specialty underwriter. The addition was core to the expansion of our operating platform giving us more complete access to what has become a single broadly distributed specialty insurance marketplace.

"We now have a platform differentiated from most of our industry peers and believe the breadth of our operations in Bermuda, the US and London will provide increasing opportunities for intelligent growth in all areas of our business.

"While we were disappointed by the frequency of losses brought on by the significant number of severe storms that affected the mid section of the United States in the quarter, the losses incurred were not unexpected given the geographic dispersion of our business. Despite this, it was encouraging that our reinsurance segment, in only its second full quarter of operations, performed in line with our expectations by writing what we believe are attractive risks in the catastrophe reinsurance market."

For the second quarter of 2008, Argo Group reported net income of $23 million or 75 cents per share on 30.8 million shares. Second quarter results included approximately $16.4 million of pre-tax losses attributed to 15 severe US weather events that occurred during the three months ending June 30, 2008.

Favourable development on prior year loss reserves totalled approximately $9.2 million pre-tax for this year's second quarter. This compares to 2007 second quarter net income of $21 million, or $0.94 per diluted common share on 22.4 million shares, which included pre-tax losses of $3.1 million attributed to six severe US weather events that occurred during the second quarter of 2007 as well as favourable development on prior year loss reserves of $7.1 million pre-tax.