Argo Group reports $27.2m profit
Argo Group International Holdings Ltd has reported a profit of $27.2 million, or 78 cents per common share, for the first quarter.
That compares to a loss of $24.7 million, or 72 cents per share, for the same period a year ago.
Bermudian-based Argo recorded total catastrophe losses in the quarter of $47.5 million.
Operating income was $15.5 million, compared to $12.5 million for the same period in 2020. The primary driver of the increase was better investment income.
Gross written premium declined 8.4 per cent to $756.5 million. Premium growth of 2.7 per cent in US operations was offset by a 23.6 per cent decline in international operations.
Adjusting for the sale of Ariel Re in November 2020, and planned or executed exits of business in Italy, Malta and the US grocery business, underlying premiums grew approximately 6.5 per cent during the quarter, the company said.
In the US, premium growth in strategic growth areas was up more than 15 per cent, while overall growth was tempered by business exits and re-underwriting actions in certain underperforming businesses and property lines.
The decline in international premiums was due to the sale of Ariel Re and planned exits of business in Italy and Malta, partially offset by organic growth in Bermuda insurance and Syndicate 1200 reflecting continued rate increases, Argo said.
Pricing increases remained in the low double digits on average across Argo, with the range varying by business line.
The combined ratio was 103.8 per cent during the first quarter compared to 103.2 per cent in the prior year quarter. The higher combined ratio was driven by increased catastrophe losses during the quarter.
Total catastrophe losses were $47.5 million. Natural catastrophes accounted for $43.1 million, and $4.4 million was related to the Covid-19 pandemic.
Natural catastrophe losses were primarily attributed to winter storm Uri in February. Approximately $7 million of the reported natural catastrophe losses in the current quarter related to Argo's remaining exposures to Ariel Re for 2020 and prior open years of account.
Annualised operating return on common shareholders' equity was 3.7 per cent in the quarter.
Kevin J Rehnberg, chief executive officer of Argo, said: "We are pleased with the improved underlying combined ratio of 93.4 per cent during the quarter, which was our strongest result since 2016. We believe the improvement in underwriting results this quarter is further evidence that the actions we have taken over the last two years are the right ones.
“This positive momentum is supported by our expense focus and positions us to take advantage of market opportunities and execute on our targeted growth strategy.
“While the first quarter included elevated catastrophe losses, we have made good progress on reducing our property exposure. We expect the majority of our targeted actions to be completed ahead of US wind season. This will reduce our exposure to future events.”