Bermudian-based Argo Group International Holdings Ltd has revealed that its fourth-quarter 2021 results will be negatively affected by adverse prior-year reserve development and non-operating charges.

Argo said it expects net adverse prior-year reserve development to be in the range of $130 million to $140 million for the quarter. Prior-year adverse development was the result of the recently concluded fourth-quarter 2021 reserve review.

The largest reserve increases were related to construction defect claims within Argo’s US operations, in addition to reserve increases in the run-off segment.

The company said the prior-year reserve increase for construction defect primarily related to the 2017 and prior underwriting years in business lines that have either been significantly remediated or discontinued.

Additionally, the company said, several non-operating charges are anticipated to be reflected in Argo’s fourth-quarter 2021 results.

As part of a continuing strategic review and recent operating results, an impairment of goodwill and intangible assets is expected to be in the range of $40 million to $45 million related to Argo’s Syndicate 1200 business unit, the company said.

Also, non-operating expense charges are expected to be in the range of $20 million to $25 million primarily related to the reduction in Argo’s real estate footprint in the United Kingdom and the impairment of certain information technology assets.

The company said Argo’s estimates of losses are based on claims received to date, policy-level reviews, discussions with distribution partners, its internal and external modelling resources, and publicly available industry loss estimates.

Argo’s estimates are dependent on broad assumptions about coverage, liability, reinsurance and potential changes to both known and unknown claims.

Accordingly, the actual ultimate net impact may differ materially from Argo’s estimates, the company said.

Argo will release its fourth-quarter results after the close of business on February 22.