Under fire Argo Group International Holdings Ltd, the Bermudian-based underwriter of specialty insurance products, has reported a net loss attributable to common shareholders of $51.4 million for the third quarter of the year.

That compares to net income attributable to common shareholders of $19.8 million for the third quarter 2021.

The annualised return on average common shareholders' equity was minus 16.5 per cent, compared to 4.5 per cent in the prior year third quarter.

The net loss included pre-tax net realised investment and other losses of $44.7 million, compared to $5.3 million of pre-tax net realised investment and other losses in the prior year third quarter.

The increase was primarily driven by $34.2 million of pre-tax realised losses related to the impairment of assets that will be transferred upon the close of the company's previously announced loss portfolio transfer transaction with a wholly owned subsidiary of Enstar Group Limited.

The net loss also included a $28.5 million impairment of goodwill and intangible assets related to the announced sale of Argo Underwriting Agency Limited and its Lloyd's Syndicate 1200.

Gross written premiums of $750.9 million decreased $124.7 million, or 14.2 per cent, primarily due to businesses the company has exited.

Earned premiums of $455 million decreased $32.5 million, or 6.7 per cent.

Reinstatement premiums primarily associated with catastrophes in the current and prior year third quarters were $12.5 million and $5.6 million, respectively.

The combined ratio of 101.1 per cent increased 0.8 percentage points, driven by a higher loss ratio, partially offset by an improved expense ratio.

Total catastrophe losses were $23.4 million or 5.1 percentage points on the loss ratio due to Hurricane Ian.

In comparison, catastrophe losses in the prior year third quarter were $27.3 million or 5.6 percentage points on the loss ratio.

Net investment income of $34 million decreased by $12.1 million.

Argo executive chairman and chief executive officer Thomas A Bradley said: "Argo's third quarter financial performance benefited from growth in earned premiums in attractive business lines, reduced underwriting volatility, and lower expenses.

“In particular, our US operations produced a strong current accident year performance primarily driven by disciplined underwriting and positive rate continuing to earn through.

“While our thoughts are with those impacted by Hurricane Ian, we are pleased the company's quarterly catastrophe losses once again decreased year-over-year despite elevated industry catastrophe losses.

“These results are a testament to the success of our volatility reduction efforts through exiting businesses with property catastrophe exposure."

Argo is locked in a proxy battle with activist investors Capital Returns Management LLC, who are seeking to replace two members of the company’s board of directors with their nominees at the annual general meeting on December 15.

Meanwhile, the Police and Fire Retirement System for the City of Detroit has filed a class-action lawsuit against Argo and five officers and former officers of the company.

The securities class action complaint names Argo, Mr Bradley, Scott Kirk, Kevin J. Rehnberg, Mark E. Watson III and Jay S. Bullock.

The suit alleges the defendants defrauded investors by issuing false and misleading statements concerning the company’s ability to set appropriate reserves, changing its underwriting policies and writing policies outside of its “core” business.