Argo could be hit by $25m in Q3 losses
Argo Group International Holdings has announced a preliminary pre-tax catastrophe loss estimate for the three-month period ended September 30, 2018 of approximately $25 million.
The company said that the catastrophe losses are related primarily to Hurricane Florence, Typhoon Jebi and other catastrophe and weather-related events in the third quarter of 2018. Catastrophe loss estimates include claims costs net of ceded reinsurance recoverables and reinstatement premiums, and include losses related to certain aggregate excess of loss contracts.
“As we indicated following the catastrophe loss events in 2017, we restructured our reinsurance program for 2018 to incorporate a single retention that combined the reinsurance portfolios for Argo and the acquired Ariel Re, and we strategically increased our use of third-party capital,” said chief executive officer Mark Watson. “Our loss results for the third quarter of 2018 reflect these actions.”
Argo Group said that its estimates of catastrophe losses are based on claims received to date, policy-level reviews, discussions with distribution partners, the company’s internal and external modelling resources, and publicly available industry loss estimates.
Argo also added the caveat that the estimates are preliminary and dependent on broad assumptions about coverage, liability, reinsurance and potential changes to both known and unknown claims. Accordingly, the actual ultimate net impact attributable to catastrophes may differ materially from Argo Group’s preliminary estimates.
