Argo Group positive despite profit slip

Argo Group has announced that its second quarter and first half 2018 profits fell slightly compared to the same period of 2017, but that it was making good progress with its overall business plan.

Second quarter 2018 net income was $41.8 million, compared to net income of $46.0 million for the 2017 second quarter. Addressing this fall the company said that in the first quarter of 2018, the company adopted a new accounting standard and as a result the 2018 second quarter net income was favourably impacted by an after-tax gain of $3.4 million, whereas the 2017 second quarter included an after-tax net investment gain of $9.3 million relating to the net asset sales of an equity investee.

Argo said that the quarter’s results took the company to a net profit of $66.6 million, down on the net income of $82.7 million that it reported for the 2017 six-month period. It stated that the 2018 six-month period net income was adversely impacted by an after-tax loss of $21.3 million.

“Improved underwriting results in both the second quarter and the first six months of 2018 reflect the continued execution of our business plan,” said chief executive officer Mark Watson. “In our US Operations, gross written premiums were up over 12 percent in the quarter with continued strong underlying margins. In our International Operations, we reduced exposure to select risks, and allocated capital and resources where we can earn more attractive returns. In addition, we are making progress in our ongoing expense initiatives. The overall expense ratio improved by 1.3 points in the second quarter of 2018 to 37.5 percent compared to the same period in 2017, reflecting the streamlining of operations, our digital initiatives and use of technology, all while making continued investments in our strategic growth areas.”

Second quarter 2018 gross written premiums were up 2.3 percent to $702.8 million, compared to $687.2 million for the 2017 second quarter. The company said that US Operations grew 12.3 percent to $410.0 million, while the International Operations were down 9.2 percent to $292.6 million compared to the 2017 second quarter.

First half gross written premiums were up 9.9 percent to $1.413 billion, compared to $1.286 billion for the 2017 six-month period. U.S. Operations grew 11.8 percent to $782.8 million, while the International Operations grew 7.6 percent to $630.3 million compared to the 2017 six-month period.