Argo posts 2022 loss in ‘transformative year’ for business
In what its CEO described as a “transformative year” for the business, Argo Group posted a loss and shrunk its gross written premiums dramatically last year, as it also prepares for a new chapter under new ownership.
The re/insurer made a net loss of $185.7 million last year, a deterioration on the $3.8 million loss it made a year earlier. Its combined ratio remained unchanged at 105.6% for the year. It posted net investment income of $129.8 million, also a drop on the $187.6 million it made a year earlier.
Its gross written premiums fell to $2.8 billion in 2022, a 10.5% decline on the same period a year earlier.
But it has been a period of big strategic changes for the company. It completed the sale of Argo Underwriting Agency and its Lloyd’s Syndicate 1200 on February 2, 2023, transforming Argo into a focused, pure play US specialty insurer. Also in February, its sale to Brookfield Reinsurance for $1.1 billion was confirmed.
It also, in Q4 last year, completed US loss portfolio transfer. This meant it recognized an after tax charge of approximately $100 million in connection with the transaction.
It also highlighted its strategy of reducing its catastrophe exposure. Its total catastrophe losses were $9.4 million in the fourth quarter 2022. Full year 2022 total catastrophe losses of $44 million were more than 50% lower compared to the prior year.
“2022 was a transformative year for the company,” said Thomas Bradley, CEO, Argo. “The strategic actions we have taken strengthened Argo and better position it to deliver strong returns moving forward. The Argo of today is markedly different from the Argo of only two years ago. We have streamlined the company to focus on our most profitable business lines, achieved targeted expense reductions, and continued to de-risk the balance sheet. At the same time, we have remained nimble in the marketplace responding to the needs of customers and business partners.
“We are excited about our next chapter as part of Brookfield Reinsurance. We believe the merger transaction that we announced on February 8, 2023, will enhance our opportunities for growth, and scale Argo into a market leading specialty insurer with capabilities across admitted and E&S markets. Lastly, I want to thank our leadership team and employees for their dedication over the past year as we worked through the strategic alternatives review process.”
