Argo reports fall in Q2 2019 income
Argo has announced that net income for the second quarter of 2019 was $28.8 million, down on the $41.8 million it reported for the second quarter of 2018.
However, Argo stressed that the 2019 second quarter net income included pre-tax charges of $32.3 million related to an increase in current and prior accident year losses of $10.0 million and $22.3 million, respectively.
In addition, the 2019 second quarter included approximately $7.5 million of expenses associated with proxy solicitation and related activities. In a statement Argo said that: “Given the unique and non-recurring nature of the events that gave rise to these expenses, these costs are not included in the Company’s definition of adjusted operating income and as such, not included in the calculation of the combined ratio. There were no comparable costs incurred during the 2018 second quarter.”
The second quarter results take the company’s net income for the first half of 2019 to $120 million, compared to net income of $66.6 million for the 2018 six month period.
The 2019 six month period included pre-tax net gains related to changes in the fair value of equity securities of $66.8 million, compared to pre-tax net losses related to changes in the fair value of equity securities of $26.6 million in the 2018 six month period, resulting in a year over year improvement of $93.4 million.
Argo also said that the 2019 six month period was adversely impacted by the previously announced increase in current and prior accident year losses of approximately $32.3 million.
The 2019 six month period also included approximately $8.0 million of expenses associated with proxy solicitation and related activities. The company again announced that given the unique and non-recurring nature of the events that gave rise to these expenses, these costs were not included in the company’s definition of adjusted operating income and as such, not included in the calculation of the combined ratio. There were no comparable costs incurred during the 2018 second quarter.
Gross written premiums for the second quarter of 2019 grew 10.0 percent to $772.9 million, compared to $702.8 million for the 2018 second quarter. Argo's US Operations grew 10.6 percent to $453.6 million, compared to $410.0 million for the 2018 second quarter. Argo's International Operations grew 9.1 percent to $319.2 million, compared to $292.6 million for the 2018 second quarter.
Argo said that gross written premiums for the first half of 2019 grew 8.5 percent to $1.5 billion, compared to $1.4 billion for the 2018 six month period. US Operations grew 10.4 percent to $864.3 million, compared to $782.8 million for the 2018 six month period. International Operations grew 6.2 percent to $669.3 million, compared to $630.3 million for the 2018 six month period.
