Argo takes $500,000 loss ahead of Brookfield sale
Argo Group, which is in the process of being sold to Brookfield Re, took a $500,000 loss as premiums fell after the sale of its Lloyd’s operations.
Bermuda-based Argo said the loss improved on the $18.9 million loss it suffered in the second quarter of 2022.
Gross written premiums fell 23.2% from $732 million to $561.9 million while loss and loss adjustment expenses fell 12.5% from $276 million to $241.4 million, resulting in an underwriting loss of $22.4 million compared to a $17.3 million gain a year earlier.
Argo’s combined ratio rose to 106.8% from 96.2%.
Argo executive chairman and chief executive officer Thomas Bradley (pictured) said: “Our second quarter performance further reflects the proactive steps we are taking to prioritize improving profitability.
"Our top line results reflect our deliberate and disciplined actions in certain lines of business. However, we continue to achieve growth across the rest of the portfolio, notably in our environmental, inland marine and casualty segments. This is a testament to the importance of a diversified book of specialty businesses.“
HE added: “We have remained focused on lowering expenses and reducing earnings volatility. The success of these efforts was demonstrated in the second quarter by further improvement in the expense ratio, and a low level of catastrophe losses, despite elevated industry catastrophe losses during the period.
"We also continue to collaborate closely with Brookfield Reinsurance on integration planning as we wait for the required regulatory approvals on the pending merger and anticipate an orderly transition for our customers and business partners once the transaction is completed."
Argo said the decline in gross written premiums was “primarily due to businesses the company has sold and exited”, including the sale of Argo Underwriting Agency and Lloyd’s syndicate 1200 to Westfield which closed in the first quarter of the year.
Net investment income rose $3.5 million or 11.9% to $32.8 million, largely driven by improved interest rates.
Argo recorded realized investment gains of $1.6 million compared to $40 million realised losses in the previous year, including a $20 million loss on the sale of the company’s Malta operations.
The company also spent $6.8 million on legal expenses related to the Brookfield Re sale during the quarter. That sale is expected to close in the second half of this year. Brookfield Re is also based in Bermuda.