13 February 2020News

Argo to report a Q4 underwriting loss of $114m

Argo Group International Holdings will report an underwriting loss of approximately $114 million for Q4 2019, with profits significantly undermined by a number of factors, the re/insurer has warned.

Argo said it will report prior accident year losses of approximately $77 million. Reserve increases relate to Argo International’s London, Bermuda Insurance and European business units, and property, professional and liability lines within Argo’s US operations, it said.

Argo also warned of current accident year losses of approximately $30 million. These losses reflect a change in actuarial estimates, Argo said, based on a more uncertain claims environment and the impact of prior accident year loss adjustments.

Catastrophe losses and related reinstatement premiums cost Argo approximately $3 million, the re/insurer said, primarily related to Typhoon Hagibis. It also experienced additional operating expenses, such as a reduction in workforce and “doubtful accounts” in the European business, costing it approximately $12 million.

Argo also highlighted a number of non-operating charges, including a goodwill impairment of approximately $16 million related to Argo’s European business unit, and severance costs associated with the departure of its former CEO.  It also has a number of assets, including real estate and a corporate aircraft, that are held for sale but have cost it $18 million.

Kevin Rehnberg, Argo Group’s interim CEO, described the re/insurer’s results for Q4 and full year 2019 as “clearly unacceptable.”

He said: “The industry is experiencing rising claims severity in several lines of business. We have taken appropriate action to adjust our current and prior accident year loss ratios in response to these conditions and to specific information received in the quarter.”

But Rehnberg remained upbeat about Argo’s longer term position. “We believe the actions taken strengthen our balance sheet and position us for a more profitable future,” he said. “We are experiencing substantial rate increases across our platform, with strong double-digit gains in International and certain US liability lines. Our capital position remains strong, we are continuing to refine our product strategies and we are well positioned to take advantage of opportunities in the specialty commercial insurance marketplace.”

Argo will release its official Q4 results after the close of US financial markets on February 24, 2020.




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25 February 2020   Argo Group International Holdings reported significant losses for the full year and Q4 2019, with its new chief executive, Kevin Rehnberg, vowing to turn things around and build on “a strong foundation of specialty insurance and reinsurance.”

More on this story

News
25 February 2020   Argo Group International Holdings reported significant losses for the full year and Q4 2019, with its new chief executive, Kevin Rehnberg, vowing to turn things around and build on “a strong foundation of specialty insurance and reinsurance.”