Savage Q4 leads to full year losses for Argo

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.”

Argo made a loss of $8.4 million in 2019 after a brutal Q4 in which the re/insurer lost $103.3 million.

Argo had warned investors to expect a $114 million loss for Q4, and in the event the loss was marginally more palatable. But it was still a significant loss, building on the $43.6 million loss of Q4 2018. In the full year 2018 Argo had managed to deliver a profit of $63.6 million.

Gross written premiums were $3.13 billion for 2019, up from $2.96 billion in 2018. Gross written premiums were also up for Q4, to $712.8 million, from $702 million in Q4 2018.

But its combined ratio, using GAAP accounting, rose to 109.1 percent in 2019, from 97.9 percent in 2018. In Q4 it soared to 126.7 percent, having been 99.5 percent in Q4 2018.

Rehnberg stressed the company is undergoing a review process of its operations, and will instill “a culture of results and accountability, as well as a set of operating principles that will help us to be a more focused and efficient organisation.”

This will include eliminating unnecessary spending and will deploying capital more strategically, Rehnberg said.

Rehnberg said: “Our organisation has great potential, but our results for 2019 are not indicative of our future direction,” he said.

He added: “The company has a strong foundation of specialty insurance and reinsurance businesses, focused largely on the most attractive specialty market – US domiciled risks. The core of this foundation is not going to change, but it can certainly be enhanced.”

Thomas Bradley, chairman-elect of Argo’s board of directors, said the board is fully supportive of Rehnberg’s vision, and is “impressed by all that has been achieved over the past few months.”