Bermuda
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1-15259
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98-0214719
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(I.R.S. Employer
Identification No.)
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110 Pitts Bay Road
Pembroke HM 08
Bermuda
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P.O. Box HM 1282
Hamilton HM FX
Bermuda
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(Address, Including Zip Code,
of Principal Executive Offices)
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(Mailing Address)
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99.1
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Press Release issued by Argo Group International Holdings, Ltd. dated February 14, 2012.
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ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
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By: | /s/ Jay S. Bullock | |||
Dated: February 14, 2012 | Name: | Jay S. Bullock | ||
Title: | Executive Vice President and Chief Financial Officer |
·
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Revenue was $318.6 million, an increase of $2.1 million over the fourth quarter of 2010.
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·
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Gross written premiums were $341.8 million, an increase of $52.8 million over the fourth quarter of 2010.
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·
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Net income was $1.4 million or $0.05 per diluted share compared to $12.8 million or $0.44 per diluted share in the fourth quarter of 2010.
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·
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The net after-tax operating1 loss per diluted share was $0.34 compared to $0.51 of net after-tax operating income1 per diluted share in the fourth quarter of 2010.
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·
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The pre-tax operating1 loss was $10.8 million compared to $18.2 million of pre-tax operating income1 in the fourth quarter of 2010.
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·
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Pre-tax income was $8.3 million compared to $18.3 million in the fourth quarter of 2010.
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Argo House | T 441 296 5858 |
110 Pitts Bay Road | F 441 296 6162 |
Pembroke, Bermuda HM08 | |
www.argolimited.com |
·
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Estimated pre-tax catastrophe losses net of reinsurance and estimated reinstatement premiums were $36.1 million compared to $16.6 million in the fourth quarter of 2010. Included in the current quarter’s total are $27.5 million of losses related to the Thailand Floods.
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·
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The combined ratio was 112.4% compared to 103.6% in the fourth quarter of 2010. The impact of catastrophe activity on the combined ratio was 13.4 loss ratio points compared to 5.8 loss ratio points in the fourth quarter of 2010.
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·
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Total revenue was $1.258 billion compared to $1.385 billion in 2010.
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·
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Gross written premiums were $1.545 billion compared to $1.527 billion in 2010.
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·
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The net loss was $82.4 million or $3.03 per diluted share compared to net income of $82.6 million or $2.76 per diluted share in 2010.
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·
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The net after-tax operating1 loss per diluted share was $3.39 compared to $2.00 of net after-tax operating income1 per diluted share in 2010.
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·
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The pre-tax operating loss1 was $108.6 million compared to pre-tax operating income1 of $74.7 million in 2010.
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·
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The pre-tax loss was $62.9 million compared to pre-tax income of $115.3 million in 2010.
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·
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Estimated pre-tax catastrophe losses net of reinsurance and estimated reinstatement premiums and aggregate reinsurance cover losses were $207.8 million and approximately $10.0 million, respectively. Catastrophe losses net of reinsurance and estimated reinstatement premiums were $73.3 million in 2010.
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·
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The combined ratio was 119.9% compared to 103.2% in 2010. The impact of catastrophe activity on the combined ratio, including losses related to the aggregate reinsurance covers, was 20.3 loss ratio points compared to 6.1 loss ratio points in 2010.
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·
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During the fourth quarter, the company repurchased $12.5 million or 0.4 million shares of its outstanding common stock at an average share price of $29.28. During 2011, the company repurchased $49.3 million or 1.6 million shares of its outstanding common stock at an average share price of $30.72.
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ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
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CONSOLIDATED BALANCE SHEETS
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(in millions, except per share amounts)
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December 31,
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December 31,
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2011
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2010
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|||||||
(unaudited)
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Assets | ||||||||
Total investments
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$ | 4,147.5 | $ | 4,215.4 | ||||
Cash and cash equivalents
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100.9 | 83.5 | ||||||
Accrued investment income
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32.3 | 33.5 | ||||||
Receivables
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1,452.5 | 1,505.7 | ||||||
Goodwill and intangible assets
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246.8 | 249.1 | ||||||
Deferred acquisition costs
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125.7 | 139.7 | ||||||
Ceded unearned premiums
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179.4 | 164.0 | ||||||
Other assets
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116.8 | 97.6 | ||||||
Total assets
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$ | 6,401.9 | $ | 6,488.5 | ||||
Liabilities and Shareholders' Equity
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Reserves for losses and loss adjustment expenses
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$ | 3,291.1 | $ | 3,152.2 | ||||
Unearned premiums
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658.2 | 654.1 | ||||||
Ceded reinsurance payable
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424.5 | 524.3 | ||||||
Debt
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65.5 | 65.0 | ||||||
Junior subordinated debentures
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311.5 | 311.5 | ||||||
Other liabilities
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172.1 | 155.3 | ||||||
Total liabilities
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4,922.9 | 4,862.4 | ||||||
Total shareholders' equity
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1,479.0 | 1,626.1 | ||||||
Total liabilities and shareholders' equity
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$ | 6,401.9 | $ | 6,488.5 | ||||
Book value per common share
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$ | 56.21 | $ | 58.41 |
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
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FINANCIAL HIGHLIGHTS
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ALL SEGMENTS
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(in millions, except per share amounts)
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Three Months Ended
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Twelve Months Ended
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December 31,
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December 31,
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2011
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2010
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2011
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2010
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(unaudited) | (unaudited) | |||||||||||||||
Gross Written Premiums
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$ | 341.8 | $ | 289.0 | $ | 1,544.8 | $ | 1,527.1 | ||||||||
Net Written Premiums
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249.0 | 198.9 | 1,071.8 | 1,095.7 | ||||||||||||
Earned Premiums
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278.0 | 274.7 | 1,082.0 | 1,211.6 | ||||||||||||
Net Investment Income
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29.5 | 33.1 | 125.8 | 133.6 | ||||||||||||
Net Realized Investment and Other Gains
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11.5 | 8.2 | 49.2 | 36.8 | ||||||||||||
Fee (Expense) Income, net
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(0.4 | ) | 0.5 | 1.4 | 2.5 | |||||||||||
Total Revenue
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318.6 | 316.5 | 1,258.4 | 1,384.5 | ||||||||||||
Losses and Loss Adjustment Expenses
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198.7 | 172.6 | 863.1 | 777.5 | ||||||||||||
Other Reinsurance Related Expense
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2.8 | - | 5.9 | - | ||||||||||||
Underwriting, Acquisition and Insurance Expenses
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110.8 | 111.9 | 426.7 | 472.6 | ||||||||||||
Interest Expense
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5.6 | 5.6 | 22.1 | 22.9 | ||||||||||||
Foreign Currency Exchange (Gain) Loss
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(7.6 | ) | 8.1 | 3.5 | (3.8 | ) | ||||||||||
Total Expenses
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310.3 | 298.2 | 1,321.3 | 1,269.2 | ||||||||||||
Income (Loss) Before Taxes
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8.3 | 18.3 | (62.9 | ) | 115.3 | |||||||||||
Income Tax Provision
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6.9 | 5.5 | 19.5 | 32.7 | ||||||||||||
Net Income (Loss)
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$ | 1.4 | $ | 12.8 | $ | (82.4 | ) | $ | 82.6 | |||||||
Net Income (Loss) per Common Share (Basic)
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$ | 0.05 | $ | 0.45 | $ | (3.03 | ) | $ | 2.80 | |||||||
Net Income (Loss) per Common Share (Diluted)
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$ | 0.05 | $ | 0.44 | $ | (3.03 | ) | $ | 2.76 | |||||||
Weighted Average Common Shares:
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Basic
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26.6 | 28.3 | 27.2 | 29.6 | ||||||||||||
Diluted
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26.9 | 28.8 | 27.2 | 29.9 |
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
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SEGMENT DATA
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(in millions)
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Three Months Ended
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Twelve Months Ended
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December 31,
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December 31,
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2011
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2010
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2011
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2010
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(unaudited) | (unaudited) | |||||||||||||||
Excess & Surplus Lines
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Gross Written Premiums
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$ | 120.5 | $ | 119.0 | $ | 476.3 | $ | 522.6 | ||||||||
Net Written Premiums
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100.4 | 99.4 | 389.3 | 436.6 | ||||||||||||
Earned Premiums
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99.3 | 113.7 | 404.9 | 489.7 | ||||||||||||
Underwriting Income
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$ | 13.0 | $ | 5.8 | $ | 17.4 | $ | 10.5 | ||||||||
Net Investment Income
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13.1 | 14.9 | 55.5 | 58.6 | ||||||||||||
Interest Expense
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(2.3 | ) | (1.5 | ) | (8.3 | ) | (6.4 | ) | ||||||||
Operating Income Before Taxes
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$ | 23.8 | $ | 19.2 | $ | 64.6 | $ | 62.7 | ||||||||
Loss Ratio
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52.7 | 59.8 | 61.0 | 63.5 | ||||||||||||
Expense Ratio
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34.2 | 35.1 | 34.7 | 34.3 | ||||||||||||
GAAP Combined Ratio
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86.9 | % | 94.9 | % | 95.7 | % | 97.8 | % | ||||||||
Commercial Specialty
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Gross Written Premiums
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$ | 93.7 | $ | 89.9 | $ | 428.8 | $ | 428.1 | ||||||||
Net Written Premiums
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66.4 | 59.3 | 317.2 | 314.1 | ||||||||||||
Earned Premiums
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83.0 | 78.6 | 316.7 | 332.8 | ||||||||||||
Underwriting (Loss) Income
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$ | (0.2 | ) | $ | 5.2 | $ | (26.0 | ) | $ | 3.1 | ||||||
Net Investment Income
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6.7 | 7.7 | 27.7 | 29.8 | ||||||||||||
Interest Expense
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(1.3 | ) | (1.0 | ) | (5.0 | ) | (4.1 | ) | ||||||||
Fee (Expense) Income, net
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(0.3 | ) | (0.6 | ) | 0.1 | 0.2 | ||||||||||
Operating Income (Loss) Before Taxes
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$ | 4.9 | $ | 11.3 | $ | (3.2 | ) | $ | 29.0 | |||||||
Loss Ratio
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69.6 | 59.2 | 74.6 | 66.6 | ||||||||||||
Expense Ratio
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30.6 | 34.2 | 33.6 | 32.4 | ||||||||||||
GAAP Combined Ratio
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100.2 | % | 93.4 | % | 108.2 | % | 99.0 | % | ||||||||
International Specialty
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Gross Written Premiums
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$ | 24.8 | $ | 20.9 | $ | 200.8 | $ | 188.9 | ||||||||
Net Written Premiums
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10.3 | 7.2 | 98.1 | 106.4 | ||||||||||||
Earned Premiums
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25.5 | 25.6 | 101.7 | 100.3 | ||||||||||||
Underwriting (Loss) Income
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$ | (9.2 | ) | $ | 7.9 | $ | (79.8 | ) | $ | 27.2 | ||||||
Net Investment Income
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2.9 | 2.0 | 11.4 | 8.4 | ||||||||||||
Interest Expense
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(0.9 | ) | (0.9 | ) | (3.4 | ) | (3.6 | ) | ||||||||
Operating (Loss) Income Before Taxes
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$ | (7.2 | ) | $ | 9.0 | $ | (71.8 | ) | $ | 32.0 | ||||||
Loss Ratio
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96.5 | 39.4 | 146.8 | 43.1 | ||||||||||||
Expense Ratio
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39.5 | 29.7 | 31.7 | 29.7 | ||||||||||||
GAAP Combined Ratio
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136.0 | % | 69.1 | % | 178.5 | % | 72.8 | % | ||||||||
Syndicate 1200
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Gross Written Premiums
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$ | 102.8 | $ | 60.3 | $ | 438.5 | $ | 389.9 | ||||||||
Net Written Premiums
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71.9 | 34.1 | 266.8 | 240.9 | ||||||||||||
Earned Premiums
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71.1 | 57.9 | 259.3 | 290.1 | ||||||||||||
Underwriting Loss
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$ | (21.3 | ) | $ | (22.4 | ) | $ | (81.5 | ) | $ | (44.6 | ) | ||||
Net Investment Income
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3.9 | 3.6 | 17.2 | 14.2 | ||||||||||||
Interest Expense
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(0.8 | ) | (0.7 | ) | (3.2 | ) | (3.1 | ) | ||||||||
Fee (Expense) Income, net
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(0.1 | ) | 1.1 | 1.3 | 2.3 | |||||||||||
Operating Loss Before Taxes
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$ | (18.3 | ) | $ | (18.4 | ) | $ | (66.2 | ) | $ | (31.2 | ) | ||||
Loss Ratio
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83.7 | 85.7 | 85.8 | 70.0 | ||||||||||||
Expense Ratio
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46.3 | 53.0 | 45.6 | 45.3 | ||||||||||||
GAAP Combined Ratio
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130.0 | % | 138.7 | % | 131.4 | % | 115.3 | % |
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
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RECONCILIATION OF OPERATING (LOSS) INCOME TO NET INCOME (LOSS)
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(in millions, except per share amounts)
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Three Months Ended
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Twelve Months Ended
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December 31,
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December 31,
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2011
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2010
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2011
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2010
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(unaudited) | (unaudited) | |||||||||||||||
Income (Loss) Before Taxes:
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From Operations
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$ | (10.8 | ) | $ | 18.2 | $ | (108.6 | ) | $ | 74.7 | ||||||
Foreign Currency Exchange Gain (Loss)
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7.6 | (8.1 | ) | (3.5 | ) | 3.8 | ||||||||||
Net Realized Investment and Other Gains
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11.5 | 8.2 | 49.2 | 36.8 | ||||||||||||
Income (Loss) Before Taxes
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8.3 | 18.3 | (62.9 | ) | 115.3 | |||||||||||
Income Tax Provision
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6.9 | 5.5 | 19.5 | 32.7 | ||||||||||||
Net Income (Loss)
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$ | 1.4 | $ | 12.8 | $ | (82.4 | ) | $ | 82.6 | |||||||
Net Income (Loss) per Common Share (Diluted)
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$ | 0.05 | $ | 0.44 | $ | (3.03 | ) | $ | 2.76 | |||||||
Operating (Loss) Income per Common Share (Diluted) |
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At Assumed Tax Rate:
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Income (Loss) (a)
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0.26 | 0.51 | (1.96 | ) | 3.08 | |||||||||||
Foreign Currency Exchange (Gain) Loss (a)
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(0.24 | ) | 0.23 | 0.11 | (0.10 | ) | ||||||||||
Net Realized Investment and Other Gains (a)
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(0.36 | ) | (0.23 | ) | (1.54 | ) | (0.98 | ) | ||||||||
Operating (Loss) Income per Common Share (Diluted)
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(0.34 | ) | 0.51 | (3.39 | ) | 2.00 |