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 August 4, 2014.
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ARGO GROUP INTERNATIONAL HOLDINGS, LTD. | |||
By: |
/s/ Jay S. Bullock
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Dated: August 4, 2014
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Name:
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Jay S. Bullock
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Title:
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Executive Vice President and Chief Financial Officer
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●
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Net income was $38.6 million or $1.45 per diluted share, compared to $31.7 million or $1.13 per diluted share for the second quarter of 2013.
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After-tax operating income was $23.8 million or $0.89 per diluted share, compared to $20.7 million or $0.74 per diluted share for the second quarter of 2013.
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Gross written premiums were $520.1 million compared to $542.2 million for the second quarter of 2013.
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The combined ratio was 95.8% compared to 98.3% for the second quarter of 2013.
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Net favorable prior-year reserve development was $14.4 million (benefiting the combined ratio by 4.3 points), compared with $12.8 million (benefiting the combined ratio by 4.0 points) for the second quarter of 2013.
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Estimated pre-tax catastrophe losses were $4.2 million or 1.3 points on the combined ratio, compared to $9.7 million or 3.1 points for the second quarter of 2013.
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The current accident year loss ratio excluding catastrophes was 58.1%, compared to 60.6% for the second quarter of 2013.
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Book value per share increased 4.2% to $62.80 from $60.29 at March 31, 2014, and 6.5% from $58.96 at Dec. 31, 2013.
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During the quarter the Company repurchased $23.9 million or 510,116 shares of its common stock at an average price of $46.84, which represents 1.9% of net shares outstanding at March 31, 2014.
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Argo House
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T 441 296 5858
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110 Pitts Bay Road
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F 441 296 6162
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Pembroke, Bermuda HM08
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www.argolimited.com
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●
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Net income was $78.8 million or $2.94 per diluted share, compared to $64.4 million or $2.29 per diluted share for the first half of 2013.
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After-tax operating income was $48.9 million or $1.83 per diluted share, compared to $40.7 million or $1.45 per diluted share for the first half of 2013.
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Gross written premiums were $983.2 million, compared to $980.4 million for the first half of 2013.
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The combined ratio was 95.7%, compared to 98.8% for the first half of 2013.
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Net favorable prior-year reserve development was $23.3 million (benefiting the combined ratio by 3.5 points), compared to $17.3 million (benefiting the combined ratio by 2.8 points) for the first half of 2013.
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Estimated pre-tax catastrophe losses were $8.4 million or 1.3 points on the combined ratio, compared to $11.6 million or 1.9 points for the first half of 2013.
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The current accident year loss ratio excluding catastrophes was 57.8%, compared to 59.3% for the first half of 2013.
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In the first half of 2014, the Company repurchased $31.4 million or 675,300 shares of its common stock at an average share price of $46.48, which represents 2.5% of net shares outstanding at Dec. 31, 2013.
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●
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At June 30, 2014, cash and investments totaled $4.2 billion with a net pre-tax unrealized gain of approximately $284.8 million.
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ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
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CONSOLIDATED BALANCE SHEETS
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(in millions, except per share amounts)
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June 30,
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December 31,
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|||||||
2014
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2013
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|||||||
(unaudited)
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||||||||
Assets
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||||||||
Total investments
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$ | 4,047.8 | $ | 4,079.2 | ||||
Cash
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136.2 | 157.4 | ||||||
Accrued investment income
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23.5 | 25.7 | ||||||
Receivables
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1,437.8 | 1,611.9 | ||||||
Goodwill and intangible assets
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237.2 | 239.8 | ||||||
Deferred acquisition costs, net
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126.1 | 113.9 | ||||||
Ceded unearned premiums
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244.3 | 196.3 | ||||||
Other assets
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168.3 | 166.8 | ||||||
Total assets
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$ | 6,421.2 | $ | 6,591.0 | ||||
Liabilities and Shareholders' Equity
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||||||||
Reserves for losses and loss adjustment expenses
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$ | 3,067.9 | $ | 3,230.3 | ||||
Unearned premiums
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841.2 | 779.1 | ||||||
Ceded reinsurance payable, net
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238.4 | 354.7 | ||||||
Senior unsecured fixed rate notes
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143.8 | 143.8 | ||||||
Other indebtedness
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66.3 | 66.3 | ||||||
Junior subordinated debentures
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193.3 | 193.3 | ||||||
Other liabilities
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237.2 | 260.5 | ||||||
Total liabilities
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4,788.1 | 5,028.0 | ||||||
Total shareholders' equity
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1,633.1 | 1,563.0 | ||||||
Total liabilities and shareholders' equity
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$ | 6,421.2 | $ | 6,591.0 | ||||
Book value per common share
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$ | 62.80 | $ | 58.96 |
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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Six Months Ended
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June 30,
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June 30,
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|||||||||||||||
2014
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2013
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2014
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2013
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(unaudited) | (unaudited) | |||||||||||||||
Gross Written Premiums
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$ | 520.1 | $ | 542.2 | $ | 983.2 | $ | 980.4 | ||||||||
Net Written Premiums
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398.3 | 390.2 | 675.1 | 669.2 | ||||||||||||
Earned Premiums
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336.1 | 327.5 | 661.8 | 631.7 | ||||||||||||
Net Investment Income
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20.6 | 25.3 | 43.9 | 53.2 | ||||||||||||
Fee Income, net
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0.0 | 0.2 | 0.0 | 0.2 | ||||||||||||
Net Realized Investment Gains and Other
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18.5 | 11.0 | 29.6 | 20.5 | ||||||||||||
Total Revenue
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375.2 | 364.0 | 735.3 | 705.6 | ||||||||||||
Losses and Loss Adjustment Expenses
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185.1 | 192.7 | 367.6 | 363.2 | ||||||||||||
Other Reinsurance-Related Expenses
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0.0 | 4.7 | 0.0 | 9.8 | ||||||||||||
Underwriting, Acquisition and Insurance Expenses
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136.8 | 124.6 | 265.5 | 251.3 | ||||||||||||
Interest Expense
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5.1 | 5.1 | 10.1 | 10.0 | ||||||||||||
Fee Expense , net
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0.1 | 0.0 | 1.5 | 0.0 | ||||||||||||
Foreign Currency Exchange Loss (Gain)
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3.4 | (5.9 | ) | 3.2 | (9.0 | ) | ||||||||||
Total Expenses
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330.5 | 321.2 | 647.9 | 625.3 | ||||||||||||
Income Before Taxes
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44.7 | 42.8 | 87.4 | 80.3 | ||||||||||||
Income Tax Provision
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6.1 | 11.1 | 8.6 | 15.9 | ||||||||||||
Net Income
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$ | 38.6 | $ | 31.7 | $ | 78.8 | $ | 64.4 | ||||||||
Net Income per Common Share (Basic)
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$ | 1.48 | $ | 1.18 | $ | 2.99 | $ | 2.37 | ||||||||
Net Income per Common Share (Diluted)
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$ | 1.45 | $ | 1.13 | $ | 2.94 | $ | 2.29 | ||||||||
Weighted Average Common Shares:
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Basic
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26.1 | 27.0 | 26.3 | 27.1 | ||||||||||||
Diluted
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26.6 | 28.0 | 26.8 | 28.1 |
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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Six Months Ended
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June 30,
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June 30,
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|||||||||||||||
2014
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2013
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2014
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2013
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(unaudited) | (unaudited) | |||||||||||||||
Excess & Surplus Lines
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Gross Written Premiums
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$ | 175.8 | $ | 175.8 | $ | 315.8 | $ | 303.4 | ||||||||
Net Written Premiums
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147.4 | 138.0 | 245.6 | 238.8 | ||||||||||||
Earned Premiums
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125.3 | 108.7 | 242.7 | 213.8 | ||||||||||||
Underwriting Income
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$ | 20.8 | $ | 7.3 | $ | 33.2 | $ | 11.9 | ||||||||
Net Investment Income
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9.0 | 11.2 | 18.3 | 22.1 | ||||||||||||
Interest Expense
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(1.6 | ) | (1.8 | ) | (3.2 | ) | (3.4 | ) | ||||||||
Operating Income Before Taxes
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$ | 28.2 | $ | 16.7 | $ | 48.3 | $ | 30.6 | ||||||||
Loss Ratio
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51.3 | 58.1 | 53.2 | 57.3 | ||||||||||||
Expense Ratio
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32.1 | 35.1 | 33.1 | 37.1 | ||||||||||||
GAAP Combined Ratio
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83.4 | % | 93.2 | 86.3 | % | 94.4 | % | |||||||||
Commercial Specialty
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Gross Written Premiums
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$ | 83.6 | $ | 85.6 | $ | 189.5 | $ | 191.7 | ||||||||
Net Written Premiums
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55.7 | 55.0 | 123.7 | 126.7 | ||||||||||||
Earned Premiums
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71.1 | 75.3 | 142.8 | 150.5 | ||||||||||||
Underwriting Loss
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$ | (2.4 | ) | $ | (2.8 | ) | $ | (3.5 | ) | $ | (1.8 | ) | ||||
Net Investment Income
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4.6 | 6.1 | 9.3 | 12.0 | ||||||||||||
Interest Expense
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(0.8 | ) | (0.9 | ) | (1.6 | ) | (1.8 | ) | ||||||||
Fee Expense, net
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(1.9 | ) | (0.9 | ) | (3.0 | ) | (1.2 | ) | ||||||||
Operating (Loss) Income Before Taxes
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$ | (0.5 | ) | $ | 1.5 | $ | 1.2 | $ | 7.2 | |||||||
Loss Ratio
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67.0 | 67.6 | 66.8 | 65.5 | ||||||||||||
Expense Ratio
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36.4 | 36.2 | 35.7 | 35.7 | ||||||||||||
GAAP Combined Ratio
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103.4 | % | 103.8 | 102.5 | % | 101.2 | % | |||||||||
International Specialty
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Gross Written Premiums
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$ | 97.4 | $ | 96.1 | $ | 180.6 | $ | 174.3 | ||||||||
Net Written Premiums
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64.1 | 61.5 | 97.6 | 93.7 | ||||||||||||
Earned Premiums
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37.6 | 36.4 | 74.6 | 69.1 | ||||||||||||
Underwriting Income
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$ | 4.3 | $ | 1.9 | $ | 10.1 | $ | 5.2 | ||||||||
Net Investment Income
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2.0 | 1.7 | 3.8 | 4.0 | ||||||||||||
Interest Expense
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(0.7 | ) | (0.8 | ) | (1.5 | ) | (1.6 | ) | ||||||||
Operating Income Before Taxes
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$ | 5.6 | $ | 2.8 | $ | 12.4 | $ | 7.6 | ||||||||
Loss Ratio
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48.4 | 59.7 | 49.6 | 55.2 | ||||||||||||
Expense Ratio
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40.5 | 34.6 | 36.9 | 36.9 | ||||||||||||
GAAP Combined Ratio
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88.9 | % | 94.3 | 86.5 | % | 92.1 | % | |||||||||
Syndicate 1200
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Gross Written Premiums
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$ | 163.5 | $ | 184.9 | $ | 297.1 | $ | 311.0 | ||||||||
Net Written Premiums
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131.3 | 135.9 | 208.0 | 210.0 | ||||||||||||
Earned Premiums
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102.2 | 107.4 | 201.5 | 198.3 | ||||||||||||
Underwriting Income
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$ | 7.0 | $ | 6.9 | $ | 20.2 | $ | 12.9 | ||||||||
Net Investment Income
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2.1 | 2.8 | 5.8 | 5.6 | ||||||||||||
Interest Expense
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(0.8 | ) | (1.0 | ) | (1.6 | ) | (1.7 | ) | ||||||||
Fee Income, net
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1.8 | 1.1 | 1.5 | 1.4 | ||||||||||||
Operating Income Before Taxes
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$ | 10.1 | $ | 9.8 | $ | 25.9 | $ | 18.2 | ||||||||
Loss Ratio
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51.1 | 56.4 | 48.5 | 55.1 | ||||||||||||
Expense Ratio
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42.1 | 37.0 | 41.5 | 38.3 | ||||||||||||
GAAP Combined Ratio
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93.2 | % | 93.4 | 90.0 | % | 93.4 | % |
ARGO GROUP INTERNATIONAL HOLDINGS LTD
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(in millions)
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(unaudited)
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For the Three Months Ended
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For the Six Months Ended
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June 30,
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June 30,
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Net Prior Year Development
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2014
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2013
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2014
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2013
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(Favorable)/Unfavorable
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E&S
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$ | (13.7 | ) | $ | (9.2 | ) | $ | (21.7 | ) | $ | (14.4 | ) | ||||
Commercial Specialty
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2.9 | (1.0 | ) | 4.9 | 0.1 | |||||||||||
International Specialty
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- | (0.3 | ) | 0.4 | 0.6 | |||||||||||
Syndicate 1200
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(6.4 | ) | (1.3 | ) | (15.2 | ) | (3.5 | ) | ||||||||
Run-off
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2.8 | (1.0 | ) | 8.3 | (0.1 | ) | ||||||||||
Total
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$ | (14.4 | ) | $ | (12.8 | ) | $ | (23.3 | ) | $ | (17.3 | ) |
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
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RECONCILIATION OF OPERATING INCOME (LOSS) 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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Six Months Ended
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|||||||||||||||
June 30,
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June 30,
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|||||||||||||||
2014
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2013
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2014
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2013
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(unaudited) | (unaudited) | |||||||||||||||
Income Before Taxes:
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From Operations
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$ | 29.6 | $ | 25.9 | $ | 61.0 | $ | 50.8 | ||||||||
Foreign Currency Exchange (Loss) Gain
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(3.4 | ) | 5.9 | (3.2 | ) | 9.0 | ||||||||||
Net Realized Investment Gains and Other
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18.5 | 11.0 | 29.6 | 20.5 | ||||||||||||
Income Before Taxes
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44.7 | 42.8 | 87.4 | 80.3 | ||||||||||||
Income Tax Provision
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6.1 | 11.1 | 8.6 | 15.9 | ||||||||||||
Net Income
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$ | 38.6 | $ | 31.7 | $ | 78.8 | $ | 64.4 | ||||||||
Net Income per Common Share (Diluted)
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$ | 1.45 | $ | 1.13 | $ | 2.94 | $ | 2.29 | ||||||||
Operating Income per Common Share (Diluted)
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||||||||||||||||
At Assumed Tax Rate:
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Income (a)
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1.34 | 1.22 | 2.61 | 2.29 | ||||||||||||
Foreign Currency Exchange Losses (Gains) (a)
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0.10 | (0.17 | ) | 0.10 | (0.26 | ) | ||||||||||
Net Realized Investment Gains and Other (a)
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(0.55 | ) | (0.31 | ) | (0.88 | ) | (0.58 | ) | ||||||||
Operating Income per Common Share
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0.89 | 0.74 | 1.83 | 1.45 |