Bermuda
|
1-15259
|
98-0214719
|
||
(State or other jurisdiction
of incorporation) |
(Commission
File Number) |
(I.R.S. Employer
Identification No.) |
||
110 Pitts Bay Road | P.O. Box HM 1282 | |||
Pembroke HM 08 | Hamilton HM FX | |||
Bermuda | Bermuda | |||
(Address, Including Zip Code, |
(Mailing Address)
|
|||
of Principal Executive Offices) |
ITEM 2.02.
|
RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
|
ITEM 9.01.
|
FINANCIAL STATEMENTS AND EXHIBITS.
|
(d) Exhibits: | |
|
|
ARGO GROUP INTERNATIONAL HOLDINGS, LTD. | |||
|
By:
|
/s/ Jay S. Bullock
|
|
Dated: August 6, 2018 |
Name: Jay S. Bullock
|
||
Title: Executive Vice President and Chief Financial Officer
|
Gross Written
Premiums
$702.8M
↑ 2.3%
from Q2 2017
|
Combined
Ratio
96.3%
↓ 30 basis points
from Q2 2017
|
Net Income per
Diluted Share
$1.20
↓ 7.0%
from Q2 2017
|
Underwriting
Income (1)
$15.4M
↑ 11.6%
from Q2 2017
|
Adjusted Operating
Income Per Diluted
Share (1)
$0.95
↓ 16.7%
from Q2 2017
|
“Improved underwriting results in both the second quarter and the first six months of 2018 reflect the continued execution of our business plan,” said CEO Mark E. Watson III. “In our U.S. Operations, gross written premiums were up over 12% in the quarter with continued strong underlying margins. In our International Operations, we reduced exposure to select risks, and allocated capital and resources where we can earn more attractive returns. In addition, we are making progress in our ongoing expense initiatives. The overall expense ratio improved by 1.3 points in the second quarter of 2018 to 37.5% compared to the same period in 2017, reflecting the streamlining of operations, our digital initiatives and use of technology, all while making continued investments in our strategic growth areas.”
|
HIGHLIGHTS FOR THE THREE MONTHS
ENDED JUNE 30, 2018 |
HIGHLIGHTS FOR THE SIX MONTHS
ENDED JUNE 30, 2018 |
||
●
|
Gross written premiums were up 2.3% to $702.8 million, compared to $687.2 million for the 2017 second quarter.
U.S. Operations grew 12.3% to $410.0 million, while the International Operations were down 9.2% to $292.6 million compared to the 2017 second quarter.
Refer to the U.S. and International Operations sections below for additional commentary on gross written premiums.
|
●
|
Gross written premiums were up 9.9% to $1.413 billion, compared to $1.286 billion for the 2017 six month period.
U.S. Operations grew 11.8% to $782.8 million, while the International Operations grew 7.6% to $630.3 million compared to the 2017 six month period.
|
●
|
Net income was $41.8 million or $1.20 per diluted share, compared to net income of $46.0 million or $1.29 per diluted share for the 2017 second quarter.
The year over year comparisons are impacted by two significant items. As noted in the 2018 first quarter, the Company adopted a new accounting standard (refer to the Notes below) and as a result, the 2018 second quarter net income was favorably impacted by an after-tax(2) gain of $3.4 million (earnings per diluted share of $0.10).
In addition, the 2017 second quarter included an after-tax(2) net investment gain of $9.3 million (earnings per diluted share of $0.26) relating to the net asset sales of an equity investee.
|
●
|
Net income was $66.6 million or $1.92 per diluted share, compared to net income of $82.7 million or $2.32 per diluted share for the 2017 six month period.
The year over year comparisons are impacted by two significant items. As noted in the 2018 first quarter, the Company adopted a new accounting standard (refer to the Notes below) and as a result, the 2018 six month period net income was adversely impacted by an after-tax(2) loss of $21.3 million (loss per diluted share of $0.61).
In addition, the 2017 six month period included an after-tax(2) net investment gain of $9.3 million (earnings per diluted share of $0.26) relating to the net asset sales of an equity investee.
|
●
|
Adjusted operating income(1)(2) was $32.9 million or $0.95 per diluted share, compared to adjusted operating income of $40.7 million or $1.14 per diluted share for the 2017 second quarter.
Pre-tax underwriting income(1) increased 11.6% to $15.4 million compared to $13.8 million in the 2017 second quarter.
Net investment income of $33.2 million declined by $10.4 million from $43.6 million in the 2017 second quarter, due to the aforementioned net investment gain ($11.6 million pre-tax, $9.3 million after-tax(2) or $0.26 earnings per diluted share) relating to the net asset sales of an equity investee during the 2017 second quarter.
|
●
|
Adjusted operating income(1)(2) was $69.4 million or $2.00 per diluted share, compared to adjusted operating income of $62.6 million or $1.76 per diluted share for the 2017 six month period.
Pre-tax underwriting income(1) increased 91.2% to $32.7 million compared to $17.1 million in the 2017 six month period.
Net investment income of $69.2 million declined by $4.9 million from $74.1 million in the 2017 six month period, due to the aforementioned net investment gain ($11.6 million pre-tax, $9.3 million after-tax(2) or $0.26 earnings per diluted share) relating to the net asset sales of an equity investee during the 2017 second quarter.
|
●
|
The combined ratio was 96.3% compared to 96.6% for the 2017 second quarter. The loss and expense ratios for the quarter were 58.8% and 37.5%, respectively, compared to 57.8% and 38.8% for the 2017 second quarter.
|
●
|
The combined ratio was 96.1% compared to 97.8% for the 2017 six month period. The loss and expense ratios for the quarter were 58.0% and 38.1%, respectively, compared to 58.2% and 39.6% for the 2017 six month period.
|
●
|
Catastrophe losses, net of reinstatement premiums, were $1.7 million compared to $4.5 million in the 2017 second quarter.
|
●
|
Catastrophe losses, net of reinstatement premiums, were $6.0 million compared to $6.3 million in the 2017 six month period.
|
●
|
Net favorable prior-year reserve development was $2.4 million compared with $1.1 million in the 2017 second quarter.
|
●
|
Net favorable prior-year reserve development was $4.4 million compared with adverse development of $5.7 million in the 2017 six month period. The 2017 six month period was adversely impacted by Ogden rate change in the U.K. and losses related to Hurricane Matthew.
|
●
|
Net investment income decreased 23.9% to $33.2 million, compared to $43.6 million for the 2017 second quarter.
Net investment income on the core portfolio increased 47.4% to $28.0 million compared to $19.0 million in the 2017 second quarter. Alternative investments contributed $5.2 million in the 2018 second quarter compared to $24.6 million in the 2017 second quarter. The 2017 quarter Alternative investments included $11.6 million of pre-tax net investment gains relating to the net asset sales initiated by an equity investee.
|
●
|
Net investment income decreased 6.6% to $69.2 million, compared to $74.1 million for the 2017 six month period.
Net investment income on the core portfolio increased 34.2% to $55.3 million compared to $41.2 million in the 2017 six month period. Alternative investments contributed $13.9 million in the 2018 second quarter compared to $32.9 million in the 2017 six month period. The 2017 six month period Alternative investments included $11.6 million of pre-tax net investment gains relating to the net asset sales initiated by an equity investee.
|
●
|
During the second quarter of 2018, the Company repurchased 29,947 shares of its common stock for $1.8 million.
|
●
|
During the 2018 six month period, the Company repurchased 344,533 shares of its common stock for $20.4 million.
|
●
|
Book value per share was $52.83 at June 30, 2018, down from $53.46 at December 31, 2017, and $54.48 in the 2017 second quarter. The decline since December 31, 2017 is due primarily to the impact of unrealized investment losses on the fixed maturity securities portfolio in a rising interest rate environment.
|
||
Notes
|
|||
●
|
Effective January 1, 2018, the Company adopted ASU No. 2016-01, Financial Instruments: Recognition and Measurement of Financial Assets and Liabilities, using a cumulative effect adjustment. This adjustment transferred the unrealized gains and losses as of December 31, 2017, net of tax, on equity securities from accumulated other comprehensive income to retained earnings, resulting in no overall impact to shareholders’ equity.
In accordance with this accounting standard, in the 2018 second quarter, the Company recognized the change in the fair value of its equity securities as a pre-tax gain of $4.3 million ($3.4 million net of taxes(2) and earnings of $0.10 per diluted share). Since January 1, 2018, the Company recognized a pre-tax loss of $26.6 million ($21.3 million after taxes(2) and a loss of $0.61 per diluted share). These amounts are included as a component of net realized investment losses (gains) on the income statement. Amounts for the comparable 2017 periods are not presented as a component of net income, as ASU 2016-01 was required to be adopted on a prospective basis.
|
||
●
|
Excluding repurchased shares, all references to common shares associated with the recalculation of per share amounts for all periods presented have been adjusted for the 15% stock dividend paid on March 21, 2018, to shareholders of record at the close of business on March 7, 2018.
|
||
●
|
All references to catastrophe losses are pre-tax, net of reinsurance and estimated reinstatement premiums.
|
•
|
Gross written premiums in the 2018 second quarter of $410.0 million were up $45.0 million or 12.3% compared to the 2017 second quarter. This growth was driven by all major lines of business, reflecting the continued execution of strategic growth initiatives, our digital initiatives, and appropriate risk selection and exposure management actions.
|
•
|
Net earned premiums in the 2018 second quarter of $267.0 million were up $37.9 million or 16.5% from the 2017 second quarter, as all business lines increased.
|
•
|
The loss ratio for the 2018 second quarter was 58.3%, compared to 53.6% for the 2017 second quarter. The higher loss ratio in 2018 second quarter reflects less net favorable prior-year reserve development than the 2017 quarter, partially offset by lower catastrophe losses. The current accident year ex-CAT loss ratio for the 2018 second quarter was 59.0%, compared to 57.4% for the 2017 second quarter. This increase is primarily related to a number of discrete non-catastrophe related property losses, partially offset by improving business mix trends.
|
•
|
Net favorable prior-year reserve development for the 2018 second quarter was $3.1 million, compared to net favorable prior-year reserve development of $12.8 million for the 2017 second quarter.
|
•
|
Catastrophe losses for the 2018 second quarter were $1.3 million compared to catastrophe losses of $4.0 million in the 2017 second quarter.
|
•
|
The expense ratio for the 2018 second quarter was 31.8%, compared to 33.6% for the 2017 second quarter. The improvement in the expense ratio reflects the aforementioned 16.5% increase in net earned premiums, and to a lesser extent lower acquisition costs, partially offset by continued strategic investments in people and technology in support of premium growth.
|
•
|
Underwriting income for the 2018 second quarter was $26.4 million, compared to $29.3 million for the 2017 second quarter. The $2.9 million decline in underwriting income is due to lower net favorable prior-year reserve development of $9.7 million, the aforementioned property
losses, partially offset by lower catastrophe losses and a lower expense ratio.
|
•
|
Gross written premiums in the 2018 second quarter of $292.6 million were down $29.5 million or 9.2% compared to the 2017 second quarter.
|
•
|
Net earned premiums in the 2018 second quarter of $150.5 million were down $19.4 million or 11.4% from the 2017 second quarter due to changes, as noted above, in the retained percentage of certain of our Lloyd's insurance and reinsurance businesses.
|
•
|
The loss ratio for the 2018 second quarter was 58.9%, compared to 62.4% for the 2017 second quarter. The lower loss ratio in 2018 second quarter is due a 6.2 point improvement in prior-year reserve development compared to 2017 quarter, partially offset by an increase in the current accident year ex-CAT loss ratio. The current accident year ex-CAT loss ratio for the 2018 second quarter was 58.9%, compared to 56.3% for the 2017 second quarter.
|
•
|
For the 2018 second quarter, net favorable prior-year reserve development was $0.5 million, compared to net adverse prior-year reserve development of $10.0 million in the 2017 second quarter which related primarily to Property, Liability, and Specialty lines.
|
•
|
Catastrophe losses for the 2018 second quarter were $0.4 million compared to catastrophe losses of $0.5 million for the 2017 second quarter.
|
•
|
The expense ratio for the 2018 second quarter was 36.8%, compared to 37.0% for the 2017 second quarter. The decrease in the expense ratio relates to modestly lower acquisition costs associated with syndicate operations, partially offset by certain investments in support of strategic growth areas, most notably in Europe, Latin America and Asia Pacific.
|
•
|
Underwriting income for the 2018 second quarter was $6.4 million, compared to $1.0 million for the 2017 second quarter. The $5.4 million increase in underwriting income is due primarily to the net favorable year-over-year improvement in prior-year reserve development of $10.5 million, and to a lesser extent a modest improvement in the expense ratio. These improvements were partially offset by an increase in the current accident year ex-CAT loss ratio.
|
June 30,
|
December 31,
|
|||||||
2018
|
2017
|
|||||||
(unaudited)
|
||||||||
Assets
|
||||||||
Total investments
|
$ |
4,768.9
|
$ |
4,742.9
|
||||
Cash
|
126.7
|
176.6
|
||||||
Accrued investment income
|
24.9
|
23.5
|
||||||
Receivables
|
2,829.7
|
2,691.9
|
||||||
Goodwill and intangible assets
|
273.3
|
258.2
|
||||||
Deferred acquisition costs, net
|
161.1
|
160.4
|
||||||
Ceded unearned premiums
|
493.4
|
399.5
|
||||||
Other assets
|
427.7
|
311.0
|
||||||
Total assets
|
$ |
9,105.7
|
$ |
8,764.0
|
||||
Liabilities and Shareholders' Equity
|
||||||||
Reserves for losses and loss adjustment expenses
|
$ |
4,242.9
|
$ |
4,201.0
|
||||
Unearned premiums
|
1,283.6
|
1,207.7
|
||||||
Ceded reinsurance payable, net
|
816.0
|
734.0
|
||||||
Senior unsecured fixed rate notes
|
139.7
|
139.6
|
||||||
Other indebtedness
|
184.6
|
184.5
|
||||||
Junior subordinated debentures
|
256.8
|
256.6
|
||||||
Other liabilities
|
385.0
|
220.9
|
||||||
Total liabilities
|
7,308.6
|
6,944.3
|
||||||
Total shareholders' equity
|
1,797.1
|
1,819.7
|
||||||
Total liabilities and shareholders' equity
|
$ |
9,105.7
|
$ |
8,764.0
|
||||
Book value per common share
|
$ |
52.83
|
$ |
53.46
|
For the Three Months Ended
|
For the Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Gross written premiums
|
$
|
702.8
|
$
|
687.2
|
$
|
1,413.3
|
$
|
1,285.8
|
||||||||
Net written premiums
|
443.3
|
447.1
|
810.4
|
790.5
|
||||||||||||
Earned premiums
|
417.7
|
399.1
|
832.4
|
778.5
|
||||||||||||
Net investment income
|
33.2
|
43.6
|
69.2
|
74.1
|
||||||||||||
Fee and other income
|
1.9
|
3.8
|
3.9
|
7.4
|
||||||||||||
Net realized investment gains (losses):
|
||||||||||||||||
Net realized investment gains
|
6.2
|
4.5
|
21.4
|
19.1
|
||||||||||||
Change in fair value of equity securities (1)
|
4.3
|
—
|
(26.6
|
) |
—
|
|||||||||||
Net realized investment gains (losses)
|
10.5
|
4.5
|
(5.2
|
) |
19.1
|
|||||||||||
Total revenue
|
463.3
|
451.0
|
900.3
|
879.1
|
||||||||||||
Losses and loss adjustment expenses
|
245.5
|
230.6
|
482.7
|
453.1
|
||||||||||||
Underwriting, acquisition and insurance expenses
|
156.8
|
154.7
|
317.0
|
308.3
|
||||||||||||
Interest expense
|
7.8
|
7.0
|
15.5
|
12.9
|
||||||||||||
Fee and other expense
|
1.6
|
3.3
|
3.6
|
7.4
|
||||||||||||
Foreign currency exchange (gains) losses
|
(5.5
|
) |
4.6
|
(0.6
|
) |
3.9
|
||||||||||
Total expenses
|
406.2
|
400.2
|
818.2
|
785.6
|
||||||||||||
Income before income taxes
|
57.1
|
50.8
|
82.1
|
93.5
|
||||||||||||
Income tax provision
|
15.3
|
4.8
|
15.5
|
10.8
|
||||||||||||
Net income
|
$ |
41.8
|
$ |
46.0
|
$ |
66.6
|
$ |
82.7
|
||||||||
Net income per common share (basic)
|
$ |
1.23
|
$ |
1.32
|
$ |
1.96
|
$ |
2.39
|
||||||||
Net income per common share (diluted)
|
$ |
1.20
|
$ |
1.29
|
$ |
1.92
|
$ |
2.32
|
||||||||
Weighted average common shares:
|
||||||||||||||||
Basic
|
33.9
|
34.7
|
33.9
|
34.6
|
||||||||||||
Diluted
|
34.7
|
35.7
|
34.7
|
35.6
|
(1)
|
New reporting requirements for the change in fair value of equity securities commenced January 1, 2018 resulting from our adoption of ASU 2016-01. Amounts for the three and six months ended June 30, 2017 are not presented, as ASU 2016-01 was required to be adopted on a prospective basis.
|
|
|
|
|
|
|
|
|
|
Three months ended
|
Six months ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
U.S. Operations
|
||||||||||||||||
Gross written premiums
|
$
|
410.0
|
$
|
365.0
|
$
|
782.8
|
$
|
700.0
|
||||||||
Net written premiums
|
278.1
|
261.5
|
527.1
|
478.5
|
||||||||||||
Earned premiums
|
267.0
|
229.1
|
529.3
|
450.3
|
||||||||||||
Underwriting income
|
26.4
|
29.3
|
42.4
|
50.1
|
||||||||||||
Net investment income
|
20.7
|
27.3
|
43.3
|
47.2
|
||||||||||||
Interest expense
|
(4.1
|
) |
(3.8
|
) |
(8.0
|
) |
(6.5
|
) | ||||||||
Fee (expense) income, net
|
(0.5
|
) |
0.2
|
(1.2
|
) |
(0.6
|
) | |||||||||
Net income before taxes
|
$
|
42.5
|
$
|
53.0
|
$
|
76.5
|
$
|
90.2
|
||||||||
Loss ratio
|
58.3
|
% |
53.6
|
% |
58.9
|
% |
54.6
|
% | ||||||||
Expense ratio
|
31.8
|
% |
33.6
|
% |
33.1
|
% |
34.3
|
% | ||||||||
GAAP combined ratio
|
90.1
|
% |
87.2
|
% |
92.0
|
% |
88.9
|
% | ||||||||
CAY ex-CAT, combined ratio
|
90.8
|
% |
91.0
|
% |
91.7
|
% |
91.8
|
% | ||||||||
International Operations
|
||||||||||||||||
Gross written premiums
|
$
|
292.6
|
$
|
322.1
|
$
|
630.3
|
$
|
585.7
|
||||||||
Net written premiums
|
165.0
|
185.5
|
283.1
|
311.9
|
||||||||||||
Earned premiums
|
150.5
|
169.9
|
302.9
|
328.1
|
||||||||||||
Underwriting income
|
6.4
|
1.0
|
22.2
|
4.6
|
||||||||||||
Net investment income
|
8.4
|
10.1
|
17.2
|
16.7
|
||||||||||||
Interest expense
|
(2.3
|
) |
(2.3
|
) |
(4.6
|
) |
(4.3
|
) | ||||||||
Fee income (expense), net
|
0.7
|
0.3
|
1.3
|
0.4
|
||||||||||||
Net income before taxes
|
$
|
13.2
|
$
|
9.1
|
$
|
36.1
|
$
|
17.4
|
||||||||
Loss ratio
|
58.9
|
% |
62.4
|
% |
55.4
|
% |
61.9
|
% | ||||||||
Expense ratio
|
36.8
|
% |
37.0
|
% |
37.2
|
% |
36.7
|
% | ||||||||
GAAP combined ratio
|
95.7
|
% |
99.4
|
% |
92.6
|
% |
98.6
|
% | ||||||||
CAY ex-CAT, combined ratio
|
95.7
|
% |
93.3
|
% |
93.5
|
% |
92.2
|
% |
Three months ended
|
Six months ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
U.S. Operations
|
||||||||||||||||
Loss ratio
|
58.3
|
%
|
53.6
|
%
|
58.9
|
%
|
54.6
|
%
|
||||||||
Prior accident year loss reserve development
|
1.2
|
%
|
5.6
|
%
|
0.8
|
%
|
4.0
|
%
|
||||||||
Catastrophe losses
|
(0.5
|
)%
|
(1.8
|
)%
|
(1.1
|
)%
|
(1.1
|
)%
|
||||||||
CAY ex-CAT, loss ratio
|
59.0
|
%
|
57.4
|
%
|
58.6
|
%
|
57.5
|
%
|
||||||||
International Operations
|
||||||||||||||||
Loss ratio
|
58.9
|
%
|
62.4
|
%
|
55.4
|
%
|
61.9
|
%
|
||||||||
Prior accident year loss reserve development
|
0.3
|
%
|
(5.9
|
)%
|
1.1
|
%
|
(6.0
|
)%
|
||||||||
Catastrophe losses
|
(0.3
|
)%
|
(0.2
|
)%
|
(0.2
|
)%
|
(0.4
|
)%
|
||||||||
CAY ex-CAT, loss ratio
|
58.9
|
%
|
56.3
|
%
|
56.3
|
%
|
55.5
|
%
|
||||||||
Consolidated
|
||||||||||||||||
Loss ratio
|
58.8
|
%
|
57.8
|
%
|
58.0
|
%
|
58.2
|
%
|
||||||||
Prior accident year loss reserve development
|
0.5
|
%
|
0.2
|
%
|
0.5
|
%
|
(0.7
|
)%
|
||||||||
Catastrophe losses
|
(0.4
|
)%
|
(1.1
|
)%
|
(0.7
|
)%
|
(0.8
|
)%
|
||||||||
CAY ex-CAT, loss ratio
|
58.9
|
%
|
56.9
|
%
|
57.8
|
%
|
56.7
|
%
|
Three months ended
|
Six months ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Net prior-year development - (favorable) / unfavorable
|
||||||||||||||||
U.S. Operations
|
$
|
(3.1
|
) |
$
|
(12.8
|
) |
$
|
(4.1
|
) |
$
|
(18.0
|
) | ||||
International Operations
|
(0.5
|
) |
10.0
|
(3.3
|
) |
19.6
|
||||||||||
Run-off Lines
|
1.2
|
1.7
|
3.0
|
4.1
|
||||||||||||
Total net prior-year reserve development
|
$
|
(2.4
|
) |
$
|
(1.1
|
) |
$
|
(4.4
|
) |
$
|
5.7
|
Three months ended
|
Six months ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Catastrophe losses, net of reinsurance premiums
|
||||||||||||||||
U.S. Operations
|
$ |
1.3
|
$ |
4.0
|
$ |
5.6
|
$ |
4.8
|
||||||||
International Operations
|
0.4
|
0.5
|
0.4
|
1.5
|
||||||||||||
Total catastrophe losses, net of reinsurance premiums
|
$ |
1.7
|
$ |
4.5
|
$ |
6.0
|
$ |
6.3
|
Three months ended
|
Six months ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Net income
|
$ |
41.8
|
$ |
46.0
|
$ |
66.6
|
$s |
82.7
|
||||||||
Add (deduct):
|
||||||||||||||||
Income tax provision
|
15.3
|
4.8
|
15.5
|
10.8
|
||||||||||||
Net investment income
|
(33.2
|
)
|
(43.6
|
)
|
(69.2
|
)
|
(74.1
|
)
|
||||||||
Net realized investment (gains) losses
|
(10.5
|
)
|
(4.5
|
)
|
5.2
|
(19.1
|
)
|
|||||||||
Fee and other income
|
(1.9
|
)
|
(3.8
|
)
|
(3.9
|
)
|
(7.4
|
)
|
||||||||
Interest expense
|
7.8
|
7.0
|
15.5
|
12.9
|
||||||||||||
Fee and other expense
|
1.6
|
3.3
|
3.6
|
7.4
|
||||||||||||
Foreign currency exchange (gains) losses
|
(5.5
|
)
|
4.6
|
(0.6
|
)
|
3.9
|
||||||||||
Underwriting income
|
$ |
15.4
|
$ |
13.8
|
$ |
32.7
|
$ |
17.1
|
Three months ended
|
Six months ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Net income, as reported
|
$ |
41.8
|
$ |
46.0
|
$ |
66.6
|
$s |
82.7
|
||||||||
Income tax provision
|
15.3
|
4.8
|
15.5
|
10.8
|
||||||||||||
Net income, before taxes
|
57.1
|
50.8
|
82.1
|
93.5
|
||||||||||||
Add (deduct):
|
||||||||||||||||
Net realized investment (gains) losses
|
(10.5
|
)
|
(4.5
|
)
|
5.2
|
(19.1
|
)
|
|||||||||
Foreign currency exchange (gains) losses
|
(5.5
|
)
|
4.6
|
(0.6
|
)
|
3.9
|
||||||||||
Adjusted operating income before taxes
|
41.1
|
50.9
|
86.7
|
78.3
|
||||||||||||
Provision for income taxes, at assumed rate (1)
|
8.2
|
10.2
|
17.3
|
15.7
|
||||||||||||
Adjusted operating income
|
$ |
32.9
|
$ |
40.7
|
$ |
69.4
|
$ |
62.6
|
||||||||
Adjusted operating income per common share (diluted)
|
$ |
0.95
|
$ |
1.14
|
$ |
2.00
|
$ |
1.76
|
||||||||
Weighted average common shares, diluted
|
34.7
|
35.7
|
34.7
|
35.6
|
Three months ended
|
Six months ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Segment income (loss) before income taxes
|
||||||||||||||||
U.S. Operations
|
$ |
42.5
|
$ |
53.0
|
$ |
76.5
|
$ |
90.2
|
||||||||
International Operations
|
13.2
|
9.1
|
36.1
|
17.4
|
||||||||||||
Run-off Lines
|
(0.3
|
) |
(1.2
|
) |
(1.0
|
) |
(3.7
|
) | ||||||||
Corporate and Other
|
(14.3
|
) |
(10.0
|
) |
(24.9
|
) |
(25.6
|
) | ||||||||
Net realized investment gains (losses)
|
10.5
|
4.5
|
(5.2
|
) |
19.1
|
|||||||||||
Foreign currency exchange gains (losses)
|
5.5
|
(4.6
|
) |
0.6
|
(3.9
|
) | ||||||||||
Income before income taxes
|
57.1
|
50.8
|
82.1
|
93.5
|
||||||||||||
Income tax provision
|
15.3
|
4.8
|
15.5
|
10.8
|
||||||||||||
Net income
|
$ |
41.8
|
$ |
46.0
|
$ |
66.6
|
$ |
82.7
|
U.S. Operations
|
Three months ended June 30, 2018
|
Three months ended June 30, 2017
|
||||||||||||||||||||||
Gross Written
|
Net
Written |
Net
Earned |
Gross Written
|
Net
Written |
Net
Earned |
|||||||||||||||||||
Property
|
$ |
71.8
|
$ |
38.4
|
$ |
32.4
|
$ |
69.4
|
$ |
44.4
|
$ |
30.0
|
||||||||||||
Liability
|
245.6
|
173.7
|
173.8
|
220.2
|
159.7
|
148.8
|
||||||||||||||||||
Professional
|
55.9
|
37.3
|
33.4
|
40.6
|
31.0
|
28.5
|
||||||||||||||||||
Specialty
|
36.7
|
28.7
|
27.4
|
34.8
|
26.4
|
21.8
|
||||||||||||||||||
Total
|
$ |
410.0
|
$ |
278.1
|
$ |
267.0
|
$ |
365.0
|
$ |
261.5
|
$ |
229.1
|
Six months ended June 30, 2018
|
Six months ended June 30, 2017
|
|||||||||||||||||||||||
Gross Written
|
Net
Written |
Net
Earned |
Gross Written
|
Net
Written |
Net
Earned |
|||||||||||||||||||
Property
|
$ |
117.4
|
$ |
56.8
|
$ |
67.1
|
$ |
125.3
|
$ |
59.4
|
$ |
59.0
|
||||||||||||
Liability
|
488.7
|
343.7
|
345.7
|
438.2
|
314.4
|
294.6
|
||||||||||||||||||
Professional
|
103.2
|
69.1
|
62.5
|
73.7
|
57.2
|
54.7
|
||||||||||||||||||
Specialty
|
73.5
|
57.5
|
54.0
|
62.8
|
47.5
|
42.0
|
||||||||||||||||||
Total
|
$ |
782.8
|
$ |
527.1
|
$ |
529.3
|
$ |
700.0
|
$ |
478.5
|
$ |
450.3
|
International Operations
|
Three months ended June 30, 2018
|
Three months ended June 30, 2017
|
||||||||||||||||||||||
Gross Written
|
Net
Written |
Net
Earned |
Gross Written
|
Net
Written |
Net
Earned |
|||||||||||||||||||
Property
|
$ |
107.5
|
$ |
51.9
|
$ |
48.7
|
$ |
117.2
|
$ |
62.0
|
$ |
55.2
|
||||||||||||
Liability
|
44.7
|
24.9
|
24.2
|
38.3
|
19.0
|
18.9
|
||||||||||||||||||
Professional
|
42.3
|
24.8
|
22.8
|
41.4
|
23.9
|
23.8
|
||||||||||||||||||
Specialty
|
98.1
|
63.4
|
54.8
|
125.2
|
80.6
|
72.0
|
||||||||||||||||||
Total
|
$ |
292.6
|
$ |
165.0
|
$ |
150.5
|
$ |
322.1
|
$ |
185.5
|
$ |
169.9
|
Six months ended June 30, 2018
|
Six months ended June 30, 2017
|
|||||||||||||||||||||||
Gross Written
|
Net
Written |
Net
Earned |
Gross Written
|
Net
Written |
Net
Earned |
|||||||||||||||||||
Property
|
$ |
261.8
|
$ |
82.6
|
$ |
106.7
|
$ |
210.0
|
$ |
96.0
|
$ |
115.8
|
||||||||||||
Liability
|
91.9
|
50.5
|
44.3
|
70.3
|
36.2
|
37.5
|
||||||||||||||||||
Professional
|
88.7
|
48.1
|
48.1
|
77.6
|
44.4
|
47.7
|
||||||||||||||||||
Specialty
|
187.9
|
101.9
|
103.8
|
227.8
|
135.3
|
127.1
|
||||||||||||||||||
Total
|
$ |
630.3
|
$ |
283.1
|
$ |
302.9
|
$ |
585.7
|
$ |
311.9
|
$ |
328.1
|
Consolidated
|
Three months ended June 30, 2018
|
Three months ended June 30, 2017
|
||||||||||||||||||||||
Gross Written
|
Net
Written |
Net
Earned |
Gross Written
|
Net
Written |
Net
Earned |
|||||||||||||||||||
Property
|
$ |
179.3
|
$ |
90.3
|
$ |
81.1
|
$ |
186.7
|
$ |
106.5
|
$ |
85.3
|
||||||||||||
Liability
|
290.5
|
198.8
|
198.2
|
258.5
|
178.7
|
167.7
|
||||||||||||||||||
Professional
|
98.2
|
62.1
|
56.2
|
82.0
|
54.9
|
52.3
|
||||||||||||||||||
Specialty
|
134.8
|
92.1
|
82.2
|
160.0
|
107.0
|
93.8
|
||||||||||||||||||
Total
|
$ |
702.8
|
$ |
443.3
|
$ |
417.7
|
$ |
687.2
|
$ |
447.1
|
$ |
399.1
|
Six months ended June 30, 2018
|
Six months ended June 30, 2017
|
|||||||||||||||||||||||
Gross Written
|
Net
Written |
Net
Earned
|
Gross Written
|
Net
Written |
Net
Earned |
|||||||||||||||||||
Property
|
$ |
379.2
|
$ |
139.4
|
$ |
173.8
|
$ |
335.4
|
$ |
155.5
|
$ |
174.9
|
||||||||||||
Liability
|
580.8
|
394.4
|
390.2
|
508.5
|
350.6
|
332.1
|
||||||||||||||||||
Professional
|
191.9
|
117.2
|
110.6
|
151.3
|
101.6
|
102.4
|
||||||||||||||||||
Specialty
|
261.4
|
159.4
|
157.8
|
290.6
|
182.8
|
169.1
|
||||||||||||||||||
Total
|
$ |
1,413.3
|
$ |
810.4
|
$ |
832.4
|
$ |
1,285.8
|
$ |
790.5
|
$ |
778.5
|
For the Three Months Ended
|
For the Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Net investment income, excluding alternative investments
|
$ |
28.0
|
$ |
19.0
|
$ |
55.3
|
$ |
41.2
|
||||||||
Alternative investments
|
5.2
|
24.6
|
13.9
|
32.9
|
||||||||||||
Total net investment income
|
$ |
33.2
|
$ |
43.6
|
$ |
69.2
|
$ |
74.1
|
For the Six Months Ended
|
||||||||||||
June 30,
|
||||||||||||
2018
|
2017
|
% Change
|
||||||||||
Net income
|
$ |
66.6
|
$ |
82.7
|
(19.5
|
)%
|
||||||
Adjusted operating income (1)
|
69.4
|
62.6
|
10.9
|
%
|
||||||||
Shareholders' Equity - Beginning of period
|
$ |
1,819.7
|
$ |
1,792.7
|
1.5
|
%
|
||||||
Shareholders' Equity - End of period
|
1,797.1
|
1,891.3
|
(5.0
|
)%
|
||||||||
Average Shareholders' Equity
|
$ |
1,808.4
|
$ |
1,842.0
|
(1.8
|
)%
|
||||||
Annualized return on average shareholders' equity
|
7.4
|
% |
9.0
|
% | ||||||||
Annualized adjusted operating return on average shareholders' equity
|
7.7
|
% |
6.8
|
% |