|
|
|
||
(State or other jurisdiction
of incorporation) |
(Commission
File Number) |
(I.R.S. Employer
Identification No.) |
|
P.O. Box HM 1282
Hamilton HM FX Bermuda |
(Address, Including Zip Code,
of Principal Executive Offices) |
(Mailing Address)
|
Title of each class |
Trading Symbol(s) |
Name of each exchange
on which registered
|
||
|
||||
No.
|
Exhibit
|
|
104
|
Cover Page Interactive Data File (embedded within the Inline XBRL document).
|
Dated: May 7, 2020
|
ARGO GROUP INTERNATIONAL
HOLDINGS, LTD.
|
||
By: |
/s/ Jay S. Bullock
|
||
Name: |
Jay S. Bullock | ||
Title: |
Executive Vice President and Chief Financial Officer
|
Exhibit 99.1 |
●
|
Gross written premium of $825.9 million, up 8.6%, reflects strong growth in the U.S.
|
●
|
Combined ratio of 103.2% and CAY ex-CAT combined ratio of 95.9%.
|
●
|
Net investment income increased 4.7% to $35.5 million.
|
●
|
Net loss of $18.8 million or $(0.55) per diluted share.
|
●
|
Operating income of $12.6 million or $0.36 per diluted share.
|
$ in millions
|
Three
months ended
March
31,
|
Y/Y
|
|
|||||||||
Consolidated
|
2020
|
2019
|
Change
|
|||||||||
Gross written premium
|
$
|
825.9
|
$
|
760.8
|
8.6
|
%
|
||||||
Net written premium
|
380.5
|
360.9
|
5.4
|
%
|
||||||||
Earned premium
|
435.0
|
420.5
|
3.4
|
%
|
||||||||
Underwriting income (loss)
|
(13.9
|
)
|
22.4
|
-162.1
|
%
|
|||||||
Net investment income
|
35.5
|
33.9
|
4.7
|
%
|
||||||||
Net income (loss)
|
$
|
(18.8
|
)
|
$
|
91.2
|
-120.6
|
%
|
|||||
Operating income
|
$
|
12.6
|
$
|
41.5
|
-69.6
|
%
|
||||||
Loss ratio
|
64.6
|
%
|
56.6
|
%
|
8.0p
|
ts |
||||||
Expense ratio
|
38.6
|
%
|
38.1
|
%
|
0.5p
|
ts |
||||||
Combined ratio
|
103.2
|
%
|
94.7
|
%
|
8.5p
|
ts |
● |
Gross written premium grew 8.6% to $825.9 million, compared to $760.8 million for the 2019 first quarter. Growth was experienced in our U.S. segment while
premium growth in our International segment was relatively flat compared to the prior year quarter.
|
● |
The combined ratio was 103.2% compared to 94.7% for the 2019 first quarter. The higher combined ratio was primarily driven by catastrophe losses of $29.1
million, including $26.2 million related to the COVID-19 pandemic, primarily resulting from contingency and property exposures in the company’s International Operations and property exposures in its U.S. Operations. Additionally,
reserve development added 0.6 points to the loss ratio in the first quarter of 2020, compared to releases of 0.6 points in the prior year quarter. Net reserve strengthening was reported in Argo’s U.S. Operations, although the overall
level of reserve development was modest in the quarter.
|
● |
The CAY ex-CAT combined ratio was 95.9% compared to 94.0% in the prior year quarter. The increase in the CAY ex-CAT combined ratio was primarily due to an
increase in the CAY ex-CAT loss ratio in U.S. Operations, as well as a modest increase in the expense ratio.
|
● |
Net investment income of $35.5 million increased 4.7% compared to the 2019 first quarter. Net investment income on the core portfolio increased 3.1% to $33.0
million, while alternative investments, which are reported on a lag, contributed $2.5 million in the first quarter of 2020.
|
● |
Net loss was $18.8 million or $(0.55) per diluted share, compared to net income of $91.2 million or $2.63 per diluted share for the 2019 first quarter. The 2020
first quarter result included pre-tax realized losses of $36.1 million compared to pre-tax realized gains of $52.5 million in the prior year period.
|
● |
Operating income was $12.6 million or $0.36 per diluted share, compared to operating income of $41.5 million or $1.20 per diluted share for the 2019 first
quarter. The primary driver of the decline in operating income was lower underwriting income in the first quarter of 2020, reflecting increased catastrophe losses and modest reserve strengthening.
|
$ in millions
|
Three months ended
March 31,
|
Y/Y
|
|
|||||||||
U.S. Operations
|
2020
|
2019
|
Change
|
|||||||||
Gross written premium
|
$
|
476.5
|
$
|
410.7
|
16.0
|
%
|
||||||
Net written premium
|
269.4
|
248.4
|
8.5
|
%
|
||||||||
Earned premium
|
302.5
|
273.8
|
10.5
|
%
|
||||||||
Losses and loss adjustment expenses
|
189.6
|
154.8
|
22.5
|
%
|
||||||||
Underwriting, acquisition and insurance expenses
|
96.1
|
94.2
|
2.0
|
%
|
||||||||
Underwriting income
|
$
|
16.8
|
$
|
24.8
|
-32.3
|
%
|
||||||
Loss ratio
|
62.7
|
%
|
56.5
|
%
|
6.2p
|
ts |
||||||
Expense ratio
|
31.8
|
%
|
34.4
|
%
|
-2.6p
|
ts |
||||||
Combined ratio
|
94.5
|
%
|
90.9
|
%
|
3.6p
|
ts |
● |
Gross written premium growth in the 2020 first quarter was achieved in Professional and Liability lines, while writings within Property and Specialty lines were
consistent with amounts written in the 2019 first quarter. The overall increase in gross written premium reflects the continued execution of strategic growth and digital initiatives, a continued positive rate environment and solid new
and renewal business growth.
|
● |
Net earned premium growth in the first quarter of 2020 was driven by the growth in gross written premium partially offset by the increased use of reinsurance.
All major lines of business, with the exception of Liability, reported growth in net earned premium compared to the 2019 first quarter.
|
● |
The loss ratio for the first quarter of 2020 was 62.7%, an increase of 6.2 points compared to the prior year quarter. The higher loss ratio was driven by a 1.9
point increase in the CAY ex-CAT loss ratio, 1.1 points of unfavorable net prior-year reserve development compared to favorable net prior-year reserve development in the 2019 first quarter, and an increase of 1.7 points from higher
catastrophe-related losses, primarily due to expected claim related expenses associated with COVID-19. The higher CAY ex-CAT loss ratio was primarily due to higher expected losses in Professional and Liability lines, as well as a
single large loss in Liability. The unfavorable net prior-year reserve development in the current quarter was largely due to strengthening in Professional and Liability lines, partially offset by releases in Specialty lines.
|
● |
The expense ratio for the first quarter of 2020 was 31.8%, an improvement of 2.6 points compared to the 2019 first quarter. The improvement in the expense ratio
was driven by growth in earned premium ahead of a modest increase in expenses, additional ceding commissions received and shifts in business mix.
|
$ in millions
|
Three months ended
March 31,
|
Y/Y
|
|
|||||||||
International Operations
|
2020
|
2019
|
Change
|
|||||||||
Gross written premium
|
$
|
349.2
|
$
|
350.1
|
-0.3
|
%
|
||||||
Net written premium
|
110.9
|
112.5
|
-1.4
|
%
|
||||||||
Earned premium
|
132.3
|
146.7
|
-9.8
|
%
|
||||||||
Losses and loss adjustment expenses
|
91.5
|
82.4
|
11.0
|
%
|
||||||||
Underwriting, acquisition and insurance expenses
|
60.3
|
55.1
|
9.4
|
%
|
||||||||
Underwriting income (loss)
|
$
|
-19.5
|
$
|
9.2
|
-312.0
|
%
|
||||||
Loss ratio
|
69.1
|
%
|
56.2
|
%
|
12.9p
|
ts |
||||||
Expense ratio
|
45.6
|
%
|
37.5
|
%
|
8.1p
|
ts |
||||||
Combined ratio
|
114.7
|
%
|
93.7
|
%
|
21.0p
|
ts |
● |
Gross written premium growth was approximately flat in the first quarter of 2020, as growth in Specialty and Liability lines was offset by a decrease in
Property lines. All lines of business experienced rate increases during the first quarter, with particular strength in Liability, Property and Marine lines. The pricing environment is a continuation of the positive trends experienced
in recent quarters. Rate increases across Argo’s International Operations were partially offset by certain risk management actions, such as reducing line sizes in some classes of business.
|
● |
Net earned premium in the first quarter of 2020 decreased 9.8% from the prior year quarter. The decline was driven by higher ceded premium under certain
reinsurance contracts, as well as additional reinstatement premiums incurred during the quarter.
|
● |
The loss ratio for the first quarter of 2020 was 69.1%, an increase of 12.9 points compared to the prior year quarter. The increase in the loss ratio was
primarily due to higher catastrophe losses in the quarter, largely attributed to estimated losses related to the COVID-19 pandemic in contingency and property exposures. Property losses relate to sub-limited affirmative business
interruption coverage. The CAY ex-CAT loss ratio was consistent with the 2019 first quarter.
|
● |
The expense ratio for the first quarter of 2020 was 45.6%, an increase of 8.1 points from 37.5% for the 2019 first quarter due to lower earned premium and
higher non-acquisition expenses. The increase in absolute expenses are primarily due to costs associated with increased participation in our Lloyd’s syndicates where greater expense is recognized ahead of a higher level of earned
premium, as well as non-recurring charges related to reduction in personnel.
|
● |
Book value per share decreased 7.9% to $47.37 at March 31, 2020, compared to $51.80 at December 31, 2019 primarily due to net realized and unrealized losses in
the investment portfolio. Through April 30, 2020, Argo has recovered approximately half of the decline in shareholders’ equity as a result of a recovery in assets values and closing of the previously announced sale of Trident Public
Risk Solutions.
|
● |
Argo’s Board of Directors declared a quarterly cash dividend of $0.31 per share that will be paid on June 12, 2020 to shareholders of record on May 29, 2020.
|
● |
The Company did not repurchase any shares of its common stock during the first quarter of 2020.
|
|
March 31,
|
December 31,
|
||||||
|
2020
|
2019
|
||||||
|
(unaudited)
|
|||||||
Assets
|
||||||||
Total investments
|
$
|
4,811.4
|
$
|
5,099.4
|
||||
Cash
|
158.7
|
137.8
|
||||||
Accrued investment income
|
23.2
|
25.7
|
||||||
Receivables
|
3,560.0
|
3,792.8
|
||||||
Goodwill and intangible assets
|
252.9
|
253.2
|
||||||
Deferred acquisition costs, net
|
158.0
|
160.2
|
||||||
Ceded unearned premium
|
652.9
|
545.0
|
||||||
Other assets
|
584.2
|
500.4
|
||||||
Total assets
|
$
|
10,201.3
|
$
|
10,514.5
|
||||
Liabilities and Shareholders' Equity
|
||||||||
Reserves for losses and loss adjustment expenses
|
$
|
5,067.6
|
$
|
5,157.6
|
||||
Unearned premium
|
1,460.0
|
1,410.9
|
||||||
Ceded reinsurance payable, net
|
1,094.8
|
1,203.1
|
||||||
Senior unsecured fixed rate notes
|
140.0
|
140.0
|
||||||
Other indebtedness
|
180.0
|
181.3
|
||||||
Junior subordinated debentures
|
257.5
|
257.4
|
||||||
Other liabilities
|
364.6
|
383.1
|
||||||
Total liabilities
|
8,564.5
|
8,733.4
|
||||||
Total shareholders' equity
|
1,636.8
|
1,781.1
|
||||||
Total liabilities and shareholders' equity
|
$
|
10,201.3
|
$
|
10,514.5
|
||||
Book value per common share
|
$
|
47.37
|
$
|
51.80
|
|
Three Months Ended
|
|||||||
|
March 31,
|
|||||||
|
2020
|
2019
|
||||||
Gross written premium
|
$
|
825.9
|
$
|
760.8
|
||||
Net written premium
|
380.5
|
360.9
|
||||||
Earned premium
|
435.0
|
420.5
|
||||||
Net investment income
|
35.5
|
33.9
|
||||||
Fee and other income
|
2.1
|
2.3
|
||||||
Net realized investment (losses) gains :
|
||||||||
Net realized investment gains (losses)
|
27.9
|
(1.7
|
)
|
|||||
Change in fair value of equity securities
|
(39.3
|
)
|
54.2
|
|||||
Credit losses on fixed maturity securities
|
(24.7
|
)
|
—
|
|||||
Net realized investment (losses) gains
|
(36.1
|
)
|
52.5
|
|||||
Total revenue
|
436.5
|
509.2
|
||||||
Losses and loss adjustment expenses
|
280.9
|
237.9
|
||||||
Underwriting, acquisition and insurance expenses
|
168.0
|
160.2
|
||||||
Other corporate expenses
|
3.3
|
0.5
|
||||||
Interest expense
|
7.7
|
8.5
|
||||||
Fee and other expense
|
1.2
|
1.3
|
||||||
Foreign currency exchange (gains) loss
|
(3.0
|
)
|
0.7
|
|||||
Total expenses
|
458.1
|
409.1
|
||||||
(Loss) income before income taxes
|
(21.6
|
)
|
100.1
|
|||||
Income tax (benefit) provision
|
(2.8
|
)
|
8.9
|
|||||
Net (loss) income
|
$
|
(18.8
|
)
|
$
|
91.2
|
|||
Net (loss) income per common share (basic)
|
$
|
(0.55
|
)
|
$
|
2.68
|
|||
Net (loss) income per common share (diluted)
|
$
|
(0.55
|
)
|
$
|
2.63
|
|||
Weighted average common shares:
|
||||||||
Basic
|
34.5
|
34.0
|
||||||
Diluted
|
34.5
|
34.7
|
||||||
Loss ratio
|
64.6
|
%
|
56.6
|
%
|
||||
Expense ratio (1)
|
38.6
|
%
|
38.1
|
%
|
||||
GAAP combined ratio
|
103.2
|
%
|
94.7
|
%
|
||||
CAY ex-CAT combined ratio
|
95.9
|
%
|
94.0
|
%
|
|
Three Months Ended
|
|||||||
|
March 31,
|
|||||||
|
2020
|
2019
|
||||||
U.S. Operations
|
||||||||
Gross written premium
|
$
|
476.5
|
$
|
410.7
|
||||
Net written premium
|
269.4
|
248.4
|
||||||
Earned premium
|
302.5
|
273.8
|
||||||
Underwriting income
|
16.8
|
24.8
|
||||||
Net investment income
|
25.2
|
23.1
|
||||||
Interest expense
|
(4.9
|
)
|
(5.2
|
)
|
||||
Fee expense, net
|
(0.2
|
)
|
0.2
|
|||||
Net income before taxes
|
$
|
36.9
|
$
|
42.9
|
||||
Loss ratio
|
62.7
|
%
|
56.5
|
%
|
||||
Expense ratio (1)
|
31.8
|
%
|
34.4
|
%
|
||||
GAAP combined ratio
|
94.5
|
%
|
90.9
|
%
|
||||
CAY ex-CAT combined ratio
|
90.2
|
%
|
90.9
|
%
|
||||
International Operations
|
||||||||
Gross written premium
|
$
|
349.2
|
$
|
350.1
|
||||
Net written premium
|
110.9
|
112.5
|
||||||
Earned premium
|
132.3
|
146.7
|
||||||
Underwriting (loss) income
|
(19.5
|
)
|
9.2
|
|||||
Net investment income
|
8.6
|
9.1
|
||||||
Interest expense
|
(2.3
|
)
|
(2.8
|
)
|
||||
Fee income, net
|
0.9
|
0.7
|
||||||
Net (loss) income before taxes
|
$
|
(12.3
|
)
|
$
|
16.2
|
|||
Loss ratio
|
69.1
|
%
|
56.2
|
%
|
||||
Expense ratio (1)
|
45.6
|
%
|
37.5
|
%
|
||||
GAAP combined ratio
|
114.7
|
%
|
93.7
|
%
|
||||
CAY ex-CAT combined ratio
|
100.2
|
%
|
92.1
|
%
|
|
Three Months Ended
|
|||||||
|
March 31,
|
|||||||
|
2020
|
2019
|
||||||
U.S. Operations
|
||||||||
Loss ratio
|
62.7
|
%
|
56.5
|
%
|
||||
Prior accident year loss reserve development
|
(1.1
|
)%
|
1.5
|
%
|
||||
Catastrophe losses
|
(3.2
|
)%
|
(1.5
|
)%
|
||||
CAY ex-CAT loss ratio
|
58.4
|
%
|
56.5
|
%
|
||||
International Operations
|
||||||||
Loss ratio
|
69.1
|
%
|
56.2
|
%
|
||||
Prior accident year loss reserve development
|
0.3
|
%
|
(0.5
|
)%
|
||||
Catastrophe losses
|
(14.8
|
)%
|
(1.1
|
)%
|
||||
CAY ex-CAT loss ratio
|
54.6
|
%
|
54.6
|
%
|
||||
Consolidated
|
||||||||
Loss ratio
|
64.6
|
%
|
56.6
|
%
|
||||
Prior accident year loss reserve development
|
(0.6
|
)%
|
0.6
|
%
|
||||
Catastrophe losses
|
(6.7
|
)%
|
(1.3
|
)%
|
||||
CAY ex-CAT loss ratio
|
57.3
|
%
|
55.9
|
%
|
|
Three Months Ended
|
|||||||
March 31,
|
||||||||
2020
|
2019
|
|||||||
Net Prior-Year Reserve Development
|
||||||||
(Favorable)/Unfavorable
|
||||||||
U.S. Operations
|
$
|
3.3
|
$
|
(4.0
|
)
|
|||
International Operations
|
(0.4
|
)
|
0.8
|
|||||
Run-off Lines
|
(0.2
|
)
|
0.7
|
|||||
Total net prior-year reserve development
|
$
|
2.7
|
$
|
(2.5
|
)
|
|
Three Months Ended
|
|||||||
March 31,
|
||||||||
2020
|
2019
|
|||||||
Catastrophe & COVID-19 Losses
|
||||||||
Catastrophe losses:
|
||||||||
U.S. Operations
|
$
|
2.0
|
$
|
4.0
|
||||
International Operations
|
0.9
|
1.5
|
||||||
Total catastrophe losses
|
2.9
|
5.5
|
||||||
COVID-19 losses
|
||||||||
U.S. Operations
|
7.5
|
0.0
|
||||||
International Operations
|
18.7
|
0.0
|
||||||
Total COVID-19 losses
|
26.2
|
0.0
|
||||||
Catastrophe & COVID-19 losses
|
||||||||
U.S. Operations
|
9.5
|
4.0
|
||||||
International Operations
|
19.6
|
1.5
|
||||||
Total catastrophe & COVID-19 losses
|
$
|
29.1
|
$
|
5.5
|
|
Three Months Ended
|
|||||||
|
March 31,
|
|||||||
|
2020
|
2019
|
||||||
Net (loss) income
|
$
|
(18.8
|
)
|
$
|
91.2
|
|||
Add (deduct):
|
||||||||
Income tax (benefit) provision
|
(2.8
|
)
|
8.9
|
|||||
Net investment income
|
(35.5
|
)
|
(33.9
|
)
|
||||
Net realized investment losses (gains)
|
36.1
|
(52.5
|
)
|
|||||
Fee and other income
|
(2.1
|
)
|
(2.3
|
)
|
||||
Interest expense
|
7.7
|
8.5
|
||||||
Fee and other expense
|
1.2
|
1.3
|
||||||
Foreign currency exchange (gains) loss
|
(3.0
|
)
|
0.7
|
|||||
Other corporate expenses
|
3.3
|
0.5
|
||||||
Underwriting (loss) income
|
$
|
(13.9
|
)
|
$
|
22.4
|
|
Three Months Ended
|
|||||||
|
March 31,
|
|||||||
|
2020
|
2019
|
||||||
Net (loss) income, as reported
|
$
|
(18.8
|
)
|
$
|
91.2
|
|||
Income tax (benefit) provision
|
(2.8
|
)
|
8.9
|
|||||
Net (loss) income, before taxes
|
(21.6
|
)
|
100.1
|
|||||
Add (deduct):
|
||||||||
Net realized investment losses (gains)
|
36.1
|
(52.5
|
)
|
|||||
Foreign currency exchange (gains) loss
|
(3.0
|
)
|
0.7
|
|||||
Other corporate expenses
|
3.3
|
0.5
|
||||||
Operating income before taxes
|
14.8
|
48.8
|
||||||
Income taxes provision, at assumed rate (1)
|
2.2
|
7.3
|
||||||
Operating income
|
$
|
12.6
|
$
|
41.5
|
||||
Operating income per common share (diluted)
|
$
|
0.36
|
$
|
1.20
|
||||
Weighted average common shares, diluted
|
34.5
|
34.7
|
|
Three Months Ended
|
|||||||
|
March 31,
|
|||||||
|
2020
|
2019
|
||||||
Segment income (loss) before income taxes:
|
||||||||
U.S. Operations
|
$
|
36.9
|
$
|
42.9
|
||||
International Operations
|
(12.3
|
)
|
16.2
|
|||||
Run-off Lines
|
0.5
|
0.6
|
||||||
Corporate and Other
|
(10.3
|
)
|
(10.9
|
)
|
||||
Net realized investment (losses) gains
|
(36.1
|
)
|
52.5
|
|||||
Foreign currency exchange gains (loss)
|
3.0
|
(0.7
|
)
|
|||||
Other corporate expenses
|
(3.3
|
)
|
(0.5
|
)
|
||||
(Loss) income before income taxes
|
(21.6
|
)
|
100.1
|
|||||
Income tax (benefit) provision
|
(2.8
|
)
|
8.9
|
|||||
Net (loss) income
|
$
|
(18.8
|
)
|
$
|
91.2
|
U.S. Operations
|
Three months ended March 31, 2020
|
Three months ended March 31, 2019
|
||||||||||||||||||||||
Gross
Written
|
Net
Written |
Net
Earned |
Gross
Written
|
Net
Written |
Net
Earned |
|||||||||||||||||||
Property
|
$
|
65.2
|
$
|
15.1
|
$
|
39.4
|
$
|
64.2
|
$
|
7.4
|
$
|
31.5
|
||||||||||||
Liability
|
269.9
|
162.7
|
172.3
|
242.6
|
172.2
|
178.5
|
||||||||||||||||||
Professional
|
97.2
|
58.6
|
55.5
|
60.8
|
35.2
|
31.8
|
||||||||||||||||||
Specialty
|
44.2
|
33.0
|
35.3
|
43.1
|
33.6
|
32.0
|
||||||||||||||||||
Total
|
$
|
476.5
|
$
|
269.4
|
$
|
302.5
|
$
|
410.7
|
$
|
248.4
|
$
|
273.8
|
International Operations
|
Three months ended March 31, 2020
|
Three months ended March 31, 2019
|
||||||||||||||||||||||
Gross
Written
|
Net
Written |
Net
Earned |
Gross
Written
|
Net
Written |
Net
Earned |
|||||||||||||||||||
Property
|
$
|
123.2
|
$
|
12.7
|
$
|
35.7
|
$
|
155.0
|
$
|
8.4
|
$
|
35.6
|
||||||||||||
Liability
|
56.0
|
17.4
|
20.0
|
47.0
|
27.6
|
29.4
|
||||||||||||||||||
Professional
|
55.7
|
24.5
|
28.7
|
55.9
|
27.5
|
29.2
|
||||||||||||||||||
Specialty
|
114.3
|
56.3
|
47.9
|
92.2
|
49.0
|
52.5
|
||||||||||||||||||
Total
|
$
|
349.2
|
$
|
110.9
|
$
|
132.3
|
$
|
350.1
|
$
|
112.5
|
$
|
146.7
|
Consolidated
|
Three months ended March 31, 2020
|
Three months ended March 31, 2019
|
||||||||||||||||||||||
Gross
Written
|
Net
Written |
Net
Earned |
Gross
Written
|
Net
Written |
Net
Earned |
|||||||||||||||||||
Property
|
$
|
188.4
|
$
|
27.8
|
$
|
75.1
|
$
|
219.2
|
$
|
15.8
|
$
|
67.1
|
||||||||||||
Liability
|
326.1
|
180.3
|
192.5
|
289.6
|
199.8
|
207.9
|
||||||||||||||||||
Professional
|
152.9
|
83.1
|
84.2
|
116.7
|
62.7
|
61.0
|
||||||||||||||||||
Specialty
|
158.5
|
89.3
|
83.2
|
135.3
|
82.6
|
84.5
|
||||||||||||||||||
Total
|
$
|
825.9
|
$
|
380.5
|
$
|
435.0
|
$
|
760.8
|
$
|
360.9
|
$
|
420.5
|
|
Three Months Ended
|
|||||||
|
March 31,
|
|||||||
|
2020
|
2019
|
||||||
Net investment income, excluding alternative investments
|
$
|
33.0
|
$
|
32.0
|
||||
Alternative investments
|
2.5
|
1.9
|
||||||
Total net investment income
|
$
|
35.5
|
$
|
33.9
|
March 31,
|
December 31,
|
|||||||
2020
|
2019
|
|||||||
U.S. Governments and government agencies
|
$
|
338.7
|
$
|
354.6
|
||||
States and political subdivisions
|
148.5
|
152.6
|
||||||
Foreign governments
|
239.7
|
248.7
|
||||||
Corporate – Financial
|
798.5
|
783.8
|
||||||
Corporate – Industrial
|
652.9
|
789.5
|
||||||
Corporate – Utilities
|
142.4
|
207.1
|
||||||
Asset-backed securities
|
161.7
|
165.5
|
||||||
Collateralized loan obligations
|
252.9
|
225.8
|
||||||
Mortgage-backed securities – Agency
|
429.3
|
373.8
|
||||||
Mortgage-backed securities – Commercial
|
241.8
|
217.0
|
||||||
Mortgage-backed securities – Residential
|
117.1
|
115.1
|
||||||
Total fixed maturities
|
3,523.5
|
3,633.5
|
||||||
Common stocks
|
127.3
|
116.5
|
||||||
Preferred stocks
|
5.6
|
7.9
|
||||||
Total equity securities available for sale
|
132.9
|
124.4
|
||||||
Private equity
|
220.1
|
268.1
|
||||||
Hedge fund
|
105.7
|
109.5
|
||||||
Overseas deposits
|
92.3
|
114.6
|
||||||
Other
|
4.3
|
4.3
|
||||||
Total other investments
|
422.4
|
496.5
|
||||||
Short term investments and cash equivalents
|
732.6
|
845.0
|
||||||
Cash
|
158.7
|
137.8
|
||||||
Total cash and invested assets
|
$
|
4,970.1
|
$
|
5,237.2
|
March 31,
|
December 31,
|
|||||||
2020
|
2019
|
|||||||
U.S. Governments and government agencies
|
$
|
768.1
|
$
|
728.4
|
||||
AAA
|
858.1
|
797.6
|
||||||
AA
|
328.5
|
347.0
|
||||||
A
|
807.0
|
750.9
|
||||||
BBB
|
423.2
|
585.3
|
||||||
BB
|
153.9
|
159.9
|
||||||
B
|
79.2
|
131.7
|
||||||
Lower than B
|
43.2
|
61.7
|
||||||
Not rated
|
62.3
|
71.0
|
||||||
Total fixed maturities
|
$
|
3,523.5
|
$
|
3,633.5
|
|
Three Months Ended
|
|||||||
March 31,
|
||||||||
|
2020
|
2019
|
||||||
Net (loss) income
|
$
|
(18.8
|
)
|
$
|
91.2
|
|||
Operating income (1)
|
12.6
|
41.5
|
||||||
Shareholders' Equity - Beginning of period
|
$
|
1,781.1
|
$
|
1,746.7
|
||||
Shareholders' Equity - End of period
|
1,636.8
|
1,880.6
|
||||||
Average Shareholders' Equity
|
$
|
1,709.0
|
$
|
1,813.7
|
||||
Shares outstanding - End of period
|
34.552
|
34.049
|
||||||
Book value per share
|
$
|
47.37
|
$
|
55.23
|
||||
Cash dividends paid per share during 2020
|
0.31
|
|||||||
Book value per share, March 31, 2020 - including cash dividends paid
|
$
|
47.68
|
||||||
Book value per share, prior period (2)
|
$
|
51.80
|
||||||
Change in book value per share during 2020 (2)
|
(7.9
|
)%
|
||||||
Annualized return on average shareholders' equity (ROAE)
|
(4.4
|
)%
|
20.1
|
%
|
||||
Annualized operating return on average shareholders' equity
|
2.9
|
%
|
9.2
|
%
|
(1)
|
For the purpose of calculating Operating Income, an assumed tax rate of 15% was used for all periods presented.
|
(2)
|
The percentage change in book value per share is calculated by including cash dividends of $0.31 per share paid to shareholders during the three months ended March 31, 2020, respectively. This adjusted amount (Book value per
share, including dividends) is then compared to the book value per share as of December 31, 2019 to determine the change for the three months ended March 31, 2020.
|
Brett Shirreffs
|
David Snowden
|
Head of Investor Relations
|
Senior Vice President, Group Communications
|
212.607.8830
|
210.321.2104
|
brett.shirreffs@argogroupus.com
|
david.snowden@argogroupus.com
|
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