Argo Group International Holdings, Ltd. (NYSE: ARGO) ("Argo" or the "Company") today announced financial results for the three and six months ended June 30, 2020.
"We are pleased to report the strongest quarterly underwriting income for the U.S. in Argo's history," said Argo Chief Executive Officer Kevin J. Rehnberg. "This demonstrates our shift to more positive underlying performance, particularly in our core U.S. specialty business that delivered an excellent quarter despite the broader economic challenges related to COVID-19. The company's operating results were, however, still negatively impacted by market volatility in our investment portfolio and the pandemic's effects on premium growth and catastrophe losses, particularly in our International Operations.
"We continue to experience strong improvement in pricing across the business," added Rehnberg. "We remain optimistic that current market conditions will provide opportunity for continued growth and margin improvement. In addition, our recent preferred stock offering provides Argo with additional capital, enhancing our financial strength, and enables us to more aggressively pursue our strategic growth objectives in this attractive underwriting environment."
2020 Second Quarter Operating Highlights |
||||||||||||||||||||||
Consolidated: |
||||||||||||||||||||||
$ in millions |
|
Three Months Ended
|
|
Q/Q |
|
Six Months Ended
|
|
Y/Y |
||||||||||||||
Consolidated |
|
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
||||||||||
Gross written premiums |
|
$ |
799.6 |
|
|
$ |
772.9 |
|
|
3.5 |
% |
|
$ |
1,625.5 |
|
|
$ |
1,533.7 |
|
|
6.0 |
% |
Net written premiums |
|
456.1 |
|
|
455.2 |
|
|
0.2 |
% |
|
836.6 |
|
|
816.1 |
|
|
2.5 |
% |
||||
Earned premiums |
|
433.4 |
|
|
431.7 |
|
|
0.4 |
% |
|
868.4 |
|
|
852.2 |
|
|
1.9 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Underwriting (loss) income |
|
(1.2) |
|
|
(14.5) |
|
|
-91.7 |
% |
|
(15.1) |
|
|
7.9 |
|
|
NM |
|||||
Net investment income |
|
1.5 |
|
|
42.8 |
|
|
-96.5 |
% |
|
37.0 |
|
|
76.7 |
|
|
-51.8 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (loss) income |
|
$ |
(6.4) |
|
|
$ |
28.8 |
|
|
NM |
|
$ |
(25.2) |
|
|
$ |
120.0 |
|
|
NM |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating (loss) income |
|
$ |
(4.7) |
|
|
$ |
16.8 |
|
|
NM |
|
$ |
7.9 |
|
|
$ |
58.3 |
|
|
-86.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss ratio |
|
63.0 |
% |
|
66.0 |
% |
|
-3 pts |
|
63.8 |
% |
|
61.3 |
% |
|
2.5 pts |
||||||
Expense ratio |
|
37.3 |
% |
|
37.4 |
% |
|
-0.1 pts |
|
37.9 |
% |
|
37.7 |
% |
|
0.2 pts |
||||||
Combined ratio |
|
100.3 |
% |
|
103.4 |
% |
|
-3.1 pts |
|
101.7 |
% |
|
99.0 |
% |
|
2.7 pts |
||||||
|
U.S. Operations: |
||||||||||||||||||||||
$ in millions |
|
Three Months Ended
|
|
Q/Q |
|
Six Months Ended
|
|
Y/Y |
||||||||||||||
U.S. Operations |
|
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
||||||||||
Gross written premiums |
|
$ |
480.2 |
|
|
$ |
453.6 |
|
|
5.9 |
% |
|
$ |
956.7 |
|
|
$ |
864.3 |
|
|
10.7 |
% |
Net written premiums |
|
303.6 |
|
|
295.3 |
|
|
2.8 |
% |
|
573.0 |
|
|
543.7 |
|
|
5.4 |
% |
||||
Earned premiums |
|
301.6 |
|
|
284.0 |
|
|
6.2 |
% |
|
604.1 |
|
|
557.8 |
|
|
8.3 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Losses and loss adjustment expenses |
|
171.2 |
|
|
162.9 |
|
|
5.1 |
% |
|
360.8 |
|
|
317.7 |
|
|
13.6 |
% |
||||
Underwriting expenses |
|
95.6 |
|
|
91.7 |
|
|
4.3 |
% |
|
191.7 |
|
|
185.9 |
|
|
3.1 |
% |
||||
Underwriting income |
|
$ |
34.8 |
|
|
$ |
29.4 |
|
|
18.4 |
% |
|
$ |
51.6 |
|
|
$ |
54.2 |
|
|
-4.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss ratio |
|
56.8 |
% |
|
57.4 |
% |
|
-0.6 pts |
|
59.8 |
% |
|
57.0 |
% |
|
2.8 pts |
||||||
Expense ratio |
|
31.7 |
% |
|
32.3 |
% |
|
-0.6 pts |
|
31.7 |
% |
|
33.3 |
% |
|
-1.6 pts |
||||||
Combined ratio |
|
88.5 |
% |
|
89.7 |
% |
|
-1.2 pts |
|
91.5 |
% |
|
90.3 |
% |
|
1.2 pts |
||||||
International Operations: |
||||||||||||||||||||||
$ in millions |
|
Three Months Ended
|
|
Q/Q |
|
Six Months Ended
|
|
Y/Y |
||||||||||||||
International Operations |
|
2020 |
|
2019 |
|
Change |
|
2020 |
|
2019 |
|
Change |
||||||||||
Gross written premiums |
|
$ |
319.3 |
|
|
$ |
319.2 |
|
|
? |
% |
|
$ |
668.5 |
|
|
$ |
669.3 |
|
|
-0.1 |
% |
Net written premiums |
|
152.4 |
|
|
159.8 |
|
|
-4.6 |
% |
|
263.3 |
|
|
272.3 |
|
|
-3.3 |
% |
||||
Earned premiums |
|
131.8 |
|
|
147.6 |
|
|
-10.7 |
% |
|
264.1 |
|
|
294.3 |
|
|
-10.3 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Losses and loss adjustment expenses |
|
101.1 |
|
|
120.9 |
|
|
-16.4 |
% |
|
192.6 |
|
|
203.3 |
|
|
-5.3 |
% |
||||
Underwriting expenses |
|
57.6 |
|
|
57.1 |
|
|
0.9 |
% |
|
117.9 |
|
|
112.2 |
|
|
5.1 |
% |
||||
Underwriting loss |
|
$ |
(26.9) |
|
|
$ |
(30.4) |
|
|
-11.5 |
% |
|
$ |
(46.4) |
|
|
$ |
(21.2) |
|
|
118.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss ratio |
|
76.7 |
% |
|
81.9 |
% |
|
-5.2 pts |
|
72.9 |
% |
|
69.1 |
% |
|
3.8 pts |
||||||
Expense ratio |
|
43.7 |
% |
|
38.7 |
% |
|
5 pts |
|
44.7 |
% |
|
38.1 |
% |
|
6.6 pts |
||||||
Combined ratio |
|
120.4 |
% |
|
120.6 |
% |
|
-0.2 pts |
|
117.6 |
% |
|
107.2 |
% |
|
10.4 pts |
||||||
Balance Sheet:
CONFERENCE CALL
Argo management will conduct an investor conference call starting at 10 a.m. EDT on Tuesday, August 4, 2020. Participants in the U.S. can access the call by dialing (877) 291-5203. Callers dialing from outside the U.S. can access the call by dialing (412) 902-6610. Please ask the operator for the Argo earnings call. A live webcast of the conference call can be accessed at https://services.choruscall.com/links/argo200804.html.
A webcast replay will be available shortly after the live conference call and can be accessed at https://services.choruscall.com/links/argo200804.html. A telephone replay of the conference call will be available through August 11, 2020, to callers in the U.S. by dialing (877) 344-7529 (conference #10145911). Callers dialing from outside the U.S. can access the replay by dialing (412) 317-0088 (conference #10145911).
ABOUT ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
Argo Group International Holdings, Ltd. (NYSE: ARGO) is an underwriter of specialty insurance and reinsurance products in the property and casualty market. Argo offers a full line of products and services designed to meet the unique coverage and claims handling needs of businesses in two primary segments: U.S. Operations and International Operations. Argo's insurance subsidiaries are rated ?A-' by A.M. Best and Argo's U.S. insurance subsidiaries are rated ?A-' by Standard and Poor's. More information on Argo and its subsidiaries is available at www.argolimited.com.
FORWARD-LOOKING STATEMENTS
This press release includes forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can be identified by the use of words such as "expect," "intend," "plan," "believe," "do not believe," "aim," "project," "anticipate," "seek," "will," "likely," "assume," "estimate," "may," "continue," "guidance," "objective," "remain optimistic," "outlook," "trends," "future," "could," "would," "should," "target," "on track" and similar expressions of a future or forward-looking nature.
These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause actual events or results to differ materially. For a more detailed discussion of such risks and uncertainties, see Item 1A, "Risk Factors" in Argo's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as supplemented in Part II, Item 1A, "Risk Factors" of Argo's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 and in the Company's Current Report on Form 8-K filed on July 7, 2020, and in other filings with the Securities and Exchange Commission ("SEC"). The inclusion of a forward-looking statement herein should not be regarded as a representation by Argo that Argo's objectives will be achieved. Argo undertakes no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on any such statements.
NON-GAAP FINANCIAL MEASURES
In presenting the Company's results, management has included and discussed in this press release certain non-generally accepted accounting principles ("non-GAAP") financial measures within the meaning of Regulation G as promulgated by the SEC. Management believes that these non-GAAP measures, which may be defined differently by other companies, better explain the Company's results of operations in a manner that allows for a more complete understanding of the underlying trends in the Company's business. However, these measures should not be viewed as a substitute for those determined in accordance with generally accepted accounting principles ("U.S. GAAP").
"Underwriting income" is an internal performance measure used in the management of the Company's operations and represents net amount earned from underwriting activities (net premium earned less underwriting expenses and claims incurred). Although this measure of profit (loss) does not replace net income (loss) computed in accordance with U.S. GAAP as a measure of profitability, management uses this measure of profit (loss) to focus our reporting segments on generating underwriting income. The Company presents Underwriting income as a measure that is commonly recognized as a standard of performance by investors, analysts, rating agencies and other users of its financial information.
"Current accident year (CAY) ex-CAT combined ratio" and the "Current accident year (CAY) ex-CAT loss ratio" are internal measures used by the management of the Company to evaluate the performance of its' underwriting activity and represents the net amount of underwriting income excluding catastrophe related charges (impacts to both premium and losses), the impact of changes to prior year loss reserves and other one-time items that would impact expenses or net earned premium. Although this measure does not replace the GAAP combined ratio it provides management with a view of the quality of earnings generated by underwriting activity for the current accident year.
"Operating income" is an internal performance measure used in the management of the Company's operations and represents after-tax (at an assumed effective tax rate of 15%) operational results excluding, as applicable, net realized investment gains or losses, net foreign exchange gain or loss, and other similar non-recurring items. The Company excludes net realized investment gains or losses, net foreign exchange gain or loss, and other similar non-recurring items from the calculation of operating income because these amounts are influenced by and fluctuate in part, by market conditions that are outside of management's control. In addition to presenting net income determined in accordance with U.S. GAAP, the Company believes that showing operating income enables investors, analysts, rating agencies and other users of the Company's financial information to more easily analyze our results of operations and underlying business performance. Operating income should not be viewed as a substitute for U.S. GAAP net income.
"Annualized return on average shareholders' equity" ("ROAE") is calculated using average shareholders' equity. In calculating ROAE, the net income available to shareholders for the period is multiplied by the number of periods in a calendar year to arrive at annualized net income available to shareholders. The Company presents ROAE as a measure that is commonly recognized as a standard of performance by investors, analysts, rating agencies and other users of its financial information. "Annualized operating return on average shareholders' equity" is calculated using operating income (as defined above and annualized in the manner described for net income (loss) available to shareholders under ROAE above) and average shareholders' equity.
The "percentage change in book value per share" includes (by adding) the effects of cash dividends paid per share to the calculated book value per share for the current period. This adjusted amount is then compared to the prior period's book value per share to determine the period over period change. The Company believes that including the dividends paid per share allows users of its financial statements to more easily identify the impact of the changes in book value per share from the perspective of investors.
Reconciliations of non-GAAP financial measures to their most directly comparable U.S. GAAP measures are included in the attached tables and footnotes.
ARGO GROUP INTERNATIONAL HOLDINGS, LTD. |
||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||
(in millions, except per share amounts) |
||||||||
|
|
June 30, |
|
December 31, |
||||
|
|
2020 |
|
2019 |
||||
|
|
(unaudited) |
|
|
||||
Assets |
|
|
|
|
||||
Total investments |
|
$ |
4,851.5 |
|
|
$ |
5,099.4 |
|
Cash |
|
187.7 |
|
|
137.8 |
|
||
Accrued investment income |
|
23.4 |
|
|
25.7 |
|
||
Receivables |
|
3,743.0 |
|
|
3,792.8 |
|
||
Goodwill and intangible assets |
|
247.6 |
|
|
253.2 |
|
||
Deferred acquisition costs, net |
|
153.5 |
|
|
160.2 |
|
||
Ceded unearned premiums |
|
656.5 |
|
|
545.0 |
|
||
Other assets |
|
533.5 |
|
|
500.4 |
|
||
Total assets |
|
$ |
10,396.7 |
|
|
$ |
10,514.5 |
|
|
|
|
|
|
||||
Liabilities and Shareholders' Equity |
|
|
|
|
||||
Reserves for losses and loss adjustment expenses |
|
$ |
5,216.3 |
|
|
$ |
5,157.6 |
|
Unearned premiums |
|
1,481.2 |
|
|
1,410.9 |
|
||
Ceded reinsurance payable, net |
|
1,042.7 |
|
|
1,203.1 |
|
||
Senior unsecured fixed rate notes |
|
140.1 |
|
|
140.0 |
|
||
Other indebtedness |
|
181.0 |
|
|
181.3 |
|
||
Junior subordinated debentures |
|
257.6 |
|
|
257.4 |
|
||
Other liabilities |
|
347.8 |
|
|
383.1 |
|
||
Total liabilities |
|
8,666.7 |
|
|
8,733.4 |
|
||
|
|
|
|
|
||||
Total shareholders' equity |
|
1,730.0 |
|
|
1,781.1 |
|
||
Total liabilities and shareholders' equity |
|
$ |
10,396.7 |
|
|
$ |
10,514.5 |
|
|
|
|
|
|
||||
Book value per common share |
|
$ |
49.94 |
|
|
$ |
51.80 |
|
ARGO GROUP INTERNATIONAL HOLDINGS, LTD. |
||||||||||||||||
FINANCIAL HIGHLIGHTS |
||||||||||||||||
CONSOLIDATED |
||||||||||||||||
(in millions, except per share amounts) |
||||||||||||||||
(unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
Gross written premiums |
|
$ |
799.6 |
|
|
$ |
772.9 |
|
|
$ |
1,625.5 |
|
|
$ |
1,533.7 |
|
Net written premiums |
|
456.1 |
|
|
455.2 |
|
|
836.6 |
|
|
816.1 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Earned premiums |
|
433.4 |
|
|
431.7 |
|
|
868.4 |
|
|
852.2 |
|
||||
Net investment income |
|
1.5 |
|
|
42.8 |
|
|
37.0 |
|
|
76.7 |
|
||||
Fee and other income |
|
2.0 |
|
|
2.1 |
|
|
4.1 |
|
|
4.4 |
|
||||
Net realized investment gains (losses) |
|
20.1 |
|
|
12.0 |
|
|
(16.0) |
|
|
64.5 |
|
||||
Total revenue |
|
457.0 |
|
|
488.6 |
|
|
893.5 |
|
|
997.8 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Losses and loss adjustment expenses |
|
273.2 |
|
|
284.8 |
|
|
554.1 |
|
|
522.7 |
|
||||
Underwriting, acquisition and insurance expenses |
|
161.4 |
|
|
161.4 |
|
|
329.4 |
|
|
321.6 |
|
||||
Other corporate expenses |
|
2.5 |
|
|
7.5 |
|
|
5.8 |
|
|
8.0 |
|
||||
Interest expense |
|
6.8 |
|
|
9.3 |
|
|
14.5 |
|
|
17.8 |
|
||||
Fee and other expense |
|
1.0 |
|
|
1.3 |
|
|
2.2 |
|
|
2.6 |
|
||||
Foreign currency exchange losses (gains) |
|
6.4 |
|
|
(5.3) |
|
|
3.4 |
|
|
(4.6) |
|
||||
Total expenses |
|
451.3 |
|
|
459.0 |
|
|
909.4 |
|
|
868.1 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes |
|
5.7 |
|
|
29.6 |
|
|
(15.9) |
|
|
129.7 |
|
||||
Income tax provision |
|
12.1 |
|
|
0.8 |
|
|
9.3 |
|
|
9.7 |
|
||||
Net (loss) income |
|
$ |
(6.4) |
|
|
$ |
28.8 |
|
|
$ |
(25.2) |
|
|
$ |
120.0 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) income per common share (basic) |
|
$ |
(0.18) |
|
|
$ |
0.84 |
|
|
$ |
(0.73) |
|
|
$ |
3.52 |
|
Net (loss) income per common share (diluted) |
|
$ |
(0.18) |
|
|
$ |
0.83 |
|
|
$ |
(0.73) |
|
|
$ |
3.45 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
34.6 |
|
|
34.2 |
|
|
34.6 |
|
|
34.1 |
|
||||
Diluted |
|
34.6 |
|
|
34.8 |
|
|
34.6 |
|
|
34.8 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Loss ratio |
|
63.0 |
% |
|
66.0 |
% |
|
63.8 |
% |
|
61.3 |
% |
||||
Expense ratio (1) |
|
37.3 |
% |
|
37.4 |
% |
|
37.9 |
% |
|
37.7 |
% |
||||
GAAP combined ratio |
|
100.3 |
% |
|
103.4 |
% |
|
101.7 |
% |
|
99.0 |
% |
||||
CAY ex-CAT combined ratio (2) |
|
93.0 |
% |
|
96.7 |
% |
|
94.4 |
% |
|
95.3 |
% |
||||
(1) The expense ratio is calculated as "Underwriting, acquisition and insurance expense" divided by "Earned premiums".
(2) For purposes of calculating these ratios, net earned premiums were adjusted to exclude outward reinstatement premium adjustments of $2.1 million for the three and six months ended June 30, 2020. There were no such adjustments for the three and six months ended June 30, 2019.
ARGO GROUP INTERNATIONAL HOLDINGS, LTD. |
||||||||||||||||
SEGMENT DATA |
||||||||||||||||
(in millions) |
||||||||||||||||
(unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
Six months ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
U.S. Operations |
|
|
|
|
|
|
|
|
||||||||
Gross written premiums |
|
$ |
480.2 |
|
|
$ |
453.6 |
|
|
$ |
956.7 |
|
|
$ |
864.3 |
|
Net written premiums |
|
303.6 |
|
|
295.3 |
|
|
573.0 |
|
|
543.7 |
|
||||
Earned premiums |
|
301.6 |
|
|
284.0 |
|
|
604.1 |
|
|
557.8 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Underwriting income |
|
34.8 |
|
|
29.4 |
|
|
51.6 |
|
|
54.2 |
|
||||
Net investment income |
|
0.8 |
|
|
29.6 |
|
|
26.0 |
|
|
52.7 |
|
||||
Interest expense |
|
(4.2) |
|
|
(5.7) |
|
|
(9.1) |
|
|
(10.9) |
|
||||
Fee (expense) income, net |
|
(0.2) |
|
|
(0.1) |
|
|
(0.4) |
|
|
0.1 |
|
||||
Net income before taxes |
|
$ |
31.2 |
|
|
$ |
53.2 |
|
|
$ |
68.1 |
|
|
$ |
96.1 |
|
|
|
|
|
|
|
|
|
|
||||||||
Loss ratio |
|
56.8 |
% |
|
57.4 |
% |
|
59.8 |
% |
|
57.0 |
% |
||||
Expense ratio (1) |
|
31.7 |
% |
|
32.3 |
% |
|
31.7 |
% |
|
33.3 |
% |
||||
GAAP combined ratio |
|
88.5 |
% |
|
89.7 |
% |
|
91.5 |
% |
|
90.3 |
% |
||||
CAY ex-CAT combined ratio |
|
86.5 |
% |
|
90.0 |
% |
|
88.4 |
% |
|
90.4 |
% |
||||
|
|
|
|
|
|
|
|
|
||||||||
International Operations |
|
|
|
|
|
|
|
|
||||||||
Gross written premiums |
|
$ |
319.3 |
|
|
$ |
319.2 |
|
|
$ |
668.5 |
|
|
$ |
669.3 |
|
Net written premiums |
|
152.4 |
|
|
159.8 |
|
|
263.3 |
|
|
272.3 |
|
||||
Earned premiums |
|
131.8 |
|
|
147.6 |
|
|
264.1 |
|
|
294.3 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Underwriting loss |
|
(26.9) |
|
|
(30.4) |
|
|
(46.4) |
|
|
(21.2) |
|
||||
Net investment income |
|
0.5 |
|
|
11.5 |
|
|
9.1 |
|
|
20.6 |
|
||||
Interest expense |
|
(2.0) |
|
|
(3.1) |
|
|
(4.3) |
|
|
(5.9) |
|
||||
Fee income, net |
|
0.9 |
|
|
1.0 |
|
|
1.8 |
|
|
1.7 |
|
||||
Net loss before taxes |
|
$ |
(27.5) |
|
|
$ |
(21.0) |
|
|
$ |
(39.8) |
|
|
$ |
(4.8) |
|
|
|
|
|
|
|
|
|
|
||||||||
Loss ratio |
|
76.7 |
% |
|
81.9 |
% |
|
72.9 |
% |
|
69.1 |
% |
||||
Expense ratio (1) |
|
43.7 |
% |
|
38.7 |
% |
|
44.7 |
% |
|
38.1 |
% |
||||
GAAP combined ratio |
|
120.4 |
% |
|
120.6 |
% |
|
117.6 |
% |
|
107.2 |
% |
||||
CAY ex-CAT combined ratio (2) |
|
101.4 |
% |
|
101.1 |
% |
|
100.8 |
% |
|
96.7 |
% |
(1) The expense ratio is calculated as "Underwriting, acquisition and insurance expense" divided by "Earned premiums".
(2) For purposes of calculating these ratios, net earned premiums were adjusted to exclude outward reinstatement premium adjustments of $2.1 million for the three and six months ended June 30, 2020. There were no such adjustments for the three and six months ended June 30, 2019.
ARGO GROUP INTERNATIONAL HOLDINGS, LTD. |
||||||||||||
RECONCILIATION OF LOSS RATIOS |
||||||||||||
(unaudited) |
||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||
|
|
June 30, |
|
June 30, |
||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||
U.S. Operations |
|
|
|
|
|
|
|
|
||||
Loss ratio |
|
56.8 |
% |
|
57.4 |
% |
|
59.8 |
% |
|
57.0 |
% |
Prior accident year loss reserve development |
|
0.2 |
% |
|
1.8 |
% |
|
(0.4) |
% |
|
1.6 |
% |
Catastrophe losses |
|
(2.2) |
% |
|
(1.5) |
% |
|
(2.7) |
% |
|
(1.5) |
% |
CAY ex-CAT loss ratio |
|
54.8 |
% |
|
57.7 |
% |
|
56.7 |
% |
|
57.1 |
% |
|
|
|
|
|
|
|
|
|
||||
International Operations |
|
|
|
|
|
|
|
|
||||
Loss ratio |
|
76.7 |
% |
|
81.9 |
% |
|
72.9 |
% |
|
69.1 |
% |
Prior accident year loss reserve development |
|
(1.1) |
% |
|
(17.9) |
% |
|
(0.4) |
% |
|
(9.2) |
% |
Catastrophe losses |
|
(17.2) |
% |
|
(1.6) |
% |
|
(16.0) |
% |
|
(1.3) |
% |
CAY ex-CAT loss ratio (1) |
|
58.4 |
% |
|
62.4 |
% |
|
56.5 |
% |
|
58.6 |
% |
|
|
|
|
|
|
|
|
|
||||
Consolidated |
|
|
|
|
|
|
|
|
||||
Loss ratio |
|
63.0 |
% |
|
66.0 |
% |
|
63.8 |
% |
|
61.3 |
% |
Prior accident year loss reserve development |
|
(0.4) |
% |
|
(5.2) |
% |
|
(0.5) |
% |
|
(2.3) |
% |
Catastrophe losses |
|
(6.7) |
% |
|
(1.5) |
% |
|
(6.7) |
% |
|
(1.4) |
% |
CAY ex-CAT loss ratio (1) |
|
55.9 |
% |
|
59.3 |
% |
|
56.6 |
% |
|
57.6 |
% |
(1) For purposes of calculating these ratios, net earned premiums were adjusted to exclude outward reinstatement premium adjustments of $2.1 million for the three and six months ended June 30, 2020. There were no such adjustments for the three and six months ended June 30, 2019.
ARGO GROUP INTERNATIONAL HOLDINGS, LTD. |
|||||||||||||||||||||||||||||
NET PRIOR-YEAR RESERVE DEVELOPMENT & CATASTROPHE LOSSES BY SEGMENT |
|||||||||||||||||||||||||||||
(in millions) |
|||||||||||||||||||||||||||||
(unaudited) |
|||||||||||||||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||||||||||||||
|
|
June 30, |
|
June 30, |
|||||||||||||||||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||||||||||||||
Net Prior-Year Reserve Development |
|
|
|
|
|
|
|
|
|||||||||||||||||||||
(Favorable)/Unfavorable |
|
|
|
|
|
|
|
|
|||||||||||||||||||||
U.S. Operations |
|
$ |
(0.6) |
|
|
$ |
(5.1) |
|
|
$ |
2.7 |
|
|
$ |
(9.1) |
|
|||||||||||||
International Operations |
|
1.5 |
|
|
26.4 |
|
|
1.1 |
|
|
27.2 |
|
|||||||||||||||||
Run-off Lines |
|
0.9 |
|
|
1.0 |
|
|
0.7 |
|
|
1.7 |
|
|||||||||||||||||
Total net prior-year reserve development |
|
$ |
1.8 |
|
|
$ |
22.3 |
|
|
$ |
4.5 |
|
|
$ |
19.8 |
|
|||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||||||||||||
|
June 30, |
|
June 30, |
||||||||||||||||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||||||||||||||||
Catastrophe & COVID-19 Losses |
|
|
|
|
|
|
|
||||||||||||||||||||||
Catastrophe losses |
|
|
|
|
|
|
|
||||||||||||||||||||||
U.S. Operations |
$ |
5.5 |
|
|
$ |
4.2 |
|
|
$ |
7.5 |
|
|
$ |
8.2 |
|
||||||||||||||
International Operations |
5.0 |
|
|
2.3 |
|
|
5.9 |
|
|
3.8 |
|
||||||||||||||||||
Total catastrophe losses |
10.5 |
|
|
6.5 |
|
|
13.4 |
|
|
12.0 |
|
||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||
COVID-19 losses |
|
|
|
|
|
|
|
||||||||||||||||||||||
U.S. Operations |
1.0 |
|
|
? |
|
|
8.5 |
|
|
? |
|
||||||||||||||||||
International Operations |
16.4 |
|
|
? |
|
|
35.1 |
|
|
? |
|
||||||||||||||||||
Total COVID-19 losses |
17.4 |
|
|
? |
|
|
43.6 |
|
|
? |
|
||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Catastrophe & COVID-19 losses |
|
|
|
|
|
|
|
||||||||||||||||||||||
U.S. Operations |
6.5 |
|
|
4.2 |
|
|
16.0 |
|
|
8.2 |
|
||||||||||||||||||
International Operations |
21.4 |
|
|
2.3 |
|
|
41.0 |
|
|
3.8 |
|
||||||||||||||||||
Total catastrophe & COVID-19 losses |
$ |
27.9 |
|
|
$ |
6.5 |
|
|
$ |
57.0 |
|
|
$ |
12.0 |
|
||||||||||||||
ARGO GROUP INTERNATIONAL HOLDINGS, LTD. |
||||||||||||||||
RECONCILIATION OF UNDERWRITING (LOSS) INCOME TO NET (LOSS) INCOME |
||||||||||||||||
CONSOLIDATED |
||||||||||||||||
(in millions) |
||||||||||||||||
(unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
Net (loss) income |
|
$ |
(6.4) |
|
|
$ |
28.8 |
|
|
$ |
(25.2) |
|
|
$ |
120.0 |
|
Add (deduct): |
|
|
|
|
|
|
|
|
||||||||
Income tax provision |
|
12.1 |
|
|
0.8 |
|
|
9.3 |
|
|
9.7 |
|
||||
Net investment income |
|
(1.5) |
|
|
(42.8) |
|
|
(37.0) |
|
|
(76.7) |
|
||||
Net realized investment (gains) losses |
|
(20.1) |
|
|
(12.0) |
|
|
16.0 |
|
|
(64.5) |
|
||||
Fee and other income |
|
(2.0) |
|
|
(2.1) |
|
|
(4.1) |
|
|
(4.4) |
|
||||
Interest expense |
|
6.8 |
|
|
9.3 |
|
|
14.5 |
|
|
17.8 |
|
||||
Fee and other expense |
|
1.0 |
|
|
1.3 |
|
|
2.2 |
|
|
2.6 |
|
||||
Foreign currency exchange losses (gains) |
|
6.4 |
|
|
(5.3) |
|
|
3.4 |
|
|
(4.6) |
|
||||
Other corporate expenses |
|
2.5 |
|
|
7.5 |
|
|
5.8 |
|
|
8.0 |
|
||||
Underwriting (loss) income |
|
$ |
(1.2) |
|
|
$ |
(14.5) |
|
|
$ |
(15.1) |
|
|
$ |
7.9 |
|
ARGO GROUP INTERNATIONAL HOLDINGS, LTD. |
||||||||||||||||
RECONCILIATION OF OPERATING INCOME TO NET (LOSS) INCOME |
||||||||||||||||
CONSOLIDATED |
||||||||||||||||
(in millions, except per share amounts) |
||||||||||||||||
(unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
Net (loss) income, as reported |
|
$ |
(6.4) |
|
|
$ |
28.8 |
|
|
$ |
(25.2) |
|
|
$ |
120.0 |
|
Income tax provision |
|
12.1 |
|
|
0.8 |
|
|
9.3 |
|
|
9.7 |
|
||||
Net income (loss), before taxes |
|
5.7 |
|
|
29.6 |
|
|
(15.9) |
|
|
129.7 |
|
||||
Add (deduct): |
|
|
|
|
|
|
|
|
||||||||
Net realized investment (gains) losses |
|
(20.1) |
|
|
(12.0) |
|
|
16.0 |
|
|
(64.5) |
|
||||
Foreign currency exchange losses (gains) |
|
6.4 |
|
|
(5.3) |
|
|
3.4 |
|
|
(4.6) |
|
||||
Other corporate expenses |
|
2.5 |
|
|
7.5 |
|
|
5.8 |
|
|
8.0 |
|
||||
Operating (loss) income before taxes |
|
(5.5) |
|
|
19.8 |
|
|
9.3 |
|
|
68.6 |
|
||||
Income tax (benefit) provision, at assumed rate (1) |
|
(0.8) |
|
|
3.0 |
|
|
1.4 |
|
|
10.3 |
|
||||
Operating (loss) income |
|
$ |
(4.7) |
|
|
$ |
16.8 |
|
|
$ |
7.9 |
|
|
$ |
58.3 |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating (loss) income per common share (diluted) |
|
$ |
(0.14) |
|
|
$ |
0.48 |
|
|
$ |
0.23 |
|
|
$ |
1.68 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares, diluted |
|
34.6 |
|
|
34.8 |
|
|
34.6 |
|
|
34.8 |
|
||||
(1) For the purpose of calculating Operating income, an assumed tax rate of 15% was used for all periods presented.
ARGO GROUP INTERNATIONAL HOLDINGS, LTD. |
||||||||||||||||
RECONCILIATION OF SEGMENT INCOME TO NET (LOSS) INCOME |
||||||||||||||||
(in millions) |
||||||||||||||||
(unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
Segment income (loss) before income taxes: |
|
|
|
|
|
|
|
|
||||||||
U.S. Operations |
|
$ |
31.2 |
|
|
$ |
53.2 |
|
|
$ |
68.1 |
|
|
$ |
96.1 |
|
International Operations |
|
(27.5) |
|
|
(21.0) |
|
|
(39.8) |
|
|
(4.8) |
|
||||
Run-off Lines |
|
(1.3) |
|
|
(1.1) |
|
|
(0.8) |
|
|
(0.5) |
|
||||
Corporate and Other |
|
(7.9) |
|
|
(11.3) |
|
|
(18.2) |
|
|
(22.2) |
|
||||
Net realized investment gains (losses) |
|
20.1 |
|
|
12.0 |
|
|
(16.0) |
|
|
64.5 |
|
||||
Foreign currency exchange (loss) gains |
|
(6.4) |
|
|
5.3 |
|
|
(3.4) |
|
|
4.6 |
|
||||
Other corporate expenses |
|
(2.5) |
|
|
(7.5) |
|
|
(5.8) |
|
|
(8.0) |
|
||||
Income (loss) before income taxes |
|
5.7 |
|
|
29.6 |
|
|
(15.9) |
|
|
129.7 |
|
||||
Income tax provision |
|
12.1 |
|
|
0.8 |
|
|
9.3 |
|
|
9.7 |
|
||||
Net (loss) income |
|
$ |
(6.4) |
|
|
$ |
28.8 |
|
|
$ |
(25.2) |
|
|
$ |
120.0 |
|
U.S. Operations |
|
Three months ended June 30, 2020 |
|
Three months ended June 30, 2019 |
||||||||||||||||||||
|
|
Gross
|
|
Net
|
|
Net
|
|
Gross
|
|
Net
|
|
Net
|
||||||||||||
Property |
|
$ |
81.5 |
|
|
$ |
47.1 |
|
|
$ |
41.3 |
|
|
$ |
78.0 |
|
|
$ |
44.1 |
|
|
$ |
33.3 |
|
Liability |
|
242.9 |
|
|
159.4 |
|
|
169.9 |
|
|
256.4 |
|
|
173.7 |
|
|
175.4 |
|
||||||
Professional |
|
103.8 |
|
|
63.3 |
|
|
58.6 |
|
|
75.9 |
|
|
46.1 |
|
|
43.6 |
|
||||||
Specialty |
|
52.0 |
|
|
33.8 |
|
|
31.8 |
|
|
43.3 |
|
|
31.4 |
|
|
31.7 |
|
||||||
Total |
|
$ |
480.2 |
|
|
$ |
303.6 |
|
|
$ |
301.6 |
|
|
$ |
453.6 |
|
|
$ |
295.3 |
|
|
$ |
284.0 |
|
|
|
Six months ended June 30, 2020 |
|
Six months ended June 30, 2019 |
||||||||||||||||||||
|
|
Gross
|
|
Net
|
|
Net
|
|
Gross
|
|
Net
|
|
Net
|
||||||||||||
Property |
|
$ |
146.7 |
|
|
$ |
62.2 |
|
|
$ |
80.7 |
|
|
$ |
142.2 |
|
|
$ |
51.5 |
|
|
$ |
64.8 |
|
Liability |
|
512.8 |
|
|
322.1 |
|
|
342.2 |
|
|
499.0 |
|
|
345.9 |
|
|
353.9 |
|
||||||
Professional |
|
201.0 |
|
|
121.9 |
|
|
114.1 |
|
|
136.7 |
|
|
81.3 |
|
|
75.4 |
|
||||||
Specialty |
|
96.2 |
|
|
66.8 |
|
|
67.1 |
|
|
86.4 |
|
|
65.0 |
|
|
63.7 |
|
||||||
Total |
|
$ |
956.7 |
|
|
$ |
573.0 |
|
|
$ |
604.1 |
|
|
$ |
864.3 |
|
|
$ |
543.7 |
|
|
$ |
557.8 |
|
International Operations |
|
Three months ended June 30, 2020 |
|
Three months ended June 30, 2019 |
||||||||||||||||||||
|
|
Gross
|
|
Net
|
|
Net
|
|
Gross
|
|
Net
|
|
Net
|
||||||||||||
Property |
|
$ |
132.3 |
|
|
$ |
50.0 |
|
|
$ |
35.6 |
|
|
$ |
139.0 |
|
|
$ |
57.1 |
|
|
$ |
41.0 |
|
Liability |
|
56.4 |
|
|
31.7 |
|
|
26.3 |
|
|
46.4 |
|
|
17.8 |
|
|
26.4 |
|
||||||
Professional |
|
51.3 |
|
|
25.8 |
|
|
29.4 |
|
|
42.1 |
|
|
26.2 |
|
|
24.6 |
|
||||||
Specialty |
|
79.3 |
|
|
44.9 |
|
|
40.5 |
|
|
91.7 |
|
|
58.7 |
|
|
55.6 |
|
||||||
Total |
|
$ |
319.3 |
|
|
$ |
152.4 |
|
|
$ |
131.8 |
|
|
$ |
319.2 |
|
|
$ |
159.8 |
|
|
$ |
147.6 |
|
|
|
Six months ended June 30, 2020 |
|
Six months ended June 30, 2019 |
||||||||||||||||||||
|
|
Gross
|
|
Net
|
|
Net
|
|
Gross
|
|
Net
|
|
Net
|
||||||||||||
Property |
|
$ |
255.5 |
|
|
$ |
62.7 |
|
|
$ |
71.3 |
|
|
$ |
294.0 |
|
|
$ |
65.5 |
|
|
$ |
76.6 |
|
Liability |
|
112.4 |
|
|
49.1 |
|
|
46.3 |
|
|
93.4 |
|
|
45.4 |
|
|
55.8 |
|
||||||
Professional |
|
107.0 |
|
|
50.3 |
|
|
58.1 |
|
|
98.0 |
|
|
53.7 |
|
|
53.8 |
|
||||||
Specialty |
|
193.6 |
|
|
101.2 |
|
|
88.4 |
|
|
183.9 |
|
|
107.7 |
|
|
108.1 |
|
||||||
Total |
|
$ |
668.5 |
|
|
$ |
263.3 |
|
|
$ |
264.1 |
|
|
$ |
669.3 |
|
|
$ |
272.3 |
|
|
$ |
294.3 |
|
Consolidated |
|
Three months ended June 30, 2020 |
|
Three months ended June 30, 2019 |
||||||||||||||||||||
|
|
Gross
|
|
Net
|
|
Net
|
|
Gross
|
|
Net
|
|
Net
|
||||||||||||
Property |
|
$ |
213.8 |
|
|
$ |
97.1 |
|
|
$ |
76.9 |
|
|
$ |
217.0 |
|
|
$ |
101.2 |
|
|
$ |
74.3 |
|
Liability |
|
299.4 |
|
|
191.2 |
|
|
196.2 |
|
|
302.9 |
|
|
191.6 |
|
|
201.9 |
|
||||||
Professional |
|
155.1 |
|
|
89.1 |
|
|
88.0 |
|
|
118.0 |
|
|
72.3 |
|
|
68.2 |
|
||||||
Specialty |
|
131.3 |
|
|
78.7 |
|
|
72.3 |
|
|
135.0 |
|
|
90.1 |
|
|
87.3 |
|
||||||
Total |
|
$ |
799.6 |
|
|
$ |
456.1 |
|
|
$ |
433.4 |
|
|
$ |
772.9 |
|
|
$ |
455.2 |
|
|
$ |
431.7 |
|
|
|
Six months ended June 30, 2020 |
|
Six months ended June 30, 2019 |
||||||||||||||||||||
|
|
Gross
|
|
Net
|
|
Net
|
|
Gross
|
|
Net
|
|
Net
|
||||||||||||
Property |
|
$ |
402.2 |
|
|
$ |
124.9 |
|
|
$ |
152.0 |
|
|
$ |
436.2 |
|
|
$ |
117.0 |
|
|
$ |
141.4 |
|
Liability |
|
625.5 |
|
|
371.5 |
|
|
388.7 |
|
|
592.5 |
|
|
391.4 |
|
|
409.8 |
|
||||||
Professional |
|
308.0 |
|
|
172.2 |
|
|
172.2 |
|
|
234.7 |
|
|
135.0 |
|
|
129.2 |
|
||||||
Specialty |
|
289.8 |
|
|
168.0 |
|
|
155.5 |
|
|
270.3 |
|
|
172.7 |
|
|
171.8 |
|
||||||
Total |
|
$ |
1,625.5 |
|
|
$ |
836.6 |
|
|
$ |
868.4 |
|
|
$ |
1,533.7 |
|
|
$ |
816.1 |
|
|
$ |
852.2 |
|
ARGO GROUP INTERNATIONAL HOLDINGS, LTD. |
||||||||||||||||||||||||||||||
COMPONENTS OF NET INVESTMENT INCOME & NET REALIZED INVESTMENT GAINS (LOSSES) |
||||||||||||||||||||||||||||||
CONSOLIDATED |
||||||||||||||||||||||||||||||
(in millions) |
||||||||||||||||||||||||||||||
(unaudited) |
||||||||||||||||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||||||||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||||||||||||||||
Net Investment Income |
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Net investment income, excluding alternative investments |
|
$ |
24.9 |
|
|
$ |
33.3 |
|
|
$ |
57.9 |
|
|
$ |
65.3 |
|
||||||||||||||
Alternative investments |
|
(23.4) |
|
|
9.5 |
|
|
(20.9) |
|
|
11.4 |
|
||||||||||||||||||
Total net investment income |
|
$ |
1.5 |
|
|
$ |
42.8 |
|
|
$ |
37.0 |
|
|
$ |
76.7 |
|
||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||||||||||||||||
|
June 30, |
|
June 30, |
|||||||||||||||||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||||||||||||||||
Net Realized Investment Gains (Losses) |
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net realized investment gains (losses) |
$ |
(21.2) |
|
|
$ |
(0.6) |
|
|
$ |
6.7 |
|
|
$ |
(2.3) |
|
|||||||||||||||
Change in fair value of equity securities |
16.8 |
|
|
12.6 |
|
|
(22.5) |
|
|
66.8 |
|
|||||||||||||||||||
Credit losses on fixed maturity securities |
(7.8) |
|
|
? |
|
|
(32.5) |
|
|
? |
|
|||||||||||||||||||
Gain on sale of Trident assets |
32.3 |
|
|
? |
|
|
32.3 |
|
|
? |
|
|||||||||||||||||||
Total net realized investments (losses) gains |
$ |
20.1 |
|
|
$ |
12.0 |
|
|
$ |
(16.0) |
|
|
$ |
64.5 |
|
|||||||||||||||
ARGO GROUP INTERNATIONAL HOLDINGS, LTD. |
||||||||
COMPONENTS OF INVESTMENT PORTFOLIO |
||||||||
CONSOLIDATED |
||||||||
(in millions) |
||||||||
(unaudited) |
||||||||
|
|
June 30, |
|
December 31, |
||||
|
|
2020 |
|
2019 |
||||
U.S. Governments and government agencies |
|
$ |
342.6 |
|
|
$ |
354.6 |
|
States and political subdivisions |
|
171.3 |
|
|
152.6 |
|
||
Foreign governments |
|
258.2 |
|
|
248.7 |
|
||
Corporate ? Financial |
|
835.8 |
|
|
783.8 |
|
||
Corporate ? Industrial |
|
725.8 |
|
|
789.5 |
|
||
Corporate ? Utilities |
|
170.5 |
|
|
207.1 |
|
||
Asset-backed securities |
|
152.9 |
|
|
165.5 |
|
||
Collateralized loan obligations |
|
266.9 |
|
|
225.8 |
|
||
Mortgage-backed securities ? Agency |
|
423.2 |
|
|
373.8 |
|
||
Mortgage-backed securities ? Commercial |
|
253.2 |
|
|
217.0 |
|
||
Mortgage-backed securities ? Residential |
|
107.0 |
|
|
115.1 |
|
||
Total fixed maturities |
|
3,707.4 |
|
|
3,633.5 |
|
||
Common stocks |
|
141.6 |
|
|
116.5 |
|
||
Preferred stocks |
|
5.9 |
|
|
7.9 |
|
||
Total equity securities available for sale |
|
147.5 |
|
|
124.4 |
|
||
Private equity |
|
190.5 |
|
|
268.1 |
|
||
Hedge fund |
|
98.0 |
|
|
109.5 |
|
||
Overseas deposits |
|
91.7 |
|
|
114.6 |
|
||
Other |
|
4.3 |
|
|
4.3 |
|
||
Total other investments |
|
384.5 |
|
|
496.5 |
|
||
Short term investments and cash equivalents |
|
612.1 |
|
|
845.0 |
|
||
Cash |
|
187.7 |
|
|
137.8 |
|
||
Total cash and invested assets |
|
$ |
5,039.2 |
|
|
$ |
5,237.2 |
|
|
|
June 30, |
|
December 31, |
||||
|
|
2020 |
|
2019 |
||||
U.S. Governments and government agencies |
|
$ |
342.6 |
|
|
$ |
354.7 |
|
AAA |
|
1,267.8 |
|
|
1,171.3 |
|
||
AA |
|
351.7 |
|
|
347.0 |
|
||
A |
|
814.9 |
|
|
750.9 |
|
||
BBB |
|
570.9 |
|
|
585.3 |
|
||
BB |
|
169.8 |
|
|
159.9 |
|
||
B |
|
79.2 |
|
|
131.7 |
|
||
Lower than B |
|
49.5 |
|
|
61.7 |
|
||
Not rated |
|
61.0 |
|
|
71.0 |
|
||
Total fixed maturities |
|
$ |
3,707.4 |
|
|
$ |
3,633.5 |
|
ARGO GROUP INTERNATIONAL HOLDINGS, LTD. |
||||||||||||||||
SHAREHOLDER RETURN ANALYSIS |
||||||||||||||||
(in millions, except per share data) |
||||||||||||||||
(unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
Net (loss) income |
|
$ |
(6.4) |
|
|
$ |
28.8 |
|
|
$ |
(25.2) |
|
|
$ |
120.0 |
|
Operating (loss) income (1) |
|
(4.7) |
|
|
16.8 |
|
|
7.9 |
|
|
58.3 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Shareholders' Equity - Beginning of period |
|
$ |
1,636.8 |
|
|
$ |
1,880.6 |
|
|
$ |
1,781.1 |
|
|
$ |
1,746.7 |
|
Shareholders' Equity - End of period |
|
1,730.0 |
|
|
1,929.0 |
|
|
1,730.0 |
|
|
1,929.0 |
|
||||
Average Shareholders' Equity |
|
$ |
1,683.4 |
|
|
$ |
1,904.8 |
|
|
$ |
1,755.6 |
|
|
$ |
1,837.9 |
|
|
|
|
|
|
|
|
|
|
||||||||
Shares outstanding - End of period |
|
34.645 |
|
|
34.278 |
|
|
34.645 |
|
|
34.278 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Book value per share |
|
$ |
49.94 |
|
|
$ |
56.28 |
|
|
$ |
49.94 |
|
|
$ |
56.28 |
|
Cash dividends paid per share during 2020 |
|
0.31 |
|
|
|
|
0.62 |
|
|
|
||||||
Book value per share, June 30, 2020 - including cash dividends paid |
|
$ |
50.25 |
|
|
|
|
$ |
50.56 |
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Book value per share, prior period (2) |
|
$ |
47.37 |
|
|
|
|
$ |
51.80 |
|
|
|
||||
Change in book value per share during 2020 |
|
5.4 |
% |
|
|
|
(3.6) |
% |
|
|
||||||
Change in book value per share including cash dividends paid, during 2020 (2) |
|
6.1 |
% |
|
|
|
(2.4) |
% |
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||||
Annualized return on average shareholders' equity |
|
(1.5) |
% |
|
6.0 |
% |
|
(2.9) |
% |
|
13.1 |
% |
||||
Annualized operating return on average shareholders' equity |
|
(1.1) |
% |
|
3.5 |
% |
|
0.9 |
% |
|
6.3 |
% |
(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 and $0.62 per share paid to shareholders during the three and six months ended June 30, 2020, respectively. This adjusted amount (Book value per share, including dividends) is then compared to the book value per share as of March 31, 2020 and December 31, 2019, respectively, to determine the change for the three and six months ended June 30, 2020.
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