[February 13, 2018] |
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Argo Group Reports 2017 Fourth Quarter and Full Year Results
Argo Group International Holdings, Ltd. (NASDAQ: AGII) today announced
financial results for the three months and year ended Dec. 31, 2017.
2017 Annual Recap
Gross Written
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Net Income
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Net Investment
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Total 2017 Return on
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Book Value
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Premiums
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Per Diluted Share
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Income
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Average Investments(1)
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Per Common Share
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$2.7B
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$1.64
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$140.0M
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5.4%
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$61.48
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? 24.6%
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? 65.5%
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? 21.6%
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? 110 basis points
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? 2.9%
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from 2016
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from 2016
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from 2016
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from 2016
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from Dec. 31, 2016
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"It has been a noteworthy year for the Property and Casualty
industry, with significant catastrophe losses, continued low interest
rates, new tax laws in the U.S., and continued merger and acquisition
activity," said Argo Group CEO Mark E. Watson III. "In this market, Argo
continues to emerge as a leading, innovative specialty insurer,
demonstrated by the nearly 25% growth in gross written premium in
2017. And while catastrophe losses impacted our underwriting margins,
our strong investment performance and capital management framework
helped us generate net income and growth in book value per share."
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HIGHLIGHTS FOR THE THREE MONTHS
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HIGHLIGHTS FOR THE YEAR
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ENDED DEC. 31, 2017:
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ENDED DEC. 31, 2017:
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Gross written premiums were up 21.5% to $606.3 million,
compared to $499.0 million for the 2016 fourth quarter.
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Gross written premiums were up 24.6% to $2.7 billion,
compared to $2.2 billion in 2016.
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Net income was $28.9 million or $0.95 per diluted share,
compared to net income of $32.9 million or $1.07 per diluted
share for the 2016 fourth quarter.
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Net income was $50.3 million or $1.64 per diluted share,
compared to $146.7 million or $4.75 per diluted share in 2016.
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Adjusted operating income(1)(2) was
$0.3 million or $0.01 per diluted share, compared to adjusted
operating income of $19.8 million or $0.64 per diluted share for
the 2016 fourth quarter.
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Adjusted operating income(1)(2)
was $5.5 million or $0.18 per diluted share, compared to $121.0
million or $3.92 per diluted share in 2016.
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The combined ratio was 106.7%, compared to 98.8% for the
2016 fourth quarter. The loss and expense ratios for the quarter
were 66.9% and 39.8%, respectively, compared to 59.1% and 39.7%
for the 2016 fourth quarter.
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The combined ratio was 107.2%, compared to 96.2% in 2016.
The loss and expense ratios were 66.8% and 40.4%, respectively,
compared to 57.4% and 38.8% in 2016.
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Estimated pre-tax catastrophe losses for Q4 events were
$37.5 million. In addition, during Q4 2017, estimates for Q3 and
other 2017 CATs were reduced by $7.6 million. Consistent with Q3
2017, the current quarter was further impacted by $4.4 million
of catastrophe related premium charges. The net impact on Q4
2017 for these items is a charge of $34.3 million, compared to a
$22.8 million charge in the 2016 fourth quarter. There were no
comparable catastrophe-related premium charges in 2016.
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Estimated pre-tax catastrophe losses were $126.2 million.
In addition, 2017 included $18.9 million of catastrophe-related
premium charges. As a result, the full year 2017 results include
a total catastrophe impact of $145.1 million, compared to $61.7
million in 2016. There were no comparable catastrophe-related
premium charges in 2016.
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The current accident year ex-CAT combined ratio, as adjusted,(1)
was 97.4%. The related loss and expense ratios for the
fourth quarter were 59.9% and 37.5%, respectively. The
comparable 2016 fourth quarter current accident year ex-CAT
combined ratio, as adjusted, was 96.4%, with underlying loss and
expense ratios of 56.7% and 39.7%, respectively.
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The current accident year ex-CAT combined ratio, as
adjusted,(1) was 96.4%. The related loss
and expense ratios for the year ended Dec. 31, 2017 were 57.8%
and 38.7%. The comparable 2016 current accident year ex-CAT
combined ratio, as adjusted, was 94.2%, with underlying loss and
expense ratios of 55.4% and 38.8%, respectively.
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Net investment income was $35.0 million, compared to
$25.5 million for the 2016 fourth quarter. Alternative
investments contributed $10.8 million and $3.1 million for the
fourth quarters of 2017 and 2016, respectively.
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Net investment income was $140.0 million, compared to
$115.1 million in 2016. Alternative investments contributed
$45.4 million and $23.8 million for 2017 and 2016, respectively.
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Total return on average investments for the 2017 fourth
quarter was 1.1%, compared to 0.0% in the fourth quarter of
2016. The 2016 quarter was adversely impacted by a net increase
in unrealized losses of approximately $37.7 million.
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Total return on average investments for 2017 was 5.4%,
compared to 4.3% in 2016, as the 2017 year reflected increases
in net investment income, net realized gains, and changes in
unrealized gains.
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Net favorable prior-year reserve development was $12.6
million (benefiting the combined ratio by 3.1 points), compared
with $14.5 million (benefiting the combined ratio by 4.0 points)
for the 2016 fourth quarter.
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Net favorable prior-year reserve development was $8.2
million (benefiting the combined ratio 0.5 points). Included in
the 2017 net benefit were charges of approximately $10.0 million
in the first quarter of 2017 relating to the Ogden rate change
and claims from Hurricane Matthew. This compares to net
favorable development of $33.3 million (benefiting the combined
ratio by 2.4 points) in 2016.
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During the fourth quarter of 2017, the Company repurchased $8.6
million or 144,218 shares of its common stock.
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During 2017, the Company repurchased $45.2 million or
756,252 shares of its common stock.
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During the fourth quarter of 2017, the Company recognized a
tax benefit of approximately $20.2 million related to the
revaluation of net deferred tax liabilities due to the reduction
of the U.S. corporate income tax rate from 35% to 21%
(increasing book value per share by $0.68).
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Book value per share increased to $61.48, up 2.9% from
$59.73 at Dec. 31, 2016.
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Cash and investments at Dec. 31, 2017 totaled $5.0
billion, with a net pre-tax unrealized gain of approximately
$181.5 million.
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Notes
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All references to catastrophe losses are pre-tax, net of
reinsurance and estimated reinstatement premiums.
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Point impacts on the combined ratio are calculated as the
difference between the reported combined ratio and the combined
ratio, excluding incurred catastrophe losses and associated
reinstatement and other catastrophe-related premium adjustments.
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(1) Refer to Non-GAAP Financial Measures below. (2)
At assumed tax rate of 20%
U.S. Operations
U.S. Operations include the Excess & Surplus Lines and Commercial
Specialty businesses.
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Fourth quarter 2017 gross written premiums growth of 23.9% was driven
by growth in all lines of business, with the strongest growth in
Professional, Liability, and Specialty lines. Property lines were up,
compared to the prior year's fourth quarter, due to the strategic
addition of a property program, partially offset by planned reductions
to exposures in certain other classes of business within this line.
Gross written premiums for 2017 were up 18.2% from the same 2016
period and reflect growth in all four business lines, as U.S.
Operations continues to execute on its strategic growth initiatives.
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Net earned premium in the fourth quarter of 2017 of $243.7 million was
up 10.9% from the prior year fourth quarter, as all business lines
increased except for property. This growth was partially offset by
additional group reinsurance programs purchased and attributed to U.S.
Operations following the acquisition of Ariel Re and the storm
activity in the 2017 third quarter.
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The fourth quarter 2017 loss ratio was 54.9%, compared to 54.3% for
the 2016 fourth quarter. For 2017, the loss ratio was 56.4%, compared
to 55.0% in 2016.
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For the 2017 fourth quarter, net favorable prior-year reserve
development was $10.0 million, compared to net favorable prior-year
reserve development of $10.3 million for the 2016 fourth quarter. For
2017, net favorable prior-year reserve development was $38.7 million,
compared to net favorable prior-year reserve development of $35.9
million for 2016.
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Catastrophe losses for Q4 events were $1.7 million. In
addition, during Q4 2017, estimates for Q3 and other 2017 CATs were
reduced by $7.0 million. Consistent with Q3 2017, the current quarter
was further impacted by $1.3 million of catastrophe-related premium
charges. The impact on Q4 2017 for these items is a net benefit of
$4.0 million, compared to a $2.7 million charge in the 2016 fourth
quarter. There were no comparable catastrophe-related premium charges
in 2016.
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The current accident year ex-CAT loss ratio, as adjusted for the 2017
fourth quarter, was 60.2%, compared to 57.8% for the 2016 fourth
quarter. For 2017, the current accident year ex-CAT loss ratio, as
adjusted, was 58.2%, compared to 57.6% for 2016. Both the quarter and
year-to-date increase relates primarily to discrete
non-catastrophe-related property losses.
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The expense ratio for the 2017 fourth quarter was 31.2%, compared to
30.9% for the 2016 fourth quarter. For 2017, the expense ratio was
34.1%, compared to 31.9% in 2016.
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The fourth quarter 2017 expense ratio, as adjusted, was 29.9%,
compared to 30.9% in the fourth quarter of 2016. For 2017, the expense
ratio, as adjusted, was 33.2%, compared to 31.9%. The decrease in the
quarterly ratio is due in large part to reductions in certain
incentive compensation programs. While the full year expense ratio
includes the reductions to compensation programs, it also includes
continued strategic investments in people and technology in support of
the aforementioned 23.9% growth in gross written premiums and other
operational initiatives.
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For the 2017 fourth quarter, U.S. Operations reported underwriting
income of $33.7 million, compared to underwriting income of $32.6
million for the 2016 fourth quarter. For 2017, underwriting income was
$89.4 million, compared to $111.5 million in 2016.
International Operations
International Operations comprises Syndicate 1200, International
Specialty, and the Ariel Re businesses, including Syndicate 1910. The
Ariel Re transaction closed on February 6, 2017; therefore, Ariel Re
results are included in the International Operations results since that
date.
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Gross written premiums were up 17.7% in the fourth quarter and 33.9%
for 2017, compared to the same periods in 2016, driven primarily by
the acquisition of Ariel Re. Also contributing to growth in the
quarter was Professional and Surety lines in the Company's European
and International Specialty businesses. This growth was partially
offset by planned reductions in Property Direct and Facultative
business for U.S. exposures written in Syndicate 1200 as part of the
actions taken to restore risk adjusted underwriting margins to more
profitable levels.
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Net premiums earned in the fourth quarter of 2017 of $160.9 million
were up 13.0%, compared to the 2016 quarter, driven primarily by the
acquisition of Ariel Re. This growth was partially offset by
additional group reinsurance programs purchased and attributed to the
International operations following the acquisition of Ariel Re and the
storm activity in the 2017 third quarter.
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The fourth quarter 2017 loss ratio was 84.3%, compared to 65.8% in the
2016 fourth quarter. For 2017, the loss ratio was 79.4%, compared to
57.8% for 2016. The increase in the fourth quarter and 2017 loss
ratios relates to higher catastrophe losses and to an increase in
attritional losses.
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For the 2017 fourth quarter, net favorable prior-year reserve
development was $3.8 million, compared to net favorable prior year
reserve development of $5.2 million for the 2016 fourth quarter. For
2017, net unfavorable prior-year reserve development was $13.2
million, compared to net favorable prior-year reserve development of
$16.0 million for 2016.
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Catastrophe losses for Q4 events were $35.8 million. In
addition, during Q4 2017, estimates for Q3 and other 2017 CATs were
reduced by $0.6 million. Consistent with Q3 2017, the current quarter
was further impacted by $3.1 million of catastrophe-related premium
charges. The impact on Q4 2017 for these items is a net charge of
$38.3 million, compared to a $20.1 million charge in the 2016 fourth
quarter. There were no comparable catastrophe-related premium charges
in 2016.
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The current accident year ex-CAT loss ratio, as adjusted for the
fourth quarter of 2017, was 59.4%, compared to 55.1% for the 2016
fourth quarter. For 2017, the current accident year ex-CAT loss ratio,
as adjusted, was 57.2%, compared to 52.0% in 2016. The increase in the
attritional loss ratio is due to higher losses within certain classes
of business at Syndicate 1200, most notably within Property lines (as
discussed in prior quarters).
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The expense ratio for the 2017 fourth quarter was 36.3%, compared to
37.5% for the 2016 fourth quarter. For 2017, the reported expense
ratio was 38.1%, compared to 37.6% in 2016.
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The fourth quarter 2017 expense ratio, as adjusted, was 33.1%,
compared to 37.5% in the same 2016 period. The 2017 expense ratio, as
adjusted, was 36.4%, compared to 37.6% in 2016. The decrease in both
the quarterly and full expense ratios, as adjusted, is due in large
part to reductions in certain incentive compensation programs.
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For the 2017 fourth quarter, International Operations reported an
underwriting loss of $33.1 million, compared to a loss of $4.8 million
for the 2016 fourth quarter. In 2017, the underwriting loss was $111.2
million, compared to underwriting income of $25.8 million in 2016.
CONFERENCE CALL
Argo Group management will conduct an investor conference call starting
at 9:30 a.m. EST (10:30 a.m. AST) tomorrow, Wed., Feb. 14, 2018. A live
webcast of the conference call can be accessed by visiting https://services.choruscall.com/links/agii180214.html.
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 to be connected to the Argo
Group earnings call.
A webcast replay will be available shortly after the live conference
call and can be accessed at https://services.choruscall.com/links/agii180214.html.
A telephone replay of the conference call will be available through Feb.
21, 2018, to callers in the U.S. by dialing (877) 344-7529 (conference #
10117133). Callers dialing from outside the U.S. can access the
telephone replay by dialing (412) 317-0088 (conference # 10117133).
ABOUT ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
Argo Group International Holdings, Ltd. (NASDAQ: AGII) is an
international underwriter of specialty insurance and reinsurance
products in the property and casualty market. Argo Group 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 Group's insurance
subsidiaries are A. M. Best-rated 'A' (Excellent) (third highest rating
out of 16 rating classifications) with a stable outlook, and Argo
Group's U.S. insurance subsidiaries are Standard and Poor's-rated 'A-'
(Strong) with a stable outlook. More information on Argo Group and its
subsidiaries is available at www.argolimited.com.
FORWARD-LOOKING STATEMENTS
This press release may include forward-looking statements, both with
respect to Argo Group and its industry, that reflect our current views
with respect to future events and financial performance. These
statements are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. 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," "outlook," "trends,"
"future," "could," "would," "should," "target," "on track" and similar
expressions of a future or forward-looking nature. All forward-looking
statements address matters that involve risks and uncertainties, many of
which are beyond Argo Group's control. Accordingly, there are or will be
important factors that could cause actual results to differ materially
from those indicated in such statements and, therefore, you should not
place undue reliance on any such statements. We believe that these
factors include, but are not limited to, the following: 1)
unpredictability and severity of catastrophic events; 2) rating agency
actions; 3) adequacy of our risk management and loss limitation methods;
4) cyclicality of demand and pricing in the insurance and reinsurance
markets; 5) statutory or regulatory developments including tax policy,
reinsurance and other regulatory matters; 6) our ability to implement
our business strategy; 7) adequacy of our loss reserves; 8) continued
availability of capital and financing; 9) retention of key personnel;
10) competition; 11) potential loss of business from one or more major
insurance or reinsurance brokers; 12) our ability to implement,
successfully and on a timely basis, complex infrastructure, distribution
capabilities, systems, procedures and internal controls, and to develop
accurate actuarial data to support the business and regulatory and
reporting requirements; 13) general economic and market conditions
(including inflation, volatility in the credit and capital markets,
interest rates and foreign currency exchange rates); 14) the integration
of Ariel Re and other businesses we may acquire or new business ventures
we may start; 15) the effect on our investment portfolios of changing
financial market conditions including inflation, interest rates,
liquidity and other factors; 16) acts of terrorism or outbreak of war;
and 17) availability of reinsurance and retrocessional coverage, as well
as management's response to any of the aforementioned factors.
In addition, any estimates relating to loss events involve the exercise
of considerable judgment and reflect a combination of ground-up
evaluations, information available to date from brokers and cedants,
market intelligence, initial tentative loss reports and other sources.
The actuarial range of reserves and management's best estimate is based
on our then current state of knowledge including explicit and implicit
assumptions relating to the pattern of claim development, the expected
ultimate settlement amount, inflation and dependencies between lines of
business. Our internal capital model is used to consider
the distribution for reserving risk around this best estimate and
predict the potential range of outcomes. However, due to the complexity
of factors contributing to the losses and the preliminary nature of the
information used to prepare these estimates, there can be no assurance
that Argo Group's ultimate losses will remain within the stated amount.
The foregoing review of important factors should not be construed as
exhaustive and should be read in conjunction with the other cautionary
statements that are included herein and elsewhere, including the risk
factors included in our most recent reports on Form 10-K and Form 10-Q
and other documents of Argo Group on file with or furnished to the U.S.
Securities and Exchange Commission ("SEC"). Any forward-looking
statements made in this press release are qualified by these cautionary
statements, and there can be no assurance that the actual results or
developments anticipated by Argo Group will be realized or, even if
substantially realized, that they will have the expected consequences
to, or effects on, Argo Group or its business or operations. Except as
required by law, Argo Group undertakes no obligation to update publicly
or revise any forward-looking statement, whether as a result of new
information, future developments or otherwise.
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 U.S. Securities and Exchange
Commission. 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 premiums 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 ex-CAT combined ratio, as adjusted", "Current
accident year ex-CAT loss ratio, as adjusted", and "Expense ratio, as
adjusted" 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,
the impact of changes to prior year loss reserves and other
non-recurring items. Although this measure does not replace the combined
ratio, it provides management with a view of the quality of earnings
generated by underwriting activity for the current accident year.
"Total return on average investments" is an internal measure used by
management of the Company to evaluate the performance of its investment
and asset management activities and represents the total of net
investment income, net realized gains and losses, and the net change in
unrealized gains and losses. These returns are analyzed as a percentage
of the average investments excluding investments managed on behalf of
trade capital providers who are third-parties that provide underwriting
capital to our Syndicate operations. This measure does not replace net
investment income as a measure of return on invested assets. However, it
provides management with an overall view of investment performance.
"Adjusted 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 20%) 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 adjusted 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 adjusted 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. Adjusted 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 adjusted operating return on average shareholders' equity"
is calculated using adjusted 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
assumed tax rate is 20%.
Reconciliations of these financial measures to their most directly
comparable U.S. GAAP measures are included in the attached tables.
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ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
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CONSOLIDATED BALANCE SHEETS
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(in millions, except per share amounts)
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December 31,
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December 31,
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2017
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2016
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(unaudited)
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Assets
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Total investments
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$
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4,742.9
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$
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4,320.3
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Cash
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176.6
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86.0
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Accrued investment income
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23.5
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20.7
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Receivables
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2,691.9
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1,849.4
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Goodwill and intangible assets
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258.2
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219.9
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Deferred acquisition costs, net
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160.4
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139.1
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Ceded unearned premiums
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399.5
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302.8
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Other assets
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311.0
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266.8
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Total assets
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$
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8,764.0
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$
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7,205.0
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Liabilities and Shareholders' Equity
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Reserves for losses and loss adjustment expenses
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$
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4,201.0
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$
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3,350.8
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Unearned premiums
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1,207.7
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970.0
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Ceded reinsurance payable, net
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734.0
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466.6
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Senior unsecured fixed rate notes
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139.6
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139.5
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Other indebtedness
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184.5
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55.4
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Junior subordinated debentures
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256.6
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172.7
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Other liabilities
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220.9
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257.3
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Total liabilities
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6,944.3
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5,412.3
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Total shareholders' equity
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1,819.7
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1,792.7
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Total liabilities and shareholders' equity
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$
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8,764.0
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$
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7,205.0
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Book value per common share
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$
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61.48
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$
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59.73
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ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
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FINANCIAL HIGHLIGHTS
|
ALL SEGMENTS
|
(in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross written premiums
|
|
|
$
|
606.3
|
|
|
|
$
|
499.0
|
|
|
|
$
|
2,697.2
|
|
|
|
$
|
2,164.8
|
|
Net written premiums
|
|
|
|
389.8
|
|
|
|
|
333.5
|
|
|
|
|
1,653.5
|
|
|
|
|
1,440.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earned premiums
|
|
|
|
404.5
|
|
|
|
|
362.3
|
|
|
|
|
1,572.3
|
|
|
|
|
1,410.8
|
|
Net investment income
|
|
|
|
35.0
|
|
|
|
|
25.5
|
|
|
|
|
140.0
|
|
|
|
|
115.1
|
|
Fee and other income
|
|
|
|
2.1
|
|
|
|
|
4.3
|
|
|
|
|
22.5
|
|
|
|
|
24.5
|
|
Net realized investment and other gains
|
|
|
|
14.2
|
|
|
|
|
13.3
|
|
|
|
|
39.3
|
|
|
|
|
26.1
|
|
Total revenue
|
|
|
|
455.8
|
|
|
|
|
405.4
|
|
|
|
|
1,774.1
|
|
|
|
|
1,576.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and loss adjustment expenses
|
|
|
|
270.7
|
|
|
|
|
214.1
|
|
|
|
|
1,050.2
|
|
|
|
|
810.1
|
|
Underwriting, acquisition and insurance expenses
|
|
|
|
161.0
|
|
|
|
|
144.0
|
|
|
|
|
635.4
|
|
|
|
|
547.0
|
|
Interest expense
|
|
|
|
7.3
|
|
|
|
|
5.0
|
|
|
|
|
27.7
|
|
|
|
|
19.6
|
|
Fee and other expense, net
|
|
|
|
2.2
|
|
|
|
|
4.3
|
|
|
|
|
14.6
|
|
|
|
|
22.4
|
|
Foreign currency exchange losses (gains)
|
|
|
|
2.3
|
|
|
|
|
(9.0
|
)
|
|
|
|
6.3
|
|
|
|
|
(4.5
|
)
|
Total expenses
|
|
|
|
443.5
|
|
|
|
|
358.4
|
|
|
|
|
1,734.2
|
|
|
|
|
1,394.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes
|
|
|
|
12.3
|
|
|
|
|
47.0
|
|
|
|
|
39.9
|
|
|
|
|
181.9
|
|
Income tax (benefit) provision
|
|
|
|
(16.6
|
)
|
|
|
|
14.1
|
|
|
|
|
(10.4
|
)
|
|
|
|
35.2
|
|
Net income
|
|
|
$
|
28.9
|
|
|
|
$
|
32.9
|
|
|
|
$
|
50.3
|
|
|
|
$
|
146.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share (basic)
|
|
|
$
|
0.98
|
|
|
|
$
|
1.10
|
|
|
|
$
|
1.68
|
|
|
|
$
|
4.86
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share (diluted)
|
|
|
$
|
0.95
|
|
|
|
$
|
1.07
|
|
|
|
$
|
1.64
|
|
|
|
$
|
4.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
29.6
|
|
|
|
|
30.0
|
|
|
|
|
30.0
|
|
|
|
|
30.2
|
|
Diluted
|
|
|
|
30.4
|
|
|
|
|
30.7
|
|
|
|
|
30.8
|
|
|
|
|
30.8
|
|
|
|
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
|
SEGMENT DATA
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross written premiums
|
|
|
$
|
380.9
|
|
|
|
$
|
307.5
|
|
|
|
$
|
1,509.8
|
|
|
|
$
|
1,277.7
|
|
Net written premiums
|
|
|
|
250.7
|
|
|
|
|
211.7
|
|
|
|
|
1,031.8
|
|
|
|
|
883.5
|
|
Earned premiums
|
|
|
|
243.7
|
|
|
|
|
219.8
|
|
|
|
|
936.6
|
|
|
|
|
849.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting income
|
|
|
|
33.7
|
|
|
|
|
32.6
|
|
|
|
|
89.4
|
|
|
|
|
111.5
|
|
Net investment income
|
|
|
|
21.2
|
|
|
|
|
16.1
|
|
|
|
|
87.2
|
|
|
|
|
71.9
|
|
Interest expense
|
|
|
|
(3.8
|
)
|
|
|
|
(2.4
|
)
|
|
|
|
(14.1
|
)
|
|
|
|
(9.2
|
)
|
Fee (expense) income net
|
|
|
|
(0.6
|
)
|
|
|
|
1.9
|
|
|
|
|
6.9
|
|
|
|
|
0.2
|
|
Net income before taxes
|
|
|
$
|
50.5
|
|
|
|
$
|
48.2
|
|
|
|
$
|
169.4
|
|
|
|
$
|
174.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio
|
|
|
|
54.9
|
%
|
|
|
|
54.3
|
%
|
|
|
|
56.4
|
%
|
|
|
|
55.0
|
%
|
Expense ratio
|
|
|
|
31.2
|
%
|
|
|
|
30.9
|
%
|
|
|
|
34.1
|
%
|
|
|
|
31.9
|
%
|
GAAP combined ratio
|
|
|
|
86.1
|
%
|
|
|
|
85.2
|
%
|
|
|
|
90.5
|
%
|
|
|
|
86.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTERNATIONAL OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross written premiums
|
|
|
$
|
225.3
|
|
|
|
$
|
191.5
|
|
|
|
$
|
1,187.3
|
|
|
|
$
|
886.8
|
|
Net written premiums
|
|
|
|
139.1
|
|
|
|
|
121.8
|
|
|
|
|
621.7
|
|
|
|
|
556.4
|
|
Earned premiums
|
|
|
|
160.9
|
|
|
|
|
142.4
|
|
|
|
|
635.8
|
|
|
|
|
560.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting (loss) income
|
|
|
|
(33.1
|
)
|
|
|
|
(4.8
|
)
|
|
|
|
(111.2
|
)
|
|
|
|
25.8
|
|
Net investment income
|
|
|
|
8.3
|
|
|
|
|
6.0
|
|
|
|
|
32.7
|
|
|
|
|
28.7
|
|
Interest expense
|
|
|
|
(2.6
|
)
|
|
|
|
(1.3
|
)
|
|
|
|
(9.7
|
)
|
|
|
|
(5.3
|
)
|
Fee income (expense), net
|
|
|
|
0.8
|
|
|
|
|
(1.4
|
)
|
|
|
|
1.5
|
|
|
|
|
2.4
|
|
Net (loss) income before taxes
|
|
|
$
|
(26.6
|
)
|
|
|
$
|
(1.5
|
)
|
|
|
$
|
(86.7
|
)
|
|
|
$
|
51.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio
|
|
|
|
84.3
|
%
|
|
|
|
65.8
|
%
|
|
|
|
79.4
|
%
|
|
|
|
57.8
|
%
|
Expense ratio
|
|
|
|
36.3
|
%
|
|
|
|
37.5
|
%
|
|
|
|
38.1
|
%
|
|
|
|
37.6
|
%
|
GAAP combined ratio
|
|
|
|
120.6
|
%
|
|
|
|
103.3
|
%
|
|
|
|
117.5
|
%
|
|
|
|
95.4
|
%
|
|
|
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Year Ended
|
Net Prior Year Development
|
|
|
December 31,
|
|
|
December 31,
|
(Favorable)/Unfavorable
|
|
|
|
2017
|
|
|
|
|
2016
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US Operations
|
|
|
$
|
(10.0
|
)
|
|
|
$
|
(10.3
|
)
|
|
|
$
|
(38.7
|
)
|
|
|
$
|
(35.9
|
)
|
International Operations
|
|
|
|
(3.8
|
)
|
|
|
|
(5.2
|
)
|
|
|
|
13.2
|
|
|
|
|
(16.0
|
)
|
Run-off Lines
|
|
|
|
1.2
|
|
|
|
|
1.0
|
|
|
|
|
17.3
|
|
|
|
|
18.6
|
|
Total
|
|
|
$
|
(12.6
|
)
|
|
|
$
|
(14.5
|
)
|
|
|
$
|
(8.2
|
)
|
|
|
$
|
(33.3
|
)
|
|
|
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
|
(in millions)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
December 31,
|
|
|
|
2017
|
|
|
2016
|
Catastrophe losses, net of reinstatement premiums
|
|
|
|
|
|
|
US Operations
|
|
|
|
|
|
|
Catastrophe losses - Q4 events
|
|
|
$
|
1.7
|
|
|
|
$
|
2.7
|
Catastrophe losses - pre Q4 events
|
|
|
|
(7.0
|
)
|
|
|
|
-
|
Total catastrophe losses
|
|
|
|
(5.3
|
)
|
|
|
|
2.7
|
CAT related premium adjustments
|
|
|
|
1.3
|
|
|
|
|
-
|
Catastrophe losses, inclusive of CAT related premium adjustments
|
|
|
$
|
(4.0
|
)
|
|
|
$
|
2.7
|
|
|
|
|
|
|
|
International Operations
|
|
|
|
|
|
|
Catastrophe losses - Q4 events (1)
|
|
|
$
|
35.8
|
|
|
|
$
|
20.1
|
Catastrophe losses - Q3 events (2)
|
|
|
|
(0.6
|
)
|
|
|
|
-
|
Total catastrophe losses
|
|
|
|
35.2
|
|
|
|
|
20.1
|
CAT related premium adjustments
|
|
|
|
3.1
|
|
|
|
|
-
|
Catastrophe losses, inclusive of CAT related premium adjustments
|
|
|
$
|
38.3
|
|
|
|
$
|
20.1
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
|
|
Catastrophe losses - Q4 events (1)
|
|
|
$
|
37.5
|
|
|
|
$
|
22.8
|
Catastrophe losses - Q3 events (2)
|
|
|
|
(7.6
|
)
|
|
|
|
-
|
Total catastrophe losses
|
|
|
|
29.9
|
|
|
|
|
22.8
|
CAT related premium adjustments
|
|
|
|
4.4
|
|
|
|
|
-
|
Catastrophe losses, inclusive of CAT related premium adjustments
|
|
|
$
|
34.3
|
|
|
|
$
|
22.8
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
|
2017
|
|
|
2016
|
Catastrophe losses, net of reinstatement premiums:
|
|
|
|
|
|
|
US Operations
|
|
|
$
|
16.8
|
|
|
|
$
|
14.2
|
International Operations (3)
|
|
|
|
109.4
|
|
|
|
|
47.5
|
Total catastrophe losses
|
|
|
|
126.2
|
|
|
|
|
61.7
|
CAT related premium adjustments
|
|
|
|
|
|
|
US Operations
|
|
|
|
5.1
|
|
|
|
|
-
|
International Operations
|
|
|
|
13.8
|
|
|
|
|
-
|
Total CAT related premium adjustments
|
|
|
|
18.9
|
|
|
|
|
-
|
Catastrophe losses, inclusive of CAT related premium adjustments
|
|
|
$
|
145.1
|
|
|
|
$
|
61.7
|
(1)
|
|
Losses for the three months ended December 31, 2017 increased $2.2
million for reinstatement premiums on out-bound reinsurance.
|
|
|
Losses for the three months ended December 31, 2016 decreased $0.6
million for reinstatement premiums on in-bound reinsurance.
|
|
|
|
(2)
|
|
Losses for the three months ended December 31, 2017 decreased $3.1
million for reinstatement premiums on in-bound reinsurance.
|
|
|
|
(3)
|
|
Losses for the years ended December 31, 2017 and 2016 decreased
$1.0 million and $0.6 million, respectively, for reinstatement
premiums on in-bound reinsurance.
|
|
|
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
|
RECONCILIATION OF RATIOS
|
(in millions)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
US Operations
|
|
|
|
2017
|
|
|
|
|
2016
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earned premiums, as reported
|
|
|
$
|
243.7
|
|
|
|
$
|
219.8
|
|
|
|
$
|
936.6
|
|
|
|
$
|
849.5
|
|
CAT related premiums adjustments
|
|
|
|
1.3
|
|
|
|
|
-
|
|
|
|
|
5.1
|
|
|
|
|
-
|
|
Net earned premiums, net of catastrophe adjustments
|
|
|
|
245.0
|
|
|
|
|
219.8
|
|
|
|
|
941.7
|
|
|
|
|
849.5
|
|
Other CAT and risk management purchases in 2017
|
|
|
|
2.7
|
|
|
|
|
-
|
|
|
|
|
4.1
|
|
|
|
|
-
|
|
Net earned premiums, as adjusted
|
|
|
$
|
247.7
|
|
|
|
$
|
219.8
|
|
|
|
$
|
945.8
|
|
|
|
$
|
849.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and loss adjustment expenses, as reported
|
|
|
$
|
133.9
|
|
|
|
$
|
119.4
|
|
|
|
$
|
528.1
|
|
|
|
$
|
467.5
|
|
Catastrophe benefits (losses)
|
|
|
|
5.3
|
|
|
|
|
(2.7
|
)
|
|
|
|
(16.8
|
)
|
|
|
|
(14.2
|
)
|
Net favorable prior accident year reserve development
|
|
|
|
10.0
|
|
|
|
|
10.3
|
|
|
|
|
38.7
|
|
|
|
|
35.9
|
|
Current accident year losses excluding CATs, as adjusted
|
|
|
$
|
149.2
|
|
|
|
$
|
127.0
|
|
|
|
$
|
550.0
|
|
|
|
$
|
489.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting, acquisition and insurance expenses, as reported
|
|
|
$
|
76.1
|
|
|
|
$
|
67.8
|
|
|
|
$
|
319.1
|
|
|
|
$
|
270.5
|
|
Restructuring charge
|
|
|
|
(2.0
|
)
|
|
|
|
-
|
|
|
|
|
(2.0
|
)
|
|
|
|
-
|
|
Final resolution of premium tax dispute
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(3.5
|
)
|
|
|
|
-
|
|
Underwriting, acquisition and insurance expenses, as adjusted
|
|
|
$
|
74.1
|
|
|
|
$
|
67.8
|
|
|
|
$
|
313.6
|
|
|
|
$
|
270.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio, as reported
|
|
|
|
54.9
|
%
|
|
|
|
54.3
|
%
|
|
|
|
56.4
|
%
|
|
|
|
55.0
|
%
|
Catastrophe losses (a)
|
|
|
|
2.2
|
%
|
|
|
|
-1.2
|
%
|
|
|
|
-1.8
|
%
|
|
|
|
-1.6
|
%
|
Prior accident year loss development
|
|
|
|
4.1
|
%
|
|
|
|
4.7
|
%
|
|
|
|
4.1
|
%
|
|
|
|
4.2
|
%
|
Other CAT and risk management purchases in 2017
|
|
|
|
-1.0
|
%
|
|
|
|
0.0
|
%
|
|
|
|
-0.5
|
%
|
|
|
|
0.0
|
%
|
Current accident year ex-cats loss ratio, as adjusted
|
|
|
|
60.2
|
%
|
|
|
|
57.8
|
%
|
|
|
|
58.2
|
%
|
|
|
|
57.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense ratio, as reported
|
|
|
|
31.2
|
%
|
|
|
|
30.9
|
%
|
|
|
|
34.1
|
%
|
|
|
|
31.9
|
%
|
Restructuring charge
|
|
|
|
-0.8
|
%
|
|
|
|
0.0
|
%
|
|
|
|
-0.2
|
%
|
|
|
|
0.0
|
%
|
Final resolution of premium tax dispute
|
|
|
|
0.0
|
%
|
|
|
|
0.0
|
%
|
|
|
|
-0.4
|
%
|
|
|
|
0.0
|
%
|
Other CAT and risk management purchases in 2017
|
|
|
|
-0.5
|
%
|
|
|
|
0.0
|
%
|
|
|
|
-0.3
|
%
|
|
|
|
0.0
|
%
|
Expense ratio, as adjusted
|
|
|
|
29.9
|
%
|
|
|
|
30.9
|
%
|
|
|
|
33.2
|
%
|
|
|
|
31.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined ratio, as reported
|
|
|
|
86.1
|
%
|
|
|
|
85.2
|
%
|
|
|
|
90.5
|
%
|
|
|
|
86.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAY ex-CAT combined ratio, as adjusted
|
|
|
|
90.1
|
%
|
|
|
|
88.7
|
%
|
|
|
|
91.4
|
%
|
|
|
|
89.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Please refer to Notes for calculation of the point
impacts of catastrophe losses on the ratios.
|
|
|
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
|
RECONCILIATION OF RATIOS
|
(in millions)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
International Operations
|
|
|
|
2017
|
|
|
|
|
2016
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earned premiums, as reported
|
|
|
$
|
160.9
|
|
|
|
$
|
142.4
|
|
|
|
$
|
635.8
|
|
|
|
$
|
560.9
|
|
CAT related premiums adjustments
|
|
|
|
3.1
|
|
|
|
|
-
|
|
|
|
|
13.8
|
|
|
|
|
-
|
|
Net earned premiums, net of catastrophe adjustments
|
|
|
|
164.0
|
|
|
|
|
142.4
|
|
|
|
|
649.6
|
|
|
|
|
560.9
|
|
Other CAT and risk management purchases in 2017
|
|
|
|
10.0
|
|
|
|
|
-
|
|
|
|
|
16.7
|
|
|
|
|
-
|
|
Net earned premiums, as adjusted
|
|
|
$
|
174.0
|
|
|
|
$
|
142.4
|
|
|
|
$
|
666.3
|
|
|
|
$
|
560.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and loss adjustment expenses, as reported
|
|
|
$
|
135.6
|
|
|
|
$
|
93.7
|
|
|
|
$
|
504.8
|
|
|
|
$
|
324.0
|
|
Catastrophe losses
|
|
|
|
(36.1
|
)
|
|
|
|
(20.7
|
)
|
|
|
|
(110.4
|
)
|
|
|
|
(49.7
|
)
|
Net favorable (unfavorable) prior accident year reserve development
|
|
|
|
3.8
|
|
|
|
|
5.2
|
|
|
|
|
(13.2
|
)
|
|
|
|
16.0
|
|
Current accident year losses excluding CATs, as adjusted
|
|
|
$
|
103.3
|
|
|
|
$
|
78.2
|
|
|
|
$
|
381.2
|
|
|
|
$
|
290.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting, acquisition and insurance expenses, as reported
|
|
|
$
|
58.4
|
|
|
|
$
|
53.5
|
|
|
|
$
|
242.2
|
|
|
|
$
|
211.1
|
|
Prior quarters intangible asset amortization true up
|
|
|
|
(0.9
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Underwriting, acquisition and insurance expenses, as adjusted
|
|
|
$
|
57.5
|
|
|
|
$
|
53.5
|
|
|
|
$
|
242.2
|
|
|
|
$
|
211.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio, as reported
|
|
|
|
84.3
|
%
|
|
|
|
65.8
|
%
|
|
|
|
79.4
|
%
|
|
|
|
57.8
|
%
|
Catastrophe losses (a)
|
|
|
|
-22.1
|
%
|
|
|
|
-14.4
|
%
|
|
|
|
-17.3
|
%
|
|
|
|
-8.7
|
%
|
Prior accident year loss development
|
|
|
|
2.3
|
%
|
|
|
|
3.7
|
%
|
|
|
|
-2.1
|
%
|
|
|
|
2.9
|
%
|
Other CAT and risk management purchases in 2017
|
|
|
|
-5.1
|
%
|
|
|
|
0.0
|
%
|
|
|
|
-2.8
|
%
|
|
|
|
0.0
|
%
|
Current accident year ex-cats loss ratio, as adjusted
|
|
|
|
59.4
|
%
|
|
|
|
55.1
|
%
|
|
|
|
57.2
|
%
|
|
|
|
52.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense ratio, as reported
|
|
|
|
36.3
|
%
|
|
|
|
37.5
|
%
|
|
|
|
38.1
|
%
|
|
|
|
37.6
|
%
|
Prior quarters intangible asset amortization true up
|
|
|
|
-0.6
|
%
|
|
|
|
0.0
|
%
|
|
|
|
0.0
|
%
|
|
|
|
0.0
|
%
|
Other CAT and risk management purchases in 2017
|
|
|
|
-2.7
|
%
|
|
|
|
0.0
|
%
|
|
|
|
-1.7
|
%
|
|
|
|
0.0
|
%
|
Expense ratio, as adjusted
|
|
|
|
33.0
|
%
|
|
|
|
37.5
|
%
|
|
|
|
36.4
|
%
|
|
|
|
37.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined ratio, as reported
|
|
|
|
120.6
|
%
|
|
|
|
103.3
|
%
|
|
|
|
117.5
|
%
|
|
|
|
95.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAY ex-CAT combined ratio, as adjusted
|
|
|
|
92.4
|
%
|
|
|
|
92.6
|
%
|
|
|
|
93.6
|
%
|
|
|
|
89.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Please refer to Notes for calculation of the point
impacts of catastrophe losses on the ratios.
|
|
|
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
|
RECONCILIATION OF RATIOS
|
(in millions)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
Consolidated
|
|
|
|
2017
|
|
|
|
|
2016
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earned premiums, as reported
|
|
|
$
|
404.5
|
|
|
|
$
|
362.3
|
|
|
|
$
|
1,572.3
|
|
|
|
$
|
1,410.8
|
|
CAT related premiums adjustments
|
|
|
|
4.4
|
|
|
|
|
-
|
|
|
|
|
18.9
|
|
|
|
|
-
|
|
Net earned premiums, net of catastrophe adjustments
|
|
|
|
408.9
|
|
|
|
|
362.3
|
|
|
|
|
1,591.2
|
|
|
|
|
1,410.8
|
|
Other CAT and risk management purchases in 2017
|
|
|
|
12.7
|
|
|
|
|
-
|
|
|
|
|
20.8
|
|
|
|
|
-
|
|
Net earned premiums, as adjusted
|
|
|
$
|
421.6
|
|
|
|
$
|
362.3
|
|
|
|
$
|
1,612.0
|
|
|
|
$
|
1,410.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and loss adjustment expenses, as reported
|
|
|
$
|
270.7
|
|
|
|
$
|
214.1
|
|
|
|
$
|
1,050.2
|
|
|
|
$
|
810.1
|
|
Catastrophe losses
|
|
|
|
(30.8
|
)
|
|
|
|
(23.4
|
)
|
|
|
|
(127.2
|
)
|
|
|
|
(63.9
|
)
|
Net favorable prior accident year reserve development
|
|
|
|
12.6
|
|
|
|
|
14.5
|
|
|
|
|
8.2
|
|
|
|
|
33.3
|
|
Current accident year losses excluding CATs, as adjusted
|
|
|
$
|
252.5
|
|
|
|
$
|
205.2
|
|
|
|
$
|
931.2
|
|
|
|
$
|
779.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting, acquisition and insurance expenses, as reported
|
|
|
$
|
161.0
|
|
|
|
$
|
144.0
|
|
|
|
$
|
635.4
|
|
|
|
$
|
547.0
|
|
Final resolution of premium tax dispute
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(3.5
|
)
|
|
|
|
-
|
|
IT outsourcing costs - Q1
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(4.0
|
)
|
|
|
|
-
|
|
Ariel Re transaction costs - Q1
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(2.5
|
)
|
|
|
|
-
|
|
Restructuring charge
|
|
|
|
(2.2
|
)
|
|
|
|
-
|
|
|
|
|
(2.2
|
)
|
|
|
|
-
|
|
Prior quarters intangible asset amortization true up
|
|
|
|
(0.9
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Underwriting, acquisition and insurance expenses, as adjusted
|
|
|
$
|
157.9
|
|
|
|
$
|
144.0
|
|
|
|
$
|
623.2
|
|
|
|
$
|
547.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio, as reported
|
|
|
|
66.9
|
%
|
|
|
|
59.1
|
%
|
|
|
|
66.8
|
%
|
|
|
|
57.4
|
%
|
Catastrophe losses (a)
|
|
|
|
-7.5
|
%
|
|
|
|
-6.4
|
%
|
|
|
|
-8.1
|
%
|
|
|
|
-4.4
|
%
|
Prior accident year loss development
|
|
|
|
3.1
|
%
|
|
|
|
4.0
|
%
|
|
|
|
0.6
|
%
|
|
|
|
2.4
|
%
|
Other CAT and risk management purchases in 2017
|
|
|
|
-2.6
|
%
|
|
|
|
0.0
|
%
|
|
|
|
-1.5
|
%
|
|
|
|
0.0
|
%
|
Current accident year ex-cats loss ratio, as adjusted
|
|
|
|
59.9
|
%
|
|
|
|
56.7
|
%
|
|
|
|
57.8
|
%
|
|
|
|
55.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense ratio, as reported
|
|
|
|
39.8
|
%
|
|
|
|
39.7
|
%
|
|
|
|
40.4
|
%
|
|
|
|
38.8
|
%
|
Final resolution of premium tax dispute
|
|
|
|
0.0
|
%
|
|
|
|
0.0
|
%
|
|
|
|
-0.2
|
%
|
|
|
|
0.0
|
%
|
IT outsourcing costs - Q1
|
|
|
|
0.0
|
%
|
|
|
|
0.0
|
%
|
|
|
|
-0.2
|
%
|
|
|
|
0.0
|
%
|
Ariel Re transaction costs - Q1
|
|
|
|
0.0
|
%
|
|
|
|
0.0
|
%
|
|
|
|
-0.2
|
%
|
|
|
|
0.0
|
%
|
Restructuring charge
|
|
|
|
-0.6
|
%
|
|
|
|
0.0
|
%
|
|
|
|
-0.1
|
%
|
|
|
|
0.0
|
%
|
Prior quarters intangible asset amortization true up
|
|
|
|
-0.2
|
%
|
|
|
|
0.0
|
%
|
|
|
|
0.0
|
%
|
|
|
|
0.0
|
%
|
Other CAT and risk management purchases in 2017
|
|
|
|
-1.5
|
%
|
|
|
|
0.0
|
%
|
|
|
|
-1.0
|
%
|
|
|
|
0.0
|
%
|
Expense ratio, as adjusted
|
|
|
|
37.5
|
%
|
|
|
|
39.7
|
%
|
|
|
|
38.7
|
%
|
|
|
|
38.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined ratio, as reported
|
|
|
|
106.7
|
%
|
|
|
|
98.8
|
%
|
|
|
|
107.2
|
%
|
|
|
|
96.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAY ex-CAT combined ratio, as adjusted
|
|
|
|
97.4
|
%
|
|
|
|
96.4
|
%
|
|
|
|
96.4
|
%
|
|
|
|
94.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Please refer to Notes for calculation of the point
impacts of catastrophe losses on the ratios.
|
|
|
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
|
RECONCILIATION OF UNDERWRITING (LOSS) INCOME TO NET INCOME
|
(in millions)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
|
$
|
28.9
|
|
|
|
$
|
32.9
|
|
|
|
$
|
50.3
|
|
|
|
$
|
146.7
|
|
Add (deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit) provision
|
|
|
|
(16.6
|
)
|
|
|
|
14.1
|
|
|
|
|
(10.4
|
)
|
|
|
|
35.2
|
|
Net investment income
|
|
|
|
(35.0
|
)
|
|
|
|
(25.5
|
)
|
|
|
|
(140.0
|
)
|
|
|
|
(115.1
|
)
|
Net realized investment and other gains
|
|
|
|
(14.2
|
)
|
|
|
|
(13.3
|
)
|
|
|
|
(39.3
|
)
|
|
|
|
(26.1
|
)
|
Fee and other income
|
|
|
|
(2.1
|
)
|
|
|
|
(4.3
|
)
|
|
|
|
(22.5
|
)
|
|
|
|
(24.5
|
)
|
Interest expense
|
|
|
|
7.3
|
|
|
|
|
5.0
|
|
|
|
|
27.7
|
|
|
|
|
19.6
|
|
Fee and other expense
|
|
|
|
2.2
|
|
|
|
|
4.3
|
|
|
|
|
14.6
|
|
|
|
|
22.4
|
|
Foreign currency exchange losses (gains)
|
|
|
|
2.3
|
|
|
|
|
(9.0
|
)
|
|
|
|
6.3
|
|
|
|
|
(4.5
|
)
|
Underwriting (loss) income
|
|
|
$
|
(27.2
|
)
|
|
|
$
|
4.2
|
|
|
|
$
|
(113.3
|
)
|
|
|
$
|
53.7
|
|
|
|
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
|
RECONCILIATION OF ADJUSTED OPERATING INCOME TO NET INCOME
|
(in millions, except per share amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income, as reported
|
|
|
$
|
28.9
|
|
|
|
$
|
32.9
|
|
|
|
$
|
50.3
|
|
|
|
$
|
146.7
|
|
(Benefit) provision for income taxes
|
|
|
|
(16.6
|
)
|
|
|
|
14.1
|
|
|
|
|
(10.4
|
)
|
|
|
|
35.2
|
|
Net income, before taxes
|
|
|
|
12.3
|
|
|
|
|
47.0
|
|
|
|
|
39.9
|
|
|
|
|
181.9
|
|
Add (deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized investment and other gains
|
|
|
|
(14.2
|
)
|
|
|
|
(13.3
|
)
|
|
|
|
(39.3
|
)
|
|
|
|
(26.1
|
)
|
Foreign currency exchange losses (gains)
|
|
|
|
2.3
|
|
|
|
|
(9.0
|
)
|
|
|
|
6.3
|
|
|
|
|
(4.5
|
)
|
Adjusted operating income before taxes
|
|
|
|
0.4
|
|
|
|
|
24.7
|
|
|
|
|
6.9
|
|
|
|
|
151.3
|
|
Provision for income taxes, at assumed rate (1)
|
|
|
|
0.1
|
|
|
|
|
4.9
|
|
|
|
|
1.4
|
|
|
|
|
30.3
|
|
Adjusted operating income
|
|
|
$
|
0.3
|
|
|
|
$
|
19.8
|
|
|
|
$
|
5.5
|
|
|
|
$
|
121.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating income per common share (diluted)
|
|
|
$
|
0.01
|
|
|
|
$
|
0.64
|
|
|
|
$
|
0.18
|
|
|
|
$
|
3.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares, diluted
|
|
|
|
30.4
|
|
|
|
|
30.7
|
|
|
|
|
30.8
|
|
|
|
|
30.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) At assumed tax rate of 20%.
|
|
|
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
|
RECONCILIATION OF SEGMENT (LOSS) INCOME TO NET (LOSS) INCOME
|
(in millions)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment income (loss) before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Operations
|
|
|
|
50.5
|
|
|
|
|
48.2
|
|
|
|
|
169.4
|
|
|
|
|
174.4
|
|
International Operations
|
|
|
|
(26.6
|
)
|
|
|
|
(1.5
|
)
|
|
|
|
(86.7
|
)
|
|
|
|
51.6
|
|
Run-off Lines
|
|
|
|
(1.5
|
)
|
|
|
|
(0.6
|
)
|
|
|
|
(17.9
|
)
|
|
|
|
(15.2
|
)
|
Corporate and Other
|
|
|
|
(22.0
|
)
|
|
|
|
(21.4
|
)
|
|
|
|
(57.9
|
)
|
|
|
|
(59.5
|
)
|
Realized investment and other gains
|
|
|
|
14.2
|
|
|
|
|
13.3
|
|
|
|
|
39.3
|
|
|
|
|
26.1
|
|
Foreign currency exchange (losses) gains
|
|
|
|
(2.3
|
)
|
|
|
|
9.0
|
|
|
|
|
(6.3
|
)
|
|
|
|
4.5
|
|
Net income before income taxes
|
|
|
|
12.3
|
|
|
|
|
47.0
|
|
|
|
|
39.9
|
|
|
|
|
181.9
|
|
(Benefit) provision for taxes
|
|
|
|
(16.6
|
)
|
|
|
|
14.1
|
|
|
|
|
(10.4
|
)
|
|
|
|
35.2
|
|
Net income
|
|
|
$
|
28.9
|
|
|
|
$
|
32.9
|
|
|
|
$
|
50.3
|
|
|
|
$
|
146.7
|
|
|
|
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
|
GROSS WRITTEN PREMIUMS BY SEGMENT AND LINE OF BUSINESS
|
(in millions)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Operations
|
|
|
Three months ended
|
|
|
Three months ended
|
(unaudited)
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
|
|
|
Gross Written
|
|
|
Net Written
|
|
|
Net Earned
|
|
|
Gross Written
|
|
|
Net Written
|
|
|
Net Earned
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
|
|
|
$
|
53.3
|
|
|
$
|
33.6
|
|
|
$
|
27.6
|
|
|
$
|
51.2
|
|
|
$
|
23.3
|
|
|
$
|
31.2
|
Liability
|
|
|
|
231.3
|
|
|
|
162.5
|
|
|
|
164.4
|
|
|
|
181.6
|
|
|
|
134.7
|
|
|
|
146.2
|
Professional
|
|
|
|
56.6
|
|
|
|
23.8
|
|
|
|
25.8
|
|
|
|
41.5
|
|
|
|
28.6
|
|
|
|
22.5
|
Specialty
|
|
|
|
39.7
|
|
|
|
30.8
|
|
|
|
25.9
|
|
|
|
33.2
|
|
|
|
25.1
|
|
|
|
19.9
|
Total
|
|
|
$
|
380.9
|
|
|
$
|
250.7
|
|
|
$
|
243.7
|
|
|
$
|
307.5
|
|
|
$
|
211.7
|
|
|
$
|
219.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International Operations
|
|
|
Three months ended
|
|
|
Three months ended
|
(unaudited)
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
|
|
|
Gross Written
|
|
|
Net Written
|
|
|
Net Earned
|
|
|
Gross Written
|
|
|
Net Written
|
|
|
Net Earned
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
|
|
|
$
|
52.3
|
|
|
$
|
36.4
|
|
|
$
|
55.4
|
|
|
$
|
48.8
|
|
|
$
|
30.3
|
|
|
$
|
51.8
|
Liability
|
|
|
|
36.0
|
|
|
|
16.5
|
|
|
|
19.5
|
|
|
|
35.6
|
|
|
|
18.5
|
|
|
|
20.4
|
Professional
|
|
|
|
49.3
|
|
|
|
32.4
|
|
|
|
30.5
|
|
|
|
47.9
|
|
|
|
34.2
|
|
|
|
30.9
|
Specialty
|
|
|
|
87.7
|
|
|
|
53.8
|
|
|
|
55.5
|
|
|
|
59.2
|
|
|
|
38.8
|
|
|
|
39.3
|
Total
|
|
|
$
|
225.3
|
|
|
$
|
139.1
|
|
|
$
|
160.9
|
|
|
$
|
191.5
|
|
|
$
|
121.8
|
|
|
$
|
142.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
Three months ended
|
|
|
Three months ended
|
(unaudited)
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
|
|
|
Gross Written
|
|
|
Net Written
|
|
|
Net Earned
|
|
|
Gross Written
|
|
|
Net Written
|
|
|
Net Earned
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
|
|
|
$
|
105.6
|
|
|
$
|
70.0
|
|
|
$
|
83.0
|
|
|
$
|
100.0
|
|
|
$
|
53.6
|
|
|
$
|
83.0
|
Liability
|
|
|
|
267.4
|
|
|
|
179.0
|
|
|
|
183.9
|
|
|
|
217.2
|
|
|
|
153.2
|
|
|
|
166.7
|
Professional
|
|
|
|
105.9
|
|
|
|
56.2
|
|
|
|
56.3
|
|
|
|
89.4
|
|
|
|
62.8
|
|
|
|
53.4
|
Specialty
|
|
|
|
127.4
|
|
|
|
84.6
|
|
|
|
81.3
|
|
|
|
92.4
|
|
|
|
63.9
|
|
|
|
59.2
|
Total
|
|
|
$
|
606.3
|
|
|
$
|
389.8
|
|
|
$
|
404.5
|
|
|
$
|
499.0
|
|
|
$
|
333.5
|
|
|
$
|
362.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Operations
|
|
|
Year Ended
|
|
|
Year Ended
|
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
|
|
|
Gross Written
|
|
|
Net Written
|
|
|
Net Earned
|
|
|
Gross Written
|
|
|
Net Written
|
|
|
Net Earned
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
|
|
|
$
|
246.7
|
|
|
$
|
138.5
|
|
|
$
|
113.4
|
|
|
$
|
239.8
|
|
|
$
|
125.7
|
|
|
$
|
124.9
|
Liability
|
|
|
|
946.7
|
|
|
|
673.8
|
|
|
|
619.2
|
|
|
|
794.8
|
|
|
|
575.5
|
|
|
|
575.3
|
Professional
|
|
|
|
176.5
|
|
|
|
113.1
|
|
|
|
111.3
|
|
|
|
140.4
|
|
|
|
100.3
|
|
|
|
79.3
|
Specialty
|
|
|
|
139.9
|
|
|
|
106.4
|
|
|
|
92.7
|
|
|
|
102.7
|
|
|
|
82.0
|
|
|
|
70.0
|
Total
|
|
|
$
|
1,509.8
|
|
|
$
|
1,031.8
|
|
|
$
|
936.6
|
|
|
$
|
1,277.7
|
|
|
$
|
883.5
|
|
|
$
|
849.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International Operations
|
|
|
Year Ended
|
|
|
Year Ended
|
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
|
|
|
Gross Written
|
|
|
Net Written
|
|
|
Net Earned
|
|
|
Gross Written
|
|
|
Net Written
|
|
|
Net Earned
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
|
|
|
$
|
442.6
|
|
|
$
|
198.3
|
|
|
$
|
224.3
|
|
|
$
|
321.9
|
|
|
$
|
200.7
|
|
|
$
|
205.6
|
Liability
|
|
|
|
162.6
|
|
|
|
77.8
|
|
|
|
79.6
|
|
|
|
145.5
|
|
|
|
80.6
|
|
|
|
86.2
|
Professional
|
|
|
|
169.7
|
|
|
|
104.7
|
|
|
|
100.9
|
|
|
|
159.1
|
|
|
|
104.9
|
|
|
|
102.7
|
Specialty
|
|
|
|
412.4
|
|
|
|
240.9
|
|
|
|
231.0
|
|
|
|
260.3
|
|
|
|
170.2
|
|
|
|
166.4
|
Total
|
|
|
$
|
1,187.3
|
|
|
$
|
621.7
|
|
|
$
|
635.8
|
|
|
$
|
886.8
|
|
|
$
|
556.4
|
|
|
$
|
560.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
Year Ended
|
|
|
Year Ended
|
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
|
|
|
Gross Written
|
|
|
Net Written
|
|
|
Net Earned
|
|
|
Gross Written
|
|
|
Net Written
|
|
|
Net Earned
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
|
|
|
$
|
689.3
|
|
|
$
|
336.8
|
|
|
$
|
337.7
|
|
|
$
|
561.7
|
|
|
$
|
326.4
|
|
|
$
|
330.5
|
Liability
|
|
|
|
1,109.4
|
|
|
|
751.6
|
|
|
|
698.8
|
|
|
|
940.6
|
|
|
|
656.4
|
|
|
|
661.9
|
Professional
|
|
|
|
346.2
|
|
|
|
217.8
|
|
|
|
212.2
|
|
|
|
299.5
|
|
|
|
205.2
|
|
|
|
182.0
|
Specialty
|
|
|
|
552.3
|
|
|
|
347.3
|
|
|
|
323.6
|
|
|
|
363.0
|
|
|
|
252.2
|
|
|
|
236.4
|
Total
|
|
|
$
|
2,697.2
|
|
|
$
|
1,653.5
|
|
|
$
|
1,572.3
|
|
|
$
|
2,164.8
|
|
|
$
|
1,440.2
|
|
|
$
|
1,410.8
|
|
|
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
|
COMPONENTS OF NET INVESTMENT INCOME
|
ALL SEGMENTS
|
(in millions)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
December 31,
|
|
|
September 30
|
|
|
June 30
|
|
|
March 31
|
|
|
December 31
|
|
|
|
2017
|
|
|
2017
|
|
|
2017
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income, excluding alternatives
|
|
|
$
|
24.2
|
|
|
$
|
25.2
|
|
|
$
|
23.0
|
|
|
$
|
22.2
|
|
|
$
|
22.4
|
Alternative investments
|
|
|
|
10.8
|
|
|
|
5.7
|
|
|
|
20.6
|
|
|
|
8.3
|
|
|
|
3.1
|
Total net investment income
|
|
|
$
|
35.0
|
|
|
$
|
30.9
|
|
|
$
|
43.6
|
|
|
$
|
30.5
|
|
|
$
|
25.5
|
|
|
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
|
RECONCILIATION OF TOTAL RETURN TO NET INVESTMENT INCOME
|
(in millions)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
Net investment income
|
|
|
$
|
35.0
|
|
|
|
$
|
25.5
|
|
|
|
$
|
140.0
|
|
|
|
$
|
115.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add (deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized investment and other gains
|
|
|
|
14.2
|
|
|
|
|
13.3
|
|
|
|
|
39.3
|
|
|
|
|
26.1
|
|
Net unrealized gains (losses)
|
|
|
|
0.2
|
|
|
|
|
(37.7
|
)
|
|
|
|
64.1
|
|
|
|
|
34.9
|
|
Total return
|
|
|
$
|
49.4
|
|
|
|
$
|
1.1
|
|
|
|
$
|
243.4
|
|
|
|
$
|
176.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average investments (1)
|
|
|
$
|
4,632.4
|
|
|
|
$
|
4,187.3
|
|
|
|
$
|
4,467.4
|
|
|
|
$
|
4,087.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total return on average investments
|
|
|
|
1.1
|
%
|
|
|
|
0.0
|
%
|
|
|
|
5.4
|
%
|
|
|
|
4.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) excludes investments managed on behalf of syndicate's
trade capital providers
|
|
|
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
|
SHAREHOLDER RETURN ANALYSIS
|
(in millions)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31,
|
|
|
|
|
2017
|
|
|
|
|
2016
|
|
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
50.3
|
|
|
|
$
|
146.7
|
|
|
|
(65.7
|
%)
|
Adjusted operating income (a)
|
|
|
|
5.5
|
|
|
|
|
121.0
|
|
|
|
(95.5
|
%)
|
|
|
|
|
|
|
|
|
|
|
Shareholders' Equity - Beginning of the period
|
|
|
$
|
1,792.7
|
|
|
|
$
|
1,668.1
|
|
|
|
7.5
|
%
|
Shareholders' Equity - End of current period
|
|
|
|
1,819.7
|
|
|
|
|
1,792.7
|
|
|
|
1.5
|
%
|
Average Shareholders' Equity
|
|
|
$
|
1,806.2
|
|
|
|
$
|
1,730.4
|
|
|
|
4.4
|
%
|
|
|
|
|
|
|
|
|
|
|
Annualized return on average shareholders' equity
|
|
|
|
2.8
|
%
|
|
|
|
8.5
|
%
|
|
|
|
Annualized adjusted operating return on average shareholders' equity
|
|
|
|
0.3
|
%
|
|
|
|
7.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) at assumed 20% tax rate
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20180213006690/en/
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