Argo Group Reports 31.6% Decline in Gross Written Premiums and $210.1 Million Net Loss

Argo Group International Holdings, Inc. reported a significant decline in its financial performance for the period from January 1, 2023, to November 15, 2023, with gross written premiums decreasing by $899.7 million, or 31.6%, compared to the previous fiscal year. The company attributed this decline primarily to the sale of its subsidiaries, including Argo Underwriting Agency Limited and Argo Seguros, as well as proactive measures taken to improve profitability in certain U.S. operations. Consolidated net earned premiums also fell by $514.5 million, or 29.6%, during the same period, reflecting the same underlying factors.

In terms of profitability, Argo Group reported a net loss of $210.1 million for the predecessor period, compared to a net loss of $183.2 million for the year ended December 31, 2022. The loss was exacerbated by an increase in the consolidated loss ratio, which rose to 84.9% from 72.0% in the previous year, driven by unfavorable prior-year reserve developments and increased catastrophe losses. The company recorded catastrophe losses of $28.6 million during the reporting period, primarily due to various U.S. storms.

Strategically, Argo Group underwent a significant organizational change following its merger with Brookfield Wealth Solutions Ltd. on November 16, 2023. This merger led to a reclassification of its reporting segments into Casualty Lines, Specialty Lines, and Run-off Lines, which will be reflected in future financial reporting. The company also reported a bargain purchase of $48.9 million as the fair value of net assets acquired exceeded the purchase consideration, a rare occurrence in mergers.

Operationally, the company’s total invested assets decreased to $3,481.2 million as of December 31, 2023, down from $3,651.9 million a year earlier. The decrease was attributed to post-merger push-down accounting and a reclassification of short-term investments. The company’s employee headcount and customer statistics were not disclosed in the filing, but the changes in business operations and strategic focus suggest a potential shift in market engagement and resource allocation.

Looking ahead, Argo Group's management expressed cautious optimism regarding future performance, emphasizing the need to adapt to changing market conditions and improve profitability across its segments. The company is focused on leveraging its new organizational structure to enhance operational efficiency and capitalize on growth opportunities in the specialty insurance market. However, uncertainties related to loss reserves and market conditions remain, and management has indicated that future developments could materially impact financial results.