Argo back to profit in Q3
Bermuda-based Argo Group International Holdings has returned to profit in the third quarter of 2018 compared to the same quarter of 2017.
Net income was $40.6 million compared to a net loss of $61.3 million for the 2017 third quarter.
The combined ratio was 99.7 percent compared to 126.5 percent for the 2017 third quarter.
Catastrophe losses were $24.2 million, net of reinstatement and other CAT-related premium adjustments. The 2017 third quarter catastrophe losses were $104.5 million, inclusive of net reinstatement and other CAT-related premium adjustments.
Gross written premiums grew 4.3 percent to $839.9 million, compared to $805.1 million for the 2017 third quarter, driven by an expansion in the US while the international business shrank.
The US operations grew 12.5 percent year on year to $482.6 million. Underwriting income for the 2018 third quarter in the US operations was $31.8 million, compared to $5.6 million for the 2017 third quarter. The $26.2 million increase in underwriting income is primarily related to lower catastrophe losses, an increase in underwriting gains related to the growth in net earned premiums, and improved scale, as reflected by a lower expense ratio, according to a corporate statement.
In the international operations, gross written premiums in the 2018 third quarter were down 5.1 percent year on year at $357.2 million.
The reduction was driven by changes in the risk profile of its recently acquired Ariel Re unit as well as by corrective underwriting actions within Syndicate 1200, most notably the Property D&F business and the non-renewal of certain casualty line accounts in Bermuda, the company explained.
Partially offsetting these declines were increases in Liability, Professional and Specialty lines in Europe, Liability, Professional and Specialty lines in Syndicate 1200 (including 2017 Year of Account (YOA) adjustments), Professional lines in Bermuda, and to a lesser extent growth in Specialty lines in Latin America.
Catastrophe losses in the international operations for the 2018 third quarter were $19.0 million, down from $72.8 million in the same period a year ago. The 2018 catastrophe losses are related to Hurricane Florence, Typhoon Jebi and other catastrophe and weather-related events in the third quarter of 2018 and include losses related to certain aggregate excess of loss contracts.
The underwriting loss for the 2018 third quarter was $7.7 million in the international operations, compared to an underwriting loss of $82.7 million for the 2017 third quarter. The $75.0 million improvement in underwriting results was due primarily to lower impacts from catastrophes.
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