Argo expands 12% in US in Q2
Bermuda-based Argo Group grew its US operations by 12.3 percent year on year to $410.0 million in the second quarter of 2018.
At the same time, the specialty re/insurance underwriter shrank the international operations by 9.2 percent year on year to $292.6 million during the period.
Overall, gross written premiums were up 2.3 percent year on year at $702.8 million in the second quarter.
The combined ratio improved slightly to 96.3 percent in the second quarter of 2018 compared to 96.6 percent in the same period a year ago. In the first six months, the combined ratio was 96.1 percent after 97.8 percent in the same period of 2017.
“Improved underwriting results in both the second quarter and the first six months of 2018 reflect the continued execution of our business plan,” said Argo CEO Mark Watson III.
“In our US operations, gross written premiums were up over 12 percent in the quarter with continued strong underlying margins,” Watson III noted.
In the US operations underwriting income for the 2018 second quarter declined slightly to $26.4 million from $29.3 million for the 2017 second quarter period, driven by lower net favourable prior-year reserve development of $9.7 million, the company said.
“In our international operations, we reduced exposure to select risks, and allocated capital and resources where we can earn more attractive returns,” Watson III said.
“In addition, we are making progress in our ongoing expense initiatives. The overall expense ratio improved by 1.3 points in the second quarter of 2018 to 37.5 percent compared to the same period in 2017, reflecting the streamlining of operations, our digital initiatives and use of technology, all while making continued investments in our strategic growth areas,” Watson III explained.
Argo group net income was $41.8 million in the second quarter compared to $46.0 million in the same period of 2017. The second quarter 2018 results were positively impacted by a new accounting standard which added an after-tax gain of $3.4 million, the company noted.
At the same time, the previous year’s second quarter benefitted from an after-tax net investment gain of $9.3 million relating to the net asset sales of an equity investee, according to the corporate statement.
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