Argo may slash more jobs amid cost-cutting drive to reshape firm

Bermuda-based re/insurer  Argo Group International Holdings will continue to seek out and  eliminate excess operating costs in a drive to make good on expense ratio targets.

"We continue to target a 36% expense ratio," CEO Kevin Rehnberg (pictured) told the Q4 investor call.

"Expense reduction does not stop here: there are incremental savings we can achieve across our business," Rehnberg said.

Under the cost cutting plan in place since 2019, Argo has cut headcount by some 300 or 20% of workforce (including via divestitures). Argo is on track to reduce spending on outside services by 30% for over $30 million in savings to end 2022 and to cut 40% from its real-estate expense following asset disposals, a presentation showed.

Lingering steps include "some home office and group staff, some corporate structure things we can take out, continued potential on the side of real estate and third-party vendors," Rehnberg said.

"It's something we are working at," he said.

Argo's expense ratio has fallen from 38.5% in 2019 to 37.5% in 2020 and 36.8% in the year just closed. The Q4 read was lower still.  General and administrative costs have come down faster than sales costs. The goal for 2022: the next 0.8 percentage points off the top to a 36% target.

Non-operating expenses ultimately sank results in 2021. The group wrote $132.3 million in adverse prior year reserves to end Q4 and FY2021 with a loss.

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