Argo slips to $25.2m half year loss; CEO remains 'optimistic'

Bermuda-based re/insurer Argo Group International Holdings witnessed strong underwriting performance in the first half of the year, but its results were negatively impacted by market volatility in the investment portfolio and challenging circumstances presented by COVID-19.

Argo made a net loss of $6.4 million for the quarter, compared with a net profit of $28.8 million in the same period of 2019. For the first half of the year, the company generated a net loss of $25.2 million, compared with a $120 million net profit in H1 2019.

Gross written premiums were up to $799.6 million for Q2 2020, from $772.9 million in Q2 2019. For H1, gross written premiums were $1.62 billion, up on the $1.53 billion written in the first half of 2019.

The re/insurer's combined ratio improved on a quarterly basis, to 100.3 percent in Q2 2020, from 103.4 percent in the same period of 2019. But for the first half of the year it jumped up to 101.7 percent, from 99.0 percent in the first half of 2019.

Kevin Rehnberg, chief executive officer at Argo, said: “We are pleased to report the strongest quarterly underwriting income for the U.S. in Argo’s history. This demonstrates our shift to more positive underlying performance, particularly in our core U.S. specialty business that delivered an excellent quarter despite the broader economic challenges related to COVID-19.

"The company’s operating results were, however, still negatively impacted by market volatility in our investment portfolio and the pandemic’s effects on premium growth and catastrophe losses, particularly in our International Operations."

“We continue to experience strong improvement in pricing across the business,” added Rehnberg. “We remain optimistic that current market conditions will provide opportunity for continued growth and margin improvement. In addition, our recent preferred stock offering provides Argo with additional capital, enhancing our financial strength, and enables us to more aggressively pursue our strategic growth objectives in this attractive underwriting environment.”