Argo Posts $20.7 Million Q1 Net Income; Operating Down at $12.2 Million

The Bermuda-based Argo Group International Holdings released the following highlights for the quarter ended March 31, 2010:
— Total revenue was $372.3 million versus $369.5 million in the year-ago quarter;
— Gross written premiums were $404.5 million versus $496.1 million for the first quarter of 2009;
— Net income was $20.7 million or $0.67 per diluted share, compared to $27.0 million or $0.88 per diluted share for the three months ended March 31, 2009;
— Net pre-tax operating income, or pre-tax income before net realized investment gains and losses and foreign currency exchange gains and losses, was $12.2 million versus $43.2 million for the first quarter of 2009;
— Estimated pre-tax losses attributable to first quarter catastrophes net of estimated reinstatement premiums totaled $29.1 million, of which $21.6 million resulted from the earthquake in Chile, versus no material cat losses in the first quarter of 2009 impacting results. Catastrophe losses for the quarter totaled approximately 1.8 percent of December 31, 2009 shareholders equity;
— Net after-tax operating income per share was $0.32 versus $1.13 per share in the year-ago quarter;
— Book value per share (BVPS) increased to an all-time high of $53.81 at March 31, 2010, increasing 19.2 percent over the preceding 12-month period.

CEO Mark E. Watson III commented: “As is the case for most in the industry, the catastrophic events during the first quarter had a substantial impact on our results. Despite these events and the intensely competitive marketplace, I’m pleased Argo Group produced profitable results and continued its trend of increasing book value per share quarter over quarter.”

The Group’s combined ratio for the first quarter of 2010 was 105.0 percent versus 96.3 percent for the same period in 2009. The bulletin noted that the “first quarter loss ratio was negatively impacted by approximately nine points from catastrophe losses. Argo Group’s 2010 first quarter combined ratios for each business segment were as follows: Excess & Surplus Lines at 100.1 percent; Commercial Specialty at 99.1 percent; Reinsurance at 73.9 percent; and International Specialty at 115.8 percent.”

The complete report, additional information and details on accessing the earnings conference call, held Wednesday, May 5, 2010, may be obtained on the group’s web site at: in the “Investors” section.

Source: Argo Group