Argo Group Q4 Net Income Drops to $12.8 Million, FY to $82.6 Million

The Bermuda-based Argo Group International Holdings, Ltd. posted lower net income figures for the fourth quarter of 2010 and for the full year.

Highlights for the three months ended Dec. 31, 2010 were listed as follows:
• Total revenue was $316.5 million compared to $391.0 million in Q4 2009;
• Net income was $12.8 million or $0.44 per diluted share, compared to $41.0 million or $1.33 per diluted share in Q4 2009;
• Net pre-tax operating income, or pre-tax income before net realized investment and other gains and losses and foreign currency exchange gains and losses, was $18.2 million versus $39.4 million in the fourth quarter of 2009;
• Net after-tax operating income per diluted share was $0.51 versus $1.02 per diluted share in the year-ago quarter.

Highlights for the year ended Dec. 31, 2010 were listed as follows:
• Total revenue was $1.38 billion compared to $1.54 billion last year;
• Net income was $82.6 million or $2.76 per diluted share versus $117.5 million or $3.81 per diluted share in 2009;
• Net pre-tax operating income, or pre-tax income before net realized investment and other gains and losses, foreign currency exchange gains and losses and an intangible asset impairment charge, was $74.7 million versus $164.8 million in the prior year;
• Net after-tax operating income per diluted share was $2.00 versus $4.28 per diluted share in 2009;
• Book value per share (BVPS) increased to an all-time high of $58.41 at Dec. 31, 2010, up 12.5 percent from Dec. 31, 2009, inclusive of common dividends paid. BVPS grew at a compound average growth rate (CAGR) of 12.1 percent for the past eight years.

The Group’s combined ratio for 2010 was 103.2 percent compared to 96.9 percent in 2009. Argo said the Group’s “combined ratios for each business segment in 2010 were as follows: Excess & Surplus Lines at 97.8 percent; Commercial Specialty at 99.0 percent; Reinsurance at 72.8 percent; and International Specialty at 115.3 percent.”

CEO Mark E. Watson III commented: “As a market-leading company in an industry in a deep cyclical trough, impacted by a series of major events over the past year, Argo Group reached an all-time high in book value per share, produced profitable operating results, and returned $121 million in capital through share repurchases and common dividends.

“Also significant was the progress we made during 2010 in areas not yet fully reflected in our financial results. These included the addition of experienced underwriting teams and continuing improvements to the efficiency of our systems and processes. Looking ahead, we believe the progress made over the last year positions our specialty platform to take better advantage of improving economic and industry market conditions.”

Source: Argo Group

Topics Profit Loss