Bermuda-based Argo Group International Holdings, Ltd. reported increases in both gross premiums written and net income for the first quarter of 2103. GPW reached $438.2 million, up by $41.9 million, a 10.6 percent increase. Net income was $32.7 million or $1.28 per diluted share compared to $19.6 million or $0.74 per diluted share in the first quarter of 2012.
Group CEO Mark E. Watson III commented: “I’m pleased with our first quarter performance. We generated solid top-line growth in a modestly improving pricing environment, and generated an underwriting profit in each of our four business segments. I am optimistic about the outlook for the remainder of 2013.”
Other earnings highlights for the first quarter were listed as follows:
• Pre-tax operating income1 was $24.9 million compared to $17.9 million in the first quarter of 2012.
• The combined ratio was 99.4 percent compared to 103.4 percent in the first quarter of 2012.
• Book value per share increased 3.2 percent in the quarter to $62.67 and increased 8.2 percent over the prior year.
• During the quarter, the Company repurchased $12.3 million or 325,825 shares of its common stock at an average share price of $37.71, representing 1.3 percent of net shares outstanding at December 31, 2012.
Commenting on the increase in net income, Argo compared said its net operating income in Q1 after tax was “$20.0 million or $0.78 per diluted share. By comparison, the first quarter of 2012 produced net income of $19.6 million or $0.74 per diluted share and net operating income after tax of $14.3 million or $0.54 per diluted share.
“Gross written premiums for the three months ended March 31, 2013 and 2012, were $438.2 million and $396.3 million, respectively. Total revenue for the three months ended March 31, 2013 and 2012, was $341.6 million and $323.1 million, respectively. Earned premiums for the three months ended March 31, 2013 and 2012, were $304.2 million and $277.3 million, respectively.
“Catastrophe losses, net of reinsurance and estimated reinstatement premiums, were $1.9 million in the first quarter 2013 compared to $4.0 million in the same period in 2012. Favorable prior year loss development was $4.5 million compared to $3.3 million for the three months ended March 31, 2012. Included in underwriting expenses was a non-cash equity-based compensation charge of $6.5 million, compared to $1.0 million in the first quarter of 2012, reflecting the increase in the Company’s stock price during the quarter.
“Net investment income for the three months ended March 31, 2013 and 2012, was $27.9 million and $31.4 million, respectively. For the three months ended March 31, 2013, the Company reported a net realized investment gain of $9.5 million versus $13.1 million for the same period in 2012. At March 31, 2013, the investment portfolio totaled $4.1 billion with a net pre-tax unrealized gain of approximately $328.5 million.”
Source: Argo Group
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