Argo Group Reports $31.7 Million Q2 Net Income; $64.4 Million 6 Months

August 7, 2013

The Bermuda-based Argo Group International Holdings, Ltd. announced financial results for the three and six months ended June 30, 2013. The earnings highlights for the second quarter of 3013 were listed as follows:
• Gross written premiums were $542.2 million, an increase of $68 million or 14.3 percent.
• The combined ratio was 98.3 percent compared to 102.5 percent in 2012.
• Net favorable prior-year reserve development was $12.8 million (benefiting the combined ratio by 4.0 points), compared with $4.1 million (benefiting the combined ratio by 1.5 points) in 2012.
• Estimated pre-tax catastrophe losses were $9.7 million or 3.1 points on the combined ratio compared to $3.9 million or 1.5 points in 2012.
• The current accident year loss ratio, excluding catastrophes, was 60.6 percent compared to 62.1 percent in 2012.
• After-tax operating income was $20.7 million or $0.74 per diluted share.
• Net income was $31.7 million or $1.13 per diluted share.
• Book value per share increased to $55.73 at June 30, 2013, from $55.22 at December 31, 2012.

Highlights for the six months ended June 30, 2013 were listed as follows:
• Gross written premiums were $980.4 million, an increase of $109.9 million or 12.6 percent over 2012.
• The combined ratio was 98.8 percent compared to 102.9 percent in 2012.
• Net favorable prior-year reserve development was $17.3 million (benefiting the combined ratio by 2.8 points), compared with $7.4 million (benefiting the combined ratio by 1.4 points) in 2012.
• Estimated pre-tax catastrophe losses were $11.6 million or 1.9 points on the combined ratio compared to $8.0 million or 1.5 points in 2012.
• The current accident year loss ratio, excluding catastrophes, was 59.3 percent compared to 61.6 percent in 2012.
• After-tax operating income was $40.7 million or $1.45 per diluted share.
• Net income was $64.4 million or $2.29 per diluted share.

Argo also noted:
• During the quarter, the Company repurchased $17.8 million or 427,751 shares of its common stock at an average share price of $41.58, which represents 1.7 percent of net shares outstanding at March 31, 2013. In the first six months of 2013, the Company repurchased $30.1 million or 753,576 shares of its common stock at an average share price of $39.91, which represents 3.0 percent of net shares outstanding at December 31, 2012.
• At June 30, 2013, cash and investments totaled $4.1 billion with a net pre-tax unrealized gain of approximately $225.0 million.

“Our results reflect another improving quarter for Argo,” said Argo Group CEO Mark E. Watson III. “This performance was driven by better underwriting margins and strong premium growth as we continue to benefit from our recent new business and operating initiatives and from improved market conditions.”

Source: Argo Group International Holdings

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