Argo Warns of $114M Underwriting Loss, Extra Costs From Watson’s Departure

By | February 13, 2020

  • February 13, 2020 at 10:07 am
    PolarBeaRepeal says:
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    First observation: $114M underwriting losses.

    Second observation: $77M Prior Acc Yr losses, $30M 2019 Acc Yr losses, $3M Cat losses, and $12M associated with job cuts and Euro operations total to $122M, not $114M.

    So, something is amiss with the accounting for the total loss. Perhaps the Euro losses aren’t included in the $114M, which may be US ops only?

  • February 13, 2020 at 10:14 am
    PolarBeaRepeal says:
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    Of course I read that the article said ‘in part’. I am confused by that, as it implies the costs listed above seem to be only costs and not ‘losses’ (not to be confused with ‘claims charges’). I assumed the author was trying to explain the $114M loss by listing components of the ‘loss’ (not ‘claims charges’). Perhaps the revenues (premiums, fees, etc.) are missing along with other expenses?

    This accounting confusion, as well as the nature and propriety of the expenses incurred by their past leader, leads me to think Voce Capital Management should hire an English detective to investigate Watson. Any names come to mind?

  • February 13, 2020 at 10:22 am
    PolarBeaRepeal says:
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    “Argo’s results for the 2019 fourth quarter and full year are clearly unacceptable,” Rehnberg said in prepared remarks. “The industry is experiencing rising claims severity in several lines of business. We have taken appropriate action to adjust our current and prior accident year loss ratios in response to these conditions and to specific information received in the quarter.”

    WOW! Rising claims (sic) severity in several lines of business over the entire industry only hurt Argo badly! What a surprising bit of bad luck.

    Current AND prior year accident year loss ratios imply something was missed in their reserve reviews OR the sign-off by their auditor / certification actuary firm. Not to pinpoint the blame on those two groups, the pricing process needs further scrutiny to determine the source of the 2019 UW loss because the term ‘loss ratios’ was used rather than ‘losses’.



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