Argo Group International Holdings, Ltd. has warned that its first-quarter 2020 results will be adversely impacted by the COVID-19 pandemic and volatility in global financial markets.
Ahead of its Q1 2020 results announcement, which is scheduled for May 7th, Argo has said that it expects to report pre-tax net catastrophe losses of $29 million, including $26 million related to the pandemic.
The majority of this $26 million COVID-19 loss is primarily from contingency and property exposures in the re/insurer’s International Operations, and property exposures in its U.S. Operations. According to Argo, property losses relate to sub-limited affirmative business interruption coverage, primarily in international markets, as well as costs associated with potential litigation.
The company explains that charges related to the ongoing COVID-19 pandemic represent estimated losses incurred through March 31st, 2020. Argo warns that over the coming quarters, it expects to incur some additional losses and claims related expenses depending on the timing and duration of impacts related to the outbreak.
In addition, the insurer and reinsurer notes that its investment results were also adversely impacted by the pandemic’s influence on financial markets in the quarter. The company expects to report realised and unrealised investment losses of $162 million in Q1 2020, which it says is partially offset by net investment income of $35 million for the period.
Argo’s Chief Executive Officer (CEO), Kevin Rehnberg, commented: “Our company has a long history of assisting policyholders as they navigate unprecedented times. While this continuing event is significant, Argo remains financially strong and will continue to support our customers and producers through the challenges ahead.
“I’m grateful for the broader Argo team, who – like so many worldwide – have been working long hours in remote locations to serve our customers. My sympathy goes out to all of those affected by this virus directly or indirectly.”