Bermuda-based Argo Group International Holdings, Ltd. has reported a net loss of $111.8m for the fourth quarter of 2022, compared with a loss of $117.8m a year earlier.
The company’s gross written premiums (GWP) narrowed to $644.5m, with an underwriting loss of $133.8m. In Q4 2021 Argo Group reported GWP earnings of $733.8m and an underwriting loss of $109m.
GWP within the company’s ongoing business were broadly in line with the prior year fourth quarter. The decrease in GWP primarily due to businesses the company has exited – the sale of Argo Underwriting Agency Limited and its Lloyd’s Syndicate 1200 on February 2, 2023.
The combined ratio of 138.2% for Q4 2022 increased 15.8 percentage points, primarily due to lower net earned premiums driven by the cost of the LPT. It compares to the 122.4% reported in the same period last year.
Argo noted that in connection with the close of the U.S. loss portfolio transfer (LPT), in the fourth quarter 2022, recognized an after-tax charge of approximately $100m in connection with the transaction.
Total catastrophe losses were $9.4m or 2.7 percentage points on the loss ratio. In comparison, catastrophe losses in the prior year fourth quarter were $6.8m or 1.4 percentage points on the loss ratio.
“2022 was a transformative year for the company,” said Argo Executive Chairman and Chief Executive Officer, Thomas A. Bradley. “The strategic actions we have taken strengthened Argo and better position it to deliver strong returns moving forward.
“The Argo of today is markedly different from the Argo of only two years ago. We have streamlined the company to focus on our most profitable business lines, achieved targeted expense reductions, and continued to de-risk the balance sheet.”
Argo also noted that it had entered into a definitive merger agreement to be acquired by Brookfield Reinsurance for approximately $1.1bn, subject to conditions for closing.
Bradley continued: “At the same time, we have remained nimble in the marketplace – responding to the needs of customers and business partners. We are excited about our next chapter as part of Brookfield Reinsurance.
“We believe the merger transaction that we announced on February 8, 2023, will enhance our opportunities for growth, and scale Argo into a market-leading specialty insurer with capabilities across admitted and E&S markets. Lastly, I want to thank our leadership team and employees for their dedication over the past year as we worked through the strategic alternatives review process.”
