Argo Group International Holdings, Ltd. has announced a deterioration in its combined ratio to 106.8% for Q2 2023 compared with 96.2% in Q2 2022, as the firm reports an underwriting loss of $22.4 million for the period on the back of a higher loss ratio.
The Q2 2023 underwriting loss compares with a gain of $17.3 million a year earlier, as the loss ratio increased from 60.8% to 73.2%, driven by a slight rise in catastrophe losses to $3.1 million, and net adverse prior year reserve development of $26.4 million.
Last year, the loss ratio included cat losses of $2.5 million, and net adverse prior year reserve development of $16.3 million.
For Q2 2023, the company’s gross written premiums (GWP) saw a year-on-year decrease of 23.2%, standing at $561.9 million, compared to the $732.1 million for Q2 2022. The declines is attributed to the businesses the company has sold and exited.
The gross written premiums within the company’s ongoing business have also decreased by approximately 0.8% from the prior year’s second quarter.
Meanwhile, earned premiums are currently at $329.9 million, showing a decrease year over year from $124.4 million in Q2 2022, reflecting a 27.4% difference.
Although, Argo’s net investment income, which stands at $32.8 million for Q2 2023, has increased by $3.5 million or 11.9% from Q2 2022. The increase has been attributed to higher interest rates, partially offset by lower returns from alternative investments.
All in all, Argo has reported a net loss of $0.5 million in the second quarter of 2023, which is an improvement on the net loss of $18.9 million reported a year earlier. The Q2 2023 net loss included pre-tax net realized investment and other gains of $1.6 million, compared with pre-tax net realized investment and other losses of $40.4 million in Q2 2022.
Thomas A. Bradley., Argo’s Executive Chairman and Chief Executive Officer, commented, “Our second quarter performance further reflects the proactive steps we are taking to prioritize improving profitability. Our top-line results reflect our deliberate and disciplined actions in certain lines of business.
“However, we continue to achieve growth across the rest of the portfolio, notably in our environmental, inland marine and casualty segments. This is a testament to the importance of a diversified book of specialty businesses. We have remained focused on lowering expenses and reducing earnings volatility. The success of these efforts was demonstrated in the second quarter by further improvement in the expense ratio, and a low level of catastrophe losses, despite elevated industry catastrophe losses during the period.
“We also continue to collaborate closely with Brookfield Reinsurance on integration planning as we wait for the required regulatory approvals on the pending merger, and anticipate an orderly transition for our customers and business partners once the transaction is completed.”
