Argo Group International Holdings, Ltd. has announced a deterioration in its combined ratio to 115.8% for Q3 2023 compared with 101.1% in Q3 2022, driven by a higher loss ratio.
The firm reported an underwriting loss of $54.3 million, compared with a $4.8 million loss a year earlier, as the loss ratio increased from 65.7% to 82.0%, driven by a rise in catastrophe losses to $24.7 million.
In comparison, catastrophe losses in the prior year third quarter were $23.4 million on the loss ratio. Catastrophe losses in the third quarter 2023 were mainly due to Hawaii wildfires, Hurricane Idalia, Tropical Storm Ophelia, and other U.S. storms.
For Q3’23, the company’s gross written premiums (GWP) saw a year-on-year decrease of 29.6%, standing at $528.3 million, compared to the $750.9 million for Q3 2022. The declines is attributed to the businesses the company has sold and exited.
The GWP within the company’s ongoing business have also decreased by approximately 9.1% from the prior year’s third quarter.
Meanwhile, earned premiums are currently at $342.7 million, showing a decrease year over year from $455.0 million in Q3 2022, reflecting a 24.7% difference.
Although, Argo’s net investment income, which stands at $40.4 million for Q3 2023, has increased by $6.4 million or 18.8% from Q3 2022. The has been attributed to higher interest rates and improved returns on alternative investments.
All in all, Argo has reported a net loss of $49.5 million in the third quarter of 2023, which is an improvement on the net loss of $51.4 million reported a year earlier. The Q3 2023 net loss included pre-tax net realized investment and other losses of $4.7 million, compared to $44.7 million of pre-tax net realized investment and other losses in the prior year third quarter.
“We were pleased to receive a majority of the required regulatory approvals for the merger with Brookfield Reinsurance,” said Argo Executive Chairman and Chief Executive Officer, Thomas A. Bradley.
“As we wait to receive the remaining required regulatory approvals, we continue to work diligently with Brookfield Reinsurance on integration planning and anticipate an orderly transition for our customers and business partners once the transaction is completed.
“Argo’s third quarter performance benefited from disciplined expense management and increased investment returns. We are encouraged by the progress of our ongoing efforts to optimise the business to deliver improved profitability moving forward and believe the company is well positioned to capitalise on its enhanced future growth prospects as part of Brookfield Reinsurance.”
