Bermuda-based property and casualty insurer Argo Group has reported a net loss of $118.8 million for the fourth quarter of 2021, compared to a net loss of $3.5 million for the same prior year period, driven by adverse prior year reserve development and non-operating charges.
The company also reported a spike in its combined ratio which came in at 122.4% compared to 108% for 4Q20, this was reflected in the company’s underwriting loss which came in at $109 million, compared to $37.1 million in 2020.
The increase in combined ratio was driven by adverse prior year reserve development, partially offset by lower catastrophe losses and an improved expense ratio, which the company pre-warned earlier this month.
According to Argo, the biggest reserve increase relates to construction defect claims within the company’s U.S. business, in addition to reserve increases in the Run-off division.
The increase for construction defect mainly relates to the 2017 and prior underwriting years in lines that have either been significantly remediated or discontinued.
On a better note, the company reported $733.8 million in Gross Written Premiums (GWP), compared to $717.6 million for the prior year period.
The company’s net written premiums increased to $479 million compared to $439.6 million, with its earned premiums also increasing to $486.2 million from $466.6 million for the prior year period.
Chief Executive Officer Kevin Rehnberg commented: “Our strategic priorities of pursuing profitable growth, reducing volatility, and disciplined expense management are evident in our 2021 current accident year underwriting results.
“We remain encouraged by the continued growth and underlying strength of our ongoing business.”
The company’s net investment income reportedly increased to $44 million compared to $33.7 million for the fourth quarter of 2020.
