Argo Group has reported an improvement in its catastrophe losses, as the figure is significantly lower at $2.5 million in Q2 2022 compared to the $11.1 million reported in the same period last year.
According to the group, this quarter’s cat-loss result reflects their strategy to reduce catastrophe exposure despite continued industry catastrophe losses this quarter.
Overall, Argo Group reported a net loss of $18.9 million in the second quarter of 2022, a significant difference compared to the $67.1 million in income reported in the same period last year
According to the company, this figure included pre-tax net realised investment and other losses of $40.4 million, of which $21.3 million was attributable to a loss on the sale of the company’s Malta operations, ArgoGlobal Holdings.
In comparison, net income in the prior year second quarter included $24.7 million of pre-tax net realised investment and other gains, the group noted.
Net written premiums went down 4.9%, to $469.1 million in Q2 2022 compared to $493.3 in last year’s second quarter.
Argo Group said that even though its net earned premiums decreased 3.4% from the prior year second quarter – due to exited businesses – net earned premiums from ongoing business grew approximately 12.0%, primarily attributable to business lines where it retains more of the risk on a net basis.
The group also reported an underwriting income 19.2% lower compared to the same period last year, from $21.4 million in 2021 to $17.3 million. As well as net investment income 44.4% lower compared to last year’s Q2, from $52.7 million in Q2 2021 to $17.3 million in Q2 2022.
Argo group said: “While investment income from the fixed income portfolio increased $2.4 million driven by higher reinvestment rates, the reduction in investment income was attributable to $25.8 million in lower alternative investment income in the second quarter 2022, compared to strong alternative investment income results in the prior year second quarter.”
This all resulted in a combined ratio of 96.2% compared to the 95.4% reported in the second quarter of 2021. This result was driven by a higher loss ratio – 60.8% in Q2 2022 compared to 57.7% in 2021 -, partially offset by an improved expense ratio, according to Argo Group.
Thomas A. Bradley, Argo Executive Chairman and Chief Executive Officer, commented: “The company’s second quarter results reflect our focused approach to profitable growth as we successfully target the most attractive business lines.
“We are pleased with the success in executing on our strategic priorities, particularly, managing expenses and reducing volatility. Ongoing cost reduction efforts significantly lowered the expense ratio from the prior year second quarter and our commitment to reducing volatility in the underwriting results has driven improvement in year-over-year catastrophe losses for five consecutive quarters.”
“Through six months, operating earnings increased four percent from a year ago, primarily due to significantly higher underwriting income. We are also encouraged by increasing interest income from our fixed income portfolio. The meaningful increase in underwriting income more than offset the lower contribution from alternative investment income. Looking ahead, we believe the company continues to be well-positioned to deliver profitable growth.”
