Global specialty re/insurer Argo Group International Holdings Ltd. has revealed an expected $32.5 million hit to its second-quarter results, largely driven by reserve increases for its casualty business, as well as some current accident year losses as well.
Argo warned that its second quarter of 2019 results will be impacted by a number of loss items in its London, Europe, and Bermuda operations.
The re/insurer said that prior accident year losses of roughkly $22.5 million or 5.2 points on its loss ratio are to be expected.
This prior year loss creep impact is largely due to reserve increases affecting its Bermuda casualty business unit, as well as to a lesser extent Argo International’s European and London operations, offset by slight reserve decreases within its U.S. Operations.
Current accident year losses of roughly $10 million, or 2.3 points on the loss ratio, are also expected, with these driven by a number of large losses across property and energy lines of its International unit.
Argo Group CEO Mark E. Watson III. explained, “The losses we reported today reflect specialty insurance businesses that are subject to occasional volatility related to a number of large losses that we don’t believe are an indication of a longer term trend.
“Our Bermuda casualty business has a strong track record of performance and has been very profitable over the long-term. The results in Europe and London are primarily related to businesses that we have previously exited or where we have taken aggressive remedial underwriting actions.”
It’s not immediately clear whether the casualty losses are something specific to Argo, or whether we should be looking out for similar prior year loss reserve strengthening by other re/insurers during this results season.