Bermuda-based property and casualty insurer, Argo Group International Holdings, Ltd., has reported that its fourth quarter 2021 financial results will include up to $140 million of net adverse prior year reserve development, and also some non-operating charges.
Argo has pre-announced a number of negative impacts ahead of the release of its Q4 2021 results, scheduled for February 22nd, 2022.
This includes net adverse prior year reserve development of between $130 million and $140 million, driven by the recently concluded quarterly reserve review.
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.
Alongside the adverse prior year development, Argo has pre-warned that several non-operating charges are anticipated to be reflected in its Q4 performance.
Argo says that as part of an ongoing strategic review and recent operating results, it’s expecting an impairment of goodwill and intangible assets expense of between $40 million to $45 million related to the firm’s Syndicate 1200 business in Q4.
Furthermore, Argo anticipates non-operating expense charges of between $20 million to $25 million primarily related to the reduction in its real estate footprint in the UK, and the impairment of certain information technology assets.
