Argo enjoys strong growth in 2018 despite challenging market

Bermuda specialty re/insurer Argo Group enjoyed strong growth and better profits in 2018 by “optimising its portfolio” and growing in lines with most “profit potential” according to its CEO.

Its gross written premiums (GWP) were up 9.6 percent to $3 billion in 2018 compared with $2.7 billion in 2017. For the fourth quarter alone, its GWP grew by 15.8 percent to $702 million, compared with $606.3 million for Q4 in the previous year.

Its net income for the full year was $63.6 million, compared with net income of $50.3 million in 2017. However, in the fourth quarter the re/insurer saw a net loss of $43.6 million, compared to net income of $28.9 million in the same period in 2017.

The company said the Q4 net income was adversely impacted by an after-tax loss of $66.4 million related to the change in fair value of equity securities.

For the fourth quarter, the re/insurer posted a combined ratio of 99.5 percent (compared with 106.7 percent for the previous year), while its full-year combined ratio improved to 97.9 percent compared with 107.2 percent for 2017.

The impact of catastrophe losses decreased to $61.9 million, inclusive of net reinstatement premium adjustments, for the full year, compared with $145.1 million in 2017. For Q4 2018, catastrophe losses were $31.7 million, inclusive of net reinstatement premium adjustments, compared to $34.3 million in the prior year.

Argo's Q4 net investment income decreased 16 percent to $29.4 million, while its full-year 2018 net investment income declined to $133.1 million.

The US operations grew 12.1 percent to $1.7 billion in 2018. In its international operations, gross written premiums in the 2018 were up by 6.4 percent to $1.3 billion.

Growth in both the quarter and full year was achieved in all major lines of business, most notably professional lines, and specialty lines which grew 16.6 percent and 16.4 percent for the 2018 fourth quarter and the year, respectively.

Argo's president and CEO Mark Watson III said: "Our results in 2018 demonstrate the continued execution of our strategy to optimize the efficiency of the platform, grow in lines with the most profit potential and scale the business globally.

“Our business has been performing well against a difficult market environment. We posted 9.6% growth in annual gross written premiums including a 12.1 % rise in the U.S., improvements in current year margins, and a 260 basis point improvement in the annual expense ratio. While late year volatility in the investment markets masked the full impact of our solid results, we believe we are well positioned to continue to deliver strong shareholder value.”

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