Investment gains drive Q1 profits at Argo Group amid challenges

Argo Group posted a profit of $36.7 million in the first quarter of 2017, a 25 percent increase on the $27.7 million it made over the same period of 2016.

The company’s gross written premiums for the period were $598.6 million, a 15.2 percent increase on the $519.8 million it wrote over the first three months of 2016.

For its international operations segment gross written premiums grew by 13.5 percent to $263.6 million from $232.2 million. Excluding Ariel Re, which it acquired in February 2017, overall gross written premiums were therefore up 9.3 percent in the first quarter comparison.

Estimated pre-tax catastrophe losses for the first quarter of 2017 were $1.8 million, compared to $3.3 million for the first quarter of 2016.

Argo admitted that the quarter was impacted by approximately $10 million from the combination of the Ogden rate change, and claims from Hurricane Matthew. As a result net unfavorable prior-year reserve development in the quarter was $6.8 million, compared to net favorable prior-year reserve development of $3.2 million for the first quarter of 2016.

However, net investment income was $30.5 million, up on the $21.2 million it reported for the 2016 first quarter.

“First quarter 2017 net income per share grew 33.7 percent to $1.19 per share benefiting from strong results in our investment portfolio, our US Operations, and within our International Segment, the inclusion of Ariel Re,” said Argo Group CEO Mark Watson III.

“Despite challenges in the Lloyd’s market and pre-announced charges related to claims for Hurricane Matthew and the Ogden rate change, our book value per share grew 8.4 percent from March 31, 2016.”

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