Argo Group sees GWP climb 19%

Argo Group International Holdings, Ltd. has released its 2017 mid-year report, and chief executive Mark E. Watson III told shareholders the underwriter is “steady” on its strategic course.

Here are the numbers for the first six months of the year, compared to the same period in 2016:

Overall

• Gross written premiums - $1.286 billion, up 19%
• Combined ratio - 98%, from 95%
• Net income - $82.7 million, from $58.6 million
• Adjusted operating income - $62.6 million, from $66.9 million
• Investment income - $74.1 million, up more than 30%

US operations

• Gross written premiums - $700 million, up 15%
• Net written premiums - $478.5 million, from $412.9 million
• Earned premiums - $450.3 million, up 9%
• Underwriting income - $50.1 million, from $51.4 million
• Combined ratio - 89%, from 88%

International operations

• Gross written premiums - $585.7 million, up 24%
• Net written premiums - $311.9 million, from $278.3 million
• Earned premiums - $328.1 million, from $276.2 million
• Underwriting income - $4.6 million, from $18.1 million
• Combined ratio - 99%, from 93%

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In his letter to shareholders, Watson said: “During the first six months of 2017, we achieved profitable growth in our US operations, Bermuda, and Latin America, managed a complex and difficult market at Lloyd’s, and generated strong investment returns.”

According to Watson, there is still more supply than demand in the London subscription market. “This is one of the most complex and competitive markets we have seen for some time, with sustained pressure on pricing tempting some syndicates to make unwise decisions. Not us,” he noted.

Watson explained that while conditions are tough, Argo Group’s strategy is solid. He continued: “We exercise controlled management of expenses and refuse to chase top-line growth, preferring to wait and find risks we can underwrite more locally.”

The CEO added that the company’s acquisition of Ariel Re in February was “greeted enthusiastically” by brokers. The Ariel Re companies underwrite a global portfolio of business through offices in London, the US, and Bermuda.

Argo Group is an international underwriter of specialty insurance and reinsurance products in the property and casualty market. Its primary segments are excess & surplus lines, commercial specialty, international specialty, and Syndicate 1200.