Argo Group Reports Third Quarter 2022 Results
Argo Group International Holdings announced its Q3 2022 financial results, showing a significant net loss of $51.4 million per diluted share, compared to a profit of $19.8 million in Q3 2021. Despite a 2% increase in U.S. earned premiums and a 14% growth in ongoing business, overall gross written premiums fell by 14.2% to $750.9 million. The company reported a reduced expense ratio of 35.4% and lower catastrophe losses of $23.4 million, reflecting its strategy to mitigate risk. Additionally, the sale of Argo Underwriting Agency and Syndicate 1200 is poised to further streamline operations.
- U.S. earned premiums increased 2% year-over-year.
- Ongoing business premiums grew approximately 14%, indicating strong performance in certain lines.
- Expense ratio improved to 35.4%, reflecting effective cost management.
- Total catastrophe losses decreased to $23.4 million, down 14% from Q3 2021.
- Net loss of $51.4 million, a significant drop from a net income of $19.8 million in Q3 2021.
- Gross written premiums down 14.2% to $750.9 million, indicating decreased overall business activity.
- Net investment income dropped 26.2% compared to Q3 2021, impacting financial stability.
- Annualized return on average common shareholders' equity fell to (16.5%), down from 4.5%.
Execution on Strategic Priorities Continues to Benefit Results
-
Simplified Business Model: As announced in September the company entered into a definitive agreement for the sale of
Argo Underwriting Agency Limited and its Lloyd's Syndicate 1200. -
Continued Growth in Ongoing Business:
U.S. Operations earned premiums increased approximately2% from the prior year third quarter, while earned premiums fromU.S. ongoing business1 grew approximately14% , primarily attributable to business lines where the company retains more of the risk on a net basis. -
Reduced Catastrophe Losses: Total catastrophe losses of
were$23.4 million 14% lower than the third quarter 2021 despite elevated industry catastrophe losses; reflects strategy to reduce catastrophe exposure. -
Delivered Expense Reductions: Expense ratio of
35.4% improved 0.9 percentage points from the prior year third quarter, driven by ongoing cost reduction efforts.
($ in millions, except per share data) |
Three Months Ended |
Nine Months Ended |
||||||||||||||
|
|
|||||||||||||||
|
2022 |
|
|
2021 |
|
Q/Q
|
|
2022 |
|
|
2021 |
|
Y/Y Change |
|||
Net income (loss) attributable to common shareholders |
$ |
(51.4 |
|
$ |
19.8 |
|
NM |
|
$ |
(73.9 |
) |
$ |
114.1 |
|
NM |
|
Per diluted common share |
$ |
(1.47 |
) |
$ |
0.56 |
|
NM |
|
$ |
(2.11 |
) |
$ |
3.26 |
|
NM |
|
Operating earnings |
$ |
15.5 |
|
$ |
31.7 |
|
-51.1 |
% |
$ |
89.8 |
|
$ |
103.4 |
|
-13.2 |
% |
Per diluted common share |
$ |
0.44 |
|
$ |
0.91 |
|
-51.6 |
% |
$ |
2.57 |
|
$ |
2.95 |
|
-12.9 |
% |
Annualized return on average common shareholders' equity |
|
(16.5 |
)% |
|
4.5 |
% |
-21.0 pts |
|
(7.1 |
)% |
|
8.8 |
% |
-15.9 pts |
||
Annualized operating return on average common shareholders' equity |
|
5.0 |
% |
|
7.3 |
% |
-2.3 pts |
|
8.6 |
% |
|
8.0 |
% |
0.6 pts |
"Over the past two years, we have transformed Argo, better positioning the company to advance our business strategies," said Argo Executive Chairman and Chief Executive Officer,
1 |
|
|
|
"Argo's third quarter financial performance benefited from growth in earned premiums in attractive business lines, reduced underwriting volatility, and lower expenses. In particular, our
Consolidated Highlights |
||||||||||||||||
($ in millions) |
Three Months Ended
|
Q/Q Change |
Nine Months Ended
|
Y/Y Change |
||||||||||||
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|||||
Gross written premiums |
$ |
750.9 |
|
$ |
875.6 |
|
-14.2 |
% |
$ |
2,203.6 |
|
$ |
2,447.4 |
|
-10.0 |
% |
Net written premiums |
|
505.2 |
|
|
583.7 |
|
-13.4 |
% |
|
1,414.8 |
|
|
1,498.3 |
|
-5.6 |
% |
Earned premiums |
$ |
455.0 |
|
$ |
487.5 |
|
-6.7 |
% |
$ |
1,389.9 |
|
$ |
1,423.9 |
|
-2.4 |
% |
Loss and loss adjustment expenses |
|
298.8 |
|
|
311.7 |
|
-4.1 |
% |
|
858.4 |
|
|
890.9 |
|
-3.6 |
% |
Acquisition expenses |
|
77.2 |
|
|
83.4 |
|
-7.4 |
% |
|
237.6 |
|
|
244.3 |
|
-2.7 |
% |
General and administrative expenses |
|
83.8 |
|
|
93.7 |
|
-10.6 |
% |
|
257.3 |
|
|
286.5 |
|
-10.2 |
% |
Underwriting income |
$ |
(4.8 |
) |
$ |
(1.3 |
) |
NM |
|
$ |
36.6 |
|
$ |
2.2 |
|
NM |
|
|
|
|||||||||||||||
Net investment income |
$ |
34.0 |
|
$ |
46.1 |
|
-26.2 |
% |
$ |
100.9 |
|
$ |
143.2 |
|
-29.5 |
% |
Loss ratio |
|
65.7 |
% |
|
64.0 |
% |
1.7 pts |
|
61.8 |
% |
|
62.5 |
% |
-0.7 pts |
||
Acquisition expense ratio |
|
17.0 |
% |
|
17.1 |
% |
-0.1 pts |
|
17.1 |
% |
|
17.2 |
% |
-0.1 pts |
||
General and administrative expense ratio |
|
18.4 |
% |
|
19.2 |
% |
-0.8 pts |
|
18.5 |
% |
|
20.1 |
% |
-1.6 pts |
||
Expense ratio |
|
35.4 |
% |
|
36.3 |
% |
-0.9 pts |
|
35.6 |
% |
|
37.3 |
% |
-1.7 pts |
||
Combined ratio |
|
101.1 |
% |
|
100.3 |
% |
0.8 pts |
|
97.4 |
% |
|
99.8 |
% |
-2.4 pts |
||
CAY ex-CAT loss ratio |
|
58.0 |
% |
|
57.1 |
% |
0.9 pts |
|
57.0 |
% |
|
56.1 |
% |
0.9 pts |
Third Quarter 2022 Results - Consolidated
(All comparisons vs. third quarter 2021, unless noted otherwise)
Premiums
Gross written premiums of
- Gross written premiums within the company’s ongoing business2 were in line with the prior year third quarter.
Earned premiums of
Adjusting for reinstatement premiums, earned premiums decreased
2 |
Ongoing business excludes the following businesses the company is exiting, plan to exit, or have sold, including sales of Ariel Re, which was sold in |
-
Earned premiums increased approximately
13.1% within the company’s ongoing business reflecting business mix shift towards lines of business where the company retains more risk.
Underwriting
The combined ratio of
The loss ratio of
-
The current accident year, excluding catastrophes ("CAY ex-CAT") loss ratio of
58.0% increased 0.9 percentage points. Adjusting for reinstatement premiums, the CAY ex-CAT loss ratio for the third quarter 2022 was56.4% , which is in line with the prior year third quarter. -
Total catastrophe losses were
or 5.1 percentage points on the loss ratio. In comparison, catastrophe losses in the prior year third quarter were$23.4 million or 5.6 percentage points on the loss ratio.$27.3 million -
Net adverse prior year reserve development was
, or 2.6 percentage points on the loss ratio. In comparison, net adverse prior year reserve development in the third quarter 2021 was$11.9 million , or 1.3 percentage points on the loss ratio.$6.2 million
The CAY ex-CAT combined ratio of
Expenses
The expense ratio of
-
Adjusting for reinstatement premiums, the expense ratio for the third quarter 2022 was
34.4% , an improvement of 1.5 percentage points year-over-year.
-
The lower expense ratio is primarily driven by a
decrease in general and administrative expenses and reflects continued execution of the company's cost reduction initiatives.$9.9 million
Investment Income
Net investment income of
Earnings
Net loss attributable to common shareholders was
-
The net loss attributable to common shareholders in the third quarter 2022 included pre-tax net realized investment and other losses of
, compared to$44.7 million of pre-tax net realized investment and other losses in the prior year third quarter. The increase was primarily driven by$5.3 million of pre-tax realized losses related to the impairment of assets that will be transferred upon the close of the company's previously announced loss portfolio transfer (LPT) transaction with a wholly owned subsidiary of Enstar Group Limited.$34.2 million
-
The net loss attributable to common shareholders in the third quarter 2022 also included a
impairment of goodwill and intangible assets related to the announced sale of$28.5 million Argo Underwriting Agency Limited and its Lloyd's Syndicate 1200.
-
In addition, the net loss attributable to common shareholders in the third quarter 2022 included
of non-operating expenses, which were mainly attributable to non-operating advisory fees. In comparison, the prior year third quarter reported$11.0 million in non-operating expenses, which were primarily driven by costs associated with the reduction in the company's real estate footprint.$8.2 million
Operating income was
Shareholders' Equity
Book value per common share was
-
AOCI was
( as of$332.9) million September 30, 2022 , compared to( on$256.0) million June 30, 2022 . The change in AOCI was driven by the movement in unrealized investment losses in the third quarter of , or$75.9 million per common share.$2.17
Book value per common share, excluding AOCI, was
|
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($ in millions) |
Three Months Ended
|
Q/Q Change |
Nine Months Ended
|
Y/Y Change |
||||||||||||
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|||||
Gross written premiums |
$ |
500.4 |
|
$ |
562.5 |
|
-11.0 |
% |
$ |
1,476.7 |
|
$ |
1,564.9 |
|
-5.6 |
% |
Net written premiums |
|
354.0 |
|
|
375.0 |
|
-5.6 |
% |
|
998.8 |
|
|
985.2 |
|
1.4 |
% |
Earned premiums |
$ |
329.3 |
|
$ |
323.5 |
|
1.8 |
% |
$ |
998.5 |
|
$ |
952.4 |
|
4.8 |
% |
Loss and loss adjustment expenses |
|
217.0 |
|
|
203.9 |
|
6.4 |
% |
|
625.7 |
|
|
583.1 |
|
7.3 |
% |
Acquisition expenses |
|
55.8 |
|
|
49.0 |
|
13.9 |
% |
|
164.7 |
|
|
149.6 |
|
10.1 |
% |
General and administrative expenses |
|
47.2 |
|
|
55.7 |
|
-15.3 |
% |
|
148.1 |
|
|
168.6 |
|
-12.2 |
% |
Underwriting income |
$ |
9.3 |
|
$ |
14.9 |
|
-37.6 |
% |
$ |
60.0 |
|
$ |
51.1 |
|
17.4 |
% |
|
|
|||||||||||||||
Loss ratio |
|
65.9 |
% |
|
63.0 |
% |
2.9 pts |
|
62.7 |
% |
|
61.2 |
% |
1.5 pts |
||
Acquisition expense ratio |
|
16.9 |
% |
|
15.2 |
% |
1.7 pts |
|
16.5 |
% |
|
15.7 |
% |
0.8 pts |
||
General and administrative expense ratio |
|
14.4 |
% |
|
17.2 |
% |
-2.8 pts |
|
14.8 |
% |
|
17.7 |
% |
-2.9 pts |
||
Expense ratio |
|
31.3 |
% |
|
32.4 |
% |
-1.1 pts |
|
31.3 |
% |
|
33.4 |
% |
-2.1 pts |
||
Combined ratio |
|
97.2 |
% |
|
95.4 |
% |
1.8 pts |
|
94.0 |
% |
|
94.6 |
% |
-0.6 pts |
||
CAY ex-CAT loss ratio |
|
59.7 |
% |
|
59.8 |
% |
-0.1 pts |
|
59.0 |
% |
|
57.8 |
% |
1.2 pts |
Third Quarter 2022 Results -
(All comparisons vs. third quarter 2021, unless noted otherwise)
Premiums
- Rates on average were up in the low-single digits for the third quarter 2022.
-
Gross written premiums within the
U.S. ongoing business were in line with the prior year third quarter.
Earned premiums of
-
Earned premiums increased approximately
13.6% within the company’sU.S. ongoing business, reflecting business mix shift towards lines of business where the company retains more risk.
Underwriting
The loss ratio of
-
The CAY ex-CAT loss ratio of
59.7% was broadly in line with the third quarter 2021.
-
Catastrophe losses were
, or 1.3 percentage points on the loss ratio, compared to$4.2 million or 3.1 percentage points on the loss ratio in the prior year third quarter. Catastrophe losses in the third quarter 2022 were due to Hurricane Ian.$10.0 million -
Net adverse prior year reserve development was
or 4.9 percentage points on the loss ratio. In comparison, net adverse development in the prior year third quarter was$16.2 million , or 0.1 percentage point on the loss ratio. The adverse development in the third quarter 2022 was primarily attributable to losses from businesses the company has exited.$0.2 million
Expenses
The expense ratio was
-
The 2.8 percentage point reduction in the general and administrative expense ratio was driven by a
decrease in general and administrative expenses combined with higher earned premiums in the third quarter 2022.$8.5 million
Strategic Actions
The company anticipates completing the LPT transaction with a wholly-owned subsidiary of Enstar upon receipt of final regulatory approval later this month. The LPT was announced on
-
The company also anticipates recognizing an after-tax charge of approximately
in connection with the transaction in the fourth quarter 2022.$100 million
International Operations Highlights |
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($ in millions) |
Three Months Ended
|
Q/Q
|
Nine Months Ended
|
Y/Y
|
||||||||||||
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|||||
Gross written premiums |
$ |
250.1 |
|
$ |
312.9 |
|
-20.1 |
% |
$ |
726.3 |
|
$ |
881.9 |
|
-17.6 |
% |
Net written premiums |
|
150.7 |
|
|
208.5 |
|
-27.7 |
% |
|
415.3 |
|
|
512.5 |
|
-19.0 |
% |
Earned premiums |
$ |
125.2 |
|
$ |
163.9 |
|
-23.6 |
% |
$ |
390.7 |
|
$ |
471.1 |
|
-17.1 |
% |
Loss and loss adjustment expenses |
|
81.7 |
|
|
103.8 |
|
-21.3 |
% |
|
229.8 |
|
|
301.2 |
|
-23.7 |
% |
Acquisition expenses |
|
21.2 |
|
|
34.2 |
|
-38.0 |
% |
|
71.9 |
|
|
94.5 |
|
-23.9 |
% |
General and administrative expenses |
|
25.8 |
|
|
30.5 |
|
-15.4 |
% |
|
83.4 |
|
|
94.3 |
|
-11.6 |
% |
Underwriting income (loss) |
$ |
(3.5 |
) |
$ |
(4.6 |
) |
NM |
|
$ |
5.6 |
|
$ |
(18.9 |
) |
NM |
|
|
|
|||||||||||||||
Loss ratio |
|
65.3 |
% |
|
63.3 |
% |
2.0 pts |
|
58.8 |
% |
|
63.9 |
% |
-5.1 pts |
||
Acquisition expense ratio |
|
16.9 |
% |
|
20.9 |
% |
-4.0 pts |
|
18.4 |
% |
|
20.1 |
% |
-1.7 pts |
||
General and administrative expense ratio |
|
20.6 |
% |
|
18.6 |
% |
2.0 pts |
|
21.4 |
% |
|
20.0 |
% |
1.4 pts |
||
Expense Ratio |
|
37.5 |
% |
|
39.5 |
% |
-2.0 pts |
|
39.8 |
% |
|
40.1 |
% |
-0.3 pts |
||
Combined ratio |
|
102.8 |
% |
|
102.8 |
% |
0.0 pts |
|
98.6 |
% |
|
104.0 |
% |
-5.4 pts |
||
CAY ex-CAT loss ratio |
|
53.5 |
% |
|
51.6 |
% |
1.9 pts |
|
52.1 |
% |
|
52.7 |
% |
-0.6 pts |
||
|
|
Third Quarter 2022 Results - International Operations
(All comparisons vs. third quarter 2021, unless noted otherwise)
Premiums
Gross written premiums of
- Rates on average were up in the high-single digits for the third quarter 2022.
Earned premiums of
Underwriting
The loss ratio of
-
The CAY ex-CAT loss ratio was
53.5% , an increase of 1.9 percentage points. Adjusting for reinstatement premiums, the CAY ex-CAT loss ratio for the third quarter 2022 was48.9% , an improvement 1.1 percentage points from the prior year third quarter. -
Catastrophe losses were
, or 15.3 percentage points on the loss ratio, compared to$19.2 million , or 10.5 percentage points on the loss ratio in the prior year third quarter. Catastrophe losses in the third quarter 2022 were due to Hurricane Ian.$17.3 million -
Net favorable prior year reserve development was
, which lowered the loss ratio by 3.5 percentage points. In comparison, the prior year third quarter had$4.4 million of net adverse development, which increased the loss ratio 1.2 percentage points.$2.0 million
Expenses
The expense ratio of
-
Adjusting for reinstatement premiums, the expense ratio was
34.4% in the third quarter 2022, an improvement of 3.9 percentage points from the prior year third quarter.
Strategic Actions
On
-
The sale is subject to closing conditions and regulatory approvals, including Lloyd’s of
London, UK Prudential Regulation Authority andUK Financial Conduct Authority .
CONFERENCE CALL
Argo management will conduct an investor conference call starting at
A webcast replay will be available shortly after the live conference call and can be accessed at https://events.q4inc.com/attendee/631519581. A telephone replay of the conference call will be available through
ABOUT
FORWARD-LOOKING STATEMENTS
This press release and related oral statements may include forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can be identified by the use of words such as "expect," "intend," "plan," "believe," “do not believe,” “aim,” "project," "anticipate," “seek,” "will," “likely,” “assume,” “estimate,” "may," “continue,” “guidance,” “growth,” “objective,” “remain optimistic,” “improve,” “progress,” "path toward," "looking forward," “outlook,” “trends,” “future,” “could,” “would,” “should,” “target,” “on track” and similar expressions of a future or forward-looking nature.
Such statements are subject to certain risks and uncertainties that could cause actual events or results to not occur or differ materially, including, but not limited to, recent changes in interest rates and inflation, the outcome of our exploration of strategic alternatives and our ability to realize the anticipated benefits of any actions taken in connection therewith, the adequacy of our projected loss reserves, employee retention and changes in key personnel, the ability of our insurance subsidiaries to meet risk-based capital and solvency requirements, the outcome of legal and regulatory proceedings, investigations, inquiries, claims and litigation, and other risks and uncertainties discussed in our filings with the
NON-GAAP FINANCIAL MEASURES
In presenting the company's results, management has included and discussed in this press release certain non- generally accepted accounting principles ("non-GAAP") financial measures within the meaning of Regulation G as promulgated by the
“CAY ex-CAT combined ratio” and the “CAY ex-CAT loss ratio" are internal measures used by the management of the company to evaluate the performance of its underwriting activity and represents the net amount of underwriting income excluding catastrophe related charges and the impact of changes to prior year loss reserves. Although this measure does not replace the GAAP combined ratio, it provides management with a view of the quality of earnings generated by underwriting activity for the current accident year.
“Operating income (loss)" is an internal performance measure used in the management of the company's operations and represents operating results after-tax (at an assumed effective tax rate of
"Annualized operating return on average common shareholders' equity" is calculated using operating income (loss) (as defined above and annualized in the manner described for net income (loss) attributable to common shareholders ("ROACE")) and average common shareholders' equity. In calculating ROACE, the net income attributable to common shareholders for the period is multiplied by the number of periods in a calendar year to arrive at annualized net income available to common shareholders. In addition to presenting ROACE determined in accordance with
"Operating income (loss) per common share (diluted)" is calculated using operating income (as defined above) and the weighted average common shares (diluted) for the current period. In addition to presenting net income (loss) per common share (diluted) in accordance with
“Underwriting income (loss)” is an internal performance measure used in the management of the company’s operations and represents net amount earned from underwriting activities (net premium earned less underwriting expenses and claims incurred). Underwriting income is a financial measure that is commonly recognized as a standard of performance by investors, analysts, rating agencies and other users of its financial information. Although this measure of profit (loss) does not replace net income (loss) computed in accordance with
"Book value per common share excluding AOCI" is total common shareholders’ equity excluding AOCI, net of tax, included in shareholders’ equity, divided by the number of common shares outstanding. In the opinion of the company’s management, book value per common share excluding AOCI is useful in an analysis of a property casualty company’s book value per share as it removes the effect of changing prices on invested assets (i.e., net unrealized investment gains (losses), net of tax), which do not have an equivalent impact on unpaid claims and claim adjustment expense reserves.
"Tangible book value per common share" is book value per share excluding the after-tax value of goodwill and other intangible assets divided by the number of common shares outstanding. In the opinion of the company’s management, tangible book value per common share is useful in an analysis of a property casualty company’s book value on a nominal basis as it removes certain effects of purchase accounting (i.e., goodwill and other intangible assets).
"Tangible book value per common share excluding AOCI" is book value per share excluding the after-tax value of goodwill and other intangible assets and AOCI, net of tax. In the opinion of the company's management, tangible book value per common share excluding AOCI is useful in an analysis of a property casualty company's book value per share as it removes certain aspects of purchase accounting (i.e., goodwill and other intangible assets) and the effect of changing prices on invested assets (i.e., net unrealized investment gains (losses), net of tax).
The “percentage change in book value per common share” includes (by adding) the effects of cash dividends paid per common share to the calculated book value per common share for the current period. This adjusted amount is then compared to the prior period’s book value per common share to determine the period over period change. The company believes that including the dividends paid per common share allows users of its financial statements to more easily identify the impact of the changes in book value per common share from the perspective of investors.
Reconciliations of non-GAAP financial measures to their most directly comparable
(financial tables follow)
|
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CONSOLIDATED BALANCE SHEETS |
||||||
(in millions, except per share amounts) |
||||||
|
|
|
||||
|
2022 |
|
|
2021 |
|
|
(unaudited) |
|
|||||
Assets |
|
|
||||
Total investments |
$ |
4,905.1 |
|
$ |
5,322.6 |
|
Cash |
|
99.4 |
|
|
146.1 |
|
Accrued investment income |
|
23.1 |
|
|
20.9 |
|
Receivables |
|
3,672.3 |
|
|
3,615.0 |
|
|
|
136.1 |
|
|
164.6 |
|
Deferred acquisition costs, net |
|
183.4 |
|
|
168.0 |
|
Ceded unearned premiums |
|
450.8 |
|
|
506.7 |
|
Other assets |
|
388.5 |
|
|
373.9 |
|
Total assets |
$ |
9,858.7 |
|
$ |
10,317.8 |
|
|
|
|
||||
Liabilities and Shareholders' Equity |
|
|
||||
Reserves for losses and loss adjustment expenses |
$ |
5,731.4 |
|
$ |
5,595.0 |
|
Unearned premiums |
|
1,404.9 |
|
|
1,466.8 |
|
Ceded reinsurance payable, net |
|
503.1 |
|
|
724.4 |
|
Senior unsecured fixed rate notes |
|
140.5 |
|
|
140.3 |
|
Other indebtedness |
|
52.5 |
|
|
57.0 |
|
Junior subordinated debentures |
|
258.5 |
|
|
258.2 |
|
Other liabilities |
|
442.9 |
|
|
340.9 |
|
Total liabilities |
|
8,533.8 |
|
|
8,582.6 |
|
|
|
|
||||
Preferred shares |
|
144.0 |
|
|
144.0 |
|
Common shares |
|
46.3 |
|
|
46.2 |
|
Additional paid-in capital |
|
1,392.6 |
|
|
1,386.4 |
|
|
|
(455.1 |
) |
|
(455.1 |
) |
Retained earnings |
|
530.0 |
|
|
636.4 |
|
Accumulated other comprehensive income, net of taxes |
|
(332.9 |
) |
|
(22.7 |
) |
Total shareholders' equity |
|
1,324.9 |
|
|
1,735.2 |
|
Total liabilities and shareholders' equity |
$ |
9,858.7 |
|
$ |
10,317.8 |
|
|
|
|
||||
Book value per common share |
$ |
33.72 |
|
$ |
45.63 |
|
Tangible book value per common share |
$ |
29.83 |
|
$ |
40.91 |
|
Book value per common share excluding AOCI, net of tax |
$ |
43.23 |
|
$ |
46.28 |
|
Tangible book value per common share excluding AOCI, net of tax |
$ |
39.34 |
|
$ |
41.56 |
|
|
||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS |
||||||||||||
(in millions, except per share amounts) |
||||||||||||
(unaudited) |
||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||
|
|
|||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Gross written premiums |
$ |
750.9 |
|
$ |
875.6 |
|
$ |
2,203.6 |
|
$ |
2,447.4 |
|
Net written premiums |
|
505.2 |
|
|
583.7 |
|
|
1,414.8 |
|
|
1,498.3 |
|
|
|
|
|
|
||||||||
Earned premiums |
|
455.0 |
|
|
487.5 |
|
|
1,389.9 |
|
|
1,423.9 |
|
Net investment income |
|
34.0 |
|
|
46.1 |
|
|
100.9 |
|
|
143.2 |
|
Net investment and other gains (losses): |
|
|
|
|
||||||||
Net realized investment and other gains (losses) |
|
(42.3 |
) |
|
0.6 |
|
|
(119.2 |
) |
|
3.3 |
|
Change in fair value recognized Change in allowance for credit losses on fixed |
|
(1.1 |
) |
|
(5.1 |
) |
|
2.5 |
|
|
30.7 |
|
maturity securities |
|
(1.3 |
) |
|
(0.8 |
) |
|
(2.9 |
) |
|
(1.5 |
) |
Net realized investment and other gains (losses) |
|
(44.7 |
) |
|
(5.3 |
) |
|
(119.6 |
) |
|
32.5 |
|
Total revenue |
|
444.3 |
|
|
528.3 |
|
|
1,371.2 |
|
|
1,599.6 |
|
|
|
|
|
|
||||||||
Losses and loss adjustment expenses |
|
298.8 |
|
|
311.7 |
|
|
858.4 |
|
|
890.9 |
|
Acquisition expenses |
|
77.2 |
|
|
83.4 |
|
|
237.6 |
|
|
244.3 |
|
General and administrative expenses |
|
83.8 |
|
|
93.7 |
|
|
257.3 |
|
|
286.5 |
|
Non-operating expenses |
|
11.0 |
|
|
8.2 |
|
|
33.9 |
|
|
20.9 |
|
Interest expense |
|
6.8 |
|
|
5.5 |
|
|
18.7 |
|
|
16.3 |
|
Fee and other (income) expense, net |
|
0.1 |
|
|
(1.1 |
) |
|
(1.8 |
) |
|
(1.8 |
) |
Foreign currency exchange (gains) losses |
|
(9.1 |
) |
|
(1.3 |
) |
|
(16.5 |
) |
|
4.4 |
|
Impairment of goodwill |
|
28.5 |
|
|
— |
|
|
28.5 |
|
|
— |
|
Total expenses |
|
497.1 |
|
|
500.1 |
|
|
1,416.1 |
|
|
1,461.5 |
|
|
|
|
|
|
||||||||
Income before income taxes |
|
(52.8 |
) |
|
28.2 |
|
|
(44.9 |
) |
|
138.1 |
|
Income tax provision (benefit) |
|
(4.0 |
) |
|
5.8 |
|
|
21.1 |
|
|
16.1 |
|
Net income (loss) |
$ |
(48.8 |
) |
$ |
22.4 |
|
$ |
(66.0 |
) |
$ |
122.0 |
|
Dividends on preferred shares Net income (loss) attributable to common |
|
2.6 |
|
|
2.6 |
|
|
7.9 |
|
|
7.9 |
|
shareholders |
$ |
(51.4 |
) |
$ |
19.8 |
|
$ |
(73.9 |
) |
$ |
114.1 |
|
Net income (loss) per common share (basic) |
$ |
(1.47 |
) |
$ |
0.57 |
|
$ |
(2.11 |
) |
$ |
3.28 |
|
Net income (loss) per common share (diluted) |
$ |
(1.47 |
) |
$ |
0.56 |
|
$ |
(2.11 |
) |
$ |
3.26 |
|
|
|
|
|
|
||||||||
Weighted average common shares: |
|
|
|
|
||||||||
Basic |
|
35.0 |
|
|
34.9 |
|
|
35.0 |
|
|
34.8 |
|
Diluted |
|
35.0 |
|
|
35.0 |
|
|
35.0 |
|
|
35.1 |
|
|
|
|
|
|
||||||||
Loss ratio |
|
65.7 |
% |
|
64.0 |
% |
|
61.8 |
% |
|
62.5 |
% |
Acquisition expense ratio |
|
17.0 |
% |
|
17.1 |
% |
|
17.1 |
% |
|
17.2 |
% |
General and administrative expense ratio |
|
18.4 |
% |
|
19.2 |
% |
|
18.5 |
% |
|
20.1 |
% |
Expense ratio |
|
35.4 |
% |
|
36.3 |
% |
|
35.6 |
% |
|
37.3 |
% |
GAAP combined ratio |
|
101.1 |
% |
|
100.3 |
% |
|
97.4 |
% |
|
99.8 |
% |
CAY ex-CAT combined ratio |
93.4 |
% |
3.4 |
% |
92.6 |
% |
93.4 |
% | ||||
|
||||||||||||
SEGMENT DATA |
||||||||||||
(in millions) |
||||||||||||
(unaudited) |
||||||||||||
Three Months Ended |
Nine months ended |
|||||||||||
|
|
|||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
||||||||
Gross written premiums |
$ |
500.4 |
|
$ |
562.5 |
|
$ |
1,476.7 |
|
$ |
1,564.9 |
|
Net written premiums |
|
354.0 |
|
|
375.0 |
|
|
998.8 |
|
|
985.2 |
|
Earned premiums |
|
329.3 |
|
|
323.5 |
|
|
998.5 |
|
|
952.4 |
|
|
|
|
|
|
||||||||
Underwriting income |
|
9.3 |
|
|
14.9 |
|
|
60.0 |
|
|
51.1 |
|
Net investment income |
|
23.1 |
|
|
29.2 |
|
|
68.7 |
|
|
91.7 |
|
Interest expense |
|
(4.7 |
) |
|
(3.5 |
) |
|
(12.8 |
) |
|
(10.6 |
) |
Fee (expense), net |
|
0.1 |
|
|
(0.1 |
) |
|
— |
|
|
(0.6 |
) |
Operating income before taxes |
$ |
27.8 |
|
$ |
40.5 |
|
$ |
115.9 |
|
$ |
131.6 |
|
|
|
|
|
|
||||||||
Loss ratio |
|
65.9 |
% |
|
63.0 |
% |
|
62.7 |
% |
|
61.2 |
% |
Acquisition expense ratio |
|
16.9 |
% |
|
15.2 |
% |
|
16.5 |
% |
|
15.7 |
% |
General and administrative expense ratio |
|
14.4 |
% |
|
17.2 |
% |
|
14.8 |
% |
|
17.7 |
% |
Expense Ratio |
|
31.3 |
% |
|
32.4 |
% |
|
31.3 |
% |
|
33.4 |
% |
GAAP combined ratio |
|
97.2 |
% |
|
95.4 |
% |
|
94.0 |
% |
|
94.6 |
% |
CAY ex-CAT combined ratio |
|
91.0 |
% |
|
92.2 |
% |
|
90.3 |
% |
|
91.2 |
% |
International Operations |
||||||||||||
Gross written premiums |
$ |
250.1 |
|
$ |
312.9 |
|
$ |
726.3 |
|
$ |
881.9 |
|
Net written premiums |
|
150.7 |
|
|
208.5 |
|
|
415.3 |
|
|
512.5 |
|
Earned premiums |
|
125.2 |
|
|
163.9 |
|
|
390.7 |
|
|
471.1 |
|
|
|
|
|
|
||||||||
Underwriting income (loss) |
|
(3.5 |
) |
|
(4.6 |
) |
|
5.6 |
|
|
(18.9 |
) |
Net investment income |
|
10.3 |
|
|
12.3 |
|
|
30.4 |
|
|
38.2 |
|
Interest expense |
|
(2.1 |
) |
|
(1.3 |
) |
|
(5.7 |
) |
|
(4.2 |
) |
Fee income, net |
|
(0.2 |
) |
|
1.0 |
|
|
1.8 |
|
|
1.5 |
|
Operating income before taxes |
$ |
4.5 |
|
$ |
7.4 |
|
$ |
32.1 |
|
$ |
16.6 |
|
|
|
|
|
|
||||||||
Loss ratio |
|
65.3 |
% |
|
63.3 |
% |
|
58.8 |
% |
|
63.9 |
% |
Acquisition expense ratio |
|
16.9 |
% |
|
20.9 |
% |
|
18.4 |
% |
|
20.1 |
% |
General and administrative expense ratio |
|
20.6 |
% |
|
18.6 |
% |
|
21.4 |
% |
|
20.0 |
% |
Expense Ratio |
|
37.5 |
% |
|
39.5 |
% |
|
39.8 |
% |
|
40.1 |
% |
GAAP combined ratio |
|
102.8 |
% |
|
102.8 |
% |
|
98.6 |
% |
|
104.0 |
% |
CAY ex-CAT combined ratio |
|
91.0 |
% |
|
91.1 |
% |
|
91.9 |
% |
|
92.8 |
% |
|
||||
RECONCILIATION OF LOSS RATIOS |
||||
(unaudited) |
||||
Three Months Ended |
Nine Months End |
|||
|
|
|||
|
2022 |
2021 |
2022 |
2021 |
|
|
|
|
|
Loss ratio |
65.9 % |
63.0 % |
62.7 % |
61.2 % |
Prior accident year loss reserve development |
(4.9)% |
(0.1)% |
(2.8)% |
0.1 % |
Catastrophe losses |
(1.3)% |
(3.1)% |
(0.9)% |
(3.5)% |
CAY ex-CAT loss ratio |
59.7 % |
59.8 % |
59.0 % |
57.8 % |
International Operations |
||||
Loss ratio |
65.3 % |
63.3 % |
58.8 % |
63.9 % |
Prior accident year loss reserve development |
3.5 % |
(1.2)% |
(0.2)% |
— % |
Catastrophe losses |
(15.3)% |
(10.5)% |
(6.5)% |
(11.2)% |
CAY ex-CAT loss ratio |
53.5 % |
51.6 % |
52.1 % |
52.7 % |
Consolidated |
||||
Loss ratio |
65.7 % |
64.0 % |
61.8 % |
62.5 % |
Prior accident year loss reserve development |
(2.6)% |
(1.3)% |
(2.3)% |
(0.4)% |
Catastrophe losses |
(5.1)% |
(5.6)% |
(2.5)% |
(6.0)% |
CAY ex-CAT loss ratio |
58.0 % |
57.1 % |
57.0 % |
56.1 % |
|
||||||||||
NET PRIOR-YEAR RESERVE DEVELOPMENT & CATASTROPHE LOSSES BY SEGMENT |
||||||||||
(in millions) |
||||||||||
(unaudited) |
||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||
|
|
|||||||||
|
|
2022 |
|
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
||||||
(Favorable)/Unfavorable |
|
|
|
|
||||||
|
$ |
16.2 |
|
$ |
0.2 |
$ |
27.9 |
$ |
(0.7 |
) |
International Operations |
|
(4.4 |
) |
|
2.0 |
|
0.8 |
|
0.1 |
|
Run-off Lines |
|
0.1 |
|
|
4.0 |
|
2.9 |
|
6.6 |
|
Total net prior-year reserve development |
$ |
11.9 |
|
$ |
6.2 |
$ |
31.6 |
$ |
6.0 |
|
Three Months Ended |
Nine Months Ended |
|||||||
|
|
|||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Catastrophe & COVID-19 Losses |
|
|
|
|
||||
Catastrophe losses |
|
|
|
|
||||
|
$ |
4.2 |
$ |
10.0 |
$ |
9.2 |
$ |
32.9 |
International Operations |
|
19.2 |
|
14.3 |
|
25.4 |
|
41.0 |
Total catastrophe losses |
|
23.4 |
|
24.3 |
|
34.6 |
|
73.9 |
COVID-19 losses |
|
|||||||
|
— |
— |
|
— |
— |
|||
International Operations |
|
— |
|
3.0 |
|
— |
|
12.0 |
Total COVID-19 losses |
|
— |
|
3.0 |
|
— |
|
12.0 |
|
|
|
||||||
Catastrophe & COVID-19 losses |
|
|
|
|
||||
|
|
4.2 |
|
10.0 |
|
9.2 |
|
32.9 |
International Operations |
|
19.2 |
|
17.3 |
|
25.4 |
|
53.0 |
Total catastrophe & COVID-19 losses |
$ |
23.4 |
$ |
27.3 |
$ |
34.6 |
$ |
85.9 |
|
||||
RECONCILIATION OF LOSS AND EXPENSE RATIOS |
||||
(unaudited) |
||||
Three Months Ended |
Nine Months Ended |
|||
|
|
|||
|
2022 |
2021 |
2022 |
2021 |
|
|
|
|
|
Loss ratio |
65.9 % |
63.0 % |
62.7 % |
61.2 % |
Prior accident year loss reserve development |
(4.9)% |
(0.1)% |
(2.8)% |
0.1 % |
Catastrophe losses |
(1.3)% |
(3.1)% |
(0.9)% |
(3.5)% |
CAY ex-CAT loss ratio |
59.7 % |
59.8 % |
59.0 % |
57.8 % |
Reinstatement premiums |
(0.2)% |
— % |
— % |
(0.3)% |
CAY ex-CAT loss ratio (Adjusted) |
59.5 % |
59.8 % |
59.0 % |
57.5 % |
International Operations |
||||
Loss ratio |
65.3 % |
63.3 % |
58.8 % |
63.9 % |
Prior accident year loss reserve development |
3.5 % |
(1.2)% |
(0.2)% |
— % |
Catastrophe losses |
(15.3)% |
(10.5)% |
(6.5)% |
(11.2)% |
CAY ex-CAT loss ratio |
53.5 % |
51.6 % |
52.1 % |
52.7 % |
Reinstatement premiums |
(4.6)% |
(1.6)% |
(1.6)% |
(0.6)% |
CAY ex-CAT loss ratio (Adjusted) |
48.9 % |
50.0 % |
50.5 % |
52.1 % |
|
|
|
|
|
Consolidated |
|
|
|
|
Loss ratio |
65.7 % |
64.0 % |
61.8 % |
62.5 % |
Prior accident year loss reserve development |
(2.6)% |
(1.3)% |
(2.3)% |
(0.4)% |
Catastrophe losses |
(5.1)% |
(5.6)% |
(2.5)% |
(6.0)% |
CAY ex-CAT loss ratio |
58.0 % |
57.1 % |
57.0 % |
56.1 % |
Reinstatement premiums |
(1.6)% |
(0.7)% |
(0.5)% |
(0.4)% |
CAY ex-CAT loss ratio (Adjusted) |
56.4 % |
56.4 % |
56.5 % |
55.7 % |
|
||||
Expense Ratio |
31.3 % |
32.4 % |
31.3 % |
33.4 % |
Reinstatement premiums |
(0.1)% |
(0.1)% |
— % |
(0.2)% |
Expense ratio (Adjusted) |
31.2 % |
32.3 % |
31.3 % |
33.2 % |
International Operations |
||||
Expense Ratio |
37.5 % |
39.5 % |
39.8 % |
40.1 % |
Reinstatement premiums |
(3.1)% |
(1.2)% |
(1.3)% |
(0.5)% |
Expense ratio (Adjusted) |
34.4 % |
38.3 % |
38.5 % |
39.6 % |
|
|
|
|
|
Consolidated |
|
|
|
|
Expense Ratio |
35.4 % |
36.3 % |
35.6 % |
37.3 % |
Reinstatement premiums |
(1.0)% |
(0.4)% |
(0.3)% |
(0.3)% |
Expense ratio (Adjusted) |
34.4 % |
35.9 % |
35.3 % |
37.0 % |
|
||||||||||||
RECONCILIATION OF UNDERWRITING INCOME (LOSS) TO NET INCOME (LOSS) |
||||||||||||
CONSOLIDATED |
||||||||||||
(in millions) |
||||||||||||
(unaudited) |
||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||
|
|
|||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Net income (loss) |
$ |
(48.8 |
) |
$ |
22.4 |
|
$ |
(66.0 |
) |
$ |
122.0 |
|
Add (deduct): |
|
|
|
|
||||||||
Income tax provision (benefit) |
|
(4.0 |
) |
|
5.8 |
|
|
21.1 |
|
|
16.1 |
|
Net investment income |
|
(34.0 |
) |
|
(46.1 |
) |
|
(100.9 |
) |
|
(143.2 |
) |
Net realized investment and other (gains) losses |
|
44.7 |
|
|
5.3 |
|
|
119.6 |
|
|
(32.5 |
) |
Interest expense |
|
6.8 |
|
|
5.5 |
|
|
18.7 |
|
|
16.3 |
|
Fee and other (income) expense, net |
|
0.1 |
|
|
(1.1 |
) |
|
(1.8 |
) |
|
(1.8 |
) |
Foreign currency exchange (gains) losses |
|
(9.1 |
) |
|
(1.3 |
) |
|
(16.5 |
) |
|
4.4 |
|
Non-operating expenses |
|
11.0 |
|
|
8.2 |
|
|
33.9 |
|
|
20.9 |
|
Impairment of goodwill |
|
28.5 |
|
|
— |
|
|
28.5 |
|
|
— |
|
Underwriting income |
$ |
(4.8 |
) |
$ |
(1.3 |
) |
$ |
36.6 |
|
$ |
2.2 |
|
|
||||||||||||
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET INCOME (LOSS) |
||||||||||||
CONSOLIDATED |
||||||||||||
(in millions, except per share amounts) |
||||||||||||
(unaudited) |
||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||
|
|
|||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Net income (loss), as reported |
$ |
(48.8 |
) |
$ |
22.4 |
|
$ |
(66.0 |
) |
$ |
122.0 |
|
Income tax provision (benefit) |
|
(4.0 |
) |
|
5.8 |
|
|
21.1 |
|
|
16.1 |
|
Net income (loss), before taxes |
|
(52.8 |
) |
|
28.2 |
|
|
(44.9 |
) |
|
138.1 |
|
Add (deduct): |
|
|
|
|
||||||||
Net realized investment and other (gains) losses |
|
44.7 |
|
|
5.3 |
|
|
119.6 |
|
|
(32.5 |
) |
Foreign currency exchange (gains) losses |
|
(9.1 |
) |
|
(1.3 |
) |
|
(16.5 |
) |
|
4.4 |
|
Non-operating expenses |
|
11.0 |
|
|
8.2 |
|
|
33.9 |
|
|
20.9 |
|
Impairment of goodwill |
|
28.5 |
|
|
— |
|
|
28.5 |
|
|
— |
|
Operating income before taxes and preferred share |
||||||||||||
dividends |
|
22.3 |
|
|
40.4 |
|
|
120.6 |
|
|
130.9 |
|
Income tax provision, at assumed rate (1) |
|
4.2 |
|
|
6.1 |
|
|
22.9 |
|
|
19.6 |
|
Preferred share dividends |
|
2.6 |
|
|
2.6 |
|
|
7.9 |
|
|
7.9 |
|
Operating income |
$ |
15.5 |
|
$ |
31.7 |
|
$ |
89.8 |
|
$ |
103.4 |
|
|
|
|
|
|
||||||||
Operating income per common share (diluted) |
$ |
0.44 |
|
$ |
0.91 |
|
$ |
2.57 |
|
$ |
2.95 |
|
|
|
|
|
|
||||||||
Weighted average common shares, diluted |
|
35.0 |
|
|
35.0 |
|
|
35.0 |
|
|
35.1 |
|
(1) |
For the purpose of calculating Operating Income, an assumed tax rate of |
|
||||||||||||
RECONCILIATION OF PRE-TAX OPERATING INCOME (LOSS) BY SEGMENT TO NET INCOME (LOSS) |
||||||||||||
(in millions) |
||||||||||||
(unaudited) |
||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||
|
|
|||||||||||
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
Operating income (loss) before income taxes: |
|
|
|
|
||||||||
|
$ |
27.8 |
|
$ |
40.5 |
|
$ |
115.9 |
|
$ |
131.6 |
|
International Operations |
|
4.5 |
|
|
7.4 |
|
|
32.1 |
|
|
16.6 |
|
Run-off Lines |
|
0.7 |
|
|
(3.6 |
) |
|
(1.9 |
) |
|
(4.5 |
) |
Corporate and Other |
|
(10.7 |
) |
|
(3.9 |
) |
|
(25.5 |
) |
|
(12.8 |
) |
Total operating income before income taxes |
|
22.3 |
|
|
40.4 |
|
|
120.6 |
|
|
130.9 |
|
Net realized investment and other gains (losses) |
|
(44.7 |
) |
|
(5.3 |
) |
|
(119.6 |
) |
|
32.5 |
|
Foreign currency exchange (losses) gains |
|
9.1 |
|
|
1.3 |
|
|
16.5 |
|
|
(4.4 |
) |
Non-operating expenses |
|
(11.0 |
) |
|
(8.2 |
) |
|
(33.9 |
) |
|
(20.9 |
) |
Impairment of goodwill |
|
(28.5 |
) |
|
— |
|
|
(28.5 |
) |
|
— |
|
Income before income taxes |
|
(52.8 |
) |
|
28.2 |
|
|
(44.9 |
) |
|
138.1 |
|
Income tax provision (benefit) |
|
(4.0 |
) |
|
5.8 |
|
|
21.1 |
|
|
16.1 |
|
Net income (loss) |
$ |
(48.8 |
) |
$ |
22.4 |
|
$ |
(66.0 |
) |
$ |
122.0 |
|
|
||||||||||||
PREMIUMS BY SEGMENT AND LINE OF BUSINESS |
||||||||||||
(in millions) |
||||||||||||
(unaudited) |
||||||||||||
|
Three months ended |
Three months ended |
||||||||||
|
Gross Written |
Net Written |
Net Earned |
Gross Written |
Net Written |
Net Earned |
||||||
Property |
$ |
57.6 |
$ |
43.4 |
$ |
33.5 |
$ |
73.5 |
$ |
54.2 |
$ |
35.7 |
Liability |
|
288.1 |
|
196.1 |
|
178.0 |
|
306.3 |
|
192.4 |
|
170.1 |
Professional |
|
97.7 |
|
72.1 |
|
74.8 |
|
129.8 |
|
89.4 |
|
81.3 |
Specialty |
|
57.0 |
|
42.4 |
|
43.0 |
|
52.9 |
|
39.0 |
|
36.4 |
Total |
$ |
500.4 |
$ |
354.0 |
$ |
329.3 |
$ |
562.5 |
$ |
375.0 |
$ |
323.5 |
Nine months ended |
Nine months ended |
|||||||||||
|
Gross Written |
Net Written |
Net Earned |
Gross Written |
Net Written |
Net Earned |
||||||
Property |
$ |
159.5 |
$ |
110.0 |
$ |
113.1 |
$ |
203.2 |
$ |
108.6 |
$ |
116.5 |
Liability |
|
833.2 |
|
537.6 |
|
520.1 |
|
837.8 |
|
514.7 |
|
501.2 |
Professional |
|
308.7 |
|
218.2 |
|
239.3 |
|
362.0 |
|
242.7 |
|
227.7 |
Specialty |
|
175.3 |
|
133.0 |
|
126.0 |
|
161.9 |
|
119.2 |
|
107.0 |
Total |
$ |
1,476.7 |
$ |
998.8 |
$ |
998.5 |
$ |
1,564.9 |
$ |
985.2 |
$ |
952.4 |
International Operations |
Three months ended |
Three months ended |
||||||||||
|
Gross
|
Net
|
Net
|
Gross
|
Net
|
Net
|
||||||
Property |
$ |
56.1 |
$ |
13.4 |
$ |
11.8 |
$ |
87.3 |
$ |
45.0 |
$ |
28.3 |
Liability |
|
63.6 |
|
36.0 |
|
30.4 |
|
69.2 |
|
38.8 |
|
33.5 |
Professional |
|
54.7 |
|
44.7 |
|
35.5 |
|
62.5 |
|
52.4 |
|
43.8 |
Specialty |
|
75.7 |
|
56.6 |
|
47.5 |
|
93.9 |
|
72.3 |
|
58.3 |
Total |
$ |
250.1 |
$ |
150.7 |
$ |
125.2 |
$ |
312.9 |
$ |
208.5 |
$ |
163.9 |
Nine months ended |
Nine months ended |
|||||||||||
|
Gross
|
Net
|
Net
|
Gross
|
Net
|
Net
|
||||||
Property |
$ |
169.1 |
$ |
45.0 |
$ |
60.0 |
$ |
247.8 |
$ |
93.5 |
$ |
104.2 |
Liability |
|
170.9 |
|
102.0 |
|
95.1 |
|
192.0 |
|
107.8 |
|
99.2 |
Professional |
|
157.2 |
|
103.9 |
|
97.7 |
|
168.7 |
|
120.0 |
|
113.3 |
Specialty |
|
229.1 |
|
164.4 |
|
137.9 |
|
273.4 |
|
191.2 |
|
154.4 |
Total |
$ |
726.3 |
$ |
415.3 |
$ |
390.7 |
$ |
881.9 |
$ |
512.5 |
$ |
471.1 |
Consolidated |
Three months ended |
Three months ended |
||||||||||
|
Gross
|
Net
|
Net
|
Gross
|
Net
|
Net
|
||||||
Property |
$ |
113.7 |
$ |
56.8 |
$ |
45.3 |
$ |
160.8 |
$ |
99.2 |
$ |
64.0 |
Liability |
|
352.1 |
|
232.6 |
|
208.9 |
|
375.7 |
|
231.4 |
|
203.7 |
Professional |
|
152.4 |
|
116.8 |
|
110.3 |
|
192.3 |
|
141.8 |
|
125.1 |
Specialty |
|
132.7 |
|
99.0 |
|
90.5 |
|
146.8 |
|
111.3 |
|
94.7 |
Total |
$ |
750.9 |
$ |
505.2 |
$ |
455.0 |
$ |
875.6 |
$ |
583.7 |
$ |
487.5 |
Nine months ended |
Nine months ended |
|||||||||||
|
Gross
|
Net
|
Net
|
Gross
|
Net
|
Net
|
||||||
Property |
$ |
328.6 |
$ |
155.0 |
$ |
173.1 |
$ |
451.0 |
$ |
202.1 |
$ |
220.7 |
Liability |
|
1,004.7 |
|
640.3 |
|
615.9 |
|
1,030.4 |
|
623.1 |
|
600.8 |
Professional |
|
465.9 |
|
322.1 |
|
337.0 |
|
530.7 |
|
362.7 |
|
341.0 |
Specialty |
|
404.4 |
|
297.4 |
|
263.9 |
|
435.3 |
|
310.4 |
|
261.4 |
Total |
$ |
2,203.6 |
$ |
1,414.8 |
$ |
1,389.9 |
$ |
2,447.4 |
$ |
1,498.3 |
$ |
1,423.9 |
|
||||||||
COMPONENTS OF NET INVESTMENT INCOME & NET REALIZED INVESTMENT AND OTHER GAINS |
||||||||
(LOSSES) |
||||||||
CONSOLIDATED |
||||||||
(in millions) |
||||||||
(unaudited) |
||||||||
Three Months Ended |
Nine Months Ended |
|||||||
|
|
|||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
Net Investment Income | ||||||||
Net investment income, excluding alternative |
||||||||
investments |
$ |
30.8 |
$ |
21.9 |
$ |
80.0 |
$ |
68.4 |
Alternative investments |
|
3.2 |
|
24.2 |
|
20.9 |
|
74.8 |
Total net investment income |
$ |
34.0 |
$ |
46.1 |
$ |
100.9 |
$ |
143.2 |
Three Months Ended |
Nine Months Ended |
|||||||||||||||
|
|
|||||||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
|
|
|
|
|
||||||||||||
Net realized investment (losses) gains |
$ |
(40.9 |
) |
$ |
0.6 |
|
$ |
(64.1 |
) |
$ |
14.8 |
|
||||
Change in fair value recognized |
|
(1.1 |
) |
|
(5.1 |
) |
|
2.5 |
|
|
30.7 |
|
||||
Change in allowance for credit losses on fixed |
|
|
|
|
||||||||||||
maturity securities |
|
|
(1.3 |
) |
|
|
(0.8 |
) |
|
|
(2.9 |
) |
|
|
(1.5 |
) |
(Loss) on sale of Trident assets |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(11.5 |
) |
Loss on the sale of business divestitures including the |
|
|
|
|
|
|
|
|
||||||||
realization of foreign exchange translation losses |
|
|
(1.4 |
) |
|
|
— |
|
|
|
(55.1 |
) |
|
|
— |
|
Total net realized investments and other gains |
|
|
|
|
|
|
|
|
||||||||
(losses) |
$ |
|
(44.7 |
) |
$ |
|
(5.3 |
) |
$ |
|
(119.6 |
) |
$ |
|
32.5 |
|
|
||||
COMPONENTS OF INVESTMENT PORTFOLIO |
||||
CONSOLIDATED |
||||
(in millions) |
||||
(unaudited) |
||||
|
2022 |
|
2021 |
|
|
$ |
511.8 |
$ |
425.0 |
States and political subdivisions |
|
161.0 |
|
171.3 |
Foreign governments |
|
198.3 |
|
232.8 |
Corporate – Financial |
|
848.5 |
|
986.9 |
Corporate – Industrial |
|
716.5 |
|
850.6 |
Corporate – Utilities |
|
111.9 |
|
145.8 |
Asset-backed securities |
|
182.4 |
|
173.6 |
Collateralized loan obligations |
|
291.2 |
|
336.1 |
Mortgage-backed securities – Agency |
|
347.3 |
|
457.2 |
Mortgage-backed securities – Commercial |
|
345.8 |
|
418.7 |
Mortgage-backed securities – Residential |
|
15.6 |
|
25.3 |
Total fixed maturities |
|
3,730.3 |
|
4,223.3 |
Commercial Mortgage Loans |
|
158.6 |
|
— |
Common stocks |
|
43.8 |
|
55.6 |
Preferred stocks |
|
0.1 |
|
0.7 |
Total equity securities available for sale |
|
43.9 |
|
56.3 |
Private equity |
|
263.0 |
|
248.9 |
Hedge fund |
|
55.0 |
|
58.6 |
Overseas deposits |
|
78.9 |
|
74.9 |
Other |
|
4.7 |
|
4.8 |
Total other investments |
|
401.6 |
|
387.2 |
Short term investments and cash equivalents |
|
570.7 |
|
655.8 |
Cash |
|
99.4 |
|
146.1 |
Total cash and invested assets |
$ |
5,004.5 |
$ |
5,468.7 |
|
|
2022 |
|
2021 |
|
$ |
859.0 |
$ |
882.1 |
|
|
654.4 |
|
788.6 |
AA |
|
350.4 |
|
390.9 |
A |
|
813.3 |
|
894.2 |
BBB |
|
718.4 |
|
820.5 |
BB |
|
95.0 |
|
174.2 |
B |
|
61.5 |
|
71.3 |
Lower than B |
|
13.8 |
|
22.5 |
Not rated |
|
164.5 |
|
179.0 |
Total fixed maturities |
$ |
3,730.3 |
$ |
4,223.3 |
|
||||||
RECONCILIATION OF COMMON SHAREHOLDERS' EQUITY TO TANGIBLE SHAREHOLDERS' EQUITY CONSOLIDATED |
||||||
(in millions) |
||||||
(unaudited) |
||||||
|
|
|
||||
|
2022 |
|
|
2021 |
|
|
Common shareholders' equity |
$ |
1,180.9 |
|
$ |
1,591.2 |
|
Less: Accumulated other comprehensive income (AOCI), net of taxes |
|
(332.9 |
) |
|
(22.7 |
) |
Common shareholders' equity excluding AOCI, net of tax |
$ |
1,513.8 |
|
$ |
1,613.9 |
|
|
|
|
||||
Common shareholders' equity |
$ |
1,180.9 |
|
$ |
1,591.2 |
|
Less: |
|
136.1 |
|
|
164.6 |
|
Tangible common shareholders' equity |
|
1,044.8 |
|
|
1,426.6 |
|
Less: AOCI, net of tax |
|
(332.9 |
) |
|
(22.7 |
) |
Tangible common shareholders' equity excluding AOCI, net of tax |
$ |
1,377.7 |
|
$ |
1,449.3 |
|
|
|
|
||||
Common shares outstanding - end of period |
|
35.021 |
|
|
34.875 |
|
|
|
|
||||
Book value per common share |
$ |
33.72 |
|
$ |
45.63 |
|
Tangible book value per common share |
$ |
29.83 |
|
$ |
40.91 |
|
Book value per common share excluding AOCI, net of tax |
$ |
43.23 |
|
$ |
46.28 |
|
Tangible book value per common share excluding AOCI, net of tax |
$ |
39.34 |
|
$
|
41.56
|
|
|
||||||||||||
SHAREHOLDER RETURN ANALYSIS |
||||||||||||
(in millions, except per share data) |
||||||||||||
(unaudited) |
||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||
|
|
|||||||||||
|
2022 |
|
|
2021 |
|
2022 |
|
|
2021 |
|||
shareholders |
$ |
(51.4 |
) |
$ |
19.8 |
$ |
(73.9 |
) |
$ |
114.1 |
||
Operating income (loss) (1) |
|
15.5 |
|
|
31.7 |
|
89.8 |
|
|
103.4 |
||
|
|
|
|
|
||||||||
Common Shareholders' Equity - Beginning of period |
$ |
1,316.7 |
|
$ |
1,753.9 |
$ |
1,591.2 |
|
$ |
1,713.8 |
||
Common Shareholders' Equity - End of period |
|
1,180.9 |
|
|
1,743.6 |
|
1,180.9 |
|
|
1,743.6 |
||
Average Common Shareholders' Equity |
$ |
1,248.8 |
|
$ |
1,748.8 |
$ |
1,386.1 |
|
$ |
1,728.7 |
||
|
|
|
|
|
||||||||
Common shares outstanding - End of period |
|
35.021 |
|
|
34.863 |
|
35.021 |
|
|
34.863 |
||
|
|
|
|
|
||||||||
Book value per common share |
$ |
33.72 |
|
$ |
50.01 |
$ |
33.72 |
|
$ |
50.01 |
||
Cash dividends paid per common share during 2022 |
|
0.31 |
|
|
|
0.93 |
|
|
||||
Book value per common share, |
$ | 34.03 |
34.65 |
|||||||||
|
|
|
|
|
Book value per common share, prior period (2) |
$ |
37.65 |
|
$ |
45.62 |
|
||||
Change in book value per common share during 2022 | (10.4 |
)% | (26.1 |
)% | ||||||
Change in book value per common share including
cash dividends paid, during 2022 (2) |
|
(9.6 |
)% |
(24.0 |
)% | |||||
|
||||||||||
Annualized return on average common shareholders' equity |
|
(16.5 |
)% |
4.5 |
% |
|
(7.1 |
)% |
8.8 |
% |
Annualized operating return on average common shareholders' equity |
|
5.0 |
% |
7.3 |
% |
|
8.6 |
% |
8.0 |
% |
(1) |
For the purpose of calculating Operating Income, an assumed tax rate of |
|
|
(2) |
The percentage change in book value per common share is calculated by including cash dividends of |
View source version on businesswire.com: https://www.businesswire.com/news/home/20221107005838/en/
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Senior Vice President, Communications
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AVP, Investor Relations and Corporate Finance
978.387.4150
gregory.charpentier@argogroupus.com
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