Argo Group: “Solid Top-Line Growth” In Q/1
Bermuda-based Argo Group International Holdings, Ltd. on Thursday [May 2] announced financial results for the three months ended March 31, 2013.
“I’m pleased with our first quarter performance,” Argo Group CEO Mark E. Watson III said. “We generated solid top-line growth in a modestly improving pricing environment, and generated an underwriting profit in each of our four business segments. I am optimistic about the outlook for the remainder of 2013.”
Highlights For The First Quarter Ended March 31, 2013
- Gross written premiums were $438.2 million, an increase of $41.9 million or 10.6% over the first quarter of 2012.
- Pre-tax operating income1 was $24.9 million compared to $17.9 million in the first quarter of 2012.
- Net income was $32.7 million or $1.28 per diluted share compared to $19.6 million or $0.74 per diluted share in the first quarter of 2012.
- The combined ratio was 99.4% compared to 103.4% in the first quarter of 2012.
- Book value per share increased 3.2% in the quarter to $62.67 and increased 8.2% over the prior year.
- During the quarter, the Company repurchased $12.3 million or 325,825 shares of its common stock at an average share price of $37.71, representing 1.3% of net shares outstanding at December 31, 2012.
Financial Results
For the three months ended March 31, 2013, Argo Group reported net income of $32.7 million or $1.28 per diluted share and net operating income after tax of $20.0 million or $0.78 per diluted share. By comparison, the first quarter of 2012 produced net income of $19.6 million or $0.74 per diluted share and net operating income after tax of $14.3 million or $0.54 per diluted share.
Gross written premiums for the three months ended March 31, 2013 and 2012, were $438.2 million and $396.3 million, respectively. Total revenue for the three months ended March 31, 2013 and 2012, was $341.6 million and $323.1 million, respectively. Earned premiums for the three months ended March 31, 2013 and 2012, were $304.2 million and $277.3 million, respectively.
Argo Group’s combined ratios for the three months ended March 31, 2013 and 2012, were 99.4% and 103.4%, respectively. Catastrophe losses, net of reinsurance and estimated reinstatement premiums, were $1.9 million in the first quarter 2013 compared to $4.0 million in the same period in 2012. Favorable prior year loss development was $4.5 million compared to $3.3 million for the three months ended March 31, 2012. Included in underwriting expenses was a non-cash equity-based compensation charge of $6.5 million, compared to $1.0 million in the first quarter of 2012, reflecting the increase in the Company’s stock price during the quarter.
Net investment income for the three months ended March 31, 2013 and 2012, was $27.9 million and $31.4 million, respectively. For the three months ended March 31, 2013, the Company reported a net realized investment gain of $9.5 million versus $13.1 million for the same period in 2012.
At March 31, 2013, the investment portfolio totaled $4.1 billion with a net pre-tax unrealized gain of approximately $328.5 million.
Conference Call
Argo Group management will conduct an investor conference call starting at 10:30 a.m. Eastern Daylight Time today, May 3, 2013.
A live webcast of the conference call can be accessed by visiting Argo Group’s Investor Relations Website at www.argolimited.com/pages/investors/events-and-webcasts.
Participants inside the US and Canada can access the call by phone by dialing [888]-895-5271 [pass code: 34754739]. Callers dialing from outside the US and Canada can access the call by dialing [847]-619-6547 [pass code: 34754739].
A webcast replay will be available shortly after the conference call and can be accessed at www.argolimited.com/pages/investors/events-and-webcasts. In addition, a telephone replay of the call will be available through May 10, 2013, to callers from inside the US and Canada by dialing [888]-843-7419 (pass code: 3475 4739#). Callers dialing from outside the U.S. and Canada can access the telephone replay by dialing (630) 652-3042 (pass code: 3475 4739#).
Headquartered in Bermuda, Argo Group International Holdings, Ltd. is an international underwriter of specialty insurance and reinsurance products in the property and casualty market.
Argo Group offers a full line of products and services designed to meet the unique coverage and claims handling needs of businesses in four primary segments: Excess & Surplus Lines, Commercial Specialty, International Specialty and Syndicate 1200.
Argo Group’s insurance subsidiaries are A. M. Best-rated ‘A’ [Excellent] with a stable outlook, and Argo’s US insurance subsidiaries are Standard and Poor’s-rated ‘A-’ [Strong] with a stable outlook.
