Argo Group International Holdings, Ltd. (NASDAQ: AGII) today
announced financial results for the three and nine months ended
Sept. 30, 2015.
"Argo Group’s continued focus and commitment to specialty lines
produced consistent underwriting profits across all of our business
segments," said CEO Mark E. Watson III. "In addition, we continue
to selectively grow in our profitable niches.”
HIGHLIGHTS FOR THE THIRD QUARTER ENDED SEPT. 30,
2015:
- Gross written premiums were up 6.9% to
$531.4 million from $497.2 million in the third quarter of
2014.
- After-tax operating income was $24.6
million or $0.86 per diluted share, compared to $23.5 million or
$0.81 per diluted share for the third quarter of 2014.
- Net income was $35.3 million or $1.24
per diluted share, compared to $44.7 million or $1.54 per diluted
share for the third quarter of 2014.
- Pre-tax underwriting income increased
10.9% to $13.2 million in the third quarter of 2015 from $11.9
million for the third quarter of 2014.
- The combined ratio was 96.2% compared
to 96.4% for the third quarter of 2014. The loss and expense ratios
for the quarter were 57.8% and 38.4%, respectively, compared to
56.8% and 39.6% for the third quarter of 2014.
- Net favorable prior-year reserve
development was $6.6 million (benefiting the combined ratio by 1.9
points), compared with $3.1 million (benefiting the combined ratio
by 0.9 points) for the third quarter of 2014.
- Estimated pre-tax catastrophe losses
were $13.1 million or 3.9 points on the combined ratio, compared to
$5.5 million or 1.7 points on the combined ratio for the third
quarter of 2014.
- The loss ratio excluding catastrophes
and reserve development was 55.8% for the third quarter of 2015,
compared to 56.0% for the third quarter of 2014.
- During the quarter, the Company
repurchased $4.8 million or 85,959 shares of its common stock at an
average price of $55.27 per share.
HIGHLIGHTS FOR THE NINE MONTHS ENDED SEPT. 30, 2015:
- Gross written premiums were up 5.8% to
$1.566 billion from $1.480 billion in the first nine months of
2014.
- After-tax operating income was $79.9
million or $2.80 per diluted share, compared to $72.3 million or
$2.47 per diluted share for the first nine months of 2014.
- Net income was $122.0 million or $4.28
per diluted share, compared to $123.5 million or $4.21 per diluted
share for the first nine months of 2014.
- Pre-tax underwriting income increased
24.1% to $50.4 million in the first nine months of 2015 from $40.6
million in 2014.
- The combined ratio was 95.0% compared
to 96.0% for the first nine months of 2014. The loss and expense
ratios for the first nine months of 2015 were 55.9% and 39.1%,
respectively compared to 56.0% and 40.0% for the first nine months
of 2014.
- Net favorable prior-year reserve
development was $15.3 million (benefiting the combined ratio by 1.5
points), compared with $26.4 million (benefiting the combined ratio
by 2.6 points) for the first nine months of 2014.
- Estimated pre-tax catastrophe losses
were $18.5 million or 1.8 points on the combined ratio, compared to
$13.9 million or 1.5 points on the combined ratio for the first
nine months of 2014.
- The loss ratio excluding catastrophes
and reserve development was 55.6% for the first nine months of
2015, compared to 57.2% for the first nine months of 2014.
- In the first nine months of 2015, the
Company repurchased $29.7 million or 575,055 shares of its common
stock at an average share price of $51.58, which represents 2.0% of
net shares outstanding at December 31, 2014.
- Book value per share increased to
$58.89, up 1.2% from $58.22 at Dec. 31, 2014.
- At Sept. 30, 2015, cash and investments
totaled $4.2 billion with a net pre-tax unrealized gain of
approximately $99.7 million.
Notes:
All per share amounts, except for number of
shares repurchased, are adjusted for the 10% stock dividend that
was paid on March 16, 2015, to stockholders of record on March 2,
2015.
All references to catastrophe losses are
pre-tax and net of reinsurance and estimated reinstatement
premiums. Point impacts on the combined ratio are calculated as the
difference between the reported combined ratio and the combined
ratio excluding incurred catastrophe losses and associated
reinstatement premiums.
After-tax operating income is defined as net
income excluding net realized investment gains/losses and foreign
currency exchange gains/losses at an assumed 20% effective tax
rate.
FINANCIAL HIGHLIGHTS BY SEGMENT
Excess and Surplus Lines
The Excess and Surplus Lines segment in the third quarter
reported gross written premiums of $162.4 million, up $15.9 million
or 10.9%, compared to $146.5 million in the third quarter of 2014.
The primary driver of growth in the quarter was casualty and
professional lines. Net written premiums were up 9.2% to $132.7
million, and earned premiums were up 11.9% to $135.7 million, when
compared to the third quarter of 2014. Underwriting income was
$19.2 million for the quarter, compared to $20.3 million for the
third quarter of 2014. The third quarter 2015 combined ratio of
85.9% compares to 83.4% for the prior-year quarter. Net favorable
prior-year reserve development was $10.1 million for the third
quarter of 2015, benefiting the combined ratio by 7.5 points,
compared to net favorable prior-year reserve development of $12.9
million or 10.6 points for the third quarter of 2014. Catastrophe
losses for the quarter were $2.7 million or 2.0 points on the
combined ratio, compared to $0.5 million or 0.4 points for the
third quarter of 2014. The third quarter 2015 loss ratio, excluding
catastrophe losses and reserve development, was 60.3% compared to
58.6% for the third quarter of 2014.
For the nine months ended Sept. 30, 2015, gross written premiums
were $521.2 million, up $58.9 million or 12.7%, compared to $462.3
million in the first nine months of 2014. Net written premiums were
up 15.8% to $424.9 million, and earned premiums were up 7.1% to
$389.9 million, when compared to the first nine months of 2014.
Underwriting income was $53.6 million compared to $53.5 million for
the first nine months of 2014. The first nine months 2015 combined
ratio of 86.3% compares to 85.3% for the first nine months of 2014.
Net favorable prior-year reserve development was $25.1 million for
the first nine months of 2015, benefiting the combined ratio by 6.4
points, compared to net favorable prior-year reserve development of
$34.6 million or 9.5 points for the first nine months of 2014.
Catastrophe losses for the first nine months of 2015 were $4.7
million or 1.2 points on the combined ratio, compared to $2.9
million or 0.8 points for the first nine months of 2014. The first
nine months 2015 loss ratio, excluding catastrophe losses and
reserve development, was 59.5% compared to 60.3% for the first nine
months of 2014.
Commercial Specialty
The Commercial Specialty segment reported gross written premiums
of $147.8 million, up $9.1 million or 6.6%, compared to $138.7
million in the third quarter of 2014. Growth in the quarter was
driven by program, public entity, and surety businesses. Net
written premiums were down 5.7% to $97.3 million, and earned
premiums were up 0.9% to $73.3 million, when compared to the third
quarter of 2014. Underwriting income was $8.1 million for the
quarter, compared to $3.0 million for the third quarter of 2014.
The third quarter 2015 combined ratio of 89.0% compares to 95.9%
for the prior-year quarter. For the third quarter of 2015, net
favorable prior-year reserve development was $1.2 million or 1.6
points on the combined ratio, compared to net unfavorable
prior-year reserve development of $0.3 million or 0.4 points for
the third quarter of 2014. Catastrophe losses for the quarter were
$0.4 million or 0.7 points on the combined ratio, compared to $1.0
million or 1.4 points for the third quarter of 2014. The third
quarter 2015 loss ratio, excluding catastrophe losses and reserve
development, was 56.8% compared to 58.5% for the third quarter of
2014.
For the nine months ended Sept. 30, 2015, gross written premiums
were $347.3 million, up $19.1 million or 5.8%, compared to $328.2
million in the first nine months of 2014. Net written premiums were
down 4.5% to $216.6 million, and earned premiums were up 1.0% to
$217.6 million, when compared to the first nine months of 2014.
Underwriting income was $11.4 million compared to an underwriting
loss of $0.5 million for the first nine months of 2014. The first
nine months 2015 combined ratio of 94.8% compares to 100.3% for the
first nine months of 2014. For the first nine months of 2015, net
unfavorable prior-year reserve development was $10.4 million or 4.8
points on the combined ratio, compared to net unfavorable
prior-year reserve development of $5.2 million or 2.4 points for
the first nine months of 2014. Catastrophe losses for the first
nine months of 2015 were $1.8 million or 0.9 points on the combined
ratio, compared to $5.0 million or 2.4 points for the first nine
months of 2014. The first nine months 2015 loss ratio, excluding
catastrophe losses and reserve development, was 57.1% compared to
59.9% for the first nine months of 2014.
Syndicate 1200
The segment reported gross written premiums of $157.7 million in
the third quarter of 2015, up $11.0 million or 7.5% from $146.7
million for third quarter of 2014. Growth versus a year ago
primarily reflects North America binder business, International
Casualty, and our new platforms in Asia. Net written premiums were
$114.9 million versus $116.5 million in the third quarter of 2014.
Earned premiums were $99.1 million versus $104.4 million for the
third quarter of 2014. Underwriting income was $4.1 million for the
quarter, compared to $7.2 million for the third quarter of 2014,
reflecting a combined ratio of 95.9%, compared with 93.1% in the
prior-year quarter. Net favorable prior-year reserve development
was $0.3 million or 0.3 points on the combined ratio for the third
quarter of 2015, compared to net favorable prior-year reserve
development of $0.6 million or 0.6 points for the third quarter of
2014. Catastrophe losses for the quarter were $4.0 million or 4.0
points on the combined ratio, compared to no catastrophe losses for
the third quarter of 2014. The third quarter 2015 loss ratio,
excluding catastrophe losses and reserve development, was 51.4%,
compared to 54.9% in the third quarter of 2014.
For the nine months ended Sept. 30, 2015, gross written premiums
were $463.5 million, up $19.7 million or 4.4% from $443.8 million
for the first nine months of 2014. Net written premiums were $316.5
million versus $324.5 million in the first nine months of 2014.
Earned premiums were $305.5 million versus $305.9 million for the
first nine months of 2014. Underwriting income was $20.6 million
compared to $27.4 million for the first nine months of 2014,
reflecting a combined ratio of 93.3%, compared with 91.1% in the
first nine months of 2014. Net favorable prior-year reserve
development for the first nine months of 2015 was $2.8 million or
0.9 points on the combined ratio for the first nine months of 2015,
compared to net favorable prior-year reserve development of $15.8
million or 5.2 points for the first nine months of 2014.
Catastrophe losses for the first nine months of 2015 were $5.0
million or 1.6 points on the combined ratio, compared to no
catastrophe losses for the first nine months of 2014. The first
nine months 2015 loss ratio, excluding catastrophe losses and
reserve development, was 51.9%, compared to 55.6% in the first nine
months of 2014.
International Specialty
The International Specialty segment includes our property
reinsurance business as well as our insurance business in Bermuda
and Brazil. In the third quarter of 2015, gross written premiums
were $63.2 million, down $0.8 million or 1.3% from $64.0 million
for the third quarter of 2014. The decline reflects more
competitive market conditions in nearly all of this segment’s
business lines. Net written premiums were $41.0 million versus
$38.0 million in the third quarter of 2014. Earned premiums for the
quarter were $37.6 million versus $38.0 million for the third
quarter of 2014. Underwriting income was $1.4 million for the
quarter, compared to $2.5 million for the third quarter of 2014,
reflecting a combined ratio of 96.5%, compared with 93.1% in the
prior-year quarter. Net favorable prior-year reserve development
was $2.1 million or 5.8 points on the combined ratio for the third
quarter of 2015, compared to net favorable reserve development of
$0.5 million or 1.4 points for the third quarter of 2014.
Catastrophe losses for the quarter were $6.0 million or 17.6 points
on the combined ratio, compared to $4.0 million or 12.1 points for
the third quarter of 2014. The third quarter 2015 loss ratio,
excluding catastrophe losses and reserve development, was 49.7%,
compared to 47.6% in the third quarter of 2014.
For the nine months ended Sept. 30, 2015, gross written premiums
were $233.5 million, down $11.1 million or 4.5% from $244.6 million
for the first nine months of 2014. Net written premiums were down
slightly to $135.4 million versus $135.6 million in the first nine
months of 2014. Earned premiums were up 0.5% to $113.2 million
versus $112.6 million for the first nine months of 2014.
Underwriting income was $14.9 million compared to $12.6 million for
the first nine months of 2014, reflecting a combined ratio of
86.8%, compared with 88.8% in the first nine months of 2014. Net
favorable prior-year reserve development for the first nine months
of 2015 was $5.8 million or 5.2 points on the combined ratio for
the first nine months of 2015, compared to net favorable prior-year
reserve development of $0.1 million or 0.1 points for the first
nine months of 2014. Catastrophe losses for the first nine months
of 2015 were $7.0 million or 6.7 points on the combined ratio
compared to $6.0 million or 5.8 points in the first nine months of
2014. The first nine months 2015 loss ratio, excluding catastrophe
losses and reserve development, was 49.4%, compared to 46.8% in the
first nine months of 2014.
CONFERENCE CALL
Argo Group management will conduct an investor conference call
tomorrow, Oct. 27, 2015, starting at 11 a.m. EDT (Noon ADT). A live
webcast of the conference call can be accessed by visiting
http://services.choruscall.com/links/agii151027. Participants
inside the U.S. can access the call by phone by dialing (877)
291-5203. Callers dialing from outside the U.S. can access the call
by dialing (412) 902-6610. Please ask the operator to be connected
to the Argo Group earnings call.
A webcast replay will be available shortly after the conference
call and can be accessed at
http://services.choruscall.com/links/agii151027. In addition, a
telephone replay of the call will be available through Nov. 3,
2015, to callers from inside the U.S. by dialing (877) 344-7529
(conference # 10074943). Callers dialing from outside the U.S. can
access the telephone replay by dialing (412) 317-0088 (conference #
10074943).
ABOUT ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
Argo Group International Holdings, Ltd. (NASDAQ: AGII) 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,
Syndicate 1200 and International Specialty. Argo Group's insurance
subsidiaries are A. M. Best-rated 'A' (Excellent) (highest rating
out of 16 rating classifications) with a stable outlook, and Argo's
U.S. insurance subsidiaries are Standard and Poor's-rated 'A-'
(Strong) with a stable outlook. More information on Argo Group and
its subsidiaries is available at www.argolimited.com.
FORWARD-LOOKING STATEMENTS
This press release contains certain statements that are
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, as amended. Such statements are qualified by
the inherent risks and uncertainties surrounding future
expectations generally and also may differ materially from actual
future experience involving any one or more of such statements. For
a more detailed discussion of such risks and uncertainties, see
Argo Group's filings with the SEC. The inclusion of a
forward-looking statement herein should not be regarded as a
representation by Argo Group that Argo Group's objectives will be
achieved. Argo Group undertakes no obligation to publicly update
forward-looking statements, whether as a result of new information,
future events or otherwise.
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 U.S. Securities and
Exchange Commission. Management believes that these non-GAAP
measures, which may be defined differently by other companies,
better explain the Company's results of operations in a manner that
allows for a more complete understanding of the underlying trends
in the Company's business. However, these measures should not be
viewed as a substitute for those determined in accordance with
generally accepted accounting principles ("U.S. GAAP").
“Underwriting income” is an internal performance measure used in
the management of the Company’s operations and represents net
amount earned from underwriting activities (net premiums earned
less underwriting expenses and claims incurred). Although this
measure of profit (loss) does not replace net income (loss)
computed in accordance with U.S. GAAP as a measure of
profitability, management uses this measure of profit (loss) to
focus our reporting segments on generating underwriting income.
"Operating income" is an internal performance measure used in
the management of the Company's operations and represents after-tax
operational results excluding, as applicable, net realized
investment gains or losses, net foreign exchange gain or loss, and
other non-recurring items. The Company excludes net realized
investment gains or losses, net foreign exchange gain or loss, and
other non-recurring items from the calculation of operating income
because these amounts are influenced by and fluctuate in part
according to the availability of market opportunities and other
factors. In addition to presenting net income determined in
accordance with U.S. GAAP, the Company believes that showing
operating income enables investors, analysts, rating agencies and
other users of the Company's financial information to more easily
analyze our results of operations and underlying business
performance. Operating income should not be viewed as a substitute
for U.S. GAAP net income.
"Annualized net income return on average equity" ("ROAE") is
calculated using average shareholders' equity. In calculating ROAE,
the net income available to shareholders for the period is
multiplied by the number of periods in a calendar year to arrive at
annualized net income available to shareholders. The Company
presents ROAE as a measure that is commonly recognized as a
standard of performance by investors, analysts, rating agencies and
other users of its financial information.
"Annualized operating return on average shareholders' equity" is
calculated using operating income (as defined above and annualized
in the manner described for net income (loss) available to
shareholders under ROAE above) and average shareholders' equity.
The assumed tax rate is 20%.
Reconciliations of these financial measures to their most
directly comparable U.S. GAAP measures are included in the attached
tables.
ARGO GROUP INTERNATIONAL HOLDINGS, LTD. CONSOLIDATED
BALANCE SHEETS (in millions, except per share amounts)
September 30, December 31, 2015 2014
(unaudited) Assets Total investments $ 4,133.0 $ 4,097.9 Cash 96.2
81.0 Accrued investment income 21.0 22.1 Receivables 1,504.7
1,350.8 Goodwill and intangible assets 226.6 230.8 Deferred
acquisition costs, net 141.4 124.6 Ceded unearned premiums 262.5
207.6 Other assets 242.1 241.5 Total assets $ 6,627.5
$ 6,356.3 Liabilities and Shareholders' Equity Reserves for
losses and loss adjustment expenses $ 3,104.1 $ 3,042.4 Unearned
premiums 932.7 817.2 Ceded reinsurance payable, net 286.4 178.8
Senior unsecured fixed rate notes 143.8 143.8 Other indebtedness
57.4 62.0 Junior subordinated debentures 172.7 172.7 Other
liabilities 288.9 292.7 Total liabilities 4,986.0
4,709.6 Total shareholders' equity 1,641.5
1,646.7 Total liabilities and shareholders' equity $ 6,627.5 $
6,356.3 Book value per common share $ 58.89 $ 58.22
ARGO GROUP INTERNATIONAL HOLDINGS, LTD. FINANCIAL HIGHLIGHTS
ALL SEGMENTS (in millions, except per share amounts)
Three Months Ended Nine
Months Ended September 30, September 30, 2015 2014 2015 2014
(unaudited) (unaudited) Gross Written Premiums $ 531.4 $
497.2 $ 1,565.9 $ 1,480.4 Net Written Premiums 386.2 380.5 1,093.8
1,055.6 Earned Premiums 346.0 337.6 1,026.6 999.4 Net
Investment Income 21.3 20.8 63.9 64.7 Fee and other income
(expense), net 1.0 1.6 (0.1 ) 0.1 Net Realized Investment and Other
Gains 3.7 12.9 25.0
42.5 Total Revenue 372.0 372.9 1,115.4 1,106.7
Losses and Loss Adjustment Expenses 200.0 191.9 574.3 559.5
Underwriting, Acquisition and Insurance Expenses 132.8 133.8 401.9
399.3 Interest Expense 4.8 4.9 14.3 15.0 Fee Expense, net Foreign
Currency Exchange Gain (1.8 ) (6.0 ) (8.4 )
(2.8 ) Total Expenses 335.8 324.6 982.1 971.0 Income
Before Taxes 36.2 48.3 133.3 135.7 Income Tax Provision 0.9
3.6 11.3 12.2 Net
Income $ 35.3 $ 44.7 $ 122.0 $ 123.5
Net Income per Common Share (Basic) $ 1.27 $
1.57 $ 4.36 $ 4.28 Net Income
per Common Share (Diluted) $ 1.24 $ 1.54 $ 4.28
$ 4.21 Weighted Average Common Shares: Basic
27.9 28.6 28.0
28.8 Diluted 28.5 29.1
28.5 29.3 ARGO GROUP
INTERNATIONAL HOLDINGS, LTD. SEGMENT DATA (in millions)
Three Months Ended Nine Months Ended
September 30 September 30 2015 2014 2015
2014 (unaudited) (unaudited)
Excess and Surplus
Lines
Gross Written Premiums $ 162.4 $ 146.5 $ 521.2 $ 462.3 Net Written
Premiums 132.7 121.5 424.9 367.1 Earned Premiums 135.7 121.2 389.9
363.9 Underwriting Income 19.2 20.3 53.6 53.5 Net Investment Income
8.8 8.9 26.3 27.2 Interest Expense (1.5 ) (1.6 )
(4.5 ) (4.8 ) Operating Income Before Taxes $ 26.5
$ 27.6 $ 75.4 $ 75.9 Loss Ratio 54.8 %
48.4 % 54.3 % 51.6 % Expense Ratio 31.1 35.0
32.0 33.7 GAAP Combined Ratio
85.9 % 83.4 % 86.3 % 85.3 %
Commercial
Specialty
Gross Written Premiums $ 147.8 $ 138.7 $ 347.3 $ 328.2 Net Written
Premiums 97.3 103.2 216.6 226.9 Earned Premiums 73.3 72.7 217.6
215.5 Underwriting Income (Loss) 8.1 3.0 11.4 (0.5 ) Net Investment
Income 4.6 4.5 13.8 13.8 Interest Expense (0.8 ) (0.8 ) (2.4 ) (2.4
) Fee and Other Income (Expense), net 0.5 1.3
(2.0 ) (1.7 ) Operating Income Before Taxes $
12.4 $ 8.0 $ 20.8 $ 9.2 Loss Ratio 55.9
% 60.3 % 62.8 % 64.7 % Expense Ratio 33.1 35.6
32.0 35.6 GAAP Combined Ratio
89.0 % 95.9 % 94.8 % 100.3 %
Syndicate
1200
Gross Written Premiums $ 157.7 $ 146.7 $ 463.5 $ 443.8 Net Written
Premiums 114.9 116.5 316.5 324.5 Earned Premiums 99.1 104.4 305.5
305.9 Underwriting Income 4.1 7.2 20.6 27.4 Net Investment Income
2.3 2.1 6.9 7.9 Interest Expense (0.6 ) (0.8 ) (1.9 ) (2.4 ) Fee
and Other Income, net 1.1 0.3
2.4 1.8 Operating Income Before Taxes $ 6.9
$ 8.8 $ 28.0 $ 34.7 Loss Ratio 55.1 %
54.3 % 52.6 % 50.5 % Expense Ratio 40.8 38.8
40.7 40.6 GAAP Combined Ratio
95.9 % 93.1 % 93.3 % 91.1 %
International
Specialty
Gross Written Premiums $ 63.2 $ 64.0 $ 233.5 $ 244.6 Net Written
Premiums 41.0 38.0 135.4 135.6 Earned Premiums 37.6 38.0 113.2
112.6 Underwriting Income 1.4 2.5 14.9 12.6 Net Investment Income
2.9 2.3 8.8 6.1 Interest Expense (0.8 ) (0.8 )
(2.3 ) (2.3 ) Operating Income Before Taxes $ 3.5 $
4.0 $ 21.4 $ 16.4 Loss Ratio 61.5 % 58.3 %
50.9 % 52.5 % Expense Ratio 35.0 34.8
35.9 36.3 GAAP Combined Ratio
96.5 % 93.1 % 86.8 % 88.8 % ARGO
GROUP INTERNATIONAL HOLDINGS LTD (in millions) (unaudited)
For the
Three Months For the Nine Months Ended September 30, Ended
September 30, Net Prior Year Development 2015
2014 2015 2014
(Favorable)/Unfavorable
Excess and Surplus Lines $ (10.1 ) $ (12.9 ) $ (25.1 ) $ (34.6 )
Commercial Specialty (1.2 ) 0.3 10.4 5.2 Syndicate 1200 (0.3 ) (0.6
) (2.8 ) (15.8 ) International Specialty (2.1 ) (0.5 ) (5.8 ) (0.1
) Run-off 7.1 10.6 8.0
18.9 Total $ (6.6 ) $ (3.1 ) $ (15.3 ) $ (26.4 )
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
RECONCILIATION OF OPERATING INCOME TO NET INCOME (in millions,
except per share amounts)
Three Months Ended Nine Months Ended September 30,
September 30, 2015 2014 2015 2014 (unaudited) (unaudited)
Income Before Taxes: From Operations $ 30.7 $ 29.4 $ 99.9 $ 90.4
Foreign Currency Exchange Gain 1.8 6.0 8.4 2.8 Net Realized
Investment and Other Gains 3.7 12.9
25.0 42.5 Income Before Taxes 36.2 48.3
133.3 135.7 Income Tax Provision 0.9 3.6
11.3 12.2 Net Income $ 35.3
$ 44.7 $ 122.0 $ 123.5
Net Income per Common Share (Diluted) $ 1.24 $ 1.54 $
4.28 $ 4.21 Operating Income per Common Share
(Diluted) At Assumed Tax Rate: Income (a) 1.02 1.33 3.74 3.70
Foreign Currency Exchange Gains (a) (0.05 ) (0.17 ) (0.24 ) (0.07 )
Net Realized Investment and Other Gains (a) (0.11 )
(0.35 ) (0.70 ) (1.16 ) Operating Income per
Common Share 0.86 0.81 2.80
2.47 (a) Per diluted share at assumed
tax rate of 20%. ARGO GROUP INTERNATIONAL HOLDINGS,
LTD. RECONCILIATION OF UNDERWRITING INCOME TO NET INCOME (in
millions) Three Months Ended
Nine Months Ended September 30, September 30, 2015
2014 2015 2014 (unaudited) (unaudited) Earned
Premiums 346.0 337.6 1,026.6 999.4 Losses and Loss Adjustment
Expenses 200.0 191.9 574.3 559.5 Underwriting, Acquisition and
Insurance Expenses 132.8 133.8
401.9 399.3 Underwriting Income 13.2 11.9 50.4
40.6 Net Investment Income 21.3 20.8 63.9 64.7 Fee and other income
(expense), net 1.0 1.6 (0.1 ) 0.1 Net Realized Investment and Other
Gains 3.7 12.9 25.0 42.5 Interest Expense (4.8 ) (4.9 ) (14.3 )
(15.0 ) Foreign Currency Exchange Gain 1.8 6.0
8.4 2.8 Income Before Taxes 36.2
48.3 133.3 135.7 Income Tax Provision 0.9 3.6
11.3 12.2 Net Income $ 35.3
$ 44.7 $ 122.0 $ 123.5
ARGO GROUP INTERNATIONAL HOLDINGS, LTD. SHAREHOLDER RETURN ANALYSIS
(in millions) Nine Months
Ended September 30, 2015 2014 % Change
Net income $ 122.0 $ 123.5 (1.2 %) Operating income (a) 79.9
72.3 10.5 % Shareholders' Equity - Beginning of the period
1,646.7 1,563.0 5.4 % Shareholders' Equity - End of current period
1,641.5 1,633.1 0.5 % Average
Shareholders' Equity $ 1,644.1 $ 1,598.1 2.9 %
Annualized net
income return on average shareholders' equity 9.9 % 10.3 %
Annualized operating income return on average shareholders' equity
6.5 % 6.0 %
(a) at assumed 20% tax rate
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151026006460/en/
Argo Group International Holdings, Ltd.Susan Spivak Bernstein,
212-607-8835Senior Vice President, Investor Relations
Argo (NYSE:ARGO)
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