Argo Group International Holdings, Ltd. (NASDAQ: AGII), an
international underwriter of specialty insurance and reinsurance
products, announced today it will make a change to its reporting of
financial results aligned with two reportable segments – U.S.
Operations and International Operations – rather than the
previously reported four segments, representing a simplification of
its former operational framework.
“This is an important step better reflecting the way we are
managing our businesses and thinking about our operating
platforms,” said Argo Group CEO Mark E. Watson III. “We achieved
important enhancements last year with the addition of Jose A.
Hernandez to lead our international business and the acquisition of
Ariel Re, which closed earlier this year. These recent additions
combined with the consolidation of our U.S. Operations under the
leadership of Kevin J. Rehnberg, allows us to make this change.
With these additions and operational changes, we are better
positioned as a global underwriter of specialty insurance and
reinsurance products.”
The reporting changes are effective with first quarter 2017
earnings. The U.S. Operations will include the Excess & Surplus
Lines and Commercial Specialty businesses. International Operations
will include Syndicate 1200, International Specialty and the newly
acquired Ariel Re business.
To allow investors to view the new reporting segments structure
prior to Argo Group’s upcoming earnings report, scheduled for
release after the close of markets on Wednesday, May 3, 2017,
certain historical information is attached and presented including
segment information based on the new framework. The attached
historical information includes (1) the recasting of previously
issued segment-related financial information to reflect the new
framework and (2) certain other historical financial information
that is unchanged from previously reported financial information
and included herein only for purposes of context. The attached
financial information does not represent a restatement of
previously issued financial statements and does not affect our
consolidated financial statements for any of the previously
reported periods.
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 two primary
segments: U.S. Operations and International Operations. Argo
Group's insurance subsidiaries are A. M. Best-rated 'A' (Excellent)
(third highest rating out of 16 rating classifications) with a
stable outlook, and Argo Group'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. The
Company presents Underwriting income as a measure that is commonly
recognized as a standard of performance by investors, analysts,
rating agencies and other users of its financial information.
"Adjusted operating income" is an internal performance measure used
in the management of the Company's operations and represents
after-tax (at an assumed effective tax rate of 20%) operational
results excluding, as applicable, net realized investment gains or
losses, net foreign exchange gain or loss, and other similar
non-recurring items. The Company excludes net realized investment
gains or losses, net foreign exchange gain or loss, and other
similar non-recurring items from the calculation of adjusted
operating income because these amounts are influenced by and
fluctuate in part, by market conditions that are outside of
managements’ control. In addition to presenting net income
determined in accordance with U.S. GAAP, the Company believes that
showing adjusted 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. Adjusted operating income should
not be viewed as a substitute for U.S. GAAP net income. "Annualized
return on average shareholders’ 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 adjusted operating return on
average shareholders' equity" is calculated using adjusted
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.
Notes:
The presentation of Argo Group’s financial reporting segments
was modified to better reflect its new operating framework and
management structure. Under this model, Argo Group CEO Mark E.
Watson III evaluates performance and allocates resources based on
the review of the U.S. Operations and International Operations.
The U.S. Operations includes the former Excess & Surplus and
Commercial Specialty reportable segments.
The International Operations includes the former Syndicate 1200,
International Specialty reportable segments, and the recently
acquired Ariel Re business.
It is the business unit that produces the risk and not the
location of the underlying exposure that is the primary
characteristic in distinguishing U.S. Operations from International
Operations. For example, a U.S. property exposure underwritten
through our Syndicate platform would be included in our
International Operations.
Argo Group’s reportable segments will include four primary
insurance and reinsurance services and offerings:
- Property – includes both
property insurance and reinsurance solutions. Insurance products
cover commercial properties primarily in North America with some
residential and international covers. Reinsurance covers underlying
exposures that are located throughout the world, including the
United States. These offerings include coverages for man-made and
natural disasters.
- Liability – includes a broad
range of primary and excess casualty for risks on both an admitted
and non-admitted basis in the United States. Internationally, Argo
Group writes worldwide casualty risks primarily exposed in the UK,
Canada, and Australia.
- Professional – includes various
professional lines products including of errors and omissions,
management liability (including Directors and Officers) and cyber
coverages.
- Specialty – includes niche
insurance coverages including marine & energy, accident &
health, and surety product offerings.
Corporate and Run-Off include all other activity of Argo Group.
Consistent with prior reporting, amounts for both Corporate and
Run-Off are included in the consolidated financial results.
(financial tables follow)
ARGO GROUP
INTERNATIONAL HOLDINGS, LTD. CONSOLIDATED BALANCE SHEETS (in
millions, except per share amounts) December 31, December
31, 2016 2015 Assets Total investments $ 4,324.3 $ 4,115.7
Cash 86.0 121.7 Accrued investment income 20.7 21.6 Receivables
1,849.4 1,525.6 Goodwill and intangible assets 219.9 225.5 Deferred
acquisition costs, net 139.1 132.4 Ceded unearned premiums 302.8
250.8 Other assets 262.8 232.3 Total assets $ 7,205.0
$ 6,625.6 Liabilities and Shareholders' Equity Reserves for
losses and loss adjustment expenses $ 3,350.8 $ 3,123.6 Unearned
premiums 970.0 886.7 Ceded reinsurance payable, net 466.6 312.4
Senior unsecured fixed rate notes 139.5 139.3 Other indebtedness
55.4 55.2 Junior subordinated debentures 172.7 172.7 Other
liabilities 257.3 267.6 Total liabilities 5,412.3
4,957.5 Total shareholders' equity 1,792.7
1,668.1 Total liabilities and shareholders' equity $ 7,205.0 $
6,625.6 Book value per common share $ 59.73 $ 54.31
ARGO GROUP INTERNATIONAL HOLDINGS, LTD. FINANCIAL HIGHLIGHTS
ALL SEGMENTS (in millions, except per share amounts)
Years Ended December 31, 2016 2015 Gross
written premiums $ 2,164.8 $ 2,012.1 Net written premiums 1,440.2
1,402.1 Earned premiums 1,410.8 1,371.9 Net investment
income 115.1 88.6 Fee and other income 24.5 22.2 Net realized
investment and other gains 26.1 24.1
Total revenue 1,576.5 1,506.8 Losses and loss adjustment
expenses 810.1 766.1 Underwriting, acquisition and insurance
expenses 547.0 536.7 Interest expense 19.6 19.0 Fee and other
expense, net 22.4 25.8 Foreign currency exchange gain (4.5 )
(18.3 ) Total expenses 1,394.6 1,329.3 Income before
taxes 181.9 177.5 Income tax provision 35.2
14.3 Net income $ 146.7 $ 163.2
Net income per common share (basic) $ 4.86 $ 5.31
Net income per common share (diluted) $ 4.75 $
5.20 Weighted average common shares: Basic
30.2 30.8 Diluted 30.8
31.4
No change to previously reported amounts.
ARGO GROUP INTERNATIONAL HOLDINGS, LTD. SEGMENT DATA
(in millions) Years Ended
December December 2016 2015
US
OPERATIONS
Gross written premiums $ 1,277.7 $ 1,145.2 Net written premiums
883.5 838.5 Earned premiums 849.5 815.4 Underwriting income
111.5 84.9 Net investment income 71.9 52.2 Fee and other income
(expense), net 0.2 (3.5 ) Interest expense (9.2 )
(9.2 ) Net income before taxes $ 174.4 $ 124.4 Loss ratio
55.0 % 57.8 % Expense ratio 31.8 % 31.8 % GAAP
combined ratio 86.9 % 89.6 %
INTERNATIONAL
OPERATIONS
Gross written premiums $ 886.8 $ 866.4 Net written premiums 556.4
563.2 Earned premiums 560.9 556.1 Underwriting income 25.8
49.3 Net investment income 28.7 20.3 Fee and other income, net 2.4
0.4 Interest expense (5.3 ) (5.6 ) Net income before
taxes $ 51.6 $ 64.4 Loss ratio 57.8 % 51.5 % Expense ratio
37.6 % 39.6 % GAAP combined ratio 95.4 %
91.1 % ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
QUARTERLY SEGMENT DATA (in millions)
December September June March December September June
March 2016 2016 2016 2016 2015 2015 2015 2015
US
OPERATIONS
Gross written premiums $ 307.5 $ 360.8 $ 321.8 $ 287.6 $ 276.7 $
310.2 $ 288.7 $ 269.6 Net written premiums 211.7 258.9 223.5 189.4
197.0 230.0 221.6 189.9 Earned premiums 219.8 216.3 206.8 206.6
207.9 209.0 202.8 195.7 Underwriting income 32.6 27.5 27.2
24.2 19.9 27.3 19.1 18.6 Net investment income 16.1 20.3 21.7 13.8
12.5 11.6 15.1 13.0 Fee and other income (expense), net 1.9 0.3
(1.1 ) (0.9 ) (1.5 ) 0.5 (1.7 ) (0.8 ) Interest expense (2.4
) (2.2 ) (2.4 ) (2.2 ) (2.3 )
(2.3 ) (2.3 ) (2.3 ) Net income before taxes $ 48.2
$ 45.9 $ 45.4 $ 34.9 $ 28.6 $
37.1 $ 30.2 $ 28.5 Loss ratio 54.3 %
54.3 % 55.7 % 55.9 % 59.2 % 55.1 % 58.4 % 58.4 % Expense ratio
30.8 % 33.0 % 31.2 % 32.4 % 31.2
% 31.8 % 32.1 % 32.1 % GAAP combined ratio
85.2 % 87.3 % 86.8 % 88.3 % 90.4
% 86.9 % 90.6 % 90.5 %
INTERNATIONAL
OPERATIONS
Gross written premiums $ 191.5 $ 224.5 $ 238.6 $ 232.2 $ 169.4 $
220.9 $ 268.7 $ 207.4 Net written premiums 121.8 156.3 164.3 114.0
111.3 155.9 189.6 106.4 Earned premiums 142.4 142.3 137.9 138.3
137.4 136.7 142.8 139.2 Underwriting income (loss) (4.8 )
12.5 6.3 11.8 13.8 5.5 13.9 16.1 Net investment income 6.0 7.5 9.1
6.1 4.9 4.4 5.9 5.1 Fee and other income (expense), net (1.4 ) 1.5
1.2 1.1 (2.0 ) 1.1 0.9 0.4 Interest expense (1.3 )
(1.4 ) (1.3 ) (1.3 ) (1.4 ) (1.4 )
(1.3 ) (1.5 ) Net income before taxes $ (1.5 ) $ 20.1
$ 15.3 $ 17.7 $ 15.3 $ 9.6 $
19.4 $ 20.1 Loss ratio 65.8 % 55.4 % 55.6 %
54.0 % 49.6 % 56.8 % 49.9 % 49.8 % Expense ratio 37.6 %
35.8 % 39.8 % 37.5 % 40.4 % 39.1
% 40.3 % 38.6 % GAAP combined ratio 103.4 %
91.2 % 95.4 % 91.5 % 90.0 % 96.0
% 90.3 % 88.4 %
ANNUAL:
ARGO
GROUP INTERNATIONAL HOLDINGS, LTD. GROSS WRITTEN PREMIUM BY SEGMENT
AND LINE OF BUSINESS (in millions) Years Ended December 31,
2016 2015
US
OPERATIONS
Property $ 239.8 $ 185.8 Liability 794.8 770.7 Professional 140.4
119.1 Specialty 102.8 69.6 Total $ 1,277.7 $ 1,145.2
INTERNATIONAL
OPERATIONS
Property $ 321.8 $ 307.1 Liability 145.5 154.4 Professional 159.0
150.3 Specialty 260.5 254.6 Total $ 886.8 $ 866.4
HISTORICAL QUARTERLY: ARGO GROUP
INTERNATIONAL HOLDINGS, LTD. GROSS WRITTEN PREMIUM BY SEGMENT AND
LINE OF BUSINESS (in millions) Three Months Ended December
September June March December September June March 2016 2016 2016
2016 2015 2015 2015 2015
US
OPERATIONS
Property $ 51.2 $ 69.1 $ 75.7 $ 43.7 $ 44.1 $ 47.4 $ 55.2 $ 39.1
Liability 181.6 226.8 192.6 193.9 177.8 212.7 188.9 191.3
Professional 41.5 35.3 34.1 29.5 35.8 29.0 29.2 25.1 Specialty
33.2 29.6 19.4 20.5 19.0
21.1 15.4 14.1 Total $ 307.5 $ 360.8 $ 321.8 $ 287.6
$ 276.7 $ 310.2 $ 288.7 $ 269.6
INTERNATIONAL
OPERATIONS
Property $ 48.7 $ 76.6 $ 99.5 $ 97.0 $ 45.1 $ 73.0 $ 115.9 $ 73.0
Liability 35.6 40.5 33.1 36.3 36.7 42.5 44.0 31.1 Professional 47.8
39.7 39.8 31.7 37.7 41.4 35.7 35.6 Specialty 59.4
67.7 66.2 67.2 49.9 63.9 73.1
67.7 Total $ 191.5 $ 224.5 $ 238.6 $ 232.2 $ 169.4 $ 220.9 $
268.7 $ 207.4
ANNUAL: ARGO GROUP INTERNATIONAL
HOLDINGS, LTD. NET WRITTEN PREMIUM BY SEGMENT AND LINE OF BUSINESS
(in millions) Years Ended December 31, 2016 2015
US
OPERATIONS
Property $ 125.7 $ 135.9 Liability 575.5 578.5 Professional Lines
100.3 69.3 Specialty 81.9 54.9 Total $ 883.5 $ 838.5
INTERNATIONAL
OPERATIONS
Property $ 200.7 $ 202.2 Liability 80.6 91.0 Professional Lines
104.9 101.2 Specialty 170.1 168.8 Total $ 556.4 $
563.2
HISTORICAL QUARTERLY: ARGO
GROUP INTERNATIONAL HOLDINGS, LTD. NET WRITTEN PREMIUM BY SEGMENT
AND LINE OF BUSINESS (in millions) Three Months Ended
December September June March December September June March 2016
2016 2016 2016 2015 2015 2015 2015
US
OPERATIONS
Property $ 23.3 $ 42.8 $ 40.5 $ 19.1 $ 28.8 $ 38.1 $ 45.3 $ 23.6
Liability 134.7 164.2 140.9 135.7 133.0 158.7 146.5 140.4
Professional Lines 28.6 28.6 25.8 17.3 20.9 16.5 17.4 14.5
Specialty 25.1 23.3 16.2 17.3
14.3 16.8 12.4 11.4 Total $ 211.7 $ 258.9 $
223.5 $ 189.4 $ 197.0 $ 230.0 $ 221.6 $ 189.9
INTERNATIONAL
OPERATIONS
Property $ 30.3 $ 58.3 $ 70.0 $ 42.1 31.0 54.0 91.9 25.3 Liability
18.5 23.0 18.6 20.5 20.4 26.3 25.0 19.3 Professional Lines 34.2
25.9 27.3 17.6 25.6 30.3 22.6 22.8 Specialty 38.7
49.1 48.4 33.9 34.4 45.4 50.0
39.0 Total $ 121.8 $ 156.3 $ 164.3 $ 114.0 $ 111.3 $ 155.9 $
189.6 $ 106.4
ANNUAL:
ARGO GROUP INTERNATIONAL
HOLDINGS, LTD. NET EARNED PREMIUM BY SEGMENT AND LINE OF BUSINESS
(in millions) Years Ended December 31, 2016 2015
US
OPERATIONS
Property $ 124.9 $ 138.1 Liability 575.3 567.9 Professional Lines
79.3 57.1 Specialty 70.0 52.5 Total $ 849.5 $ 815.4
INTERNATIONAL
OPERATIONS
Property $ 205.8 $ 199.8 Liability 86.2 88.1 Professional Lines
102.6 99.2 Specialty 166.3 169.0 Total $ 560.9 $
556.1
HISTORICAL QUARTERLY: ARGO
GROUP INTERNATIONAL HOLDINGS, LTD. NET EARNED PREMIUM BY SEGMENT
AND LINE OF BUSINESS (in millions) Three Months Ended
December September June March December September June March 2016
2016 2016 2016 2015 2015 2015 2015
US
OPERATIONS
Property $ 31.2 $ 28.6 $ 31.6 $ 33.5 $ 34.2 $ 34.5 $ 34.8 $ 34.6
Liability 146.2 146.3 142.0 140.8 143.0 145.8 141.8 137.3
Professional Lines 22.5 21.2 17.9 17.6 16.7 14.9 13.5 12.0
Specialty 19.8 20.1 15.3
14.7 14.1 13.7 12.8
11.8 Total $ 219.8 $ 216.3 $ 206.8 $ 206.6 $ 207.9 $
209.0 $ 202.8 $ 195.7
INTERNATIONAL
OPERATIONS
Property $ 52.0 $ 53.3 $ 48.8 $ 51.7 $ 52.1 $ 47.2 $ 53.3 $ 47.2
Liability 20.5 24.3 20.2 21.3 22.4 23.8 21.0 21.0 Professional
Lines 30.8 22.3 26.0 23.5 24.6 25.7 23.9 24.9 Specialty 39.2
42.5 42.8 41.8
38.3 39.9 44.7 46.1 Total
$ 142.4 $ 142.3 $ 137.9 $ 138.3 $ 137.4 $ 136.7 $ 142.8 $ 139.2
ANNUAL: ARGO GROUP INTERNATIONAL HOLDINGS,
LTD. (in millions) Years Ended Net Prior Year
Development December 31,
(Favorable)/Unfavorable
2016 2015 US Operations $ (35.9 ) $ (23.0 ) International
Operations (16.0 ) (18.0 ) Run-off 18.6 8.6
Total $ (33.3 ) $ (32.4 )
HISTORICAL
QUARTERLY: ARGO GROUP INTERNATIONAL HOLDINGS, LTD. (in
millions)
Net
Prior Year Development December September June March December
September June March
(Favorable)/Unfavorable
2016 2016 2016 2016 2015 2015 2015 2015 US Operations $
(10.3 ) $ (13.7 ) $ (9.0 ) $ (2.9 ) $ (8.3 ) $ (11.3 ) $ (2.4 ) $
(1.0 ) International Operations (5.2 ) (0.6 ) (8.5 ) (1.7 ) (9.4 )
(2.4 ) (3.4 ) (2.8 ) Run-off 1.0 11.4
4.8 1.4 0.6 7.1
0.8 0.1 Total $ (14.5 ) $ (2.9 )
$ (12.7 ) $ (3.2 ) $ (17.1 ) $ (6.6 ) $ (5.0 ) $ (3.7 )
ANNUAL: ARGO GROUP INTERNATIONAL HOLDINGS,
LTD. RECONCILIATION OF LOSS RATIOS (in millions)
Years Ended December 31, 2016 2015
US
OPERATIONS
Loss ratio 55.0% 57.8% Prior accident year loss development 4.2%
2.8% Catastrophe losses -1.7% -1.3% Current accident year ex-cats
loss ratio 57.5% 59.3%
INTERNATIONAL
OPERATIONS
Loss ratio 57.8% 51.5% Prior accident year loss development 2.8%
3.2% Catastrophe losses -8.6% -2.4% Current accident year ex-cats
loss ratio 52.0% 52.3%
CONSOLIDATED
Loss ratio 57.4% 55.8% Prior accident year loss development 2.4%
2.4% Catastrophe losses -4.4% -1.8% Current accident year ex-cats
loss ratio 55.4% 56.4%
HISTORICAL QUARTERLY:
ARGO GROUP INTERNATIONAL HOLDINGS, LTD. RECONCILIATION OF
LOSS RATIOS (in millions)
December September June March December September June
March 2016 2016 2016 2016 2015 2015 2015 2015
US
OPERATIONS
Loss ratio 54.3% 54.3% 55.7% 55.9% 59.2% 55.1% 58.4% 58.4% Prior
accident year loss development 4.7% 6.3% 4.3% 1.4% 4.0% 5.4% 1.2%
0.5% Catastrophe losses -1.2% -2.1% -2.2% -1.1% -2.0% -1.5% -1.1%
-0.5% Current accident year ex-cats loss ratio 57.8% 58.5% 57.8%
56.2% 61.2% 59.0% 58.5% 58.4%
INTERNATIONAL
OPERATIONS
Loss ratio 65.8% 55.4% 55.6% 54.0% 49.6% 56.8% 49.9% 49.8% Prior
accident year loss development 3.6% 0.4% 6.4% 1.3% 6.8% 1.8% 2.4%
2.0% Catastrophe losses -14.3% -5.9% -13.8% -0.8% -0.8% -7.7% 0.0%
-1.4% Current accident year ex-cats loss ratio 55.1% 49.9% 48.2%
54.5% 55.6% 50.9% 52.3% 50.4%
CONSOLIDATED
Loss ratio 59.1% 57.9% 57.0% 55.5% 55.5% 57.8% 55.1% 54.9% Prior
accident year loss development 4.0% 0.8% 3.7% 0.9% 5.0% 1.9% 1.4%
1.1% Catastrophe losses -6.4% -3.6% -6.8% -0.9% -1.5% -3.9% -0.6%
-0.9% Current accident year ex-cats loss ratio 56.7% 55.1% 53.9%
55.5% 59.0% 55.8% 55.9% 55.1% ARGO GROUP
INTERNATIONAL HOLDINGS, LTD. RECONCILIATION OF ADJUSTED OPERATING
INCOME (LOSS) TO NET INCOME (LOSS) (in millions, except per share
amounts) (unaudited) Years Ended
December 31, 2016 2015 Net income, as reported $
146.7 $ 163.2 Provision for income taxes 35.2
14.3 Net income, before taxes 181.9 177.5 Add (deduct): Net
realized investment and other gains (26.1 ) (24.1 ) Foreign
currency exchange gains (4.5 ) (18.3 ) Adjusted
operating income before taxes 151.3 135.1 Provision for income
taxes, at assumed rate (a) 30.3 27.0
Adjusted operating income $ 121.0 $ 108.1
Adjusted operating income per common share (diluted) $ 3.92
$ 3.44 Weighted average common shares, diluted
30.8 31.4 (a) At assumed tax
rate of 20%.
No change to previously reported
amounts. ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
RECONCILIATION OF UNDERWRITING INCOME TO NET INCOME (in millions)
(unaudited) Years Ended December 31,
2016 2015 Net Income $ 146.7 $ 163.2 Add (deduct): Income
tax provision 35.2 14.3 Net investment income (115.1 ) (88.6 ) Net
realized investment and other gains (26.1 ) (24.1 ) Fee and other
income (24.5 ) (22.2 ) Interest expense 19.6 19.0 Fee and other
expense 22.4 25.8 Foreign currency exchange gains (4.5 )
(18.3 ) Underwriting income $ 53.7 $ 69.1
No change to previously reported amounts.
ARGO GROUP INTERNATIONAL HOLDINGS, LTD.
RECONCILIATION OF SEGMENT INCOME TO NET INCOME (in millions)
(unaudited) For the Years Ended
December 31, 2016 2015 Segment income (loss) before income
taxes US Operations $ 174.4 $ 124.4 International Operations 51.6
64.4 Run-off Lines (15.2 ) (7.4 ) Corporate and Other (59.5 ) (46.3
) Realized investment and other gains 26.1 24.1 Foreign currency
exchange gains 4.5 18.3 Net income
before income taxes 181.9 177.5 Provision for taxes 35.2
14.3 Net income $ 146.7 $ 163.2
ARGO GROUP INTERNATIONAL HOLDINGS, LTD. SHAREHOLDER
RETURN ANALYSIS (in millions) (unaudited)
For the Years Ended December 31, 2016
2015 % Change Net income $ 146.7 $ 163.2 (10.1 %) Adjusted
operating income (a) 121.0 108.1 12.0 % Shareholders' Equity
- Beginning of the period $ 1,668.1 $ 1,646.7 1.3 % Shareholders'
Equity - End of current period 1,792.7 1,668.1
7.5 % Average Shareholders' Equity $ 1,730.4 $ 1,657.4 4.4 %
Annualized return on average shareholders' equity 8.5
% 9.8 % Annualized adjusted operating return on average
shareholders' equity 7.0 %
6.5 % (a) at
assumed 20% tax rate
No change to previously reported
amounts.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170501005469/en/
Argo Group International Holdings, Ltd.Susan Spivak Bernstein,
212-607-8835Senior Vice President, Investor Relations
Argo (NYSE:ARGO)
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