Argo Group International Holdings, Ltd. (NASDAQ: AGII) today
announced financial results for the three months and year ended
Dec. 31, 2015.
"This concludes a record year of underwriting income for Argo
Group," said CEO Mark E. Watson III. "We continue to benefit from
initiatives aimed at improving underwriting and simplifying
business processes. For 2016, we will drive growth through
innovation in products and distribution in our selected customer
niches.”
HIGHLIGHTS FOR THE YEAR ENDED DEC. 31, 2015:
- Gross written premiums were up 5.6% to
$2.012 billion from $1.905 billion in 2014.
- After-tax operating income was $105.7
million or $3.70 per diluted share, compared to $94.1 million or
$3.22 per diluted share in 2014.
- Net income was $163.2 million or $5.72
per diluted share, compared to $183.2 million or $6.27 per diluted
share in 2014.
- Pre-tax underwriting income increased
28.5% to $66.2 million in 2015 from $51.5 million in 2014.
- The combined ratio was 95.2% compared
to 96.2% in 2014. The loss and expense ratios in 2015 were 55.8%
and 39.4%, respectively, compared to 55.9% and 40.3% in 2014.
- Net favorable prior-year reserve
development was $32.4 million (benefiting the combined ratio by 2.4
points), compared with $37.7 million (benefiting the combined ratio
by 2.8 points) in 2014.
- Estimated pre-tax catastrophe losses
were $23.7 million or 1.8 points on the combined ratio, compared to
$17.7 million or 1.4 points on the combined ratio in 2014.
- The loss ratio excluding catastrophes
and reserve development was 56.4% in 2015, compared to 57.3% in
2014.
- In 2015, the Company repurchased $29.7
million or 575,155 shares of its common stock at an average share
price of $51.58, which represents 2.0% of net shares outstanding at
Dec. 31, 2014.
- Book value per share increased to
$59.74, up 2.6% from $58.22 at Dec. 31, 2014.
- At Dec. 31, 2015, cash and investments
totaled $4.2 billion with a net pre-tax unrealized gain of
approximately $84.2 million.
HIGHLIGHTS FOR THE FOURTH QUARTER ENDED DEC. 31,
2015:
- Gross written premiums were up 5.0% to
$446.2 million from $425.0 million in the fourth quarter of
2014.
- After-tax operating income was $25.8
million or $0.90 per diluted share, compared to $21.8 million or
$0.76 per diluted share for the fourth quarter of 2014.
- Net income was $41.2 million or $1.44
per diluted share, compared to $59.7 million or $2.07 per diluted
share for the fourth quarter of 2014.
- Pre-tax underwriting income increased
45.0% to $15.8 million in the fourth quarter of 2015 from $10.9
million for the fourth quarter of 2014.
- The combined ratio was 95.4% compared
to 96.8% for the fourth quarter of 2014. The loss and expense
ratios for the quarter were 55.5% and 39.9%, respectively, compared
to 55.5% and 41.3% for the fourth quarter of 2014.
- Net favorable prior-year reserve
development was $17.1 million (benefiting the combined ratio by 5.0
points), compared with $11.3 million (benefiting the combined ratio
by 3.3 points) for the fourth quarter of 2014.
- Estimated pre-tax catastrophe losses
were $5.2 million or 1.5 points on the combined ratio, compared to
$3.8 million or 1.1 points on the combined ratio for the fourth
quarter of 2014.
- The loss ratio excluding catastrophes
and reserve development was 59.0% for the fourth quarter of 2015,
compared to 57.7% for the fourth quarter of 2014.
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 before taxes
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 fourth quarter of
2015 reported gross written premiums of $158.3 million, up $13.4
million or 9.2%, compared to $144.9 million in the fourth quarter
of 2014. The primary drivers of growth in the quarter were the
casualty and professional lines. Net written premiums were up 6.0%
to $128.0 million, and earned premiums were up 11.6% to $135.4
million, when compared to the fourth quarter of 2014. Underwriting
income was $13.2 million for the quarter, compared to $22.1 million
for the fourth quarter of 2014. The fourth quarter 2015 combined
ratio of 90.2% compares to 81.8% for the prior-year quarter. Net
favorable prior-year reserve development was $7.0 million for the
fourth quarter of 2015, benefitting the combined ratio by 5.2
points, compared to net favorable prior-year reserve development of
$12.8 million or 10.6 points for the fourth quarter of 2014.
Catastrophe losses for the quarter were $0.8 million or 0.6 points
on the combined ratio, compared to negligible catastrophe losses
for the fourth quarter of 2014. The fourth quarter 2015 loss ratio,
excluding catastrophe losses and reserve development, was 63.9%
compared to 60.7% for the fourth quarter of 2014.
For the year ended Dec. 31, 2015, gross written premiums were
$679.5 million, up $72.3 million or 11.9%, compared to $607.2
million in 2014. Net written premiums were up 13.3% to $552.9
million, and earned premiums were up 8.3% to $525.3 million, when
compared to 2014. Underwriting income was $66.8 million compared to
$75.6 million in 2014. The 2015 combined ratio of 87.3% compares to
84.4% in 2014. Net favorable prior-year reserve development was
$32.1 million in 2015, or 6.1 points on the combined ratio,
compared to net favorable prior-year reserve development of $47.4
million or 9.8 points in 2014. Catastrophe losses in 2015 were $5.5
million or 1.0 points on the combined ratio, compared to $2.3
million or 0.5 points in 2014. The 2015 loss ratio, excluding
catastrophe losses and reserve development, was 60.6% compared to
60.4% in 2014.
Commercial Specialty
The Commercial Specialty segment reported gross written premiums
of $118.4 million, up $6.4 million or 5.7%, compared to $112.0
million in the fourth quarter of 2014. Growth in the quarter was
driven by program and public entity businesses. Net written
premiums were down 7.0% to $69.0 million, and earned premiums were
down 5.1% to $72.5 million, when compared to the fourth quarter of
2014. Underwriting income was $6.7 million for the quarter,
compared to an underwriting loss of $0.2 million for the fourth
quarter of 2014. The fourth quarter 2015 combined ratio of 90.9%
compares to 100.2% for the prior-year quarter. For the fourth
quarter of 2015, net favorable prior-year reserve development was
$1.3 million or 1.8 points on the combined ratio, compared to net
unfavorable prior-year reserve development of $1.6 million or 2.0
points for the fourth quarter of 2014. Catastrophe losses for the
quarter were $3.4 million or 4.6 points on the combined ratio,
compared to $0.7 million or 0.9 points for the fourth quarter of
2014. The fourth quarter 2015 loss ratio, excluding catastrophe
losses and reserve development, was 56.1% compared to 62.3% for the
fourth quarter of 2014.
For the year ended Dec. 31, 2015, gross written premiums were
$465.7 million, up $25.5 million or 5.8%, compared to $440.2
million in 2014. Net written premiums were down 5.1% to $285.6
million, and earned premiums were down 0.6% to $290.1 million, when
compared to 2014. Underwriting income was $18.1 million compared to
an underwriting loss of $0.7 million in 2014. The 2015 combined
ratio of 93.8% compares to 100.2% in 2014. In 2015, net unfavorable
prior-year reserve development was $9.1 million or 3.1 points on
the combined ratio, compared to net unfavorable prior-year reserve
development of $6.8 million or 2.3 points in 2014. Catastrophe
losses in 2015 were $5.2 million or 1.8 points on the combined
ratio, compared to $5.7 million or 2.0 points in 2014. The 2015
loss ratio, excluding catastrophe losses and reserve development,
was 56.9% compared to 60.5% in 2014.
Syndicate 1200
The segment reported gross written premiums of $124.0 million in
the fourth quarter of 2015, up $1.6 million or 1.3% from $122.4
million for fourth quarter of 2014. Market conditions at Lloyd’s
remain challenging and modest growth is reflected in our North
American binder business, international casualty treaty, and new
platforms in Asia offset by a slightly reduced participation on the
Syndicate. Net written premiums were $86.8 million versus $96.3
million in the fourth quarter of 2014. Earned premiums were $101.9
million versus $105.2 million for the fourth quarter of 2014.
Underwriting income was $3.3 million for the quarter, compared to
$7.8 million for the fourth quarter of 2014, reflecting a combined
ratio of 96.7%, compared with 92.5% in the prior-year quarter. For
the fourth quarter of 2015, net favorable prior-year reserve
development was $7.5 million or 7.4 points on the combined ratio,
compared to net favorable prior-year reserve development of $5.3
million or 5.0 points for the fourth quarter of 2014. Catastrophe
losses for the quarter were negligible compared to $2.4 million or
2.3 points on the combined ratio for the fourth quarter of 2014.
The fourth quarter 2015 loss ratio, excluding catastrophe losses
and reserve development, was 59.3%, compared to 53.8% in the fourth
quarter of 2014.
For the year ended Dec. 31, 2015, gross written premiums were
$587.5 million, up $21.3 million or 3.8% from $566.2 million in
2014. Net written premiums were $403.3 million versus $420.8
million in 2014. Earned premiums were $407.4 million versus $411.1
million in 2014. Underwriting income was $23.9 million compared to
$35.2 million in 2014, reflecting a combined ratio of 94.1%,
compared with 91.4% in 2014. Net favorable prior-year reserve
development in 2015 was $10.3 million or 2.5 points on the combined
ratio, compared to net favorable prior-year reserve development of
$21.1 million or 5.2 points in 2014. Catastrophe losses in 2015
were $5.0 million or 1.2 points on the combined ratio, compared to
$2.4 million or 0.6 points on the combined ratio in 2014. The 2015
loss ratio, excluding catastrophe losses and reserve development,
was 53.7%, compared to 55.2% in 2014.
International Specialty
The International Specialty segment includes our property
reinsurance business as well as our insurance business in Bermuda
and Brazil. In the fourth quarter of 2015, gross written premiums
were $45.4 million, down slightly from $45.6 million for the fourth
quarter of 2014. More competitive market conditions exist in nearly
all of this segment’s business lines. In Brazil our business was up
year over year but the growth is partially offset in the reported
numbers by the devaluation of the local currency. Net written
premiums were $24.5 million versus $21.0 million in the fourth
quarter of 2014. Earned premiums for the quarter were $35.5 million
versus $35.7 million for the fourth quarter of 2014. Underwriting
income was $7.6 million for the quarter, compared to $3.4 million
for the fourth quarter of 2014, reflecting a fourth quarter 2015
combined ratio of 78.7%, compared with 90.7% in the prior-year
quarter. Net favorable prior-year reserve development was $1.9
million or 5.4 points on the combined ratio for the fourth quarter
of 2015, compared to net favorable reserve development of $0.3
million or 0.8 points for the fourth quarter of 2014. Catastrophe
losses for the quarter were $1.0 million or 3.1 points on the
combined ratio, compared to $1.3 million or 3.3 points for the
fourth quarter of 2014. The fourth quarter 2015 loss ratio,
excluding catastrophe losses and reserve development, was 45.2%,
compared to 49.7% in the fourth quarter of 2014.
For the year ended Dec. 31, 2015, gross written premiums were
$278.9 million, down $11.3 million or 3.9% from $290.2 million in
2014. Net written premiums were $159.9 million versus $156.6
million in 2014. Earned premiums were $148.7 million versus $148.3
million in 2014. Underwriting income was $22.5 million compared to
$16.0 million in 2014, reflecting a 2015 combined ratio of 84.9%,
compared with 89.2% in 2014. Net favorable prior-year reserve
development in 2015 was $7.7 million or 5.3 points on the combined
ratio in 2015, compared to net favorable prior-year reserve
development of $0.4 million or 0.2 points in 2014. Catastrophe
losses in 2015 were $8.0 million or 5.9 points on the combined
ratio compared to $7.3 million or 5.2 points in 2014. The 2015 loss
ratio, excluding catastrophe losses and reserve development, was
48.4%, compared to 47.5% in 2014.
CONFERENCE CALL
Argo Group management will conduct an investor conference call
tomorrow, Feb. 9, 2016, starting at 10 a.m. EST (11 a.m. AST). A
live webcast of the conference call can be accessed by visiting
http://services.choruscall.com/links/agii160209. 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/agii160209. In addition, a
telephone replay of the call will be available through Feb. 15,
2016, to callers from inside the U.S. by dialing (877) 344-7529
(conference # 10078869). Callers dialing from outside the U.S. can
access the telephone replay by dialing (412) 317-0088 (conference #
10078869).
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) December 31, December 31, 2015 2014
(unaudited) Assets Total investments $ 4,115.7 $ 4,097.9 Cash 121.7
81.0 Accrued investment income 21.6 22.1 Receivables 1,525.6
1,350.8 Goodwill and intangible assets 225.5 230.8 Deferred
acquisition costs, net 132.4 124.6 Ceded unearned premiums 250.8
207.6 Other assets 236.8 241.5 Total assets $ 6,630.1
$ 6,356.3 Liabilities and Shareholders' Equity Reserves for
losses and loss adjustment expenses $ 3,123.6 $ 3,042.4 Unearned
premiums 886.7 817.2 Ceded reinsurance payable, net 312.4 178.8
Senior unsecured fixed rate notes 143.8 143.8 Other indebtedness
55.2 62.0 Junior subordinated debentures 172.7 172.7 Other
liabilities 267.6 292.7 Total liabilities 4,962.0
4,709.6 Total shareholders' equity 1,668.1
1,646.7 Total liabilities and shareholders' equity $ 6,630.1 $
6,356.3 Book value per common share $ 59.74 $ 58.22
ARGO GROUP INTERNATIONAL HOLDINGS, LTD. FINANCIAL HIGHLIGHTS
ALL SEGMENTS (in millions, except per share amounts) Three
Months Ended Years Ended
December 31,
December 31,
2015 2014 2015 2014 (unaudited) (unaudited) Gross written
premiums $ 446.2 $ 425.0 $ 2,012.1 $ 1,905.4 Net written premiums
308.3 312.3 1,402.1 1,367.9 Earned premiums 345.3 338.7
1,371.9 1,338.1 Net investment income 21.7 21.9 85.6 86.6 Net
realized investment and other gains 2.1 51.5
27.1 94.0 Total revenue 369.1
412.1 1,484.6 1,518.7 Losses and loss adjustment expenses
191.8 187.9 766.1 747.4 Underwriting, acquisition and insurance
expenses 137.7 139.9 539.6 539.2 Interest expense 4.7 4.9 19.0 19.9
Fee and other expense, net 0.6 0.7 0.7 0.6 Foreign currency
exchange gain (9.9 ) (5.0 ) (18.3 ) (7.8 ) Impairment of intangible
assets 0.0 3.4 0.0
3.4 Total expenses 324.9 331.8 1,307.1 1,302.7 Income
before taxes 44.2 80.3 177.5 216.0 Income tax provision 3.0
20.6 14.3 32.8 Net
income $ 41.2 $ 59.7 $ 163.2 $ 183.2
Net income per common share (basic) $ 1.48 $
2.11 $ 5.83 $ 6.39 Net income
per common share (diluted) $ 1.44 $ 2.07 $ 5.72
$ 6.27 Weighted average common shares: Basic
27.9 28.3 28.0
28.7 Diluted 28.5 28.8
28.6 29.2
ARGO GROUP INTERNATIONAL HOLDINGS, LTD. SEGMENT DATA
(in millions) Three Months Ended Years Ended
December 31, December 31, 2015 2014 2015 2014 (unaudited)
(unaudited)
Excess and Surplus
Lines
Gross written premiums $ 158.3 $ 144.9 $ 679.5 $ 607.2 Net written
premiums 128.0 120.7 552.9 487.8 Earned premiums 135.4 121.3 525.3
485.2 Underwriting income 13.2 22.1 66.8 75.6 Net investment income
8.9 9.5 35.2 36.7 Interest expense (1.5 ) (1.5 )
(6.0 ) (6.3 ) Income before income taxes $ 20.6
$ 30.1 $ 96.0 $ 106.0 Loss ratio 59.3 %
49.6 % 55.5 % 51.1 % Expense ratio 30.9 32.2
31.8 33.3 GAAP combined ratio
90.2 % 81.8 % 87.3 % 84.4 %
Commercial
Specialty
Gross written premiums $ 118.4 $ 112.0 $ 465.7 $ 440.2 Net written
premiums 69.0 74.2 285.6 301.1 Earned premiums 72.5 76.4 290.1
291.9 Underwriting income (loss) 6.7 (0.2 ) 18.1 (0.7 ) Net
investment income 4.7 4.9 18.5 18.7 Interest expense (0.8 ) (0.8 )
(3.2 ) (3.2 ) Fee expense, net (1.5 ) (0.8 ) (3.5 ) (2.5 )
Impairment of intangible assets - (3.4 )
- (3.4 ) Income (loss) before income taxes $
9.1 $ (0.3 ) $ 29.9 $ 8.9 Loss ratio 58.9 %
65.2 % 61.8 % 64.8 % Expense ratio 32.0 35.0
32.0 35.4 GAAP combined ratio
90.9 % 100.2 % 93.8 % 100.2 %
Syndicate
1200
Gross written premiums $ 124.0 $ 122.4 $ 587.5 $ 566.2 Net written
premiums 86.8 96.3 403.3 420.8 Earned premiums 101.9 105.2 407.4
411.1 Underwriting income 3.3 7.8 23.9 35.2 Net investment income
2.3 2.3 9.2 10.2 Interest expense (0.7 ) (0.8 ) (2.6 ) (3.2 ) Fee
income, net 0.9 0.1 3.3
1.9 Income before income taxes $ 5.8 $ 9.4
$ 33.8 $ 44.1 Loss Ratio 51.9 % 51.1 % 52.4 %
50.6 % Expense Ratio 44.8 41.4
41.7 40.8 GAAP Combined Ratio 96.7 %
92.5 % 94.1 % 91.4 %
International
Specialty
Gross written premiums $ 45.4 $ 45.6 $ 278.9 $ 290.2 Net written
premiums 24.5 21.0 159.9 156.6 Earned premiums 35.5 35.7 148.7
148.3 Underwriting income 7.6 3.4 22.5 16.0 Net investment income
3.0 2.1 11.8 8.2 Interest expense (0.7 ) (0.8 )
(3.0 ) (3.1 ) Income before income taxes $ 9.9
$ 4.7 $ 31.3 $ 21.1 Loss ratio 42.9 % 52.2 %
49.0 % 52.5 % Expense ratio 35.8 38.5
35.9 36.7 GAAP combined ratio
78.7 % 90.7 % 84.9 % 89.2 %
ARGO GROUP INTERNATIONAL HOLDINGS,
LTD.
(in millions) (unaudited) For the Three
Months For the Years Ended December 31, Ended December 31, Net
Prior Year Development 2015 2014 2015 2014
(Favorable)/Unfavorable
Excess and Surplus Lines $ (7.0 ) $ (12.8 ) $ (32.1 ) $ (47.4 )
Commercial Specialty (1.3 ) 1.6 9.1 6.8 Syndicate 1200 (7.5 ) (5.3
) (10.3 ) (21.1 ) International Specialty (1.9 ) (0.3 ) (7.7 ) (0.4
) Run-off 0.6 5.5 8.6
24.4 Total $ (17.1 ) $ (11.3 ) $ (32.4 ) $ (37.7 )
ARGO GROUP INTERNATIONAL HOLDINGS, LTD. RECONCILIATION OF
OPERATING INCOME TO NET INCOME (in millions, except per share
amounts) Three Months Ended Years Ended December 31,
December 31, 2015 2014 2015 2014 (unaudited) (unaudited)
Income before taxes: From operations $ 32.2 $ 27.2 $ 132.1 $ 117.6
Foreign currency exchange gains 9.9 5.0 18.3 7.8 Net realized
investment and other gains 2.1 51.5 27.1 94.0 Impairment of
intangible assets 0.0 (3.4 ) 0.0
(3.4 ) Income before taxes 44.2 80.3 177.5 216.0 Income tax
provision 3.0 20.6 14.3
32.8 Net income $ 41.2 $ 59.7 $ 163.2
$ 183.2 Net income per common share
(diluted) $ 1.44 $ 2.07 $ 5.72 $ 6.27
Operating income per common share (diluted) At assumed
income tax rate:
Income (a)
$ 1.24 $ 2.23 $ 4.97 $ 5.92 Foreign currency exchange gains (0.28 )
(0.14 ) (0.51 ) (0.21 ) Net realized investment and other gains
(0.06 ) (1.43 ) (0.76 ) (2.58 ) Impairment of intangible assets
- 0.09 - 0.09
Operating income per common share (diluted) $ 0.90
$ 0.76 $ 3.70 $ 3.22 (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 Years Ended
December 31, December 31, 2015 2014 2015 2014 (unaudited)
(unaudited) Earned Premiums $ 345.3 $ 338.7 $ 1,371.9 $
1,338.1 Losses and Loss Adjustment Expenses 191.8 187.9 766.1 747.4
Underwriting, Acquisition and Insurance Expenses 137.7
139.9 539.6 539.2
Underwriting Income 15.8 10.9 66.2 51.5 Net investment income 21.7
21.9 85.6 86.6 Net realized investment and other gains 2.1 51.5
27.1 94.0 Interest expense (4.7 ) (4.9 ) (19.0 ) (19.9 ) Fee and
other expense, net (0.6 ) (0.7 ) (0.7 ) (0.6 ) Foreign currency
exchange gain 9.9 5.0 18.3 7.8 Impairment of intangible assets
0.0 (3.4 ) 0.0 (3.4 )
Income Before Taxes 44.2 80.3 177.5 216.0 Income Tax Provision
3.0 20.6 14.3 32.8
Net Income $ 41.2 $ 59.7 $ 163.2 $
183.2
ARGO GROUP INTERNATIONAL HOLDINGS, LTD. SHAREHOLDER RETURN
ANALYSIS (in millions) Years Ended December
31, 2015 2014 % Change Net income $ 163.2 $ 183.2 (10.9 %)
Operating income (a) 105.7 94.1 12.3 % Shareholders' Equity
- Beginning of the period 1,646.7 1,563.0 5.4 % Shareholders'
Equity - End of current period 1,668.1 1,646.7
1.3 % Average Shareholders' Equity $ 1,657.4 $ 1,604.9 3.3 %
Annualized net income
return on average shareholders' equity 9.8 % 11.4 % Annualized
operating income return on average shareholders' equity
6.4 % 5.9 %
(a) at assumed 20% tax rate
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160208006263/en/
Argo Group International Holdings, Ltd.Susan Spivak Bernstein,
212-607-8835Senior Vice President, Investor Relations
Argo (NYSE:ARGO)
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