Argo Group International Holdings, Ltd. (“Argo” or the “company”) (NYSE: ARGO), announced today that its results for the first quarter of 2020 will be adversely affected by certain loss items primarily related to the impact of the COVID-19 pandemic and volatility in global financial markets, summarized in more detail below.
Argo expects to report pre-tax net catastrophe losses of $29 million, including approximately $26 million related to the COVID-19 pandemic, primarily resulting from contingency and property exposures in the company’s International Operations and property exposures in its U.S. Operations. Property losses relate to sub-limited affirmative business interruption coverage, primarily in certain International markets, as well as expected costs associated with potential litigation.
“Our company has a long history of assisting policyholders as they navigate unprecedented times,” said Argo Chief Executive Officer Kevin J. Rehnberg. “While this continuing event is significant, Argo remains financially strong and will continue to support our customers and producers through the challenges ahead.
“I’m grateful for the broader Argo team, who – like so many worldwide – have been working long hours in remote locations to serve our customers. My sympathy goes out to all of those affected by this virus directly or indirectly.”
Charges related to the COVID-19 pandemic represent estimated losses incurred through March 31, 2020. Argo expects to incur some additional losses and claim related expenses in subsequent quarters depending on the timing and duration of impacts related to the COVID-19 pandemic. Additionally, net prior year reserve development was not material in the first quarter of 2020.
Investment results in the quarter were adversely impacted by extreme volatility in interest rates, credit spreads and equity markets. As a result, Argo expects to report pre-tax net realized and unrealized investment losses of $162 million, partially offset by net investment income of $35 million for the first quarter of 2020.
Argo Schedules Earnings Release for May 7, 2020
The company will release first quarter 2020 financial results after the close of U.S. financial markets on Thursday, May 7, 2020. Company management will conduct an investor conference call starting at 11 a.m. EDT on Friday, May 8, 2020.
Instructions for Connecting to the May 8, 2020, Conference Call
A live webcast of the conference call can be accessed at https://services.choruscall.com/links/argo200508.html. Participants in the U.S. can access the call by dialing 877-291-5203. Callers dialing from outside the U.S. can access the call by dialing +1 412-902-6610. Please ask the operator to be connected to the Argo Group earnings call.
A webcast replay will be available shortly after the live conference call and can be accessed at https://services.choruscall.com/links/argo200508.html. A telephone replay of the conference call will be available through May 15, 2020, to callers in the U.S. by dialing 877-344-7529 (conference 10143599). Callers dialing from outside the U.S. can access the telephone replay by dialing +1 412-317-0088 (conference 10143599).
ABOUT LOSS ESTIMATES
Argo Group’s estimates of losses are based on claims received to date, policy-level reviews, discussions with distribution partners, the Company’s internal and external modeling resources, and publicly available industry loss estimates. Argo Group’s estimates are dependent on broad assumptions about coverage, liability, reinsurance and potential changes to both known and unknown claims. Accordingly, the actual ultimate net impact may differ materially from Argo Group’s estimates.
