Argo Group International Holdings Ltd
Argo Group International — Investor Presentation (February 2022)
24 slides from Argo Group International's investor presentation, Feb 23, 2022
Slide 1: Argo Group Investor Presentation, February 2022
February 2022 ARGO GROUP Investor Presentation Exhibit 99.1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes forward-looking statements, both with respect to Argo Group International Holdings, Ltd. (“Argo Group”, “we”, or “our”) and its industry, that reflect our current views with respect to future events and financial performance. Forward-looking stat
Slide 3: A U.S.-Focused Specialty Insurer
A U.S.-Focused Specialty Insurer A distinctive U.S.-focused specialty insurer with well-established businesses operating in key specialty markets ARGO GROUP ~90% of Companywide Premium from U.S. Domiciled Risks U.S. Operations Differentiated Excess & Surplus (E&S) and specialty admitted platform Str
Slide 4: Argo Group Strategy
Argo Group Strategy Operate as a specialty property and casualty insurer achieving a combined ratio in the low 90% range Enforce and embrace a culture of accountability and integrity whereby the organization adheres to a core set of values Encourage innovation and process improvement ensuring that t
Slide 5: Announced Actions Aligned With Strategic Priorities
Announced Actions Aligned With Strategic Priorities Exited London Property D&F and North American Binders business in Syndicate 1200 (~$80M of GWP1) Announced an Agreement to Sell Brazilian Operations, Argo Seguros (~$75M of GWP1,2) U.S. Operations International Operations 2020 2021 2022 Exited U.S.
Slide 6: U.S. Operations pro-forma business profile post-portfolio changes
U.S. retention ratio (Net Written Premium (NWP) / GWP) has been impacted by fronting business Business exits include U.S. Grocery & Retail, Contract Binding P&C business, U.S. Specialty Property and other lines of business that are no longer written U.S. Operations Gross Written Premium (GWP) $ in m
Slide 7: International pro-forma business profile post-portfolio changes
Int’l retention ratio (NWP / GWP) increasing due to strategic repositioning of the portfolio toward less catastrophe exposed lines of business Business exits include Ariel Re, Argo Seguros, Brazil and the planned exits of businesses in Italy and Malta and reflects re-underwritten and / or other line
Slide 8: Net Catastrophe Losses vs. Insured Industry Losses
Net Catastrophe Losses vs. Insured Industry Losses2 Volatility Reduction Actions Insured Industry Catastrophe Losses2 Argo Group Net Catastrophe Losses Argo Group Hurricane Ida Net Catastrophe Losses Argo Group Winter Storm Uri Net Catastrophe Losses $ in millions unless otherwise noted. 1Catastroph
Slide 9: Expense Reduction Actions
20% Workforce (Nearly 300 headcount decrease) 35% Outside Services (Contract review and prioritization; more than $30M) 40% Real Estate Expense (Footprint reduction; $8M savings) Expense Initiatives Anticipated Savings (vs. 2019) Expense Ratio 2019 Expense Ratio 2020 Expense Ratio 2022E Expense Rati
Slide 10: Underlying underwriting results strong; combined ratio impacted by prior year development
Underlying underwriting results are strong while the overall combined ratio was impacted by adverse prior year development primarily in our run-off lines and in businesses we have significantly remediated or exited 105.4% Guidance Low-End Guidance High-End FY 2021 Actual 96.0% 93.6% 105.6% 105.0% $8
Slide 11: 2022 Financial Objectives
Financial Objectives 2022 Financial Objectives Margins 92% to 95% Combined Ratio Returns 9% to 11% Operating Return on Common Equity (Operating ROACE)2 Growth Double-Digit Net Earned Premium Growth1 1Excluding the impact of business exits and divestitures of approximately $280 million. 2The Company
Slide 12: Key actions to deliver 9% to 11% operating ROACE in 2022
Key actions to deliver an 9% to 11% operating return on common equity in 2022 Operating Return on Common Equity Glidepath 9% 11% 1 1 1Reconciliation of non-GAAP financial measure to its most directly comparable U.S. GAAP measure is included in the appendix of this presentation. The Company is not pr
Slide 13: Balanced Investment Strategy
Balanced Investment Strategy December 31, 2021 Portfolio Mix Portfolio Characteristics $ in millions, unless otherwise noted (1) Duration includes cash & equivalents. (2) Book yield is pre-tax & includes all fixed maturities. December 31, 2018 Portfolio Mix Net Investment Income Duration of 2.8 year
Slide 14: Proactive Approach to Capital Management
Proactive Approach to Capital Management Commitment to ensure strong levels of capital are maintained to support our regulatory and rating agency obligations Focused on capital stewardship: return capital to shareholders when it is more financially attractive to do so than deploying elsewhere in the
Slide 15: Well-Positioned to Create Value in 2022 and Beyond
We Believe We Are Well-Positioned to Create Value in 2022 and Beyond Positioned for growth in attractive markets 90%+ U.S. domiciled risks Benefitting from improving market conditions Dynamic and disciplined approach to business Expense initiatives in place anticipated to remove costs and achieve a
Slide 16: Appendix
Appendix
Slide 17: U.S. Operations: 66% of Companywide NWP
U.S. Operations: 66% of Companywide NWP Segment Overview Net Written Premiums by Business Mix Gross Written Premium Argo Construction – Offers primary and excess casualty coverage to the construction segment Argo Pro – Customer service focused Directors & Officers and Errors & Omissions specialty pl
Slide 18: International Operations: 34% of Companywide NWP
International Operations: 34% of Companywide NWP Segment Overview Net Written Premiums by Business Mix Gross Written Premium Property Liability Professional Lines Specialty Focused on U.S. and worldwide insurance risks written in Lloyd’s and Bermuda markets Established multi-class platform at Lloyd’
Slide 19: Argo's Ongoing Commitment to ESG
Argo’s Ongoing Commitment to ESG Argo’s corporate responsibility to stakeholders requires that we hold ourselves to the highest standards by being stewards of the environment, advancing our societal impact and providing transparent corporate governance – our 3rd ESG Annual Report is expected to be i
Slide 20: Reconciliation of Non-GAAP Measures: Consolidated CAY ex-CAT ratios
Reconciliation of Non-GAAP Measures “CAY ex-CAT combined ratio” and the “CAY ex-CAT loss ratio" are internal measures used by the management of the Company to evaluate the performance of its underwriting activity and represents the net amount of underwriting income excluding catastrophe related char
Slide 21: Reconciliation of Non-GAAP Measures: U.S. Operations CAY ex-CAT ratios
Reconciliation of Non-GAAP Measures “CAY ex-CAT combined ratio” and the “CAY ex-CAT loss ratio" are internal measures used by the management of the Company to evaluate the performance of its underwriting activity and represents the net amount of underwriting income excluding catastrophe related char
Slide 22: Reconciliation of Non-GAAP Measures: International Operations CAY ex-CAT ratios
Reconciliation of Non-GAAP Measures “CAY ex-CAT combined ratio” and the “CAY ex-CAT loss ratio" are internal measures used by the management of the Company to evaluate the performance of its underwriting activity and represents the net amount of underwriting income excluding catastrophe related char
Slide 23: Reconciliation of Non-GAAP Measures: Operating income (loss)
Reconciliation of Non-GAAP Measures “Operating income (loss)" is an internal performance measure used in the management of the Company's operations and represents operating results after-tax (at an assumed effective tax rate of 15%) and preferred share dividends excluding, as applicable, net realize
Slide 24: Reconciliation of Non-GAAP Measures: Operating ROACE analysis
Reconciliation of Non-GAAP Measures "Annualized operating return on average common shareholders' equity" is calculated using operating income (loss) (as defined on slide 23 and annualized in the manner described for net income (loss) attributable to common shareholders ("ROACE")) and average common
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