Argo

Enstar is conducting due diligence around taking on the rest of the Argo back book.

Activist investor Capital Returns had nominated Ron Bobman and David Michelson, but withdrew the nominations on Monday.

The carrier has called this month’s vote ‘a critical moment in Argo’s history’.

The activist investor’s statement comes as a reaction to Argo’s message to investors last Friday ahead of the carrier’s annual shareholder meeting.

The carrier is urging shareholders to appoint all seven of its nominees to the board in an annual meeting next month, amid activist investor pressure.

The Bermudian claimed Ron Bobman and David Michelson’s directorship would ‘diminish’ the board’s capabilities and expertise.

Argo has recognized $37.7mn of prior year development (PYD) in the first nine months of 2022, which falls within the retained loss corridor of $75mn in the loss portfolio transfer (LPT) deal the specialty insurer struck with Enstar in Q2 for its US insurance back-book.

The specialty insurer booked an $11.9mn overall net adverse reserve development, up from $6.2mn last year, fueled by a $16.2mn charge in the US business.

The activist investor has been trying to join the board of the struggling firm and has been interviewed by Argo.

The company said the resignation was due to “professional and personal commitments”.

Argo Group has been sued by investors, who claim the company has engaged in inadequate underwriting and misrepresentation of facts which resulted in a 60% drop in the specialty carrier’s common stock value this year.

Bobman said the board of directors “demonstrated poor judgment” by approving the recruitment of Jessica Snyder as president of Argo’s US insurance division.