Argo
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Slipstream will be available to marine, cargo and logistics UK clients.
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Current CEO Thomas Bradley, who announced his intention to retire on the closure of the deal, will receive a one-time cash bonus of $1.2mn.
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The appointment follows that of Williams and Drakontaidis as head of contract surety and head of commercial surety respectively.
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The US operations drove the net adverse development with a $25.4mn hit, up from $6.7mn in Q2 2022, attributable to business lines the company has exited.
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Argo has also hired former RLI surety head Greg Chilson as an adviser.
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The charge was related to a reassessment of potential claims in professional lines, mostly from accident years 2019 and prior, and to losses from businesses Argo has exited.
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The companies expect to complete the transaction in the second half of the year, subject to regulatory approvals and customary closing conditions.
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Argo’s first bids included an implied firm value of $49.71 per Argo common share and $40 per share in cash, among others.
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The firm’s US unit recorded $36.6mn of net unfavorable development in Q4 2022, compared with a $121.6mn charge in Q4 2021.
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S&P said the change reflected uncertainty around Argo’s risk appetite following its $1.1bn acquisition by Brookfield Reinsurance.
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The member joined the board in August 2022, two and a half years after ending his activist campaign against the carrier’s management.
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The ratings agency has placed under review with developing implications Argo’s A- financial strength ratings, as well as its credit ratings.
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The reinsurer said in its Q4 earnings call that Argo’s takeover further diversifies its operations and adds a foundational piece to its expanding P&C activity in the US.
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The consideration represents a 48.7% premium to Argo’s share price before the sale of its Lloyd’s business.
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The New York-listed carrier has completed its $125mn deal.
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Enstar is conducting due diligence around taking on the rest of the Argo back book.
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Activist investor Capital Returns had nominated Ron Bobman and David Michelson, but withdrew the nominations on Monday.
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The carrier has called this month’s vote ‘a critical moment in Argo’s history’.
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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.
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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.
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The Bermudian claimed Ron Bobman and David Michelson’s directorship would ‘diminish’ the board’s capabilities and expertise.
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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.
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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.
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The activist investor has been trying to join the board of the struggling firm and has been interviewed by Argo.
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The company said the resignation was due to “professional and personal commitments”.
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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.
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Bobman said the board of directors “demonstrated poor judgment” by approving the recruitment of Jessica Snyder as president of Argo’s US insurance division.
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Capital Returns Master has proposed its president Ronald Bobman and David Michelson, president of DWM Consulting, as two new Argo board members.
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A broader approach to deal structure leaves room open for a private firm to reverse into the company to go public.
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Insurance Insider selects 10 exclusive news stories reported by our team on the frontline at Monte Carlo Rendez-Vous.
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Westfield will take on 2021 and 2022 as part of the agreement, but it is not yet clear if 2020 will be included in a legacy deal Argo struck this year for 2018 and 2019 in the run-up to sale.
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Goldman Sachs has reapproached potential bidders as the Bermudian moves rapidly following the recent legacy deal and divestiture.
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The deal price represents 1.16x tangible book value.
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A signed deal would end a roughly three-year hiatus for significant strategic balance sheet M&A at Lloyd’s.
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Plus the latest people moves and all the top news from this week.
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A sale of the managing agency and Syndicate 1200 would represent tangible progress in Argo’s strategic process.
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The transaction would mark a fifth legacy deal struck by Argo as it seeks to clean up its back book amid a strategic review.
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The executive will report to CEO and executive chairman Tom Bradley, who recently took over the role on a permanent basis.
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With the addition of roughly 512,000 shares, Enstar’s interest in Argo was valued at ~$62.7mn at the end of June.
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The deal also includes a $75mn loss corridor that must be eroded before adverse development passes to the legacy firm.
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The Goldman Sachs-run process drew limited interest and does not offer a path to takeout at a premium valuation.
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It is understood that the carrier, which is currently going through a sale process, is being advised by TigerRisk.
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The board retained Goldman Sachs to advise in April, and the investment bank has been running a sales process.
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Current CEO Bradley will receive 78,760 shares of restricted stock over a 12-month period, as well as 135,000 stock appreciation rights with an exercise price of $43.80.
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Kevin Rehnberg, who has been out on leave for health reasons since March 2022, is stepping down from the top role and the board of directors.
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KPMG has been appointed to succeed its Big Four rival as the up-for-sale Bermudian tries to turn the page on its delayed annual filings.
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Q1 net adverse prior year reserve development was $3.4mn, or 0.7 points on the LR, up from last year’s $1mn net reserve charge.
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Plus this week’s Q1 results and all the top news of the week.
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Ron Bobman first called for the sale of the firm back in September 2021, and recently launched a proxy campaign to join its board.
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Argo’s board is considering a potential sale as it announced an “exploration of strategic alternatives”, which will also consider a merger or other strategic transaction.
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Argo Re kept its A- (excellent) financial strength rating.
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Remedial actions this year have included dropping property D&F and North American binder business.
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The company reported a pre-tax, pre-divide income of $5.3mn and combined ratio of 105.6%.
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Major shareholder mocks Argo statements on progress, stating “attempt at transformation has failed,” based on Argo performance.
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The carrier has interviewed nominees Ron Bobman and David Michelson.
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Capital Returns has proposed to nominate both Ron Bobman and David Michelson to the Bermudian carrier’s board.
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The insurer also failed to file its annual report on time last year.
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Argo’s Q4 2021 loss ratio jumped to 87.1% from 69.8% a year ago, despite cat losses dropping to $6.8mn from over $50mn in Q4 2020.
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The investor has been calling on the board to explore strategic alternatives for the business since September last year.
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The company is also writing down the value of Syndicate 1200 by $40mn-$45mn.
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The transaction is expected to close during H1 2022 and reflects Argo’s strategic refocus on US specialty.
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The executive said during a Q3 earnings call that the company wouldn’t comment on market rumors related to the sale of its primary Lloyd's insurance business.
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The company shrank overall GWP by 1.6% to $876mn, weighed down by a 10% drop of in international premiums, though it grew its core lines of business in the US by 20%.
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The exit in London comes at a time of wider market discussion around the adequacy of cat pricing.
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The divestiture comes amid Argo’s drawback from international business.
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The planned disposal of the syndicate underlines the challenges the cohort of Bermudian entries has faced.
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Capital Returns Management has waged successful campaigns against Watford, FBL Group and FedNat.
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The business is being marketed by investment bank Morgan Stanley following last year's sale of Ariel Re.
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Matt Harris, the carrier’s head of international, has also left the business, as general counsel Susan Comparato takes up the role of chief administrative officer.
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The insurer cut average annual loss exposure by 40% more than a year ahead of schedule after shedding property limit and restructuring reinsurance purchases.
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The underwriting profits within the carrier’s US operations narrowed to $25mn, after higher economic activity and attritional claims caused margins to tighten.
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The consortium, understood to have a limit of $30mn, is targeting mid-market business.
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The underwriter will be based in Barcelona and focus on professional indemnity business.
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The move comes amid a reassessment of ESG by (re)insurers.
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Tierra Underwriting is led by Andrew Beechey and supports green project-finance transactions.
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Kevin Rehnberg says the carrier is disappointed with the level of catastrophe losses but expects less volatility going forward.
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The US-focused specialty insurer dropped its core loss ratio by almost two points as it delivered its best underlying underwriting result since 2016.
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Claims from Winter Storm Uri will cost the carrier about $43mn, before tax.
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Former Argo executives Tim Hadler and Nigel Mortimer will join the MGA to lead the new programme.
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Corrections to historical numbers push the net loss down to $58.7mn.
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The deal will transfer legacy Pembroke business that still sat with Liberty Mutual Group for the 2018 and prior years of account.
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Beazley has rebuilt its contingency team after large losses and a number of senior underwriter departures.
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Argo is looking to redeploy capital from reinsurance and into high growth US E&S.
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The company benefited from improved underlying results, premium growth at its US operations, and a much smaller reserve hit.
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The executive replaces Jay Bullock, who announced his departure last summer.
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The carrier has set aside $13mn to pay coronavirus claims at its international unit.
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The executive, based in Chicago, is a former broker and joined Argo’s ceded re team from Allied World in 2020.
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The regulator found that Watson and Argo failed to disclose $5.3mn in personal benefits.
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As part of the deal Pelican Ventures and JC Flowers will provide capital for 2021 onwards, with Argo maintaining responsibility for years prior.
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The investment consortium has also finalized an operational partnership with Apollo Syndicate Management.
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The disposal plans are the latest of a string of restructuring measures under the leadership of CEO Kevin Rehnberg.
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The international segment’s underlying loss ratio improved by 15 points to 50%.
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Ariel Re will focus on key lines of business, including cat, retro, marine and professional lines.
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The Bermudian is expecting to pay $17mn in third quarter Covid-19 claims.
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The deal is structured as a reinsurance-to-close transaction for 2017 and prior years at Syndicate 1200.
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Former RenaissanceRe CEO and founder Jim Stanard looks set to pick up the reinsurance platform.
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The funding for the deal was set to come from Cantor Fitzgerald and its billionaire CEO Howard Lutnick.
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The group remains committed to the class in Bermuda and the US.
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The specialty insurer’s underlying loss ratio dropped to 55.9% from 59.3% the year before.
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Activist investor Voce had previously criticised the performance of the firm's international businesses.
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Argo Group has exited the SME cyber market, leading to the departure of senior underwriter and group head of cyber Paul Miskovich from the carrier.
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The offering will be used to repay the remaining $125mn of a loan and provide working capital for growth.
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The estimate is in line with Argo's earlier projection and will likely precede additional announcements from the sector in the coming weeks.
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CEO Kevin Rehnberg continues to reshape the carrier's management.
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Syndicate 1200 is the second Lloyd’s syndicate after Canopius to explore such a deal.
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Sources say the carrier’s group head of cyber Paul Miskovich has left his post.
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The execs are set to leave the firm after a combined 26 years at Argo and its predecessor companies.
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Argo has consented to a cease-and-desist order and will pay a $900,000 civil penalty.
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The carrier’s chief executive officer said the “vast majority” of BI cover in the US has virus exclusions.
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Strong growth in the US helped increase premium volume at the Bermudian carrier by 8.6 percent to $826mn.
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The losses mainly relate to event cancellation and BI losses.
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RLI shares plunged by nearly 12 percent, while and Argo dropped over 6 percent.
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Bernard Bailey and Fred Donner join Carol McFate as new Argo directors following a shareholder vote.
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Insurance stocks outperformed as Federal Reserve agreed to take further action and lawmakers mulled a pandemic backstop.
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The bolstered position follows a detente between the fund and the insurer’s management.
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The former CEO has instructed his lawyers to dispute what the company believes he should repay.
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The expenses were made public in a disclosure to investors on Friday.
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The ratings agency said the action follows Argo’s response to a recent SEC subpoena.
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The Bermudian has put its corporate jet up for sale in wake of public criticism over expenses.
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CEO Kevin Rehnberg said the 2019 results were “not indicative of our future direction”.
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Dr Bernard Bailey and Fred Donner will stand for election at the Argo annual shareholders meeting on 16 April.
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The leadership moves come after a year of activist investor-driven turmoil at the carrier.
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Interim CEO Kevin Rehnberg said the results were “clearly unacceptable”.
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The former AIG treasurer’s appointment as a director came as part of a truce with activist investor Voce Capital.
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Paragon insurance will acquire the business, which will continue to write on Argo paper.
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The executive joins Verus after about 20 years with Bermudian carrier Argo.
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The appointment follows a major business restructure at the carrier and the launch of a new specialty business.
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Jeremy Shallow becomes head of international specialty, while Ross MacDonald takes on the post of head of non-US international casualty.
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The Bermudian carrier’s retreat from Miami follows similar moves by Brit and Aspen.
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The investor’s nominee Carol McFate will take the spot vacated by former CEO Mark Watson III.
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The meeting was moved up from a previous date in May after five directors stepped down.
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The activist investor called on the carrier to elect shareholder-nominated directors.
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The departures represent a significant win for the activist investor, which was seeking to force a special meeting to oust the directors.
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The former executive’s business travel has been restricted as part of the exit deal.
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A proposal for a special meeting from activist fund Voce Capital requires the backing of at least 10 percent of Argo shareholders.
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He will report directly to the company’s interim CEO Kevin Rehnberg, in a restructuring of the North American business.
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The carrier was concerned about Voce’s influence over the appointment of new directors.
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On Friday this publication revealed that the board of Argo would seek to make insider Kevin Rehnberg the permanent CEO, having earlier appointed him interim chief.
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The insurer requires permission from Bermudian authorities to affirm the appointment.
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An SEC investigation into corporate perks suggests “potential shortcomings in Argo’s governance framework”, S&P said.
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A forensic auditor found that benefits to former CEO Mark Watson were either ‘not disclosed or incorrectly disclosed’ to investors.
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The moves comes after a subpoena by the US Securities and Exchange Commission and the departure of CEO Mark Watson III.
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Incoming CEO Rehnberg said he is “not satisfied” with Bermudian's Q3 performance
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The activist investment firm criticised Watson’s expected $7.6mn exit payout.
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The refund of a potential $2.23mn is likely to add fuel to activist Voce’s campaign at the carrier.
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The outgoing CEO of Argo spoke to this publication as he stood down after almost 20 years.
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Head of Americas Kevin Rehnberg will take over from Watson on an interim basis.
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It is a testing time for the Argo management team.
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Tim Carter formerly served as CUO for global commercial insurance at AIG.
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The carrier expects a $42mn prior-year reserve charge in Q3.
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Axis reported a Q3 operating loss, while Argo anticipates a $42mn reserve charge in the period.
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The carrier also disclosed an estimate of pre-tax catastrophe losses for the third quarter of $19mn.
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The senior underwriter joins from Abu Dhabi National Insurance Company.
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The five directors the activist wants out include chairman Gary Woods.
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The regulator has asked the carrier to disclose documents relating to staff compensation.
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Investigation comes after activist investor accused Argo executives of misusing corporate assets.
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The executive was responding to questions over $26.4mn of reserve strengthening carried out by the insurer in the second quarter of the year.
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The decision follows the appointment of John Moffatt as active underwriter.
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The Bermudian carrier will now underwrite surety bond programmes with an aggregate value up to $300mn.
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The executive is to step down from his responsibilities after seven years at the firm.
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The proposals follow a bitter proxy battle with Voce Capital centering on expenses and corporate governance.
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CEO Mark Watson pledged to make Bermudian digital “from top to bottom”.
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The Bermudian’s proxy battle with Voce cost $7.5mn in additional expenses.
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The syndicate’s CUO and head of specialty will replace Steve Eccles.
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The insurer's share price recovered slightly after dropping following the announcement that prior-year and second quarter losses will erode results by $32.5mn.
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The carrier says about $22.5mn of losses will come from prior-year events, with another $10mn from current-year claims.
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The class, which has experienced a string of recent losses, will now be written from Argo’s Bermuda platform.
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Chairman of Argo’s international business Jose Hernandez is also to leave at the end of this year.
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The outcome of the proxy contest could be seen as a coup for the carrier, but questions over expense management and corporate governance persist.
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The Bermudian won the non-binding vote on executive pay, but claimed just 50.3 percent of the vote.
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The underwriter moves following the completion of RenRe’s takeover of the Tokio Marine unit.
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The hedge fund said Tuesday that it was discontinuing a proxy campaign to get five new directors on the board.
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The activist claims Illinois and Virginia state departments ‘flip-flopped’ on proxy statement approvals after lobbying.
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The proxy firm backs two of the activist's director candidates, though Argo highlights support from the adviser on its returns track record.
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The planned changes to the company's board size come after feedback from long-term shareholders, the insurer said.
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The proxy firm has found in favour of the Bermudian on the key director votes, but against CEO Mark Watson III’s remuneration.
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The advisory firm sees no case for a board sweep-out but criticises elements of Mark Watson's pay.
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A new presentation from Argo outlines its track record and criticises Voce for short-term approach.
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The activist investor upped the ante by pushing for asset sales as well as issuing a $100mn expense save target.
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The revelation of the existence of a penthouse threatens to tarnish the insurer's credibility as it heads into a proxy fight.
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CEO Mark Watson highlighted the importance of long-strategic thinking on the firm’s Q1 call amid activist pressure
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Newton Queiroz will take the helm at Argo Seguros next week, reporting to group head of Latin America Jorge Cazar.
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Voce has offered “no information” about how its board nominees would do a better job than those who currently have seats.
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The activist investor promises to publish its own blueprint for unlocking value at the insurer next week.
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The carrier claims representations made by activist Voce Capital demonstrate “a reckless disregard for the truth”.
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As the Argo-Voce skirmish nears its first checkpoint, a proxy vote, The Insurance Insider breaks down the state of affairs and speculates on paths forward.
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David Martin will report to deputy global reinsurance head Matthew Wilken.
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Specialty carrier defends corporate governance practices.
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The index rises more than 10 percent in the first three months of the year.
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Helen Donegan’s appointment follows the recruitment of an EMEA CUO from RSA last month.
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Earlier this week Voce slammed Argo’s “laconic response” to allegations of corporate expenses misuse.
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Argo insists its appointment of two directors in late February were legitimate.
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