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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Activist investor has responded to Argo’s proxy statement.
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The Bermuda carrier responds to the activist's attempt to replace directors including chairman Gary Woods.
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Alfredo Alonso will join the carrier this month and report to group head of international operations Matt Harris
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I always feel a twinge of sympathy whenever I see yet another executive team such as Argo’s put in the crosshairs of activist investors.
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Voce’s criticisms of Argo and its CEO Mark Watson coming under scrutiny.
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Voce said none of its nominees have business or financial entanglements with the investment firm.
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The New York-listed (re)insurer has retained Bank of America Merrill Lynch to advise.
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Argo highlighted its “qualified and engaged” board of directors on the heels of criticism from Voce.
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The investor went public with criticism after seeing additions to the Bermudian (re)insurer's board, a classic activism defence.
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One tempting way to think about the sensational letter sent to Argo’s investors by activist investor Voce Capital is to dismiss it as an amusing but inconsequential sideshow from an external investor that doesn’t get the uniqueness of our market.
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Argo Group’s board and management have responded to the explosive letter issued by activist investor Voce Capital Management.
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The activist investor takes aim at CEO Mark Watson and prepares to name four new independent director candidates.
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