Argo

The announcement comes a week after the institutional investor said it would accelerate its pivot to an insurance-led strategy.

Arturo Pelaez will continue in his managing director role at Brookfield Asset Management.

Argo shelved the sale of its Bermudian insurance business in mid-2024.

The agency cited SiriusPoint’s recent management moves including lower cat exposure as a driver of the change.

The business – which writes professional liability, excess casualty and property - was marketed by investment bank RBC.

He brings 23 years of insurance industry experience.

Slipstream will be available to marine, cargo and logistics UK clients.

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.

The appointment follows that of Williams and Drakontaidis as head of contract surety and head of commercial surety respectively.

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.

Argo has also hired former RLI surety head Greg Chilson as an adviser.

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.

The companies expect to complete the transaction in the second half of the year, subject to regulatory approvals and customary closing conditions.

Argo’s first bids included an implied firm value of $49.71 per Argo common share and $40 per share in cash, among others.

The firm’s US unit recorded $36.6mn of net unfavorable development in Q4 2022, compared with a $121.6mn charge in Q4 2021.

S&P said the change reflected uncertainty around Argo’s risk appetite following its $1.1bn acquisition by Brookfield Reinsurance.

The member joined the board in August 2022, two and a half years after ending his activist campaign against the carrier’s management.

The ratings agency has placed under review with developing implications Argo’s A- financial strength ratings, as well as its credit ratings.

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.

The consideration represents a 48.7% premium to Argo’s share price before the sale of its Lloyd’s business.

The New York-listed carrier has completed its $125mn deal.

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.

Capital Returns Master has proposed its president Ronald Bobman and David Michelson, president of DWM Consulting, as two new Argo board members.

A broader approach to deal structure leaves room open for a private firm to reverse into the company to go public.

Insurance Insider selects 10 exclusive news stories reported by our team on the frontline at Monte Carlo Rendez-Vous.