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Argo Group (ARGO) Banks on Segmental Growth Amid Cost Woes
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Argo Group International Holdings, Ltd. is well-poised for growth, driven by highly profitable business, growth efforts, expense initiative program, investment in technology and a solid capital position.
Argo Group remains focused on being a pure-play U.S. specialty insurer and pursues strategic actions to streamline its business model, strengthen its balance sheet and re-underwrite and drive efficiencies in its core businesses.
Higher income from alternative investment portfolio which includes earnings from both private equity and hedge fund investments and higher interest rates are expected to drive net investment income.
Argo Group’s highly profitable businesses are well-poised for growth in attractive markets.
Argo Property, Casualty, Construction, Environmental, Inland Marine and Surety contribute two-thirds of the U.S. premium base. ARGO continues to experience better pricing across its portfolio of businesses.
In May 2023, Argo Surety partnered with Trisura Group to support its surety underwriting operations and grow its surety business. This partnership will enable the insurer to build on its commitment to the surety business for the valuable broker partners as well as expand its capacity for new business. The strategic partnership will advance ARGO’s business across North America.
In its continuous efforts to improve underwriting profitability, the insurer exited reinsurance operations and non-core lines of business, lowered property exposure substantially, lowered volatility and increased price. These, in turn, will help ARGO achieve its target.
The insurance industry is undergoing digitalization at an accelerated pace and Argo Group is no exception. The company consistently invests in technology to improve operating efficiency and risk selection while reducing overall expenses.
Banking on operational strength, ARGO has a solid balance sheet with modest financial leverage.
Argo Group’s expenses have been rising over the last several quarters, resulting in the contraction of margins. Such escalating expenses are driven by higher losses and loss adjustment expenses, underwriting, acquisition and insurance expenses, non-operating costs, interest expense, fee and other costs and the impairment of goodwill and intangible assets. The company must manage its expense prudently, else margin could erode.
Other Industry Players
Other players in the brokerage insurance industry include Axis Capital Holdings Limited (AXS - Free Report) , Chubb Limited (CB - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) .
Axis Capital has a solid track record of beating earnings estimates in three of the last four quarters, while missing in one, the average being 9.75%.
Axis Capital continues to build on its Specialty Insurance, Reinsurance and Accident and Health to pave the way for long-term growth. Its focus on deploying resources prudently while enhancing efficiencies, improving its portfolio mix and underwriting profitability apart from fortifying the casualty and professional lines in insurance segment bode well. AXS effectively deploys capital to boost shareholder value.
Chubb has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 3.36%.
Chubb benefits from a suite of compelling products as well as services. It made investments in various strategic initiatives that paved the way for long-term growth. Strong capital position helps it boost shareholder value. Its inorganic growth story helps it to achieve a higher long-term return on equity. It boasts a strong capital position with sufficient cash generation capabilities.
Cincinnati Financial has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 25.25%.
Cincinnati Financial continues to grow premiums through a disciplined expansion of Cincinnati Re, while the division makes a nice contribution to its overall earnings. Price increases and a higher level of insured exposures are positives. It is focused on earning new business through appointing new agencies and believes that an agent-focused business model will drive long-term premium growth. It boasts a solid capital position that supports effective capital deployment.
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Argo Group (ARGO) Banks on Segmental Growth Amid Cost Woes
Argo Group International Holdings, Ltd. is well-poised for growth, driven by highly profitable business, growth efforts, expense initiative program, investment in technology and a solid capital position.
Argo Group remains focused on being a pure-play U.S. specialty insurer and pursues strategic actions to streamline its business model, strengthen its balance sheet and re-underwrite and drive efficiencies in its core businesses.
Higher income from alternative investment portfolio which includes earnings from both private equity and hedge fund investments and higher interest rates are expected to drive net investment income.
Argo Group’s highly profitable businesses are well-poised for growth in attractive markets.
Argo Property, Casualty, Construction, Environmental, Inland Marine and Surety contribute two-thirds of the U.S. premium base. ARGO continues to experience better pricing across its portfolio of businesses.
In May 2023, Argo Surety partnered with Trisura Group to support its surety underwriting operations and grow its surety business. This partnership will enable the insurer to build on its commitment to the surety business for the valuable broker partners as well as expand its capacity for new business. The strategic partnership will advance ARGO’s business across North America.
In its continuous efforts to improve underwriting profitability, the insurer exited reinsurance operations and non-core lines of business, lowered property exposure substantially, lowered volatility and increased price. These, in turn, will help ARGO achieve its target.
The insurance industry is undergoing digitalization at an accelerated pace and Argo Group is no exception. The company consistently invests in technology to improve operating efficiency and risk selection while reducing overall expenses.
Banking on operational strength, ARGO has a solid balance sheet with modest financial leverage.
Argo Group’s expenses have been rising over the last several quarters, resulting in the contraction of margins. Such escalating expenses are driven by higher losses and loss adjustment expenses, underwriting, acquisition and insurance expenses, non-operating costs, interest expense, fee and other costs and the impairment of goodwill and intangible assets. The company must manage its expense prudently, else margin could erode.
Other Industry Players
Other players in the brokerage insurance industry include Axis Capital Holdings Limited (AXS - Free Report) , Chubb Limited (CB - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) .
Axis Capital has a solid track record of beating earnings estimates in three of the last four quarters, while missing in one, the average being 9.75%.
Axis Capital continues to build on its Specialty Insurance, Reinsurance and Accident and Health to pave the way for long-term growth. Its focus on deploying resources prudently while enhancing efficiencies, improving its portfolio mix and underwriting profitability apart from fortifying the casualty and professional lines in insurance segment bode well. AXS effectively deploys capital to boost shareholder value.
Chubb has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 3.36%.
Chubb benefits from a suite of compelling products as well as services. It made investments in various strategic initiatives that paved the way for long-term growth. Strong capital position helps it boost shareholder value. Its inorganic growth story helps it to achieve a higher long-term return on equity. It boasts a strong capital position with sufficient cash generation capabilities.
Cincinnati Financial has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 25.25%.
Cincinnati Financial continues to grow premiums through a disciplined expansion of Cincinnati Re, while the division makes a nice contribution to its overall earnings. Price increases and a higher level of insured exposures are positives. It is focused on earning new business through appointing new agencies and believes that an agent-focused business model will drive long-term premium growth. It boasts a solid capital position that supports effective capital deployment.