Argo Group International Holdings Ltd. boosted its profits by 87 percent during 2009 as its reaped the rewards of a diversified business platform.

The international specialty re/insurance underwriter saw net income rise to $117.5 million or $3.81 per share from $62.9 million or $2.05 per share for 2008.

Fourth-quarter net income was $41 million, or $1.33 per share, versus $11.8 million, or 38 cents per share, for the same period in 2008.

Gross written premiums increased 9.3 percent to $415 million from $380 million over the respective periods, while total revenue was up 12.9 percent to $391 million in Q4 2009 compared to $346 million for the three months ended December 31, 2008.

Argo Group CEO Mark Watson said: "Our record 2009 results and continued growth in book value per share reflect the benefit of our diversified business platform, which affords us maximum flexibility in deploying capital.

"Looking ahead, what's most exciting is that we are beginning to leverage the entire potential of our international platform through higher margin opportunities worldwide. We believe this platform differentiates Argo Group in the specialty insurance market."

Over the year, gross written premiums increased 24.2 percent to $2 billion versus $1.6 billion the previous year, with total revenue rising by 23.7 percent to $1.5 billion, compared to $1.2 billion in 2008.

Book value per share was up 18.6 percent in 2009, to $52.36 at December 31, 2009, representing an all-time high and increasing 16 percent since 2007.

Net operating income for 2009 was $131.8 million or $4.28 per share. By comparison, 2008 produced net operating income of $97.6 million or $3.17 per share.

Net investment income for the years ended December 31, 2009 and 2008 was $145.5 million and $150.2 million, respectively. Net losses on sales of investments and other than temporary impairment charges amounted to $16.7 million and $35.1 million, respectively, for 2009 and 2008.

At the end of 2009, the investment portfolio totalled $4.3 billion, with a net pre-tax unrealised gain of approximately $167.9 million — an increase of about $170.5 million since December 31, 2008.

For 2009, gross written premiums for the company's international specialty segment were $706 million, generating pre-tax operating income of $24.1 million and a combined ratio of 95.8 percent. The underwriting results for 2009 include unfavourable prior year loss development of $23.5 million, which was offset by favourable prior year premium development of $24.1 million.

Results for the year in the international specialty segment benefited from a lack of major storm activity in 2009, offset by the continuing underperformance of the property binder book.

ARGO GROUP Q4 REPORT CARD

Net income: $41 million compared to $11.8 million in 2008

Gross premiums written: $415 million compared to $380 million in 2008