ARGO GROUP Q4

REPORT CARD

Net income: $11.8 million compared to $23.5 million in 2007.

Combined ratio: 98.6 percent compared to 95.2 percent in 2007.

Gross premiums written: $379.6 million compared to $284.4 million in 2007.

Bermuda-based Argo Group International Holdings Ltd. reported a profit of nearly $12 million for the fourth quarter of last year, as gross premiums written soared by a third.

Argo also recorded a full-year net income of $62.9 million, or $2.05 per share. That compared to $143.8 million in 2007, when the company made a $66.3 million one-off gain related to the merger with reinsurer PXRE.

Argo chief executive officer Mark Watson said: "During a year of tremendous market turmoil, Argo Group in 2008 produced top-line growth and improved operating results over the prior year.

"While the industry sustained well documented challenges, the financial fundamentals of Argo Group remained strong. Moreover, we believe our international specialty platform positions us well to capture additional growth opportunities should the pricing environment in the property and casualty market improve."

Fourth quarter net income of $11.8 million broke down to 38 cents per share and compared to $23.5 million, or 76 cents per share, in the same period a year earlier.

Argo made a $16.8 million write-down due to realised investment losses and other-than-temporary impairments during the three-month period. And it also added $15 million to its earlier estimates of losses related to Hurricane Ike.

Underwriting operations just failed to break even, as the group's combined ratio for the year was 100.4 percent, impacted by total losses $75 million from hurricanes Gustav and Ike. Combined ratio was 99.4 percent in 2007.

Gross premiums written (GPW) rose 33.5 percent in the quarter to $379.6 million, compared to $284.4 million in the prior year last quarter, thanks in part to Argo's acquisition of Heritage Underwriting Agency last year.

Argo's results inclueded the contribution from June 1 last year onwards, which helped GPW for the year rise 35.6 percent to $1.6 billion.

The company recognised favourable development related to prior years' loss reserves of $61.2 million in 2008.

Book value per share was $44.18 at December 31, 2008, compared to $45.15 at the end of 2007.