Investment market volatility and catastrophe losses related to the Covid-19 pandemic impacted the second quarter income of Argo Group International Holdings Ltd.

The Bermudian-based company reported a net loss of $6.4 million, or 18 cents per diluted share, compared to a profit of £28.8 million, or 83 cents per share, for the same three months last year.

However, Argo had the strongest quarterly underwriting income in its history in the US. Its gross written premiums in the US were up 5.9 per cent, year-on-year, at $480.2 million.

Kevin Rehnberg, Argo’s chief executive officer, said: “This demonstrates our shift to more positive underlying performance, particularly in our core US specialty business that delivered an excellent quarter despite the broader economic challenges related to Covid-19.

“The company’s operating results were, however, still negatively impacted by market volatility in our investment portfolio and the pandemic’s effects on premium growth and catastrophe losses, particularly in our international operations.”

Argo had an operating loss of $4.7 million for the three months to the end of June, compared to operating income of $16.8 million a year ago.

Its combined ratio improved to 100.3 per cent, from 103.4 per cent for the same period in 2019.

Gross written premiums were up year-on-year to $799.6 million, compared to $772.9 million.

Catastrophe losses were $27.9 million, including $17.4 million related to the Covid-19 pandemic, primarily resulting from contingency and property exposures in Argo’s international operations.

Net investment income was $1.5 million, down 96.5 per cent compared to $48.2 million in last year’s second quarter. Argo said the decline, excluding alternatives, was primarily due to lower interest rates and portfolio de-risking actions that had been executed since the fourth quarter of 2019.

Looking ahead, Mr Rehnberg said: “We continue to experience strong improvement in pricing across the business. We remain optimistic that current market conditions will provide opportunity for continued growth and margin improvement.

“In addition, our recent preferred stock offering provides Argo with additional capital, enhancing our financial strength, and enables us to more aggressively pursue our strategic growth objectives in this attractive underwriting environment.”