Argo Group International Holdings, Ltd. could be on the market for sale or a merger, the company has said.

The board of directors has initiated an exploration of strategic alternatives, according to a press statement.

The review will include consideration of a wide range of options for the company including, among other things, a potential sale, merger or other strategic transaction.

“Over the last year, Argo’s board of directors and executive leadership team have taken decisive actions to strengthen the company by pursuing profitable growth, reducing volatility and employing disciplined expense management,” said chairman Thomas Bradley.

“The board believes now is an opportune time to explore a range of potential strategic alternatives to maximise shareholder value.”

Argo is a specialty insurance underwriter in the property and casualty market.

The company recently announced adverse reserve development, affecting the group’s risk-adjusted capitalisation, as measured by AM Best’s Capital Adequacy Ratio.

The lower BCAR score no longer supported the prior “strongest” assessment level considered by the rating agency, which also last month mentioned weaker than expected earnings for the year.

Best has positive expectations for Argo, citing its 2021 operating losses as being related to specific business from prior accident years.

The company was expected to get back on a positive track with management taking great strides in “improving governance, internal controls, communication and transparency”.

Positive moves included board level changes, greater accountability, transparency and better engagement among its stakeholders, Best said.

The agency stated: “Argo also successfully addressed the material weakness in internal controls related to financial reporting, which were identified in its 10-K filing for year-end 2020.”

Meanwhile, last week the board also postponed the 2022 Annual General Meeting until the second half of this year, saying it was better for the company to conduct a strategic review process prior to holding the annual meeting.

The statement concluded: “There can be no assurance that this process will result in the company pursuing a particular transaction or other strategic outcome.

“Argo has not set a timetable for completion of this process, and it does not intend to disclose further developments unless and until it determines that further disclosure is appropriate or necessary.”

Argo has retained Goldman Sachs & Co. LLC as its financial adviser and Skadden, Arps, Slate, Meagher & Flom LLP as its legal counsel to assist in the review process.