REPEAT/Argonaut Group, Inc. Announces First Quarter Results.Business Editors REPEATING... SAN ANTONIO--(BUSINESS WIRE)--April 30, 2002 Argonaut Group, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :AGII) today announced its results for the quarter ended March 31, 2002, posting net income of $7.5 million ($0.34 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. common share), earned premiums Earned premium is the portion of an insurance written premium which is considered "earned" by the insurer, based on the part of the policy period that the insurance has been in effect, and during which the insurer has been exposed to loss. of $84.6 million and total revenue of $106.0 million. For the first quarter of 2001, the Company reported net income of $0.3 million ($0.02 per diluted common share), earned premiums of $29.6 million and total revenue of $45.4 million. The results for the first quarter of 2002 include Colony colony, any nonself-governing territory subject to the jurisdiction of a usually distant country. The term is also applied to a group of nationals who settle in a foreign country or territory but retain political or cultural connections with their parent state. Insurance Group and Rockwood Rock´wood` n. 1. (Min.) Ligniform asbestus; also, fossil wood. Casualty Insurance Group, which were acquired on August 23, 2001. Net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. after tax was $2.2 million ($0.10 per diluted common share) for the quarter, compared to an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $1.0 million ($0.04 per diluted common share) for the same period last year. Operating income excludes gains on the sale of investments. Total revenue includes gains on sales of investments of $8.1 million for the current quarter, compared to gains of $2.1 million for the same period in 2001. SEGMENT RESULTS: Specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. Excess & Surplus Lines - This segment includes the results of Colony Insurance Group, acquired during the third quarter of 2001. Net earned premiums for the quarter totaled $28.7 million generating an underwriting profit Underwriting profit is a term used in the insurance industry. It consists of the earned premium remaining after losses have been paid and administrative expenses have been deducted. It does not include any investment income earned on held premiums. for the quarter of $0.7 million. Specialty Commercial Lines - This segment includes results of Rockwood Casualty Insurance Group, acquired during the third quarter of 2001, and Argonaut Great Central Insurance Company. Net earned premiums for this segment totaled $24.9 million for the three months ended March 31, 2002, compared with $8.1 million for the same period in 2001. Rockwood contributed net earned premiums of $16.4 million for the current quarter. The net underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. loss for the three months ended March 31, 2001 was $0.6 million, compared to a net underwriting loss of $2.8 million for the same period in 2001. Specialty Workers' Compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. - This segment includes the results of Argonaut Insurance Company. Net earned premiums were $29.1 million for the three months ended March 31, 2002, up from $21.1 million for the same quarter in 2001. Net earned premiums increased due to rate increases implemented throughout 2001 coupled with new business written. The net underwriting loss was $9.8 million for the quarter ended March 31, 2002, compared with a loss of $12.4 million for the quarter ended March 31, 2001. Managing General Underwriters - This segment includes public entity business written by Trident Insurance Services. Net earned premiums were $1.8 million, compared with $0.4 million for the quarters ended March 31, 2002 and 2001, respectively. The net underwriting loss for the quarter ended March 31, 2002 was $0.2 million compared with a loss of $0.3 million for the same period in 2001. SIGNIFICANT EVENTS On April 15, the Company announced that it acquired the renewal rights and certain other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. of Fulcrum fulcrum: see lever. Insurance Company, an excess and surplus lines underwriter underwriter n. a company or person which/who underwrites an insurance policy, issue of corporate securities, business, or project. (See: underwrite) UNDERWRITER, insurances. One who signs a policy of insurance, by which he becomes an insurer. and subsidiary of SCOR SCOR Scientific Committee on Oceanic Research SCOR Supply Chain Operations Reference model SCOR Small Corporate Offering Registration SCOR Specialized Center of Research (White Plains, NY) SCOR Second Cousin Once Removed Group. This transaction is subject to various consents and approvals, and will be completed as soon as possible. This acquisition complements the existing business written through Colony Insurance Group. Also, the Company announced earlier this month the appointment of John G. Gantz  This article needs copy editing for grammar, style, cohesion, tone and/or spelling.You can assist by [ editing it] now. , Jr. as president of Argonaut Insurance Company, effective May 1. Mr. Gantz joins Argonaut from Swiss Re Swiss Re is the world’s largest reinsurer, now that it has acquired GE Insurance Solutions (Ligi 2006). Founded in 1863, Swiss Re now operates in more than 30 countries. General Electric owns 8.9% of the firm. New Markets, and brings leadership and extensive experience in the large risk and alternative markets to complement the offerings of Argonaut Insurance Company. Under its stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program announced in 1989, the Company has acquired 7,906,236 shares out of an aggregate authorization The right or permission to use a system resource; the process of granting access. See access control. of ten million shares. As of March 31, 2002 there were 21,562,238 common shares outstanding, compared with 21,557,238 shares as of December December: see month. 31, 2001. This news release contains "forward looking statements" which are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. The forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. are based on the Company's current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that actual developments will be those anticipated by the Company. Actual results may differ materially from those projected as a result of significant risks and uncertainties, including non-receipt of the expected payments, changes in interest rates, effect of the performance of financial markets on investment income and fair values of investments, development of claims and the effect on loss reserves, accuracy in projecting loss reserves, the impact of competition and pricing environments, changes in the demand for the Company's products, the effect of general economic conditions, adverse state and federal legislation and regulations, developments relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc existing agreements, heightened competition, changes in pricing environments, and changes in asset valuations. For a more detailed discussion of risks and uncertainties, see the Company's public filings made with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update any forward looking statements. Argonaut Group is a national provider of specialty insurance products focused on high-quality customer service for specific niches of property-casualty insurance. The Company has superior financial strength with assets of $1.9 billion, no debt, and financial strength of its principal subsidiary rated "A (Excellent)" by A.M. Best and "A" by Standard & Poor's. Argonaut Group is traded on NASDAQ's National Market System, ticker symbol Ticker Symbol An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors AGII. More information can be found on their website at www.argonautgroup.com.
ARGONAUT GROUP, INC.
Financial Highlights
(In Millions, Except per Share Amounts)
Three Months Ended
March 31
2002 2001
Gross Written Premiums $ 122.8 $ 46.4
Net Written Premiums 96.0 39.2
Earned Premiums 84.6 29.6
Net Investment Income 13.3 13.7
Gain on Sales of Investments 8.1 2.1
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Total Revenue 106.0 45.4
Losses and Loss Adjustment Expenses 62.6 26.4
Underwriting, Acquisition, and Insurance
Expenses 32.6 18.7
Other Expenses 0.0 0.7
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Total Expenses 95.2 45.8
Income (Loss) Before Tax 10.8 (0.4)
Income Tax Provision 3.3 (0.7)
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Net Income (Loss) $ 7.5 $ 0.3
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Net Income (Loss):
From Operations 2.2 (1.0)
From Sale of Investments 5.3 1.3
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Total Net Income $ 7.5 $ 0.3
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Net Income per Common Share (Diluted):
From Operations $ 0.10 $ (0.04)
From Sale of Investments 0.24 0.06
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Total Net Income per Common Share (Diluted) $ 0.34 $ 0.02
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Total Net Income per Common Share (Basic) $ 0.35 $ 0.02
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Weighted Average Common Shares (Thousands):
Basic 21,557.9 21,733.7
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Diluted 21,663.7 21,738.0
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SEGMENT DATA:
Three Months Ended
March 31
2002 2001
Excess & Surplus Lines:
Net Written Premiums $ 33.3 n/a
Premiums Earned 28.7
Underwriting Income 0.7
Loss Ratio 62.5%
Expense Ratio 35.0%
GAAP Combined Ratio 97.5%
Specialty Commercial:
Net Written Premiums $ 26.4 $ 9.3
Premiums Earned 24.9 8.1
Underwriting Loss (0.6) (2.8)
Loss Ratio 70.9% 95.7%
Expense Ratio 31.4% 39.3%
GAAP Combined Ratio 102.3% 135.0%
Specialty Workers' Compensation:
Net Written Premiums $ 33.8 $ 29.0
Premiums Earned 29.1 21.1
Underwriting Loss (9.8) (12.4)
Loss Ratio 87.9% 86.4%
Expense Ratio 45.6% 72.3%
GAAP Combined Ratio 133.5% 158.7%
Managing General Underwriters:
Net Written Premiums $ 2.5 $ 0.9
Premiums Earned 1.8 0.4
Underwriting Loss (0.2) (0.3)
Loss Ratio 72.1% 84.2%
Expense Ratio 40.7% 78.8%
GAAP Combined Ratio 112.7% 163.0%
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