AM Best Removes Under Review With Developing Implications; Affirms Credit Ratings of Argo Group International Holdings, Inc. and Its Subsidiaries

AM Best has removed from under review with developing implications and affirmed the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb-” (Good) and the associated Long-Term Issue Credit Ratings (Long-Term IR) of Argo Group International Holdings, Inc. (Argo Group) (headquartered in New York, NY). In addition, AM Best has removed from under review with developing implications and affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term ICRs of “a-” (Excellent) of its operating subsidiaries. At the same time, AM Best has removed from under review with developing implications and affirmed the Long-Term ICR of “bbb-” (Good) and the Long-Term IRs of Argo Group US, Inc. (headquartered in New York, NY). The outlook assigned to these Credit Ratings (ratings) is positive. (See below for a detailed listing of the companies and ratings.)

The ratings reflect Argo Group’s balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The ERM assessment reflects Argo Group’s improved risk management practices, governance and culture and fully remediated financial reporting concerns. The revision of the operating performance assessment to marginal reflects challenges tied to operating profitability reported as Argo Group works through various underwriting actions and works to reduce volatility across core lines of business. Despite these challenges, Argo Group is committed to implementing additional controls and is taking a disciplined approach to writing new business. Although this has tempered premiums written, it should lead to a return to profitability and ensure future capital growth. The positive outlooks reflect the belief that these operating results should improve within the intermediate term. Furthermore, the balance sheet and holding company assessments are supported by the strong level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and appropriate leverage and coverage ratios.

The FSR has been removed from under review with developing implications and affirmed at A- (Excellent) and the Long-Term ICRs have been removed from under review with developing implications and affirmed at “a-” (Excellent), each with an assigned outlook of positive for Argo Group International Holdings, Inc.’s operating subsidiaries:

• Argo Re Ltd.
• Argonaut Great Central Insurance Company
• Argonaut Insurance Company
• Argonaut-Midwest Insurance Company
• ARIS Title Insurance Corporation
• Colony Insurance Company
• Peleus Insurance Company
• Colony Specialty Insurance Company
• Rockwood Casualty Insurance Company
• Somerset Casualty Insurance Company

The following indicative Long-Term IRs available under various shelf registrations have been removed from under review with developing implications, affirmed and assigned positive outlooks:

Argo Group International Holdings, Inc. —

-- “bbb-” (Good) on senior unsecured debt

-- “bb+” (Fair) on subordinated debt

-- “bb” (Fair) on preferred stock

Argo Group US, Inc. —

-- “bbb-” (Good) on senior unsecured debt

-- “bb+” (Fair) on subordinated debt

Argo Group Statutory Trust —

-- “bb” (Fair) on preferred stock

The following Long-Term IR has been removed from under review with developing implications affirmed and assigned positive outlooks:

Argo Group US, Inc. —

-- “bbb-” (Good) on $143.75 million 6.5% senior unsecured notes, due 2042

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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