By Isha Marathe
April 25 - (The Insurer) -
The outlooks on Argo Group's A-minus financial strength rating and its a-minus long-term issuer credit rating have been revised to stable from positive by AM Best.
The revision reflects continued earnings weakness and material deviation of results from management’s projections, especially from its run-off lines of business, AM Best said.
New York-headquartered Argo is taking corrective measures to improve operating performance, which the rating agency believes will gradually lead to stronger underwriting earnings.
"However, it is unclear how long the adverse impact of the run-off operations will continue to pressure the overall results," AM Best said.
Additionally, Argo's balance sheet strength is supported by the organisation’s very strong level of risk-adjusted capitalisation as measured by Best Capital Adequacy Ratio, AM Best said.
In 2024, Argo Group received a $500 million capital contribution from its parent, Brookfield Wealth Solutions, which led to improved BCAR scores and provided support for the growth of ongoing operations and the reserve-strengthening needs of the run-off blocks, AM Best said.
Argo promoted CFO Chris Donahue to CEO in March after the departure of Jessica Buss.
Brookfield Asset Management took Argo private in November 2023.
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