argo-20241231

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2024

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period

from to

Commission file number: 1-15259

ARGO GROUP INTERNATIONAL HOLDINGS, INC.

(Exact name of Registrant as specified in its charter)

Delaware

98-0214719

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification Number)

501 7th Avenue 7th Floor

New York

10018

New York

10018

New York

(Address of principal executive offices)

(Mailing address)

(Registrant’s telephone number, including area code): (210) 321-8400

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
6.500% Senior Notes due 2042 issued by Argo Group US, Inc. and The Guarantee with Respects Thereto	ARGD	New York Stock Exchange
Depositary Shares, Each Representing a 1/1000th Interest in 7.00% Resettable Fixed Rate Preferred Stock, Series A, Par Value $1.00 Per Share	ARGO/PA	New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒


Smaller reporting company			☐			Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ¨

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ¨

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No x

As of June 30, 2024, there was no common stock held by non-affiliates.

As of March 25, 2025, the registrant had 13 shares of common stock outstanding. All of the registrant’s common stock is owned by Brookfield Wealth Solutions Ltd.

Argo Group International Holdings, Inc. meets the conditions set forth in General Instruction I(1)(a) and (b) for Form 10-K and therefore is filing

this Form 10-K in the reduced disclosure format.

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ARGO GROUP INTERNATIONAL HOLDINGS, INC.

Annual Report on Form 10-K

For the Year Ended December 31, 2024

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Unless otherwise stated in this report, references to “Argo Group,” “we,” “us,” “our,” or “the Company” refer to Argo Group International Holdings, Inc. and its subsidiaries. On November 30, 2023, we changed our jurisdiction of incorporation from Bermuda to the State of Delaware, which we refer to herein as the Redomestication. All references to “Argo Group,” “we,” “us,” “our,” or “the Company” on or before November 30, 2023 refer to Argo Group International Holdings, Ltd., an exempted company incorporated pursuant to the laws of Bermuda, and its subsidiaries. All such references after November 30, 2023 refer to Argo Group International Holdings, Inc., a Delaware corporation, and its subsidiaries. All references to “common stock” on or before November 30, 2023 refer to the common shares of Argo Group International Holdings, Ltd. prior to the Redomestication, and all such references after November 30, 2023 refer to the common stock of Argo Group International Holdings, Inc. after the Redomestication. All references to “preferred stock” on or before November 30, 2023 refer to the Series A Preference shares of Argo Group International Holdings, Ltd. prior to the Redomestication, and all such references after November 30, 2023 refer to the Series A Preferred stock of Argo Group International Holdings, Inc. after the Redomestication. For additional detail, please see “Item 1. Business—Corporate Information.”


PART I
			Page
Item	1.	Business	3
Item	1A.	Risk Factors	10
Item	1B.	Unresolved Staff Comments	30
Item	1C.	Cybersecurity	30
Item	2.	Properties	31
Item	3.	Legal Proceedings	31
Item	4.	Mine Safety Disclosure	32
PART II
Item	5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	33
Item	6.	[Reserved]	33
Item	7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item	7A.	Quantitative and Qualitative Disclosures about Market Risk	65
Item	8.	Financial Statements and Supplementary Data	67
Item	9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	67
Item	9A.	Controls and Procedures	67
Item	9B.	Other Information	68
Item	9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	68
PART III
Item	10.	Directors, Executive Officers and Corporate Governance	69
Item	11.	Executive Compensation	69
Item	12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	69
Item	13.	Certain Relationships and Related Transactions and Director Independence	69
Item	14.	Principal Accounting Fees and Services	69
PART IV
Item	15.	Exhibits, Financial Statement Schedules	70
Item	16.	Form 10-K Summary	75

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Annual Report on Form 10-K for the year ended December 31, 2024 (this “Form 10-K” or this “report”) are “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. Our forward-looking statements include, but are not limited to, statements regarding our management’s projections, forecasts, expectations, beliefs, intentions or strategies, and include all statements that do not relate solely to historical or current facts. Forward-looking statements may be identified by the use of words such as “expect,” “intend,” “plan,” “believe,” “do not believe,” “aim,” “project,” “anticipate,” “seek,” “will,” “likely,” “assume,” “estimate,” “may,” “continue,” “guidance,” “objective,” “remain optimistic,” “path toward,” “outlook,” “trends,” “future,” “could,” “would,” “should,” “target,” “on track” and similar expressions of a future or forward-looking nature.

There can be no assurance that actual developments will be those anticipated by Argo Group International Holdings, Inc. Throughout this Form 10-K, unless the context otherwise requires, references to “Argo Group,” “we,” “us,” “our” or the “Company” mean Argo Group International Holdings, Inc. and all of its subsidiaries, taken together as a whole. Actual results may differ materially as a result of significant risks and uncertainties including but not limited to:

Insurance Underwriting Risks:

•the adequacy of our projected loss reserves, which may be affected by both internal and external events, including:

◦the judgement used in selecting actuarial assumptions and weighing the indications of the various actuarial methods in developing our ultimate loss selection;

◦the development of claims that varies from that which was expected when loss reserves were established;

◦adverse legal rulings which may impact the liability under insurance contracts beyond that which was anticipated when the reserves were established;

◦development of new theories related to coverage which may increase liabilities under insurance contracts beyond that which were anticipated when the loss reserves were established;

◦reinsurance coverage being other than what was anticipated when the loss reserves were established;

◦changes in claims handling procedures;

◦economic and social inflation;

•our ability to compete effectively;

•actions by our competitors, many of which have a larger capital base and are more highly rated than we are;

•unexpected changes in the claims environment or catastrophes and terrorist acts;

•the impact of global climate change and related regulation, including physical risks and transition risks;

•our dependence on insurance and reinsurance agents and brokers as distribution channels;

•changes in the pricing environment and the cyclical nature of our business, with periods with excess underwriting capacity and unfavorable premium rates and other periods with a shortage of underwriting capacity when premium rates are strong; and

•our agents and producers exceeding their underwriting authorities or breaching obligations owed to us.

Operational Risks:

•our ability to attract and retain qualified employees and key executives;

•loss of our executive officers or other key personnel or other changes to our management team;

•the adequacy of our strategies and processes to mitigate insurance risk;

•the effectiveness of our internal controls;

•our dependence on our information technology network and the impact of any cybersecurity breach;

•our ability to adequately protect customer personal information;

•our ability to effectively select, develop, implement and monitor our outsourcing relationships; and

•failure to execute on expense targets.

Financial Risks:

•the impact of any prolonged recession or a period of significant turmoil in the U.S. and international financial markets;

•changes in economic and political conditions, including inflation and changes in interest rates;

•market and credit risks that may impact our investment portfolio;

•foreign currency fluctuations;

•the availability, cost or quality of reinsurance;

•any impairment in the carrying value of intangible assets;

•any impairment or allowances of our investments; and

•any failure of one or more reinsurers or capital market counterparties to meet their payment obligations to us or our inability to collect reinsurance recoverables.

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Cybersecurity Risks:

•technology-related events compromising the integrity, confidentiality, and availability of data;

•any incident experienced by a third-party service provider impacting our ability to successfully operate critical technology functions;

•increased adoption of artificial intelligence exacerbating our ability to identify attempted breaches using social engineering.

Strategic Risks:

•uncertain conditions in the global economy;

•our existing indebtedness and ability to access additional capital;

•our holding company structure and certain regulatory and other constraints that affect our ability to pay dividends and make other payments;

•any ratings downgrades; and

•the success of our business plan and our ability to successfully execute strategic transactions.

Reputational Risks:

•any violations of laws and regulations relating to sanctions, anti-corruption and money laundering; and

•any failure to meet stakeholder expectations regarding environmental, social and corporate governance matters.

Legal, Regulatory and Litigation Risks:

•the ability of our insurance subsidiaries to meet risk-based capital and solvency requirements in their respective regulatory domiciles;

•the outcome of legal and regulatory proceedings, investigations, inquiries, claims and litigation;

•regulatory constraints on our ability to operate our business, including on our ability to charge adequate rates and efficiently allocate capital; and

•changes in legal environment, and changes in insurance regulations in the U.S. or other jurisdictions in which we operate.

Taxation Risks:

•adverse consequences due to new, and changes to existing, tax legislation, treaties, and regulations in the jurisdictions in which the Company, its subsidiaries, and certain of their affiliates have a taxable presence;

•adverse consequences due to challenges by tax authorities to our current and historical tax positions and practices;

•adverse consequences due to U.S. federal withholding taxes on distributions paid to our non-U.S. stockholders and any obligation we may have to pay additional amounts to such stockholders;

•adverse consequences due to changes to, or our eligibility to qualify for benefits under, any income tax treaties on which we rely; and

•adverse consequences due to changes in tax laws in jurisdictions in which we have a taxable presence as a result of the implementation of proposals by the Organisation for Economic Cooperation and Development (the “OECD”), which include, among other things, proposals to (1) shift taxing rights to the jurisdiction of the consumer and (2) establish a global minimum tax for multinational companies of 15% (namely the “Pillar I” and Pillar II” Frameworks).

The foregoing summary of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this Form 10-K, including the risk factors set forth in Item 1A, “Risk Factors.” We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

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PART I

Item 1. Business

Business Overview

Argo Group, a Delaware corporation and holding company, is a U.S. focused underwriter of specialty insurance products in the property and casualty market.

Business Strategy

Argo Group operates in the specialty and Excess and Surplus Lines (“E&S”) insurance markets where we focus on discrete niche products or businesses that require specialized underwriting knowledge and usually hard-to-place coverage. We believe the specialized nature of the products we offer provides our underwriters the flexibility over rates, terms and forms to produce superior loss ratios over the long-term. Our fundamental operating principles are designed to create an efficient organization that is focused on delivering results and sustained, long-term stockholder value creation.

Our Structure

The following is a summary organizational chart of Argo Group as of December 31, 2024:

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Business Segments and Products

For the year ended December 31, 2024, our operations included three reportable segments – Casualty Lines, Specialty Lines, and Run-off. For discussion of the operating results of each reportable segment, please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Note 15, “Segment Information,” in the Notes to the Consolidated Financial Statements.

The below describes the lines of businesses that are included within our reportable segments.

Casualty Lines

Argo Construction

Argo Construction specializes in underwriting primary general liability and supported excess coverages for the construction trades. The unit leverages their industry expertise to handle insurance needs of U.S. based project owners, developers, general and trade contractors via a national distribution channel of wholesale brokers. Argo Construction’s specialized underwriters understand the rates, pricing and coverages needed to meet contractors’ insurance requirements and help project owners succeed. This business unit is segmented into three groups: New York Construction, Middle Market Construction, and Owners Interest / Owners and Contractors Protective.

Argo Environmental

Argo Environmental provides a range of environmental liability insurance products on a primary and supported and unsupported excess basis to a range of businesses, including those that operate in the environmental industry and those that face environmental liabilities arising from their industrial and commercial activities.

Argo Casualty

Argo Casualty offers primary casualty and excess casualty coverages in the excess and surplus lines space. The underwriting focus of our primary casualty portfolio includes real estate, mercantile, hospitality, manufacturers, and service contractors. Our excess casualty targets classes of business including products liability, off premises and on premises liability.

Rockwood

Rockwood Casualty Insurance Company (“Rockwood”) is primarily a specialty underwriter of workers compensation, with a focus on workers in the mining industry. It also underwrites coverage for commercial businesses, including retail operations, light manufacturing, services and restaurants. Rockwood underwrites policies on both a large-deductible basis and on a guaranteed-cost basis for smaller commercial accounts. In addition, Rockwood provides general liability and commercial automobile coverage, as well as coverage for pollution liability, umbrella liability, and surety to support its core clients’ other mining and mining-related exposures.

Bermuda Casualty

Bermuda Casualty services Fortune 2000 market leaders with general and product liability offerings.

Specialty Lines

Specialty Programs and Fronting (formerly “Alternative Risk Solutions”)

Argo supports managing general agents (“MGAs”)/Programs and other insurance companies, with a range of support models from fronting to fully retained risk-bearing capacity. Our Fronting business provides fronting and alternative risk solutions for U.S. insurers, reinsurers, captives and program administrators with bundled or unbundled claims handling options. Programs provides paper and risk-bearing capacity to program administrators or managing general underwriters (“MGUs”)/MGAs who have proven track record of profitable underwriting performance.

Colony Specialty Garage

Colony Specialty Garage provides property and liability garage products through wholesale general agents, focused on the delegated binding authority team. This unit provides products designed to cover a wide range of auto dealer and auto service operations. Example of auto dealer operations include those involved in selling new or used autos, trailers, recreational vehicles, motorcycles and off-road vehicles. Example of service/repair operations include vehicle service/repair, towing, repossession, salvage yards, and valet parking.

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Argo Inland Marine

Argo Inland Marine offers a wide range of products, coverages and services for the inland marine insurance market through a team of dedicated specialists. Inland marine insurance covers products, materials and equipment when they are transported over land, such as via truck or train, or while they are temporarily warehoused by a third party. The unit provides a wide range of standard inland marine coverages, including Cargo, Contractor’s Equipment, Warehouse Legal Liability, Builder’s Risk, and other miscellaneous marine risks.

Bermuda Property

Bermuda Property offers a range of Direct & Facultative support on worldwide basis for US-based companies. The business focuses on Commercial Property and Technical risk (industrial, energy). Appetite typically focuses on Fortune 1000, shared-and-layered risks, as well as binder support for mid-market business. Argo selectively does Assumed Reinsurance to complement the Direct & Facultative portfolio.

Run-off Lines

The Run-off Lines segment includes outstanding liabilities associated with discontinued lines previously underwritten by our insurance subsidiaries. These include lines exited in recent years such as surety and our recently exited professional lines platform as well as liability policies dating back to the 1960s, 1970s and into the 1980s; exited international business including ArgoGlobal Assicurazioni, our Italian operations; risk management policies written by a business unit that has since been sold to a third party; and other legacy accounts previously written by our reinsurance subsidiaries.

Marketing and Distribution

We provide products and services to well-defined niche markets. Using our capital strength and the Argo Group brand we cross market products offered by our segments amongst our different operating platforms. We offer our distribution partners tailored, innovative solutions for managing risk, using the full range of products and services we have available.

Our U.S. insurance businesses distribute products through a network of appointed wholesale and retail agents specializing in excess and surplus lines and certain targeted admitted lines and MGUs. Approximately 90% of E&S premium volume in 2024 was produced by wholesale brokers who submit business and rely on Argo Group to produce quotes and handle policy issuance on such accounts. The majority of the remaining E&S premium was produced through a select group of wholesale agents and MGAs to whom we have delegated limited authority to act on our behalf contained within the Programs and Garage business units. These agents are granted authority to underwrite, quote, bind and issue policies in accordance with predetermined guidelines and procedures prescribed by us.

The remainder of the U.S. business uses a broad distribution platform to deliver specialty insurance products and services to our policyholders and agents. Environmental, Inland Marine and Excess Casualty distribute their products through both retail and wholesale brokers. Rockwood distributes its product lines through its network of retail and wholesale agents.

The Bermuda operations’ businesses obtain business through brokers and third-party intermediaries. The businesses’ marketing and distribution strategies are for the most part managed by local distribution teams and underwriters based in Bermuda.

Competition

Argo Group competes in a wide variety of markets against numerous and varied competitors, depending on the nature of the risk and coverage being written. The competition for any one account may range from large international firms to smaller regional companies in the domiciles in which we operate. The insurance industry is highly regulated. As a result, it can be difficult for insurance companies to differentiate their products, which results in a highly competitive market based largely on price and the customer experience. The nature, size and experience of our primary competitors vary across the jurisdictions in which we do business.

Ratings

Ratings are an important factor in assessing our competitive position and our ability to meet our ongoing obligations. Ratings are not a recommendation to buy, sell or hold any security, and they may be revised or withdrawn at any time by the rating agency. Moreover, the ratings of each rating agency should be evaluated independently as the rating methodology and evaluation process may differ. The ratings issued for us or our subsidiaries by any of these agencies are announced publicly and are available on our website and the respective rating agency’s websites. We have two types of ratings: (1) Financial Strength Ratings (“FSR”) and (2) Debt Ratings or Issuer Credit Ratings (“ICR”).

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FSRs reflect a rating agency’s assessment of an insurer’s ability to meet its financial obligations to policyholders. All of our insurance companies have an FSR of “A-” (Excellent), with a positive outlook, from A.M. Best Company (“A.M. Best”), and an FSR of “A-” (Strong), with a stable outlook, from Standard & Poor’s (“S&P”).

ICRs reflect a rating agency’s assessment of a company’s prospects for repaying its debts and can be considered by lenders in connection with the setting of interest rates and terms for a company’s short-term or long-term borrowings. Argo Group has an ICR and senior unsecured debt rating of “BBB-” from S&P. Argo Group has an ICR and senior unsecured debt rating of “bbb-” from A.M. Best. All of our insurance companies have an ICR of “a-” from A.M. Best.

A.M. Best FSRs range from “A++” (Superior) to “S” (Suspended) and include 16 separate ratings categories. S&P Financial Strength Ratings range from “AAA” (Extremely Strong) to “R” (under regulatory supervision) and include 21 separate ratings categories.

Regulation

General

The insurance business and related services is regulated in most countries, although the degree and type of regulation varies from one jurisdiction to another. The principal jurisdictions in which Argo Group’s insurance businesses operate are Bermuda and the U.S. Argo Group is also regulated in other countries where it does business. A summary of the material regulations in these jurisdictions is set forth below. We may become subject to regulations in new jurisdictions or additional regulations in existing jurisdictions.

Bermuda

Insurance Group Supervision and Regulation Scheme

The Bermuda Monetary Authority (“BMA”) may, in respect of an insurance group, determine whether it is appropriate for the BMA to act as its group supervisor in accordance with the Insurance Act 1978 of Bermuda and related regulations, as amended (the “Insurance Act”). The BMA’s group supervision objective is to provide a coordinated approach to the regulation of an insurance group and its supervisory and capital requirements. Until the end of September 2024, the BMA acted as the “Group Supervisor” of the Company and its regulated subsidiaries. On September 27, 2024, the BMA withdrew as Group Supervisor of the Company due, in part, to the filing of petitions of redomestication with the Nebraska Department of Insurance by six of the Company’s non-Bermuda operating companies. However, the BMA maintains supervision over all Bermuda registered insurers, including Argo Re, which is registered as a Class 4 insurer in Bermuda. A variety of requirements and restrictions are imposed on Argo Re including: periodic financial reporting; corporate governance framework; solvency and financial performance; compliance with minimum enhanced capital requirements; minimum solvency margins and liquidity ratios; notification of material changes; and limitations on dividends, distributions and capital reductions.

United States

State Insurance Regulation

Argo Group US, Inc.’s (“Argo Group U.S.”) insurance subsidiaries are subject to the supervision and regulation of the states in which they are domiciled. We currently have 9 insurance companies domiciled in 3 states (the “U.S. Subsidiaries”). Argo Group U.S., as the direct and indirect parent of the U.S. Subsidiaries, is subject to the insurance holding company laws of Nebraska, New York, and Pennsylvania. These laws generally require each of the U.S. Subsidiaries to submit annual holding company registration statements to its respective domestic state insurance departments and to furnish annual financial and other information about the operations of the companies within the holding company group. Generally, all material transactions among companies in the holding company group to which any of the U.S. Subsidiaries is a party, including sales, loans, reinsurance agreements and service agreements, must be fair and, if material or of a specified category, require prior notice and approval by the insurance department where the subsidiary is domiciled. Transfers of assets among such affiliated companies, certain dividend payments from insurance subsidiaries and certain material transactions between companies within the holding company group may be subject to prior notice to, or prior approval by, state regulatory authorities. Such supervision and regulation are intended to primarily protect our policyholders. Matters relating to authorized lines of business, underwriting standards, financial condition standards, licensing of insurers, investment standards, premium levels, policy provisions, the filing of annual and other financial reports prepared on the basis of Statutory Accounting Principles, the filing and form of actuarial reports, dividends and a variety of other financial and non-financial matters are also areas that are regulated and supervised by the states in which each of our U.S. Subsidiaries are domiciled.

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Cyber Regulations

The New York Department of Financial Services (“NYDFS”) issued Cybersecurity Regulations for Financial Services Companies that require certain parts of Argo Group’s insurance operations to, among other things, establish and maintain a cybersecurity policy, a cybersecurity breach incident response process and to designate a Chief Information Security Officer.

The National Association of Insurance Commissioners (“NAIC”) adopted the Insurance Data Security Model Law in October 2017 (“Model Law”). The purpose of this Model Law is to establish recommended standards for data security and for the notification to insurance commissioners of cybersecurity incidents involving unauthorized access to, or the misuse of, certain non-public information. It also requires annual compliance reporting obligations. The Pennsylvania Insurance Department adopted the Model Law in 2023.

The California Consumer Privacy Act (“CCPA”) enhances privacy rights and consumer protection for residents of California who are consumers. It also requires that companies who collect such consumer personal information implement reasonable security measures to protection that information. The CCPA provides for an exemption for personal information that is collected from business contacts in the context of business-to-business transactions. It also exempts personal information collected pursuant to the Gramm-Leach-Bliley Act.

For a discussion of our risk management strategies and governance over cyber threats, please refer to Item 1C, “Cybersecurity.”

Guaranty Associations

Our licensed U.S. Subsidiaries are participants in the statutorily created insolvency guaranty associations in all states where they are licensed carriers. These associations were formed for the purpose of paying for the return of unearned premium and loss claims of licensed insolvent insurance companies. The licensed U.S. Subsidiaries are assessed according to their pro rata share of such claims based upon their written premiums, subject to a maximum annual assessment per line of insurance. The cost of such assessments may be recovered, in certain jurisdictions, through the application of surcharges on future premiums. Non-admitted business is neither supported by nor subject to guaranty assessments.

Dividends

All of the U.S. Subsidiaries are subsidiaries of Argo Group U.S., meaning that any dividends from the U.S. Subsidiaries are payable in the first instance to Argo Group U.S. prior to being passed upward as dividends to Argo Group’s parent company. The ability of our U.S. Subsidiaries to pay dividends is subject to certain restrictions imposed by the jurisdictions of domicile that regulate our U.S. Subsidiaries and each such jurisdiction’s limitations upon the amount of dividends that an insurance company may pay without the approval of its insurance regulator.

Argo Group U.S. may receive dividends from its direct subsidiaries: Argonaut Insurance Company (“Argonaut”) and Rockwood. During 2025, Argonaut is permitted to pay dividends up to $149.8 million without approval from the Nebraska, based on the application of the Nebraska ordinary dividend calculation. Rockwood is permitted to pay ordinary dividends up to $18.9 million, subject to prior approval from the Pennsylvania Department of Insurance. Effective November 26, 2025—two years following the merger with Brookfield Wealth Solutions Ltd.—Rockwood’s dividends will not be subject to this prior approval. Business and regulatory considerations may impact the amount of dividends actually paid, and prior regulatory approval of extraordinary dividend payments is required.

State laws require prior notice or regulatory approval of direct or indirect changes in control of an insurer, reinsurer or its holding company, and certain significant inter-corporate transfers of assets within the holding company structure. An investor, who acquires or attempts to acquire shares representing or convertible into more than 10% of the voting power of the securities of Argo Group, would become subject to at least some of these laws. This would require approval from the five domiciliary regulators of the U.S. Subsidiaries prior to acquiring such shares and would be required to file certain notices and reports with the five domiciliary regulators prior to such acquisition.

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The Terrorism Risk Insurance Program Reauthorization Act

On November 26, 2002, the President of the United States signed into law the Terrorism Risk Insurance Act of 2002 (“TRIA”). On December 20, 2019, the President of the United States signed into law the Terrorism Risk Insurance Program Reauthorization Act of 2019, which extends TRIA through December 31, 2027. Under TRIA, commercial insurers are required to offer insurance coverage against terrorist incidents and are reimbursed by the federal government for paid claims subject to deductible and retention amounts. TRIA, and its related rules, contain certain definitions, requirements and procedures for insurers filing claims with the Treasury for payment of the Federal share of compensation for insured losses under the Terrorism Risk Insurance Program (“TRIP”). TRIP is a temporary federal program that has been extended by TRIA to provide for a transparent system of shared public and private compensation for insured losses resulting from acts of terrorism. The Treasury implements the program. On June 29, 2004, the Treasury issued a final Claims Procedures Rule, effective July 31, 2004, as part of its implementation of Title I of TRIA. TRIA also contains specific provisions designed to manage litigation arising out of, or resulting from, a certified act of terrorism, and on July 28, 2004, the Treasury issued a final Litigation Management Rule for TRIA. The Claims Procedures Rule specifically addresses requirements for Federal payment, submission of an initial notice of insured loss, loss certifications, timing and process for payment, associated recordkeeping requirements, as well as the Treasury’s audit and investigation authority. These procedures will apply to all insurers that wish to receive their payment of the Federal share of compensation for insured losses under TRIA.

Additional materials addressing TRIA and TRIP, including Treasury issued interpretive letters, are contained on the Treasury’s website.

Italy

ArgoGlobal Assicurazioni is an authorized insurance entity domiciled in Italy. It is authorized by the IVASS to operate the business of insurance under ISVAP n. 2581 as of January 21, 2008. ArgoGlobal Assicurazioni is enrolled in the Register of Insurance Companies under n. 1.00163. In addition, ArgoGlobal Assicurazioni is subject to regulation in Italy. When payable, dividends from ArgoGlobal Assicurazioni are subject to applicable laws and regulations in Italy.

General Data Protection Regulations (E.U.)

In the E.U., the General Data Protection Regulation (the “GDPR”) came into force on May 25, 2018. Argo Group is subject to the applicable requirements of GDPR in regards the collection of personal information related to the provision of our services and products within the E.U. or the collection and processing of personal information from residents of the E.U.

Reinsurance

As is common practice within the insurance industry, Argo Group’s insurance subsidiaries transfer a portion of the risks insured under their policies by entering into a reinsurance treaty with another insurance or reinsurance company. As a specialty insurer, we purchase a broad-based series of reinsurance programs in an effort to mitigate the risk of significant capital deterioration, as well as to minimize the volatility of earnings against the impact of a single, large catastrophe or several smaller, but still significant catastrophe events. The ability to collect on reinsurance is subject to the solvency of the reinsurers, interpretation of contract language and other factors.

At December 31, 2024, Argo Group’s reinsurance recoverable balance totaled $3,053.2 million, net of the allowance for credit losses of $5.8 million. The following table reflects the credit ratings for our reinsurance recoverable balance at December 31, 2024:


	2024
(in millions)	Reinsurance Recoverables		% of Total
Ratings per A.M. Best
Reinsurers rated A+ or better	$	1,557.0	51.0	%
Reinsurers rated A	769.1		25.2	%
Reinsurers rated A-	172.4		5.6	%
Reinsurers rated below A- or not rated (1)	554.7		18.2	%
	$	3,053.2	100.0	%

(1) On November 9, 2022, the U.S. Loss Portfolio Transaction (“U.S. LPT”) with Cavello Bay Reinsurance Ltd., a wholly-owned subsidiary of Enstar Group Limited (“Enstar”), covering a majority of the Company’s U.S. casualty insurance reserves, including construction, for accident years 2011 to 2019 closed. On the closing date, the Company transferred cash and investments to Enstar a portion of which was deposited into a trust established to secure Enstar’s claim payment obligation to the Company. As such, our reinsurance recoverable with Enstar, which is not a credit rated reinsurer, is contractually required to be fully collateralized. Subsequent to December 31, 2024 but prior to the issuance of this Form 10-K, Cavello Bay Reinsurance Ltd. received an “A” credit rating from A.M. Best.

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The top 10 reinsurers accounted for $1,459.4 million, or approximately 47.8%, of the reinsurance recoverable balance as of December 31, 2024. One reinsurer in our top 10 is not rated “A” or higher, but is required to fully collateralize any ceded reserves. Subsequent to December 31, 2024 but prior to the issuance of this Form 10-K, this reinsurer received an “A” credit rating from A.M. Best. Management has concluded that all balances are considered recoverable as of December 31, 2024.

Additional information relating to our reinsurance activities is included under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 6, “Reinsurance,” in the Notes to the Consolidated Financial Statements.

Reserves for Losses and Loss Adjustment Expenses

Argo Group records reserves for specific claims incurred and reported, as well as reserves for claims incurred but not reported (“IBNR”). The estimates of losses for reported claims are established on an individual case basis based on management’s reasonable judgment. Such estimates are based on our particular experience with the type of risk involved and our knowledge of the circumstances surrounding each individual claim. Reserves for reported claims consider our estimate of the ultimate cost to settle the claims, including investigation and defense of the claim, and may be adjusted for differences between costs originally estimated and costs re-estimated or incurred.

The estimate of reinsurance recoverables related to reported and unreported losses and loss adjustment expenses represent the portion of the gross liabilities that are anticipated to be recovered from reinsurers. Amounts recoverable from reinsurers are recognized as assets at the same time as, and in a manner consistent with, the estimate of the gross losses covered by the reinsurance agreement.

We are subject to and establish estimates for claims arising out of catastrophes that may have a significant effect on our business, results of operations and/or financial condition. Catastrophes can be caused by various events, including, but not limited to, hurricanes, windstorms, earthquakes, hailstorms, explosions, power outages, severe winter weather, fires, global health pandemics and man-made events, such as terrorist attacks.

We have discontinued underwriting certain lines of business; however, we are still obligated to pay losses incurred on these lines. Certain lines currently in run-off are characterized by long elapsed periods between the occurrence of a claim and any ultimate payment to resolve the claim. Included in Run-off Lines are claims related to asbestos and environmental liabilities arising out of liability policies primarily written in the 1960s, 1970s and into the early 1980s with a limited number of claims occurring on policies written in the early 1990s. Business no longer underwritten, including in more recent years, is also classified in Run-off Lines.

Additional information relating to our loss reserve development is included under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Note 7, “Reserves for Losses and Loss Adjustment Expenses,” in the Notes to Consolidated Financial Statements.

Investments

Our investment portfolio is designed to ensure adequate liquidity for the prompt payment of our obligations, including any potential claims payments. To help ensure adequate liquidity for payment of claims, we broadly seek to match the profile of our invested assets with those of our liabilities. We consider liquidity, anticipated duration, and the currency of our liabilities when making investment decisions, and our investment guidelines provide restrictions on our portfolio’s composition, including issuer limits, sector limits, credit quality limits, portfolio duration, limits on the amount of investments in approved countries and permissible security types. To meet our liquidity needs, our bond portfolio consists primarily of investment grade, fixed-maturity securities. As of December 31, 2024, fixed maturities, along with cash, cash equivalents and short-term investments, represented 62.6% of our total investments and cash equivalents.

Effective November 16, 2023, an affiliate of Brookfield Asset Management Ltd. was hired as our investment manager to oversee our portfolio.

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Additional information relating to our investment portfolio is included under Item 1A, “Risk Factors,” Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” and Note 3, “Investments,” in the Notes to Consolidated Financial Statements.

Human Capital Management

As of December 31, 2024, we had 827 employees, of which 815 were full-time employees of which 770 were employed in the U.S. and 45 were employed in foreign countries including Bermuda, Italy and the U.K. Additionally, we utilize independent contractors and temporary personnel to supplement our workforce. We regularly monitor and evaluate turnover metrics to ensure we are responsive to the evolving and competitive market for top talent.

Available Information

General information about us can be found on our website at www.argolimited.com. The information contained on our website is not included as a part of, or incorporated by reference into, this Form 10-K and such web addresses are provided as textual references only. Our Code of Conduct and Business Ethics applies to all of our Board members, officers, third-party providers and employees, including our principal executive officer, principal financial officer and principal accounting officer.

We intend to post on our website any amendment to our Code of Conduct and Business Ethics and any waivers thereof for directors or executive officers.

Item 1A. Risk Factors

Summary of Risk Factors

Our operations and financial results are subject to various risks and uncertainties, including those described below, that could adversely affect our business, financial condition, results of operations, and cash flows. Stakeholders should carefully consider these risks, along with the other information included in this Form 10-K and in our other filings with the SEC, before making an investment decision regarding our securities. There may be additional risks of which we are currently unaware or that we currently consider immaterial. All of these risks could have a material adverse effect on our financial condition, results of operations and cash flows.

•Insurance Underwriting Risks. Insurance underwriting risks include risks related to adverse changes in the value of insurance liabilities, including risks related to an excess or shortage of underwriting capacity, unexpected changes in the claims, legal or social environment, changes to distribution channels, sufficiency of reserves, our ability to compete effectively, and breach of the obligations of our agents.

•Operational Risks. Operational risks include risks related to employee retention and changes in key personnel, strategies and processes to mitigate insurance risks, ineffective internal controls, information technology, failure to protect confidential information and outsourcing relationships.

•Financial Risks. Financial risks cover our market, credit, investment and liquidity risks, which include risks related to the performance of Argo Group’s investment portfolio as well as risks related to the performance of financial markets, economic and political conditions, foreign currency fluctuations, impairments in investments, performance of counterparties, and the availability of reinsurance.

•Strategic Risks. Strategic risks include risks related to Argo Group’s inability to implement appropriate business plans and strategies, and include risks related to the macroeconomic environment, risk-based capital requirements, the Company’s debt, holding company structure, ratings and strategic transactions.

•Cybersecurity Risks. Cyber security risks include technology-related events that could compromise the integrity, confidentiality, and availability of Argo Group’s financial data, including data breaches and ransomware attacks, phishing and social engineering, Denial of Service (DoS) attacks, and exploits to third-party service providers.

•Reputational Risks. Reputational risks include risks related to the risk of potential loss through a deterioration of Argo Group’s reputation, and include risks related to potential violations of sanctions, anti-corruption or AML regulations.

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•Legal, Regulatory and Litigation Risks. Legal, regulatory and litigation risks include risks related to the outcome of legal and regulatory proceedings, including regulatory constraints on Argo Group’s business, such as constraints imposed on our Bermuda, U.S., or other subsidiaries, risk-based capital and solvency requirements, the outcome of legal proceedings, and limitations on a potential change of control due to Argo Group’s corporate structure.

•Taxation Risks. Taxation risks include risks related to the Company and its subsidiaries’ potential exposure to various taxes, including as a result of new, and changes to existing, tax legislation, treaties, and regulations in the jurisdictions in which the Company, its subsidiaries, and certain of their affiliates have a taxable presence, challenges by tax authorities to our current and historical tax positions and practices, U.S. federal withholding taxes on distributions paid to our non-U.S. stockholders, and any additional amounts that we may be required to pay to such stockholders, changes to, or our eligibility to qualify for benefits under, any income tax treaties on which we rely; and changes in tax laws in jurisdictions in which we have a taxable presence as a result of the implementation of the Pillar I and Pillar II proposals by the OECD.

We may be adversely affected by changes in economic and political conditions, including inflation and changes in interest rates.

The effects of inflation could cause the cost of claims to rise in the future. Our reserve for losses and loss adjustment expenses (“LAE”) includes assumptions about future payments for settlement of claims and claims handling expenses, such as medical treatments and litigation costs. To the extent inflation causes these costs to increase above reserves established for these claims, we will be required to increase our loss reserves with a corresponding reduction in our net income in the period in which the deficiency is identified. Furthermore, if we experience deflation or a lack of inflation going forward and interest rates are low or decline, we could experience low portfolio returns because we hold fixed income investments of fairly short duration.

Additionally, our operating results are affected, in part, by the performance of our investment portfolio. Our investment portfolio may be adversely affected by inflation or changes in interest rates. Such adverse effects include the potential for realized and unrealized losses in a rising interest rate environment or the loss of income in an environment of prolonged low interest rates. Such effects may be further impacted by decisions made regarding such things as portfolio composition and duration given the prevailing market environment. Although we attempt to take measures to manage the risks of investing in changing interest rate environments, we may not be able to mitigate interest rate sensitivity effectively. If Argo Re’s ECR ratio falls below the Company’s risk tolerance, Argo Re’s ability to pay dividends to the Company will be restricted. Economic and political conditions, including inflation and fluctuation in interest rates or failure to maintain Argo Re’s ECR ratio in excess of the Company’s risk tolerance would have a material adverse effect on our business, results of operations, financial condition and our ability to pay dividends to stockholders.

Our insurance subsidiaries are subject to risk-based capital and solvency requirements in their respective regulatory domiciles and any failure to comply with these requirements may have a material adverse effect on our business.

A risk-based capital system is designed to measure whether the amount of available capital is adequate to support the inherent specific risks of each insurer. Risk-based regulatory capital is calculated at least annually. Authorities use the risk-based capital formula to identify insurance companies that may be undercapitalized and thus may require further regulatory attention. The formulas prescribe a series of risk measurements to determine a minimum capital amount for an insurance company, based on the profile of the individual company. The ratio of a company’s actual policyholder surplus to its minimum capital requirements will determine whether any regulatory action is required based on the respective local thresholds. The application and methods of calculating risk-based regulatory capital are subject to change, and the ultimate impact on our solvency position from any future material changes cannot be determined at this time.

We may have future capital requirements that may not be available to us on commercially favorable terms. Regulatory capital and solvency requirements for our future capital requirements depend on many factors, including our ability to underwrite new business, risk propensity and ability to establish premium rates and accurately set reserves at levels adequate to cover expected losses. To the extent that the funds generated by insurance premiums received and sale proceeds and income from our investment portfolio are insufficient to fund future operating requirements and cover incurred losses and loss expenses, we may need to raise additional funds through financings or curtail our growth and reduce in size. Uncertainty in the equity and fixed maturity securities markets could affect our ability to raise additional capital in the public or private markets. Any future financing, if available at all, may be on terms that are not favorable to us and our stockholders. In the case of equity financing, dilution to current shareholdings could result, and the securities issued may have rights, preferences and privileges that are senior or otherwise superior to those of our shares of common stock.

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Failure to comply with the capital requirement laws and regulations in any of the jurisdictions where we operate, including the U.S., the E.U., or Bermuda could result in remedial plans to rectify any capital level shortfalls that could require capital contributions and/or other actions, administrative actions and/or penalties imposed by a particular governmental or self-regulatory authority, unanticipated costs associated with remedying such failure or other claims, harm to our reputation, restrictions or prohibitions on the payment of dividends or other forms of distributions, or interruption of our operations, any of which could have a material and adverse impact on our business, financial position, results of operations, liquidity and cash flows.

The outcome of legal and regulatory proceedings, investigations, inquiries, claims and litigation related to our business operations, and changes in the legal environment, may have a material adverse effect on our results of operations and financial condition.

We are regularly subject to, and are currently involved in, legal and regulatory proceedings, investigations, inquiries, claims and litigation in connection with our business operations. Due to the inherent uncertainty of the outcomes of such matters, there can be no assurance that the resolution of any particular claim or proceeding would not materially adversely affect our results of operations and financial condition. Determining legal reserves or possible losses from such matters involves judgment and may not reflect the full range of uncertainties and unpredictable outcomes. Should any of our estimates and assumptions change or prove to have been incorrect, it could have a material adverse effect on our financial position, results of operations and cash flows. Investigations, inquiries, disputes, claims and regulatory and legal and arbitration proceedings, including securities, derivative action and class action litigation, can be expensive and disruptive and could materially adversely affect our financial position, results of operations and cash flows. Such matters, even if pending or not ultimately substantiated or if indemnified or insured, may adversely impact us, including by disrupting our operations, diverting management resources and harming our reputation.

Significant changes in the legal environment could cause our ultimate liabilities to change from our current expectations. Such changes could be judicial in nature, like trends in the size of jury awards, developments in the law relating to tort liability or the liability of insurers, and rulings concerning the scope of insurance coverage or the amount or types of damages covered by insurance. In addition, changes in federal or state laws and regulations relating to the liability of insurers or policyholders, including state laws expanding “bad faith” liability and state “reviver” statutes, extending statutes of limitations for certain abuse claims, could result in changes in business practices, additional litigation, or could result in unexpected losses, including increased frequency and severity of claims. It is impossible to forecast such changes reliably, much less to predict how they might affect our loss reserves or how those changes might adversely affect our ability to price our insurance products appropriately. Thus, significant judicial or legislative developments could adversely affect our business, financial condition, results of operations and liquidity.

Insurance Underwriting Risks

Insurance underwriting risks are defined as the risk of loss, or adverse change in the value of insurance liabilities, due to inadequate pricing and/or reserving practices. These risks may be caused by the fluctuations in timing, frequency and severity of insured events and claim settlements in comparison to the expectations at the time of underwriting.

We may incur income statement charges (or benefits) if the reserves for losses and loss adjustment expenses are insufficient (or redundant). Such income statement charges could be material, individually or in the aggregate, to our financial condition and operating results in future periods.

General Loss Reserves

We maintain reserves for losses and loss adjustment expenses to cover estimated ultimate unpaid liabilities with respect to reported and unreported claims incurred as of the end of each balance sheet date. Reserves do not represent an exact calculation of liability, but instead represent management’s best estimates, which take into account various statistical and actuarial projection techniques as well as other influencing factors. Multiple actuarial methods are used in developing the ultimate claims liability. Each method has its own set of assumption variables and its own advantages and disadvantages. The relative strengths and weaknesses of a particular estimation method when applied to a particular group of claims can also change over time. Variables in the reserve estimation process can be affected by both internal and external events, such as changes in claims handling procedures, economic and social inflation, legal precedent and legislative changes.

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Social, economic, political and environmental issues, including rising income inequality, climate change, prescription drug use and addiction, exposures to new substances or those previously considered to be safe, along with the use of social media to proliferate messaging around such issues, has expanded the theories for reporting claims, which may increase our claims administration and/or litigation costs. State and local governments' increased efforts aimed to respond to the costs and concerns associated with these types of issues, may also lead to expansive, new theories for reporting claims or may lead to the passage of “reviver” statutes that extend the statute of limitations for the reporting of these claims, including statutes passed in certain states with respect to abuse claims. In addition, these and other social, economic, political and environmental issues may either extend coverage beyond our underwriting intent or increase the frequency or severity of claims.

In addition, many of these items are not directly quantifiable, particularly on a prospective basis, and there may be significant reporting lags between the occurrence of an insured event and the time it is actually reported to the insurer. During such a time lag, there may be development of claims that varies from that which was expected when loss reserves were established, adverse legal rulings which may impact the liability under insurance contracts beyond that which was anticipated when the reserves were established, and development of new theories related to coverage which may increase liabilities under insurance contracts beyond that which were anticipated when the loss reserves were established. Given the long-tail nature of some of our claims, judgement used in selecting actuarial assumptions and weighing the indications of the various actuarial methods in developing our ultimate loss selection may have a material impact on our reserves. Construction defect and professional liability claims are two examples where determining the ultimate claims liability can be complex and challenging. Claims on these lines are subject to greater inherent variability than is typical of the remainder of the Company’s reserves, and are highly dependent upon court settlements, economic conditions, and the predictability of those results inherently have a larger range of potential outcomes. For example, for the construction defect lines the Company’s reserve estimates for recent accident years rely heavily on expected loss ratios that are derived from analysis of rate changes, changes in underwriting, and other factors which are all effected by market conditions. While the Company believes the methods used to measure these changes are reasonable with input from the claims and underwriting departments, it is difficult to precisely measure the potential impacts on the Company’s reserves. Although reserve estimates are continually reevaluated in a regular ongoing process, because the calculation and setting of the reserves for losses and loss adjustment expenses is an inherently uncertain process dependent on estimates, our existing reserves may be insufficient or redundant and estimates of ultimate losses and loss adjustment expenses may increase or decrease over time. While we actively manage our risk exposure through underwriting limits and processes and further mitigate it through the purchase of reinsurance protection, including loss portfolio transfers, our losses could exceed our reinsurance limits which may have a material adverse impact on our business, results of operations and/or financial condition.

In light of these inherent uncertainties and as a result of our 2024 reserve review, we recorded prior year reserve development of $254.9 million for the year ended December 31, 2024. The largest reserve increases were primarily driven by our Run-off and Casualty segments related to professional and construction lines, respectively, including the impact of large losses. Such reserves were established in accordance with applicable insurance laws and U.S. GAAP. For further discussion of our loss reserves, please see Part II, Item 7 “Management’s discussion and analysis of financial condition and results of operations—Critical accounting policies, estimates and recent accounting pronouncements” and “Management’s discussion and analysis of financial condition and results of operations—Reserves for losses and loss adjustment expenses.”

Asbestos and Environmental Liability Loss Reserves

In addition to the previously described general uncertainties encountered in estimating reserves, there are significant additional uncertainties in estimating the amount of our potential losses from asbestos and environmental claims. Reserves for asbestos and environmental claims cannot be estimated with traditional loss reserving techniques that rely on historical accident year development factors due to the uncertainties surrounding these types of claims.

Among the uncertainties impacting the estimation of such losses are:

•difficulty in identifying sources of or exposure to environmental or asbestos contamination;

•uncertainty regarding the number and identity of insureds with potential asbestos or environmental exposure;

•changes in underlying laws and judicial interpretation of asbestos-related laws, including with respect to the interpretation and application of insurance coverage; and

•difficulty in properly allocating responsibility and/or liability for environmental or asbestos damage.

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Although we have established reserves to account for our exposure to asbestos and related environmental liability claims, management believes these factors continue to render traditional actuarial methods less effective at estimating reserves for asbestos and environmental losses than reserves on other types of losses. In addition, there is no assurance that future adverse development will not occur, and such development may have an adverse effect on our results of operations.

Black Lung Disease Loss Reserves

Through workers compensation coverage provided to coal mining operations by our subsidiary Rockwood, we have exposure to claims for black lung disease. Those diagnosed with black lung disease are eligible to receive workers compensation benefits from various U.S. federal and state programs. These programs are continually being reviewed by the governing bodies and may be revised without notice in such a way as to increase our level of exposure.

As described above, estimates of ultimate losses and loss adjustment expenses may increase in the future. Such changes in estimates could be material, individually or in the aggregate, to our future operating results and financial condition. We can provide no assurances such capital will be available.

Additional information relating to our reserves for losses and loss adjustment expense is included under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 7, “Reserves for Losses and Loss Adjustment Expenses,” in the Notes to Consolidated Financial Statements.

We operate in a highly competitive environment and no assurance can be given that we will continue to be able to compete effectively in this environment.

We compete with numerous companies that provide casualty, property and specialty lines of insurance and related services. Some of those companies have a larger capital base and are more highly rated than we are. No assurance can be given that we will be able to continue to compete successfully in the insurance market. Increased competition in these markets could result in a change in the supply and/or demand for insurance, affect our ability to price our products at risk-adequate rates and retain existing business or underwrite new business on favorable terms. If this increased competition limits our ability to transact business, our operating results could be adversely affected.

Our insurance subsidiaries have exposure to unpredictable and unexpected changes in the claims environment or catastrophes and terrorist acts that can materially and adversely affect our business, results of operations and/or financial condition.

Emerging Claims

Changes in industry practices and legal, judicial, social, technological and other environmental conditions may have an unforeseeable adverse impact on claims and coverage issues. This could include the impact of “social inflation,” which is generally described by the rising costs of insurance claims due to societal trends which may result in increased litigation, broader definitions of liability and contractual interpretations, plaintiff-friendly legal decisions, larger compensatory jury awards, and larger awards for non-economic damages. These issues may adversely affect our business, such as by extending coverage beyond the intended scope at the time of underwriting business or increasing the number or size of expected claims. In some instances, these changes may not become apparent until sometime after insurance contracts that are affected were issued and hence cannot be appropriately factored into the underwriting decision. As a result, the full extent of liability under such insurance contracts may not be known for many years after these contracts have been issued, and our financial position and results of operations may be materially and adversely affected in such future periods. We maintain an emerging risk identification, analysis and reporting process, overseen by our Emerging Risk Review Group, as part of our enterprise risk framework, which seeks to provide an early identification of such trends. The effects of these and other unforeseen evolving or emerging claims and coverage issues are inherently difficult to predict.

Catastrophic Losses

We are subject to claims arising out of catastrophes that may have a significant effect on our business, results of operations and/or financial condition. Catastrophes can be caused by various events, including, but not limited to, tornadoes, hurricanes, windstorms, tsunamis, earthquakes, hailstorms, explosions, power outages, severe winter weather, wildfires and man-made events, including civil unrest. The incidence and severity of such catastrophic events are inherently unpredictable, and our losses from catastrophes could be substantial. Logistical challenges in responding to such events, resource constraints and other difficulties in resolving associated claims may ultimately result in higher claim amounts than expected. Insurance companies are generally not permitted to reserve for probable catastrophic events until they occur. Therefore, although we will actively manage our risk exposure to catastrophes through underwriting limits and processes, and further mitigate it through the purchase of reinsurance protection and other hedging instruments, an especially severe catastrophe or series of catastrophes could exceed our reinsurance or hedging protection and may have a material adverse impact on our business, results of operations and/or financial condition.

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Terrorism

We are exposed to the risk of losses resulting from acts of terrorism. Reinsurers are able to exclude coverage for terrorist acts or price that coverage at rates that we consider attractive. However, direct insurers, like our primary insurance company subsidiaries, might not be able to likewise exclude coverage of terrorist acts because of regulatory constraints. Terrorism exclusions are not permitted in the U.S. for worker’s compensation policies under U.S. federal law or under the laws of any state or jurisdiction in which we operate. When underwriting existing and new workers compensation business, we consider the added potential risk of loss due to terrorist activity, including foreign and domestic, and this may lead us to decline to underwrite or to renew certain business. However, even in lines where terrorism exclusions are permitted, our clients may object to a terrorism exclusion in connection with business that we may still desire to underwrite without an exclusion, some or many of our insurance policies may not include a terrorism exclusion. Given the reinsurance retention limits imposed under the TRIA and its subsequent legislative extensions, and that some or many of our policies may not include a terrorism exclusion, future foreign or domestic terrorist attacks may result in losses that have a material adverse effect on our business, results of operations and/or financial condition. See “Item 1. Business—Regulation” for a description of the applicability of the TRIA and the Terrorism Risk Insurance Program Reauthorization Act of 2014 to the Argo Group of Companies and its U.S. operations.

In the event coverage of terrorist acts cannot be excluded, we, in our capacity as a primary insurer, would have a significant gap in our own reinsurance protection with respect to potential losses as a result of any terrorist act. It is impossible to predict the occurrence of such events with statistical certainty and difficult to estimate the amount of loss per occurrence they will generate. If there is a future terrorist attack, the possibility exists that losses resulting from such event could prove to be material to our financial condition and results of operations. Terrorist acts may also cause multiple claims, and there is no assurance that our attempts to limit our liability through contractual policy provisions will be effective.

Global climate change, as well as increasing related regulation, may have an adverse effect on our business, financial results and operations.

We are exposed to physical and transition risks as a result of global climate change, and classify climate change as a material emerging risk. Physical risks arise from the direct effects of climate change, such as the destruction of property and infrastructure, which may result in a business interruption. Transition risks arise from the process of transitioning towards a low-carbon economy, primarily from extensive policy, legal/regulatory, technology, social and market changes in support of this transition. In addition, we may be exposed to losses in the value of our investments arising from the physical and transition impacts of climate change, including 'stranded assets', on the companies and securities in which we invest. We manage a well-diversified portfolio, both geographically and by sector, and we monitor our investment-allocation strategies as the economy transitions toward long-term decarbonization, allowing us to adjust our exposure to sectors and/or geographical areas that face severe risks due to climate change. Despite these efforts, there remains a risk that our financial condition or operating performance may be impacted by changes in our business model arising from climate change transition, and by the performance of strategies we put in place to manage this transition.

Physical Risks

A rise in the frequency of extreme weather events has increased natural disaster-related insurance claims, particularly from underwriting property insurance, requiring us to consider changes in premiums, product coverages, underwriting practices, and reinsurance utilization. Changes in climate conditions may also cause our underlying modeling data to no longer appropriately reflect the frequency and severity, limiting our ability to effectively evaluate and manage the related risks, of catastrophes and severe weather events.

Over the longer term, climate change may also have an impact on the economic viability of certain lines of business if suitable adjustments in price and coverage cannot be achieved. Climate change has been, and continues to be, a significant factor in the property insurance and reinsurance businesses and is something we have considered when reassessing our lines of business and our risk appetite for catastrophe-exposed property insurance. The effects of climate change could also lead to increased credit risk of other counterparties we transact business with, including reinsurers.

Transition Risks

We may face market pressure to contribute to a low-carbon economy, including, to no longer underwrite risks for carbon-intensive business (reducing insurance liability exposure) and to no longer invest in carbon-intensive business (reduce insurance asset portfolio exposure). There is a risk that certain elements of our business cease to be viable as a result of such climate change ‘transition’. Additionally, government policies or regulations to slow climate change, such as emission controls or technology mandates, may have an adverse impact on sectors such as utilities, transportation and manufacturing, affecting demand for our products and our investments in these sectors.

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As part of the transition risks, we may also face liability associated with allegations of failure to mitigate or adapt to climate change risk or associated disclosure failures. We are subject to complex and changing laws, regulation and public policy debates relating to climate change which are difficult to predict and quantify and may have an adverse impact on our business. Changes in regulations relating to climate change or our own decisions implemented as a result of assessing the impact of climate change on our business may result in an increase in the cost of doing business or a decrease in premiums in certain lines of business. Because there is significant variability associated with the impacts of climate change, we cannot predict how legal, regulatory and social responses may impact our business.

Because our business is dependent upon insurance and reinsurance agents and brokers, we are exposed to certain risks arising out of distribution channels that could cause our results to be adversely affected.

We market and distribute some of our insurance products and services through a select group of wholesale agents who have limited quoting and binding authority and who, in turn, sell our insurance products to insureds through retail insurance brokers. These agencies can bind certain risks that meet our pre-established guidelines. If these agents fail to comply with our underwriting guidelines and the terms of their appointment, we could be bound on a particular risk or number of risks, that were not anticipated, when we developed the insurance products. Such actions could adversely affect our results of operations. Additionally, in any given period, we may derive a significant portion of our business from a limited number of agents and brokers and the loss of any of these relationships, or significant changes in distribution channels resulting in loss of access to market through those agents and brokers, could have a significant impact on our ability to market our products and services.

In accordance with industry practice, we may pay amounts owed on claims under our insurance and reinsurance contracts to brokers and/or third-party administrators who in turn remit these amounts to our insureds or reinsureds. Although the law is unsettled and depends upon the facts and circumstances of each particular case, in some jurisdictions in which we conduct business, if an agent or broker fails to remit funds delivered for the payment of claims, we may remain liable to our insured or reinsured ceding insurer for the deficiency. Likewise, in certain jurisdictions, when the insured or reinsured pays the remitting funds to our agent or broker in full, our premiums are considered to have been paid in full, notwithstanding that we may or may not have actually received the premiums from the agent or broker. Consequently, we assume a degree of credit risk associated with certain agents and brokers with whom we transact business.

The insurance business is historically cyclical, and we may experience periods with excess underwriting capacity and unfavorable premium rates; conversely, we may have a shortage of underwriting capacity when premium rates are strong, both of which could adversely impact our results.

Historically, insurers and reinsurers have experienced significant fluctuations in operating results due to competition, frequency and severity of catastrophic events, levels of capacity, adverse trends in litigation, regulatory constraints, general economic conditions and other factors. The supply of insurance is related to prevailing prices, the level of insured losses and the level of capital available to the industry that, in turn, may fluctuate in response to changes in rates of return on investments being earned in the insurance industry. As a result, the insurance business historically has been a cyclical industry characterized by periods of intense price competition due to excessive underwriting capacity as well as periods when shortages of capacity increased premium levels. Demand for reinsurance depends on numerous factors, including the frequency and severity of catastrophic events, levels of capacity, introduction of new capital providers, general economic conditions and underwriting results of primary insurers. The supply of reinsurance is related to prevailing prices, recent loss experience and capital levels. All of these factors fluctuate and may contribute to price declines generally in the reinsurance industry.

We cannot predict with certainty whether market conditions will improve, remain constant or deteriorate. Negative market conditions may impair our ability to underwrite insurance at rates that we consider appropriate and commensurate relative to the risk assumed. If we cannot underwrite insurance at appropriate rates, our ability to transact business would be materially and adversely affected. Any of these factors could lead to an adverse effect on our business, results of operations and/or financial condition.

Our agents, producers, or other third parties may exceed their underwriting authorities, commit fraud or otherwise breach obligations owed to us, which could adversely affect our results of operations and financial condition.

We authorize managing general agents, general agents and other producers to write business on our behalf from time to time within underwriting authorities we prescribe. We rely on the underwriting controls of these agents and producers to write business within these underwriting authorities. Our monitoring efforts may not be adequate and our agents and producers may exceed their underwriting authorities or otherwise breach obligations owed to us. There is also the risk that we may be held responsible for obligations that arise from the acts or omissions of third parties if they are deemed to have acted on our behalf. In addition, our agents, producers, insureds or other third parties may commit fraud or otherwise breach their obligation to us. To the extent that our agents, producers, insureds or other third parties exceed their authorities, commit fraud or otherwise breach obligations owed to us, our operating results and financial condition may be materially adversely affected.

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Operational Risks

Operational risk refers to the risk of loss arising from inadequate or failed internal processes, people, systems or the operational impact of external events. This risk encompasses all exposures faced by functions and services rendered in the course of conducting business including, but not limited to, underwriting, accounting and financial reporting, business continuity, claims management, information technology and data processing, legal and regulatory compliance, outsourcing and reinsurance purchasing.

We may be unable to attract and retain qualified employees and key executives.

We depend on our ability to attract and retain experienced underwriting talent, skilled employees and seasoned key executives who are knowledgeable about our business. The pool of highly skilled employees available to fill our key positions may fluctuate based on market dynamics specific to our industry and overall economic conditions. As such, higher demand for internal leaders and employees having desired talents could lead to increased compensation expectations for existing and prospective personnel, making it difficult for us to recruit and retain key employees and/or maintain labor costs at desired operating levels. If we are unable to attract and retain such talented team members and leaders, we may be unable to maintain our current competitive position in the specialized markets in which we operate and be unable to expand our operations into new markets, which could adversely affect our results.

Argo Re has operations that require highly skilled personnel to work in Bermuda. The ability to fill certain highly skilled key positions in Bermuda is constrained by Bermuda law, which provides that non-Bermudians are not permitted to engage in any occupation in Bermuda without an approved work permit from the Bermuda Department of Immigration. If the Bermuda Department of Immigration changes its current policies with respect to work permits, and as a result these key employees are unable to work in Bermuda, our operations could be disrupted and our financial performance could be adversely affected.

In addition, offices in foreign jurisdictions, such as Bermuda, may have residency and other mandatory requirements that affect the composition of its local boards of directors, executive teams and choice of third-party service providers. Due to the competition for available talent in such jurisdictions, we may not be able to attract and retain personnel as required by our business plans, which could disrupt operations and adversely affect our financial performance.

Loss of our executive officers or other key personnel or other changes to our management team could disrupt our operations or harm our business.

We depend on the efforts of our executive officers and certain key personnel. Any unplanned turnover or our failure to develop an adequate succession plan or business continuity plan for one or more of our executive officers or other key positions could deplete our institutional knowledge base and erode our competitive advantage. The loss or limited availability of the services of one or more of our executive officers or other key personnel, or our inability to recruit and retain qualified executive officers or other key personnel in the future, could, at least temporarily, have a material adverse effect on our operating results and financial condition. Leadership transitions can be inherently difficult to manage, and an inadequate transition may cause disruption to our business, including to our relationships with our customers and employees.

Our strategies and processes to mitigate insurance risk may fail and have an adverse effect on our business.

We use a number of strategies and processes to mitigate our insurance risk exposure including:

•engaging in disciplined and rigorous underwriting within clearly defined risk parameters and subject to various levels of oversight by experienced underwriting professionals;

•undertaking technical analysis to inform pricing decisions;

•carefully evaluating terms and conditions of our policies;

•focusing on our risk aggregations by geographic zones, industry type, credit exposure and other bases; and

•ceding insurance risk to reinsurance companies.

However, there are inherent limitations to the effectiveness of these strategies and processes. No assurance can be given that a failure to maintain or follow such processes or controls, an unanticipated event or series of such events will not result in loss levels that could have a material adverse effect on our financial condition or results of operations.

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If we fail to maintain an effective system of disclosure controls and procedures and internal controls over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.

We are required to maintain effective disclosure controls and procedures and internal control over financial reporting. Effective internal controls are necessary for us to provide reliable financial reports and aid in preventing fraud.

Our management does not expect that our disclosure controls or our internal controls over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. As a result of the inherent limitations in all control systems, our evaluation of controls cannot provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons or by collusion of two or more people. Additionally, the design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. As a result, our internal controls over financial reporting may have gaps or other deficiencies.

Any such gaps or deficiencies may require significant resources to remediate, could cause delays in our filing of quarterly or annual financial results, require the attention of management, and may also expose us to litigation, regulatory fines or penalties, or other losses. Inadequate process design or a failure in operating effectiveness could result in a material misstatement of our financial statements due to, but not limited to, poorly designed systems, changes in end-user computing, poorly designed IT reports, ineffective oversight of outsourced processes, failure to perform relevant management reviews, accounting errors or duplicate payments, any of which could result in a restatement of financial accounts. If our management team is unable to assert that our internal control over financial reporting is effective as of the end of a fiscal year, investor confidence in the accuracy and completeness of our financial statement and reports could be negatively impacted, which may have an adverse effect on our reputation and stock price.

We are dependent on our information technology systems, which could fail or suffer a cybersecurity breach, that could adversely affect our business, reputation, results of operations or financial condition or result in the loss of sensitive information.

Our business is highly dependent upon the successful and uninterrupted functioning of our computer and data processing systems for various purposes, including accounting, policy administration, actuarial and other modeling functions necessary for underwriting business, and claims and payment processing. Certain of our operations are also dependent upon systems operated by third parties, including administrators, market counterparties and their sub-custodians and other service providers, and our service providers may also depend on information technology systems. Notwithstanding the diligence that we perform on our service providers, we may not be in a position to verify all of the potential risks or reliability of such information technology systems.

While we are not aware of a material cybersecurity breach to date, we have no assurance that such a breach will not occur.

We must continuously monitor and develop our information technology networks and infrastructure in an effort to prevent, detect, address and mitigate the risk of threats to our data and systems, including malware and computer virus attacks, ransomware, unauthorized access, business e-mail compromise, misuse, denial-of-service attacks, system failures and disruptions. Incidents of publicly reported cyber security incidents have increased recently and the insurance sector as a whole is more exposed than in the past. Over time, and particularly recently, the sophistication of these threats has continued to increase. Although we have implemented multiple layers of protection to minimize the risks to systems, personal data and the privacy of individuals, including robust training, review, and audit procedures, there is no assurance that our security measures, including information security policies, will provide fully effective protection from such events.

We continuously monitor international risks associated with our global operations, including impacts from military conflicts or political instability. Although we cannot predict the ultimate impacts, military conflicts or political instability may create a heightened risk of threats resulting in cyber activities against our operations. In addition, with the increasing adoption of Artificial Intelligence (“AI”), Argo Group has implemented an AI Policy with associated guidance on best practices and continues to monitor how AI developments might impact our security program, especially to combat the threat of deepfake audio and video schemes intending to impersonate Company employees with the aim of gaining unauthorized system access or defrauding the Company.

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The potential consequences of a material cybersecurity incident include disruption to business operations, a loss of confidential information, reputational damage, litigation with third parties, and remediation costs, which in turn could have a material impact on our results of operation or financial condition. While we continue to maintain and review our cyber liability insurance protection, providing for first party and third-party losses, such insurance may not provide insurance coverage for all of the costs and damages associated with the consequences of a cybersecurity incident. In some cases, such unauthorized access may not be immediately detected. This may impede or interrupt our business operations and could adversely affect our consolidated financial condition or results of operations.

Any failure to protect the confidential customer information that we handle routinely could adversely affect our business, reputation, results of operations or financial condition.

We are subject to a number of data privacy laws and regulations enacted in the jurisdictions in which we do business. See “Item 1. Business—Regulation” for a description of the applicability of certain cybersecurity and data protection regulations and requirements on the Argo Group.

We are not aware of a material privacy breach to date, and specifically no material events involving Personal Information (“PI”) or customer information, but we have no assurance that such a breach will not occur in the future. A misuse or mishandling of personal information being sent to or received from a client, employee or third party could damage our businesses or our reputation or result in significant monetary damages, regulatory enforcement actions, fines and criminal prosecution in one or more jurisdictions. We routinely transmit, receive and store certain types of personal information by email and other electronic means. Although we attempt to protect this personal information and have implemented robust privacy protection standards and training programs to mitigate the risk of a privacy breach, we may be unable to protect personal information in all cases, especially with customers, business partners, and other third parties who may not have or use appropriate controls to protect personal information.

We are continuously evaluating and enhancing systems and creating new systems and processes, including to maintain or upgrade our business continuity plans (including, for example, use of cloud services), as our business depends on our ability to maintain and improve our technology systems for interacting with customers, brokers and employees. Due to the complexity and interconnectedness of these systems and processes, these changes, as well as changes designed to update and enhance our protective measures to address new threats, increase the risk of a system or process failure or the creation of a gap in the associated security measures. Any such failure or gap could adversely affect our business operations and the advancement of our business or strategic initiatives.

The potential consequences of a material privacy incident include reputational damage, litigation with third parties, regulatory fines, and penalties and associated remediation costs, which in turn could have a material impact on our results of operation or financial condition. While we continue to maintain and review our cyber liability insurance protection, such insurance may not provide insurance coverage for all of the costs and damages associated with the consequences of personal information being compromised, such as investigations, sanctions and regulatory and law enforcement action, and result in reputational harm and loss of business, which could have a material adverse effect on our business, cash flows, financial condition and results of operations.

Furthermore, certain of our businesses are subject to compliance with laws and regulations enacted by various regulatory organizations or exchanges relating to the privacy and security of the information of clients, employees or others. The variety of applicable privacy and information security laws and regulations exposes us to heightened regulatory scrutiny and requires us to incur significant technical, legal and other expenses in an effort to ensure and maintain compliance. If we are found not to be in compliance with these laws and regulations, we could be subjected to significant civil and criminal liability and exposed to reputational harm.

We may experience issues with outsourcing relationships, which could negatively impact our business, results of operations, and financial condition.

We outsource a number of technology and business process functions to third-party providers and we may continue to do so in the future. If we do not effectively select, develop, implement and monitor our outsourcing relationships, or if we experience technological or other issues with transition, or if third-party providers do not perform as anticipated, we may not realize productivity improvements or cost efficiencies and may experience operational difficulties, increased costs (including litigation costs), and a loss of business that may have an adverse effect upon on our operations or financial condition.

Also, we periodically negotiate amendments and renewals of such relationships, and there can be no assurance that such terms will remain acceptable to us or such third parties. If third-party providers experience disruptions or do not perform as anticipated, or we experience problems with a transition to a third-party provider, we may experience operational difficulties, an inability to meet obligations (including, but not limited to, policyholder obligations), a loss of business, litigation, and increased costs, or suffer other negative consequences, all of which may adversely affect our business and results of operations.

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Our outsourcing of certain technology and business process functions to third parties may expose us to enhanced risk related to data security, which could result in adverse monetary, reputational and/or regulatory consequences, which in turn could have an adverse effect on our operations or financial condition. If we do not effectively monitor these relationships, third party providers do not perform as anticipated, technological or other problems occur with an outsourcing relationship, we may not realize expected productivity improvements or cost efficiencies and may experience operational difficulties. In addition, our ability to receive services from third-party providers based in different countries could be impacted by political instability, unanticipated regulatory requirements or policies inside or outside of the U.S., which could adversely affect our business.

Financial Risks

The performance of our investment portfolio is subject to a variety of risks, including market risk, credit risk, investment risk and liquidity risk. Market risk is the risk of loss or adverse change in our financial position due to fluctuations in the level and volatility of market prices of assets, liabilities and financial instruments. This risk may be caused by fluctuations in interest rates, foreign exchange rates or equity, property and securities values.

Credit risk is the risk of loss or adverse change in our financial position due to fluctuations in the credit standing of issuers of securities, counterparties or any other debtors, including risk of loss arising from an insurer’s inability to collect funds from debtors.

Investment risk is the uncertainty associated with making an investment that may not yield the expected returns or performance, including the risk that an investment will decline in value, result in a loss or result in liability or other adverse consequences for the investor.

Liquidity risk is the risk of loss or our inability to realize investments and other assets in order to meet our financial obligations when they fall due or the inability to meet such obligations except at excessive cost.

A prolonged recession or a period of significant turmoil in the U.S. and international financial markets, could adversely affect our business, liquidity and financial condition and our share price.

U.S. and international financial market disruptions such as the ones experienced in the last global financial crisis along with the possibility of a prolonged recession, may potentially affect various aspects of our business, including the demand for and claims made under our products, our counterparty credit risk and the ability of our customers, counterparties and others to establish or maintain their relationships with us, our ability to access and efficiently use internal and external capital resources and our investment performance. Volatility in the U.S. and other securities markets may also adversely affect our share price. Depending on future market conditions, we could incur substantial realized and unrealized losses in future periods, which may have an adverse impact on our results of operations, financial condition, debt and financial strength ratings, insurance subsidiaries’ capital levels and our ability to access capital markets.

We may be adversely affected by changes in economic and political conditions, including inflation and changes in interest rates.

The effects of inflation could cause the cost of claims to rise in the future. Our reserve for losses and loss adjustment expenses (“LAE”) includes assumptions about future payments for settlement of claims and claims handling expenses, such as medical treatments and litigation costs. To the extent inflation causes these costs to increase above reserves established for these claims, we will be required to increase our loss reserves with a corresponding reduction in our net income in the period in which the deficiency is identified. Furthermore, if we experience deflation or a lack of inflation going forward and interest rates remain very low or continue to decline, we could experience low portfolio returns because we hold fixed income investments of fairly short duration.

Additionally, our operating results are affected, in part, by the performance of our investment portfolio. Our investment portfolio may be adversely affected by inflation or changes in interest rates. Such adverse effects include the potential for realized and unrealized losses in a rising interest rate environment or the loss of income in an environment of prolonged low interest rates. Such effects may be further impacted by decisions made regarding such things as portfolio composition and duration given the prevailing market environment. Although we attempt to take measures to manage the risks of investing in changing interest rate environments, we may not be able to mitigate interest rate sensitivity effectively. Fluctuation in interest rates could have a material adverse effect on our business, results of operations and/or financial condition.

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Our investment portfolio is subject to significant market and credit risks which could result in an adverse impact on our financial position or results.

Although our investment policies stress diversification of risks, conservation of principal and liquidity, our investments are subject to general economic conditions and market risks as well as risks inherent to particular securities.

For example, to the extent there is an economic downturn affecting a certain area in which our investment portfolio is concentrated, the risk that certain investments may default or become impaired would increase. Such defaults and impairments could reduce our net investment income and result in realized investment losses. Our investment portfolio is also subject to increased valuation uncertainties when investment markets are illiquid. The valuation of investments is more subjective when markets are illiquid, increasing the risk that the fair value of certain of our investments may not be readily determinable.

Our investments in fixed maturity and short-term securities may be adversely affected by changes in inflation and/or interest rates which, in turn, may adversely affect operating results. The fair value and investment income of these assets fluctuate with general economic and market conditions. Generally, the fair value of fixed maturity securities will decrease as interest rates increase. Some fixed maturity securities have call or prepayment options, which represent possible reinvestment risk in declining rate environments. Other fixed maturity securities such as mortgage-backed and asset-backed securities carry prepayment risk.

We also invest in marketable equity securities. These securities are carried on our balance sheet at fair value and are subject to potential losses and declines in market value. Our invested assets also include investments in limited partnerships, privately held securities and other alternative investments. Such investments entail substantial risks.

Risks for all types of securities are managed through application of the investment policy, which establishes investment parameters that include, but are not limited to, maximum percentages of investment in certain types of securities, minimum levels of credit quality and option-adjusted duration guidelines. There is no guarantee of policy effectiveness.

In addition, there can be no assurance that our investment objectives will be achieved, and results may vary substantially over time. Although we seek investment strategies that are correlated with our insurance and reinsurance exposures, losses in our investment portfolio may occur at the same time as underwriting losses and, therefore, exacerbate such losses’ adverse effect on us. See “Item 1. Business—Investments.”

We may be adversely affected by foreign currency fluctuations.

Although our foreign subsidiaries’ functional currency is the U.S. Dollar, with the exception of our Italian subsidiary whose functional currency is the Euro, certain premium receivables and loss reserves include business denominated in currencies other than U.S. Dollars. We are exposed to the possibility of significant claims in currencies other than U.S. Dollars. We may experience losses in the form of increased claims costs or devaluation of assets available for paying claims resulting from fluctuations in these non-U.S. currencies, which could materially and adversely affect our operating results.

We face a risk of non-availability of reinsurance, which could materially and adversely affect our business, results of operations and/or financial condition.

We purchase reinsurance for our own account in order to mitigate the effect of certain large and multiple losses upon our financial condition. As is common practice within the insurance industry, we transfer a portion of the risks insured under our policies to other companies through the purchase of reinsurance or other, similar risk-mitigating hedging instruments. This reinsurance is maintained to protect the insurance and reinsurance subsidiaries against the severity of losses on individual claims, unusually serious occurrences in which a number of claims produce an aggregate extraordinary loss and catastrophic events. Although reinsurance does not discharge our subsidiaries from their primary obligation to pay for losses insured under the policies they issue, reinsurance does make the assuming reinsurer liable to the insurance and reinsurance subsidiaries for the reinsured portion of the risk.

Our reinsurers or capital market counterparts are dependent on their ratings in order to continue to write business and some have suffered downgrades in ratings in the past as a result of their exposures. Our reinsurers or capital market counterparties may also be affected by adverse developments in the financial markets, which could adversely affect their ability to meet their obligations to us. Insolvency of these counterparties, their inability to continue to write business or reluctance to make timely payments under the terms of their agreements with us could have a material adverse effect on us because we remain liable to our insureds or cedants in respect of the reinsured risks. Market conditions beyond our control may impact the availability, quality and cost of the reinsurance we purchase. No assurances can be made that reinsurance will remain continuously available to us to the same extent and on the same terms and rates as is currently available.

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An impairment in the carrying value of intangible assets could negatively impact our consolidated results of operations and stockholders’ equity.

Intangible assets are originally recorded at fair value. Intangible assets are reviewed for impairment at least annually or more frequently if indicators are present. Management, in evaluating the recoverability of such assets, relies on estimates and assumptions related to margin, growth rates, discount rates and other data. There are inherent uncertainties related to these factors and management’s judgment in applying these factors. Intangible asset impairment charges can result from declines in operating results, divestitures or sustained market capitalization declines and other factors. Impairment charges could materially affect our financial results in the period in which they are recognized.

The determination of the estimate of allowances and impairments taken on our investments is highly subjective and could materially impact our operating results or financial position.

We perform a detailed analysis each reporting period end to assess declines in the fair values of available for sale debt securities in accordance with applicable accounting guidance regarding the recognition and presentation of current expected losses. The process of determining an allowance for available for sale securities requires judgment and involves analyzing many factors. Assessing the accuracy of the allowances reflected, in our financial statements is inherently uncertain given the subjective nature of the process. Furthermore, additional impairments may need to be taken or allowances provided in the future with respect to events that may impact specific investments. Future material impairments or any error in accurately accounting for such impairments may have a material adverse effect on our financial condition or results of operations.

Our financial condition and operating results may be adversely affected by the failure of one or more reinsurers or capital market counterparties to meet their payment obligations to us.

We are subject to credit risk with respect to our ability to recover amounts due from reinsurers to the extent that any reinsurer is unable or unwilling to meet the obligations assumed under the reinsurance contracts. The collectability of reinsurance is subject to the solvency of the reinsurers, interpretation and application of contract language and other factors. Despite strong ratings, the financial condition of a reinsurer may change based on market conditions. In certain instances we also require assets in trust, letters of credit or other acceptable collateral to support balances due, however, there is no certainty that we can collect on these collateral agreements in the event of a reinsurers default. It is not always standard business practice to require security for balances due; therefore, certain balances are not collateralized. A reinsurer’s insolvency or inability to make payments under the terms of a reinsurance contract could have a material adverse effect on our business, results of operations and/or financial condition.

We may be adversely affected by the replacement of benchmark indices.

The withdrawal and replacement of widely used benchmark indices with alternative benchmark rates could adversely affect our business. For example, as a result of the phase-out of the London Interbank Offered Rate (“LIBOR”), we recognize that we have some related risk exposure within our investment portfolio and corporate debt structures, including that there remains the possibility that certain instruments and contracts without succession or alternative rate provisions could be adversely impacted from this transition, and that there are significant differences between how LIBOR and certain successor rates are calculated. The withdrawal and replacement of widely used benchmark indices with alternative benchmark rates may have an adverse effect on our business, results of operations or financial condition.

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Strategic Risks

Strategic risk means the risk of our inability to implement appropriate business plans and strategies, make decisions, allocate resources or adapt to changes in the business environment. Strategic risk includes the risk of the current or prospective adverse impact on earnings or capital arising from business decisions, improper execution of decisions or lack of responsiveness to industry changes.

Uncertain conditions in the global economy may adversely affect our business, results of operations and financial condition.

Economic imbalances and financial market turmoil affecting the global banking system and global financial markets could result in a new or incremental tightening in the credit markets, low liquidity, extreme volatility in fixed maturity, credit, currency, and equity markets and volatility in share prices. Major public health issues could harm our operations and have a major impact on the global economy and financial markets. These circumstances could lead to a decline in asset value and potentially reduce the demand for insurance due to limited economic growth prospects. These circumstances could adversely impact our ability to obtain financing. Even if financing is available, it may only be available on terms that are not favorable to us, which could decrease our profitability. Global and local economic conditions could also increase the number and size of claims made under our policies, our counter-party credit risk, and the ability of our counterparties to establish or maintain their relationships with us.

Net investment income and net realized and unrealized gains or losses also could vary materially depending on market conditions; impairment charges resulting from revaluations of debt and equity securities and other investments; interest rates; inflation; cash balances; and changes in the fair value of financial and derivative instruments. Increased volatility in the financial markets and overall economic uncertainty would increase the risk that the actual amounts realized in the future on our financial instruments could differ significantly from the fair values assigned to them.

Adverse developments in the broader global economy could create significant challenges to the insurance industry. If policy responses in Europe, the U.S. and other jurisdictions are not effective in mitigating these conditions, the insurance sector could be adversely affected by the resulting financial and economic environment. The ultimate impact of such conditions on the insurance industry in general, and on our operations in particular, however, cannot be fully or accurately quantified at this time.

We may not realize the anticipated benefits from the Merger.

Following the closing of the Merger in November 2023, we became an indirect wholly-owned subsidiary of Brookfield Wealth Solutions Ltd. We may fail to realize the anticipated benefits of the Merger, including due to factors that may be outside of our control, such as changes in laws or regulations or in the interpretation of existing laws or regulations, general economic, political, legislative or regulatory conditions, the loss or limited availability of the services of one or more of our executive officers or other key personnel, and other factors described in this report. Failure to realize the anticipated benefits of the Merger could adversely affect our business, financial condition and results of operations.

We may incur significant additional indebtedness which may adversely impact our results of operations and financial condition, including our access to capital and liquidity.

We may seek to incur additional indebtedness either through the issuance of public or private debt or through bank or other financing. The funds raised by the incurrence of such additional indebtedness may be used to repay existing indebtedness, including amounts borrowed under our credit facility, outstanding subordinated debt and floating rate loan stock or for our general corporate purposes, including additions to working capital, capital expenditures, investments in subsidiaries or acquisitions.

This additional indebtedness, particularly if not used to repay existing indebtedness, could limit our financial and operating flexibility, including as a result of the need to dedicate a greater portion of our cash flows from operations to interest and principal payments. It may also be more difficult for us to obtain additional financing on favorable terms, if at all, limiting our ability to capitalize on significant business opportunities and making us more vulnerable to economic downturns.

We may enter into future private debt arrangements containing restrictive business and financial covenants and complying with these covenants could limit our financial and operational flexibility. Our failure to comply with these covenants could also result in an increased cost of borrowing under the applicable agreement or an event of default under the credit facilities, which could result in us being required to repay any amounts outstanding under the credit facilities or debt arrangement prior to maturity. Such an event could have an adverse effect on our results of operations and financial condition, including our access to capital and liquidity. Our credit facilities and our outstanding notes are described in more detail in "Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources."

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We may require additional capital in the future, which may not be available or may only be available on unfavorable terms.

Our future capital requirements depend on many factors, including our ability to write new business successfully, deploy capital into more profitable business lines, identify acquisition opportunities, manage investments and preserve capital in volatile markets, and establish premium rates and reserves at levels sufficient to cover losses. To the extent our funds are insufficient to fund future operating requirements or cover claims losses, we may need to raise additional funds through corporate finance transactions or curtail our growth and reduce our liabilities. Any such financing, if available at all, may be on terms that are not favorable to us. Our ability to raise such capital successfully would depend upon the facts and circumstances at the time, including our financial position and operating results, market conditions and applicable regulatory filings and legal issues. If we cannot obtain adequate capital on favorable terms, or obtain it at all, our business, financial condition and operating results could be adversely affected.

Our holding company structure and certain regulatory and other constraints affect our ability to pay dividends and make other payments.

Argo Group is a holding company and conducts substantially all of its operations through its subsidiaries. Argo Group’s only significant assets are the capital stock of its subsidiaries. Because substantially all of our operations are conducted through our insurance subsidiaries, substantially all of our consolidated assets are held by our subsidiaries and most of our cash flow, and consequently, our ability to meet our ongoing cash requirements, including any debt service payments or other expenses, and the ability to pay dividends to our stockholders, is dependent on the earnings of those subsidiaries and the transfer of funds by those subsidiaries to us in the form of distributions or loans.

In addition, if we fail to comply, or if and to the extent payment of dividend would cause us to fail to comply, with applicable laws, rules and regulations (including, in respect of Argo Re, any applicable capital adequacy guidelines established by the BMA) we may not declare, pay or set aside for payment dividends. As a result, if payment of dividends would cause us to fail to comply with any applicable law, rule or regulation, we will not declare or pay a dividend, including dividends on our shares of Series A Preferred stock (the “preferred stock”) for such dividend period. In addition, the ability of our insurance subsidiaries to make distributions to us is limited by applicable insurance laws and regulations. These laws and regulations and the determinations by the regulators implementing them may significantly restrict such distributions, and, as a result, adversely affect our overall liquidity. The ability of our subsidiaries to make distributions to us may also be restricted by, among other things, other applicable laws and regulations and the terms of our bank loans and our subsidiaries’ bank loans. Refer to “Legal, Regulatory and Litigation Risks—Our insurance subsidiaries are subject to risk-based capital and solvency requirements in their respective regulatory domiciles and any failure to comply with these requirements may have a material adverse effect on our business” below and also “Item 1. Business―Regulation,” for additional details on restrictions on our ability to make distributions.

Any ratings downgrades could result in an adverse effect on our business, financial condition and operating results.

Ratings with respect to claims paying ability and financial strength are important factors in establishing the competitive position of insurance companies and will also impact the cost and availability of capital to an insurance company. Ratings by A.M. Best and S&P represent an important consideration in maintaining customer confidence in us and in our ability to market insurance products. Rating organizations regularly analyze the financial performance and condition of insurers.

A.M. Best is a widely recognized insurance company rating agency and some policyholders are required to obtain insurance coverage from insurance companies that have an “A-” (Excellent) rating or higher from A.M. Best. In addition, certain of our credit facilities require that all significant insurance subsidiaries of Argo Group U.S. maintain an A.M. Best Financial Strength Rating of at least “B++”. FSR reflect the rating agency’s assessment of an insurer’s ability to meet its financial obligations to policyholders. All of our insurance companies have an FSR of “A-” (Excellent), with positive outlook, from A.M. Best. Argo Group U.S. insurance companies have an FSR of “A-” (Strong), with a stable outlook, from S&P. See “Item 1. Business—Ratings” for a detailed description of our ratings.

Our ability to refinance our existing debt or obtain new debt in the capital markets is impacted by any credit ratings. Any credit rating downgrade would result in higher borrowing costs. Additionally, many producers are prohibited from placing insurance with companies that are rated below “A-” (Excellent). We may also be required to maintain a greater amount of capital in order to maintain our existing ratings or become subject to a ratings downgrade if we experience weaker than-expected underwriting performance, our capital adequacy position decline for a prolonged period, our financial leverage materially increases or our liquidity materially decreases, among other factors.

A.M. Best and S&P continually monitor their ratings and may revise or withdraw their ratings at any time. Any future downgrade in our ratings could impair our ability to sell insurance policies and materially and adversely affect our competitive position in the insurance industry, future financial condition and operating results.

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Our use of strategic transactions to further our growth strategy may not succeed, which may result in underperformance relative to our expectations and have a material adverse effect on our business, financial condition or results of operations.

Our strategy for growth may include mergers and acquisitions, as well as divestitures. This strategy presents risks that could have a material adverse effect on our business, financial performance and results of operations, including: (1) the diversion of management’s attention, (2) our ability to execute a transaction effectively, including the integration of operations and the retention of employees, (3) our ability to retain key employees, (4) the contingent and latent risks associated with the past operations of and other unanticipated problems arising from an acquisition partner, and (5) the uncertainty of retained financial obligations associated with divested business or run-off.

Our future acquisitions could involve a number of additional risks that we may not be able to identify during the due diligence process, such as potential losses from unanticipated litigation, levels of covered claims or other liabilities and exposures, an inability to generate sufficient investment income and other revenue to offset acquisition costs and financial exposures in the event that sellers breach their representations and warranties and/or are unable or unwilling to meet their indemnification, reinsurance and other contractual obligations to us. We cannot predict whether we will be able to identify and complete a future transaction on terms favorable to us. We cannot know if we will realize the anticipated benefits of a completed transaction or if there will be substantial unanticipated costs associated with such a transaction. In addition, strategic transactions may expose us to increased litigation risks. A future merger or acquisition may result in tax consequences at either or both the stockholder and Argo Group level, potentially dilutive issuances of our equity securities, the incurrence of additional debt and the recognition of potential impairment of intangible assets. Each of these factors could adversely affect our financial position.

We have recently divested or placed in run-off several business lines. In connection with these actions, we have retained certain financial liabilities and contractual obligations related to these divested or discontinued business lines. We have quantified our exposures and an expectation that these exposures will decrease over time. There is no assurance, however, that prior to that time the amount of these obligations will not increase by an amount greater than we expect or that the process of ending these business lines will not take longer than we expect. The impact of such an increase could cause our exposure to be greater than expected. If the actual time periods and cost values are greater than the amounts we expect, our profitability could be adversely affected.

Our business strategy involves focusing on expense targets and generally reducing our expense ratio. We may be unable to execute on our expense targets. Strategic acquisitions and growth may not reduce our expense ratio, while strategic divestitures may not reduce overall expenses as much as we anticipate prior to any sale.

Reputational Risks

Reputational risk is the risk of potential loss through a deterioration of our reputation or standing due to a negative perception of our image among customers, counterparties, stockholders or supervisory authorities, and includes risk of adverse publicity regarding our business practices and associations. While we assess the reputational impact of all reasonably foreseeable material risks within our risk management processes, we also recognize a number of specific reputational risks.

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We are subject to laws and regulations relating to sanctions, anti-corruption and money laundering, the violation of which could adversely affect our operations.

Our activities are subject to applicable economic and trade sanctions, money laundering regulations, and anti-corruption laws in the jurisdictions where we operate, including Bermuda, the U.K. and the European Community and the U.S., among others. For example, we are subject to The Bribery Act, 2016 of Bermuda, the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010, which, among other matters, generally prohibit corrupt payments or unreasonable gifts to foreign governments or officials. New sanction regimes may be initiated, or existing sanctions expanded, at any time, which can impact our business activities. We believe we maintain strong oversight and control through the deployment of our Code of Conduct and Business Ethics and associated policies and procedures including the Company’s whistleblower policies and continuous education and training programs. However, although we have in place systems and controls designed to ensure compliance with applicable laws and regulations, there is a risk that those systems and controls will not always be effective to achieve full compliance. It is also possible that an employee or intermediary could fail to comply with applicable laws and regulations. Failure to accurately interpret or comply with or obtain appropriate authorizations and/or exemptions under such laws or regulations could subject us to investigations, criminal sanctions or civil remedies, including fines, injunctions, loss of an operating license and other sanctions, all of which could damage our business or reputation, and have a material adverse effect on our financial condition and results of operations.

Any failure to meet investor and stakeholder expectations regarding environmental, social and corporate governance (“ESG”) matters may damage our reputation.

There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, public interest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet stakeholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmental stewardship, climate risk management, Board and employee diversity, human capital management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted. Additionally, investors may reconsider their capital investment in our Company, and customers and partners may choose to stop doing business with us, which could have a material adverse effect on our reputation, business or financial condition.

Legal, Regulatory and Litigation Risks

The regulation and regulatory measures that would apply to Argo Group and its subsidiaries are discussed above under “Item 1. Business―Regulation.”

Legal and Regulatory Risk means the risk arising from our (1) failure to comply with statutory or regulatory obligations; (2) failure to comply with our Amended and Restated Bylaws; or (3) failure to comply with any contractual agreement.

Litigation Risk means the risk that acts or omissions or other business activity of Argo Group and our key functionaries and employees could result in legal proceedings to which we are a party, the uncertainty surrounding the outcome of such legal proceedings and the risk of an adverse impact on us resulting from such legal proceedings.

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As a result of these and other requirements, we may have future capital requirements that may not be available to us on commercially favorable terms. Regulatory capital and solvency requirements for our future capital requirements depend on many factors, including our ability to underwrite new business, risk propensity and ability to establish premium rates and accurately set reserves at levels adequate to cover expected losses. To the extent that the funds generated by insurance premiums received and sale proceeds and income from our investment portfolio are insufficient to fund future operating requirements and cover incurred losses and loss expenses, we may need to raise additional funds through financings or curtail our growth and reduce in size. Uncertainty in the equity and fixed maturity securities markets could affect our ability to raise additional capital in the public or private markets. Any future financing, if available at all, may be on terms that are not favorable to us and our stockholders. In the case of equity financing, dilution to current shareholdings could result, and the securities issued may have rights, preferences and privileges that are senior or otherwise superior to those of our common stock.

Failure to comply with the capital requirement laws and regulations in any of the jurisdictions where we operate, including the U.S., the E.U., or Bermuda could result in remedial plans to rectify any capital level shortfalls that could require capital contributions and/or other actions, administrative actions and/or penalties imposed by a particular governmental or self-regulatory authority, unanticipated costs associated with remedying such failure or other claims, harm to our reputation, or interruption of our operations, any of which could have a material and adverse impact on our business, financial position, results of operations, liquidity and cash flows. See “Item 1. Business—Regulation.”

Restrictions on Dividends and Distributions

Argo Re is prohibited from declaring or paying any dividends or making a distribution out of contributed surplus to Argo Group during any financial year if there are reasonable grounds for believing that (1) Argo Re is, or would after the payment be, unable to pay its liabilities as they become due or (2) the realizable value of its assets would thereby be less than its liabilities. Further, as a Class 4 insurer, Argo Re is prohibited from declaring or paying any dividends or making a distribution out of contributed surplus during any financial year if it is in breach of its ECR, general business solvency margin or minimum liquidity ratio or if the declaration or payment of such dividends would cause such a breach. If it has failed to meet its minimum margin of solvency or minimum liquidity ratio on the last day of any financial year, Argo Re will be prohibited, without the approval of the BMA, from declaring or paying any dividends during the next financial year. In addition, Argo Re is prohibited from declaring or paying in any financial year dividends of more than 25% of its total statutory capital and surplus (as shown on its previous financial year’s statutory balance sheet) unless it files (at least seven days before payment of such dividends) with the BMA an affidavit stating that it will continue to meet the required margins.

As discussed above under “Item 1. Business―Regulation,” Argo Group and its various subsidiaries are considered to be an affiliated group for purposes of the BMA’s Group Supervision regime. This Group Supervision regime stipulates solvency margins, capital requirements and eligible capital requirements at the consolidated Argo Group level that may affect the calculation of similar solvency and capital requirements at the Argo Re level. The methodology for applying these solvency and capital requirements, particularly in regard to the eligibility, and classification of certain capital instruments within an affiliated group, is subject to ongoing refinement and interpretation by the BMA. The applicable rules and regulations for this regime, and the manner in which they will be applied to Argo Group, are subject to change, and it is not possible to predict the ultimate impact of future changes on Argo Group’s operations and financial condition.

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We are involved in legal and regulatory proceedings, investigations, inquiries, claims and litigation in connection with our business operations. Due to the inherent uncertainty of the outcomes of such matters, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on our results of operations or financial condition. If one or more of such matters were decided against us, the effects could be material to our results of operations in the period in which we would be required to record or adjust the related liability and could also be material to our cash flows in the periods that we would be required to pay such liability.

Bermuda Subsidiaries

Argo Re is registered as a Class 4 Bermuda insurance company. As such, Argo Re subject to specific laws, rules and regulations promulgated by the Bermudian authorities according to the Insurance Act. Changes in Bermuda’s statutes, regulations and policies could result in restrictions on our ability to pursue our business plans, strategic objectives, execute our investment strategy and fulfill other stockholders’ obligations.

U.S. Subsidiaries

Our U.S. insurance subsidiaries are subject to regulation, which may reduce our profitability or inhibit our growth. If we fail to comply with these regulations, we may be subject to penalties, including fines and suspensions, which may adversely affect our financial condition and results of operations. Changes in the level of regulation of the insurance industry or changes in laws or regulations themselves or interpretations by regulatory authorities could adversely affect our ability to pursue our business plan and operate our U.S. insurance subsidiaries.

From time to time, various laws and regulations are proposed for application to the U.S. insurance industry, some of which could adversely affect the results of reinsurers and insurers. Additionally, the NAIC has been responsible for establishing certain regulatory and corporate governance requirements, which are intended to result in a group-wide supervision focus and include the Model Insurance Holding Company System Regulatory Act and the Insurance Holding Company System Model Regulation, the Requirements for ERM Report within the Annual Holding Company Registration (i.e., Form F), the Supervisory College, the Risk Management and ORSA Model, the CGAD and the Revisions to Annual Financial Reporting Model Regulation to expand the corporate audit function to provide reasonable assurance of the effectiveness of enterprise risk management, internal controls, and corporate governance. We are unable to predict the potential effect, if any, such legislative or regulatory developments may have on our future operations or financial condition.

In addition, regulatory authorities have relatively broad discretion to deny, suspend or revoke licenses for various reasons, including the violation of regulations. If we do not have the requisite licenses and approvals or do not comply with applicable regulatory requirements, insurance regulatory authorities may preclude or temporarily suspend us from carrying on some or all of our activities or otherwise penalize us. This could adversely affect our ability to operate our business.

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Taxation Risks

Our aggregate tax liability and effective tax rate could be adversely affected in the future by changes in the tax laws of the countries in which we operate, including as a result of ongoing efforts by the member countries of the OECD.

We have operations in various countries that have differing tax laws and rates. Our tax reporting is supported by current domestic tax laws in the countries in which we operate and the application of tax treaties between the various countries in which we operate. Our income tax reporting is subject to audit by domestic and foreign authorities. Our effective tax rate may change from year to year based on changes in the mix of activities and income earned among the different jurisdictions in which we operate, changes in tax laws in these jurisdictions, changes in the tax treaties between various countries in which we operate, changes in our eligibility for benefits under those tax treaties, and changes in the estimated values of deferred tax assets and liabilities. Tax laws, regulations, and administrative practices in various jurisdictions may be subject to significant change, with or without notice, due to economic, political, or other conditions, and significant judgment is required in evaluating and estimating our provision and accruals for these taxes. Such changes could result in a substantial increase in our aggregate tax liability and the effective tax rate on all or a portion of our income.

In recent years, the OECD, with the support of the G20, has developed proposals to address perceived base erosion and profit shifting (“BEPS”). BEPS refers to tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to locations with low or no tax and little or no economic activity, for the purpose of reducing a multinational group’s aggregate tax liability. In 2021, the OECD/G20 Inclusive Framework on BEPS published a statement updating and finalizing the key components of a “two pillar” plan for global tax reform, as agreed among a number of countries across the globe. Pillar I addresses tax nexus and the allocation of profits for tax purposes. Under Pillar II, a global minimum tax at the rate of 15% would be imposed on certain companies whose revenues exceed a threshold. EU member states have agreed to adopt the OECD’s minimum tax rules under the Pillar II Framework, which began going into effect in 2024. Several other countries, including Bermuda, have changed or are also considering changes to their tax laws to implement the OECD’s minimum tax proposal.

Under current Bermuda law, the Company does not pay any tax on income or profits in Bermuda. We have obtained from the Bermuda Minister of Finance, under The Exempted Undertakings Tax Protection Act 1966 of Bermuda, an assurance that if any legislation is enacted in Bermuda that would impose tax computed on profits or income, or computed on any capital asset, gain or appreciation or any tax in the nature of estate duty or inheritance tax, then the imposition of any such tax will not be applicable to our Bermuda subsidiaries, until March 31, 2035.

On December 15, 2023, the Bermuda government passed the CIT Act, which became fully operative with respect to the imposition of corporate income tax on January 1, 2025. Under the CIT Act, Bermuda corporate income tax will be chargeable in respect of fiscal years beginning on or after January 1, 2025, and will apply only to Bermuda entities and permanent establishments that are part of multinational enterprise (MNE) groups with EUR 750 million or more in annual revenues in at least two of the four fiscal years immediately preceding the fiscal year in question (a “Bermuda Constituent Entity Group”). Where corporate income tax is chargeable to a Bermuda Constituent Entity Group, the amount of corporate income tax chargeable for a fiscal year shall be (a) 15% of the net taxable income of the Bermuda Constituent Entity Group less (b) tax credits applicable to the Bermuda Constituent Entity Group under Part 4 of the CIT Act, or as prescribed.

The Bermuda Government announced in its Second Public Consultation that the new CIT Act tax regime would supersede existing Tax Assurance Certificates held by entities within the scope of the new Bermuda corporate income tax, such as those issued to us. Given the potential for the new Bermuda corporate income tax to supersede existing Tax Assurance Certificates, it is likely that the Company’s Bermuda Constituent Entity Group will be subject to Bermuda tax for tax years beginning on or after January 1, 2025.

The Company, a previously Bermuda domiciled entity, redomiciled to the United States during the period ending December 31, 2023 and will not be subject to the CIT Act. Additionally, Argo Re, a Bermuda domiciled entity, filed an Internal Revenue Code Section 953(d) election to treat the entity as a U.S. taxpayer. Any tax incurred by Argo Re in the United States via Internal Revenue Section 953(d) is expected to be fully creditable against the CIT Act. As a result, we do not anticipate the CIT Act to materially impact our aggregate tax liability and the effective tax rate.

Changes in U.S. tax law may have a material adverse effect on us or our stockholders.

The tax treatment of our company and its subsidiaries may be affected by future U.S. tax legislation. We cannot predict whether any particular proposed legislation will be enacted or, if enacted, what the specific provisions or the effective date of any such legislation would be, or whether it would have any effect on our company or its subsidiaries. No assurance can be provided that future legislative, administrative, or judicial developments will not result in an increase in the amount of U.S. tax payable by our company, its subsidiaries, or stockholders. Any such developments could have a material adverse effect on stockholders or our business, financial condition, and operating results.

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Item 1B. Unresolved Staff Comments

None.

Item 1C. Cybersecurity

Risk Management and Strategy

We regularly assess risks from cybersecurity threats, monitor our information systems for potential vulnerabilities and tests those systems pursuant to our cybersecurity policies, processes and practices. This includes scanning our internal network and infrastructure at least monthly to enhance security measures and conducting third-party vulnerability testing at minimum on an annual basis to better protect against external attacks. We also use security tools intended to protect our information systems from cybersecurity threats, and to help us identify, escalate, investigate, resolve and recover from security incidents in a timely manner.

In particular, our information security program and approach are based on the National Institute of Standards and Technology Cybersecurity Framework (“NIST Framework”). The NIST Framework establishes core requirements related to information protection, processes and technologies. In addition, we maintain a Data Protection Framework and various policies, including Information Security Policy, Privacy Policy, and Records & Information Management Policy, to appropriately manage personal information necessary to operate our business and comply with applicable regulations. We also maintain a Third-Party Risk Management Program, including a Vendor Management Policy, which allows us to better oversee, monitor, identify and control certain risks related to the processing of personal information and customer information by our authorized third parties. This program includes categorizing vendor risk based upon the types of service being provided and types of data handled, performing risk assessments using proforma questionnaires, and undertaking reviews of Systems and Organization Controls (SOC) reports for critical vendor relationships.

In accordance with these policies, we share personal information with affiliates, business partners, third-party service providers, or vendors only when we have a legitimate business purpose for doing so and it is permissible by law. We require third parties to maintain similar standards to ours to protect personal information. We have implemented a risk mitigation process to identify and assess the cyber posture of third parties providing commodities or services to our legal entities. We also have implemented multiple layers of data protection measures.

We have in the past, and may in the future, engage third parties to assess the effectiveness of our cybersecurity prevention and response systems and processes. As part of continuous improvement initiative, we strive to mature and build a robust and resilient environment to protect and defend against bad actors. We engage third parties to perform internal and external testing to improve security operations, disaster recovery, and incident response programs.

As we have noted, increased adoption of AI technologies, especially Generative AI, may increase cybersecurity risks, so Argo Group has instituted an AI Policy specifically addressing such risks. Additionally, we have implemented additional technical controls to help safeguard against data loss to generative AI and have established a cross-functional AI Working Group, which meets on a periodic basis to ensure that the company remains abreast of any AI developments that may require changes to our security posture.

To date, we are not aware of risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected, or are reasonably likely to materially affect, the Company, including its business strategy, results of operations or financial condition. Refer to the risk factors under “Operational Risks” in Part I, Item 1A, “Risk Factors” for additional description of cybersecurity risks and potential related impacts on the Company.

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Governance

Our Board oversees the Company’s risk management process, including on cybersecurity risks, directly and through committees to which the Board has delegated authority. The Company’s Audit & Risk Management Committee is responsible for overseeing our internal controls, including cybersecurity and data protection programs, and reviews the effectiveness of our financial reporting processes and internal controls, including data privacy, information technology security and control. Meetings of the Audit & Risk Management Committee often include discussions of specific risk areas, including, among others, those relating to cybersecurity. The Audit & Risk Management Committee also frequently discusses, in accordance with its duties and responsibilities as enumerated in its committee charter, the policies, guidelines and process by which management assesses and manages risks related to data protection and cybersecurity, including assessments of the overall threat landscape, steps management has taken to monitor or mitigate its risk exposure and related strategies and investments. Our Chief Information Officer and Chief Information Security Officer regularly reports on data protection and information technology security matters to the Audit & Risk Management Committee and to Argo senior management via Security Governance Council meetings.

As discussed above, our information security program and approach are based on the NIST Framework, and we have implemented cybersecurity policies, processes and practices designed to monitor and address cybersecurity threats and incidents. Our Chief Information Security Officer, under the guidance of the Chief Information Officer and in coordination with the Head of Risk, Head of Operations, and General Counsel, is responsible for leading the assessment and management of cybersecurity risks. Our Chief Information Security Officer holds the Certified Information Systems Security Professional (CISSP) designation, has over 20 years of experience working in information security, data protection and privacy, and regularly receives reports from our threat intelligence resources, in concert with enterprise risk, and legal departments, on cybersecurity threats and incidents.

In addition, plans have been authored to assist our security, legal, and finance functions in assessing and managing Argo’s material risks from cybersecurity threats, and we conduct tabletop exercises and training sessions at least annually to help ensure effectiveness of said plans. Additionally, we also utilize outside resources to assist and participate in the determination of materiality of incidents stemming from cybersecurity threats.

Item 2. Properties

We lease office space in New York, New York, where our principal executive office is located. We and our subsidiaries also lease additional office space in the U.S. as well as Bermuda and Italy. Additionally, we own the land and office building in Pennsylvania that houses Rockwood. The properties are leased on terms and for durations that are reflective of commercial standards in the communities where these properties are located. We believe the facilities we occupy are adequate for the purposes in which they are currently used and are well maintained.

For further discussion of our leasing commitments as of December 31, 2024, please see Note 5, “Leases,” in the Notes to Consolidated Financial Statements.

Item 3. Legal Proceedings

Federal Securities Class Action

The Police & Fire Retirement System City of Detroit v. Argo Group International Holdings, Inc., et al., No. 22-cv-8971 (S.D.N.Y.)

On October 20, 2022, a securities class action lawsuit was filed in the United States District Court for the Southern District of New York against the Company and certain of its current and former officers, alleging securities fraud violations under sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Plaintiff alleges that from February 13, 2018 through August 9, 2022, the defendants made false and misleading statements concerning the Company’s reserves and underwriting standards. On January 18, 2023, U.S. District Judge Lewis A. Kaplan granted the Police and Fire Retirement System City of Detroit and the Oklahoma Law Enforcement Retirement System’s joint motion for appointment as lead plaintiff. On March 27, 2023, lead plaintiffs filed an amended class action complaint. On May 26, 2023, the defendants moved to dismiss the amended class action complaint. On July 13, 2023, lead plaintiffs filed an opposition to such motion, after which defendants filed a reply on August 14, 2023. On December 12, 2024, the court granted defendants’ motion to dismiss. The period to appeal this decision expired on January 16, 2025, and accordingly, we consider this matter to be closed.

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Bermuda Appraisal Petitions

In April 2023, appraisal petitions were filed in the Supreme Court of Bermuda relating to the acquisition of the Company by Brookfield Wealth Solutions Ltd. for $30.00 per share (the “Transaction Price”) that closed on November 16, 2023.

The petitions were filed by certain persons who were shareholders of the Company at such time pursuant to Section 106(6) of the Companies Act and are captioned Corbin Erisa Opportunity Fund, Ltd. v. Argo Group International Holdings, Ltd., Corbin Opportunity Fund, L.P. v. Argo Group International Holdings, Ltd., Fourworld Event Opportunities, LP v. Argo Group International Holdings, Ltd., Fourworld Global Opportunities Fund, Ltd. v. Argo Group International Holdings, Ltd., Fourworld Special Opportunities Fund, LLC v. Argo Group International Holdings, Ltd., and FW Deep Value Opportunities Fund I, LLC v. Argo Group International Holdings, Ltd.

Section 106(6) of the Companies Act permits a shareholder of a Bermuda company, such as the Company prior to the Company’s redomestication to the State of Delaware, to petition the Court for a determination of the fair value of the Company’s shares if they are not satisfied with the Transaction Price.

On January 3, 2024, the Company filed a summons to stay the appraisal action pending judgment of the Judicial Committee of the Privy Council in the matter captioned “In re matter of Jardine Strategy Holdings Limited Case No: Civ/2022/14-31.” Hearings were held on July 9, 2024 and July 18, 2024. On December 3, 2024, the Court denied the stay application. The Company intends to continue to defend this matter vigorously.

The Company is not able at this time to determine or predict the ultimate outcome of these proceedings or provide a reasonable estimate or range of estimates of the possible outcomes or loss, if any, in these matters.

We and our subsidiaries are parties to legal actions from time to time, generally incidental to our and their business. While any litigation or arbitration proceedings include an element of uncertainty, management believes that the resolution of these matters will not materially affect our financial condition or results of operations.

Item 4. Mine Safety Disclosure

Not applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The Company is an indirect wholly-owned subsidiary of Brookfield Wealth Solutions Ltd. and accordingly, there is no established public trading market for its common equity securities. As of December 31, 2024, there is only one record holder of the Company’s common equity securities.

Our dividend policy is determined by our Board and depends, among other factors, upon our earnings, operations, financial condition, capital requirements and general business outlook at the time the policy is considered. The declaration and payment of future dividends will be at the discretion of our Board and will depend upon these aforementioned factors.

Item 6. [Reserved]

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The discussion provides an analysis of the Company's financial condition, results of operations and cash flows from management's perspective and should be read in conjunction with the Consolidated Financial Statements and related notes beginning on page F-1. Our objective is to also provide discussion of events and uncertainties known to management that are reasonably likely to cause reported financial information not to be indicative of future operating results or of future financial condition and to offer information that provides understanding of our financial condition, cash flows and results of operations.

Merger

On February 8, 2023, we entered into the Merger Agreement with Brookfield Wealth Solutions Ltd. and Merger Sub, a wholly-owned subsidiary of Brookfield Wealth Solutions Ltd. The Merger Agreement provides for the merger of the Merger Sub with and into us, which we refer to as the “Merger,” with us surviving the Merger as an indirect wholly-owned subsidiary of Brookfield Wealth Solutions Ltd.

On November 16, 2023 (“Merger Date”), we completed the Merger, which resulted in a change to the Company’s ownership.

Brookfield Wealth Solutions Ltd. elected to push-down its purchase accounting, which resulted in the Company reflecting the fair market value of its assets and liabilities as of the Merger Date, in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations. The application of push-down accounting created a new basis of accounting for all of our assets and liabilities. As such, the Company’s financial position, results of operations, and cash flows subsequent to the acquisition are not comparable with those prior to November 16, 2023, and therefore have been separated to indicate pre-acquisition and post-acquisition periods. The pre-acquisition period through November 15, 2023 is referred to as the Predecessor period. The post-acquisition period, November 16, 2023 and forward, includes the impact of push-down accounting and is referred to as the Successor period.

As a result, the following discussion regarding the results of operations of the Successor Company will be for the year ended December 31, 2024. The Successor Company will not be compared to previous periods due to the new basis of accounting it was created on, nor will it be compared to the period November 16, 2023 through December 31, 2023 (Successor) as these periods represent a full year versus forty-five days of operations, respectively.

Refer to Note 1, “Business and Significant Accounting Policies” within the Consolidated Financial Statements for additional information regarding the Merger.

For discussion of our results of operations and changes in financial conditions for the period January 1, 2023 through November 15, 2023 (Predecessor) compared to year ended December 31, 2022 and discussion for our results of operations for the period November 16, 2023 through December 31, 2023 (Successor) refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023.

Merger with AGIH Merger Sub, Inc.

On September 25, 2024, the Company and AGIH Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“AGIH Merger Sub”), entered into an Agreement and Plan of Merger, pursuant to which, among other things, AGIH Merger Sub merged with and into the Company, with the Company continuing as the surviving corporation (the “Merger with AGIH Merger Sub, Inc.”). The purpose of the Merger with AGIH Merger Sub, Inc., was to reduce the Company’s annual franchise taxes in the State of Delaware by reducing the number of authorized shares of the Company’s common stock and preferred stock. In connection with the consummation of the Merger with AGIH Merger Sub, Inc., the number of authorized shares of the Company’s common stock decreased from 2,000,000,000 to 1,000, each share of the Company’s common stock, par value $1.00 per share, of the Company was converted into and became one hundred millionth (1/100,000,000) of a validly issued, fully paid, and non-assessable share of common stock, par value $0.01 per share, of the Company, and the number of authorized shares of the Company’s preferred stock decreased from 30,000,000 to 10,000.

Forward-Looking Statements

This report includes forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can be identified by the use of words such as “expect,” “intend,” “plan,” “believe,” “do not believe,” “aim,” “project,” “anticipate,” “seek,” “will,” “likely,” “assume,” “estimate,” “may,” “continue,” “guidance,” “growth,” “objective,” “remain optimistic,” “improve,” “progress,” “path toward,” “outlook,” “trends,” “future,” “could,” “would,” “should,” “target,” “on track” and similar expressions of a future or forward-looking nature.

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Such statements are subject to certain risks and uncertainties that could cause actual events or results to differ materially including, but not limited to, recent changes in interest rates and inflation, the outcome of our exploration of strategic alternatives, the adequacy of our projected loss reserves, employee retention and changes in key personnel, the ability of our insurance subsidiaries to meet risk-based capital and solvency requirements, the outcome of legal and regulatory proceedings, investigations, inquiries, claims and litigation and other risks and uncertainties discussed in our filings with the SEC. For a more detailed discussion of such risks and uncertainties, see Part I, Item 1A, “Risk Factors.” The inclusion of a forward-looking statement herein should not be regarded as a representation by the Company that the Company’s objectives will be achieved. Argo Group undertakes no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on any such statements.

Consolidated Results of Operations (Successor)

For the year ended December 31, 2024, we reported net loss attributable to holder of common stock of $158.6 million.

The following is a comparison of selected data from our results of operations for the relevant periods:


	Successor
(in millions)	For the Year Ended		Period from
	December 31, 2024		November 16, 2023 through December 31, 2023
Net earned premiums	$	1,089.8	$	162.3
Net investment income	249.8		28.6


Net investment and other gains (losses)	20.0		(0.3)
Total consolidated revenues	1,359.6		190.6










Income (loss) before income taxes	(190.3)		2.2
Income tax provision (benefit)	(42.2)		1.3
Net income (loss)	$	(148.1)	$	0.9

Net Earned Premiums

Consolidated net earned premiums were $1,089.8 million for the year ended December 31, 2024. The majority of net earned premiums came from our Casualty segment, with a portion coming from the Specialty segment due to a significant portion of our Specialty business being from Fronting programs.

Our gross written and earned premiums are further discussed by reporting segment below under the heading “Segment Results.”

Net Investment Income

Consolidated net investment income was $249.8 million for the year ended December 31, 2024, primarily driven by $69.0 million of accretion income from the application of purchase accounting to fixed maturities and short-term investments. Additionally, a change in investment manager and investment strategy, including increased allocations to mortgage and private loan asset classes, further contributed to increased yield in the portfolio. Additionally, the Company acquired equity securities and other investments following a shift in our investment strategy under our new investment manager.

Total invested assets were $4,094.8 million compared to $3,481.2 million at December 31, 2024 and December 31, 2023, respectively. The $613.6 million increase was primarily due to a $300.0 million capital contribution from Brookfield Wealth Solutions Ltd. in the fourth quarter of 2024, resulting in a rise in private loans.

Net Investment and Other Gains and Losses

Consolidated net investment and other gains (losses) was $20.0 million for the year ended December 31, 2024, primarily driven by net realized gains on fixed maturities and equity securities of $9.5 million and $16.7 million, respectively, offset partially by credit losses on our private loan investments. Net realized gains from the sale of fixed maturities were the result of purchase accounting adjusted book values. Equity securities gains were driven by a holding gain on a single real estate joint venture investment.

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Losses and Loss Adjustment Expense

Consolidated losses and loss adjustment expenses were $1,018.3 million for the year ended December 31, 2024.

The consolidated loss ratio was 93.4% for the year ended December 31, 2024. Net unfavorable prior year development, primarily driven by higher-than-expected loss experience in our Run-off and Casualty Lines, contributed 23.4 percentage points to our loss ratio.

Catastrophe losses of $27.2 million (2.5 percentage points) for the year ended December 31, 2024, were attributable to U.S. storms.

The following table summarizes the above referenced prior-year loss reserve development for the year ended December 31, 2024 with respect to net loss reserves by segment carried as of December 31, 2023. The net unfavorable prior-year reserve development of $254.9 million is made up of unfavorable prior year reserves development of $87.7 million in Casualty Lines, $3.1 million in Specialty Lines and $164.1 million in Run-off Lines. Our losses and loss adjustment expenses, including the prior-year loss reserve development shown in the following table, are further discussed by reporting segment under the heading “Segment Results” below.


(in millions)	Net Reserves 2023		Net Reserve Development (Favorable)/ Unfavorable		Percent of 2023 Net Reserves
Casualty Lines	$	1,097.3	$	87.7	8.0	%
Specialty Lines	334.8		3.1		0.9	%
Run-off Lines	1,315.0		164.1		12.5	%
Total	$	2,747.1	$	254.9	9.3	%

In determining appropriate reserve levels for the year ended December 31, 2024, we maintained the same general processes and disciplines that were used to set reserves at prior reporting dates. No significant changes in methodologies were made to estimate the reserves since the last reporting date; however, at each reporting date we reassess the actuarial estimate of the reserve for loss and loss adjustment expenses and record our best estimate. Consistent with prior reserve valuations, as claims data becomes more mature for prior accident years, actuarial estimates were refined to weigh certain actuarial methods more heavily in order to respond to any emerging trends in the paid and reported loss data. While prior accident years’ net reserves for losses and loss adjustment expenses for some lines of business have developed favorably in recent years, this does not imply that more recent accident years’ reserves also will develop favorably; pricing, reinsurance costs, legal environment, general economic conditions including changes in inflation and many other factors impact our ultimate loss estimates.

Consolidated gross reserves for losses and loss adjustment expenses were $5,798.6 million at December 31, 2024 as compared to $5,544.5 million at December 31, 2023. The increase was primarily driven by net unfavorable prior-year reserve development during compared to year ended 2023. Management has recorded its best estimate of loss reserves at each date based on current known facts and circumstances. Due to the significant uncertainties inherent in the estimation of loss reserves, there can be no assurance that future loss development, favorable or unfavorable, will not occur.

Underwriting, Acquisition and General Expenses

Consolidated underwriting, acquisition and general expenses were $477.0 million for the year ended December 31, 2024.

The consolidated expense ratio was 43.8% for the year ended December 31, 2024, which includes amortization expense of value of business acquired (“VOBA”) and other intangible assets.

Income Tax Provision

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Consolidated Results of Operations (Predecessor)

For the period January 1, 2023 through November 15, 2023 (Predecessor), we reported a net loss attributable to holders of common stock of $220.9 million ($6.28 per diluted share of common stock) as compared to a net loss attributable to holders of common stock of $185.7 million ($5.31 per diluted share of common stock) for the year ended December 31, 2022.

The following is a comparison of selected data from our results of operations, as well as book value per share of common stock, for the relevant periods:


	Predecessor
	Period from			For the Year Ended
(in millions)	January 1, 2023 through November 15, 2023			December 31, 2022
Gross written premiums	$	1,948.4		$	2,848.1
Net earned premiums	$	1,225.9		$	1,740.4
Net investment income	121.3			129.8

Net investment and other gains (losses):
Net realized investment and other gains (losses)	(20.4)			(115.9)
Change in fair value recognized	(0.2)			3.1
Change in allowance for credit losses on fixed maturity securities	(2.1)			(2.5)
Total net investment and other gains (losses)	(22.7)			(115.3)
Total revenue	$	1,324.5		$	1,754.9
Income (loss) before income taxes	$	(210.1)		$	(183.2)
Income tax provision (benefit)	0.3			(8.0)
Net income (loss)	$	(210.4)		$	(175.2)
Less: Dividends on preferred shares	10.5			10.5
Net income (loss) attributable to common stockholders	$	(220.9)		$	(185.7)

GAAP ratios:
Loss ratio	85.1		%	67.0		%
Expense ratio	34.2		%	38.6		%
Combined ratio	119.3		%	105.6		%

The table above includes ratios in accordance with U.S. generally accepted accounting principles (“GAAP”) that we use to measure our profitability. We believe that they enhance an investor’s understanding of our profitability. They are calculated as follows:

•Loss ratio: the ratio of claims and claims expense to premiums earned. Loss ratios include the impact of catastrophe losses.

•Expense ratio: the ratio of underwriting, acquisition and general expenses to premiums earned.

•Combined ratio: the sum of the loss ratio and the expense ratio. The difference between 100% and the combined ratio represents underwriting income (loss) as a percentage of net earned premiums, or underwriting margin (loss).

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Gross Written and Net Earned Premiums

Consolidated gross written and net earned premiums by our four primary insurance lines were as follows:


	Predecessor
	Period from				For the Year Ended
	January 1, 2023 through November 15, 2023				December 31, 2022
(in millions)	Gross Written		Net Earned		Gross Written		Net Earned
Property	$	333.4	$	158.8	$	405.0	$	231.6
Liability (1)	1,000.1		632.4		1,302.0		702.3
Professional	352.8		258.9		619.0		443.9
Specialty	262.1		175.8		522.1		362.6
Total	$	1,948.4	$	1,225.9	$	2,848.1	$	1,740.4

(1) Ceded premium in 2022 of $121.0 million for the U.S. LPT has been included in the Liability line to align with the majority of the subject reserves covered under the agreement.

Gross written premiums decreased $899.7 million, or 31.6%, for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to the year ended December 31, 2022. The decrease in gross written premiums is primarily attributable to the sale of Argo Underwriting Agency Limited (“AUA”), Argo Seguros, and AGSE as well as businesses we have exited. Additionally, there were reductions in gross written premium in our U.S. operations primarily due to proactive actions taken in certain lines to prioritize improving profitability, partially offset by growth in several other businesses. Remaining decrease is attributable to the shortened Predecessor period.

Consolidated net earned premiums decreased $514.5 million, or 29.6%, for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to the year ended December 31, 2022. The decrease is driven by the aforementioned reasons for gross written premiums.

Our gross written and earned premiums are further discussed by reporting segment and major lines of business below under the heading “Segment Results.”

Net Investment Income

For the period January 1, 2023 through November 15, 2023 (Predecessor), net investment income decreased $8.5 million, or 6.5%, as compared to the year ended December 31, 2022. The decrease is primarily attributable to the periods compared as a result of the Merger. Overall, compared to 2022, net investment income for the 2023 Predecessor period benefited from higher interest rates, partially offset by a decrease in income from our alternative investment portfolio which includes earnings from both private equity and hedge fund investments.

Total invested assets were $3,481.2 million compared to $3,651.9 million at December 31, 2023 and December 31, 2022, respectively. The decrease of $170.7 million is driven by post Merger push-down accounting. The Company re-classified $747.8 million of short-term investments with maturities of 90 days or less from Short-term investments to Cash, restricted cash and cash equivalents in our Consolidated Balance Sheets. The decrease due to the aforementioned re-classification was offset by an increase to our investments driven by higher interest rates.

Net Investment and Other Gains and Losses

Consolidated net investment and other losses decreased $92.6 million for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to the year ended December 31, 2022. Consolidated net realized investment losses of $22.7 million for the period January 1, 2023 through November 15, 2023 (Predecessor), were primarily driven from the sale of AUA, which included $20.3 million of pre-tax realized losses that were previously recognized in accumulated other comprehensive income, resulting in no impact to total stockholders’ equity from this reclassification. The remaining decrease was driven by the transactions during the year ended December 31, 2022, which included consolidated net realized investment losses related to the sale of Argo Seguros and AGSE, of which $31.8 million related to historical foreign currency translation losses which were previously recognized in accumulated other comprehensive income, resulting in no impact to total stockholders’ equity from this reclassification. The Company also recognized $37.6 million of realized losses from the sale of assets transferred to Enstar as part of the U.S. LPT transaction, of which $34.2 million was an impairment recognizing losses that were previously included in accumulated other comprehensive income.

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Losses and Loss Adjustment Expense

Consolidated losses and loss adjustment expenses decreased $123.7 million, or 10.6%, for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to the year ended December 31, 2022. The consolidated loss ratio was 85.1% for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to 67.0% for the year ended December 31, 2022. The increase in the loss ratio was driven by an increase in net unfavorable prior year development for the period January 1, 2023 through November 15, 2023 (Predecessor) as compared to 2022 (18.2 percentage points). Catastrophe losses of $28.6 million for the period January 1, 2023 through November 15, 2023 (Predecessor), were attributable to Hawaii wildfires, Tropical Storm Ophelia, Hurricane Idalia, and other U.S. storms. Catastrophe losses of $44.0 million for the year ended December 31, 2022 were attributable to Hurricane Ian, Winter Storm Elliott, the Ukraine/Russia conflict, and other small events.

Consolidated gross reserves for losses and loss adjustment expenses were $5,544.5 million at December 31, 2023 as compared to $5,051.6 million at December 31, 2022. The increase was primarily driven by net unfavorable prior-year reserve development during the period January 1, 2023 through November 15, 2023 (Predecessor) as compared to year ended 2022 and retroactive reinsurance contracts the Company entered into with AUA subsidiaries. Management has recorded its best estimate of loss reserves at each date based on current known facts and circumstances. Due to the significant uncertainties inherent in the estimation of loss reserves, there can be no assurance that future loss development, favorable or unfavorable, will not occur.

Underwriting, Acquisition and General Expenses

Consolidated underwriting, acquisition and general expenses decreased $251.7 million, or 37.5%, for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to the year ended December 31, 2022.

The consolidated expense ratio decreased 4.4% to 34.2% for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to 38.6% the year ended December 31, 2022. This decrease is primarily driven by the change in business mix resulting from the sale of AUA, Argo Seguros and our Malta operations.

Non-Operating Expenses

Non-operating expenses represent costs not associated with our ongoing insurance or other operations, including severance expenses, certain legal costs, merger and acquisition and other transaction-related expenses, and certain non-recurring expenses. As such, non-operating expenses have been excluded from the calculation of our expense ratio. These non-recurring costs are included in the line item Non-operating expenses in the Company’s Consolidated Statements of Income (Loss).

Non-operating expenses were $41.1 million for the period January 1, 2023 through November 15, 2023 (Predecessor) and $51.5 million for the year ended December 31, 2022.

For the period January 1, 2023 through November 15, 2023 (Predecessor), our non-operating expenses consisted primarily of advisory and legal fees related to the Merger of the Company with Brookfield Reinsurance. For the year ended December 31, 2022, our non-operating expenses consisted primarily of advisory fees driven by the exploration of the Company’s strategic alternatives announced in the second quarter of 2022 and the contested proxy process.

Interest Expense

Consolidated interest expense increased $3.0 million, or 11.2%, to $29.8 million for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to the year ended December 31, 2022. The year-over-year increase was primarily attributable to higher short-term interest rates in 2023.

Foreign Currency Exchange Gain (Loss)

Consolidated foreign currency exchange loss was $1.8 million for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to a $5.0 million foreign currency exchange gain the year ended December 31, 2022. The changes in the foreign currency exchange gains were due to fluctuations of the U.S. Dollar, on a weighted average basis, against the Canadian Dollar, Euro and the British Pound as well as disposal of several businesses transacting in foreign currencies.

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Impairment of Goodwill and Intangible Assets

As a result of the announced sale of Argo Underwriting Agency Limited and its Lloyd’s Syndicate 1200, an estimated fair value was established for Syndicate 1200 that was below its carrying value. As such, we recorded a $28.5 million impairment charge in the third quarter of 2022, consisting of $17.3 million of indefinite lived intangible assets and $11.2 million of goodwill. There were no such impairments for the period January 1, 2023 through November 15, 2023 (Predecessor).

Income Tax Provision

The consolidated income tax provision represents the income tax expense or benefit associated with our operations based on the tax laws of the jurisdictions in which we operate. Therefore, the consolidated provision for income taxes represents taxes on net income for our Ireland, Italy, U.K. and U.S. operations. The consolidated provision for income taxes was $0.3 million for the period January 1, 2023 through November 15, 2023 (Predecessor), compared to a benefit of $8.0 million for the year ended December 31, 2022. The consolidated effective tax rates were 0.1% and 4.3% for the period January 1, 2023 through November 15, 2023 (Predecessor), and year ended December 31, 2022, respectively. The primary driver for the fluctuation in the effective tax rate was a Base Erosion and Anti-Abuse Tax Liability incurred as the result of our U.S. operations entering into a loss portfolio transfer with a Bermuda related party. This liability was ultimately reversed through purchase accounting, however the impact was recorded in our income tax provision through the period ending November 15, 2023. Additionally, non-deductible compensation under Internal Revenue Code Section 162(m) also contributed to a variance in our effective tax rate. Excluding the Base Erosion and Anti-Abuse Tax Liability and non-deductible compensation adjustments, the effective tax rate for the period ending November 30, 2023 was more aligned with statutory tax rates.

Segment Results

As a result of the Company’s merger with Brookfield Wealth Solutions Ltd, and overall strategic assessment of the business, the Company changed its internal segments in a manner that caused the composition of its reporting segments to change in the fourth quarter of 2024. The Company’s reporting segments were realigned to three reportable segments—Casualty Lines, Specialty Lines, and Run-off Lines. The Company has recast all applicable Successor periods for comparability.

For additional segment information, refer to Note 15, “Segment Information” in the Notes to the Consolidated Financial Statements.

Casualty Lines

The following table summarizes the results of operations for the Casualty Lines segment:


	Successor
	For the Year Ended		Period from
(in millions)	December 31, 2024		November 16, 2023 through December 31, 2023
Net earned premiums	$	546.1	$	66.5
Net investment income	112.4		10.1
Total segment revenues	658.5		76.6
Less:
Losses and loss adjustment expenses	432.2		42.1
Underwriting, acquisition and general expenses	145.5		15.2
Other segment items (1)	17.2		1.3
Segment operating income (loss)	$	63.6	$	18.0

(1) Includes interest expense and fee and other expense (income), net.

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Net Earned Premiums

Net earned premiums were $546.1 million for the year ended December 31, 2024. Premiums were primarily attributable to our casualty, construction, environmental, Rockwood and Bermuda businesses. Casualty experienced a favorable rate environment in all businesses except for Rockwood.

Losses and Loss Adjustment Expenses

Losses and loss adjustment expenses were $432.2 million for the year ended December 31, 2024.

The loss ratio for the year ended December 31, 2024 was 79.1%. Net unfavorable prior year development, primarily driven by the recognition of higher-than-expected loss experience, mainly in our construction line of business, along with updates to the expectations for future loss experience and development for Bermuda Casualty, contributed 16.1% percentage points to our loss ratio.

Underwriting, Acquisition and General Expenses

Underwriting, acquisition and general expenses were $145.5 million for the year ended December 31, 2024. The expense ratio was 26.7% for the same period.

Specialty Lines

The following table summarizes the results of operations for the Specialty Lines segment:


	Successor
	For the Year Ended		Period from
(in millions)	December 31, 2024		November 16, 2023 through December 31, 2023
Net earned premiums	$	257.8	$	33.2
Net investment income	17.5		5.2
Total segment revenues	275.3		38.4
Less:
Losses and loss adjustment expenses	165.7		19.5
Underwriting, acquisition and general expenses	66.2		9.5
Other segment items (1)	2.7		0.6
Segment operating income (loss)	$	40.7	$	8.8

(1) Includes interest expense and fee and other expense (income), net.

Net Earned Premiums

Net earned premiums were $257.8 million for the year ended December 31, 2024. Premiums were primarily attributable to our property, garage, inland marine, and programs. Garage and inland marine benefited from a single-digit rate increase environment while Bermuda Property experienced single-digit declines.

Losses and Loss Adjustment Expenses

Losses and loss adjustment expenses were $165.7 million for the year ended December 31, 2024. The loss ratio for the year ended December 31, 2024 was 64.3% and included 10.6 percentage points from catastrophe losses which were primarily attributable to U.S storms.

Underwriting, Acquisition and General Expenses

Underwriting, acquisition and general expenses were $66.2 million for the year ended December 31, 2024. The expense ratio was 25.7% for the year ended December 31, 2024.

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Run-off Lines

The following table summarizes the results of operations for the Run-off Lines segment:


	Successor
	For the Year Ended		Period from
(in millions)	December 31, 2024		November 16, 2023 through December 31, 2023
Net earned premiums	$	285.9	$	62.6
Net investment income	119.9		13.3
Total segment revenues	405.8		75.9
Less:
Losses and loss adjustment expenses	420.4		32.6
Underwriting, acquisition and general expenses	91.0		13.2
Other segment items (1)	18.1		1.4
Segment operating income (loss)	$	(123.7)	$	28.7

(1) Includes interest expense and fee and other expense (income), net.

Net Earned Premiums

Net earned premiums were $285.9 million for the year ended December 31, 2024. Premiums were primarily from professional lines, surety and public entity business.

Losses and Loss Adjustment Expenses

Losses and loss adjustment expenses were $420.4 million for the year ended December 31, 2024.

The loss ratio for the year ended December 31, 2024 was 147.0%. Net unfavorable prior year development, primarily driven by the recognition of higher-than-expected loss experience, including U.S. and Bermuda professional lines, Trident, and assumed business from our former Malta operations sold in 2022, along with updates to the expectations for future loss experience and developments, contributed 57.4% percentage points to our loss ratio.

Underwriting, Acquisition and General Expenses

Underwriting, acquisition and general expenses were $91.0 million for the year ended December 31, 2024. The expense ratio was 31.9% for the same period.

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U.S. Operations

The following table summarizes the results of operations for the U.S. Operations segment:


	Predecessor
	Period from			For the Year Ended
(in millions)	January 1, 2023 through November 15, 2023			December 31, 2022
Gross written premiums	$	1,578.8		$	1,940.6
Net earned premiums	$	1,101.6		$	1,209.0
Losses and loss adjustment expenses	935.1			870.1
Underwriting, acquisition and general expenses	369.6			432.8
Underwriting income (loss) (non-GAAP)	(203.1)			(93.9)
Net investment income	99.9			88.4
Interest expense	24.5			17.5
Fee and other expense (income), net	(0.2)			(0.1)

Income (loss) before income taxes	$	(127.5)		$	(22.9)

GAAP ratios:
Loss ratio	84.9		%	72.0		%
Expense ratio	33.5		%	35.8		%
Combined ratio	118.4		%	107.8		%

The table above includes underwriting income (loss) which is an internal performance measure that we use to measure our insurance profitability. We believe underwriting income (loss) enhances an investor’s understanding of insurance operations profitability. Underwriting income (loss) is calculated as earned premiums less losses and loss adjustment expenses less underwriting, acquisition and general expenses. Although underwriting income (loss) does not replace net income (loss) computed in accordance with GAAP as a measure of profitability, management uses underwriting income (loss) to focus our reporting segments on generating operating income.

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Gross Written and Net Earned Premiums

Gross written and net earned premiums by our four primary insurance lines were as follows:


	Predecessor
	Period from				For the Year Ended
	January 1, 2023 through November 15, 2023				December 31, 2022
(in millions)	Gross Written		Net Earned		Gross Written		Net Earned
Property	$	208.9	$	123.8	$	214.3	$	148.8
Liability (1)	898.3		602.0		1,073.7		576.7
Professional	279.5		227.2		410.5		310.0
Specialty	192.1		148.6		242.1		173.5

Total	$	1,578.8	$	1,101.6	$	1,940.6	$	1,209.0

(1) In 2022, ceded premium of $121.0 million for the U.S. LPT has been included in the Liability line to align with the majority of the subject reserves covered under the agreement.

Property

Gross written premiums for property decreased $5.4 million, or 2.5%, for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to the year ended December 31, 2022 primarily as a result of the shortened Predecessor period as compared to a full year of results in 2022. The decrease in net earned premiums for the period January 1, 2023 through November 15, 2023 (Predecessor), compared to the year ended December 31, 2022 was mainly attributed to the shortened Predecessor period coupled with the sale of the contract binding and excess and surplus property businesses in 2021 partially offset by growth in the inland marine business.

Liability

Gross written premiums for liability decreased $175.4 million, or 16.3%, for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to the year ended December 31, 2022. The decrease was mainly from reductions in the construction business unit and delegated authority programs, partially offset by growth in environmental, casualty, and workers’ compensation lines. Net earned premiums increased for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to the year ended December 31, 2022. The increase was primarily due to ceded premium of $121.0 million for the U.S. LPT during the fourth quarter of 2022.

Professional

Gross written premiums for professional lines decreased $131.0 million, or 31.9%, for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to the year ended December 31, 2022. The primary decrease is due to lower production in management liability and errors and omission lines, and delegated authority programs, as well as increased competition. The decrease in net earned premium for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to the year ended December 31, 2022, was also due to the reduced production from the lines noted above.

Specialty

Gross written premiums decreased $50.0 million or 20.7%, for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to the year ended December 31, 2022. The decrease was driven by surety, partially offset by an increase in fronted programs. The decrease in net earned premiums for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to the year ended December 31, 2022, was primarily a result of the shortened Predecessor period coupled with a decrease in surety lines, partially offset by an increase in delegated authority programs.

Loss and Loss Adjustment Expenses

Loss and loss adjustment expenses were $935.1 million and $870.1 million for the period January 1, 2023 through November 15, 2023 (Predecessor), and year ended December 31, 2022, respectively. The loss ratios for the period January 1, 2023 through November 15, 2023 (Predecessor), and year ended December 31, 2022, were 84.9% and 72.0%, respectively. The higher loss ratio in 2023 was driven by increased net unfavorable prior-year reserve development versus 2022 (17.1 percentage points increase), an increase in catastrophe losses (0.7 percentage point increase), partially offset by a decrease in the current accident year non-catastrophe loss ratio (4.9 percentage point decrease).

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The current accident year non-catastrophe loss ratios for the period January 1, 2023 through November 15, 2023 (Predecessor), and year ended December 31, 2022, were 60.7% and 65.6%, respectively. The current accident year non-catastrophe loss ratio for the year ended December 31, 2022 included 6.0 percentage points from the one-time cost for the 2022 U.S. LPT transaction. Excluding that impact, the current accident year non-catastrophe loss ratio for the period January 1, 2023 through November 15, 2023 (Predecessor), was 1.5 percentage points higher than the year ended December 31, 2022, driven by a large loss and the impact of rate decreases in professional lines and expectations of claims inflation given current macro-economic conditions, partially offset by improved results in property lines.

Net unfavorable prior-year reserve development included in the income statement, for the period January 1, 2023 through November 15, 2023 (Predecessor), was $246.3 million (22.4 percentage points). The net unfavorable prior-year reserve development for the period January 1, 2023 through November 15, 2023 (Predecessor), primarily related to liability lines and professional lines partially offset by favorable development in specialty lines. The liability lines movement was driven by actual losses greater than expected, including the impact of large claims, and was largely due to business we have exited. The unfavorable liability lines development from ongoing businesses was driven by accident years 2020 and prior with the biggest movements in our Environmental and delegated authority programs businesses. The professional lines movement was driven by large management liability claims primarily impacting accident years 2019 through 2021 and errors and omissions business driven by actual losses greater than expected primarily impacting accident years 2020 and 2021.

The net unfavorable prior-year reserve development, for the year ended December 31, 2022 was $64.5 million (5.3 percentage points), The net unfavorable prior-year reserve development for the year ended December 31, 2022 was due to liability lines partially offset by favorable development in specialty lines.

Catastrophe losses for the period January 1, 2023 through November 15, 2023 (Predecessor) were $20.2 million (1.8 percentage points) and were mainly attributable to Tropical Storm Ophelia, Hurricane Idalia, and other U.S. storms. Catastrophe losses for the year ended December 31, 2022 were $13.2 million (1.1 percentage points) and were mainly attributable to Hurricane Ian, Winter Storm Elliott, and other U.S. storms.

Underwriting, Acquisition and General Expenses

Underwriting, acquisition and general expenses were $369.6 million for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to $432.8 million for the year ended December 31, 2022. The expense ratio decreased to 33.5% for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to 35.8% for the year ended December 31, 2022. The improvement in the ratio was mainly due to the decrease in expenses outpacing the decrease in net earned premium.

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International Operations

The following table summarizes the results of operations for the International Operations segment:


	Predecessor
	Period from			For the Year Ended
(in millions)	January 1, 2023 through November 15, 2023			December 31, 2022
Gross written premiums	$	369.4		$	906.7
Net earned premiums	$	124.0		$	530.5
Losses and loss adjustment expenses	105.5			293.9
Underwriting, acquisition and general expenses	26.0			205.3
Underwriting income (loss) (non-GAAP)	(7.5)			31.3
Net investment income	18.7			39.1
Interest expense	4.6			7.8
Fee and other expense (income), net	(0.1)			(1.2)

Income (loss) before income taxes	$	6.7		$	63.8

GAAP ratios:
Loss ratio	85.1		%	55.4		%
Expense ratio	20.9		%	38.7		%
Combined ratio	106.0		%	94.1		%

Gross Written and Net Earned Premiums

Gross written and net earned premiums by our four primary insurance lines were as follows:


	Predecessor
	Period from				For the Year Ended
	January 1, 2023 through November 15, 2023				December 31, 2022
(in millions)	Gross Written		Net Earned		Gross Written		Net Earned
Property	$	124.3	$	34.7	$	190.7	$	82.8
Liability	101.8		30.3		227.5		124.7
Professional	73.3		31.7		208.5		133.9
Specialty	70.0		27.3		280.0		189.1
Total	$	369.4	$	124.0	$	906.7	$	530.5

Property

Gross written premiums for property decreased $66.4 million, or 34.8%, for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to the year ended December 31, 2022. The decrease in gross written premiums was primarily due to the sale of AUA, which was partially offset by growth in our Bermuda operations which was driven mainly by favorable rate increases. Net earned premiums for property decreased for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to the year ended December 31, 2022, mainly driven by the sale of AUA.

Liability

Gross written premiums for liability decreased $125.7 million, or 55.3%, for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to the year ended December 31, 2022. The reduction in gross written premiums was primarily due to the sales of AUA and Argo Seguros which were partially offset by growth in Bermuda as a result of favorable rate increases and new business. Net earned premiums decreased for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to the year ended December 31, 2022 for the aforementioned sales of AUA and Argo Seguros.

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Professional

Gross written premiums for professional lines decreased $135.2 million, or 64.8%, for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to the year ended December 31, 2022. The decrease in gross written premiums was primarily driven by the sale of AUA. The decrease in net earned premiums for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to the year ended December 31, 2022 was mainly due to the aforementioned reason.

Specialty

Gross written premiums decreased $210.0 million, or 75.0%, for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to the year ended December 31, 2022. The decrease in gross written premiums was primarily driven by the sales of AUA and Argo Seguros. The decrease in net earned premiums for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to the year ended December 31, 2022 was mainly driven by the sales of AUA and Argos Seguros.

Loss and Loss Adjustment Expenses

Loss and loss adjustment expenses were $105.5 million and $293.9 million for the period January 1, 2023 through November 15, 2023 (Predecessor), and year ended December 31, 2022, respectively. The loss ratios for the period January 1, 2023 through November 15, 2023 (Predecessor), and year ended December 31, 2022, were 85.1% and 55.4%, respectively. The increase in the loss ratio was driven by net unfavorable prior-year reserve development in 2023 versus net favorable prior-year reserve development in 2022 (17.8 percentage point increase), an increase in the current accident year non-catastrophe loss ratio (10.9 percentage point increase), and an increase in catastrophe losses (1.0 percentage point increase).

The current accident year non-catastrophe loss ratios for the year ended December 31, 2023 and year ended December 31, 2022, were 61.0% and 50.1%, respectively. The loss ratio for the year ended December 31, 2023, includes a different mix of business from 2022 due to the dispositions of various businesses driven by the sale of AUA.

Net unfavorable prior-year reserve development for the period January 1, 2023 through November 15, 2023 (Predecessor), was $21.4 million (17.3 percentage points) related to professional, property, and liability lines in our Bermuda operations partially offset by favorable development in runoff Reinsurance lines. The unfavorable prior-year reserve development in our Bermuda operations was driven by reevaluations of large claims based on new information that emerged during the year including proposed settlements and estimated costs. The property movement included losses associated with catastrophes.

The net favorable prior-year reserve development for the year ended December 31, 2022 was $2.7 million (0.5 percentage points) and primarily related to favorable development in liability and specialty lines, partially offset by unfavorable development from professional lines development included large claim movements in Argo Insurance Bermuda.

Catastrophe losses for the period from January 1, 2023 through November 15, 2023 (Predecessor), was $8.4 million (6.8 percentage points) due to Hawaii wildfires, Hurricane Idalia, Tropical Storm Ophelia and other U.S. storms. Catastrophe losses for the year ended December 31, 2022 were $30.8 million (5.8 percentage points) due to Hurricane Ian, Winter storm Elliott, and the Ukraine-Russia conflict.

Underwriting, Acquisition and General Expenses

Underwriting, acquisition and general expenses decreased to $26.0 million for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to $205.3 million for the year ended December 31, 2022. The expense ratio decreased to 20.9% for the period January 1, 2023 through November 15, 2023 (Predecessor), as compared to 38.7% for the year ended December 31, 2022. The acquisition expense amount and ratio decrease are driven by the sale of AUA as well as reduced expenses incurred from business lines we have exited.

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Run-off Lines

The following table summarizes the results of operations for the Run-off Lines segment:


	Predecessor
	Period from		For the Year Ended
(in millions)	January 1, 2023 through November 15, 2023		December 31, 2022
Net earned premiums	$	0.3	$	0.9
Losses and loss adjustment expenses	2.6		2.9
Underwriting, acquisition and general expenses	0.9		1.6
Underwriting income (loss)	(3.2)		(3.6)
Net investment income	2.7		2.3
Interest expense	0.7		0.5

(Loss) income before income taxes	$	(1.2)	$	(1.8)

Run-off Lines includes liabilities associated with other liability policies that were issued in the 1960s, 1970s and into the 1980s, as well as the former risk-management business and other business no longer underwritten. Through our subsidiary Argonaut Insurance Company (“Argonaut”), we are exposed to asbestos liability at the primary level through claims filed against our direct insureds, as well as through its position as a reinsurer of other primary carriers. Argonaut has direct liability arising primarily from policies issued from the 1960s to the early 1980s, which pre-dated policy contract wording that excluded asbestos exposure. The majority of the direct policies were issued on behalf of small contractors or construction companies. We believe that the frequency and severity of asbestos claims for such insureds is typically less than that experienced for large, industrial manufacturing and distribution concerns.

Argonaut assumed risk as a reinsurer, primarily for the period 1970 to 1975, a portion of which was assumed from the London market. Argonaut also reinsured risks on policies written by domestic carriers. Such reinsurance typically provided coverage for limits attaching at a relatively high level, which are payable only after other layers of reinsurance are exhausted. Some of the claims now being filed on policies reinsured by Argonaut are on behalf of claimants who may have been exposed at some time to asbestos incorporated into buildings they occupied, but have no apparent medical problems resulting from such exposure. Additionally, lawsuits are being brought against businesses that were not directly involved in the manufacture or installation of materials containing asbestos. We believe that a significant portion of claims generated out of this population of claimants may result in incurred losses generally lower than the asbestos claims filed over the past decade and could be below the attachment level of Argonaut.

Losses and Loss Adjustment Expenses

The following table represents a roll forward of total gross and net loss reserves for the asbestos and environmental exposures in our Run-off Lines, along with the ending balances of all other reserves within Run-off Lines. Amounts in the net column are reduced by reinsurance recoverables.


	Predecessor
	Period from				For the Years Ended December 31,
	January 1, 2023 through November 15, 2023				2022
(in millions)	Gross		Net		Gross		Net
Asbestos and environmental:
Loss reserves, beginning of the year	$	65.5	$	55.9	$	63.8	$	54.6
Incurred losses	12.2		7.3		13.2		10.5
Losses paid	(17.5)		(11.7)		(11.5)		(9.2)
Loss reserves - asbestos and environmental, end of period	60.2		51.5		65.5		55.9
Risk-management reserves	137.4		86.1		144.6		91.5
Run-off reinsurance reserves	0.4		0.4		0.4		0.4
Other run-off lines	6.7		6.6		22.6		15.5
Total loss reserves - Run-off Lines	$	204.7	$	144.6	$	233.1	$	163.3

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Losses and loss adjustment expenses for the period January 1, 2023 through November 15, 2023 (Predecessor), included $0.2 million of net unfavorable loss reserve development on prior accident years. The unfavorable prior year loss development was due to $7.5 million in asbestos and environmental lines partially offset by $7.3 million net favorable loss reserve development in risk-management business and run-off liability losses excluding asbestos and environmental. The increase in asbestos and environmental was driven by a large asbestos settlement and changes in estimates on individual asbestos and environmental claims. The decrease in risk-management business was due to workers compensation actual incurred losses lower than expected.

Loss and loss adjustment expenses for the year ended December 31, 2022, included $2.9 million of net unfavorable loss reserve development on prior accident years. The unfavorable prior year loss development was due to $10.5 million in asbestos and environmental lines partially offset by $8.3 million net favorable loss reserve development in run-off liability losses excluding asbestos and environmental. The movement on asbestos and environmental lines was due to higher than expected loss activity and movement on large claims alleging environmental losses. The movement on liability exposures excluding asbestos and environmental was due to analysis of individual claims.

The following table represents the components of gross loss reserves for the Run-off Lines:


	Predecessor
	For the Year Ended
(in millions)	December 31, 2022
Asbestos:
Direct
Case reserves	$	3.2
Unallocated loss adjustment expense	0.5
Incurred but not reported	17.4
Total direct written reserves	21.1
Assumed domestic
Case reserves	6.8
Unallocated loss adjustment expense	0.8
Incurred but not reported	13.0
Total assumed domestic reserves	20.6
Assumed London
Case reserves	2.4

Incurred but not reported	2.6
Total assumed London reserves	5.0
Total asbestos reserves	46.7
Environmental reserves	18.8
Risk-management reserves	144.6
Run-off reinsurance reserves	0.4
Other run-off lines	22.6
Total loss reserves - Run-off Lines	$	233.1

We perform an extensive actuarial analysis of the asbestos and environmental reserves on at least an annual basis. We continually monitor the status of the claims and may make adjustments outside the annual review period. The review entails a detailed analysis of our direct and assumed exposure. We consider the indications from the various actuarial methods from the review to determine our best estimate of the asbestos and environmental losses and loss adjustment expense reserves. We primarily relied on a method that projects future reported claims and severities, with some weight given to other methods. This method relies most heavily on our historical claims and severity information, whereas other methods rely more heavily on industry information. The method produces an estimate of IBNR losses based on projections of future claims and the average severity for those future claims. The severities were calculated based on our specific data and in our opinion best reflect our liabilities based upon the insurance policies issued.

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Because of the types of coverage within the Run-off Lines of business still being serviced by Argonaut, a significant amount of subjectivity and uncertainty exists in establishing the reserves for losses and loss adjustment expenses. Factors that increase these uncertainties are: (1) lack of historical data, (2) inapplicability of standard actuarial projection techniques, (3) uncertainties regarding ultimate claim costs, (4) coverage interpretations and (5) the judicial, statutory and regulatory environments under which these claims may ultimately be resolved. Significant uncertainty remains as to our ultimate liability due to the potentially long waiting period between exposure and emergence of any bodily injury or property damage and the resulting potential for involvement of multiple policy periods for individual claims. Due to these uncertainties, the current trends may not be indicative of future results. Although we have determined and recorded our best estimate of the reserves for losses and loss adjustment expenses for Run-off Lines, current judicial and legislative decisions continue to broaden liability, expand the scope of coverage and increase the severity of claims payments. As a result of these and other recent developments, the uncertainties inherent in estimating ultimate loss reserves are heightened, further complicating the already complex process of determining loss reserves. The industry as a whole is involved in extensive litigation over coverages and liability issues continue to make it difficult to quantify these exposures.

Underwriting, Acquisition and General Expenses

Underwriting, acquisition and general expenses for the Run-off Lines segment consists primarily of administrative expenses.

Liquidity and Capital Resources

Our insurance and reinsurance subsidiaries require liquidity and adequate capital to meet ongoing obligations to policyholders and claimants and fund operating expenses. For the year ended December 31, 2024, the cash flow used in operations was $144.7 million. We believe our liquidity generated from operations and, if required, from our investment portfolio, will be sufficient to meet our future obligations. We believe we have access to various sources of liquidity including cash, investments and the ability to borrow under our revolving credit facility.

Cash Flows

The Company’s future cash flows largely depend on the availability of dividends or other statutorily permissible payments from subsidiaries. The ability to pay such dividends is limited by the applicable laws and regulations of the various countries and states in which these subsidiaries operate, including, among others, Bermuda.

The primary sources of our cash inflows are premiums, reinsurance recoveries, proceeds from sales and redemptions of investments and investment income. The primary cash outflows are claim payments, loss adjustment expenses, reinsurance costs, underwriting, acquisition and overhead expenses, interest expense, purchases of investments, payment of preferred dividends and income taxes. Management believes that cash inflows are sufficient to cover cash outflows in the foreseeable future. We have access to additional sources of liquidity should the need for additional cash arise.

Cash provided by operating activities can fluctuate due to timing differences in the collection of premiums and reinsurance recoveries and the payment of losses and expenses. For the year ended December 31, 2024, cash used in operating activities was $144.7 million. Net cash used in operating activities in 2024 was primarily driven by the reinsurance payments and recoveries, claim payments and premium cash receipts. The change in premium is a result of a strategic reassessment of our various lines of business. For the period November 16, 2023 through December 31, 2023 (Successor) and January 1, 2023 through November 15, 2023 (Predecessor), cash provided by operating activities was $16.9 million and $293.7 million, respectively.

For the year ended December 31, 2024 net cash used in investing activities was $192.0 million. Net cash used in investing activities in 2024 was primarily driven by purchases of short-term investments, private loan investments, mortgage loans, and other investments offset by net proceeds from fixed maturities investments. For the period November 16, 2023 through December 31, 2023 (Successor), net cash provided by investing activities was $61.8 million. For the period January 1, 2023 through November 15, 2023 (Predecessor), net cash used in investing activities was $359.7 million.

For the year ended December 31, 2024, net cash provided by financing activities was $189.5 million. Net cash provided by financing activities in 2024 was primarily driven by the issuance of our common shares to Brookfield Wealth Solutions Ltd. There was no financing activities for the period November 16, 2023 through December 31, 2023 (Successor). For the period January 1, 2023 through November 15, 2023 (Predecessor), net cash used in financing was $9.5 million.

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We invest excess cash in a variety of investment securities. As of December 31, 2024, our investment portfolio consisted of 50.5% fixed maturities, 5.1% mortgage loans, 14.0% private loans, 10.1% equity securities, 14.1% other investments and 6.2% short-term investments (based on fair value) compared to 74.3% fixed maturities, 4.2% mortgage loans, 0.3% equity securities, 8.9% other investments and 12.3% short-term investments as of December 31, 2023. We classify the majority of our investment portfolio as available-for-sale; resulting in these investments being reported at fair market value with unrealized gains and losses, net of tax, being reported as a component of stockholders’ equity. At December 31, 2024, no investments were designated as trading.

Reinsurance and Collateral Held by Argo Group

We maintain a comprehensive reinsurance program at levels management considers adequate to diversify risk and safeguard our financial position. Increases in the costs of this program, or the failure of our reinsurers to meet their obligations in a timely fashion, may have a negative impact on liquidity.

Under certain insurance programs (i.e., large deductible programs and surety bonds) and various reinsurance agreements, collateral and letters of credit (“LOCs”) are held for our benefit to secure performance of insureds and reinsurers in meeting their obligations. At December 31, 2024, the amount of such collateral and LOCs held under insurance and reinsurance agreements was $698.9 million and $1,157.9 million respectively. Collateral can also be provided in the form of trust accounts. As we are the beneficiary of these trust accounts only to secure future performance, these amounts are not reflected in our Consolidated Balance Sheets. Collateral provided by an insured or reinsurer may exceed or fall below the amount of their total outstanding obligation.

On November 9, 2022, the Company closed on the U.S. LPT with Enstar covering a majority of the Company’s U.S. casualty insurance reserves, including construction, for accident years 2011 to 2019. On the closing date, the Company transferred cash and investments to Enstar, a portion of which was deposited into a trust established to secure Enstar’s claim payment obligation to the Company. As such, our reinsurance recoverable with Enstar is fully collateralized.

LOCs have been filed with Lloyd’s by trade capital providers as part of the terms of whole account quota share reinsurance contracts entered into by the trade capital providers. In the event such LOCs are funded, the outstanding balance would be the responsibility of the trade capital providers. The Company sold its AUA business in February 2023.

Holding Company and Intercompany Dividends

Argo Group and its other non-insurance company subsidiaries are dependent on dividends and other permitted payments from their insurance subsidiaries in order to pay cash dividends to their stockholders, for debt service and for their operating expenses. The ability of our insurance subsidiaries to pay dividends is subject to certain restrictions imposed by the jurisdictions of domicile that regulate these subsidiaries and each jurisdiction has calculations for the amount of dividends that our subsidiary can pay without the approval of the insurance regulator.

Argo Re is the primary direct subsidiary of Argo Group International Holdings, Inc. and is subject to Bermuda insurance laws. Argo Ireland is indirectly owned by Argo Re and is a mid-level holding company subject to Irish laws, and its primary subsidiary is Argo Group U.S. Argo Group U.S. is a mid-level holding company subject to Delaware laws. Argo Group U.S. is the parent of all of our U.S. insurance subsidiaries.

The payment of dividends by Argo Re is limited under Bermuda insurance laws which require Argo Re to maintain certain measures of solvency and liquidity. As of December 31, 2024, the statutory capital and surplus of Argo Re was $1,513.6 million, and the amount required to be maintained was $100.0 million, thereby allowing Argo Re the potential to pay dividends or capital distributions within the parameters of the solvency and liquidity margins. We believe that the dividend and capital distribution capacity of Argo Re will provide us with sufficient liquidity to meet the operating and debt service commitments, as well as other obligations.

During 2024, Argo Group International Holdings, Inc. received a dividend of $30.0 million from Argo Re, Argo Re received a dividend of $10.6 million from Argo International Holdings Limited (“AIH”).

During 2025, Argo Group U.S. may be permitted to receive dividends from Argonaut up to $149.8 million without prior approval from the Nebraska Department of Insurance. Argo Group U.S. is permitted to receive dividends from Rockwood of up to $18.9 million, subject to prior approval from the Pennsylvania Department of Insurance. Effective November 26, 2025—two years following the merger with Brookfield Wealth Solutions Ltd.—Rockwood’s dividends will not be subject to this prior approval. Business and regulatory considerations may impact the amount of dividends actually paid and prior approval of dividend payments may be required.

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Revolving Credit Facility and Term Loan

On November 2, 2018, each of Argo Group, Argo Group U.S., AIH, and AUA, collectively (the “Borrowers”) entered into a $325 million credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent. The Credit Agreement includes a one-time borrowing of $125 million for a term loan (the “Term Loan”), and a $200 million revolving credit facility. The Company used most of the net proceeds from the Preferred Stock Offering (as defined in Note 10, “Stockholders’ Equity” of Argo Group’s 2022 Form 10-K) to pay off the Term Loan in September 2020. The Credit Agreement was subsequently amended to increase the revolving credit facility amount to $220 million, and to provide the removal of AIH and AUA as Borrowers upon the sale of AIH and AUA, which occurred on February 2, 2023.

During July 2023, the Credit Agreement was amended to permit the acquisition of Argo Group by Brookfield Wealth Solutions Ltd. pursuant to the Merger Agreement and extend the maturity date of certain commitments under the revolving credit facility from November 2, 2023 to November 2, 2024. The Credit Agreement decreased from $220 million to $200 million effective November 2, 2023.

On February 21, 2024, the Company entered into Amendment No. 6 (“Amendment No. 6”) of the Credit Agreement with the financial institutions party thereto as lenders and JPMorgan Chase Bank, N.A., individually as a lender and as administrative agent (the “Credit Agreement”). Amendment No. 6, among other things, replaced the minimum Tangible Net Worth covenant in the Credit Agreement with a minimum Consolidated Net Worth. The Consolidated Net Worth covenant is tested at the end of each fiscal quarter and has been set at an amount equal to the sum of (i) $872.0 million plus (ii) 50% of positive net income for each fiscal quarter ending after December 31, 2023 plus (iii) 50% of net proceeds received from the issuance and sale of certain equity interests after December 31, 2023.

On February 22, 2024, the Company borrowed $100.0 million from the revolving credit facility and elected a one-month term and interest option, under the terms of the Credit Agreement. The loan had been renewed using the one-month option until May 29, 2024, when the Company repaid the $100.0 million borrowed under the revolving credit facility. The facility was subsequently terminated on June 4, 2024. On June 4, 2024, the Company was named as a party under Brookfield Wealth Solutions Ltd.’s $1.2 billion revolving credit facility.

Senior Notes

In September 2012, Argo Group (the “Parent Guarantor”), through its subsidiary Argo Group U.S. (the “Subsidiary Issuer”), issued $143.8 million aggregate principal amount of the Subsidiary Issuer’s 6.5% Senior Notes due September 15, 2042 (the “Notes”). The Notes are unsecured and unsubordinated obligations of the Subsidiary Issuer and rank equally in right of payment with all of the Subsidiary Issuer’s other unsecured and unsubordinated debt. The Notes are guaranteed on a full and unconditional senior unsecured basis by the Parent Guarantor. The Notes may be redeemed, for cash, in whole or in part at the Subsidiary Issuer’s option, at any time and from time to time, prior to maturity at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued but unpaid interest on the principal amount being redeemed to, but not including, the redemption date.

Trust Preferred Securities

Through a series of trusts, that are wholly-owned subsidiaries (non-consolidated), we issued trust preferred securities. The interest on the underlying debentures is variable with the rates being reset quarterly and subject to certain interest rate ceilings. Interest payments are payable quarterly. The debentures are all unsecured and are subordinated to other indebtedness. All are redeemable subject to certain terms and conditions at a price equal to 100% of the principal plus accrued and unpaid interest.

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A summary of our outstanding junior subordinated debentures at December 31, 2024 is presented below:

(in millions)

Issue Date

Trust Preferred Pools

Maturity

Rate Structure

Interest Rate at December 31, 2024

Par Amount

Argo Group

5/15/2003

PXRE Capital Statutory Trust II

5/15/2033

3M SOFR + TSA + 4.10%

8.89%

18.0

11/6/2003

PXRE Capital Trust VI

9/30/2033

3M SOFR + TSA + 3.90%

8.49%

10.3

Argo Group U.S.

5/15/2003

Argonaut Group Statutory Trust I

5/15/2033

3M SOFR + TSA + 4.10%

8.89%

15.5

12/16/2003

Argonaut Group Statutory Trust III

1/8/2034

3M SOFR + TSA + 4.10%

9.02%

12.3

4/29/2004

Argonaut Group Statutory Trust IV

4/29/2034

3M SOFR + TSA + 3.85%

8.64%

13.4

5/26/2004

Argonaut Group Statutory Trust V

5/24/2034

3M SOFR + TSA + 3.85%

8.63%

12.4

5/12/2004

Argonaut Group Statutory Trust VI

6/17/2034

3M SOFR + TSA + 3.80%

8.41%

13.4

9/17/2004

Argonaut Group Statutory Trust VII

12/15/2034

3M SOFR + TSA + 3.60%

8.22%

15.5

9/22/2004

Argonaut Group Statutory Trust VIII

9/22/2034

3M SOFR + TSA + 3.55%

8.15%

15.5

10/22/2004

Argonaut Group Statutory Trust IX

12/15/2034

3M SOFR + TSA + 3.60%

8.22%

15.5

9/15/2005

Argonaut Group Statutory Trust X

9/15/2035

3M SOFR + TSA + 3.40%

8.02%

30.9

Less: fair value adjustment

(10.7)

Total Outstanding

162.0

Subordinated Debentures

Unsecured junior subordinated debentures with a principal balance of $91.8 million were assumed through a previous acquisition (“the acquired debt”). The acquired debt is carried on our Consolidated Balance Sheets at $81.2 million, which represents the debt’s fair value at the Merger Date plus accumulated accretion of discount to par value, as required by accounting for business combinations under ASC 805. At December 31, 2024, the acquired debt was eligible for redemption at par. Interest accrues on the acquired debt based on a variable rate, which is reset quarterly. Interest payments are payable quarterly. A summary of the terms of the acquired debt outstanding at December 31, 2024 is presented below:

(in millions)

Issue Date

Maturity

Rate Structure

Interest Rate at December 31, 2024

Principal at December 31, 2024

Carrying Value at December 31, 2024

9/13/2007

9/15/2037

3M SOFR + TSA + 3.15%

7.77

91.8

81.2

Letter of Credit Facilities - Argo Re

Argo Re may be required to secure its obligations under various reinsurance contracts in certain circumstances. In order to satisfy these requirements, Argo Re has entered into one committed and one uncommitted secured bilateral LOC facility with commercial banks and generally uses these facilities to issue LOCs in support of non-admitted reinsurance obligations in the U.S. and other jurisdictions. The committed LOC facility has a term of one year and includes customary conditions and event of default provisions. The issuance of LOCs using the uncommitted LOC facility is at the discretion of the lenders. The availability of letters of credit under these secured facilities are subject to a borrowing base requirement, determined on the basis of specified percentages of the market value of eligible categories of securities pledged to the lender. On December 31, 2024, committed and uncommitted LOC facilities totaled $110.0 million.

On December 31, 2024, LOCs totaling $31.2 million were outstanding, of which $19.4 million were issued against the committed secured bilateral LOC facility and $11.9 million were issued against the uncommitted, secured bilateral LOC facility. Collateral with a market value of $40.1 million was pledged to these banks as security against these LOCs.

In addition to the bilateral, secured letters of credit facilities described above, Argo Re can use other forms of collateral to secure these reinsurance obligations including trust accounts, cash deposits, and LOCs issued by commercial banks on an uncommitted basis.

Other Letters of Credit

Other LOCs issued and outstanding on December 31, 2024 were $4.1 million.

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Preferred Stock Offering

On July 9, 2020, the Company issued 6,000 shares of its preferred stock (equivalent to 6,000,000 depositary shares, each representing a 1/1,000th interest in a share of preferred stock) with a $25,000 liquidation preference per share (equivalent to $25 per depositary share) (the “Preferred Stock Offering”).

Net proceeds from the sale of the depositary shares were approximately $144 million after deducting underwriting discounts and estimated offering expenses payable by the Company. The Company used most of the net proceeds to repay its term loan, which had $125 million principal outstanding, and used the remainder of the proceeds for working capital to support continued growth in insurance operations.

Dividends to the holders of preferred stock will be payable on a non-cumulative basis only when, as and if declared by our Board or a duly authorized committee thereof, quarterly in arrears on the 15th of March, June, September, and December of each year, commencing on September 15, 2020, at a rate equal to 7.00% of the liquidation preference per annum (equivalent to $1,750 per share of preferred stock and $1.75 per depositary share per annum) up to but excluding September 15, 2025. Beginning on September 15, 2025, any such dividends will be payable on a non-cumulative basis, only when, as and if declared by our Board or a duly authorized committee thereof, during each reset period, at a rate per annum equal to the Five-Year U.S. Treasury Rate as of the most recent reset dividend determination date (as described in the Company’s prospectus supplement dated July 7, 2020) plus 6.712% of the liquidation preference per annum.

For the year ended December 31, 2024, the Board declared quarterly dividends in the aggregate amount of $1,750 per share of preferred stock. For the year ended December 31, 2024 we paid cash dividends totaling $10.5 million to our holders of preferred stock.

Argo Group Common Stock and Dividends

On February 8, 2023, the Company entered into the Merger Agreement with Brookfield Wealth Solutions Ltd. and Merger Sub. As part of the Merger Agreement, the Company has agreed to suspend any dividends that would otherwise be declared and paid on the Company’s stock during the period from the date of the Merger Agreement through the earlier of the closing of the transaction or the termination of the Merger Agreement.

As of the Merger Date, pursuant to the Merger Agreement, each share of common stock of the Company issued and outstanding immediately prior to the Merger was automatically canceled and converted into the right to receive an amount in cash equal to $30.00.

As a result of the Merger, the Company’s new authorized share capital is 2,000,000,000 shares of common stock with a par value of $1.00 per share. All outstanding shares of common stock are owned by BNRE Triangle Acquisition Inc.

Capital Contribution

On February 20, 2024, Brookfield Wealth Solutions Ltd. made a $100.0 million capital contribution to the Company in exchange for the issuance of 100,000,000 shares of the Company’s common stock.

On February 23, 2024, the Company made a $100.0 million capital contribution to Argo Re for the ultimate benefit of Argonaut.

On May 28, 2024, Brookfield Wealth Solutions Ltd. made another $100.0 million capital contribution to the Company in exchange for the issuance of 100,000,000 shares of the Company’s common stock.

On December 1, 2024, Argo Group U.S. made a $293.0 million capital contribution to BP&C Shared Services, Inc. (formerly known as Argonaut Management Services, Inc,).

On December 23, 2024, Brookfield Wealth Solutions Ltd. made another $300.0 million capital contribution in the form of contributed loans to the Company for the ultimate benefit of the Company’s insurance company subsidiaries.

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Cash Obligations and Commitments

Our estimated contractual obligations and commitments as of December 31, 2024 were as follows:


			Payments Due by Period
(in millions)	Total		Less Than 1 Year		1 - 3 Years		Thereafter
Long-term debt:
Junior subordinated debentures (1)	$	504.9	$	22.8	$	68.4	$	413.7
Senior unsecured fixed rate notes (2)	307.2		9.3		27.9		270.0


Operating leases	59.9		9.9		26.0		24.0
Purchase obligations (3)	57.7		22.0		33.4		2.3
Other long-term liabilities:
Claim payments (4)	5,798.6		1,871.9		2,187.4		1,739.3
Partnership commitments (5)	214.1		214.1		—		—
Total contractual obligations	$	6,942.4	$	2,150.0	$	2,343.1	$	2,449.3

(1) Interest only on Junior Subordinated Debentures through 2037. Interest calculated based on the rate in effect at December 31, 2024. Principal due beginning May 2033.

(2) Interest only on Senior Unsecured Fixed Rate Notes through 2042. Interest calculated based on the rate in effect at December 31, 2024. Principal due September 2042.

(3) Purchase obligations consist primarily of software, hardware and equipment servicing and software licensing fees.

(4) Claim payments do not have a contractual maturity; exact timing of claim payments cannot be predicted with certainty. The above table estimates timing of claim payments based on historical payment patterns and excludes the benefits of reinsurance recoveries.

(5) Argo Group has invested in multiple limited partnership agreements and can be called to fulfill the obligations at any time.

Supplemental Guarantor Financial Information

In September 2012, the Parent Guarantor, through its Subsidiary Issuer, issued $143.8 million aggregate principal amount of the Subsidiary Issuer’s 6.5% Senior Notes due September 15, 2042 (the “Notes”). The Notes are unsecured and unsubordinated obligations of the Subsidiary Issuer and rank equally in right of payment with all of the Subsidiary Issuer’s other unsecured and unsubordinated debt. The Notes are guaranteed on a full and unconditional senior unsecured basis by the Parent Guarantor. The Notes may be redeemed, for cash, in whole or in part at the Subsidiary Issuer’s option, at any time and from time to time, prior to maturity at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued but unpaid interest on the principal amount being redeemed to, but not including, the redemption date. The Company’s ability to repay the Notes largely depends on the availability of dividends or other statutorily permissible payments from subsidiaries.

This summarized financial information has been prepared in accordance with Regulation S-X Rule 13-01, Financial Disclosures about Guarantors and Issuers of Guaranteed Securities and is not intended to present the financial position or results of operations of the obligor group in accordance with U.S. GAAP.

The following tables present summarized financial information related to the Senior Notes issued by Argo Group U.S. (the “Subsidiary Issuer") and the Company (the “Parent Guarantor”) on a combined basis after elimination of (i) intercompany transactions and balances among the Parent Guarantor and the Subsidiary Issuer, (ii) equity in undistributed earnings from and investments in any other subsidiaries that are non-obligor group, and (iii) amounts due to, amounts due from, and transactions with (1) non-obligor subsidiaries and (2) affiliates are separately disclosed, as applicable. Obligor group consists of the Subsidiary Issuer and the Parent Guarantor.

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Argo Group International Holdings, Inc. Obligor Group

Balance Sheet Information


	As of
(in millions)	December 31, 2024
Total assets (1)	$	34.3
Total liabilities (2)	361.3
Series A Preferred stock	137.1

(1) Includes $21.8 million of investments, $5.5 million of cash, restricted cash and cash equivalents, and $5.3 million of deferred tax assets, net

(2) Includes $1.5 million and $60.4 million of due to (from) affiliates and intercompany notes payable, respectively, $290.8 million of debt, and $8.5 million of accrued underwriting expenses and other liabilities

Income Statement Information


	For the Year Ended
(in millions)	December 31, 2024
Total revenue (1)	$	0.8
Total expenses (2)	31.9
Net income (loss)	(2.3)
Dividends on Series A Preferred stock	(10.5)
Net income (loss) attributable to common stockholders	(12.8)

(1) Includes $0.9 million of net investment income

(2) Includes interest expense of $33.1 million

Recent Accounting Pronouncements

ASU 2023-07 – On November 27, 2023, the FASB issued Accounting Standards Update 2023-07—Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments require the disclosure of significant segment expenses by reportable segment, enhance interim and annual disclosure requirements, and clarify circumstances in which an entity can disclose multiple segment measures of profit or loss. This ASU was effective on January 1, 2024 for annual filings (and January 1, 2025 for quarterly filings) and was applied retrospectively to all prior periods presented in our consolidated financial statements for the Successor periods. As a result of adopting this ASU, we added additional information in Note 15, “Segment Information,” in the Notes to Consolidated Financial Statements.

ASU 2023-09 – On December 14, 2023, the FASB issued Accounting Standards Update 2023-09—Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments improve income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures.

The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted.

We are currently evaluating the requirements of ASU 2023-09. However, as they apply to disclosure requirements, the adoption of the standard is not anticipated to have a material impact on our profitability, financial position or cash flows.

ASU 2024-03 – On November 4, 2024, the FASB issued Accounting Standards Update 2024-03—Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, to improve interim and annual disclosures about a public business entity’s expenses by requiring more detailed information in the notes to the financial statements about certain expense categories, including purchases of inventory, employee compensation, depreciation, amortization, and selling expenses. We expect to adopt this ASU effective January 1, 2027 and the adoption will not affect our financial position or our results of operations, but will result in additional disclosures.

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Critical Accounting Estimates

Reserves for Losses and Loss Adjustment Expenses

We establish reserves for the estimated total unpaid costs of losses including loss adjustment expenses (“LAE”), for claims that have been reported as well as claims that have been incurred but not yet reported. Unless otherwise specified below, the term “loss reserves” encompasses reserves for both losses and LAE. Loss reserves reflect management’s best estimate. Loss reserves established are not an exact calculation of our liability. Rather, loss reserves represent management’s best estimate of our liability based on application of actuarial techniques and other projection methodologies and taking into consideration other facts and circumstances known at the balance sheet date. The process of establishing loss reserves is complex and necessarily imprecise, as it involves using judgment that is impacted by many internal and external variables such as past loss experience, current claim trends and the prevailing social, economic and legal environments. In determining loss reserves, we give careful consideration to all available data and applicable actuarial analyses including expected loss ratios, loss development factors, settlement patterns and the weighting of actuarial methodologies.

The relevant factors and methodologies used to estimate loss reserves vary significantly by product line due to differences in loss exposure and claim complexity. Much of our business is underwritten on an occurrence basis, which can lead to a significant time lag between the event that gives rise to a claim and the date on which the claim is reported to us. Additional time may be required to resolve the claim once it is reported to us. During these time lags, which can span several years for complex claims, new facts and information specific to the claim become known to us. In addition, general econometric and societal trends including inflation may change. Any one of these factors may require us to refine our loss reserve estimates on a regular basis. We apply a strict regimen to assure that review of these facts and trends occurs on a timely basis so that this information can be factored into our estimate of future liabilities. However, due to the number and potential magnitude of these variables, actual paid losses in future periods may differ materially from our estimates as reflected in current reserves. These differences can be favorable or unfavorable. A more precise estimation of loss reserves is also hindered by the effects of growth in a line of business and uncertainty as to how new business performs in relation to expectations established through analysis of the existing portfolio. In addition to reserving for known claim events, we also establish loss reserves for IBNR. Loss reserves for IBNR are set using our estimates for events that have occurred as of the balance sheet date but have not yet been reported to us. Estimation of IBNR loss reserves is subject to significant uncertainty.

The following is a summary of gross and net loss reserves we recorded by line of business:


	December 31, 2024
(in millions)	Gross		Net
Casualty Lines	$	2,416.6	$	1,323.6
Specialty Lines	643.1		341.5
Run-off Lines	2,738.9		1,338.8
Total reserves	$	5,798.6	$	3,003.9


	December 31, 2023
(in millions)	Gross		Net
Casualty Lines	$	2,211.7	$	1,097.3
Specialty Lines	675.8		334.8
Run-off Lines	2,657.0		1,315.0
Total reserves	$	5,544.5	$	2,747.1

Loss Reserve Estimation Methods

The process for estimating our loss reserves begins with the collection and analysis of claim data. The data collected for actuarial analyses includes reported claims, paid losses and case reserve estimates sorted by the year the loss occurred. The data sets are sorted into homogeneous groupings, exhibiting similar loss and exposure characteristics. We primarily use internal data in the analysis but also consider industry data in developing factors and estimates. We analyze loss reserves on a quarterly basis.

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We use a variety of actuarial techniques and methods to determine loss reserves for all lines of business. Each method has its own set of assumptions, and each has strengths and weaknesses depending on the exposures being evaluated. Since no single estimation method is superior to another method in all situations, the methods and assumptions used to project loss reserves will vary by line of business and, when appropriate, by where we attach on a risk. We use what we believe to be the most appropriate set of actuarial methods and assumptions for each product line grouping. While the loss projection methods may vary by product line, the general approach for calculating IBNR remains the same: ultimate losses are forecasted first, and that amount is reduced by the amount of cumulative paid claims and case reserves.

When we initially establish IBNR reserves at the beginning of an accident year for each line of business, we often use the expected loss ratio method. This method is based upon our analyses of historical loss ratios incorporating adjustments for pricing changes, anticipated loss ratio trends, changes in mix of business and any other factors that may impact loss ratio expectations. At the end of each quarter, we review the loss ratio selections and the emerged loss experience to determine if deviating from the loss ratio method is appropriate. In general, we continue to use the loss ratio method until we deem it appropriate to begin to rely on the experience of the accident year (“AY”) being evaluated. This weighing in of the AY experience is typically done by employing the Bornhuetter-Ferguson (“BF”) reserving methodology. The BF methods compute IBNR through a blend of the expected loss ratio method and traditional loss development methods. The BF methods estimate IBNR for an accident year as the product of expected losses (earned premium multiplied by an expected loss ratio) and an expected percentage of unreported losses. The expected percentage of unreported losses is derived from age-to-ultimate loss development factors that result from our analyses of loss development triangles. As accident years mature to the point at which the reported loss experience is more credible, we assign increasing weight to the paid and incurred loss development methods.

For short-tail lines of business such as property, we generally defer to the AY loss experience more quickly as the time from claim occurrence to reporting is generally short. In the event there are large claims incurred, we will analyze large loss information separately to ensure that the loss reserving methods appropriately recognize the magnitude of these losses in the evaluation of ultimate losses.

For long-tail lines such as general liability and automobile liability, the loss experience is not deemed fully credible for several years. At the end of the accident year, we rely primarily on the BF methods and continue to rely on those methods for several years. We assign greater weight to the paid and incurred development methods as the data matures.

Workers compensation is also a long-tail line of business, and is reserved for in keeping with other long-tailed business. However, a portion of the outstanding reserves correspond to scheduled indemnity payments and are not subject to extreme volatility. The portion of reserves that is not scheduled or annuitized is subject to potentially large variations in ultimate loss cost due to the uncertainty of medical cost inflation. Sources of medical cost inflation include increased use, new and more expensive medical testing procedures and prescription drugs costs.

The Run-off Lines segment includes reserves for asbestos, environmental and other latent exposures. These latent exposures are typically characterized by extended periods of time between the dates an insured is first exposed to a loss, a claim is reported and the claim is resolved. For those Run-off Lines segment long-tail loss reserves, there is significant uncertainty involved in estimating reserves for asbestos, environmental and other latent injury claims. We use several methods to estimate reserves for these claims including an approach that projects future calendar period claims and average claim costs and ground-up analysis that relies on an evaluation of individual policy terms and conditions. We also consider survival ratio and market share methods which compare our level of loss reserves and loss payments to that of the industry for similar exposures. We apply greatest weight to the method that projects future calendar period claims and average claim costs because we believe it best captures the unique claim characteristics of our underlying exposures and loss development potential. We perform a full review of our Run-off Lines asbestos, environmental and other latent exposures loss reserves at least once a year and review loss activity quarterly for significant changes that might impact management’s best estimate.

Each business segment is analyzed individually, with development characteristics for each short-tail and long-tail line of business identified and applied accordingly. In comparing loss reserve methods and assumptions used at December 31, 2024 as compared with methods and assumptions used at December 31, 2023, management has not changed or adjusted methodologies or assumptions in any significant manner.

In conducting our actuarial analyses, we generally assume that past patterns demonstrated in the data will repeat themselves and that the data provides a basis for estimating future loss reserves. In the event that we become aware of a material change that may render past experience inappropriate for the purpose of estimating current loss reserves, we will attempt to quantify the effect of the change and use informed management judgment to adjust loss reserve forecasts appropriately.

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Uncertainties in Loss Reserve Estimation

The causes of uncertainty will vary for each product line reviewed. For short-tail property lines of business, we are exposed to catastrophe losses, both natural and man-made. Due to the nature of certain catastrophic loss events, such as hurricanes, earthquakes or terrorist attacks, our normal claims resolution processes may be impaired due to factors such as difficulty in accessing impacted areas and other physical, legal and regulatory impediments. These factors can make establishment of accurate loss reserve estimates difficult and render such estimates subject to greater uncertainty. Additionally, if the catastrophe occurs near the end of a financial reporting period, there are additional uncertainties in loss reserve estimates due to the lack of sufficient time to conduct a thorough analysis. Long-tail casualty lines of business also present challenges in establishing appropriate loss reserves, for example if changes in the legal environment occur over time which broaden our liability or scope of policy coverage and increase the magnitude of claim payments.

In all lines, final claim payments may differ from the established loss reserve. Due to the uncertainties discussed above, the ultimate losses may vary materially from current loss reserves and could have a material adverse or beneficial effect on our future financial condition, results of operations and cash flows. Any adjustments to loss reserves are reflected in the results for the year during which the adjustments are made.

In addition to the previously described general uncertainties encountered in estimating loss reserves, there are significant additional uncertainties in estimating the amount of our potential losses from asbestos and environmental claims. Loss reserves for asbestos and environmental claims normally cannot be estimated with traditional loss reserving techniques that rely on historical accident year development factors due to the uncertainties surrounding these types of claims. Among the uncertainties impacting the estimation of such losses are:

•potentially long waiting periods between exposure and emergence of any bodily injury or property damage;

•difficulty in identifying sources of environmental or asbestos contamination and in properly allocating responsibility and/or liability for damage;

•changes in underlying laws and judicial interpretation of those laws;

•potential for an environmental or asbestos claim to involve many insurance providers over many policy periods;

•long reporting delays from insureds to insurance companies;

•historical data concerning asbestos and environmental losses which is more limited than historical information on other types of claims;

•questions concerning interpretation and application of insurance coverage; and

•uncertainty regarding the number and identity of insureds with potential asbestos or environmental exposure.

Case reserves and expense reserves for costs of related litigation have been established where sufficient information has been developed. Additionally, IBNR has been established to cover additional exposure on known and unknown claims.

We underwrite environmental and pollution coverage on a limited number of policies and underground storage tanks. We establish loss reserves to the extent that, in the judgment of management, the facts and prevailing law reflect an exposure for us.

Risk Factors by Line of Business in Loss Reserve Estimation

The following section details reserving considerations and loss and LAE risk factors for the lines of business representing most of our loss reserves. Each line of business may be present in multiple reportable segments. Each risk factor presented will have a different impact on required loss reserves. Also, risk factors can have offsetting or compounding effects on required loss reserves. For example, introduction and approval of a more expensive medical procedure may result in higher estimates for medical costs. But in the workers compensation context, the availability of that same medical procedure may enable workers to return to work more quickly, thereby lowering estimates for indemnity costs for that line of business. As a result, it usually is not possible to identify and measure the impact that a change in one discrete risk factor may have or construct a meaningful sensitivity expectation around it. We do not make explicit estimates of the impact on loss reserve estimates for the assumptions related to the risk factors described below.

Loss adjustment expenses used in connection with our loss reserves are comprised of both allocated and unallocated expenses. Allocated loss adjustment expenses generally relate to specific claim files. We often combine allocated loss adjustment expenses with losses for purposes of projecting ultimate liabilities. For some types of claims, such as asbestos, environmental, professional liability, and construction defect, allocated loss adjustment expenses consisting primarily of legal defense costs may be significant, sometimes exceeding the liability to indemnify claimants for losses. Unallocated loss adjustment expenses generally relate to the administration and handling of claims in the ordinary course of business. We typically calculate unallocated loss adjustment expense reserves using a percentage of unpaid losses for each line of business.

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Workers Compensation

Workers compensation is generally considered a long-tail coverage as it takes a relatively long period of time to finalize claims from a given accident year. Certain payments, such as initial medical treatment or temporary wage replacement for the injured worker, are generally disbursed quickly. Other payments may be made over the course of several years, such as awards for permanent partial injuries. Some payments continue to take place throughout the injured worker’s life, such as permanent disability benefits and on-going medical care. Although long-tail in nature, claims generally are not subject to long reporting lags, settlements are generally not complex and most of the liability exposure is characterized by high frequency and moderate severity. The largest reserve risks are generally associated with low frequency, high severity claims that require lifetime coverage for medical expense arising from a worker’s injury.

Examples of loss and LAE risk factors that can change over time and cause workers compensation loss reserves to fluctuate include, but are not limited to, the following:

Indemnity claims risk factors:

•Time required to recover from the injury;

•Degree of available transitional jobs;

•Degree of legal involvement;

•Changes in the interpretations and processes of the workers compensation commissions’ oversight of claim;

•Future wage inflation for U.S. states that index benefits;

•Changes in the administrative policies of second injury funds; and

•Changes in benefit levels.

Medical claims risk factors:

•Changes in the cost of medical treatments, including prescription drugs, and underlying fee schedules;

•Frequency of visits to health providers;

•Number of medical procedures given during visits to health providers;

•Types of health providers used;

•Type of medical treatments received;

•Use of preferred provider networks and other medical cost containment practices;

•Availability of new medical processes and equipment;

•Changes in life expectancy;

•Changes in the use of pharmaceutical drugs; and

•Degree of patient responsiveness to treatment.

Book of Business risk factors:

•Injury type mix;

•Changes in underwriting standards; and

•Changing product mix based on insured demand.

Short-tail Specialty Lines

Short-tail specialty lines of business include several different coverages, such as marine and surety. They are considered shorter-tail lines as claims are generally known relatively quickly. However, it can take a longer period of time to finalize and resolve all claims from a given year for lines such as surety. Examples of loss and LAE risk factors associated with Specialty claims that can change over time and result in adjustments to loss reserves include, but are not limited to, the following:

Claims risk factors:

•Changes in claim handling procedures;

•Changes in policy provisions or court interpretation of such provisions;

•Changes in the economy; and

•Changes in inflation.

Book of Business risk factors:

•Incidence of catastrophes;

•Changes in policy provisions (e.g., deductibles, policy limits, endorsements);

•Changes in underwriting standards; and

•Product mix (e.g., size of account, class, industries insured, jurisdiction mix).

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Commercial Automobile Liability

The commercial automobile liability line of business is a long-tail coverage, mainly due to exposures arising out of bodily injury claims. Losses in this line associated with bodily injury claims generally are more difficult to accurately estimate and take longer to resolve. Claim reporting lags also can occur. Examples of loss and LAE risk factors that can change over time and result in adjustments to commercial automobile liability loss reserves include, but are not limited to, the following:

Claims risk factors:

•Trends in jury awards;

•Changes in the underlying court system;

•Changes in case law;

•Litigation trends;

•Subrogation opportunities;

•Changes in claim handling procedures;

•Frequency of visits to health providers;

•Types of medical treatments received;

•Changes in cost of medical treatments; and

•Degree of patient responsiveness to treatment.

Book of Business risk factors:

•Changes in policy provisions (e.g., deductibles, policy limits, endorsements, etc.);

•Changes in mix of insured vehicles;

•Changes in underwriting standards;

•Gasoline prices; and

•Changes in macroeconomic factors including but not limited to unemployment statistics.

Property

Property is considered a short-tail line as claims are generally known quickly and resolved in a short period of time. However, the time to resolve a claim can be longer when the claim involves more difficult to resolve components such as business interruption losses or when the business is written on an excess basis. Examples of loss and LAE risk factors associated with Property claims that can change over time and result in adjustments to loss reserves include, but are not limited to, the following:

Claims risk factors:

•Changes in claim handling procedures;

•Changes in the cost of building materials;

•Changes in the cost of labor available to repair damages;

•Disruptions to the supply chain;

•Demand surge related to catastrophe events;

•Changes in policy provisions or court interpretation of such provisions; and

•Changes in inflation.

Book of Business risk factors:

•Incidence of catastrophes;

•Geographical concentration of risks;

•Changes in policy provisions (e.g., deductibles, policy limits, endorsements);

•Changes in underwriting standards; and

•Product mix (e.g., size of account, class, industries insured, jurisdiction mix).

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Professional Lines

Professional Lines, including errors and omissions and directors and officers coverages, are considered long-tail lines of business, as it takes a relatively long period of time to finalize and resolve all claims from a given year. The speed at which claims are received and then resolved is a function of the specific coverage provided, jurisdiction in which the claim is located and specific policy provisions. There are numerous components underlying the Professional line. Some of these have relatively moderate payout patterns (such as primary coverage written on a claims-made basis) with most of the claims for a given year closed within five to seven years. Others, including business written on an excess basis, can be characterized by longer time lags for payment of claims. Allocated loss adjustment expenses in this line consist primarily of legal costs and may exceed the total amount of the indemnity loss on some claims.

Examples of loss and LAE risk factors associated with Professional Lines claims that can change over time and result in adjustments to loss reserves include, but are not limited to, the following:

Claims risk factors:

•Changes in claim handling procedures;

•Changes in policy provisions or court interpretation of such provisions;

•New or expanded theories of liability;

•Trends in jury awards;

•Changes in the propensity to sue, in general and with specificity to particular issues;

•Changes in statutes of limitations;

•Changes in the underlying court system, including potential impacts from shutdowns associated with COVID-19;

•Changes in tort law;

•Fluctuations in stock prices;

•Lawsuit abuse and third-party litigation finance;

•Changes in the propensity to litigate rather than settle a claim;

•Shifts in lawsuit mix between U.S. federal and state courts; and

•Changes in inflation.

Book of Business risk factors:

•Changes in policy provisions (e.g., deductibles, policy limits, endorsements);

•Changes in underwriting standards; and

•Product mix (e.g., size of account, class, industries insured, jurisdiction mix).

General Liability

General liability is considered a long-tail line of business, as it takes a relatively long period of time to finalize and resolve all claims from a given accident year. The speed at which claims are received and then resolved is a function of the specific coverage provided, jurisdiction in which the claim is located and specific policy provisions. There are numerous components underlying the general liability product line. Some of these have relatively moderate payout patterns with most of the claims for a given accident year closed within five to seven years, while others, including claims alleging construction defect, are characterized by extreme time lags for both reporting and payment of claims. In addition, this line includes asbestos and environmental claims, which are reviewed separately because of the unique character of these exposures. Allocated loss adjustment expenses in this line consist primarily of legal costs and may exceed the total amount of the indemnity loss on some claims.

Major factors contributing to uncertainty in loss reserve estimates for general liability include reporting lags (i.e., the length of time between the event triggering coverage and the actual reporting of the claim), the number of parties involved in the underlying tort action, events triggering coverage that are spread over multiple time periods, the inability to know in advance what actual indemnity costs will be associated with an individual claim, the potential for disputes over whether claims were reasonably foreseeable and intended to be covered at the time the contracts were underwritten and the potential for mass tort claims and class actions. Generally, claims with a longer reporting lag time are characterized by greater inherent risk of uncertainty.

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Examples of loss and LAE risk factors associated with general liability claims that can change over time and result in adjustments to loss reserves include, but are not limited to, the following:

Claims risk factors:

•Changes in claim handling procedures;

•Changes in policy provisions or court interpretation of such provisions;

•New or expanded theories of liability;

•Trends in jury awards;

•Changes in the propensity to sue, in general and with specificity to particular issues;

•Changes in statutes of limitations;

•Changes in the underlying court system;

•Changes in tort law;

•Frequency of visits to health care providers;

•Types of medical treatments received;

•Shifts in lawsuit mix between U.S. federal and state courts; and

•Changes in inflation.

Book of Business risk factors:

•Changes in policy provisions (e.g., deductibles, policy limits, endorsements);

•Changes in underwriting standards; and

•Product mix (e.g., size of account, class, industries insured, jurisdiction mix).

Impact of changes in key assumptions on reserve volatility

We estimate reserves using a variety of methods, assumptions and data elements. The reserve estimation process includes explicit assumptions about a number of factors in the internal and external environment. Across most lines of business, the most important assumptions are future loss development factors applied to paid or reported losses to date. The trend in loss costs is also a key assumption, particularly in the most recent accident years, where loss development factors are less credible.

The following discussion includes disclosure of possible variations from current estimates of loss reserves due to a change in certain key assumptions. Each of the impacts described below is estimated individually, without consideration for any correlation among other key assumptions or among lines of business. Therefore, it could be misleading to take each of the amounts described below and add them together in an attempt to estimate volatility for reserves in total. The estimated variations in reserves due to changes in key assumptions discussed below are a reasonable estimate of possible variations that may occur in the future, likely over a period of several calendar years. It is important to note that the variations discussed herein are not exhaustive and are not meant to be a worst or best case scenario, and therefore, it is possible that future variations may be more than amounts discussed below.

Recorded gross reserves for Casualty Lines were $2,416.6 million as of December 31, 2024. For Casualty losses relating to ongoing operations, loss development patterns are a key assumption for this line of business. Historically, assumptions on loss development patterns have been impacted by, among other things, changes in inflation, and emergence of new types of claims (e.g., construction defect claims) or a shift in the mixture between smaller, more routine claims and larger, more complex claims. We have reviewed the historical variation in loss development patterns for Casualty losses deriving from continuing operations. If the incurred loss development patterns change by 20%, a change that we have experienced in the past and that management considers possible, the estimated net reserve could change by $200.0 million, in either direction.

Specialty reserves are also affected by loss development pattern assumptions. Historically, assumptions on loss development patterns have been impacted by, among other things, movements on individual claims, and economic conditions. We have reviewed the historical variation in loss development patterns for Specialty losses. Recorded gross reserves for Specialty were $643.1 million as of December 31, 2024. If the incurred development patterns underlying our net reserves for this line of business change by 20%, a change that we have experienced in the past and that management considers possible, the estimated net reserve could change by $45.0 million, in either direction.

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Similar to Casualty and Specialty Lines, reserves for Run-off Lines are affected by loss development pattern assumptions. Historically, assumptions on loss development patterns have been impacted by, among other things, changes in inflation, movements on individual claims, emergence of new types of claims, and changes in the mixture between smaller, more routine claims and larger, more complex claims. We have reviewed the historical variation in loss development patterns for Run-off Lines losses. Recorded gross reserves for Run-off Lines were $2,738.9 million, with approximately 2% of that amount related to run-off asbestos and environmental exposures as of December 31, 2024. If the incurred development patterns underlying our net reserves for this line of business change by 20%, a change that we have experienced in the past and that management considers possible, the estimated net reserve could change by $165.0 million, in either direction.

With respect to asbestos and environmental general liability losses, we wrote several different categories of insurance contracts that may cover asbestos and environmental claims. First, we wrote primary policies providing the first layer of coverage in an insured’s general liability insurance program. Second, we wrote excess policies providing higher layers of general liability insurance coverage for losses that exhaust the limits of underlying coverage. Third, we acted as a reinsurer assuming a portion of those risks from other insurers underwriting primary, excess and reinsurance coverage. Fourth, we participated in the London Market, underwriting both direct insurance and assumed reinsurance business. With regard to both environmental and asbestos claims, significant uncertainty limits the ability of insurers and reinsurers to estimate the ultimate reserves necessary for unpaid losses and related expenses. Traditional actuarial reserving techniques cannot reasonably estimate the ultimate cost of these claims, particularly during periods where theories of law are in a state of continued uncertainty. The degree of variability of reserve estimates for these types of exposures is significantly greater than for other more traditional general liability exposures, and as such, we believe there is a high degree of uncertainty inherent in the estimation of asbestos and environmental loss reserves.

In the case of the reserves for asbestos exposures, factors contributing to the high degree of uncertainty include inadequate loss development patterns, plaintiffs’ expanding theories of liability, the risks inherent in major litigation and inconsistent emerging legal outcomes. Furthermore, over time, insurers, including Argo Group, have experienced significant changes in the rate at which asbestos claims are brought, claims experience of particular insureds and value of claims, making predictions of future exposure from past experience uncertain. For example, in the past, insurers in general, including Argo Group, have experienced an increase in the number of asbestos-related claims due to, among other things, plaintiffs’ increased focus on new and previously peripheral defendants and an increase in the number of insureds seeking bankruptcy protection as a result of asbestos-related liabilities. Plaintiffs and insureds have sought to use bankruptcy proceedings, including “pre-packaged” bankruptcies, to accelerate the funding and amount of loss payments by insurers. In addition, some policyholders continue to assert new classes of claims for coverage to which an aggregate limit of liability may not apply. Further uncertainties include insolvencies of other insurers and reinsurers, delays in the reporting of new claims by insurers and reinsurers and unanticipated issues influencing our ability to recover reinsurance for asbestos and environmental claims. Management believes these issues are not likely to be resolved in the near future.

In the case of the reserves for environmental exposures, factors contributing to the high degree of uncertainty include expanding theories of liability and damages, the risks inherent in major litigation, inconsistent decisions concerning the existence and scope of coverage for environmental claims and uncertainty as to the monetary amount being sought by the claimant from the insured.

The reporting pattern for assumed reinsurance claims, including those related to asbestos and environmental claims is much longer than for direct claims. In many instances, it takes months or years to determine that the policyholder’s own obligations have been met and how the reinsurance in question may apply to such claims. The delay in reporting reinsurance claims and exposures adds to the uncertainty of estimating the related reserves.

The factors discussed above affect the variability of estimates for asbestos and environmental reserves including assumptions with respect to the frequency of claims, average severity of those claims settled with payment, dismissal rate of claims with no payment and expense to indemnity ratio. The uncertainty with respect to the underlying reserve assumptions for asbestos and environmental adds a greater degree of variability to these reserve estimates than reserve estimates for more traditional exposures. The process of estimating asbestos and environmental reserves remains subject to a wide variety of uncertainties. Due to these uncertainties, further developments could cause us to change our estimates of our asbestos and environmental reserves, and the effect of these changes could be material to our consolidated operating results, financial condition and liquidity.

Loss Reserve Estimation Variability

After reviewing the output from various loss reserving methodologies, we select our best estimate of reserves. We believe that the aggregate loss reserves at December 31, 2024 were adequate to cover claims for losses that have occurred, including both known claims and claims yet to be reported. As of December 31, 2024, we recorded gross loss reserves of $5,798.6 million and loss reserves net of reinsurance of $3,003.9 million. Although our financial reports reflect our best estimate of reserves, it is unlikely that the final amount paid will exactly equal our best estimate.

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In establishing our best estimate for reserves, we consider facts currently known and the present judicial and legislative environment among other factors. However, given the expansion of coverage and liability by the courts, legislation in the recent past and possibility of similar interpretations in the future, particularly with regard to asbestos and environmental claims, additional loss reserves may develop in future periods. These potential increases cannot be reasonably estimated at the present time. Any increases could have an adverse impact on future operating results, liquidity, risk-based capital ratios and ratings assigned to our insurance subsidiaries by the nationally recognized insurance rating agencies.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

We believe we are principally exposed to four types of market risk: interest rate risk, credit risk, equity price risk and foreign currency risk.

Interest Rate Risk

Our primary market risk exposure is the exposure of our fixed maturity investment portfolio to interest rate risk and the changes in interest rates. Fluctuations in interest rates have a direct impact on the fair value of these securities. As interest rates rise, the fair value of our fixed maturity portfolio falls and the converse is also true. We manage interest rate risk through an active portfolio management strategy that involves the selection of investments with appropriate characteristics such as duration, yield, currency and liquidity that are tailored to the anticipated cash outflow characteristics of our liabilities. A significant portion of our investment portfolio matures each year, allowing for reinvestment at current market rates. The model duration of the assets comprising our fixed maturity investment portfolio was 2.66 years and 2.68 years at December 31, 2024 and 2023, respectively.

Based upon a pricing model, we determine the estimated change in fair value of our fixed maturity and short-term investments assuming immediate parallel shifts in the U.S. Treasury yield curve, while keeping spreads between the individual securities and treasuries static. The following tables present the estimated pre-tax impact on the fair value of our fixed maturity and short-term investments resulting from changes of 50 to 100 basis points in market rates at December 31, 2024 and 2023.


December 31, 2024	-100		-50		Base		50		100
Fair value (in millions)	$	2,296.4	$	2,268.8	$	2,241.2	$	2,213.5	$	2,185.9
Gain (loss) (in millions)	$	55.2	$	27.6	$	—	$	(27.7)	$	(55.3)


December 31, 2023	-100		-50		Base		50		100
Fair value (in millions)	$	3,092.1	$	3,053.5	$	3,014.9	$	2,976.4	$	2,937.8
Gain (loss) (in millions)	$	77.1	$	38.6	$	—	$	(38.6)	$	(77.1)

Credit Risk

We have exposure to credit risk on losses recoverable from reinsurers and receivables from insureds. Our controls to mitigate this risk include limiting our exposure to any one counterparty, evaluating the financial strength of our reinsurers, generally requiring minimum credit ratings and in certain cases receiving collateral from our reinsurers and insureds, and cancelling policies for insureds due to lack of payment.

We also have exposure to credit risk in our investment holdings. Our risk-management strategy and investment policy attempts to mitigate this risk by primarily investing in debt instruments of high credit quality issuers, limiting credit concentration, monitoring the credit quality of issuers and counterparties and diversifying issuers. The weighted average rating of our fixed maturity investments was A and A+ with 97.0% and 94.0% rated investment grade or better (BBB- or higher) at December 31, 2024 and 2023, respectively.

We review our investments to identify and evaluate those that may have credit impairments on a quarterly basis, considering the historical performance of the security, available market information, and credit ratings, among other things. For fixed maturity securities, the review includes consideration of current ratings and actions of major rating agencies (Standard & Poor's, Moody's and Fitch). If a security has two ratings, the lower rating is used. If a security has three ratings, the middle rating is used. The following table reflects the credit quality of our fixed maturity portfolio at December 31, 2024:

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Other Fixed Maturities	Cost		Fair Value
AAA	$	233.4	$	234.4
AA	96.8		98.1
A	422.4		430.0
BBB	546.8		557.0
BB/B	31.1		31.7
CCC and Below	4.9		4.6
Unrated	6.8		7.0
Other Fixed Maturities	$	1,342.2	$	1,362.8

Structured Securities	Cost		Fair Value
AAA	$	455.4	$	465.1
AA	86.0		89.7
A	101.4		103.3
BBB	33.9		34.4
BB/B	12.7		13.3
CCC and Below	0.4		0.4
Unrated	—		—
Structured Securities	$	689.8	$	706.2

Total Fixed Maturities	Cost		Fair Value
AAA	$	688.8	$	699.4
AA	182.8		187.8
A	523.8		533.2
BBB	580.7		591.5
BB/B	43.8		45.0
CCC and Below	5.3		5.0
Unrated	6.8		7.0
Total Fixed Maturities	$	2,032.0	$	2,068.9

Our portfolio includes alternative investments with a carrying value at December 31, 2024 and 2023 of $577.4 million and $311.0 million (14.1% and 8.9% of total invested assets) respectively. These assets may invest in both long and short equities, corporate debt securities, currencies, real estate, commodities and derivatives. We attempt to mitigate our risk by selecting managers with extensive experience, proven track records and robust controls and processes. We also mitigate our risk by diversifying through multiple managers and different types of assets and asset classes.

Mortgage loans add portfolio diversification. These assets typically afford credit protections through covenants and deeper due diligence given information access. We also monitor debt service coverage ratios and loan-to-value ratios in our assessment of credit risk and exposure.

Equity Price Risk

We hold a diversified portfolio of equity securities with a fair value of $413.0 million and $10.7 million (10.0% and 0.3% of total invested assets) at December 31, 2024 and 2023, respectively. Our equity securities are exposed to equity price risk which is defined as the potential for loss in fair value due to a decline in equity prices. We believe our diversified portfolio of equity securities among various industries, market segments and company sizes mitigates our exposure to equity price risk as well as limited investments in equity securities.

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Foreign Currency Risk

We have exposure to foreign currency risk in our insurance contracts and invested assets and, prior to the sale of AUA, a portion of our debt. We attempt to manage our foreign currency risk by seeking to match our liabilities under insurance and reinsurance contracts that are payable in currencies other than the U.S. Dollar with cash and investments that are denominated in such currencies. We also use foreign exchange forward contracts to attempt to mitigate this risk. For the year ended December 31, 2024 and for the period November 16, 2023 through December 31, 2023 (Successor), we recognized $9.2 million and $4.5 million of gross gains, and $5.3 million and $3.6 million of gross losses from foreign exchange contracts, for a net gain of $3.9 million and $0.9 million, respectively. For the period January 1, 2023 through November 15, 2023 (Predecessor) and for the year ended December 31, 2022, we recognized $13.5 million and $33.9 million of gross gains, and $12.4 million and $47.2 million of gross losses from foreign exchange contracts, for a net gain (loss) of $1.1 million and $13.3 million, respectively. The net gains are recorded in the Net investment and other gains (losses) in the Condensed Consolidated Statements of Income (Loss). With the divestitures executed and announced in 2023, our exposure to foreign currency risk has decreased.

Item 8. Financial Statements and Supplementary Data

The Reports of Independent Registered Public Accounting Firm, Consolidated Financial Statements of Argo Group and supplementary financial statement schedules called for by this Item 8 are included in this report beginning on page F-1 and are incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A. Controls and Procedures

Argo Group, under the supervision and with the participation of its management, including the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our “disclosure controls and procedures” as defined in Rule 13a-15(e) under the Exchange Act as of the end of the period covered by this report. In designing and evaluating these disclosure controls and procedures, Argo Group and its management recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating and implementing possible controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of December 31, 2024, at the reasonable assurance level to ensure that information required to be disclosed by Argo Group in the reports filed or submitted under the Exchange Act are recorded and reported within the time periods specified in the SEC’s rules and forms.

Management’s Report on Internal Control Over Financial Reporting

The management of Argo Group is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed under the supervision of the Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles.

As of December 31, 2024, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in “Internal Control—Integrated Framework,” issued by the Committee of Sponsoring Organizations (“COSO”) of the Treadway Commission (2013 framework). As a result of the assessment, management determined that we maintained effective internal control over financial reporting as of December 31, 2024, based on those criteria.

Change in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended December 31, 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. In addition, since we are a non-accelerated filer, our independent registered public accounting firm is not required to attest to the effectiveness of our internal control over financial reporting as long as we remain a non-accelerated filer.

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Item 9B. Other Information

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

Omitted pursuant to General Instruction I of Form 10-K.

Item 11. Executive Compensation

Omitted pursuant to General Instruction I of Form 10-K.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Omitted pursuant to General Instruction I of Form 10-K.

Item 13. Certain Relationships and Related Transactions and Director Independence

Omitted pursuant to General Instruction I of Form 10-K.

Item 14. Principal Accountant Fees and Services

Deloitte & Touche LLP (“Deloitte”) performed services as the Company’s principal accountants for the period of June 20, 2024 – December 31, 2024. The fees incurred in 2024 for services provided by Deloitte to the Company were as follows:


Category	2024		2023
Audit Fees (1)	$	5,221,320	N/A

Tax Fees (2)	58,800		N/A

Total	$	5,280,120	N/A

(1) “Audit Fees” include the aggregate fees incurred for professional services rendered by Deloitte for the review of the Company’s quarterly reports for 2024 and its fees for the audit of the Company’s annual consolidated financial statements. “Audit Fees” also include fees incurred for professional services related to other statutory and regulatory filings.

(2) “Tax Fees” are fees incurred for Deloitte’s tax services, which include fees for transfer pricing.

Audit & Risk Management Committee Pre-Approval Process

All services provided by Deloitte and KPMG in 2024 and 2023, which required pre-approval were specifically pre-approved by the Audit & Risk Management Committee of the Company’s Board or the Brookfield Wealth Solutions Ltd. Audit Committee (as applicable), as required under its respective charter then in effect. The Audit & Risk Management Committee of the Company’s Board previously adopted an Audit Committee Pre-Approval Policy, which set forth the procedures the Audit & Risk Management Committee follows to pre-approve services to be performed by the Company’s independent auditor. Pursuant to such policy, the Audit & Risk Management Committee delegates to the Chair of the Audit & Risk Management Committee authority to grant specific pre-approval on a case-by-case basis, subject to certain dollar limit. The Chair of the Audit & Risk Management Committee is required to report any pre-approval decisions to the Audit & Risk Management Committee at or prior to its next scheduled meeting. The Audit & Risk Management Committee and the Chair of the Audit & Risk Management Committee may not delegate to management the Audit & Risk Management Committee’s responsibilities to pre-approve services performed by the Company’s independent auditor.

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PART IV

Item 15. Exhibits, Financial Statement Schedules

(a)1. Financial Statements

Selected Financial Data

Reports of Independent Registered Public Accounting Firm

Consolidated Balance Sheets—December 31, 2024 (Successor) and 2023 (Successor)

Consolidated Statements of Income (Loss)

For the year ended 2024 (Successor), for the period November 16, 2023 through December 31, 2023 (Successor), January 1, 2023 through November 15, 2023 (Predecessor), and for the year ended 2022 (Predecessor)

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

(a)2. Financial Statement Schedules

Schedule II—Condensed Financial Information of Registrant

Balance Sheets—December 31, 2024 (Successor) and 2023 (Successor)

Statements of Income (Loss)—For the year ended 2024 (Successor), for the period November 16, 2023 through December 31, 2023 (Successor), January 1, 2023 through November 15, 2023 (Predecessor), and for the year ended 2022 (Predecessor)

Schedule III—Supplemental Insurance Information

Schedule V—Valuation and Qualifying Accounts

For the Years Ended December 31, 2024 (Successor), 2023 (Successor) and 2022 (Predecessor)

Schedule VI—Supplemental Information for Property-Casualty Insurance Companies

All other schedules and notes specified under Regulation S-X are omitted because they are either not applicable, not required or the information called for therein appears in response to the items of Form 10-K or in the Consolidated Financial Statements and the related Notes to Consolidated Financial Statements of Argo Group and its subsidiaries listed on the above index.

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(a)3. Exhibits

The following exhibits are numbered in accordance with Item 601 of Regulation S-K and, except as noted, are filed herewith.


Exhibit Number						Description
2.1						Agreement and Plan of Merger, dated as of February 8, 2023, by and among Argo Group International Holdings, Ltd., Brookfield Reinsurance Ltd. and BNRE Bermuda Merger Sub Ltd. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 8, 2023).

3.1						Amended and Restated Memorandum of Association of Argo Group International Holdings, Ltd., formerly PXRE Group Ltd. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 8, 2007).

3.2						Amended and Restated Bye-Laws of Argo Group International Holdings, Ltd. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 20, 2020).

3.3						Amended and Restated Certificate of Incorporation of Argo Group International Holdings, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 25, 2024)

3.4						Amended and Restated Bylaws of Argo Group International Holdings, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 25, 2024).

4.1						Form of Senior Indenture among Argo Group US, Inc., as Issuer, Argo Group International Holdings, Ltd., as Guarantor, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.3 of the Company’s registration statement on Form S-3 filed with the Securities and Exchange Commission on September 18, 2012).

4.2						Form of First Supplemental Indenture Supplementing that Certain Senior Indenture among Argo Group US, Inc., as Issuer, Argo Group International Holdings, Ltd., as Guarantor, and Wells Fargo Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.2 of the Company’s Form 8-A filed with the Securities and Exchange Commission on September 21, 2012).

4.3						Form of 6.500% Senior Notes due 2042, included as Exhibit A to Form of First Supplemental Indenture referenced above in Exhibit 4.2 (incorporated by reference to Exhibit 4.2 of the Company’s Form 8-A filed with the Securities and Exchange Commission on September 21, 2012).

4.4						Form of 6.500% Senior Notes due 2042, dated December 11, 2023 (incorporated by reference to Exhibit 4.4 of the Company's Form 10-K filed with the Securities and Exchange Commission on March 19, 2024).

4.5						Certificate of Designations of 7.00% Resettable Fixed Rate Preference Shares, Series A, of Argo Group International Holdings, Ltd. (incorporated by reference to Exhibit 4.4 of the Company's Form 10-K filed with the Securities and Exchange Commission on March 6, 2023).

4.6						Certificate of Designations of 7.00% Resettable Fixed Rate Preferred Stock, Series A, of Argo Group International Holdings, Inc. (incorporated by reference to Exhibit 4.6 of the Company’s Form 10-K filed with the Securities and Exchange Commission on March 19, 2024).

4.7						Form of Share Certificate evidencing 7.00% Resettable Fixed Rate Preference Share, Series A, of Argo Group International Holdings, Ltd. (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 9, 2020).

4.8						Form of Stock Certificate evidencing 7.00% Resettable Fixed Rate Preferred Stock, Series A, of Argo Group International Holdings, Inc. (incorporated by reference to Exhibit 4.8 of the Company’s Form 10-K filed with the Securities and Exchange Commission on March 19, 2024).

4.9						Deposit Agreement, dated as of July 9, 2020, by and among Argo Group International Holdings, Ltd., American Stock Transfer & Trust Company, LLC, as Depositary, and the Holders from time to time of the Depositary Receipts (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 9, 2020).

4.10						Amendment No. 1 to Deposit Agreement, dated as of April 19, 2024, by and between Argo Group International Holdings, Inc. and Equiniti Trust Company, LLC.

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Exhibit Number						Description
4.11						Form of Depositary Receipt for Depositary Shares, included as part of Deposit Agreement referenced above in Exhibit 4.9 (incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 9, 2020).

4.12						Form of Depositary Receipt for Depositary Shares, included as part of Amendment No. 1 to Deposit Agreement referenced above in Exhibit 4.10.

4.13						Description of Securities.

10.1						Deed Poll Guarantee of Argo Group International Holdings, Ltd., formerly PXRE Group Ltd., in respect of PXRE Reinsurance Ltd., dated as of September 1, 2002 (incorporated by reference to Exhibit 10.3a to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 12, 2002).

10.2						$325,000,000 Credit Agreement, dated as of November 2, 2018, by and among Argo Group International Holdings, Ltd., Argo Group US, Inc., Argo International Holdings Limited and Argo Underwriting Agency Limited, as Borrowers, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Wells Fargo Bank, N.A. and Bank of America, N.A., as Co-Syndication Agents, and U.S. Bank National Association and HSBC Bank USA, N.A., as Co-Documentation Agents (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 6, 2018).

10.3						Amendment No. 1 to the Credit Agreement, dated March 2, 2022, by and among Argo Group International Holdings, Ltd., Argo Group US, Inc., Argo International Holdings Limited and Argo Underwriting Agency Limited, as Borrowers, and JPMorgan Chase Bank, N.A., individually and as Administrative Agent, and the other financial institutions signatory thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 4, 2022).

10.4						Amendment No. 2 to the Credit Agreement, dated July 15, 2022, by and among Argo Group International Holdings, Ltd., Argo Group US, Inc., Argo International Holdings Limited and Argo Underwriting Agency Limited, as Borrowers, and JPMorgan Chase Bank, N.A., individually and as Administrative Agent, and the other financial institutions signatory thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Committee on July 21, 2022).

10.5						Amendment No. 3 to the Credit Agreement, dated December 20, 2022, by and among Argo Group International Holdings, Ltd., Argo Group US, Inc., Argo International Holdings Limited and Argo Underwriting Agency Limited, as Borrowers, and JPMorgan Chase Bank, N.A., individually and as Administrative Agent, and the other financial institutions signatory thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 22, 2022).

10.6						Amendment No. 4 to the Credit Agreement, dated July 14, 2023, by and among Argo Group International Holdings, Ltd., Argo Group US, Inc., as Borrowers, and JPMorgan Chase Bank, N.A., individually and as Administrative Agent, and the other financial institutions signatory thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 17, 2023).

10.7						Amendment No. 5 to the Credit Agreement, dated July 24, 2023, by and among Argo Group International Holdings, Ltd., Argo Group US, Inc., as Borrowers, and JPMorgan Chase Bank, N.A., individually and as Administrative Agent, and the other financial institutions signatory thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 24, 2023).

10.8						Amendment No. 6 to the Credit Agreement, dated February 21, 2024, by and among Argo Group International Holdings, Inc. and Argo Group US, Inc., as Borrowers, JPMorgan Chase Bank, N.A., individually as a lender and as Administrative Agent, and the other financial institutions signatory thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 26, 2024).

10.9						Argo Group International Holdings, Ltd. Employee Share Purchase Plan, amended and restated effective as of May 3, 2016 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 5, 2016).*

10.10						Argo Group International Holdings, Ltd. 2014 Long-Term Incentive Plan (incorporated by reference to Appendix I to the Company’s Proxy Statement for the 2014 Annual General Meeting of Shareholders filed with the Securities and Exchange Commission on March 7, 2014).*

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Exhibit Number						Description

10.11						Argo Group International Holdings, Ltd. 2019 Omnibus Incentive Plan (incorporated by reference to Exhibit 99.1 to the Company’s Registration Statement on Form S-8 filed with the Securities and Exchange Commission on June 25, 2019).*


10.12						Argo Group International Holdings, Ltd. Executive Severance Plan (incorporated by reference to Exhibit 10.6 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2021).*

10.13						Form of Restricted Share Agreement (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 8, 2014).*

10.14						Form of Non-Employee Director Restricted Stock Agreement (incorporated by reference to the Exhibit 10.12 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2021).*

10.15						Form of Incentive Award Agreement (Restricted Stock Awards and Cash Awards) - 2019 Omnibus Incentive Plan (incorporated by reference to the Exhibit 10.13 to the Company’s Form 10-K filed with the Securities and Exchange Commission on March 15, 2021).*

10.16						Form of Employee Restricted Stock Award Agreement (incorporated by reference to the Exhibit 10.11 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 16, 2022).*

10.17						Form of U.S. Named Executive Officer Retention Award Agreement (incorporated by reference to the Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 6, 2022).*

10.18						Argonaut Supplemental Executive Retirement Plan and subsequent amendments thereto dated each of September 2009, April 2010, and September 2010 (incorporated by reference to the Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 6, 2022).*

10.19						Executive Employment Agreement, effective as of February 18, 2020, by and between Argo Group International Holdings, Ltd. and Kevin J. Rehnberg (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 13, 2020)*

10.20						Separation and Release Agreement by and between Kevin J. Rehnberg and Argo Group International Holdings, Ltd. dated June 23, 2022 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 23, 2022).*

10.21						Executive Employment Agreement, effective as of April 26, 2019, by and between Argo Group International Holdings, Ltd. and Jay S. Bullock (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 29, 2019).*

10.22						Separation and Transition Agreement and General Release, dated as of March 23, 2021, by and between Argo Group International Holdings, Ltd. and Jay S. Bullock (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 25, 2021).*

10.23						Argo Group International Holdings, Ltd. Executive Severance Plan, effective January 1, 2021, amended and restated April 26, 2022 (incorporated by reference to the Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 6, 2022).*

10.24						Service Agreement, dated as of February 5, 2021, by and between Argo Management Services Limited and Scott Kirk (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 8, 2021).*

10.25						Retention Letter and Extension of Service Agreement, dated May 5, 2022, by and between Scott Kirk and Argo Management Services Limited (incorporated by reference to the Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 6, 2022).*

10.26						Offer Letter, dated May 15, 2020, between Argonaut Management Services, Inc. and Allison D. Kiene (incorporated by reference to the Exhibit 10.23 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 16, 2022).*

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Exhibit Number						Description
10.27						Cooperation Agreement, dated as of December 31, 2019, by and among Argo Group International Holdings, Ltd., Voce Catalyst Partners LP, Voce Capital Management LLC, Voce Capital LLC and Voce Catalyst Partners New York LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 2, 2020).

10.28						Amended and Restated Loss Portfolio Transfer Reinsurance Agreement by and between Argonaut Insurance Company and Cavello Bay Reinsurance Limited dated November 9, 2022 with an effective date of January 1, 2022 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 9, 2022).**

10.29						Share Purchase Agreement for the sale and purchase of the entire issued share capital of Argo Underwriting Agency Limited dated September 8, 2022 by and between Argo International Holdings Limited as Seller and Ohio Farmers Insurance Company as Purchaser (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 9, 2022).**

10.30						Deed of Amendment, dated February 2, 2023, related to the Share Purchase Agreement for the sale and purchase of the entire issued share capital of Argo Underwriting Agency Limited dated September 8, 2022 by and between Argo International Holdings Limited as Seller and Ohio Farmers Insurance Company as Purchaser. (incorporated by reference to Exhibit 10.34 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 6, 2023).

10.31						Voting and Support Agreement, dated as of February 8, 2023, by and between Brookfield Reinsurance Ltd., Argo Group International Holdings, Ltd. and Voce Capital Management LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 8, 2023).

10.32						Restricted Stock Award Agreement dated June 23, 2022, by and between Argo Group International Holdings, Ltd. and Thomas A. Bradley (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 23, 2022).*

10.33						Stock Appreciation Right Agreement dated June 23, 2022, by and between Argo Group International Holdings, Ltd. and Thomas A. Bradley (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 23, 2022).*

10.34						Transaction Bonus Letter, dated March 3, 2023, by and between Argo Group International Holdings, Ltd. and Thomas A. Bradley (incorporated by reference to Exhibit 10.40 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 6, 2023).*

10.35						Offer Letter, by and between Argo Group International Holdings, Ltd. and Jessica Snyder, dated November 16, 2023 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 16, 2023).*

10.36						Retention Award Agreement, by and between Argo Group International Holdings, Ltd. and Jessica Snyder, dated November 16, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 16, 2023).*

10.37						Resignation Letter, by and between Argo Group International Holdings, Ltd. and Susan Comparato, dated November 16, 2023 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 16, 2023).*

10.38						Offer Letter, by and between Argo Group International Holdings, Ltd. and Christopher Donahue, dated November 16, 2023 (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 16, 2023).*

10.39						Letter Agreement, by and between Argo Group International Holdings, Ltd. and Scott Kirk, dated November 16, 2023 (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 16, 2023).*

10.40						Offer Letter, dated August 22, 2018, between Argonaut Management Services, Inc. and Susan Comparato. (incorporated by reference to Exhibit 10.38 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 6, 2023).*

10.41						Offer Letter, dated August 2, 2022, between Argonaut Management Services, Inc. and Jessica Snyder.(incorporated by reference to Exhibit 10.39 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 6, 2023).*

14						Code of Business Conduct and Ethics.

16.1						Letter of KPMG LLP, dated June 20, 2024 (incorporated by reference to Exhibit 16.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 24, 2024).

Table o f Contents


Exhibit Number						Description

19						Insider Trading Policy

22						Guaranteed Securities



31.1						Rule 13a—14(a)/15d – 14(a) Certification of Chief Executive Officer.

31.2						Rule 13a—14(a)/15d – 14(a) Certification of Chief Financial Officer.

32.1						Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2						Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

97.1						Clawback Policy of Argo Group International Holdings, Inc. and Argo Group US, Inc.

101.INS						XBRL Instance Document

101.SCH						XBRL Taxonomy Extension Schema Document

101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF						XBRL Taxonomy Extension Definition Linkbase Document

101.LAB						XBRL Taxonomy Extension Label Linkbase Document

101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document

104						Cover Page Interactive Data File (embedded within the Inline XBRL document).

*						Denotes a management contract or compensatory plan or arrangement.

**						Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.

						Certain instruments defining the rights of the holders of long-term debt of the Company and certain of its subsidiaries, none of which authorize a total amount of indebtedness in excess of 10% of the total assets of the Company and its subsidiaries on a consolidated basis, have not been filed as Exhibits on this report. The Company hereby agrees to furnish a copy of any of these agreements to the U.S. Securities and Exchange Commission upon request.

Item 16. Form 10-K Summary

None.

Table o f Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


ARGO GROUP INTERNATIONAL HOLDINGS, INC.

By						/s/ Christopher Donahue
						Christopher Donahue
						Chief Executive Officer

Date: March 25, 2025

Table o f Contents

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature

Title

Date

/s/ Christopher Donahue

Chief Executive Officer

(principal executive officer)

March 25, 2025

Christopher Donahue

/s/ David Chan

Chief Financial Officer
(principal financial and accounting officer)

March 25, 2025

David Chan

/s/ Jonathan Bayer

Director

March 25, 2025

Jonathan Bayer

/s/ Gregory Morrison

Director

March 25, 2025

Gregory Morrison

/s/ Anne Schaumburg

Director

March 25, 2025

Anne Schaumburg

/s/ Sachin Shah

Director

March 25, 2025

Sachin Shah

Table o f Contents

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


Report of Independent Registered Public Accounting Firm (Deloitte & Touche LLP, New York, NY, Auditor Firm ID: #34)			2
Report of Independent Registered Public Accounting Firm (KPMG LLP, New York, NY, Auditor Firm ID: #185)			4

Consolidated Financial Statements:
Consolidated Balance Sheets			5
Consolidated Statements of Income (Loss)			6
Consolidated Statements of Comprehensive Income (Loss)			8
Consolidated Statements of Stockholders’ Equity			9
Consolidated Statements of Cash Flows			11
Notes to Consolidated Financial Statements			13
1. Business and Significant Accounting Policies			13
2. Recent Acquisitions, Disposals & Other Transactions			21
3. Investments			23
4. Allowance for Credit Losses			37
5. Leases			38
6. Reinsurance			39
7. Reserves for Losses and Loss Adjustment Expenses			41

8. Long-term Debt			50
9. Disclosures about Fair Value of Financial Instruments			53
1 0 . Stockholders’ Equity			54
1 1 . Accumulated Other Comprehensive Income (Loss)			56


1 2 . Underwriting, Acquisition and General Expenses			57
1 3 . Income Taxes			57

14. Commitments and Contingencies			62
15. Segment Information			63
16. Statutory Accounting Principles			67
17. Insurance Assessments			69
18. Transactions with Related Parties			69
19. Subsequent Events			69
Supplementary Financial Statement Schedules:

Schedule II—Condensed Financial Information of Registrant			70
Schedule III—Supplementary Insurance Information			72
Schedule V—Valuation and Qualifying Accounts			74
Schedule VI—Supplementary Information for Property-Casualty Insurance Companies			75

F-1

Table o f Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Argo Group International Holdings, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Argo Group International Holdings, Inc. and subsidiaries (the “Company”) as of December 31, 2024, the related consolidated statement of income (loss), statement of comprehensive income (loss), statement of stockholders’ equity and statement of cash flows for the period ended December 31, 2024, and the related notes and financial statement schedules II, III, V, and VI (collectively, referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

The consolidated financial statements of the Company as of December 31, 2023 and for the period from November 16, 2023 through December 31, 2023 (the “2023 consolidated successor financial statements”), before the effects of the retrospective adjustments to the disclosures for a change in the composition of reportable segments and the adoption of Accounting Standards Update 2023-07—Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures (“ASU 2023-07”), discussed in Notes 1 and 15 to the financial statements, were audited by other auditors whose report, dated March 18, 2024, expressed an unqualified opinion on those statements. We also have audited the adjustments to the 2023 consolidated successor financial statements to retrospectively adjust the disclosures for a change in the composition of reportable segments and the adoption of ASU 2023-07 in 2024, as discussed in Notes 1 and 15 to the financial statements. Our procedures included (1) comparing the adjustment amounts of segment revenues, operating income, and assets to the Company's underlying analysis, (2) testing the mathematical accuracy of the reconciliations of segment amounts to the 2023 consolidated successor financial statements, and (3) comparing the amounts of significant segment expenses and other segment items to the Company’s underlying analysis. In our opinion, such retrospective adjustments are appropriate and have been properly applied. However, we were not engaged to audit, review, or apply any procedures to the 2023 consolidated successor financial statements of the Company other than with respect to the retrospective adjustments, and accordingly, we do not express an opinion or any other form of assurance on the 2023 consolidated successor financial statements taken as a whole.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

F-2

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Reserves for losses and loss adjustment expenses – estimates of the reserve for unpaid costs of losses and loss adjustment expenses – Refer to Notes 1 and 7 to the financial statements

Critical Audit Matter Description

The Company establishes reserves for the estimated total unpaid costs of losses and loss adjustment expenses, for the claims that have been reported as well as claims that have been incurred but not reported. The reserve for unpaid costs of losses and loss adjustment expenses is included within Reserves for losses and loss adjustment expenses in the consolidated balance sheet. Reserves for losses and loss adjustment expenses are estimated based on the application of actuarial techniques and other projection methodologies considering internal and external variables such as past loss experience, current claims trends and prevailing social, economic and legal environments.

We identified the assessment of the Company’s estimate of the reserve for unpaid costs of losses and loss adjustment expenses as a critical audit matter as the estimate is subject to significant uncertainty. Complex auditor judgment and the involvement of actuarial professionals with specialized skills and knowledge were required to assess the methodologies and assumptions used to estimate the reserve for unpaid costs of losses and loss adjustment expenses. Specifically, key assumptions used by the Company to estimate the reserve for unpaid costs of losses and loss adjustment expenses involved significant measurement uncertainty, and included expected loss ratios, loss development factors, settlement patterns, and the weighting of actuarial methodologies.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the reserve for unpaid costs of losses and loss adjustment expenses included the following:

•We tested the effectiveness of controls related to the reserve for unpaid costs of losses and loss adjustment expenses, including management’s controls over the development, selection, and implementation of the methods and assumptions used in the actuarial estimates.

•We evaluated the methods and assumptions used by the Company to estimate the reserve for unpaid costs of losses and loss adjustment expenses by performing the following:

◦We tested the completeness and accuracy of the underlying data, on a sample basis, used to determine the assumptions for loss development patterns, including historical claims.

◦With the assistance of our actuarial specialists, we developed independent estimates for the reserve for unpaid costs of losses and loss adjustment expenses and compared our estimates to management’s estimates and assessed the consistency of management’s approach.

/s/ DELOITTE & TOUCHE LLP

New York, New York

March 25, 2025

We have served as the Company’s auditor since 2024.

F-3

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors

Argo Group International Holdings, Inc.:

Opinion on the Consolidated Financial Statements

We have audited, before the effects of the adjustments to retrospectively apply the change in segment accounting, and the adjustments to retrospectively apply the change in segment composition, as described in Note 1 and Note 15, the consolidated balance sheet of Argo Group International Holdings, Inc. and subsidiaries (the Company) as of December 31, 2023 (Successor), the related consolidated statements of income (loss), comprehensive income (loss), stockholders’ equity, and cash flows for the period from November 16, 2023 through December 31, 2023 (Successor), the period from January 1, 2023 through November 15, 2023 (Predecessor) and year ended December 31, 2022 (Predecessor), and the related notes and financial statement schedules II, III, V, and VI (collectively, the consolidated financial statements). The December 31, 2023 and December 31, 2022 consolidated financial statements before the effects of the adjustments described in Note 1 and Note 15 are not presented herein. In our opinion, the consolidated financial statements, before the effects of the adjustments to retrospectively apply the change in segment accounting, and the adjustments to retrospectively apply the change in segment composition, as described in Note 1 and Note 15, present fairly, in all material respects, the financial position of the Company as of December 31, 2023 (Successor), and the results of its operations and its cash flows for the period from November 16, 2023 through December 31, 2023 (Successor), the period from January 1, 2023 through November 15, 2023 (Predecessor) and year ended December 31, 2022 (Predecessor), in conformity with U.S. generally accepted accounting principles.

We were not engaged to audit, review, or apply any procedures to the adjustments to retrospectively apply the change in segment accounting, or the adjustments to retrospectively apply the change in segment composition, described in Note 1 and Note 15 and, accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied. Those adjustments were audited by other auditors.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ KPMG LLP

We served as the Company’s auditor from 2022 to 2024.

New York, New York

March 18, 2024

F-4

Table o f Contents

ARGO GROUP INTERNATIONAL HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(in millions, except number of shares and per share amounts)


	Successor
	As of		As of
	December 31, 2024		December 31, 2023
Assets
Investments:
Fixed maturities available-for-sale, at fair value (cost: $2,032.9 and $2,521.5, respectively; allowance for expected credit losses: $0.9 and $0.2, respectively)	$	2,068.9	$	2,585.4
Mortgage loans (cost: $210.1 and $144.8, respectively; allowance for expected credit losses: $1.2 and $0.2, respectively)	208.2		144.6
Private loans (cost: $577.3 and $—, respectively; allowance for expected credit losses: $4.4 and $—, respectively)	572.9		—
Equity securities, at fair value (cost: $396.3 and $11.7, respectively)	413.0		10.7
Other investments (cost: $577.4 and $311.0, respectively)	577.4		311.0
Short-term investments (cost: $254.1 and $429.0, respectively)	254.4		429.5
Total investments	4,094.8		3,481.2
Cash, restricted cash and cash equivalents	644.4		791.6
Accrued investment income	18.6		20.4
Premiums receivable	179.5		230.7
Reinsurance recoverables	3,053.2		2,959.3

Other intangible assets, net of accumulated amortization	139.3		180.6
Current income taxes receivable, net	21.6		53.1
Deferred tax asset, net	91.5		39.1
Deferred acquisition costs, net	52.1		7.2
Ceded unearned premiums	357.8		356.0
Operating lease right-of-use assets	47.6		51.2
Other assets	166.3		189.1
Value of business acquired, net of accumulated amortization	12.9		143.6

Total assets	$	8,879.6	$	8,503.1
Liabilities and Stockholders' Equity
Reserves for losses and loss adjustment expenses	$	5,798.6	$	5,544.5
Unearned premiums	798.8		916.6
Accrued underwriting expenses and other liabilities	54.3		73.9
Ceded reinsurance payable, net	158.7		192.7
Funds held	44.6		57.3
Senior unsecured fixed rate notes	128.8		128.0


Junior subordinated debentures	243.2		241.2


Operating lease liabilities	49.1		51.4

Total liabilities	7,276.1		7,205.6
Commitments and contingencies (Note 14)
Stockholders' equity:
Series A Preferred stock and additional paid-in capital ($1.00 par, 10,000 and 30,000,000 shares authorized, respectively; 6,000 shares issued; liquidation preference $25,000)	137.1		137.1
Common stock ($0.01 par and $1.00 par, respectively; 1,000 and 2,000,000,000 shares authorized, respectively; 13 and 1,056,638,730 shares issued, respectively)	—		1,056.6
Additional paid-in capital	1,592.4		51.1

Retained earnings (Accumulated deficit)	(157.7)		0.9
Accumulated other comprehensive income, net of taxes	31.7		51.8
Total stockholders' equity	1,603.5		1,297.5
Total liabilities and stockholders' equity	$	8,879.6	$	8,503.1

See accompanying notes.

F-5

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ARGO GROUP INTERNATIONAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(in millions, except number of shares and per share amounts)


	Successor				Predecessor
	For the Year Ended		Period from		Period from		For the Year Ended
	December 31, 2024		November 16, 2023 through December 31, 2023		January 1, 2023 through November 15, 2023		December 31, 2022

Premiums and other revenue:
Net earned premiums	$	1,089.8	$	162.3	$	1,225.9	$	1,740.4
Net investment income	249.8		28.6		121.3		129.8

Net investment and other gains (losses):
Net realized investment and other gains (losses)	11.6		0.1		(20.4)		(115.9)
Change in fair value recognized	14.2		(0.2)		(0.2)		3.1
Change in allowance for credit losses	(5.8)		(0.2)		(2.1)		(2.5)
Total net investment and other gains (losses)	20.0		(0.3)		(22.7)		(115.3)
Total revenue	1,359.6		190.6		1,324.5		1,754.9
Expenses:
Losses and loss adjustment expenses	1,018.3		94.2		1,043.2		1,166.9
Underwriting, acquisition and general expenses	477.0		77.2		419.0		670.7
Non-operating expenses	17.6		13.1		41.1		51.5
Interest expense	38.1		3.5		29.8		26.8
Fee and other (income) expense, net	(0.1)		(0.2)		(0.3)		(1.3)
Foreign currency exchange (gains) losses	(1.0)		0.6		1.8		(5.0)
Impairment of goodwill and intangible assets	—		—		—		28.5
Total expenses	1,549.9		188.4		1,534.6		1,938.1
Income (loss) before income taxes	(190.3)		2.2		(210.1)		(183.2)
Income tax provision (benefit)	(42.2)		1.3		0.3		(8.0)
Net income (loss)	$	(148.1)	$	0.9	$	(210.4)	$	(175.2)
Dividends on Series A Preferred stock	10.5		—		10.5		10.5
Net income (loss) attributable to common stockholders	$	(158.6)	$	0.9	$	(220.9)	$	(185.7)

Net income (loss) attributable to common stockholders per share of common stock:
Basic					$	(6.28)	$	(5.31)
Diluted					$	(6.28)	$	(5.31)
Dividend declared per share of common stock					$	—	$	1.24
Weighted average common stock:
Basic					35,166,679		34,980,608
Diluted					35,166,679		34,980,608

See accompanying notes.

F-6

Table o f Contents

ARGO GROUP INTERNATIONAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(in millions, except number of shares and per share amounts)


	Successor				Predecessor
	For the Year Ended		Period from		Period from		For the Year Ended
	December 31, 2024		November 16, 2023 through December 31, 2023		January 1, 2023 through November 15, 2023		December 31, 2022

Net realized investment gains (losses) before other-than-temporary impairment losses	$	20.0	$	(0.3)	$	(19.8)	$	(79.2)
Other-than-temporary impairment losses recognized in earnings:
Other-than-temporary impairment losses on fixed maturities	—		—		(2.9)		(36.1)


Investment impairment losses recognized in earnings	—		—		(2.9)		(36.1)
Net realized investment (losses) gains	$	20.0	$	(0.3)	$	(22.7)	$	(115.3)

See accompanying notes.

F-7

Table o f Contents

ARGO GROUP INTERNATIONAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions)


	Successor				Predecessor
	For the Year Ended		Period from		Period from		For the Year Ended
	December 31, 2024		November 16, 2023 through December 31, 2023		January 1, 2023 through November 15, 2023		December 31, 2022
Net income (loss)	$	(148.1)	$	0.9	$	(210.4)	$	(175.2)
Other comprehensive income (loss):
Foreign currency translation:
Foreign currency translation adjustments	(0.5)		0.1		1.0		(0.7)
Reclassification adjustment for foreign currency translation included in net income	—		—		—		31.8
Defined benefit pension plans:
Net gain (loss) arising during the period	0.4		0.8		1.0		(0.9)
Fixed maturity securities:
Unrealized gains (losses) arising during the year	(16.5)		64.7		15.2		(428.1)
Reclassification adjustment for (gains) losses included in net income	(8.7)		(0.1)		28.0		43.6
Other comprehensive (loss) income before tax	(25.3)		65.5		45.2		(354.3)

Income tax provision (benefit) related to other comprehensive income (loss):
Defined benefit pension plans:
Net gain (loss) arising during the period	0.1		0.2		0.2		(0.2)
Fixed maturity securities:
Unrealized gains (losses) arising during the period	(3.5)		13.5		1.5		(80.9)
Reclassification adjustment for (gains) losses included in net income	(1.8)		—		5.9		9.2
Income tax provision (benefit) related to other comprehensive income (loss)	(5.2)		13.7		7.6		(71.9)
Other comprehensive income (loss), net of tax	(20.1)		51.8		37.6		(282.4)
Comprehensive income (loss)	$	(168.2)	$	52.7	$	(172.8)	$	(457.6)

See accompanying notes.

F-8

Table o f Contents

ARGO GROUP INTERNATIONAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions, except number of shares and per share amounts)


	Successor
	Preferred Stock and Additional Paid-in Capital		Common Stock		Additional Paid-In Capital		Treasury Shares		Retained Earnings (Accumulated deficit)		Accumulated Other Comprehensive Income (Loss), net of taxes		Stockholders’ Equity
Balance, November 16, 2023	$	137.1	$	1,056.6	$	51.1	$	—	$	—	$	—	$	1,244.8
Net income (loss)	—		—		—		—		0.9		—		0.9

Other comprehensive income - change in fair value of fixed maturities, net of taxes	—		—		—		—		—		51.1		51.1
Other comprehensive income, net - other	—		—		—		—		—		0.7		0.7







Balance, December 31, 2023	137.1		1,056.6		51.1		—		0.9		51.8		1,297.5
Net income (loss)	—		—		—		—		(148.1)		—		(148.1)

Other comprehensive loss - change in fair value of fixed maturities, net of taxes	—		—		—		—		—		(19.9)		(19.9)
Other comprehensive loss, net of tax	—		—		—		—		—		(0.2)		(0.2)




Purchase accounting adjustments (1)	—		—		(15.3)		—		—		—		(15.3)
Changes in common stock due to merger with AGIH Merger Sub, Inc.(2)	—		(1,256.6)		1,256.6		—		—		—		—
Dividends on preferred stock	—		—		—		—		(10.5)		—		(10.5)

Capital contributions	—		200.0		300.0		—		—		—		500.0

Balance, December 31, 2024	$	137.1	$	—	$	1,592.4	$	—	$	(157.7)	$	31.7	$	1,603.5

(1) Impact of measurement period adjustment on bargain purchase in connection with the Merger. Refer to Note 2, “Recent Acquisitions, Disposals & Other Transactions” for additional information.
(2) Refer to the Merger with AGIH Merger Sub, Inc. in Note 2, “Recent Acquisitions, Disposals & Other Transactions” for additional information.

See accompanying notes.

F-9

Table o f Contents

ARGO GROUP INTERNATIONAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions, except number of shares and per share amounts)


	Predecessor
	Preferred Stock and Additional Paid-in Capital		Common Stock		Additional Paid-In Capital		Treasury Shares		Retained Earnings (Accumulated deficit)		Accumulated Other Comprehensive Income (Loss), net of taxes		Stockholders’ Equity
Balance, January 1, 2022	$	144.0	$	46.2	$	1,386.4	$	(455.1)	$	636.4	$	(22.7)	$	1,735.2
Net income (loss)	—		—		—		—		(175.2)		—		(175.2)

Other comprehensive loss - change in fair value of fixed maturities, net of taxes	—		—		—		—		—		(312.8)		(312.8)
Other comprehensive income, net of tax	—		—		—		—		—		30.4		30.4
Activity under stock incentive plans	—		0.2		9.4		—		—		—		9.6
Retirement of common stock (tax payments on equity compensation)	—		(0.1)		(2.1)		—		—		—		(2.2)
Employee stock purchase plan	—		0.1		1.7		—		—		—		1.8
Dividends on preferred stock	—		—		—		—		(10.5)		—		(10.5)
Cash dividend declared - common stock ($1.24/share)	—		—		—		—		(43.4)		—		(43.4)


Balance, December 31, 2022	144.0		46.4		1,395.4		(455.1)		407.3		(305.1)		1,232.9
Net income (loss)	—		—		—		—		(210.4)		—		(210.4)

Other comprehensive income - change in fair value of fixed maturities, net of taxes	—		—		—		—		—		35.8		35.8
Other comprehensive income, net - other	—		—		—		—		—		1.8		1.8
Activity under stock incentive plans	—		0.1		(0.7)		—		—		—		(0.6)
Retirement of common stock (tax payments on equity compensation)	—		—		(0.9)		—		—		—		(0.9)
Employee stock purchase plan	—		—		1.5		—		—		—		1.5
Dividends on preferred stock	—		—		—		—		(10.5)		—		(10.5)
Cash dividend declared - common stock ($0.00/share)	—		—		—		—		0.3		—		0.3

Balance, November 15, 2023	$	144.0	$	46.5	$	1,395.3	$	(455.1)	$	186.7	$	(267.5)	$	1,049.9

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ARGO GROUP INTERNATIONAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)


	Successor				Predecessor
	For the Year Ended		Period from		Period from		For the Year Ended
	December 31, 2024		November 16, 2023 through December 31, 2023		January 1, 2023 through November 15, 2023		December 31, 2022
Cash flows provided by (used in) operating activities:
Net income (loss)	$	(148.1)	$	0.9	$	(210.4)	$	(175.2)
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Amortization and depreciation	183.4		39.6		12.2		18.5
Share-based payments expense	—		—		1.5		9.6
Deferred income tax expense (benefit), net	(41.8)		1.3		(14.9)		15.4
Net investment and other (gains) losses	(20.0)		0.3		22.7		115.3
Undistributed earnings from alternative investment portfolio	(24.5)		(2.2)		(11.5)		(17.7)
Loss on disposals of long-lived assets, net	—		—		1.2		0.6
Foreign currency exchange (gains) losses	(1.0)		0.6		1.8		—
Impairment of goodwill and intangibles	—		—		—		28.5
Change in:
Accrued investment income	1.8		(3.3)		1.4		0.2
Receivables	(42.7)		98.5		614.3		(193.6)
Deferred acquisition costs	(44.9)		(7.2)		8.8		(12.6)
Ceded unearned premiums	(1.8)		31.6		(69.7)		88.4
Reserves for losses and loss adjustment expenses	235.7		17.2		(27.9)		446.2
Unearned premiums	(117.8)		(69.6)		(12.0)		(74.7)
Ceded reinsurance payable and funds held	(46.7)		(57.3)		20.1		(162.9)
Income taxes	31.5		0.1		14.6		(47.5)
Accrued underwriting expenses and other liabilities	(19.6)		(19.3)		18.7		14.7
Other, net	(88.2)		(14.3)		(77.2)		—
Cash provided by (used in) operating activities	(144.7)		16.9		293.7		53.2
Cash flows provided by (used in) investing activities:
Sales of fixed maturity investments	286.6		0.7		24.2		818.5
Maturities and mandatory calls of fixed maturity investments	492.8		22.3		139.3		380.1
Proceeds from mortgage loans	51.8		—		—		—
Proceeds from private loan investments	57.1		—		—		—
Sales of equity securities	2.8		—		45.7		17.8
Sales of short-term investments	2,760.1		—		—		—
Sales of other investments	78.7		22.2		24.0		58.1
Purchases of fixed maturity investments	(227.3)		(10.1)		(11.9)		(1,093.6)
Purchases of mortgage loans	(114.9)		—		—		(159.9)
Purchases of private loan investments	(324.3)		—		—		—
Purchases of equity securities	(388.3)		—		(0.3)		(1.0)
Purchases of short-term investments	(2,552.4)		—		—		—
Purchases of other investments	(320.6)		(2.9)		(19.3)		(52.8)
Change in foreign regulatory deposits and voluntary pools	—		—		—		(6.7)

Change in short-term investments	—		24.1		(627.0)		26.1

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ARGO GROUP INTERNATIONAL HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions)
	Successor				Predecessor
	For the Year Ended		Period from		Period from		For the Year Ended
	December 31, 2024		November 16, 2023 through December 31, 2023		January 1, 2023 through November 15, 2023		December 31, 2022
Settlements of foreign currency exchange forward contracts	0.8		1.3		4.5		(22.0)
Proceeds from business divestitures, net of cash transferred	5.9		4.2		63.8		14.9


Purchases of fixed assets, net	(0.8)		—		(2.7)		(6.1)

Cash provided by (used in) investing activities	(192.0)		61.8		(359.7)		(26.6)
Cash flows provided by (used in) financing activities:
Debt borrowings	100.0		—		—		—
Repayment of debt	(100.0)		—		—		—

Issuance of common stock	200.0		—		—		—
Activity under stock incentive plans	—		—		0.7		1.8

Payment of cash dividends to preferred stockholders	(10.5)		—		(10.5)		(10.5)
Payment of cash dividends to common stockholders	—		—		0.3		(43.4)
Cash provided by (used in) financing activities	189.5		—		(9.5)		(52.1)
Effect of exchange rate changes on cash	—		—		0.3		0.4
Net change in cash and restricted cash including balances classified as held-for-sale	(147.2)		78.7		(75.2)		(25.1)

Net change in cash balances classified as held-for-sale (1)	—		—		70.8		(70.8)
Cash, restricted cash, and cash equivalents, beginning of period	791.6		712.9		50.2		146.1
Cash, restricted cash, and cash equivalents, end of period	$	644.4	$	791.6	$	45.8	$	50.2

(1) See Note 2, “Recent Acquisitions, Disposals & Other Transactions” in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission (the “2023 Form 10-K”) for details of the assets and liabilities classified as “held-for-sale” as of December 31, 2022.

See accompanying notes.

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ARGO GROUP INTERNATIONAL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.Business and Significant Accounting Policies

Business

Argo Group International Holdings, Inc. (“Argo Group,” “we” or the “Company”), an indirect wholly-owned subsidiary of Brookfield Wealth Solutions Ltd (formerly known as Brookfield Reinsurance Ltd.), is an underwriter of specialty insurance products in the property and casualty market.

Argo Re Ltd. (“Argo Re”), a Bermuda based company, is the parent of Argo Group US, Inc. (“Argo Group U.S.”) and Argo International Holdings, Ltd. Argo Re is directly owned by Argo Group.

On February 8, 2023, we entered into an Agreement and Plan of Merger (the “Merger Agreement”), with Brookfield Wealth Solutions Ltd. and BNRE Bermuda Merger Sub Ltd. (“Merger Sub”), a wholly-owned subsidiary of Brookfield Wealth Solutions Ltd. The Merger Agreement provides for the merger of the Merger Sub with and into us, which we refer to as the “Merger,” with us surviving the Merger as an indirect wholly-owned subsidiary of Brookfield Wealth Solutions Ltd.

On November 16, 2023, we merged with Brookfield Wealth Solutions Ltd., which resulted in a change to Company’s ownership. Brookfield Wealth Solutions Ltd. elected to push-down its purchase accounting, which resulted in the Company reflecting the fair market value of our assets and liabilities as of November 16, 2023, in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations. The application of push-down accounting created a new basis of accounting for all of our assets and liabilities. As such, the Company’s financial position, results of operations, and cash flows subsequent to the acquisition are not comparable with those prior to November 16, 2023, and therefore have been separated to indicate pre-acquisition and post-acquisition periods. The pre-acquisition period through November 15, 2023 is referred to as the Predecessor. The post-acquisition period, November 16, 2023 and forward, includes the impact of push-down accounting and is referred to as the Successor. The summary of the total consideration paid for the Company by Brookfield Wealth Solutions Ltd. and Company’s fair values assigned to its assets and liabilities as of November 16, 2023 are presented in Note 2, “Recent Acquisitions, Disposals & Other Transactions.”

As a result of the Company’s merger with Brookfield Wealth Solutions Ltd, and overall strategic shift, the Company changed its internal segments in a manner that caused the composition of its reporting segments to change in the fourth quarter of 2024. The Company’s reporting segments were realigned to three reportable segments—Casualty Lines, Specialty Lines, and Run-off Lines. Previously, the Company reported its operations under U.S Operations, International Operations and Run-off Lines, which primarily consisted of other liability policies that were issued in the 1960s, 1970s and into the 1980s, as well as the former risk-management business. For additional segment information, refer to Note 15, “Segment Information.” The Company has recast all applicable Successor periods for comparability.

Basis of Presentation and Use of Estimates

The Consolidated Financial Statements of Argo Group and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. The major estimates reflected in our Consolidated Financial Statements include, but are not limited to, reserves for losses and loss adjustment expenses; reinsurance recoverables, including the reinsurance recoverables allowance for expected credit losses; fair value of investments and assessment of potential impairment, including the allowance for credit losses on fixed maturity securities, mortgage loans and private loans; valuation of intangibles, including those identified as part of purchase accounting related to the Merger, and our deferred tax asset valuation allowance. Actual results could differ from those estimates.

Specifically, estimates for reserves for losses and loss adjustment expenses are based upon past claim experience modified for current trends as well as prevailing economic, legal and social conditions. Although management believes that amounts included in the accompanying Consolidated Financial Statements are reasonable, such estimates may be more or less than the amounts ultimately paid when the claims are settled. The estimates are continually reviewed and any changes are reflected in current operating results. Further, the nature of loss exposures involves significant variability due to the nature of the long-tailed payments on certain claims. As such, losses and loss adjustment expenses could vary significantly from the recorded amounts.

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Accounting for business combinations requires significant estimates and assumptions, especially at the acquisition date. In determining the Company’s estimated fair value of assets acquired and liabilities assumed by Brookfield Wealth Solutions Ltd. as part of the Merger, we used various recognized valuation methods including the income, market and cost approaches. Valuations were performed by independent valuation specialists under the Company’s supervision. The value of business acquired represents the fair value of the expected future profits in unearned premiums, net of reinsurance, utilizing primarily ultimate loss and expense related assumptions, for insurance contracts acquired as a result of the Merger. The fair value adjustment for reserves for losses and loss adjustment expenses represents the difference between the fair value and book value of unpaid incurred claims net of reinsurance recoveries. Value of business acquired is classified separately on our Consolidated Balances Sheets, while the fair value adjustment for reserves for losses and loss adjustment expenses is included in our intangible assets. These intangible assets were based primarily on an income valuation technique with assumptions for: (i) settlement patterns that reflect an actuarial estimate of the expected future net cash flows, (ii) a discount rate that reflect a market participant’s view of (a) a reduction to those cash flows for the time value of money and (b) a risk component to reflect the net present value of profit that an investor would demand in return for the assumption of the development risk.

The Consolidated Financial Statements include the accounts and operations of Argo Group and its subsidiaries. All material intercompany accounts and transactions have been eliminated. Certain reclassifications have been made to financial information presented for prior years to conform to the current year’s presentation.

We have evaluated our investment in our eleven statutory trusts (collectively, the “Trusts”) under the Financial Accounting Standards Board’s (“FASB’s”) provisions for consolidation of variable interest entities under Accounting Standards Codification (“ASC”) Topic 810-10, “Consolidation,” as amended. We determined that the Trusts are variable interest entities due to the fact that the Trusts do not have sufficient equity to finance their activities without additional subordinate financial support from other parties. We do not have any power to direct the activities that impact the Trusts’ economic performance. We are not entitled to receive more than insignificant residual returns of the Trusts. Additionally, we are not responsible for absorbing the majority of the expected losses of the Trusts; therefore, we are not the primary beneficiary and, accordingly, the Trusts are not included in our Consolidated Financial Statements.

Investments

Investments in fixed maturities at December 31, 2024 and 2023 include bonds and structured securities. Equity securities include common stocks, preferred stocks, private equity direct investments and mutual funds. Other investments consist of foreign regulatory deposits, hedge funds, private equity funds, private equity direct investments, and voluntary pools. Mortgage loans include commercial and residential loans. Private loans consist of debt and direct lending investments. Derivatives are used primarily to manage foreign exchange risk. Short-term investments consist of money market funds, certificates of deposit, bonds, sovereign debt and interest-bearing cash accounts. Investments with original maturities of over 90 days and less than one year are classified as short-term investments in our Consolidated Financial Statements as they are part of our investing activities. Previous to the Merger and the application of push-down accounting, the Company classified interest-bearing cash accounts and short-term investments with original maturities of 90 days or less as Short-term investments in our Consolidated Balance Sheets. Post Merger, these securities are classified in Cash, restricted cash and cash equivalents in our Consolidated Balance Sheets.

The amortized cost of fixed maturity securities is adjusted for amortization of premiums and accretion of discounts. This amortization or accretion is included in Net investment income in our Consolidated Statements of Income (Loss).

For the structured securities portion of the fixed maturity securities portfolio, we recognize income using a constant effective yield based on anticipated prepayments and the estimated economic life of the securities. Premium or discount is amortized into income using the retrospective method.

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Our investments in fixed maturities are considered available-for-sale and are carried at fair value. As available-for-sale investments, changes in the fair value of fixed maturities are not recognized in income during the period, but rather are recognized as a separate component of stockholders’ equity until realized. Fair value of these investments is estimated using prices obtained from third-party pricing services, where available. For securities where we were unable to obtain fair values from a pricing service or broker, fair values were estimated using information obtained from investment advisors. We performed several processes to ascertain the reasonableness of these investment values by (1) obtaining and reviewing internal control reports for our service providers that obtain fair values from third-party pricing services, (2) obtaining and reviewing evaluated pricing methodology documentation from third-party pricing services and (3) comparing the security pricing received from a secondary third-party pricing service versus the prices used in the Consolidated Financial Statements and obtaining additional information for variances that exceeded a defined threshold. As of December 31, 2024, investments reported at fair value for which we did not receive a fair value from a pricing service or broker accounted for less than 3% of our investment portfolio. The actual value at which such securities could be sold or settled with a willing buyer or seller may differ from such estimated fair values depending on a number of factors including, but not limited to, current and future economic conditions, the quantity sold or settled, the presence of an active market and the availability of a willing buyer or seller. The cost of securities sold is based on the specific identification method.

Mortgage loans are carried at unpaid principal balances less allowance for credit losses, plus or minus adjustments for the accretion or amortization of discount or premium. Interest income on such loans is accrued as earned.

Our investments in equity securities are reported at fair value. Changes in the fair value of equity securities are included in Net realized investment and other gains (losses) in the Consolidated Statements of Income (Loss).

Changes in the value of other investments consisting of hedge funds, private equity funds, private equity direct investments and voluntary pools are principally recognized in income during the period using the equity method of accounting. Our foreign regulatory deposits are assets held in trust in jurisdictions where there is a legal and regulatory requirement to maintain funds locally in order to protect policyholders.

Private loans are carried at cost less allowance for credit losses, plus or minus adjustments for the accretion or amortization of discount or premium. Interest income on such loans is accrued as earned.

Derivatives are reported at fair value and we apply hedge accounting when the derivative is designated as a hedge of a specific exposure and there is assurance that it will continue to be effective as a hedge based on an expectation of offsetting fair values. Hedge accounting is discontinued when the derivative no longer qualifies as a hedge or the derivative contract expires. We use the critical terms matched method to assess hedge effectiveness.

We regularly review our investments to identify and evaluate those that may be credit impaired. For fixed maturity securities, the evaluation for credit losses is generally based on the present value of expected cash flows of the security as compared to the amortized cost, the financial condition, near-term and long-term prospects for the issuer, including industry conditions, implications of rating agency actions, the likelihood of principal and interest recoverability and whether it is more likely than not we will be required to sell the investment prior to the anticipated recovery in value.

Effective January 1, 2020 with the adoption of ASU 2016-13—Financial Instruments—Credit Losses, we recognize credit losses on fixed maturities, mortgage loans and private loans through an allowance account. For fixed maturities that we do not intend to sell or for which it is more likely than not we will not be required to sell prior to the anticipated recovery in value, we separate the credit component of the impairment from the component related to all other market factors and report the credit loss component to net realized investment gains (losses) in the Consolidated Statement of Income (Loss). The impairment related to all other market factors is reported as a separate component of stockholders’ equity in other comprehensive income (loss). The credit loss allowance account is adjusted for any additional credit losses or subsequent recoveries and the cost basis of the fixed maturity security is not adjusted.

For fixed maturity securities that we intend to sell or for which it is more likely than not that we will be required to sell before an anticipated recovery in value, the full amount of the impairment is recognized in Net realized investment and other gains (losses) in the Consolidated Statements of Income (Loss) and the cost basis of the fixed maturity security is adjusted to reflect the recognized realized loss. The new cost basis is not adjusted for any recoveries in fair value.

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For mortgage and private loans, we establish an allowance at acquisition and update it on a quarterly basis. The initial allowance and subsequent changes are recorded in Net realized investment and other gains (losses). The allowance reflects the risk of loss expected over the remaining contractual life of the loan, even if that risk is remote, and considers historical loss experience, current conditions, and reasonable and supportable forecasts of future economic conditions. We utilize third-party forecasting models to estimate lifetime expected credit losses for mortgage loans. These models incorporate macroeconomic scenarios that produce expected cash flows and project the probability of default, loss given default and exposure at default. Our investment manager develops the key inputs used to model expected credit losses for private loans, which primarily include assumed default and recovery rates.

Accrued Investment Income

We report accrued investment income separately from fixed maturity securities and have elected to not measure an allowance for credit losses for accrued investment income. The write-off of investment income accrued for fixed maturities that have defaulted on interest payments is recognized as a loss in Net realized investment and other gains (losses), in the period of the default, in the Consolidated Statements of Income (Loss).

Cash, Restricted Cash, and Cash Equivalents

Cash, restricted cash, and cash equivalents consists of cash deposited in operating accounts with commercial banks and short-term investments with original maturities of 90 days or less. Previous to the Merger and the application of push-down accounting, the Company classified short-term investments with original maturities of 90 days or less as Short-term investments in our Consolidated Balance Sheets.

Premiums Receivables and Reinsurance Recoverables

Premiums receivable, representing amounts due from insureds, are presented net of an allowance for uncollectible premiums, including expected lifetime credit losses, both dispute and credit related. The allowance is based upon our ongoing review of amounts outstanding, historical loss data, including delinquencies and write-offs, current and forecasted economic conditions and other relevant factors. Credit risk is partially mitigated by our ability to cancel the policy if the policyholder does not pay the premium.

Reinsurance recoverables represent amounts of paid losses and loss adjustment expenses, case reserves and incurred but not reported (“IBNR”) amounts ceded to reinsurers under reinsurance treaties. Amounts recoverable from reinsurers are estimated in a manner consistent with the associated claim liability. We report our reinsurance recoverables net of an allowance for estimated uncollectible reinsurance, including expected credit losses. The allowance is based upon our ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing, disputes, applicable coverage defenses and other relevant factors. We use the rating-based method to estimate the uncollectible reinsurance reserves due to credit losses. Under this method, reinsurance credit risk is estimated by considering the reinsurers probability of default. Reinsurance recoverables are forecasted out of the assumed billing periods and a liquidation factor is applied based on the rating of the reinsurer and adjusted as needed based on our historical experience with the reinsurers. Additionally, reinsurance recoverable balances are evaluated to identify any disputed risk and when required, an additional reserve is recorded. Amounts deemed to be uncollectible, including amounts due from known insolvent reinsurers, are written off against the allowance. Changes in the allowance, as well as any subsequent collections of amounts previously written off, are reported as part of underwriting expense. We evaluate and monitor the financial condition of our reinsurers under voluntary reinsurance arrangements to minimize our exposure to significant losses from reinsurer insolvencies.

As a result of push-down accounting due to the Merger, the fair value of the allowance for uncollectible premiums as well as reinsurance recoverables were nil as of November 16, 2023. The previous allowances were applied to the premium receivable or reinsurance recoverable balance, resulting in no net change in the asset.

Recoveries occur when subsequent collection or litigation results in the receipt of amounts previously written off. Amounts recovered are applied against the allowance for expected credit losses. For further disclosures about the allowance for expected credit losses, see Note 4, “Allowance for Credit Losses.”

Deferred Acquisition Costs

Policy acquisition costs, which include commissions, premium taxes, fees and certain other costs of underwriting policies, are deferred, when such class of policies are profitable, and amortized over the same period in which the related premiums are earned. To qualify for capitalization, the policy acquisition cost must be directly related to the successful acquisition of an insurance contract. We continually review the methods of making such estimates and establishing the deferred costs with any adjustments made in the accounting period in which it arose.

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The amortization of deferred acquisition costs is included in Underwriting, acquisition and general expenses in our Consolidated Statements of Income (Loss).

The Company evaluates the recoverability of deferred acquisition costs by determining if the future-earned premiums is greater than the expected future claims and expenses. The Company considers anticipated investment income in this determination. If a loss is probable on the unexpired portion of policies in force, a premium deficiency reserve is recognized. At December 31, 2024 and 2023, the deferred acquisition costs were considered fully recoverable and no premium deficiency reserve was recorded.

As a result of push-down accounting due to the Merger, the fair value of our deferred acquisition costs was nil as of November 16, 2023. Our deferred acquisition costs at December 31, 2024 and 2023 relates to policy acquisition costs incurred after November 16, 2023.

Value of Business Acquired and Other Intangible Assets

Intangible assets are allocated to reporting units in which the results of operations for the acquired company are reported. Intangible assets with a finite life are amortized over the estimated useful life of the asset. Intangible assets with an indefinite useful life are not amortized. Intangible assets are tested for impairment on an annual basis or more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable.

We perform our annual intangible asset impairment test on October 1 of each year.

The intangible asset amortization expense is reflected in Underwriting, acquisition and general expenses in our Consolidated Statements of Income (Loss).

Successor

The following table presents our intangible assets and accumulated amortization recognized on our Consolidated Balance Sheets as of December 31, 2024:


	As of December 31,
	2024
(in millions)	Gross Carrying Amount		Accumulated Amortization		Net Value		Useful Life
Value of business acquired	$	176.3	$	(163.4)	$	12.9	(a)
Other intangible assets:
Broker relations	21.5		(1.7)		19.8		13 to 16 years
Trade names	12.9		(2.9)		10.0		5 years
Insurance licenses	25.0		—		25.0		Indefinite
Leases	7.1		(0.8)		6.3		9 years
Internally developed software	16.5		(3.1)		13.4		5 to 7 years
Fair value adjustment for reserves for losses and loss adjustment expenses	102.8		(38.0)		64.8		(b)



Total other intangible assets	185.8		(46.5)		139.3
Total intangible assets	$	362.1	$	(209.9)	$	152.2

(a) Amortized based on unearned premium earnout pattern.

(b) Amortized based on settlement pattern.

Total intangible asset amortization expense was $172.0 million for the year ended December 31, 2024 and $37.9 million for the period November 16, 2023 through December 31, 2023 (Successor).

The Company did not recognize any goodwill as a result of the Merger as the Company’s fair value of assets acquired and liabilities assumed exceeded the total consideration paid resulting in a bargain purchase, which is reflected as Additional paid-in capital on our Consolidated Balance Sheets. Refer to Note 2, “Recent Acquisitions, Disposals & Other Transactions” for additional detail.

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The following table outlines the estimated future amortization expense related to definite lived intangible assets held as of December 31, 2024:


(in millions)
Years	As of December 31,
2025	$	39.8
2026	25.7
2027	17.4
2028	13.3
2029	8.9
Thereafter	22.1
Total amortization expense	$	127.2

Predecessor

As of December 31, 2020, all of our finite-lived intangible assets had been fully amortized and we had no amortization expense for the period January 1, 2023 through November 15, 2023 (Predecessor), and for the year ended December 31, 2022.

In conjunction with our annual test, the estimated fair value of each reporting unit exceeded its carrying value for the year ended December 31, 2022, except for our Syndicate 1200 reporting unit. As a result of the announced sale of Argo Underwriting Agency Limited and its Lloyd’s Syndicate 1200, an estimated fair value was established for Syndicate 1200 that was below its carrying value. For the year ended December 31, 2022, we recorded a $28.5 million impairment charge in the third quarter, consisting of $17.3 million of indefinite lived intangible assets and $11.2 million of goodwill so that carrying value equals fair value.

Leases

We determine if a contract contains a lease at inception and recognize operating lease right-of-use assets and operating lease liabilities based on the present value of the future minimum lease payments at the commencement date. As our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at the commencement date to determine the present value of future payments. Lease agreements have lease and non-lease components. We account for these components separately, therefore our operating lease right-of-use asset and operating lease liabilities represent base rent only. Lease expense is recognized on a straight-line basis over the lease term. Renewal options are evaluated prior to the expiration date and recorded upon exercise. Refer to Note 5, “Leases” for additional detail.

Property and Equipment

Property and equipment used in operations, including certain costs incurred to develop or obtain computer software for internal use, are capitalized and carried at cost less accumulated depreciation and are reported in Other assets in our Consolidated Balance Sheets. Depreciation is calculated using a straight-line method over the estimated useful lives of the assets, generally three to thirty-nine years. The accumulated depreciation for property and equipment was, $13.7 million and $2.3 million at December 31, 2024 and 2023, respectively. The net book value of our property and equipment at December 31, 2024 and 2023 was $20.6 million and $31.1 million, respectively. The depreciation expenses were $11.4 million for the year ended December 31, 2024, as compared to, $2.3 million for the period November 16, 2023 through December 31, 2023 (Successor), $9.1 million for the period January 1, 2023 through November 15, 2023 (Predecessor), and $22.3 million, for the year ended December 31, 2022.

Derivative Instruments

We enter into short-term, currency spot and forward contracts to manage operational currency exposure from our non-USD insurance operations. The forward contracts are typically thirty to ninety days and are renewed as management deems necessary to accomplish the objectives of the contracts. These foreign currency forward contracts are carried at fair value in Other assets on our Consolidated Balance Sheets at December 31, 2024 and 2023, respectively. The realized and unrealized gains and losses are included in Net realized investment and other gains (losses) in our Consolidated Statements of Income (Loss). The forwards contracts are not designated as hedges for accounting purposes.

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Reserves for Losses and Loss Adjustment Expenses

Liabilities for unpaid losses and loss adjustment expenses include the accumulation of individual case estimates for claims reported as well as estimates of IBNR claims and estimates of claim settlement expenses. Reserves for loss and loss adjustment expenses represents management's best estimate of the ultimate liability to settle these claims as of the balance sheet date. The effects of changes in this estimate are included in results of operations in the period in which the estimates are changed. Reinsurance recoverables on unpaid claims and claim expenses represent estimates of the portion of such liabilities that will be recoverable from reinsurers. Amounts recoverable from reinsurers are recognized as assets at the same time and in a manner consistent with the unpaid claims liabilities associated with the reinsurance policy.

Reinsurance

In the normal course of business, our insurance subsidiaries cede risks above certain retention levels to other insurance companies. Reinsurance recoverables include claims we paid and estimates of unpaid losses and loss adjustment expenses that are subject to reimbursement under reinsurance and retrocessional contracts. The method for determining reinsurance recoverables for unpaid losses and loss adjustment expenses involves reviewing actuarial estimates of gross unpaid losses and loss adjustment expenses to determine our ability to cede unpaid losses and loss adjustment expenses under our existing reinsurance contracts. This method is continually reviewed and updated and any resulting adjustments are reflected in earnings in the period identified. Reinsurance premiums, commissions and expense reimbursements are accounted for on a basis consistent with those used in accounting for the original policies issued and the term of the reinsurance contracts. Amounts recoverable from reinsurers for losses and loss adjustment expenses for which our insurance and reinsurance subsidiaries have not been relieved of their legal obligations to the policyholder are reported as assets.

On November 9, 2022, the Company closed on the U.S. LPT with Enstar covering a majority of the Company’s U.S. casualty insurance reserves, including construction, for accident years 2011 to 2019.

Earned Premiums

Premium revenue is generally recognized ratably over the policy period. Premiums that have yet to be earned are reported as Unearned premiums in our Consolidated Balance Sheets.

Assumed reinstatement premiums that reinstate coverage are written and earned at the time the associated loss event occurs. The original premium is earned over the remaining exposure period of the contract. Reinstatement premiums are estimated based upon contract terms for reported losses and estimated for incurred but not reported losses.

Non-Operating Expenses

Foreign Currency Exchange

The reporting currency of the Company is the U.S. dollar (“USD”). USD is the functional currency of all but one of our remaining foreign operations. For foreign operations with the U.S. dollar as the functional currency, monetary assets and liabilities that are denominated in local currencies are remeasured at the exchange rates in effect at the balance sheet date. The resulting gains and losses from changes in the foreign exchange rates are reflected in net income. Non-monetary assets and liabilities are not remeasured. In the case of our non-USD denominated available-for-sale investments, the change in exchange rates between the local currency and USD at each balance sheet date represents an unrealized appreciation or depreciation in value of these securities and is included as a component of Accumulated other comprehensive income (loss) on our Consolidated Balance Sheets. Revenues and expenses denominated in foreign currencies are translated at the prevailing exchange rate during the period with the resulting foreign exchange gains and losses included in net income (loss) for the period.

Translation gains and losses related to our operations denominated in local currencies are recorded as a component of stockholders’ equity in our Consolidated Balance Sheets. At December 31, 2024 and 2023, the foreign currency translation adjustments were a loss of $0.4 million and income of $0.1 million, respectively.

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Income Taxes

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in net income or loss in the period in which the change is enacted.

We recognize interest expense and penalties related to the unrecognized tax benefits in Interest expense and Underwriting, acquisition and general expenses, respectively, in our Consolidated Statements of Income (Loss).

We recognize valuation allowance in Income tax provision (benefit) in our Consolidated Statements of Income (Loss).

Supplemental Cash Flow Information

Interest paid and income taxes paid (recovered) were as follows:


	Successor				Predecessor
	For the Year Ended		Period from		Period from		For the Year Ended
	December 31, 2024		November 16, 2023 through December 31, 2023		January 1, 2023 through November 15, 2023		December 31, 2022
(in millions)
Senior unsecured fixed rate notes	$	9.3	$	1.2	$	8.2	$	9.3
Junior subordinated debentures	24.4		4.1		19.3		13.5
Other indebtedness	1.9		—		0.8		1.3
Total interest paid	$	35.6	$	5.3	$	28.3	$	24.1

Income taxes paid	0.1		0.1		0.2		26.2
Income taxes recovered	(32.0)		—		(0.1)		(2.1)
Income taxes paid, net	$	(31.9)	$	0.1	$	0.1	$	24.1

Non-cash:

During the fourth quarter of 2024, BNRE Triangle Acquisition Inc. contributed an additional $300.0 million to the Company in the form of private loans. This contribution represents a non-cash transaction and does not impact our Consolidated Statements of Cash Flows.

Consolidated Statements of Cash Flows for the year ended December 31, 2024 excludes $3.3 million of non-cash activity for a lease which commenced in 2024. The lease is reflected on our Consolidated Balance Sheets in Operating lease right-of-use assets and Operating lease liabilities.

Recent Accounting Pronouncements

ASU 2023-06: On October 9, 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2023-06—Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. The amendments modify the disclosure or presentation requirements on a variety of Topics in the Codification. Certain of the amendments represent clarifications to or technical corrections of the current requirements and also facilitate the comparison of entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the SEC’s requirements. Further, the amendments align the requirements in the Codification with the SEC’s regulations.

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The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The amendments in this Update should be applied prospectively.

We are currently evaluating the requirements of ASU 2023-06. However, as they apply to disclosure requirements, the adoption of the standard is not anticipated to have a material impact on our profitability, financial position or cash flows.

ASU 2023-07: On November 27, 2023, the FASB issued Accounting Standards Update 2023-07—Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments require the disclosure of significant segment expenses by reportable segment, enhance interim and annual disclosure requirements, and clarify circumstances in which an entity can disclose multiple segment measures of profit or loss. This ASU was effective on January 1, 2024 for annual filings (and January 1, 2025 for quarterly filings) and was applied retrospectively to prior periods presented in our consolidated financial statements for the Successor periods. As a result of adopting this ASU, we added additional information in Note 15, “Segment Information,” in the Notes to Consolidated Financial Statements.

ASU 2023-09: On December 14, 2023, the FASB issued Accounting Standards Update 2023-09—Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments improve income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures.

The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted.

ASU 2024-03: On November 4, 2024, the FASB issued Accounting Standards Update 2024-03—Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses: Disaggregation of Income Statement Expenses, to improve interim and annual disclosures about a public business entity’s expenses by requiring more detailed information in the notes to the financial statements about certain expense categories, including purchases of inventory, employee compensation, depreciation, amortization, and selling expenses. We expect to adopt this ASU effective January 1, 2027 and the adoption will not affect our financial position or our results of operations, but will result in additional disclosures.

2. Recent Acquisitions, Disposals & Other Transactions

Merger

On November 16, 2023, the Company completed the Merger, which resulted in a change to the Company’s ownership. The Company became an indirect wholly-owned subsidiary of Brookfield Wealth Solutions Ltd.

Pursuant to ASC 805, the total value of the consideration transferred was $1,058.9 million. This consisted of $1,056.6 million for 35,221,291 shares of common stock issued and outstanding immediately prior to the Merger which were automatically canceled and converted into the right to receive an amount in cash equal to $30.00, without interest, and a $2.3 million settlement of unvested employee stock. There is no contingent consideration arrangement in connection with the Merger.

On the date of the Merger, the transaction resulted in a $48.9 million bargain purchase since the value of the net assets acquired exceeded the purchase consideration. The bargain purchase determination is consistent with the fact that the Company’s shares traded at a discount to book value, and when considering the circumstances surrounding the Company at the time of sale, including those related to the strategic review.

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The following table is a summary of the purchase price and the fair value of assets acquired and liabilities assumed as part of the Merger as of November 16, 2023:


	As of
(in millions)	November 16, 2023
Consideration transferred settling 35,221,291 shares of outstanding common stock	$	1,056.6
Consideration transferred settling unvested employee stock	2.3
Total consideration	$	1,058.9

Assets
Investments:
Fixed maturities available-for-sale, at fair value	$	2,525.3
Mortgage loans	144.9
Equity securities, at fair value	11.7
Other investments	327.8
Short-term investments, at fair value	450.1
Total investments	3,459.8
Cash	712.9
Accrued investment income	17.1
Premiums receivable	306.8
Reinsurance recoverables	2,981.6

Other intangible assets	186.1
Current income taxes receivable, net	53.2
Deferred tax asset, net	54.0

Ceded unearned premiums	387.6
Operating lease right-of-use assets	51.6
Other assets	190.8
Value of business acquired	176.3
Total assets (1)	$	8,577.8
Liabilities
Reserves for losses and loss adjustment expenses	5,526.4
Unearned premiums	986.2
Accrued underwriting expenses and other liabilities	92.0
Ceded reinsurance payable, net	257.4
Funds held	49.9
Senior unsecured fixed rate notes	127.9
Junior subordinated debentures	241.0
Operating lease liabilities	52.1

Total liabilities assumed (2)	$	7,332.9

Fair value of net assets acquired	$	1,244.9

Other claims on net assets:
Preferred stock	$	137.1

Bargain purchase recognized in Additional paid-in capital	$	48.9

(1) Reflects net fair value adjustments of $114.2 million to increase the total assets acquired, including value of business acquired and other intangible assets.

(2) Reflects net fair value adjustments of $80.9 million to reduce the total liabilities assumed.

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Purchase Accounting Measurement Period Adjustment

The Merger resulted in a bargain purchase, which is uncommon, since the value of the net assets acquired exceeded the purchase consideration. The values of certain assets and liabilities were considered preliminary in nature and were subject to adjustment during the measurement period as additional information was obtained. As the valuations were finalized, any changes to the preliminary valuation of assets acquired or liabilities assumed might have resulted in retrospective adjustments to the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date.

During the three months ended September 30, 2024, the Company reduced its bargain purchase amount by $15.3 million to $33.6 million, resulting in a reduction to Additional paid-in capital. The adjustment related to the Company’s valuation of loss reserves.

Other Transactions

Merger with AGIH Merger Sub, Inc.

The merger constituted a common-control transaction as defined under current accounting standards as there was no change in control over the net assets of the Company. Therefore, these resulting financial statements reflect the financial position and results of operations as if the merger had occurred on January 1, 2024.

Commutation of Riverstone Holdings Limited Reinsurance Agreement

On June 2, 2024, the Company entered into a commutation with Riverstone Holdings Limited (part of the RiverStone International group) on its legacy assumed business from our former Malta operations, ArgoGlobal Holdings (Malta) Ltd., which was sold in 2022. This transaction had no material impact on our net income. The final consideration of $86.7 million was paid to Riverstone Holdings Limited on July 1, 2024.

3. Investments

As a result of the push-down accounting due to the Merger, the amortized cost of our investments is based on the fair value as of November 16, 2023.

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Fixed Maturities

The amortized cost, gross unrealized gains, gross unrealized losses, allowance for credit losses, and fair value in fixed maturity investments were as follows:


December 31, 2024
(in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
Fixed maturities
U.S. Governments	$	222.3	$	1.5	$	0.6	$	—	$	223.2
Foreign Governments	7.1		—		—		—		7.1
Obligations of states and political subdivisions	80.1		1.6		—		—		81.7
Corporate bonds	1,033.5		19.4		1.3		0.9		1,050.7
Commercial mortgage-backed securities	276.6		10.0		0.3		—		286.3
Residential mortgage-backed securities	201.0		2.8		0.6		—		203.2
Asset-backed securities	104.9		2.6		0.1		—		107.4
Collateralized loan obligations	107.4		2.1		0.2		—		109.3
Total fixed maturities	$	2,032.9	$	40.0	$	3.1	$	0.9	$	2,068.9


December 31, 2023
(in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
Fixed maturities
U.S. Governments	$	357.7	$	4.5	$	—	$	—	$	362.2
Foreign Governments	27.9		2.6		—		0.2		30.3
Obligations of states and political subdivisions	92.4		2.0		—		—		94.4
Corporate bonds	1,185.0		28.9		0.8		—		1,213.1
Commercial mortgage-backed securities	270.9		10.1		0.5		—		280.5
Residential mortgage-backed securities	235.2		13.6		—		—		248.8
Asset-backed securities	140.4		1.7		0.1		—		142.0
Collateralized loan obligations	212.0		2.1		—		—		214.1
Total fixed maturities	$	2,521.5	$	65.5	$	1.4	$	0.2	$	2,585.4

Contractual Maturity

The amortized cost and fair values of fixed maturity investments as of December 31, 2024, by contractual maturity, were as follows:


(in millions)	Amortized Cost		Fair Value
Due in one year or less	$	262.5	$	263.9
Due after one year through five years	887.4		898.7
Due after five years through ten years	173.0		179.4
Due after ten years	20.1		20.7
Structured securities	689.9		706.2
Total	$	2,032.9	$	2,068.9

The actual maturities may differ from the contractual maturities because debtors may have the right to call or prepay obligations. The model duration of the assets comprising our fixed maturity investment portfolio was 2.66 years and 2.68 years at December 31, 2024 and 2023, respectively.

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Other Investments

Details regarding the carrying value and unfunded investment commitments of other investments as of December 31, 2024 and 2023 were as follows:


December 31, 2024
(in millions)	Carrying Value		Unfunded Commitments
Investment Type
Hedge funds	$	27.5	$	—
Private equity	262.4		214.1
Real estate equity investments	282.6		—
Other	4.9		6.8
Total other investments	$	577.4	$	220.9


December 31, 2023
(in millions)	Carrying Value		Unfunded Commitments
Investment Type
Hedge funds	$	56.2	$	—
Private equity	250.3		93.4

Other	4.5		—
Total other investments	$	311.0	$	93.4

The following describes each investment type:

•Hedge funds: Hedge funds, carried at net asset value (“NAV”) as a practical expedient of fair value, include funds that primarily buy and sell stocks, including short sales, multi-strategy credit, relative value credit and distressed credit.

•Private equity: Private equity includes limited partnership investments accounted for in accordance with the equity method of accounting and whose strategies include: buyout funds, real asset/infrastructure funds, credit special situations funds, mezzanine lending funds and direct investments and strategic non-controlling minority investments in private companies.

•Real estate equity investments: Includes equity interests with underlying real estate investments accounted for in accordance with the equity method of accounting.

•Other: Other primarily includes equity investments accounted for in accordance with the equity method of accounting and investments for which the Company has elected the fair value option of accounting.

Unrealized Losses and Other-than-temporary Impairments

An aging of unrealized losses on our investments in fixed maturities is presented below.


December 31, 2024	Less Than One Year				One Year or Greater				Total
(in millions)	Fair Value (1)		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value (1)		Unrealized Losses
Fixed maturities
U.S. Governments	$	17.4	$	0.6	$	—	$	—	$	17.4	$	0.6


Corporate bonds	19.6		1.2		1.7		0.1		21.3		1.3
Commercial mortgage-backed securities	9.7		0.1		8.0		0.2		17.7		0.3
Residential mortgage-backed securities	48.9		0.6		—		—		48.9		0.6
Asset-backed securities	9.9		0.1		—		—		9.9		0.1
Collateralized loan obligations	11.5		0.2		—		—		11.5		0.2
Total fixed maturities	$	117.0	$	2.8	$	9.7	$	0.3	$	126.7	$	3.1

(1) Current year presentation: The fair values associated with unrealized losses less than $0.1 are not presented in the table above.

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December 31, 2023	Less Than One Year				One Year or Greater				Total
(in millions)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Fixed maturities
U.S. Governments	$	—	$	—	$	—	$	—	$	—	$	—
Foreign Governments	0.1		—		—		—		0.1		—
Obligations of states and political subdivisions	0.5		—		—		—		0.5		—
Corporate bonds	38.7		0.8		—		—		38.7		0.8
Commercial mortgage-backed securities	32.2		0.5		—		—		32.2		0.5
Residential mortgage-backed securities	2.9		—		—		—		2.9		—
Asset-backed securities	11.4		0.1		—		—		11.4		0.1
Collateralized loan obligations	21.4		—		—		—		21.4		—
Total fixed maturities	$	107.2	$	1.4	$	—	$	—	$	107.2	$	1.4

We hold a total of 1,042 fixed maturity securities, of which 105 were in an unrealized loss position for less than one year and 13 were in an unrealized loss position for a period one year or greater as of December 31, 2024.

For fixed maturities with a decline in fair value below the amortized cost due to credit-related factors, an allowance is established for the difference between the estimated recoverable value and amortized cost with a corresponding charge to Net investment and other gains (losses) in the Consolidated Statements of Income (Loss). The allowance is limited to the difference between amortized cost and fair value. The estimated recoverable value is the present value of cash flows expected to be collected, as determined by management. The difference between fair value and amortized cost that is not associated with credit-related factors is reported as a separate component of stockholders’ equity in other comprehensive income (loss). Accrued interest is excluded from the measurement of the allowance for credit losses.

When determining if a credit loss has been incurred, we may consider the historical performance of the security, available market information and security specific considerations such as the priority payment of the security. In addition, inputs used in our analysis include, but are not limited to, credit ratings and downgrades, delinquency rates, missed scheduled interest or principal payments, purchase yields, underlying asset performance, collateral types, modeled default rates, modeled severity rates, call/prepayment rates, expected cash flows, industry concentrations, and potential or filed bankruptcies or restructurings.

In cooperation with our investment managers, we evaluate for credit losses each quarter utilizing a bottom up review approach. At the security level, a determination is made as to whether a decline in fair value below the amortized cost basis is due to credit-related or noncredit-related factors. If we determine that all or a portion of a fixed maturity is uncollectible, the uncollectible amortized cost is written off with a corresponding reduction to the allowance for credit losses. If we collect cash flows that were previously written off, the recovery is recognized in realized investment gains. We also consider whether we intend to sell an available-for-sale security or if it is more likely than not that we will be required to sell the security before recovery of its amortized cost. In these instances, a decline in fair value is recognized in Net investment and other gains (losses) in the Consolidated Statements of Income (Loss) based on the fair value of the security at the time of assessment, resulting in a new cost basis for the security.

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The following table presents a roll-forward of the changes in allowance for credit losses on available-for-sale fixed maturities by industry category for the months ending December 31, 2024 and 2023, respectively:


	Predecessor
	Foreign Governments		Obligations of states and political subdivisions		Corporate bonds		Asset backed securities		Total
Balance, January 1, 2023	$	0.7	$	0.4	$	1.6	$	0.1	$	2.8

Securities for which allowance was not previously recorded	0.1		0.5		2.1		—		2.7
Securities sold during the period	—		—		(0.7)		—		(0.7)
Reductions for credit impairments	—		—		—		—		—
Additional net increases (decreases) in existing allowance	0.3		(0.4)		(0.4)		—		(0.5)
Balance, through November 15, 2023	$	1.1	$	0.5	$	2.6	$	0.1	$	4.3

	Successor
Balance, November 16, 2023	$	—	$	—	$	—	$	—	$	—
Additions-initial adoption of accounting standard	—		—		—		—		—
Securities for which allowance was not previously recorded	—		—		—		—		—
Securities sold during the period	—		—		—		—		—
Reductions for credit impairments	—		—		—		—		—
Additional net increases (decreases) in existing allowance	—		—		0.2		—		0.2
Balance, through December 31, 2023	$	—	$	—	$	0.2	$	—	$	0.2
Additions-initial adoption of accounting standard	—		—		—		—		—
Securities for which allowance was not previously recorded	—		—		0.8		—		0.8
Securities sold during the period	—		—		(0.1)		—		(0.1)
Reductions for credit impairments	—		—		—		—		—
Additional net increases (decreases) in existing allowance	—		—		—		—		—
Balance, December 31, 2024	$	—	$	—	$	0.9	$	—	$	0.9

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	Predecessor
(in millions)	Mortgage loans		Private loans		Total
Balance, January 1, 2023	$	0.2	$	—	$	0.2
Additions-initial adoption of accounting standard	—		—		—
Securities for which allowance was not previously recorded	—		—		—
Securities sold during the period	—		—		—
Reductions for credit impairments	—		—		—
Additional net increases (decreases) in existing allowance	—		—		—
Balance, through November 15, 2023	$	0.2	$	—	$	0.2

	Successor
Balance, November 16, 2023	$	0.2	$	—	$	0.2
Additions-initial adoption of accounting standard	—		—		—
Securities for which allowance was not previously recorded	—		—		—
Securities sold during the period	—		—		—
Reductions for credit impairments	—		—		—
Additional net increases (decreases) in existing allowance	—		—		—
Balance, through December 31, 2023	$	0.2	$	—	$	0.2
Additions-initial adoption of accounting standard	—		—		—
Securities for which allowance was not previously recorded	0.8		4.8		5.6
Securities sold during the period	(0.4)		—		(0.4)
Reductions for credit impairments	—		—		—
Additional net increases (decreases) in existing allowance	0.6		(0.4)		0.2
Balance, December 31, 2024	$	1.2	$	4.4	$	5.6

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Mortgage Loans

Mortgage loan investments are composed of participation interests in a portfolio of commercial and residential mortgage loans. Loan collateral is diversified with regard to property type and geography. The following table presents loans by property type:


	December 31, 2024
(in millions)	Cost		Composition		Loan Count
Apartments	$	82.5	39.3	%	10
Hotel	12.6		6.0	%	1
Industrial	69.2		32.9	%	3
Office	26.0		12.4	%	1
Retail	19.8		9.4	%	2
Total	$	210.1	100.0	%	17


	December 31, 2023
(in millions)	Cost		Composition		Loan Count
Apartments	$	76.1	52.6	%	16
Hotel	22.4		15.4	%	4
Industrial	26.0		18.0	%	4
Retail	20.3		14.0	%	4
Total	$	144.8	100.0	%	28

The following table presents our commercial mortgage loans by Debt Service Coverage Ratio (“DSCR”):


	December 31, 2024
(in millions)	Cost		Loan Count
Less than 1.00	$	12.2	3
1.00 to 1.50	37.1		4
Greater than 1.5 to 2.0	135.7		8
Greater than 2.0 to 3.0	12.6		1


Total	$	197.6	16


	December 31, 2023
(in millions)	Cost		Loan Count
Less than 1.00	$	36.2	8
1.00 to 1.50	29.4		6
Greater than 1.5 to 2.0	30.9		6
Greater than 2.0 to 3.0	36.0		6
Greater than 3.0 to 4.0	12.3		2
Total	$	144.8	28

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The following table presents loans by Loan To Value (“LTV”):


	December 31, 2024
(in millions)	Cost		Loan Count
Equal to or less than 50.0%	$	1.7	2
Greater than 50.0% to 55.0%	43.2		1
Greater than 55.0% to 60.0%	12.4		1
Greater than 60.0% to 70.0%	47.6		4
Greater than 70.0%	105.2		9
Total	$	210.1	17


	December 31, 2023
(in millions)	Cost		Loan Count
Equal to or less than 50.0%	$	12.3	2
Greater than 50.0% to 55.0%	9.1		2
Greater than 55.0% to 60.0%	18.9		4
Greater than 60.0% to 70.0%	37.3		6
Greater than 70.0%	67.2		14
Total	$	144.8	28

The following table presents loans by maturity:


	December 31, 2024
(in millions)	Cost		Loan Count
One Year or Less	$	34.9	3
Greater than One Year and Less than Three Years	103.5		7
Greater than Three Years and Less than Five Years	17.7		2
Greater than Five Years and Less than Seven Years	0.0		0
Greater than Seven Years and Less than Ten Years	54.0		5

Total	$	210.1	17


	December 31, 2023
(in millions)	Cost		Loan Count
One Year or Less	$	19.7	4
Greater than One Year and Less than Three Years	34.9		6
Greater than Three Years and Less than Five Years	32.4		6
Greater than Five Years and Less than Seven Years	17.2		4
Greater than Seven Years and Less than Ten Years	40.6		8

Total	$	144.8	28

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Investment and Other Gains and Losses

The following table presents our gross realized investment gains and losses:


	Successor				Predecessor
	For the Year Ended		Period from		Period from		For the Year Ended
(in millions)	December 31, 2024		November 16, 2023 through December 31, 2023		January 1, 2023 through November 15, 2023		December 31, 2022
Realized gains on fixed maturities and other:
Fixed maturities	$	10.9	$	0.1	$	0.6	$	20.5
Other investments, including short-term investments	8.0		5.4		14.9		34.8

Total realized gains on fixed maturities and other	18.9		5.5		15.5		55.3
Realized losses on fixed maturities and other:
Fixed maturities	(1.4)		—		(25.7)		(29.9)
Other investments, including short-term investments	(4.1)		(5.4)		(11.3)		(51.1)
Other assets	(3.2)		—		—		—


Total realized losses on fixed maturities and other	(8.7)		(5.4)		(37.0)		(81.0)

Other net losses recognized on fixed maturities and other:
Credit gains (losses) on fixed maturities	(0.8)		(0.2)		(2.2)		(4.6)
Impairment related to change in intent(1)	—		—		(2.9)		(34.2)
Other(2)	(6.1)		—		(8.4)		(55.1)
Total realized losses on fixed maturities and other	(6.9)		(0.2)		(13.5)		(93.9)

Equity securities
Net realized gains (losses) on equity securities	(0.9)		—		6.8		1.2
Change in unrealized gains (losses) on equity securities held at the end of the period	17.6		(0.2)		5.5		3.1
Net gains (losses) on equity securities	16.7		(0.2)		12.3		4.3
Net investment and other gains (losses) before income taxes	20.0		(0.3)		(22.7)		(115.3)
Income tax (benefit) provision	4.2		(0.1)		(6.8)		(10.0)
Net investment and other gains (losses), net of income taxes	$	15.8	$	(0.2)	$	(15.9)	$	(105.3)

(1) Refer to the Loss Portfolio Transfer - U.S. in Note 2, “Recent Acquisitions, Disposals & Other Transactions” in our 2023 Form 10-K for the year ended December 31, 2022.

(2) Refer to the sale of AGSE and Argo Seguros in Note 2, “Recent Acquisitions, Disposals & Other Transactions” in our 2023 Form 10-K for the year ended December 31, 2022.

The cost of securities sold is based on the specific identification method.

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Changes in unrealized gains (losses) related to investments are summarized as follows:


	Successor				Predecessor
	For the Year Ended		Period from		Period from		For the Year Ended
(in millions)	December 31, 2024		November 16, 2023 through December 31, 2023		January 1, 2023 through November 15, 2023		December 31, 2022
Change in unrealized gains (losses)
Fixed maturities	$	(25.0)	$	64.2	$	41.2	$	(383.7)

Other and short-term investments	(0.2)		0.4		2.0		(0.8)
Net unrealized investment gains (losses) before income taxes	(25.2)		64.6		43.2		(384.5)
Income tax provision (benefit)	(5.3)		13.5		7.4		(71.7)
Net unrealized investment gains (losses), net of income taxes	$	(19.9)	$	51.1	$	35.8	$	(312.8)

Foreign Currency Exchange Forward Contracts

We entered into foreign currency exchange forward contracts primarily to manage operation currency exposure from our non-USD insurance operations. We also invested in a total return strategy which invested in multiple currencies, and that investment was terminated in mid-2021. The currency forward contracts are carried at fair value in our Consolidated Balance Sheets in Accrued underwriting expenses and other liabilities and Other assets at December 31, 2024 and 2023. The net realized gains and (losses) are included in Net realized investment and other gains (losses) in our Consolidated Statements of Income (Loss).

The fair value of our foreign currency exchange forward contracts as of December 31, 2024 and 2023 was as follows:


	As of
	December 31, 2024				December 31, 2023
(in millions)	Notional Amount		Fair Value		Notional Amount		Fair Value
Operational currency exposure	$	—	$	—	$	75.4	$	1.8
Asset manager investment exposure	151.0		2.7		89.1		(0.5)

Total	$	151.0	$	2.7	$	164.5	$	1.3

The following table presents our gross investment realized gains and losses on our foreign currency exchange forward contracts:


	Successor				Predecessor
	For the Year Ended		Period from		Period from		For the Year Ended
(in millions)	December 31, 2024		November 16, 2023 through December 31, 2023		January 1, 2023 through November 15, 2023		December 31, 2022
Realized gains
Operational currency exposure	$	2.8	$	4.5	$	12.0	$	30.0
Asset manager investment exposure	6.4		—		1.5		3.9

Gross realized investment gains	9.2		4.5		13.5		33.9
Realized losses
Operational currency exposure	(3.6)		(2.9)		(11.4)		(46.3)
Asset manager investment exposure	(1.7)		(0.7)		(1.0)		(0.9)

Gross realized investment losses	(5.3)		(3.6)		(12.4)		(47.2)
Net realized investment gains (losses) on foreign currency exchange forward contracts	$	3.9	$	0.9	$	1.1	$	(13.3)

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Regulatory Deposits, Pledged Securities and Letters of Credit

We are required to maintain assets on deposit with various regulatory authorities to support our insurance and reinsurance operations. We maintain assets pledged as collateral in support of irrevocable letters of credit issued under the terms of certain reinsurance agreements for reported loss and loss expense reserves. The following table presents our components of restricted assets:


	As of
(in millions)	December 31, 2024		December 31, 2023
Securities and cash on deposit for regulatory and other purposes	$	180.1	$	153.4
Securities pledged as collateral for letters of credit and other	40.1		109.2

Total restricted investments	$	220.2	$	262.6

Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability, or in the absence of a principal market, the most advantageous market. Market participants are buyers and sellers in the principal (or most advantageous) market that are independent, knowledgeable, able to transact for the asset or liability and willing to transfer the asset or liability.

Valuation techniques consistent with the market and income approach are used to measure fair value. The inputs of these valuation techniques are categorized into three levels.

•Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that can be accessed at the reporting date. We define actively traded as a security that has traded in the past seven days. We receive one quote per instrument for Level 1 inputs.

•Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. We receive one quote per instrument for Level 2 inputs.

•Level 3 inputs are unobservable inputs. Unobservable inputs reflect our own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances.

We receive fair value prices from third-party pricing services and our outside investment managers. These prices are determined using observable market information such as dealer quotes, market spreads, cash flows, yield curves, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the security’s terms and conditions, among other things. We have reviewed the processes used by the third-party providers for pricing the securities, and have determined that these processes result in fair values consistent with GAAP requirements. In addition, we review these prices for reasonableness, and have not adjusted any prices received from the third-party providers as of December 31, 2024 and 2023. A description of the valuation techniques we use to measure assets at fair value is as follows:

Fixed Maturities (Available-for-Sale) Levels 1 and 2:

•U.S. Treasury securities are typically valued using Level 1 inputs. For these securities, we obtain fair value measurements from third-party pricing services using quoted prices (unadjusted) in active markets at the reporting date.

•U.S. Government agencies, non-U.S. Government securities, obligations of states and political subdivisions, credit securities and foreign denominated government and credit securities are reported at fair value using Level 2 inputs. For these securities, we obtain fair value measurements from third-party pricing services. Observable data may include dealer quotes, market spreads, yield curves, live trading levels, trade execution data, credit information and the security’s terms and conditions, among other things.

•Asset and mortgage-backed securities and collateralized loan obligations are reported at fair value using Level 2 inputs. For these securities, we obtain fair value measurements from third-party pricing services. Observable data may include dealer quotes, market spreads, cash flows, yield curves, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the security’s terms and conditions, among other things.

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Fixed Maturities Level 3: We own term loans and asset-backed securities that are valued using unobservable inputs.

Equity Securities Level 1: Equity securities are reported at fair value using Level 1 inputs. For these securities, we obtain fair value measurements from a third-party pricing service using quoted prices (unadjusted) in active markets at the reporting date.

Equity Securities Level 3: We own certain equity securities that are reported at fair value using Level 3 inputs. The valuation techniques for these securities include the following:

•Fair value measurements from asset managers based on broker quotes that may be non-binding or use inputs that can be difficult to corroborate with observable market data. Due to the lack of transparency into broker valuation methodologies, valuations based on broker quotes are categorized into Level 3.

•Fair value measurements for private CLO equity tranches that utilize discounted cash flow techniques and incorporate unobservable assumptions.

•Fair value measurements for investments in commercial real estate entities utilizing valuation techniques that incorporate unobservable assumptions, including equity investments in real entities for which we have elected the fair value option. We elect the fair value option for certain investments in order to reflect fair value changes in Net investment and other gains (losses) on our Consolidated Statements of Income (Loss). We apply the equity method of accounting to other similar investments where we have not elected the fair value option of accounting and include those investments within Other investments on our Consolidated Balance Sheets.

Short-term Investments: Short-term investments are principally reported at fair value using Level 1 inputs, with the exception of short-term corporate and governmental bonds reported at fair value using Level 2 inputs as described in the fixed maturities section above. Values for the investments categorized as Level 1 are obtained from various financial institutions as of the reporting date.

Based on an analysis of the inputs, our financial assets and liabilities measured at fair value on a recurring basis have been categorized as follows:


			Fair Value Measurements at Reporting Date Using
(in millions)	December 31, 2024		Level 1		Level 2		Level 3
Fixed maturities
U.S. Governments	$	223.2	$	221.0	$	2.2	$	—
Foreign Governments	7.1		—		7.1		—
Obligations of states and political subdivisions	81.7		—		81.7		—
Corporate bonds	1,050.7		—		1,028.0		22.7
Commercial mortgage-backed securities	286.3		—		286.3		—
Residential mortgage-backed securities	203.2		—		203.2		—
Asset-backed securities	107.4		—		93.5		13.9
Collateralized loan obligations	109.3		—		109.3		—
Total fixed maturities	2,068.9		221.0		1,811.3		36.6
Equity securities	413.0		297.5		—		115.5
Other investments	4.7		—		0.2		4.5
Short-term investments	209.1		208.9		0.2		—
Derivatives	24.2		—		24.2		—
Total assets	$	2,719.9	$	727.4	$	1,835.9	$	156.6

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			Fair Value Measurements at Reporting Date Using
(in millions)	December 31, 2023		Level 1		Level 2		Level 3
Fixed maturities
U.S. Governments	$	362.2	$	360.1	$	2.1	$	—
Foreign Governments	30.3		—		30.3		—
Obligations of states and political subdivisions	94.4		—		94.4		—
Corporate bonds	1,213.1		—		1,180.5		32.6
Commercial mortgage-backed securities	280.5		—		280.5		—
Residential mortgage-backed securities	248.8		—		248.8		—
Asset-backed securities	142.0		—		124.2		17.8
Collateralized loan obligations	214.1		—		214.1		—
Total fixed maturities	2,585.4		360.1		2,174.9		50.4
Equity securities	10.7		4.3		—		6.4
Other investments	0.2		—		0.2		—
Short-term investments	429.5		429.0		0.5		—
Derivatives	1.3		—		1.3		—
Total assets	$	3,027.1	$	793.4	$	2,176.9	$	56.8

The fair value measurements in the tables above do not equal to Total investments on our Consolidated Balance Sheets as they primarily exclude Mortgage loans, Private loans, certain Other investments and certain Short-term investments. Our mortgage loans and private loans, some of which are classified as short-term investments based on the time to maturity at acquisition, are carried at amortized cost. Certain other investments are accounted for in accordance with the equity-method of accounting, carried at amortized cost or use NAV as a practical expedient.

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A reconciliation of the beginning and ending balances for the investments categorized as Level 3 are as follows:

Fair Value Measurements Using Observable Inputs (Level 3)


(in millions)	Fixed Maturities		Equity Securities		Other Investments		Total
Beginning balance, January 1, 2024	$	50.4	$	6.4	$	—	$	56.8
Transfers into Level 3	0.7		—		—		0.7
Transfers out of Level 3	(10.1)		—		—		(10.1)
Total gains or losses (realized/unrealized):
Included in net income	1.5		28.3		—		29.8
Included in other comprehensive income	(0.7)		—		—		(0.7)
Purchases, issuances, sales, and settlements:
Purchases	2.5		80.9		8.3		91.7

Sales	—		(0.1)		(1.6)		(1.7)
Settlements	(7.7)		—		(2.2)		(9.9)
Ending balance, December 31, 2024	$	36.6	$	115.5	$	4.5	$	156.6
Amount of total gains or losses for the year included in net income attributable to the change in unrealized gains or losses relating to assets still held at December 31, 2024	$	—	$	28.4	$	—	$	28.4


(in millions)	Credit Financial		Equity Securities		Total
Beginning balance, January 1, 2023	$	40.7	$	15.5	$	56.2
Transfers into Level 3	5.6		—		5.6
Transfers out of Level 3	(5.6)		(7.6)		(13.2)
Total gains or losses (realized/unrealized):
Included in net income	(0.1)		(0.4)		(0.5)
Included in other comprehensive loss	0.8		—		0.8
Purchases, issuances, sales, and settlements:
Purchases	10.6		—		10.6

Sales	(0.5)		(1.1)		(1.6)
Settlements	(1.1)		—		(1.1)
Ending balance, December 31, 2023	$	50.4	$	6.4	$	56.8
Amount of total gains or losses for the year included in net income attributable to the change in unrealized gains or losses relating to assets still held at December 31, 2023	$	—	$	(0.8)	$	(0.8)

At December 31, 2024 and 2023, we did not have any financial assets or financial liabilities measured at fair value on a nonrecurring basis or any financial liabilities on a recurring basis.

The Company holds investments in mortgage loans and private loans reported at cost, less an allowance for expected credit losses on the Consolidated Balance Sheets. The allowance for expected credit losses on mortgage loans was $1.2 million and $0.2 million at December 31, 2024 and 2023, respectively. The allowance for expected credit losses on private loans was $4.4 million and $0.0 million at December 31, 2024 and 2023, respectively. The cost and estimated fair value of the investments in mortgage and private loans were:


	As of
	December 31, 2024				December 31, 2023
(in millions)	Cost		Fair Value		Cost		Fair Value
Mortgage Loans	$	210.1	$	214.2	$	144.8	$	148.8
Private Loans	577.3		597.2		—		—
Total	$	787.4	$	811.4	$	144.8	$	148.8

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4. Allowance for Credit Losses

Premiums receivable

The following table represents the balances of premiums receivable, net of allowance for estimated uncollectible premiums, including expected lifetime credit losses, and the changes in the allowance for the respective periods:


(in millions)	Premiums Receivable, Net of Allowance for Estimated Uncollectible Premiums		Allowance for Estimated Uncollectible Premiums
	Successor
Balance, November 16, 2023	$	306.8	$	—
Current period change for estimated uncollectible premiums			3.3
Write-offs of uncollectible premiums receivable			(0.3)
Balance, December 31, 2023	$	230.7	$	3.0
Current period change for estimated uncollectible premiums			6.9
Write-offs of uncollectible premiums receivable			(2.1)
Balance, December 31, 2024	$	179.5	$	7.8

	Predecessor
Balance, December 31, 2022	$	292.0	$	4.7
Current period change for estimated uncollectible premiums			5.4
Write-offs of uncollectible premiums receivable			(2.7)
Balance, November 15, 2023	$	306.8	$	7.4

Reinsurance Recoverables

The following table presents the balances of reinsurance recoverables, net of the allowance for estimated uncollectible reinsurance, including expected credit losses, and changes in the allowance for the respective periods:


(in millions)	Reinsurance Recoverables, Net of Allowance for Estimated Uncollectible Reinsurance		Allowance for Estimated Uncollectible Reinsurance
	Successor
Balance, November 16, 2023	$	2,981.6	$	—
Balance, December 31, 2023	$	2,959.3	$	—
Current period change for estimated uncollectible reinsurance			5.8
Balance, December 31, 2024	$	3,053.2	$	5.8

	Predecessor
Balance, December 31, 2022	$	3,029.1	$	4.7
Balance, November 15, 2023	$	2,981.6	$	4.7

We primarily utilize A.M. Best credit ratings when determining the allowance, adjusted as needed based on our historical experience with the reinsurers. Certain of our reinsurance recoverables are collateralized by letters of credit, funds held or trust agreements.

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5. Leases

Our operating lease obligations are for our office facilities. Our leases have remaining lease terms ranging between less than 1 year and 9 years, some of which include options to extend the leases.

The lease information is as follows:


	December 31,
	2024			2023
(in millions)
Operating leases right-of-use assets	$	47.6		$	51.2
Operating lease liabilities	49.1			51.4

Operating lease weighted-average remaining lease term	6.80			7.70
Operating lease weighted-average discount rate	6.07		%	6.13		%


	Successor				Predecessor
	For the Year Ended		Period from		Period from		For the Year Ended
	December 31, 2024		November 16, 2023 through December 31, 2023		January 1, 2023 through November 15, 2023		December 31, 2022
(in millions)
Operating lease costs	$	5.2	$	0.7	$	5.2	$	8.1
Variable lease costs	2.3		0.5		3.3		4.7
Sublease income	(1.0)		(0.1)		(0.9)		(1.0)
Total lease costs	$	6.5	$	1.1	$	7.6	$	11.8

Our short-term leases as of December 31, 2024 and 2023 were not material.

Future minimum lease payments under operating leases as of December 31, 2024 were as follows:


	December 31,
(in millions)	2024
2025	$	9.9
2026	9.5
2027	8.9
2028	7.6
2029	7.2
Thereafter	16.8
Total future minimum lease payments	59.9


Less imputed interest	(10.8)
Total operating lease liability	$	49.1

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6. Reinsurance

We reinsure certain risks with other insurance companies. Such arrangements serve to limit our maximum loss on certain individual risks as well as on catastrophes and large or unusually hazardous risks. We are liable to our insureds for reinsurance ceded in the event our reinsurers do not meet their obligations. Thus, a credit exposure exists with respect to reinsurance ceded to the extent that any reinsurer is unable or unwilling to meet the obligations assumed under the reinsurance contracts. Our allowance for uncollectible reinsurance balances receivable on paid losses and incurred claims was $5.8 million at December 31, 2024 as compared to nil at December 31, 2023 (see Note 4, “Allowance for Credit Losses” for additional information). Under certain reinsurance agreements, collateral, including letters of credit, is held to secure performance of reinsurers in meeting their obligations. The amount of such collateral was $1,157.9 million and $1,212.2 million at December 31, 2024 and December 31, 2023, respectively. The collateral we hold does not apply to our entire outstanding reinsurance recoverable. Rather, collateral is provided on an individual contract basis, as appropriate. For each individual reinsurer, the collateral held may exceed or fall below the total outstanding recoverable from that individual reinsurer.

The long-term nature of the reinsurance contracts creates a credit risk to us over time arising from potentially uncollectible reinsurance. To mitigate that counterparty risk, we evaluate our reinsurers to assess their financial condition. The factors that underlie these reviews include a financial risk assessment as well as an internal assessment of the capitalization and the operational risk of the reinsurer. As a result of these reviews, we may make changes to the approved markets that are used in both our treaty and facultative reinsurance programs.

In light of collateral held, we believe that no exposure to a single reinsurer represents an inappropriate concentration of credit risk to the Company. Gross reinsurance assets due from reinsurers exceeding five percent of our total reinsurance assets were approximately $836.1 million and $945.0 million at December 31, 2024 and 2023, respectively, of which approximately $367.3 million and $465.1 million, respectively, was secured by collateral.

Estimated losses recoverable from reinsurers and the ceded portion of unearned premiums are reported as assets in our Consolidated Balance Sheets. Included in Reinsurance recoverables are paid loss recoverables of $258.5 million and $161.9 million as of December 31, 2024 and 2023, respectively. Earned premiums and losses and loss adjustment expenses are reported net of reinsurance in our Consolidated Statements of Income (Loss).

Losses and loss adjustment expenses were $1,018.3 million for the year ended December 31, 2024, $94.2 million for the period ended period November 16, 2023 through December 31, 2023 (Successor), $1,043.2 million for January 1, 2023 through November 15, 2023 (Predecessor), and, $1,166.9 million for the year ended December 31, 2022, are net of amounts ceded to reinsurers of $825.3 million, $79.3 million, $607.3 million and $958.8 million, respectively.

We are required to accept certain assigned risks and other legally mandated reinsurance obligations. Prior to the mid-1980s, we assumed various forms of casualty reinsurance for which we continue to maintain reserves for losses and loss adjustment expenses. For such assumed reinsurance transactions, we engage in various monitoring steps that are common with assumed reinsurance such as ongoing claims reviews. We assumed property related reinsurance primarily through Argo Re.

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Premiums were as follows:


	Successor						Predecessor
	For the Year Ended			Period from			Period from			For the Year Ended
	December 31, 2024			November 16, 2023 through December 31, 2023			January 1, 2023 through November 15, 2023			December 31, 2022
(in millions)
Direct written premiums	$	1,740.6		$	186.0		$	1,907.9		$	2,682.8
Reinsurance ceded to other companies	(775.5)			(66.8)			(803.6)			(1,106.7)
Reinsurance assumed from other companies	5.2			5.1			40.4			165.4
Net written premiums	$	970.3		$	124.3		$	1,144.7		$	1,741.5
Direct earned premiums	$	1,843.3		$	252.3		$	1,906.5		$	2,757.8
Reinsurance ceded to other companies	(773.6)			(98.4)			(724.9)			(1,205.3)
Reinsurance assumed from other companies	20.1			8.4			44.3			187.9
Net earned premiums	$	1,089.8		$	162.3		$	1,225.9		$	1,740.4
Percentage of reinsurance assumed to net earned premiums	1.8		%	5.2		%	3.6		%	10.8		%

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7. Reserves for Losses and Loss Adjustment Expenses

The following table provides a reconciliation of reserves for losses and loss adjustment expenses (“LAE”):


	Successor				Predecessor
	For the Year Ended		Period from		Period from		For the Year Ended
(in millions)	December 31, 2024		November 16, 2023 through December 31, 2023		January 1, 2023 through November 15, 2023		December 31, 2022
Net reserves beginning of the period	$	2,747.1	$	2,734.6	$	2,213.1	$	3,123.2


Add:
Losses and LAE incurred during current calendar year, net of reinsurance:
Current accident year	763.4		94.2		775.3		1,102.2
Prior accident years	254.9		—		267.9		64.7
Losses and LAE incurred during calendar year, net of reinsurance	1,018.3		94.2		1,043.2		1,166.9
Deduct:
Losses and LAE payments made during current calendar year, net of reinsurance:
Current accident year	91.4		33.5		100.6		171.5
Prior accident years	687.0		51.8		427.3		828.0
Losses and LAE payments made during current calendar year, net of reinsurance:	778.4		85.3		527.9		999.5
Add/(Deduct):
Divestitures (1)	—		—		24.4		(35.2)
Reclassified to liabilities held-for-sale (2)	—		—		—		(313.0)
Net reserves ceded to Syndicate 1200 (2)	—		—		—		(129.6)
Deferred gain on U.S. loss portfolio transfer, net of amortization	—		—		(40.9)		—
Loss portfolio transfer:
U.S. (3)	—		—		—		(472.6)
Syndicate 1200 (for years of account 2018 and 2019) (4)	—		—		—		(144.0)

Retroactive reinsurance (5)	—		—		21.7		—
Change in participation interest (6)	—		—		—		34.3
Purchase accounting adjustment (7)	19.4		—		—		—
Total net reserve adjustments	19.4		—		5.2		(1,060.1)
Foreign exchange adjustments	(2.5)		3.6		1.0		(17.4)
Net reserves - end of period	3,003.9		2,747.1		2,734.6		2,213.1
Add:
Reinsurance recoverables on unpaid losses and LAE, end of year	2,794.7		2,797.4		2,791.8		2,838.5
Gross reserves - end of period	$	5,798.6	$	5,544.5	$	5,526.4	$	5,051.6

(1)For the period ended November 15, 2023, the adjustment relates to the year-to-date activity of Syndicate 1200 and on reinsurance contracts with AUA subsidiaries. Refer to the sale of Argo Underwriting Agency Limited in Note 2, “Recent Acquisitions, Disposals & Other Transactions” in our 2023 Form 10-K for additional information. For the period ended December 31, 2022, refer to the sale of Argo Seguros and AGSE in Note 2, “Recent Acquisitions, Disposals & Other Transactions” in our 2023 Form 10-K for additional information.

(2)Refer to the sale of Argo Underwriting Agency Limited in Note 2, “Recent Acquisitions, Disposals & Other Transactions” in our 2023 Form 10-K for additional information. Additionally, the Company reduced net reserves in the amount of $129.6 million for reinsurance contracts with AUA subsidiaries, which were reclassified to held-for-sale.

(3)Loss portfolio transfer of the Company’s U.S. casualty insurance reserves for accident years 2011 to 2019. Refer to Note 2, “Recent Acquisitions, Disposals & Other Transactions” in our 2023 Form 10-K for additional information.

(4)Loss portfolio transfer on Syndicate 1200's reserves for the 2018 and 2019 years of account. Refer to Note 2, “Recent Acquisitions, Disposals & Other Transactions” in our 2023 Form 10-K for additional information.

(5)In connection with the sale of AUA, the Company entered into two retroactive reinsurance agreements with AUA subsidiaries.

(6)Amount represents the change in reserves due to changing our participation in Syndicates 1200 and 1910.

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(7)Impact of measurement period adjustment in connection with the Merger. Refer to Note 2, “Recent Acquisitions, Disposals & Other Transactions” for additional information.

Reserves for losses and LAE represent the estimated indemnity cost and related adjustment expenses necessary to investigate and settle claims. Such estimates are based upon individual case estimates for reported claims, estimates from ceding companies for reinsurance assumed and actuarial estimates for losses that have been incurred but not yet reported to the insurer. Any change in probable ultimate liabilities is reflected in current operating results.

The impact from the net unfavorable (favorable) development of prior accident years’ losses and LAE reserves on each reporting segment is presented below:


	Successor
	For the Year Ended		Period from
(in millions)	December 31, 2024		November 16, 2023 through December 31, 2023
Casualty Lines	$	87.7	$	—
Specialty Lines	3.1		—
Run-off Lines	164.1		—
Total (favorable) unfavorable prior-year development	$	254.9	$	—


	Predecessor
	Period from		For the Year Ended
(in millions)	January 1, 2023 through November 15, 2023		December 31, 2022
U.S. Operations	$	246.3	$	64.5
International Operations	21.4		(2.7)
Run-off Lines	0.2		2.9
Total (favorable) unfavorable prior-year development	$	267.9	$	64.7

The following describes the primary factors behind each segment’s net prior accident year reserve development for the year ended December 31, 2024, for the period January 1, 2023 through November 15, 2023 (Predecessor), and for the year ended December 31, 2022:

Year ended December 31, 2024:

•Casualty Lines: Net unfavorable development related to the recognition of higher-than-expected loss experience, primarily in construction segments, along with updates to the expectations for future loss experience and development for Bermuda Casualty.

•Specialty Lines: Net unfavorable development related to the recognition of higher-than-expected loss experience in Inland Marine, along with small offsetting amounts across other specialty segments.

•Run-off Lines: Net unfavorable development related to the recognition of higher-than-expected loss experience across several runoff segments, including U.S. and Bermuda professional lines, Trident, and assumed business from our former Malta operations sold in 2022, along with updates to the expectations for future loss experience and development for U.S. and Bermuda professional lines.

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The Company did not recognize any development of prior accident years’ losses and LAE reserves for the period November 16, 2023 through December 31, 2023 (Successor).

Period ended January 1, 2023 through November 15, 2023 (Predecessor):

•U.S. Operations: Net unfavorable development primarily related to liability lines and professional lines, including the impact of large losses partially offset by favorable development in specialty lines. The liability lines movement was largely due to businesses we have exited. The professional lines movement largely impacted accident years 2019 through 2021.

•International Operations: Net unfavorable development primarily related to unfavorable development in professional and liability lines in Argo Insurance Bermuda.

•Run-off Lines: Net unfavorable development primarily related to asbestos and environmental lines largely offset by favorable loss reserve development in run-off workers compensation and liability losses excluding asbestos and environmental.

Year ended December 31, 2022:

•U.S. Operations: Net unfavorable development primarily related to liability lines, including the impact of large losses and claims alleging construction defect, and driven by businesses we have exited, partially offset by favorable development in specialty and professional lines. The net unfavorable prior year development relates to accident years 2019 and prior partially offset by favorable prior year development on accident years 2020 and 2021.

•International Operations: Net favorable development primarily related to favorable development in liability and specialty lines, partially offset by unfavorable development from professional and property lines. The professional lines development included large claim movements in Argo Insurance Bermuda.

•Run-off Lines: Net unfavorable development primarily related to asbestos and environmental lines partially offset by favorable loss reserve development in run-off liability losses excluding asbestos and environmental.

Our reserves represent the best estimate of our ultimate liabilities, based on currently known facts, current law, and reasonable assumptions where facts are not known. Due to the significant uncertainties and related management judgments, there can be no assurance that future favorable or unfavorable loss development, which may be material, will not occur.

Actuarial models base future emergence on historic experience, with adjustments for current trends, and the appropriateness of these assumptions involved more uncertainty as of December 31, 2024. We expect there will be impacts to the timing of loss emergence and ultimate loss ratios for certain coverages we underwrite. The industry is experiencing new issues, including the temporary suspension of civil court cases in most states, the extension of certain statutes of limitations and the impact on our insureds from a significant reduction in economic activity. Our booked reserves include consideration of these factors, but legislative, regulatory or judicial actions could result in loss reserve deficiencies and reduce earnings in future periods.

Short-Duration Contract Disclosures

Our basis for disaggregating short-duration contracts is by each of our three ongoing reporting segments, Casualty Lines, Specialty Lines, and Run-off. We have chosen to disaggregate the data in this way so as to not obscure useful information by otherwise aggregating items with significantly different characteristics. See Note 15, “Segment Information,” for additional information regarding our three ongoing reporting segments.

Reserves for IBNR Claims

Reserves for IBNR claims are based on the estimated ultimate cost of settling claims, including the effects of inflation and other social and economic factors, using past experience adjusted for current trends and any other factors that would modify past experience. We use a variety of actuarial techniques to analyze current claims costs, including frequency and severity data. These actuarial techniques consider variables such as past loss experience, current claims trends, and prevailing economic, social and legal environments. Each such method has its own set of assumptions and outputs, and each has strengths and weaknesses in different areas. Since no single estimation method is superior to another method in all situations, the methods and assumptions used to project loss reserves will vary by coverage and product. We use what we believe to be the most appropriate set of actuarial methods and assumptions for each product line grouping and coverage. While the loss projection methods may vary by product line and coverage, the general approach for calculating IBNR remains the same: ultimate losses are forecasted first, and that amount is reduced by the amount of cumulative paid claims and case reserves. Reserves established in prior years are adjusted as loss experience develops and new information becomes available. Adjustments to previously estimated reserves are reflected in the results of operations in the year in which they are made.

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As described above, various actuarial methods are used to determine the reserves for losses and LAE recorded in our Consolidated Balance Sheets. Weightings of methods at a detailed level may change from evaluation to evaluation based on a number of observations, measures, and time elements. In comparing loss reserve methods and assumptions used at December 31, 2024 as compared with methods and assumptions used at December 31, 2023, management has not changed or adjusted methodologies or assumptions in any significant manner.

Incurred & Paid Claims Development Disclosures

The following tables provide information about incurred and cumulative paid losses and allocated loss adjustment expenses (“ALAE”), net of reinsurance. The following tables also include IBNR reserves plus expected development on reported claims and the cumulative number of reported claims as of December 31, 2024.


Reporting Segment: Casualty Lines (in millions, except number of claims reported)
	Incurred Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
		2015 (1)		2016 (1)		2017 (1)		2018 (1)		2019 (1)		2020 (1)		2021 (1)		2022 (1)		2023 (1)		2024 (1)
2015		$	186.8	$	186.8	$	187.3	$	194.1	$	191.2	$	198.4	$	212.1	$	158.7	$	185.3	$	202.2
2016				205.6		204.9		191.6		179.6		178.7		184.5		162.4		157.1		159.4
2017						228.1		227.0		231.7		233.9		257.5		147.6		216.1		225.2
2018								253.4		261.2		245.9		241.3		194.3		174.4		190.3
2019										248.1		243.5		233.5		359.3		144.2		143.4
2020												235.4		213.3		190.2		203.3		233.2
2021														257.1		243.7		247.6		255.8
2022																306.7		302.4		300.4
2023																		332.8		328.5
2024																				331.4
																		Total		$	2,369.8

	Cumulative Paid Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
		2015 (1)		2016 (1)		2017 (1)		2018 (1)		2019 (1)		2020 (1)		2021 (1)		2022 (1)		2023 (1)		2024 (1)
2015		$	11.7	$	30.7	$	70.5	$	98.2	$	119.4	$	141.4	$	161.4	$	174.3	$	174.9	$	175.6
2016				12.3		33.4		58.3		91.7		110.8		128.9		131.7		132.6		137.1
2017						12.7		43.4		72.8		124.6		158.4		164.3		171.8		188.6
2018								16.2		58.6		100.7		130		140.6		146.3		148.6
2019										15.2		49.9		80.1		90.5		97.9		101.9
2020												13.3		33.9		54.4		79.9		116.8
2021														13.1		37.4		70.3		104.3
2022																12.9		42.4		72.9
2023																		13.8		51.8
2024																				12.9
																		Total		1,110.5
Other Casualty outstanding liabilities including unpaid loss and ALAE prior to 2014, net of reinsurance																				54.2
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance																				$	1,313.5

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	As of December 31, 2024
Accident Year	Incurred Losses & ALAE, Net of Reinsurance		IBNR & Expected Development on Reported Claims		Cumulative Number of Reported Claims (2)
2015	$	202.2	$	14.9	5,764
2016	159.4		16.1		5,853
2017	225.2		30.1		8,831
2018	190.3		30.9		9,352
2019	143.4		21.6		9,210
2020	233.2		62.7		7,137
2021	255.8		103.8		7,591
2022	300.4		181.6		7,728
2023	328.5		238.1		6,341
2024	331.4		289.3		4,989

(1)Information presented for calendar years prior to 2024 is required supplementary information and is unaudited.

(2)During 2021, the Company revised the manner in which it measures reported claims. The cumulative number of reported claims is measured by individual claimant at a coverage level. Reported occurrences that do not result in a liability are included as reported claims. During 2021, we implemented additional processes to consolidate multiple data sources for U.S. Operations reserving. As part of that process, the level of detail used to determine the number of reported claims for some of the business units in U.S. Operations changed. As a result, the cumulative number of reported claims for each accident year presented above as of December 31, 2021 is not comparable to the cumulative number of reported claims disclosed in previously issued financial statements.


Reporting Segment: Specialty Lines (in millions, except number of claims reported)
	Incurred Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
	2015 (1)		2016 (1)		2017 (1)		2018 (1)		2019 (1)		2020 (1)		2021 (1)		2022 (1)		2023 (1)		2024 (1)
2015	$	49.2	$	50.8	$	45.9	$	47.5	$	47.8	$	47.4	$	47.5	$	45.0	$	45.0	$	45.4
2016			40.6		41.0		41.2		44.9		43.7		43.4		42.2		41.7		41.8
2017					64.2		66.0		67.8		73.0		75.4		70.9		67.3		67.6
2018							91.8		94.0		91.5		95.7		87.9		84.6		86.2
2019									104.9		98.4		96.0		83.6		85.4		86.5
2020											98.3		106.5		135.0		144.7		143.3
2021													127.7		149.9		150.1		152.5
2022															191.0		193.6		198.3
2023																	170.5		155.5
2024																			155.4
																	Total		$	1,132.5

	Cumulative Paid Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
	2015 (1)		2016 (1)		2017 (1)		2018 (1)		2019 (1)		2020 (1)		2021 (1)		2022 (1)		2023 (1)		2024 (1)
2015	$	19.4	$	31.7	$	36.9	$	42.6	$	44.6	$	45.8	$	45.9	$	45.3	$	45.4	$	46.1
2016			18.8		28.5		34.6		39.7		41.1		42.1		40.2		40.5		40.5
2017					24.4		37.6		49.3		58.6		65.0		65.9		66.7		67.6
2018							32.0		51.0		62.7		73.3		78.4		80.2		82.4
2019									30.9		51.6		64.3		75.1		79.1		82.1
2020											31.0		62.9		93.1		106.9		117.4
2021													33.8		84.1		96.8		111.2
2022															51.8		103.0		128.4
2023																	56.2		98.1
2024																			43.2
																	Total		817.0
Other Specialty outstanding liabilities including unpaid loss and ALAE prior to 2014, net of reinsurance																			(6.2)
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance																			$	309.3

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	As of December 31, 2024
Accident Year	Incurred Losses & ALAE, Net of Reinsurance		IBNR & Expected Development on Reported Claims		Cumulative Number of Reported Claims (2)
2015	$	45.4	$	(0.8)	3,354
2016	41.8		1.2		4,559
2017	67.6		—		7,835
2018	86.2		3.7		8,398
2019	86.5		3.0		9,194
2020	143.3		12.9		9,094
2021	152.5		28.4		9,903
2022	198.3		47.7		9,248
2023	155.5		35.8		8,417
2024	155.4		79.5		6,487

(1)Information presented for calendar years prior to 2024 is required supplementary information and is unaudited.

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Reporting Segment: Run-off Lines (in millions, except number of claims reported)
	Incurred Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
	2015 (1)		2016 (1)		2017 (1)		2018 (1)		2019 (1)		2020 (1)		2021 (1)		2022 (1)		2023 (1)		2024 (1)
2015	$	402.4	$	403.5	$	399.4	$	397.0	$	408.8	$	412.4	$	420.4	$	393.1	$	391.7	$	390.8
2016			440.8		442.6		459.0		458.3		457.0		471.6		444.9		448.9		449.8
2017					525.4		493.1		523.9		546.9		575.7		539.8		533.0		528.8
2018							460.2		563.3		556.0		578.9		584.6		599.6		609.5
2019									429.2		497.7		537.8		414.1		425.3		449.9
2020											461.0		448.1		403.5		474.7		516.6
2021													396.8		342.1		374.6		417.1
2022															288.1		303.9		317.1
2023																	281.6		314.8
2024																			238.4
																	Total		$	4,232.8

	Cumulative Paid Losses & ALAE, Net of Reinsurance
Accident Year	For the Years Ended December 31,
	2015 (1)		2016 (1)		2017 (1)		2018 (1)		2019 (1)		2020 (1)		2021 (1)		2022 (1)		2023 (1)		2024 (1)
2015	$	83.3	$	146.3	$	211.3	$	272.0	$	306.4	$	325.6	$	385.9	$	386.0	$	385.2	$	388.8
2016			94.1		113.7		275.9		353.1		374.2		428.0		430.2		436.0		432.0
2017					200.7		250.9		364.8		432.7		492.3		508.2		504.9		523.5
2018							104.0		298.2		366.4		430.3		493.7		510.2		552.8
2019									102.6		264.4		305.1		331.4		356.0		380.1
2020											186.0		194.6		248.5		312.0		374.7
2021													72.0		125.6		177.2		248.2
2022															30.0		82.2		114.2
2023																	20.5		93.4
2024																			27.7
																	Total		3,135.4
Other Runoff outstanding liabilities including unpaid loss and ALAE prior to 2014, net of reinsurance																			168.7
Total outstanding liabilities for unpaid losses and ALAE, net of reinsurance																			$	1,266.1


	As of December 31, 2024
Accident Year	Incurred Losses & ALAE, Net of Reinsurance		IBNR & Expected Development on Reported Claims		Cumulative Number of Reported Claims (2)
2015	$	390.8	$	0.7	21,158
2016	449.8		15.6		19,828
2017	528.8		6.8		21,751
2018	609.5		47.9		23,784
2019	449.9		55.6		23,774
2020	516.6		68.8		22,592
2021	417.1		115.1		18,914
2022	317.1		132.9		17,526
2023	314.8		189.5		13,258
2024	238.4		152.1		9,260

(1)Information presented for calendar years prior to 2024 is required supplementary information and is unaudited.

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The reconciliation of the net incurred and paid development tables to the liability for unpaid losses and LAE in our Consolidated Balance Sheets is as follows:


(in millions)	As of December 31, 2024
Liabilities for unpaid losses and ALAE:
Casualty Lines	$	1,313.5
Specialty Lines	309.3
Run-off Lines	1,266.1
Other lines	68.7
Total liabilities for unpaid losses and ALAE, net of reinsurance	2,957.6

Reinsurance recoverables on unpaid losses and LAE:
Casualty Lines	1,046.0
Specialty Lines	214.3
Run-off Lines	1,042.2
Other lines	492.2
Total reinsurance recoverables on unpaid losses and LAE	2,794.7

Unallocated LAE	68.3
Unamortized reserve discount	(22.0)
Gross liability for unpaid losses and LAE	$	5,798.6

Other lines in the table above are comprised of lines of business and operating divisions within our three ongoing reporting segments which are not individually significant for separate disaggregated disclosure.

Claims Duration

The following table provides supplementary unaudited information about the annual percentage payout of incurred losses and ALAE, net of reinsurance, as of December 31, 2024:


	Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (1)
	Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10	Remainder
Casualty Lines	2.8%	8.2%	12.5%	14.9%	14.0%	11.0%	11.1%	7.4%	5.4%	3.9%	8.8%
Specialty Lines	30.4%	24.3%	14.2%	8.5%	8.1%	5.1%	3.1%	2.0%	1.4%	0.9%	2.0%
Run-off Lines	15.0%	18.0%	14.8%	13.1%	11.1%	8.8%	5.4%	3.9%	2.8%	2.0%	5.1%

(1) The average annual percentage payout is calculated from a paid losses and ALAE development pattern based on an actuarial analysis of the paid losses and ALAE movements by accident year for each disaggregation category. The paid losses and ALAE development pattern provides the expected percentage of ultimate losses and ALAE to be paid in each year. The pattern considers all accident years included in the claims development tables.

Information About Amounts Reported at Present Value

We discount certain workers compensation liabilities for unpaid losses and LAE within our U.S. Operations and Run-off Lines segments. The discounted U.S. Operations liabilities relate to all non-ALAE workers compensation liabilities within one of our insurance subsidiaries. In Run-off Lines, we discount certain pension-type liabilities for unpaid losses and LAE. The following tables provide information about these discounted liabilities for unpaid losses and LAE:


	Carrying Amount of
	Reserves for Losses & LAE						Aggregate Amount of Discount
	As of December 31,						As of December 31,
(in millions, except discount percentages)	2024		2023		2022		2024		2023		2022
Casualty Lines	$	197.1	$	182.6	$	168.0	$	17.4	$	16.1	$	14.7
Run-off Lines	81.9		76.8		93.0		4.6		4.7		4.6
Total	$	279.0	$	259.4	$	261.0	$	22.0	$	20.8	$	19.3

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	Interest Accretion (1)								Discount Rate
	Successor				Predecessor
	For the Year Ended		Period from		Period from		For the Year Ended		As of December 31,
	December 31, 2024		November 16, 2023 through December 31, 2023		January 1, 2023 through November 15, 2023		December 31, 2022		2024	2023	2022
Casualty Lines	$	1.5	$	0.1	$	1.3	$	1.7	2.25%	2.25%	2.25%
Run-off Lines	0.1		—		0.1		0.1		3.50%	3.50%	3.50%
Total	$	1.6	$	0.1	$	1.4	$	1.8

(1) Interest accretion is recorded in the line item Losses and loss adjustment expenses in our Consolidated Statements of Income (Loss).

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8. Long-term Debt

The Company recorded its debt at its fair value as of November 16, 2023 due to push-down accounting which included a discount to the total principal amount. The discount is being amortized to Interest expense in our Consolidated Statements of Income (Loss) using the effective yield method over the remaining period of the underlying debt obligations.

Senior Unsecured Fixed Rate Notes

In September 2012, Argo Group (the “Parent Guarantor”), through its subsidiary Argo Group U.S. (the “Subsidiary Issuer”), issued $143.8 million aggregate principal amount of the Subsidiary Issuer’s 6.5% Senior Notes due September 15, 2042 (the “Notes”). The Notes are unsecured and unsubordinated obligations of the Subsidiary Issuer and rank equally in right of payment with all of the Subsidiary Issuer’s other unsecured and unsubordinated debt. The Notes are guaranteed on a full and unconditional senior unsecured basis by the Parent Guarantor. The Notes may be redeemed, for cash, in whole or in part, on or after September 15, 2017, at the Subsidiary Issuer’s option, at any time and from time to time, prior to maturity at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued but unpaid interest on the principal amount being redeemed to, but not including, the redemption date.

In accordance with ASC 835, we present the unamortized debt issuance costs in the balance sheet as a direct deduction from the carrying value of the debt liability. At December 31, 2024 and 2023, the Notes consisted of the following:


(in millions)	December 31, 2024		December 31, 2023
Senior unsecured fixed rate notes
Principal	$	143.8	$	143.8
Less: unamortized debt issuance costs and fair value adjustment	(15.0)		(15.8)
Senior unsecured fixed rate notes, less unamortized debt issuance costs	$	128.8	$	128.0

Junior Subordinated Debentures

Through a series of trusts, that are wholly-owned subsidiaries (non-consolidated), we issued debt. The debentures are variable with the rate being reset quarterly and subject to certain interest rate ceilings. Interest payments are payable quarterly. The debentures are all unsecured and are subordinated to other indebtedness. At December 31, 2024 and 2023, all debentures were eligible for redemption subject to certain terms and conditions at a price equal to 100% of the principal plus accrued and unpaid interest.

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A summary of our outstanding junior subordinated debentures is presented below:

December 31, 2024

(in millions)

Issue Date

Trust Preferred Pools

Maturity

Rate Structure

Interest Rate at December 31, 2024

Amount

Argo Group

5/15/2003

PXRE Capital Statutory Trust II

5/15/2033

3M SOFR + TSA + 4.10%

8.89%

18.0

11/6/2003

PXRE Capital Trust VI

9/30/2033

3M SOFR + TSA + 3.90%

8.49%

10.3

Argo Group U.S.

5/15/2003

Argonaut Group Statutory Trust I

5/15/2033

3M SOFR + TSA + 4.10%

8.89%

15.5

12/16/2003

Argonaut Group Statutory Trust III

1/8/2034

3M SOFR + TSA + 4.10%

9.02%

12.3

4/29/2004

Argonaut Group Statutory Trust IV

4/29/2034

3M SOFR + TSA + 3.85%

8.64%

13.4

5/26/2004

Argonaut Group Statutory Trust V

5/24/2034

3M SOFR + TSA + 3.85%

8.63%

12.4

5/12/2004

Argonaut Group Statutory Trust VI

6/17/2034

3M SOFR + TSA + 3.80%

8.41%

13.4

9/17/2004

Argonaut Group Statutory Trust VII

12/15/2034

3M SOFR + TSA + 3.60%

8.22%

15.5

9/22/2004

Argonaut Group Statutory Trust VIII

9/22/2034

3M SOFR + TSA + 3.55%

8.15%

15.5

10/22/2004

Argonaut Group Statutory Trust IX

12/15/2034

3M SOFR + TSA + 3.60%

8.22%

15.5

9/15/2005

Argonaut Group Statutory Trust X

9/15/2035

3M SOFR + TSA + 3.40%

8.02%

30.9

Less: fair value adjustment

(10.7)

Total Outstanding

162.0

December 31, 2023

(in millions)

Issue Date

Trust Preferred Pools

Maturity

Rate Structure

Interest Rate at December 31, 2023

Amount

Argo Group

5/15/2003

PXRE Capital Statutory Trust II

5/15/2033

3M SOFR + TSA + 4.10%

9.74%

18.0

11/6/2003

PXRE Capital Trust VI

9/30/2033

3M SOFR + TSA + 3.90%

9.49%

10.3

Argo Group U.S.

5/15/2003

Argonaut Group Statutory Trust I

5/15/2033

3M SOFR + TSA + 4.10%

9.74%

15.5

12/16/2003

Argonaut Group Statutory Trust III

1/8/2034

3M SOFR + TSA + 4.10%

9.76%

12.3

4/29/2004

Argonaut Group Statutory Trust IV

4/29/2034

3M SOFR + TSA + 3.85%

9.49%

13.4

5/26/2004

Argonaut Group Statutory Trust V

5/24/2034

3M SOFR + TSA + 3.85%

9.49%

12.4

5/12/2004

Argonaut Group Statutory Trust VI

6/17/2034

3M SOFR + TSA + 3.80%

9.47%

13.4

9/17/2004

Argonaut Group Statutory Trust VII

12/15/2034

3M SOFR + TSA + 3.60%

9.25%

15.5

9/22/2004

Argonaut Group Statutory Trust VIII

9/22/2034

3M SOFR + TSA + 3.55%

9.18%

15.5

10/22/2004

Argonaut Group Statutory Trust IX

12/15/2034

3M SOFR + TSA + 3.60%

9.25%

15.5

9/15/2005

Argonaut Group Statutory Trust X

9/15/2035

3M SOFR + TSA + 3.40%

9.05%

30.9

Less: fair value adjustment

(11.9)

Total Outstanding

160.8

Unsecured junior subordinated debentures with a principal balance of $91.8 million were assumed through a previous business acquisition. The acquired debt is carried on our Consolidated Balance Sheets at $81.2 million, which represents the debt’s fair value as of November 16, 2023 as required by accounting for business combinations under ASC 805. At December 31, 2024, the acquired debt was eligible for redemption at par. Interest accrues on the acquired debt based on a variable rate, which is reset quarterly. Interest payments are payable quarterly.

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A summary of the terms of the acquired debt outstanding is presented below:

(in millions)

Issue Date

Maturity

Rate Structure

Interest Rate at December 31, 2024

Principal at December 31, 2024

Carrying Value at December 31, 2024

9/13/2007

9/15/2037

3M SOFR + TSA + 3.15%

7.77

91.8

81.2

(in millions)

Issue Date

Maturity

Rate Structure

Interest Rate at December 31, 2023

Principal at December 31, 2023

Carrying Value at December 31, 2023

9/13/2007

9/15/2037

3M SOFR + TSA + 3.15%

8.79

91.8

80.4

Other Indebtedness

The following table presents interest and maturities of long-term debt as of December 31, 2024:


		For the Years Ended
(in millions)	Total	2025	2026	2027	2028	2029	Thereafter
Long-term debt:
Junior subordinated debentures (1)	504.9	22.8	22.8	22.8	22.8	22.8	390.9
Senior unsecured fixed rate notes (2)	307.2	9.3	9.3	9.3	9.3	9.3	260.7

(1) Interest only on Junior Subordinated Debentures through 2037. Interest calculated based on interest rate forecast. Principal due beginning May 2033.

(2) Interest only on Senior Unsecured Fixed Rate Notes through 2042. Interest calculated based on the fixed rate of the notes. Principal due September 2042.

Revolving Credit Facility

On November 2, 2018, each of Argo Group, Argo Group U.S., Argo International Holdings Limited, and AUA, collectively (the “Borrowers”) entered into a new $325 million credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent. The Credit Agreement includes a one-time borrowing of $125 million for a term loan (the “Term Loan”), and a $200 million revolving credit facility. The Company used most of the net proceeds from the Preferred Stock Offering (as defined in Note 10, “Stockholders’ Equity”) to pay off the Term Loan in September 2020. The Credit Agreement was subsequently amended to increase the revolving credit facility amount to $220 million, and to provide the removal of AIH and AUA as Borrowers upon the sale of AIH and AUA, which occurred on February 2, 2023.

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Letter of Credit Facilities - Argo Re

Argo Re may be required to secure its obligations under various reinsurance contracts in certain circumstances. In order to satisfy these requirements, Argo Re has entered into one committed and one uncommitted secured bilateral LOC facility with commercial banks and generally uses these facilities to issue LOC’s in support of non-admitted reinsurance obligations in the U.S. and other jurisdictions. The committed letters of credit facility has a term of one year and includes customary conditions and event of default provisions. The issuance of LOC’s using the uncommitted LOC facility is at the discretion of the lenders. The availability of letters of credit under these secured facilities are subject to a borrowing base requirement, determined on the basis of specified percentages of the market value of eligible categories of securities pledged to the lender. On December 31, 2024, committed and uncommitted LOC facilities totaled $110.0 million.

On December 31, 2024, letters of credit totaling $31.2 million were outstanding, of which $19.4 million were issued against the committed, secured bilateral LOC facility and $11.9 million were issued against the uncommitted, secured bilateral LOC facility. Collateral with a market value of $40.1 million was pledged to these banks as security against these LOC’s.

In addition to the bilateral, secured LOC facility described above, Argo Re can use other forms of collateral to secure these reinsurance obligations including trust accounts, cash deposits, and LOC’s issued by commercial banks on an uncommitted basis.

Other Letters of Credit

Other letters of credit issued and outstanding at December 31, 2024 were $4.1 million.

9. Disclosures about Fair Value of Financial Instruments

Cash. The carrying amount approximates fair value.

Investment securities and short-term investments. See Note 3, “Investments,” for additional information.

Premiums receivable and reinsurance recoverables on paid losses. The carrying value of current receivables and reinsurance recoverables on paid losses approximates fair value due to their short-term nature.

Debt. At December 31, 2024 and 2023, the fair value of our debt instruments is determined using both Level 1 and Level 2 inputs, as previously defined in Note 3, “Investments”.

We receive fair value prices for similar financial instruments being traded in active markets. These prices are determined using observable market information such as publicly traded quoted prices, and trading prices for similar financial instruments actively being traded in the current market. We have reviewed the processes used by third-party providers for pricing these instruments and have determined that they result in fair values consistent with GAAP requirements. In addition, we review these prices for reasonableness, and have not adjusted any prices received from the third-party providers as of December 31, 2024 and December 31, 2023. A description of the valuation techniques we use to measure these liabilities at fair value is as follows:

Senior Unsecured Fixed Rate Notes Level 1:

•Our senior unsecured fixed rate notes are valued using Level 1 inputs. For these securities, we obtain fair value measurements from a third-party pricing service using quoted prices (unadjusted) in active markets at the reporting date.

Junior Subordinated Debentures and Floating Rate Loan Stock Level 2:

•Our trust preferred debentures, subordinated debentures are typically valued using Level 2 inputs. For these securities, we obtain fair value measurements using quoted prices for similar securities being traded in active markets at the reporting date, as our specific debt instruments are less frequently traded.

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A summary of our financial instruments whose carrying value did not equal fair value is shown below:


	December 31,
	2024				2023
(in millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Junior subordinated debentures:
Trust preferred debentures	$	162.0	$	163.9	$	160.8	$	165.9
Subordinated debentures	81.2		81.3		80.4		83.3
Total junior subordinated debentures	243.2		245.2		241.2		249.2
Senior unsecured fixed rate notes	128.8		128.6		128.0		132.7

Total	$	372.0	$	373.8	$	369.2	$	381.9

Based on an analysis of the inputs, our financial instruments measured at fair value on a recurring basis have been categorized as follows:


			Fair Value Measurements at Reporting Date Using
(in millions)	December 31, 2024		Level 1 (1)		Level 2 (2)		Level 3 (3)
Junior subordinated debentures:
Trust preferred debentures	$	163.9	$	—	$	163.9	$	—
Subordinated debentures	81.3		—		81.3		—
Total junior subordinated debentures	245.2		—		245.2		—
Senior unsecured fixed rate notes	128.6		128.6		—		—

Total	$	373.8	$	128.6	$	245.2	$	—

(1)Quoted prices in active markets for identical assets

(2)Significant other observable inputs

(3)Significant unobservable inputs


			Fair Value Measurements at Reporting Date Using
(in millions)	December 31, 2023		Level 1 (1)		Level 2 (2)		Level 3 (3)
Junior subordinated debentures:
Trust preferred debentures	$	165.9	$	—	$	165.9	$	—
Subordinated debentures	83.3		—		83.3		—
Total junior subordinated debentures	249.2		—		249.2		—
Senior unsecured fixed rate notes	132.7		132.7		—		—

Total	$	381.9	$	132.7	$	249.2	$	—

(1)Quoted prices in active markets for identical assets

(2)Significant other observable inputs

(3)Significant unobservable inputs

10. Stockholders’ Equity

Merger with AGIH Merger Sub, Inc.

On September 25, 2024, the Company and AGIH Merger Sub entered into an Agreement and Plan of Merger, pursuant to which, among other things, AGIH Merger Sub merged with and into the Company, reducing the number of authorized shares of the Company’s common stock and preferred stock. Additionally, the Merger with AGIH Merger Sub, Inc. reduced the par value of the Company’s common stock. Refer to the Merger with AGIH Merger Sub, Inc. in Note 2, “Recent Acquisitions, Disposals & Other Transactions” for additional information.

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Preferred Stock

At December 31, 2024, the Company has 6,000 shares of our preferred stock issued and outstanding (equivalent to 6,000,000 depositary shares, each representing a 1/1,000th interest in a share of preferred stock) with a $25,000 liquidation preference per share (equivalent to $25 per depositary share) (the “Preferred Stock Offering”).

Dividends to the holders of the preferred stock will be payable on a non-cumulative basis only when, as and if declared by our Board of Directors (the “Board”) or a duly authorized committee thereof, quarterly in arrears on the 15th of March, June, September, and December of each year, commencing on September 15, 2020, at a rate equal to 7.00% of the liquidation preference per annum (equivalent to $1,750 per share of preferred stock and $1.75 per depositary share per annum) up to but excluding September 15, 2025. Beginning on September 15, 2025, any such dividends will be payable on a non-cumulative basis, only when, as and if declared by our Board or a duly authorized committee thereof, during each reset period, at a rate per annum equal to the Five-Year U.S. Treasury Rate as of the most recent reset dividend determination date (as described in the Company’s prospectus supplement dated July 7, 2020) plus 6.712% of the liquidation preference per annum.

So long as any shares of preferred stock remain outstanding, unless dividends on all outstanding shares of preferred stock payable on a dividend payment date have been declared and paid or provided for in full, (1) no dividend shall be paid or declared on our shares of common stock or any other junior shares or any parity shares, other than a dividend payable solely in our shares of common stock, other junior shares or (solely in the case of parity shares) other parity shares, as applicable, and (2) no shares of common stock, other junior shares or parity shares shall be purchased, redeemed or otherwise acquired for consideration by us, directly or indirectly (other than (i) as a result of a reclassification of junior shares for or into other junior shares, or a reclassification of parity shares for or into other parity shares, or the exchange or conversion of one junior share for or into another junior share or the exchange or conversion of one parity share for or into another parity share, (ii) through the use of the proceeds of a substantially contemporaneous sale of junior shares or (solely in the case of parity shares) other parity shares, as applicable, or (iii) as required by or necessary to fulfill the terms of any employment contract, benefit plan or similar arrangement with or for the benefit of one or more employees, directors or consultants), in each case, during the following dividend period.

Upon any voluntary or involuntary liquidation, dissolution or winding-up of Argo Group holders of the preferred stock are entitled to receive out of our assets available for distribution to stockholders, before any distribution is made to holders of our shares of common stock or other junior shares, a liquidating distribution in the amount of $25,000 per share of common stock (equivalent to $25 per depositary share) plus the amount of declared and unpaid dividends, if any, to the date fixed for distribution, without interest on such unpaid dividends. Distributions will be made pro rata in accordance with the respective aggregate liquidation preferences of the preferred stock and any parity shares, and only to the extent of our assets, if any, that are available after satisfaction of all liabilities to creditors.

Neither the depositary shares nor the underlying shares of preferred stock will be convertible into, or exchangeable for, shares of any other class or series of stock or other securities of Argo Group or our subsidiaries. Neither the depositary shares nor the underlying shares of preferred stock have a stated maturity or will be subject to any sinking fund, retirement fund, or purchase fund or other obligation of ours to redeem, repurchase or retire the depositary shares or the shares of preferred stock.

We may redeem the shares of preferred stock at our option, in whole or in part, from time to time, on or after September 15, 2025, at a redemption price equal to $25,000 per share (equivalent to $25 per depositary share), plus the amount of declared and unpaid dividends, if any, without interest on such unpaid dividends. In addition, we may redeem the shares of preferred stock in specified circumstances relating to certain corporate, regulatory, rating agency or tax events; provided that no such redemption may occur prior to September 15, 2025 unless one of the redemption requirements is satisfied. The depositary shares will be redeemed only if and to the extent the related shares of preferred stock are redeemed by us.

The shares of preferred stock will not have voting rights, except under limited circumstances.

During 2024, our Board declared quarterly cash dividends totaling $1,750 on each share of our preferred stock, or $1.75 per depositary share, outstanding to our stockholders of record. For the year ended December 31, 2024 we declared cash dividends totaling $10.5 million to our preferred stockholders.

We are authorized to issue 10,000 shares of $1.00 par value preferred stock.

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Common Stock / Additional Paid-in Capital

As a result of the Merger, the Company’s authorized and outstanding share capital is owned by BNRE Triangle Acquisition Inc., a subsidiary of Brookfield Wealth Solutions Ltd.

During the six months ended June 30, 2024, the Company issued a total of 200.0 million shares of its common stock at par value for $200.0 million to BNRE Triangle Acquisition Inc.

As a result of the Merger with AGIH Merger Sub, Inc., the Company’s new authorized share capital is 1,000 shares of common stock with a par value of $0.01 per share. All 13 outstanding shares are owned by BNRE Triangle Acquisition Inc.

During the fourth quarter of 2024, BNRE Triangle Acquisition Inc. contributed an additional $300.0 million to the Company in the form of private loans, which is reflected in Additional Paid-in Capital in our Consolidated Balance Sheets.

11. Accumulated Other Comprehensive Income (Loss)

A summary of changes in accumulated other comprehensive income (loss), net of taxes (where applicable) by component for the year ended December 31, 2024, the periods November 16, 2023 through December 31, 2023 (Successor) and January 1, 2023 through November 15, 2023 (Predecessor), and for the year ended December 31, 2022 is presented below:


(in millions)	Foreign Currency Translation Adjustments		Unrealized Holding Gains (Losses) on Securities		Defined Benefit Pension Plans		Total
	Predecessor
Balance, December 31, 2022	$	(4.2)	$	(293.1)	$	(7.8)	$	(305.1)
Other comprehensive income (loss) before reclassifications	1.0		13.7		0.8		15.5
Amounts reclassified from accumulated other comprehensive loss	—		22.1		—		22.1
Net current-period other comprehensive income (loss)	1.0		35.8		0.8		37.6

Balance, November 15, 2023	$	(3.2)	$	(257.3)	$	(7.0)	$	(267.5)
	Successor
Balance, November 16, 2023	$	—	$	—	$	—	$	—
Other comprehensive income (loss) before reclassifications	0.1		51.2		0.6		51.9
Amounts reclassified from accumulated other comprehensive income	—		(0.1)		—		(0.1)
Net current-period other comprehensive income (loss)	0.1		51.1		0.6		51.8
Balance, December 31, 2023	0.1		51.1		0.6		51.8
Other comprehensive income (loss) before reclassifications	(0.5)		(13.0)		0.3		(13.2)
Amounts reclassified from accumulated other comprehensive income	—		(6.9)		—		(6.9)
Net current-period other comprehensive income (loss)	(0.5)		(19.9)		0.3		(20.1)
Balance, December 31, 2024	$	(0.4)	$	31.2	$	0.9	$	31.7

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The amounts reclassified from accumulated other comprehensive income (loss) shown in the above table have been included in the following captions in our Consolidated Statements of Income (Loss):


	Successor				Predecessor
	For the Year Ended		Period from		Period from		For the Year Ended
	December 31, 2024		November 16, 2023 through December 31, 2023		January 1, 2023 through November 15, 2023		December 31, 2022
(in millions)
Unrealized gains and losses on securities:
Net realized investment and other losses (gains) (1)	$	(8.7)	$	(0.1)	$	28.0	$	43.6
(Benefit) provision for income taxes	1.8		—		(5.9)		(9.2)
Foreign currency translation adjustments:
Net realized investment and other losses (gains) (2)	—		—		—		31.8
Total, net of taxes	$	(6.9)	$	(0.1)	$	22.1	$	66.2

(1) Net realized investment and other losses (gains) in the Predecessor periods include losses realized as a result of the Loss Portfolio Transfer - U.S. and the sale of Argo Underwriting Agency Limited. Refer to Note 2, “Recent Acquisitions, Disposals & Other Transactions” in our 2023 Form 10-K for additional information.

(2) Foreign currency translation losses were realized as a result of the sale of Argo Seguros and AGSE in 2022. Refer to the sale of Argo Seguros and AGSE in Note 2, “Recent Acquisitions, Disposals & Other Transactions” in our 2023 Form 10-K for additional information.

Income tax effects are released from accumulated other comprehensive income (loss) for unrealized gains or losses when the gains or losses are realized, and are taxed at the statutory rate based on the jurisdiction of the underlying transaction.

12. Underwriting, Acquisition and General Expenses

Underwriting, acquisition and general expenses were as follows:


	Successor				Predecessor
	For the Year Ended		Period from		Period from		For the Year Ended
	December 31, 2024		November 16, 2023 through December 31, 2023		January 1, 2023 through November 15, 2023		December 31, 2022
(in millions)
Commissions	$	89.6	$	12.7	$	141.7	$	280.2
Other underwriting and insurance expenses	260.3		33.8		268.3		401.0
Amortization of value of business acquired and other intangible assets	172.0		37.9		—		—
Total	521.9		84.4		410.0		681.2
Net deferral of policy acquisition costs	(44.9)		(7.2)		9.0		(10.5)
Total underwriting, acquisition and general expenses	$	477.0	$	77.2	$	419.0	$	670.7

13. Income Taxes

The Company was incorporated under the laws of Bermuda until November 30, 2023. Under Bermuda law, the Company was not obligated to pay any taxes in Bermuda based upon income or capital gains. We previously received an undertaking from the Supervisor of Insurance in Bermuda pursuant to the provisions of the Exempted Undertakings Tax Protection Act, 2011, which exempted us from any Bermuda taxes computed on profits, income or any capital asset, gain or appreciation or any tax in the nature of estate duty or inheritance tax, at least until the year 2035. As of November 30, 2023, the Company redomiciled from Bermuda to the United States. In connection with redomiciling from Bermuda to the United States, the Company’s pre-tax loss is reported in Bermuda for the predecessor period. No tax is associated with this entity during the predecessor period. Subsequent to redomiciling, the Company pre-tax loss and tax benefit is reported in the United States for the successor period. Separately, Argo Re is in the process of completing an Internal Revenue Code Section 953(d) election to treat the entity as a U.S. taxpayer. The election is deemed retroactive to the period beginning January 1, 2023. Argo Re pre-tax loss for the predecessor period is reported in Bermuda. The retroactive United States tax benefit incurred for the predecessor period is reflected in purchase accounting. Argo Re pre-tax loss and tax benefit is reported in the United States for the successor period.

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We have subsidiaries based in the U.S. that are subject to U.S. tax laws. Under current law, these subsidiaries are taxed at the applicable corporate tax rates. Beginning January 1, 2024, our U.S. subsidiaries file a consolidated U.S. federal income tax return with BAMR US Holdings LLC, a subsidiary of Brookfield Wealth Solutions Ltd.

We also have operations in United Kingdom, Ireland, and Italy which are subject to income taxes imposed by the jurisdiction in which they operate. In addition, we have an operation in Barbados which is not subject to income tax under the laws of that country.

On June 10, 2021, U.K. tax legislation referred to as Finance Act 2021 received Royal Assent and was enacted. The effects of changes in tax laws and tax rates are recognized in the period of enactment. Accordingly, we recorded the impacts of Finance Act 2021 in our June 30, 2021 consolidated financial statements which primarily includes the remeasurement of our deferred tax assets and liabilities for the increased U.K. tax rate from 19% to 25% beginning on April 1, 2023.

On August 16, 2022, U.S. legislation referred to as the Inflation Reduction Act of 2022 was enacted. This legislation enacted a new Corporate Alternative Minimum Tax (“CAMT”) and Excise Tax on Repurchases of Corporate Stock. The Company has determined as of the period ending December 31, 2024, that it is not a CAMT taxpayer or subject to Excise Tax on Repurchases of Corporate Stock.

The following table presents the components of income tax provision (benefit) included in the amounts reported in our consolidated financial statements:


	Successor				Predecessor
	For the Year Ended		Period from		Period from		For the Year Ended
(in millions)	December 31, 2024		November 16, 2023 through December 31, 2023		January 1, 2023 through November 15, 2023		December 31, 2022
Current income tax provision (benefit) related to:
United States (Federal)	$	(0.2)	$	4.2	$	15.1	$	(21.0)
United States (State)	(0.2)		(4.2)		0.1		0.1
United Kingdom	—		—		(0.1)		(0.8)
Other jurisdictions	—		—		0.1		(1.7)
Total current income tax provision	(0.4)		—		15.2		(23.4)
Deferred income tax provision (benefit) related to:
United States	(41.8)		1.3		(7.9)		6.0
United Kingdom	—		—		(7.0)		7.3
Other jurisdictions	—		—		—		2.1
Total deferred income tax (benefit)	(41.8)		1.3		(14.9)		15.4
Income tax provision (benefit)	$	(42.2)	$	1.3	$	0.3	$	(8.0)

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Our expected income tax provision (benefit) computed on pre-tax income (loss) at the weighted average tax rate has been calculated as the sum of the pre-tax income (loss) in each jurisdiction multiplied by that jurisdiction’s applicable statutory tax rate. For the year ended December 31, 2024, for the periods of November 16, 2023 through December 31, 2023 (successor), January 1, 2023 through November 15, 2023 (Predecessor), and year ended December 31, 2022, pre-tax income (loss) attributable to our operations and the operations’ effective tax rates were as follows:


	Successor									Predecessor
	For the Year Ended				Period from						Period from					For the Year Ended
	December 31, 2024				November 16, 2023 through December 31, 2023						January 1, 2023 through November 15, 2023					December 31, 2022
(in millions)	Pre-Tax Income (Loss)		Effective Tax Rate		Pre-Tax Income (Loss)			Effective Tax Rate			Pre-Tax Income (Loss)			Effective Tax Rate		Pre-Tax Income (Loss)		Effective Tax Rate
Bermuda	$	—	—	%	$	(11.3)		—	%		$	(90.3)		—	%	$	(76.0)	—	%
United States	(183.6)		23.0	%	14.3			9.0	%		(96.9)			(7.5)	%	(83.2)		17.9	%
United Kingdom	(3.1)		—	%	(1.3)			—	%		(23.2)			30.4	%	23.4		27.9	%
Barbados	—		—	%	—		(1)	—	%		—		(1)	—	%	(4.5)		—	%
Brazil	—		—	%	—			—	%		—			—	%	(0.1)		(422.4)	%
United Arab Emirates	—		—	%	—			—	%		0.3			—	%	1.4		—	%
Ireland	—		—	%	0.5			—	%		(0.1)			—	%	(39.1)		—	%
Italy	(3.6)		(1.0)	%	—		(1)	2.1	%		0.1			50.3	%	(0.9)		(4.8)	%
Malta	—		—	%	—			—	%		—			—	%	(4.2)		—	%
Pre-tax income (loss)	$	(190.3)	22.2	%	$	2.2		59.1	%		$	(210.1)		0.1	%	$	(183.2)	4.3	%

(1) Pre-tax income for the respective year was less than $0.1 million.

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Our effective tax rate may vary significantly from period to period depending on the jurisdiction generating the pre-tax income (loss) and its corresponding statutory tax rate. The geographic distribution of pre-tax income (loss) can fluctuate significantly between periods given the inherent nature of our business. A reconciliation of the difference between the provision for income taxes and the expected tax provision (benefit) at the weighted average tax rate is as follows:


	Successor				Predecessor
	For the Year Ended		Period from		Period from		For the Year Ended
	December 31, 2024		November 16, 2023 through December 31, 2023		January 1, 2023 through November 15, 2023		December 31, 2022
(in millions)
Income tax provision (benefit) at expected rate	$	(40.2)	$	2.9	$	(24.7)	$	(14.7)
Tax effect of:
Nontaxable investment income	(0.2)		—		(0.1)		(0.4)
Foreign exchange adjustments	—		—		(2.6)		(2.1)
Impairment of goodwill	—		—		—		5.4
Base erosion and anti-abuse tax	—		—		23.5		—
Withholding taxes	—		—		0.1		2.7
Ireland capital loss	3.3		—		—		—
U.S. state tax expense, net of federal income tax effect	(0.2)		0.1		(1.2)		—
Change in uncertain tax position liability	—		(3.4)		1.2		(1.4)
Change in valuation allowance	(2.8)		1.8		(1.4)		(7.6)
Impact of change in tax rate related to Finance Act 2021	—		(0.2)		(0.2)		1.7
Brazil premiums and underwriting	—		—		—		0.3
Sale of Brazil and Malta operations	—		—		—		6.6
Excess executive compensation	0.9		—		2.0		—
United Kingdom debt forgiveness	—		—		—		1.1
Prior period adjustment	(4.5)		—		—		—
Other	1.5		0.1		3.7		0.4
Income tax provision (benefit)	$	(42.2)	$	1.3	$	0.3	$	(8.0)

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The net deferred tax asset (liability) comprises the tax effects of temporary differences related to the following assets and liabilities:


	As of December 31,
(in millions)	2024		2023
Deferred tax assets:
Losses and loss adjustment expense reserve discounting	$	50.1	$	45.5
Unearned premiums	18.0		23.9
Net operating loss carryforwards	64.5		36.3
Investment in limited partnership interests	0.2		9.3
Unrealized losses on equity securities	3.4		6.9
Unrealized losses on fixed maturities and other investment securities	33.3		42.3

Investments	4.3		4.9
Lease liability	10.2		10.6
Accrued bonus	6.0		5.5
Bad debt	5.0		3.2
Other	3.1		2.6
Deferred tax assets, gross	198.1		191.0
Deferred tax liabilities:
Debt obligations	(5.9)		(6.4)
Unrealized gains on limited partnership interests	(15.2)		(24.8)
Depreciable fixed assets	(5.0)		(7.3)
Deferred acquisition costs	(10.9)		(0.5)
Right of use assets	(11.8)		(12.1)
TCJA reserve transitional liability	(0.5)		(1.1)
Value of business acquired	(2.7)		(32.2)
Other intangible assets	(27.2)		(37.1)
Underwriting results	(8.6)		(9.1)
Other	(0.9)		(0.6)
Deferred tax liabilities, gross	(88.7)		(131.2)
Deferred tax assets, net before valuation allowance	$	109.4	$	59.8
Valuation allowance	(17.9)		(20.7)
Deferred tax asset (liabilities), net	$	91.5	$	39.1

Net deferred tax assets (liabilities) - United States	91.5		39.1
Deferred tax asset (liabilities), net	$	91.5	$	39.1

Our gross deferred tax assets are supported by taxes paid in previous periods, reversal of taxable temporary differences and recognition of future taxable income. Management regularly evaluates the recoverability of the deferred tax assets and makes any necessary adjustments to them based upon any changes in management’s expectations of future taxable income. Realization of deferred tax assets is dependent upon our generation of future taxable income sufficient to recover tax benefits that cannot be recovered from taxes paid in the carryback period, generally for our U.S. property and casualty insurers two years for net operating losses and for all our U.S. subsidiaries three years for capital losses. If a company determines that any of its deferred tax assets will not result in future tax benefits, a valuation allowance must be established for the portion of these assets that are not expected to be realized. The valuation allowance for deferred tax assets decreased by $2.8 million in 2024 and primarily related to the following: $0.8 million of losses incurred in the United Kingdom, $3.3 million valuation allowance release related to Ireland capital losses that will not be recognized due to the planned Ireland entity dissolution. Based upon a review of all positive and negative evidence, our management concluded that it is more-likely-than-not that $91.5 million of our deferred tax assets will be realized. Should our future income deviate from our present income estimates, the Company’s realization assessment may differ from our current conclusion.

For tax return purposes, as of December 31, 2024, we had NOL carryforwards in Italy, United States, and United Kingdom. The amount and timing of realizing the benefits of NOL carryforwards depend on future taxable income and limitations imposed by tax laws. Only a portion of the United States NOL carryforwards have been recognized as mentioned above in the consolidated financial statements and is included in net deferred tax assets. The NOL amounts by jurisdiction and year of expiration are as follows:

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(in millions)	December 31, 2024		Expiration
Net operating loss carryforwards by jurisdiction:
Italy	$	48.2	Indefinite
United Kingdom	$	10.0	Indefinite
United States	$	240.1	2025-2044

For any uncertain tax positions not meeting the “more-likely-than-not” recognition threshold, accounting standards require recognition, measurement and disclosure in a company’s financial statements. The balances at December 31, 2024 and 2023 included no unrecognized tax benefits that, if recognized, would affect the annual effective tax rate. A net increase (decrease) of interest in the amount of $0.0 million, $0.0 million, $(0.4) million, and $0.6 million has been recorded in the line item Interest Expense in our Consolidated Statements of Income (Loss) for the year ended December 31, 2024, for the periods ended November 16, 2023 through December 31, 2023 (successor), January 1, 2023 through November 15, 2023 (Predecessor), and for the year ended December 31, 2022, respectively. A net increase (decrease) of penalty in the amount of $0.0 million, $0.0 million, $0.0 million, and $0.1 million has been recorded in the line item Underwriting, acquisition and general expenses in our Consolidated Statements of Income (Loss) for the year ended December 31, 2024, for the periods ended November 16, 2023 through December 31, 2023 (successor), January 1, 2023 through November 15, 2023 (Predecessor), and for the year ended December 31, 2022, respectively.

The following is a reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2024 and 2023:


(in millions)	2024		2023
Balance at January 1	$	—	$	4.6
Additions for tax positions of prior years	—		—
Reductions for tax positions of prior years	—		(1.0)


Reductions based on settlements with taxing authorities	—		(2.4)
Expiration of statute of limitations	—		(1.2)
Balance at December 31	$	—	$	—

Our U.S. subsidiaries are no longer subject to U.S. federal and state income tax examinations by tax authorities for years before 2021. Our U.K. subsidiary is no longer subject to U.K. income tax examinations by His Majesty’s Revenue and Customs for years before 2023. Our Ireland subsidiary is no longer subject to Ireland income tax examinations by tax authorities for years before 2020. Our Italy subsidiary is no longer subject to Italy income tax examinations by tax authorities for years before 2019.

As of December 31, 2024, our Texas Sales, Excise, and Use Tax returns for the periods April 1, 2020 through July 31, 2023 are under examination. At this time, the Company cannot reasonably estimate an assessment by the taxing authority. We do not expect the ultimate disposition of these audits to result in a material change in our financial position, results of operations, or liquidity.

14. Commitments and Contingencies

Legal Actions

Argo Group’s subsidiaries are parties to legal actions incidental to their business. As of December 31, 2024, management believes that the resolution of these matters would not materially affect our financial condition or results of operations since the potential risk of loss is remote.

Federal Securities Class Action

The Police & Fire Retirement System City of Detroit v. Argo Group International Holdings, Inc., et al., No. 22-cv-8971 (S.D.N.Y.)

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Bermuda Appraisal Petitions

In April 2023, appraisal petitions were filed in the Supreme Court of Bermuda (the “Court”) relating to the acquisition of the Company by Brookfield Wealth Solutions Ltd. for $30.00 per share (the “Transaction Price”) that closed on November 16, 2023.

The petitions were filed by certain persons who were shareholders of the Company at such time pursuant to Section 106(6) of the Bermuda Companies Act, and are captioned Corbin Erisa Opportunity Fund, Ltd. v. Argo Group International Holdings, Ltd., Corbin Opportunity Fund, L.P. v. Argo Group International Holdings, Ltd., Fourworld Event Opportunities, LP v. Argo Group International Holdings, Ltd., Fourworld Global Opportunities Fund, Ltd. v. Argo Group International Holdings, Ltd., Fourworld Special Opportunities Fund, LLC v. Argo Group International Holdings, Ltd., and FW Deep Value Opportunities Fund I, LLC v. Argo Group International Holdings, Ltd.

Contractual Commitments

We have contractual commitments to invest up to $214.1 million related to our limited partnership investments at December 31, 2024, as further disclosed in Note 3, “Investments.” These commitments will be funded as required by the partnership agreements which can be called to be fulfilled at any time. Additionally, the Company has commitments to fund up to $137.1 million related to various other investments, including private and mortgage loans.

15. Segment Information

We are primarily engaged in underwriting property and casualty insurance and reinsurance. As a result of the Company’s merger with Brookfield Wealth Solutions Ltd, and overall strategic assessment of the business, the Company changed its internal segments in a manner that caused the composition of its reporting segments to change in the fourth quarter of 2024. The Company’s reporting segments were realigned to three reportable segments—Casualty Lines, Specialty Lines, and Run-off Lines. For the period January 1, 2023 through November 15, 2023 (Predecessor) and for the year ended December 31, 2022 we had two ongoing reporting segments: U.S. Operations and International Operations. In addition, the Run-off Lines segment is for certain products that we no longer underwrite. The Company has recast all applicable Successor periods for comparability.

We consider many factors, including the nature of each segment’s insurance and reinsurance products, production sources, distribution strategies and the regulatory environment, in determining how to aggregate operating segments. Transactions between segments are reported in the segment that initiated the transaction.

Our reporting segments consist primarily of the following products:

•Casualty Lines: Argo Construction, Argo Environmental, Argo Casualty, Rockwood, Bermuda Casualty, and Bermuda Insurance and Europe

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•Specialty Lines: Specialty Programs and Fronting, Colony Specialty Garage, Argo Inland Marine, and Bermuda Property

•Run-off Lines: Liability and surety policies

We have identified our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as our Chief Operating Decision Maker (“CODM”).

In evaluating the operating performance of our segments, the CODM assesses the segments’ performance by using each segments’ segment operating income (loss) consistent with GAAP measures.

The CODM uses segment operating income (loss) for each segment predominantly in the quarterly/annual budget and forecasting process. The CODM considers budget-to-actual variances on a quarterly basis for the profit measure when making decisions about the allocation of operating and capital resources to each segment. The CODM also uses segment operating income (loss) for each segment for evaluating pricing strategy and to assess the performance of each segment by comparing the results of each segment with one another and in determining the compensation of certain employees.

Realized investment and other gains (losses) are reported as a component of Corporate and Other, as decisions regarding the acquisition and disposal of securities reside with the corporate investment function and are not under the control of the individual business segments.

Revenue and segment operating income (loss) for each segment were as follows:


	Successor
	For the Year Ended December 31, 2024
(in millions)	Casualty Lines		Specialty Lines		Run-off Lines		Total
Net earned premiums	$	546.1	$	257.8	$	285.9	$	1,089.8
Net investment income	112.4		17.5		119.9		249.8
Total segment revenues	658.5		275.3		405.8		1,339.6
Reconciliation of revenue
Net investment and other gains (losses)							20.0
Total consolidated revenues							1,359.6
Less:
Losses and loss adjustment expenses	432.2		165.7		420.4
Underwriting, acquisition and general expenses	145.5		66.2		91.0
Other segment items (1)	17.2		2.7		18.1
Segment operating income (loss)	63.6		40.7		(123.7)		(19.4)
Reconciliation of profit or loss
Unallocated amounts:
Non-operating expenses							17.6
Foreign currency exchange (gains) losses							(1.0)
Net investment and other (gains) losses							(20.0)
Total other expenses (2)							174.3
Income (loss) before income taxes							$	(190.3)

(1) Includes interest expense and fee and other expense (income), net.

(2) Includes amortization of value of business acquired and other intangible assets related to purchase accounting of $172.0 million.

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	Successor
	The period from November 16, 2023 through December 31, 2023
(in millions)	Casualty Lines		Specialty Lines		Run-off Lines		Total
Net earned premiums	$	66.5	$	33.2	$	62.6	$	162.3
Net investment income	10.1		5.2		13.3		28.6
Total segment revenues	76.6		38.4		75.9		190.9
Reconciliation of revenue
Net investment and other gains (losses)							(0.3)
Total consolidated revenues							190.6
Less:
Losses and loss adjustment expenses	42.1		19.5		32.6
Underwriting, acquisition and general expenses	15.2		9.5		13.2
Other segment items (1)	1.3		0.6		1.4
Segment Operating Income (Loss)	18.0		8.8		28.7		55.5
Reconciliation of profit or loss
Unallocated amounts:
Non-operating expenses							13.1
Foreign currency exchange (gains) losses							0.6
Net investment and other (gains) losses							0.3
Total other expenses (2)							39.3
Income (loss) before income taxes							$	2.2

(1) Includes interest expense and fee and other expense (income), net.

(2) Includes amortization of value of business acquired and other intangible assets related to purchase accounting of $37.9 million.

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	Predecessor
	Period from		For the Year Ended
(in millions)	January 1, 2023 through November 15, 2023		December 31, 2022
Revenue:
Net earned premiums
U.S. Operations	$	1,101.6	$	1,209.0
International Operations	124.0		530.5
Run-off Lines	0.3		0.9
Total net earned premiums	1,225.9		1,740.4
Net investment income
U.S. Operations	99.9		88.4
International Operations	18.7		39.1
Run-off Lines	2.7		2.3

Total net investment income	121.3		129.8
Net investment and other gains (losses)	(22.7)		(115.3)
Total revenue	$	1,324.5	$	1,754.9


	Predecessor
	Period from		For the Year Ended
(in millions)	January 1, 2023 through November 15, 2023		December 31, 2022
Income (loss) before income taxes
U.S. Operations	$	(127.5)	$	(22.9)
International Operations	6.7		63.8
Run-off Lines	(1.2)		(1.8)
Total segment income before income taxes	(122.0)		39.1
Corporate and Other	(22.5)		(32.0)
Net investment and other gains (losses)	(22.7)		(115.3)
Foreign currency exchange gains (losses)	(1.8)		5.0
Impairment of goodwill and intangible assets	—		(28.5)
Non-operating expense	(41.1)		(51.5)
Total income (loss) before income taxes	$	(210.1)	$	(183.2)

The table below presents net earned premiums by geographic location for the periods November 16, 2023 through December 31, 2023 (Successor), and January 1, 2023 through November 15, 2023 (Predecessor), and for the years ended December 31, 2024 and 2022. For this disclosure, we determine geographic location by the country of domicile of our subsidiaries that underwrite the business and not by the location of insureds or reinsureds from whom the business was generated.

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	Successor				Predecessor
	For the Year Ended		Period from		Period from		For the Year Ended
(in millions)	December 31, 2024		November 16, 2023 through December 31, 2023		January 1, 2023 through November 15, 2023		December 31, 2022
United States	$	989.0	$	147.4	$	1,101.9	$	1,209.9
United Kingdom	—		—		48.3		480.2
Bermuda	100.8		14.9		75.7		38.0
Malta	—		—		—		3.9
All other jurisdictions	—		—		—		8.4
Total net earned premiums	$	1,089.8	$	162.3	$	1,225.9	$	1,740.4

The following table represents identifiable assets by geographic location:


	As of
(in millions)	December 31, 2024		December 31, 2023
U.S. Operations	$	7,429.3	$	6,813.1
International Operations	1,450.3		1,690.0
Total assets	$	8,879.6	$	8,503.1

16. Statutory Accounting Principles

Financial Information

The statutory capital and surplus for our principal operating subsidiaries was as follows:


Statutory capital and surplus (1)	December 31,
(in millions)	2024		2023
Bermuda	$	1,513.6	$	1,150.6

United States	1,639.3		1,410.4

(1) Such amounts include ownership interests in affiliate insurance and reinsurance subsidiaries.

The statutory net income (loss) for our principal operating subsidiaries was as follows:


Statutory net income (loss) (1)	For the Years Ended December 31,
(in millions)	2024		2023		2022
Bermuda	$	(52.1)	$	0.8	$	(29.1)
United Kingdom (2)	—		—		21.4
United States	(132.6)		39.5		(117.8)

(1) Such amounts include ownership interests in affiliate insurance and reinsurance subsidiaries.

(2) Sold on February 2, 2023. See Note 2, “Recent Acquisitions, Disposals & Other Transactions” in our 2023 Form 10-K for additional information related to this transaction.

As of December 31, 2024 and 2023, Argo Re’s solvency and liquidity margins and statutory capital and surplus were in excess of the minimum levels required by the Insurance Act. As of December 31, 2024 and 2023, the minimum statutory capital and surplus required to be maintained by Argo Re was $100.0 million and $106.6 million, respectively.

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Our U.S. insurance subsidiaries file financial statements prepared in accordance with statutory accounting principles prescribed or permitted by insurance regulatory authorities of the state in which they are domiciled. The differences between statutory-based financial statements and financial statements prepared in accordance with GAAP vary between jurisdictions. The principal differences are that for statutory-based financial statements, deferred acquisition costs are not recognized, a portion of the deferred federal income tax asset is non-admitted, bonds are generally carried at amortized cost, certain assets are non-admitted and charged directly to surplus, a collectability allowance related to reinsurance recoverables is charged directly to surplus and outstanding losses and unearned premium are presented net of reinsurance.

Dividends

As an insurance holding company, we are largely dependent on dividends and other permitted payments from our insurance subsidiaries to pay cash dividends to our stockholders, for debt service and for our operating expenses. The ability of our insurance subsidiaries to pay dividends to us is subject to certain restrictions imposed by the jurisdictions of domicile that regulate our insurance subsidiaries and each jurisdiction has calculations for the amount of dividends that an insurance company can pay without the approval of the insurance regulator.

The payment of dividends to our stockholders is permitted so long as (i) we are not, or would not be after the payment, unable to pay our liabilities as they become due and (ii) the realizable value of our assets is in excess of our liabilities after taking such payment into account. In light of these restrictions, we have no material restrictions on dividend payments that may be made to our stockholders at December 31, 2024.

Bermuda Insurance Subsidiary

Argo Re is the direct subsidiary of Argo Group, and therefore, has direct dividend paying capabilities to the parent.

Argo Re is generally prohibited from declaring or paying, in any financial year, dividends of more than 25% of its total statutory capital and surplus (as shown on its previous financial year’s statutory balance sheet) unless it files (at least seven days before payment of such dividends) with the Bermuda Monetary Authority (“BMA”) an affidavit signed by at least two directors (one of whom must be a Bermuda resident director if any of the insurer’s directors are resident in Bermuda) and the principal representative stating that it will continue to meet its solvency margin and minimum liquidity ratio. Argo Re may not reduce its total statutory capital by 15% or more, as set out in its previous year’s financial statements, unless it has received the prior approval of the BMA. Based on these regulatory restrictions, the maximum amount available for payment of dividends to Argo Group by Argo Re during 2025 without prior regulatory approval is $378.4 million.

In 2024, Argo Group received total dividends of $30.0 million from Argo Re, and Argo Re received a dividend of $10.6 million from AIH. The proceeds of the dividends were used to repay intercompany balances, interest payments and other corporate expenses.

U.S. Insurance Subsidiaries

As an intermediate insurance holding company, Argo Group U.S. is largely dependent on dividends and other permitted payments from its insurance subsidiaries to service its debt, fund operating expenses and pay dividends. Various state insurance laws restrict the amount that may be transferred to Argo Group U.S. from its subsidiaries in the form of dividends without prior approval of regulatory authorities. In addition, that portion of the insurance subsidiaries’ net equity that results from the difference between statutory insurance principles and GAAP would not be available for dividends.

Argonaut Insurance Company is a direct subsidiary of Argo Group U.S. and is regulated by the Nebraska Department of Insurance. During 2025, Argonaut Insurance Company may be permitted to pay dividends of up to $149.8 million without approval from the Nebraska Department of Insurance. During 2024, Argo Group U.S. did not receive a dividend from Argonaut Insurance Company.

Rockwood, a direct subsidiary of Argo Group U.S., is regulated by the Pennsylvania Department of Insurance. Rockwood may be permitted to pay ordinary dividends of up to $18.9 million with approval from the Pennsylvania Department of Insurance during 2025. Each department of insurance may require prior approval for the payment of all dividends, based on business and regulatory conditions of the insurance companies. During 2024, Argo Group U.S. did not receive a dividend from Rockwood.

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17. Insurance Assessments

We participate in statutorily created insolvency guarantee and weather-related loss protection associations in all states where we are authorized to transact business. These associations were formed for the purpose of paying the claims of insolvent companies. We are assessed a pro-rata share of such claims based upon our premium writings, subject to a maximum annual assessment per line of insurance. Certain of these assessments can be recovered through premium tax offsets or policy surcharges. We do not believe that assessments on current insolvencies will have a material impact on our financial condition or results of operations. We have accrued assessments of $4.7 million and $6.9 million at December 31, 2024 and 2023, respectively.

18. Related Party Transactions

As part of the Merger, the Company has entered into recurring transactions and agreements with Brookfield Wealth Solutions Ltd., its subsidiaries and affiliates.

For the year ended December 31, 2024, the Company purchased related party investments of $906.4 million and received $300.0 million of related party investments as part of a capital contribution from Brookfield Wealth Solutions Ltd. Additionally, for the year ended December 31, 2024, the Company recorded an unrealized gain of $28.2 million reflected in Net investment and other gains (losses) on our Consolidated Statements of Income (Loss), driven by a commercial real estate equity investment for which we have elected the fair value option of accounting. Related party investments as of December 31, 2024 were primarily attributed to $427.2 million of private loans, $305.4 million in other investments and $270.3 million of equity securities. Additionally, the Company has unfunded commitments totaling $218.6 million across the related party investments. Investment transactions with related parties are accounted for in the same manner as those with unrelated parties in the financial statements.

For the year ended December 31, 2024, the Company incurred investment management fees due to related party arrangements of $11.5 million, which is recognized in Net investment income on our Consolidated Statements of Income (Loss). As of December 31, 2024, the related party investment management fees payable is $2.5 million which is recognized in Accrued underwriting expenses and other liabilities on our Consolidated Balance Sheets.

Additionally, the Company issued common stock to BNRE Triangle Acquisition Inc. See Note 10, “Stockholders’ Equity,” for additional information.

19. Subsequent Events

Appointment of Chief Executive Officer and Chief Financial Officer

On March 21, 2025, Jessica Buss notified the Company of her resignation as Chief Executive Officer of the Company, effective immediately (the “Resignation”). Ms. Buss’ decision is not due to any disagreement with the Company or the Board of Directors of the Company on any matter relating to the Company’s operations, policies or practices.

In connection with the Resignation and effective immediately, Christopher Donahue, the Company’s Chief Financial Officer, was appointed as the Chief Executive Officer of the Company, and David Chan, the Company’s Chief Accounting Officer, was appointed as the Chief Financial Officer of the Company.

Argo Pro

In January 2025, certain subsidiaries of the Company entered into a Business Transfer Agreement, as amended and restated, with Core Specialty Insurance Holdings, Inc. (“Core”) and a Renewal Rights Agreement with Westfield Insurance Company, Westfield National Insurance Company, Westfield Select Insurance Company and Westfield Specialty Insurance Company (collectively, “Westfield”, and together with Core, collectively, the “Purchasers”), whereby the Purchasers purchased the renewal rights and related unearned premium reserves of the Company’s professional lines businesses. The Company entered into the transaction in order to meet the Company’s foreseeable strategic goals and continue to serve our broker partners through growth across other lines of business.

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ARGO GROUP INTERNATIONAL HOLDINGS, INC.

SCHEDULE II

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

(in millions)


	As of
BALANCE SHEETS	December 31,
	2024		2023
Assets

Investment in subsidiaries	$	1,654.1	$	1,363.3
Cash, restricted cash and cash equivalents	—		2.2

Deferred tax assets, net	1.3		—


Other assets	0.9		0.9
Due from subsidiaries	15.4		—
Total assets	$	1,671.7	$	1,366.4


Liabilities and Stockholders' Equity
Junior subordinated debentures	$	27.2	$	14.3

Accrued underwriting expenses and other liabilities	4.8		2.2
Current income taxes payable, net	3.0		—

Due to subsidiaries	—		21.3
Intercompany notes payable	33.2		31.1
Total liabilities	68.2		68.9
Stockholders' equity	1,603.5		1,297.5
Total liabilities and stockholders' equity	$	1,671.7	$	1,366.4


STATEMENTS OF INCOME (LOSS)	Successor				Predecessor
	For the Year Ended		Period from		Period from		For the Year Ended
	December 31, 2024		November 16, 2023 through December 31, 2023		January 1, 2023 through November 15, 2023		December 31, 2022
Revenue:
Net investment expense	$	—	$	(0.1)	$	—	$	—

Total revenue	—		(0.1)		—		—
Expenses:
Interest expense	2.9		0.4		2.3		1.6
Operating expenses	2.2		(1.3)		6.8		(0.6)
Non-operating expenses	(15.2)		2.7		21.3		26.2

Total expenses	(10.1)		1.8		30.4		27.2
(Loss) income before income taxes	10.1		(1.9)		(30.4)		(27.2)
Provision for income taxes	1.7		—		—		—
Net income before equity in earnings of subsidiaries	8.4		(1.9)		(30.4)		(27.2)
Equity in undistributed earnings of subsidiaries (1)	(156.5)		2.8		(180.0)		(148.0)
Net (loss) income	$	(148.1)	$	0.9	$	(210.4)	$	(175.2)
Dividends on preferred stock	10.5		—		10.5		10.5
Net (loss) income attributable to common stockholders	$	(158.6)	$	0.9	$	(220.9)	$	(185.7)

(1) Includes dividend income from consolidated subsidiaries

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ARGO GROUP INTERNATIONAL HOLDINGS, INC.

SCHEDULE II

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

(in millions)


	Successor				Predecessor
STATEMENTS OF CASH FLOWS	For the Year Ended		Period from		Period from		For the Year Ended
	December 31, 2024		November 16, 2023 through December 31, 2023		January 1, 2023 through November 15, 2023		December 31, 2022
Cash flows from operating activities:
Net (loss) income	$	(148.1)	$	0.9	$	(210.4)	$	(175.2)
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Amortization and depreciation	—		—		—		1.5
Share-based payments expense	—		—		1.0		2.8
Deferred income tax expense (benefit), net	(1.3)		—		—		—

Loss on disposal of fixed assets	—		—		—		(3.5)
Undistributed earnings of subsidiaries	156.5		(2.8)		180.0		148.0
Change in:
Prepaid assets	—		—		0.2		(1.8)
Accrued expenses	2.4		(8.0)		10.6		6.0
Due to (from) subsidiaries	(7.4)		5.6		22.7		28.8
Income taxes	3.0		—		—		—
Other, net	0.4		(2.2)		5.1		4.7
Cash provided by (used in) operating activities	5.5		(6.5)		9.2		11.3
Cash flows from investing activities:
Change in short-term investments	—		—		(3.8)		12.7
Settlements of foreign currency exchange forward contracts	—		—		2.0		(2.0)
Capital contribution to subsidiaries	(200.0)		—		—		—

Dividend received from subsidiaries	2.8		—		—		33.3


Cash provided by (used in) investing activities	(197.2)		—		(1.8)		44.0
Cash flows from financing activities:
Capital contribution	200.0		—		—		—


Activity under stock incentive plans	—		—		0.7		1.8

Payment of cash dividend to preferred stockholders	(10.5)		—		(10.5)		(10.5)
Payment of cash dividend to common stockholders	—		—		0.3		(43.4)
Cash used in financing activities	189.5		—		(9.5)		(52.1)
Change in cash	(2.2)		(6.5)		(2.1)		3.2
Cash, beginning of period	2.2		8.7		5.2		2.0
Cash, end of period	$	—	$	2.2	$	3.1	$	5.2

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ARGO GROUP INTERNATIONAL HOLDINGS, INC.

SCHEDULE III

SUPPLEMENTAL INSURANCE INFORMATION

AS OF DECEMBER 31, 2024, 2023 AND 2022

(in millions)


Segment	DAC (1)		Reserves for Losses and Loss Adjustment Expenses (2)		UPR (3)
As of December 31, 2024
Casualty Lines	25.1		2,416.6		323.8
Specialty Lines	9.6		643.1		245.3
Run-off Lines	17.4		2,738.9		229.7

Total	$	52.1	$	5,798.6	$	798.8
As of December 31, 2023
Casualty Lines	2.9		2,211.7		319.3
Specialty Lines	1.0		675.8		244.8
Run-off Lines	3.3		2,657.0		352.5

Total	$	7.2	$	5,544.5	$	916.6
As of December 31, 2022
U.S. Operations	109.4		3,718.1		893.4
International Operations (4)	(2.4)		1,100.4		146.5
Run-off Lines	—		233.1		—

Total	$	107.0	$	5,051.6	$	1,039.9

(1) Deferred acquisition costs.

(2) Future policy benefits, losses, claims and loss expenses.

(3) Unearned premiums.

(4) $993.4 million of gross reserves were reclassified as liabilities held-for-sale at December 31, 2022. Refer to the sale of Argo Underwriting Agency Limited in Note 2, “Recent Acquisitions, Disposals & Other Transactions” in our 2023 Form 10-K for additional information.

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ARGO GROUP INTERNATIONAL HOLDINGS, INC.

SCHEDULE III

SUPPLEMENTAL INSURANCE INFORMATION

FOR THE YEAR ENDED DECEMBER 31, 2024, FOR THE PERIOD NOVEMBER 16, 2023 THROUGH DECEMBER 31, 2023, JANUARY 1, 2023 THROUGH NOVEMBER 15, 2023, AND

FOR THE YEAR ENDED DECEMBER 31, 2022

(in millions)


Segment	Premium Revenue (1)		Net Investment Income (2)		Loss & LAE (3)		Amortization (Deferral) DAC (4) (5)		Other Operating Expenses (6)		Net Premiums Written (7)
Year Ended December 31, 2024
Casualty Lines	546.1		112.4		432.2		(22.3)		167.8		575.4
Specialty Lines	257.8		17.5		165.7		(8.6)		74.8		244.3
Run-off Lines	285.9		119.9		420.4		(14.0)		105.0		150.6
Corporate and Other	—		—		—		—		174.3		—
Total	$	1,089.8	$	249.8	$	1,018.3	$	(44.9)	$	521.9	$	970.3
The Period from November 16, 2023 through December 31, 2023 (Successor)
Casualty Lines	66.5		10.1		42.1		1.0		14.2		53.2
Specialty Lines	33.2		5.2		19.5		1.9		7.6		27.4
Run-off Lines	62.6		13.3		32.6		(10.1)		23.3		43.7
Corporate and Other	—		—		—		—		39.3		—
Total	$	162.3	$	28.6	$	94.2	$	(7.2)	$	84.4	$	124.3
The Period from January 1, 2023 through November 15, 2023 (Predecessor)
U.S. Operations	1,101.6		99.9		935.1		19.9		349.7		1,002.7
International Operations	124.0		18.7		105.5		(10.9)		36.9		141.8
Run-off Lines	0.3		2.7		2.6		—		0.9		0.2
Corporate and Other	—		—		—		—		22.5		—
Total	$	1,225.9	$	121.3	$	1,043.2	$	9.0	$	410.0	$	1,144.7
Year Ended December 31, 2022
U.S. Operations	1,209.0		88.4		870.1		(3.5)		436.3		1,196.2
International Operations	530.5		39.1		293.9		(7.0)		212.3		544.5
Run-off Lines	0.9		2.3		2.9		—		1.6		0.8
Corporate and Other	—		—		—		—		31.0		—
Total	$	1,740.4	$	129.8	$	1,166.9	$	(10.5)	$	681.2	$	1,741.5

(1) Premium revenue, net (premiums earned).

(2) Net investment income allocated based upon each segment’s share of investable funds.

(3) Benefits, claims, losses and settlement expenses.

(4) Amortization (deferral) of deferred acquisition costs.

(5) The amortization (deferral) of deferred acquisition costs will not equal the change in the balance sheet. See Note 1, “Business and Significant Accounting Policies” for further discussion.

(6) Other insurance expenses allocated based on specific identification, where possible, and related activities.

(7) Premiums written, net.

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ARGO GROUP INTERNATIONAL HOLDINGS, INC.

SCHEDULE V

VALUATION AND QUALIFYING ACCOUNTS

(in millions)


	Balance at Beginning of Year		Charged to Cost and Expense		Capital Loss Carryforward		Net Operating Loss Carryforward		Charged to Other Accounts		Deductions		Balance at End of Year
Year Ended December 31, 2024
Deducted from assets:
Valuation allowance for deferred tax asset	$	20.7	$	—	$	(3.3)	$	0.5	$	—	$	—	$	17.9
Year Ended December 31, 2023
Deducted from assets:
Valuation allowance for deferred tax asset	$	20.3	$	—	$	—	$	0.4	$	—	$	—	$	20.7
Year Ended December 31, 2022
Deducted from assets:
Valuation allowance for deferred tax asset	$	27.9	$	—	$	3.3	$	(10.9)	$	—	$	—	$	20.3

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ARGO GROUP INTERNATIONAL HOLDINGS, INC.

SCHEDULE VI

SUPPLEMENTAL INFORMATION FOR PROPERTY-CASUALTY INSURANCE COMPANIES

(in millions)


	Successor				Predecessor
	For the Year Ended		Period from		Period from		For the Year Ended
	December 31, 2024		November 16, 2023 through December 31, 2023		January 1, 2023 through November 15, 2023		December 31, 2022
Deferred acquisition costs (1)	$	52.1	$	7.2	$	88.7	$	107.0
Reserves for losses and loss adjustment expenses (1)	$	5,798.6	$	5,544.5	$	5,526.4	$	5,051.6
Unamortized discount in reserves for losses (1)	$	22.0	$	20.8	$	20.4	$	19.3
Unearned premiums (1)	$	798.8	$	916.6	$	986.2	$	1,039.9
Premiums earned	$	1,089.8	$	162.3	$	1,225.9	$	1,740.4
Net investment income	$	249.8	$	28.6	$	121.3	$	129.8
Losses and loss adjustment expenses incurred:
Current year	$	763.4	$	94.2	$	775.3	$	1,102.2
Prior years	254.9		—		267.9		64.7
Losses and loss adjustment expenses incurred	$	1,018.3	$	94.2	$	1,043.2	$	1,166.9
(Deferral) amortization of policy acquisition costs (2)	$	(44.9)	$	(7.2)	$	9.0	$	(10.5)
Paid losses and loss adjustment expenses, net of reinsurance	$	778.4	$	85.3	$	527.9	$	999.5
Gross premiums written	$	1,745.8	$	191.2	$	1,948.4	$	2,848.1

(1) As of December 31, 2022, balances related to AUA were reclassified to held-for-sale. See Note 2, “Recent Acquisitions, Disposals & Other Transactions” in our 2023 Form 10-K.

(2) The amortization (deferral) of policy acquisition costs will not equal the change in the balance sheet. For further discussion, see Note 1, “Business and Significant Accounting Policies.”

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