Argo Group International Holdings, Ltd. (NYSE:ARGO) Q3 2019 Earnings Conference Call - Final Transcript

Nov 08, 2019 • 11:00 am ET

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Argo Group International Holdings, Ltd. (NYSE:ARGO) Q3 2019 Earnings Conference Call - Final Transcript

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Q & A
Analyst
Greg Peters

apple that's going to happen at year-end? Sort of provide us some near-term visibility on how you think that's going to move.

Executive
Jay S. Bullock

Well, let me start with your last question. Obviously, we try to put forth our best estimate each quarter. And so, I would never say that it's impossible to see additional, but I would never say that I expect a future charge, otherwise, it wouldn't be a future charge, would it? I don't -- I'm not discounting the fact, especially given our track record, that these numbers are large. That said, $40 million on $2 billion in reserves, as a percentage -- only as a percentage, is relatively small. As it impacts income, it's a large number. So I'm not trying to downplay that at all. And I feel like what I would repeat is kind of what I went through in my prepared comments, which is we review each line of business each quarter. What's been frustrating has been the additional information that keeps coming to the surface each quarter. And some of this -- let me give you an example. In professional lines -- sorry, what I want to try to -- the point I want to try to make here is when we say that we've taken action on some of these lines of business, I'd like to provide an example. So professional lines in Bermuda was driven by two related claims -- not two -- sorry -- two unrelated claims, both that had an element of cyber to them. One of them was affirmative cyber, and the other one was what you might refer to as silent cyber.

On affirmative cyber, we've exited, we've gotten off all large company cyber. And that's really what was driving that. And that's really where most of the losses have come up. And I think we're very, very close to having all of that rolled off the books, if you will, from an open exposure standpoint. And the second one, I think there's a very much of a renewed focus by the underwriting team in Bermuda to think about the organization and where silent cyber might exist and taking action not to write professional liability lines where there might be material cyber exposure. Kevin, I don't know if you want to add anything to that?

Executive
Kevin J. Rehnberg

Yes, I think it wasn't silent that we missed. It was silent that we accepted.

Executive
Jay S. Bullock

Yes.

Executive
Kevin J. Rehnberg

On that particular risk, it was known, underwritten and it's -- was part of the larger accounts that were being underwritten at the time, which we have gotten off worldwide, and we're down to a handful at the moment with only one carrying into next year.

Executive
Jay S. Bullock

So Greg, I feel like I'm not sure I covered all your points, but perhaps I do.

Analyst
Greg Peters

Well, you provided a fair amount of information, which is appreciated. I know there's other analysts that are going to be asking questions. So maybe we can talk about for a second the departure