Argo Group International Holdings, Ltd.
The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Southern District of New York on behalf of those who acquired Argo Group International Holdings, Ltd. (“Argo”) (NYSE: ARGO) securities between February 13, 2018 through August 9, 2022 (the “Class Period”). Investors have until December 19, 2022 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
Argo underwrites international specialty insurance products in the property and casualty markets.
On February 8, 2022, Argo reported that its fourth quarter results for 2021 would be negatively impacted by $130 to $140 million worth of prior year reserve development and non-operating charges. The Company admitted that the largest reserve increases were related to construction defect claims within Argo’s U.S. Operations, in addition to reserve increases in the Run-off segment. The Company also admitted that the prior year reserve increase for construction defect primarily related to the 2017 and prior underwriting years in business lines that had either been significantly remediated or discontinued. On this news, the price of Argo shares declined by $7.11 per share, or approximately 13.7%, from $51.87 per share to close at $44.76 on February 9, 2022.
On August 8, 2022, Argo again shocked its investors when it announced that it had entered into a Loss Portfolio Transfer agreement with a wholly owned subsidiary of Enstar Group Limited covering a majority of the company’s U.S. casualty insurance reserves. On this news, the price pf Argo shares declined by $5.71 per share, or approximately 17.72%, from $32.22 per share to close at $26.51 on August 9, 2022. The price of Argo shares declined further the following day by $3.41 per share, or approximately 12.86%, from $26.51 per share to close at $23.10 on August 10, 2022. This drop caused the Company’s market capitalization to fall another $320 million. Argo’s stock price is down more than 60% this year.
The lawsuit alleges that, throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (1) Argo’s reserves were inadequate and its underwriting standards were not prudent as was represented; (2) Argo altered its underwriting policies on certain U.S. construction contracts as far back as 2018; and (3) these policies were underwritten outside of the Company’s “core” business including in certain states and for certain exposures that were far riskier than investors understood and that the Company no longer would service moving forward.