Specialty insurer and reinsurer Argo Group International is exiting the grocery and retail lines of business, which include providing general liability and self-insured retention risk management programs for grocery stores, convenience stores, restaurants and other retail businesses.
The company said it intends to put this business into run-off immediately, a move that will result in a staff reduction of approximately 20 positions from Argo Insurance and its dedicated claims team. The company said it will work to move some of this team into other open positions, and a few members of the team will stay on to assist with the run-off operations.
The company declined to disclose the amount of business being runoff.
“This is another step in our ongoing efforts to simplify the business, reduce expenses and streamline operations,” said Gary Grose, U.S. Operations executive vice president, in prepared remarks. “This is in line with the plan we announced to investors last year, which also emphasized our efforts to continue investing in lines of business with the most opportunity for significant profitability.”
For agents and brokers, this means they must start now to move all of their Argo grocery and retail renewals to another carrier. The company told Insurance Journal it has been in communication with its agents and brokers and has retained a “core team” to ensure that it provides a “high level of service as policy terms expire and we exit the business.”
Argo officials have been reviewing operations to identify strengths and weaknesses. They have acknowledged the reviews could lead to some lines being discontinued or sold.
“If you look back at our financials for the U.S. operations for the last seven years, you’ll see that this strategy has led to strong and attractive margins, and that’s why we plan to execute for the entire organization going forward, Kevin J. Rehnberg, chief executive officer, said on a recent quarterly call with analysts.
In a September 2020 presentation for investors, the company indicated units with $500 million or more in premiums are under review. It views the specialties with the best growth prospects to be construction and casualty, surety, environmental and transportation.
Last fall the company exited Asia’s insurance market and global hull business and earlier this year it sold its Trident Pubic Risk Solutions unit to Paragon MGA.
More than 80% of Argo’s gross premiums come from U.S. domiciled risks, which are written out of U.S. and international markets.
Source: Argo Group
*This story ran previously in our sister publication Insurance Journal