Argo Group International Holdings, Ltd.

Good morning, everybody, and welcome to today's Argo Group second quarter 2022 earnings call. My name is Drew, and I'll be coordinating your call today. If you would like to ask a question during the presentation, you may do so by pressing star followed by one on your telephone keypad. We ask that you ask one question with one follow-up, and also, if you change your mind, please press star followed by two. I'm now going to hand over to Andrew Hursom, Investor Relations, to begin. Please go ahead.

Thank you, and good morning. Welcome to Argo Group's conference call for the second quarter ended June 30th, 2022. After the market closed last night, we issued a press release on our earnings, which is available in the investor section of our website, argogroup.com, and was filed with the SEC. Presenting on today's call is Tom Bradley, Argo Group Executive Chairman and Chief Executive Officer, and Scott Kirk, Chief Financial Officer. As the operator mentioned, this call is being recorded. During this conference call, ARGO management may make comments that reflect ARGO's intentions, beliefs, and expectations for the future. Such forward-looking statements are qualified by the inherent risks and uncertainties surrounding future expectations generally and may materially differ from the actual future results involving any one or more of such statements. ARGO Group undertakes no obligation to publicly update forward-looking statements as a result of events or developments subsequent to this call. For a more detailed discussion of such risks and uncertainties, please see Argo Group's filings with the SEC. Also, note that we will be referencing certain non-GAAP financial information, including reconciliations thereof. More information regarding these non-GAAP financial measures is provided in our earnings release. I will now turn the call over to Tom.

Thank you, Andrew, and thank you to everyone for joining us today. Before getting to the results, I wanted to say it is a privilege to be appointed CEO and lead Argo and its dedicated employees forward into the company's next chapter. Together, we have transformed many aspects of the franchise over the past couple years, positioning it well to deliver growth and profitability. As a result, I'm excited about the opportunities ahead to further enhance the company to better serve customers, expand our leadership role in the specialty insurance market, and maximize value for shareholders. Now turning to the quarter. The company's performance for the second quarter and for the first six months of the year reflects our continued execution on our strategic priorities and our focused approach to profitable growth as we successfully target business lines we view the most attractive. For the second quarter, operating earnings were 89 cents per diluted common share, benefited from positive underwriting income as we continue to achieve double-digit net earned premium growth in our ongoing business primarily driven by increased retentions and positive rates continuing to earn through. For the first six months of the year, the combined ratio of 95.6% drove an operating return on average common shareholders' equity of 10.2%. These results reflect significant year-over-year improvement in underwriting income, which more than offset the decline in net investment income from the alternative investment portfolio. In our ongoing businesses, top-line growth was strong through six months, with earned premiums increasing approximately 16% from a year ago. I am particularly pleased with our efforts to reduce cap volatility and manage expenses, as demonstrated in our under-earning results. Catastrophe losses of $2.5 million in the second quarter marked the fifth consecutive quarter of year-over-year improvement and is Argo's lowest level since 2019. The reduction in our cap losses is in contrast to the level of these losses the industry is continuing to experience. Year to date, catastrophe losses were 11.2 million compared to cap losses in the first half of 2020 and 2021 of 57 million and 59 million respectively. The success of our strategy of reducing volatility through exiting non-core business is evident in these results. The expense ratio improved by over two percentage points for both the second quarter of 2022 and on a year-to-date basis, reflecting the effectiveness of our ongoing cost reduction efforts. We are steadfast in our commitment to further reduce costs and remain very confident in our ability to continue improving the expense ratio. We feel good about the rates we are seeing and the direction of our markets. We continue to see strong levels of both rate and premium growth in many business lines, with particular strength in casualty, environmental, and inland marine. Overall, consistent with the first quarter, rates increased in the mid-single digits across the vast majority of our businesses. Importantly, the average rate we are achieving continues to trend at or above lost cost inflation expectations. We continue to explore a wide range of potential options to maximize shareholder value and take advantage of opportunities in the market. Consistent with that objective, we are entering into a lost portfolio transfer with NSTAR, which covers the majority of our U.S. casualty insurance reserves, including construction, relating to accident years 2011 to 2019. While Scott will give more details on the transaction shortly, I would like to note that this gives us protection against reserve volatility and provides us with additional capital flexibility. We remain focused on pursuing profitable growth as a U.S. specialty insurer with leading positions in very attractive specialty lines. I'll now turn over to Scott to discuss the results in more detail.