Written by Jasir Jawaid
Argo Group International Holdings Ltd. thinks that recent hires by Berkshire Hathaway Inc. in an apparent excess-and surplus lines push should not have much of an impact on the company because they are likely to focus on large accounts at the Warren Buffett-led company, President and CEO Mark Watson III said on a first-quarter earnings conference call.
There has been recent chatter over Berkshire's hiring of four American International Group Inc. executives, including the president of its main E&S writer, Lexington Insurance Co., which accounted for the vast majority of AIG's E&S premiums in 2012, at about $4.23 billion, according to SNL data. AIG has since filled those roles.
In his opening remarks, the CEO said the company was advancing on all fronts in its excess-and-surplus lines business.
"We've been adding to the depth and breadth of our teams, which has enabled us to grow our top line profitably."
According to the first-quarter earnings release, net written premiums in the segment rose year over year to $100.8 million from $88.9 million. Gross written premiums and earned premiums also increased year over year.
During the call's question-and-answer session, Argo Group management was asked if these hires changed the outlook or thought process on the E&S market. "I have no idea what their business plan is, but I suspect they will focus on larger accounts. If that's the case, then I expect it will have little direct impact on our portfolio," Watson responded.
Argo Group's direct excess-and-surplus lines premiums written in the U.S., as of year-end 2012, was $409.9 million, up 7.18% year over year. It was the 17th-largest E&S writer in the U.S., followed by Berkshire, according to SNL data.
"There's always someone new coming in to the market; I think this one just has more headline," Watson concluded.
This article was published by S&P Global Market Intelligence on the S&P Capital IQ Pro platform.
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