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ArgoGlobal pulls plug on ‘unsustainable’ Asia

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ArgoGlobal will ditch its business in Asia to focus on other markets that offer better earnings potential.

Most of its hull underwriting business would be put into runoff as well, the Lloyd’s syndicate announced last week.

The move to withdraw from Asia will not affect the Australian market, where the syndicate writes business through delegated authorities.

“That book is managed directly out of London, hence there will be no impact on our Australian clients,” Head of International Marketing and Producer Management Ewelina Kudla told insuranceNEWS.com.au.

She says gross written premium from Australian accounts makes up less than 5% of the syndicate’s book.

The business in Asia is returning “unsustainable” combined ratios, Group Head of International Operations Matt Harris says.

“While we still see growth opportunities in the region, we need to prioritise our efforts on profitable growth in other markets,” he added.

While the syndicate will be ceasing most of its hull underwriting business, it remains committed to the remaining marine classes it insures, including hull accounts on non-Lloyd’s platforms.

ArgoGlobal, the trading brand of Syndicate 1200, narrowed its losses last year to £35.9 million ($64.7 million) from £112.3 million ($202 million) in 2017, according to its financial report.

Argo Managing Agency, which manages the syndicate, has signalled that becoming profitable again is a key priority.

“It is imperative that the business returns to consistent profitability,” Chairman Tony Latham says in the report.

“To achieve that we must continue to adhere to underwriting plans and remain committed to achieve rate increases where needed.

“It is also critical that we drive down the cost of acquiring business, which remains too high. Where we believe market conditions do not allow a line of business to be profitable, then we shall exit those lines.”