OREANDA-NEWS. February 08, 2016. Fitch Ratings has published an Unrated Issuer Report (UIR) on Argo Group International Holdings, Ltd. (AGII). UIRs provide analytical perspective and transparency on key issues that impact an organization's creditworthiness but without providing a credit rating or rating-like opinion.

In addition to highlighting what Fitch considers to be AGII's main credit issues and trends, the report takes a closer look at:

--Operating performance;
--Business mix and competitive position.

AGII has successfully repositioned its portfolio following geograhic expansion through acquisition in 2007-2008. With underwriting losses in 2010-2012, AGII reduced premium volume and property exposures to address poorer performing business and to respond to market conditions. Premium volume has increased steadily in the last three years, particularly in excess & surplus (E&S) lines.

Underwriting improved noticeably with repositioning efforts, resulting in a combined ratio in the mid-90s for 2014 and 2015. AGII's largest segment, E&S, exhibited favorable results. However, the E&S business will be challenged by moderating premium growth and price competition fostered by ample market capacity. Future improvement in ROE will also be hindered by continued low asset yields.

AGII faces market consolidation pressures. Relative to other publicly held specialty insurers, AGII is a smaller, midsize organization based on premium volume and capitalization. Amid the recent spate of merger and acquisition activity and interest from activist investors in the property/casualty market, chances have increased that AGII will boost its operating scale through an acquisition or become a target for a larger buyer.

A peer analysis and a summary of market-based indicators round out the UIR.

UIRs are not solicited by the issuer, and Fitch receives no compensation from the issuer for the provision of an UIR. While a UIR is typically based primarily on public information, Fitch analysts may ask questions of an issuer's management while preparing the report. The level of management participation, if any, can vary significantly from case to case.