Statutory Accounting Principles

12 Months Ended

Dec. 31, 2024

Statutory Accounting Principles [Abstract]

Financial Information

The statutory capital and surplus for our principal operating subsidiaries was as follows:


Statutory capital and surplus (1)	December 31,
(in millions)	2024		2023
Bermuda	$	1,513.6	$	1,150.6

United States	1,639.3		1,410.4

(1) Such amounts include ownership interests in affiliate insurance and reinsurance subsidiaries.

The statutory net income (loss) for our principal operating subsidiaries was as follows:


Statutory net income (loss) (1)	For the Years Ended December 31,
(in millions)	2024		2023		2022
Bermuda	$	(52.1)	$	0.8	$	(29.1)
United Kingdom (2)	—		—		21.4
United States	(132.6)		39.5		(117.8)

(1) Such amounts include ownership interests in affiliate insurance and reinsurance subsidiaries.

(2) Sold on February 2, 2023. See Note 2, “Recent Acquisitions, Disposals & Other Transactions” in our 2023 Form 10-K for additional information related to this transaction.

As of December 31, 2024 and 2023, Argo Re’s solvency and liquidity margins and statutory capital and surplus were in excess of the minimum levels required by the Insurance Act. As of December 31, 2024 and 2023, the minimum statutory capital and surplus required to be maintained by Argo Re was $100.0 million and $106.6 million, respectively.

Our U.S. insurance subsidiaries file financial statements prepared in accordance with statutory accounting principles prescribed or permitted by insurance regulatory authorities of the state in which they are domiciled. The differences between statutory-based financial statements and financial statements prepared in accordance with GAAP vary between jurisdictions. The principal differences are that for statutory-based financial statements, deferred acquisition costs are not recognized, a portion of the deferred federal income tax asset is non-admitted, bonds are generally carried at amortized cost, certain assets are non-admitted and charged directly to surplus, a collectability allowance related to reinsurance recoverables is charged directly to surplus and outstanding losses and unearned premium are presented net of reinsurance.

Dividends

As an insurance holding company, we are largely dependent on dividends and other permitted payments from our insurance subsidiaries to pay cash dividends to our stockholders, for debt service and for our operating expenses. The ability of our insurance subsidiaries to pay dividends to us is subject to certain restrictions imposed by the jurisdictions of domicile that regulate our insurance subsidiaries and each jurisdiction has calculations for the amount of dividends that an insurance company can pay without the approval of the insurance regulator.

The payment of dividends to our stockholders is permitted so long as (i) we are not, or would not be after the payment, unable to pay our liabilities as they become due and (ii) the realizable value of our assets is in excess of our liabilities after taking such payment into account. In light of these restrictions, we have no material restrictions on dividend payments that may be made to our stockholders at December 31, 2024.

Bermuda Insurance Subsidiary

Argo Re is the direct subsidiary of Argo Group, and therefore, has direct dividend paying capabilities to the parent.

Argo Re is generally prohibited from declaring or paying, in any financial year, dividends of more than 25% of its total statutory capital and surplus (as shown on its previous financial year’s statutory balance sheet) unless it files (at least seven days before payment of such dividends) with the Bermuda Monetary Authority (“BMA”) an affidavit signed by at least two directors (one of whom must be a Bermuda resident director if any of the insurer’s directors are resident in Bermuda) and the principal representative stating that it will continue to meet its solvency margin and minimum liquidity ratio. Argo Re may not reduce its total statutory capital by 15% or more, as set out in its previous year’s financial statements, unless it has received the prior approval of the BMA. Based on these regulatory restrictions, the maximum amount available for payment of dividends to Argo Group by Argo Re during 2025 without prior regulatory approval is $378.4 million.

In 2024, Argo Group received total dividends of $30.0 million from Argo Re, and Argo Re received a dividend of $10.6 million from AIH. The proceeds of the dividends were used to repay intercompany balances, interest payments and other corporate expenses.

U.S. Insurance Subsidiaries

As an intermediate insurance holding company, Argo Group U.S. is largely dependent on dividends and other permitted payments from its insurance subsidiaries to service its debt, fund operating expenses and pay dividends. Various state insurance laws restrict the amount that may be transferred to Argo Group U.S. from its subsidiaries in the form of dividends without prior approval of regulatory authorities. In addition, that portion of the insurance subsidiaries’ net equity that results from the difference between statutory insurance principles and GAAP would not be available for dividends.

Argonaut Insurance Company is a direct subsidiary of Argo Group U.S. and is regulated by the Nebraska Department of Insurance. During 2025, Argonaut Insurance Company may be permitted to pay dividends of up to $149.8 million without approval from the Nebraska Department of Insurance. During 2024, Argo Group U.S. did not receive a dividend from Argonaut Insurance Company.

Rockwood, a direct subsidiary of Argo Group U.S., is regulated by the Pennsylvania Department of Insurance. Rockwood may be permitted to pay ordinary dividends of up to $18.9 million with approval from the Pennsylvania Department of Insurance during 2025. Each department of insurance may require prior approval for the payment of all dividends, based on business and regulatory conditions of the insurance companies. During 2024, Argo Group U.S. did not receive a dividend from Rockwood.