Argo Group US Inc.

The negative outlook reflects what S&P Global Ratings sees as potential shortcomings with the company's governance, which includes the relative effectiveness of the board's oversight, as well as the uncertainty associated with the ongoing SEC investigation. We could lower the ratings during the next 12-24 months if: There is a material adverse development arising from the ongoing governance and disclosure review by the board or SEC investigation; We believe that the governance and internal risk controls are not sufficiently enhanced to address existing deficiencies; or Argo's operating results are significantly weaker than our expectations, or are substantially worse than peers', or its capitalization declines materially. We could revise the outlook to stable and affirm our ratings during the next 12-24

...Argo Group International Holdings Ltd. (Argo), parent of Argo Group U.S. Inc. (Argo U.S.), recently announced the immediate retirement of its CEO. This announcement follows the company's disclosure a few weeks ago of the board's review of governance and compensation-related matters subsequent to an SEC subpoena. These developments suggest potential shortcomings in Argo's governance framework, including the independence and effectiveness of board oversight. Moreover, the potential impact on the company from the SEC investigation remains unknown. Argo has a strong competitive position in the U.S. commercial and specialty lines market, although its international business is undergoing remediation efforts and the group remains hampered by a high expense base.Argo has invested in technology, workflow processes, and predictive analytics, which are providing growth opportunities, and expense efficiencies, especially in the U.S. business. However, its international business remains challenged with...

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