Argo Group International Holdings Ltd (ARGO) 2022 Q3 法說會逐字稿

Hello. Welcome to today's Argo Group Third Quarter 2022 Earnings Call. My name is Bailey, and I will be the moderator for today's call. (Operator Instructions)

大家好！歡迎參加今天的 Argo Group 2022 年第三季財報電話會議。我叫 Bailey，將擔任今天的電話會議主持人。 （操作員指示）

I would now like to pass the conference over to our host, Andrew Hersom, Head of Investor Relations. Please go ahead.

現在，我想將會議交給主持人，投資人關係主管 Andrew Hersom。請開始。

Thank you, and good morning. Welcome to Argo Group's conference call for the third quarter ended September 30, 2022. After the market closed last night, we issued a press release on our earnings, which is available in the Investors section of our website, argogroup.com, and was filed with the SEC.

謝謝大家，早安！歡迎參加 Argo Group 截至 2022 年 9 月 30 日的第三季電話會議。昨晚股市收盤後，我們發布了一份關於公司業績的新聞稿，您可以在我們網站 argogroup.com 的「投資者」板塊查看，該新聞稿已提交給美國證券交易委員會 (SEC)。

Presenting on today's call is Tom Bradley, Argo Group Executive Chairman and Chief Executive Officer; and Scott Kirk, Chief Financial Officer.

參加今天電話會議的有 Argo Group 執行董事長兼執行長湯姆·布拉德利 (Tom Bradley) 和財務長 Scott Kirk。

As the operator mentioned, this call is being recorded. During this conference call, Argo management may make comments that reflect Argo's intentions, beliefs and expectations for the future. Such forward-looking statements are qualified by inherent risks and uncertainties surrounding future expectations generally and may materially differ from actual future results involving any one or more of such statements. Argo Group undertakes no obligation to publicly update forward-looking statements as a result of events or developments subsequent to the call.

正如接線員所述，本次通話正在錄音中。在本次電話會議中，Argo管理階層可能會發表反映其未來意圖、信念和預期的評論。此類前瞻性陳述通常受未來預期固有風險和不確定性的影響，可能與涉及任何一項或多項此類陳述的實際未來結果有重大差異。 Argo集團不承擔因電話會議後發生的事件或事態發展而公開更新前瞻性陳述的義務。

For a more detailed discussion of such risks and uncertainties, please see Argo Group's filings with the SEC. Also note that we'll be referencing certain non-GAAP financial information. More information regarding these non-GAAP financial measures is provided in our earnings release.

有關此類風險和不確定性的更詳細討論，請參閱 Argo Group 提交給美國證券交易委員會 (SEC) 的文件。另請注意，我們將引用某些非公認會計準則 (non-GAAP) 財務資訊。有關這些非公認會計準則 (non-GAAP) 財務指標的更多信息，請參閱我們的收益報告。

I will now turn the call over to Tom.

我現在將電話轉給湯姆。

Thank you, Andrew, and thank you to everyone for joining us today.

謝謝你，安德魯，也謝謝今天參加我們活動的所有人。

Over the past 2 years, we have transformed Argo, better positioning the company to advance our business strategies. In September, we announced the sale of our Lloyd's operation, which marks a significant milestone in Argo becoming a focused, pure-play U.S. specialty insurer. Importantly, this transaction further simplifies our corporate structure and enables greater focus on our diverse portfolio of profitable and scalable U.S. specialty businesses.

過去兩年，我們對 Argo 進行了轉型，使其更好地定位於推進我們的業務策略。今年九月，我們宣佈出售旗下勞合社 (Lloyd's) 業務，這標誌著 Argo 成為一家專注於美國專業險業務的保險公司的重要里程碑。更重要的是，此交易進一步簡化了我們的公司架構，使我們能夠更加專注於多元化、盈利能力強且可擴展的美國專業險業務組合。

In addition, the announced U.S. loss portfolio transfer with Enstar will help provide protection against potential future reserve volatility. We believe these transactions will strengthen and derisk our balance sheet and better position the company to evaluate additional strategic opportunities. We are fully committed to maximizing shareholder value and remain focused on our strategic review process for the benefit of all Argo's shareholders.

此外，已宣布與Enstar公司轉讓美國虧損資產組合將有助於防範未來潛在的儲備波動。我們相信，這些交易將增強我們的資產負債表並降低風險，使公司能夠更好地評估其他策略機會。我們全力致力於最大化股東價值，並將繼續專注於我們的策略評估流程，以造福所有Argo股東。

Turning to the third quarter. We reported operating earnings of $0.44 per common share and an ex-CAT current accident year combined ratio of 93.4%. Our performance continues to benefit from earned premium growth in attractive business lines, lower expenses and lower catastrophe losses despite Hurricane Ian. We also continue to be encouraged by the increasing investment income from our fixed income portfolio driven by higher reinvestment rates.

回顧第三季度，我們報告每股普通股營業收益為0.44美元，扣除巨災因素後本年度綜合成本率為93.4%。儘管受颶風伊恩影響，我們的業績仍然受益於具有吸引力的險種的已賺保費增長、更低的支出和巨災損失的減少。此外，由於再投資率上升，我們固定收益投資組合的投資收益持續成長，這讓我們繼續感到鼓舞。

Our U.S. operations generated a strong current accident year performance with a 1.9 percentage point improvement in the segment's current accident year loss ratio compared to a year ago. This improvement was driven by disciplined underwriting, lower CAT losses and positive rate continuing to earn through.

我們美國業務在事故年度表現強勁，該部門事故年度損失率較去年同期下降了1.9個百分點。這項改善得益於嚴格的承保、較低的巨災損失以及持續的正利率。

While our thoughts are with those impacted by Hurricane Ian, we are pleased with the company's quarterly CAT losses decreased year-over-year for the sixth straight quarter despite elevated industry CAT losses. Our total CAT losses of $23.4 million in the quarter were down 14% from third quarter last year. Our U.S. operations accounted for just $4.2 million of these losses, which did not reach our U.S. CAT reinsurance retention levels. Our remaining CAT losses were in the International segment.

雖然我們與受颶風伊恩影響的人們同在，但我們很欣慰地看到，儘管行業巨災損失普遍增加，但公司季度巨災損失連續六個季度同比下降。本季巨災損失總額為2,340萬美元，較去年第三季下降14%。其中，美國業務僅佔420萬美元，未達我們美國巨災再保險留存額。其餘巨災損失均來自國際業務。

In contrast to broader industry trends, Argo's CAT losses for the 9 months of 2022 are nearly 60% lower than the same period last year while these losses in our CAT -- while these losses in our U.S. operations were down over 70%. The success of our volatility reduction efforts through exiting businesses with property CAT exposure is evident in these results.

與產業整體趨勢相比，Argo 2022年前9個月的巨災損失較去年同期下降了近60%，而我們美國業務的巨災損失則下降了70%以上。這些績效證明了我們透過退出涉及房地產巨災風險的業務來降低波動性的努力取得了成功。

We are also particularly pleased with the continued success of our ongoing cost reduction efforts. The expense ratio improved 0.9 percentage points from the prior year third quarter or 1.5 percentage points after adjusting for the reinstatement premiums.

我們對持續的成本削減工作取得的持續成功感到特別高興。費用率較去年第三季改善了0.9個百分點，經複效保費調整後則改善了1.5個百分點。

Through 9 months, we have lowered total expenses by over $35 million and reduced the expense ratio 1.7 percentage points to 35.6%. Our expense reduction efforts have successfully helped streamline our operations. And we remain confident there are opportunities to further reduce costs and improve the expense ratio in the future.

過去九個月，我們已將總支出降低了3,500多萬美元，費用率也降低了1.7個百分點，降至35.6%。我們的費用削減措施已成功幫助我們精簡營運。我們深信，未來仍有進一步降低成本、改善費用率的機會。

We continue to feel good about the pricing gains we are seeing across our portfolio of businesses. We are achieving both rate and premium growth in many lines with particular strength in casualty, environmental and inland marine. While there are some pockets of rate softness in the portfolio, most notably public company D&O, we remain disciplined in our underwriting approach.

我們持續對旗下業務組合的定價收益感到滿意。我們在許多險種的費率和保費均實現成長，尤其在意外險、環境險和內陸海運險方面表現尤為出色。儘管組合中存在一些費率疲軟的領域，尤其是上市公司的董事及高階主管責任險 (D&O)，但我們依然堅持嚴謹的承保策略。

Consistent with the first half of the year, rates increased in the mid-single digits across the vast majority of our businesses. Importantly, the average rates we're achieving continue to trend above loss cost expectations.

與上半年情況一致，我們絕大多數業務的費率均實現了中等個位數的成長。重要的是，我們實現的平均費率持續高於損失成本預期。

We remain focused on executing our business strategies, building upon our performance through the first 9 months of 2022 and further enhancing the company's position for 2023. As I've said, we are fully committed to the strategic review process. And we continue as a Board, along with our financial and legal advisers, to actively consider a wide range of options for Argo.

我們將繼續專注於執行業務策略，鞏固2022年前9個月的業績，並進一步提升公司在2023年的地位。正如我所說，我們全力投入策略評估流程。董事會將繼續與我們的財務和法律顧問一起，積極考慮Argo的各種方案。

I will now turn the call over to Scott to discuss third quarter results in more detail.

現在我將把電話轉給史考特，更詳細地討論第三季的業績。

Thank you, Tom, and good morning, everyone. Operating earnings for the third quarter were $15.5 million and $89.8 million for the 9 months in 2022. These results reflect our continued efforts to reduce CAT losses, maintain expense discipline and grow earned premiums in our ongoing businesses. These favorable trends were partially offset by the lower contribution from alternative investment portfolio compared to a year ago.

謝謝湯姆，大家早安。 2022年第三季的營業利潤為1,550萬美元，前九個月的營業利潤為8,980萬美元。這些績效反映了我們持續努力減少巨災損失、維持費用控制並增加持續經營業務的已賺保費。這些有利趨勢被另類投資組合貢獻較去年同期的下降部分抵銷。

While we reported positive operating earnings of $15.5 million for the quarter, our net loss attributable to common shareholders was $51.4 million. The difference is primarily attributable to net realized investment losses of $44.7 million and a $28.5 million impairment of goodwill and intangible assets associated with the previously announced sale of our Lloyd's operation. Included in the net realized investment losses was $34.2 million of impairment losses related to the assets that will be transferred upon closing of the LPT.

本季我們報告的營業利潤為1550萬美元，但歸屬於普通股股東的淨虧損為5,140萬美元。此差異主要歸因於4,470萬美元的已實現淨投資損失，以及與先前宣佈出售勞合社業務相關的2,850萬美元商譽及無形資產減損。已實現淨投資損失包括3,420萬美元的減損損失，這些損失與LPT交割後將轉讓的資產有關。

Before I provide more detail on the results, I wanted to update you on the U.S. LPT transaction with Enstar. We received the final regulatory approval yesterday and expect the transaction to close imminently. The results for the quarter, therefore, do not include the circa $100 million net of tax charge in connection with the LPT as we'd originally anticipated per our Q2 earnings call. Now we expect to record this charge in the fourth quarter this year.

在提供更多業績細節之前，我想先更新與Enstar在美國LPT交易的最新情況。我們昨天獲得了最終監管部門的批准，預計交易即將完成。因此，本季業績並未計入我們在第二季財報電話會議上最初預期的與LPT相關的約1億美元稅後費用。目前，我們預計將在今年第四季計入這筆費用。

And with regards to the loss corridor in the LPT, as we previously mentioned, Argo will retain $75 million of losses above the $746 million of reserves transferred. By way of update, through the 9 months ended September 30, 2022, we have recognized $37.7 million of prior year development that falls within the retained loss corridor, leaving at $37.3 million of the corridor remaining until we reach the $275 million covered layer of the LPT. In addition, we expect to transfer just over $500 million of remaining reserves upon closing of the LPT transaction.

關於LPT的損失走廊，正如我們之前提到的，Argo將在轉移的7.46億美元準備金之外保留7500萬美元的損失。更新後，截至2022年9月30日的九個月內，我們已確認3,770萬美元的上一年開發案屬於保留損失走廊，因此在達到LPT 2.75億美元覆蓋層之前，剩餘的損失走廊金額為3,730萬美元。此外，我們預計在LPT交易完成後將轉移略高於5億美元的剩餘準備金。

Looking at the consolidated results in more detail. Reported gross written premiums decreased 14.2% from the prior year third quarter primarily driven by businesses the company has exited. Gross written premiums in our ongoing business, however, were in line with the prior year third quarter. As Tom mentioned, we have seen positive rate trends across several areas in our portfolio.

更詳細回顧一下合併業績。報告的毛承保保費較去年第三季下降14.2%，主要原因是公司已退出的業務。然而，我們持續經營業務的毛承保保費與去年第三季持平。正如Tom所提到的，我們投資組合中的多個領域都出現了積極的費率趨勢。

Net earned premiums were $455 million compared to $487.5 million in the third quarter last year. This includes $12.5 million of reinstatement premiums primarily associated with CAT losses compared to $5.6 million of reinstatement premiums in the third quarter last year. In our ongoing business, however, net earned premiums grew over 13%. We are retaining more risk net on the businesses we feel are most attractive, resulting in net earned premiums outpacing gross written premiums on both a reported and ongoing basis.

淨已賺保費為4.55億美元，去年第三季為4.875億美元。其中包括1,250萬美元的複效保費，主要與巨災損失有關，而去年第三季的複效保費為560萬美元。然而，在我們持續經營的業務中，淨已賺保費增加了13%以上。我們在我們認為最具吸引力的業務上保留了更多風險淨額，因此，無論是報告的還是持續經營的，淨已賺保費都超過了毛承保保費。

Our loss ratio increased 1.7 percentage points to 65.7% in the third quarter driven mainly by net adverse prior year reserve development of $11.9 million or 2.6 percentage points on the loss ratio. The current accident year ex-CAT loss ratio of 58% increased 90 basis points from the prior year third quarter. However, when you adjust for the reinstatement premiums, the current accident year ex-CAT loss ratio for the third quarter of 2022 was 56.4%, which is in line with the prior year third quarter.

我們的賠付率在第三季上升了1.7個百分點，達到65.7%，這主要是由於去年同期準備金淨負成長1,190萬美元，即賠付率上升了2.6個百分點。本事故年度（不包括巨災損失）的賠付率為58%，較上年同期第三季上升了90個基點。然而，如果調整複效保費，2022年第三季本事故年度（不包括巨災損失）的賠付率為56.4%，與去年同期第三季持平。

The loss ratio also benefited from lower year-over-year CAT losses, which totaled $23.4 million or 5.1 percentage points on the loss ratio in the third quarter of 2022. This result compares favorably to CAT losses of $27.3 million or 5.6 percentage points on the loss ratio in the prior year third quarter.

損失率也受惠於年比 CAT 損失的降低，2022 年第三季 CAT 損失總計 2,340 萬美元，損失率下降 5.1 個百分點。這一結果與去年同期第三季 CAT 損失 2,730 萬美元或損失率下降 5.6 個百分點相比更為有利。

Turning to expenses. Our expense ratio was 35.4%, a 90 basis point improvement compared to the prior year third quarter. This reduction was primarily driven by an 80 basis point improvement in the G&A expense ratio and reflects $9.9 million decrease in G&A expenses when compared to the third quarter last year. And when adjusting for the reinstatement premiums, the expense ratio for the third quarter of 2022 was 34.4%, an improvement of 150 basis points from a year ago.

談到費用。我們的費用率為35.4%，較去年第三季改善了90個基點。這一下降主要得益於一般及行政費用率改善了80個基點，與去年第三季相比，一般及行政費用減少了990萬美元。經調整複效保費後，2022年第三季的費用率為34.4%，較去年同期改善了150個基點。

Moving on to the segment results. U.S. operations generated underwriting income of $9.3 million and a combined ratio of 97.2%. Gross written premiums in our ongoing business were in line with the third quarter of 2021 while earned premiums increased approximately 13% in our ongoing business.

再來看看分部業績。美國業務的承保收入為930萬美元，綜合成本率為97.2%。我們持續經營業務的毛承保保費與2021年第三季持平，而持續經營業務的已賺保費增加了約13%。

The loss ratio increased 2.9 percentage points to 65.9% in the third quarter compared to the same period last year. The increase was primarily driven by the net adverse prior year reserve development of $16.2 million, which was primarily attributable to losses from businesses we have exited.

第三季度，損失率較去年同期上升2.9個百分點，達65.9%。損失率上升的主要原因是去年同期準備金淨虧損1,620萬美元，主要歸因於我們已退出業務的損失。

On a current accident year ex-CAT basis, the loss ratio of 59.7% was broadly in line with the prior year quarter. Catastrophe losses of $4.2 million or 1.3 percentage points on the loss ratio decreased nearly 60% from a year ago.

以本事故年度（不含巨災損失）計算，損失率為59.7%，與去年同期基本持平。巨災損失為420萬美元，損失率下降了1.3個百分點，較去年同期下降了近60%。

The expense ratio of 31.3% decreased 110 basis points from the prior year third quarter. This improvement was due to a 2.8 percentage point reduction in the G&A expense ratio partially offset by a higher acquisition expense ratio.

費用率為31.3%，較去年同期第三季下降110個基點。這項改善是由於一般及行政費用率下降2.8個百分點，但部分被收購費用率的上升所抵銷。

Turning to the international operations. The segment reported an underwriting loss of $3.5 million driven by the CAT losses and the reinstatement premiums from Hurricane Ian in the quarter. This compares to a $4.6 million loss in the third quarter last year. The loss ratio increased 2 percentage points to 65.3% in the third quarter of 2022.

談到國際業務。該部門報告稱，本季承保損失為350萬美元，主要原因是巨災損失和颶風伊恩帶來的複效保費。相比之下，去年第三季的損失為460萬美元。 2022年第三季度，損失率上升了2個百分點，達到65.3%。

CAT losses in our international operations were $19.2 million during the third quarter of 2022 or 15.3 percentage points on the loss ratio. These results compare to CAT losses of $17.3 million or 10.5 percentage points on the loss ratio in the prior year third quarter. The current quarter benefited from net favorable prior year reserve development of $4.4 million compared to $2 million of net adverse development a year ago.

2022年第三季度，我們國際業務的巨額損失為1,920萬美元，損失率下降15.3個百分點。相較之下，去年同期巨額損失為1,730萬美元，損失率下降10.5個百分點。本季受惠於去年同期淨準備金成長440萬美元，而去年同期淨準備金成長為200萬美元。

The current accident year ex-CAT loss ratio of 53.5% increased 1.9 percentage points year-over-year. However, adjusting for the reinstatement premiums, the current accident year ex-CAT loss ratio was 48.9%, an improvement of 110 basis points.

本事故年度除巨災因素外的損失率為53.5%，較去年同期上升1.9個百分點。然而，經調整複效保費後，本事故年度除巨災因素外的損失率為48.9%，改善了110個基點。

The expense ratio of 37.5% decreased 2 percentage points from the third quarter of 2021. This improvement was due to a 4 percentage point reduction in the acquisition expense ratio partially offset by a 2 percentage point increase in the G&A expense ratio. Adjusting for the reinstatement premiums, the expense ratio for the third quarter of 2022 was 34.4%, an improvement of 3.9 percentage points year-over-year.

費用率為37.5%，較2021年第三季下降了2個百分點。這項改善是由於收購費用率下降了4個百分點，但被一般及行政費用率上升了2個百分點部分抵銷。經過複效保費調整後，2022年第三季的費用率為34.4%，較去年同期改善了3.9個百分點。

Moving on to investments. We generated net investment income of $34 million in the current year third quarter compared to $46.1 million a year ago with the decrease due to lower returns from our alternative investments. Now while down from the prior year third quarter, the alternative investment portfolio continued to generate positive net investment income. As we've said, alternative investment returns may continue to be challenged over the next few quarters given the continued volatility in the markets.

再來說說投資。今年第三季度，我們的淨投資收益為3,400萬美元，而去年同期為4,610萬美元，下降的原因是另類投資的收益下降。雖然與去年同期相比有所下降，但另類投資組合仍持續產生正的淨投資收益。正如我們之前所說，鑑於市場持續波動，未來幾季另類投資的回報可能仍將面臨挑戰。

We are, however, encouraged by the increased investment income from our fixed income portfolio, which grew approximately 24% compared to the third quarter 2021 and approximately 10% from the second quarter this year. Our reinvestment yields were hovering around 1.75% at the end of 2021 for an average A bond compared to above 4.5% for short-term U.S. securities.

然而，我們固定收益投資組合的投資收益成長令我們感到鼓舞，與2021年第三季相比成長了約24%，與今年第二季相比成長了約10%。 2021年底，我們A級債券的平均再投資收益率徘徊在1.75%左右，而短期美國證券的再投資收益率則超過4.5%。

We continue to hold a relatively short duration portfolio at 2.7 years including cash. This shorter duration positions us well in a rising interest rate environment. Now as we expect duration to shorten further, we anticipate the future change in the level of unrealized investment losses from interest rate movements to be less volatile.

我們繼續持有期間相對較短的投資組合，包括現金，期限為2.7年。較短的期限使我們在利率上升的環境中處於有利地位。現在，由於我們預期期限將進一步縮短，我們預期未來利率變動導致的未實現投資損失水準的波動性將會減弱。

Now let me talk about capital. Book value per share was $33.72 at September 30, 2022, and decreased 10.4% from June 30 with the decrease driven largely by changes in accumulated other comprehensive income. The change in AOCI is mainly attributable to unrealized investment losses in our fixed income portfolio of $75.9 million net of tax for the quarter. For the 9-month period in 2022, we have approximately $340 million of unrealized losses net of tax from the investment portfolio included in AOCI.

現在我來談談資本。截至2022年9月30日，每股帳面價值為33.72美元，較6月30日下降10.4%，主要原因是累計其他綜合收益的變化。 AOCI的變動主要歸因於本季我們固定收益投資組合中7,590萬美元的稅後未實現投資損失。 2022年前9個月，我們納入AOCI的投資組合中約有3.4億美元的稅後未實現損失。

Given our shorter duration investment portfolio, we would anticipate the unrealized investment losses arising from interest rate movements to unwind over approximately 3 years as securities reach maturity. At the same time, we will also see higher interest rates continue to benefit investment income. Excluding AOCI, book value per share was $43.23 at the end of the third quarter 2022, a decrease of 3.9% from June 30.

鑑於我們投資組合的久期較短，我們預期利率變動產生的未實現投資損失將在約3年內隨著證券到期而平倉。同時，我們也將看到利率上升繼續利好投資收益。不計AOCI，截至2022年第三季末，每股帳面價值為43.23美元，較6月30日下降3.9%。

And in closing, we continue to engage in regular communication and maintain strong relationships with our rating agencies and regulators. Most recently, S&P reaffirmed our A- strong financial strength rating.

最後，我們將繼續與評級機構和監管機構保持定期溝通和良好關係。最近，標準普爾重申了我們「A-」的強勁財務實力評級。

And with that, I would now like to hand the call back to Tom.

現在，我想把電話交還給湯姆。

Thank you, Scott. And before we open the call for questions, I'd like to briefly address matters related to our upcoming annual meeting and one of our shareholders, Capital Returns Management.

謝謝斯科特。在開始提問之前，我想先簡單談談我們即將召開的年會以及我們的股東之一——資本回報管理公司（Capital Returns Management）的相關事宜。

Last week, we filed a definitive proxy statement, an accompanying blue proxy card and other relevant materials with the SEC in connection with the solicitation of proxies for the annual meeting. As I hope we have made very clear to you today and over the past several months, Argo's Board is actively overseeing a robust strategic review process to maximize value for our shareholders, which includes exploring a potential sale, merger or a strategic transaction.

上週，我們向美國證券交易委員會 (SEC) 提交了一份最終委託書聲明、隨附的藍色委託書卡以及其他相關資料，用於徵集年度股東大會的委託書。我希望今天以及過去幾個月我們已經向各位明確表示，Argo 董事會正在積極監督一項嚴謹的戰略審查流程，以最大限度地提升股東價值，其中包括探索潛在的出售、合併或戰略交易。

At the same time, Argo has made significant progress in repositioning the company for growth and increased profitability. Today, Argo is a focused, pure-play U.S. specialty insurer with over $2 billion in premium and renewed momentum, better positioned to drive our business strategies and evaluate further strategic opportunities to drive value.

同時，Argo在重塑公司成長和獲利能力方面取得了顯著進展。如今，Argo已成為一家專注於業務的美國專業保險公司，保費收入超過20億美元，並煥發新的發展勢頭，更有能力推動公司業務戰略，並評估進一步的戰略機遇，從而創造價值。

Argo consistently engages with its shareholders and appreciates their ideas and input towards maximizing shareholder value. In keeping with this, for more than a year the Argo Board and management team have engaged with Capital Returns in an attempt to foster constructive dialogue and hear their views.

Argo 始終與股東保持溝通，並重視他們為實現股東價值最大化而提出的想法和意見。為此，一年多來，Argo 董事會和管理團隊一直與 Capital Returns 保持溝通，力求促進建設性對話，並聽取他們的意見。

Despite this outreach and the significant progress we have made, Capital Returns has nominated 2 director candidates to stand for election at our 2022 annual meeting. Pursuant to our established policies, the Board's Nominating and Corporate Governance Committee formally interviewed both of Capital Returns' nominees and concluded that neither candidate offers any incremental skills or experience that would be additive to the current Board or to its ongoing strategic review process. In fact, we believe they would diminish the Board's overall capabilities and expertise.

儘管我們進行了廣泛的宣傳並取得了重大進展，Capital Returns 仍提名了兩位董事候選人參加 2022 年年度股東大會。根據我們既定的政策，董事會提名和公司治理委員會正式面試了 Capital Returns 的兩位候選人，並得出結論：兩位候選人均未提供任何能夠為現任董事會或其正在進行的戰略審查流程帶來額外補充的技能或經驗。事實上，我們認為，他們會削弱董事會的整體能力和專業知識。

As such, the Board presented its recommended slate of director nominees in our definitive proxy materials, encouraging shareholders to use the blue proxy card and vote for all of the Argo nominees. Any and all details related to our annual meeting can be found in our public filings on our IR web page.

因此，董事會已在我們的最終代理材料中公佈了其推薦的董事候選人名單，鼓勵股東使用藍色代理卡投票給所有 Argo 提名人。所有與我們年度股東大會相關的詳情，均可在我們投資者關係 (IR) 網頁上的公開文件中查閱。

With that, I'd like to hand the call back over to the operator for any questions.

好了，我想把電話轉回給接線生，以便回答任何問題。

(Operator Instructions) There are no questions registered at this time -- we have a question registered, apologies. Our first question today comes from the line of John Heagney from Dowling & Partners.

（操作員指示）目前沒有登記問題－抱歉，我們有一個登記問題。今天的第一個問題來自道林律師事務所（Dowling & Partners）的約翰希格尼（John Heagney）。

I did want to touch on one thing, maybe get your thoughts. You're talking a lot about changing the portfolio, business development. I guess could you take a deeper dive into what has actually changed in the U.S. operations?

我想談一件事，或許可以了解您的想法。您一直在談論產品組合和業務發展的改變。能否請您更深入地談談美國業務究竟發生了哪些變化？

I mean I get it holistically. You sold Lloyd's. You're focused on the U.S. But what specifically in the U.S. is now changing or improving versus, let's call it, 2 years ago, 1.5 years ago, when you had -- when the company had its first sort of strategic review of its underwriting business?

我的意思是，我完全理解。你賣掉了勞合社，現在專注於美國市場。但與兩年前或一年半前，也就是公司首次對核保業務進行策略評估時相比，美國市場現在具體有哪些變化或改善？

Yes. Thank you, John, for that. The biggest single change that we've kind of referred to is property, not only deemphasizing it but specifically reducing our exposure there as not only as a capital management exercise but as a profitability exercise. We had poor results and not the right capabilities to do that. So we sold off some of those businesses and just dropped out of others.

是的。謝謝你，約翰。我們提到的最大的一個變化是房地產，我們不僅淡化了對房地產的重視，而且明確地減少了我們在房地產領域的投資，這不僅是為了資本管理，也是為了獲利。我們的業績不佳，而且沒有足夠的能力來做到這一點。所以我們賣了其中一些業務，並放棄了其他業務。

I think the other significant change would be rationalization of some of the programs in our program segment. Again, to actively manage programs and where we see we don't have a future visibility into profitability, we've taken action to, a, either remediate or exit those programs.

我認為另一個重大變化是對我們專案部門中一些專案的合理化。為了積極管理這些項目，我們發現未來獲利能力難以預測，我們會採取行動，要麼補救，要麼退出這些項目。

Scott, anything you want to add?

史考特，您還有什麼要補充的嗎？

No. John, I'd just also add that, obviously, we've been actively looking at the level of expenses we've incurred in the business. And over the last 18 months or so, you've seen a significant reduction there. It's a great profitability lever for us. And look, we continue to be active and execute on those opportunities.

不，約翰，我還要補充一點，我們一直在積極關注業務支出水準。過去18個月左右，我們已經看到支出顯著減少。這對我們來說是一個很大的獲利槓桿。而且，我們將繼續積極把握這些機會。

(Operator Instructions) There are no additional questions waiting at this time. So I'd like to pass the conference over to Tom Bradley for any closing remarks.

（接線員指示）目前沒有其他問題。因此，我想將會議交給湯姆·布拉德利，請他做最後發言。

Thank you, operator. In closing, our third quarter performance continued to benefit from the execution on our strategic priorities, including growth in our most attractive lines of business, reduced underwriting volatility and lower expenses. Catastrophe losses declined year-over-year despite elevated industry losses, highlighting the success of our strategy of reducing volatility through exiting businesses with property CAT exposure.

謝謝接線生。最後，我們第三季的業績繼續受益於我們策略重點的執行，包括最具吸引力的業務線的成長、承保波動性的降低以及費用的降低。儘管行業損失有所增加，但巨災損失同比下降，凸顯了我們透過退出財產險業務來降低波動性的策略的成功。

Our LPT and Lloyd's transactions will strengthen and derisk our balance sheet as we have delivered on our core strategy of becoming a focused, pure-play U.S. specialty insurer. And finally, we are unwavering in our commitment to evaluate additional strategic alternatives, including the potential sale or merger of the company that will deliver on our goal of maximizing value for all shareholders. We are pleased by the progress of our strategic review and the level of interest in Argo to date.

我們的LPT和勞合社交易將增強我們的資產負債表並降低風險，因為我們已實現成為一家專注、純粹的美國專業保險公司的核心策略。最後，我們堅定不移地致力於評估其他策略選擇，包括潛在的出售或合併公司，以實現我們為所有股東實現價值最大化的目標。我們對策略評估的進展以及迄今為止對Argo的興趣程度感到滿意。

Thank you, everyone, for your time and for your interest in Argo. Good day.

感謝大家抽出時間，也感謝大家對 Argo 的關注。大家好！

This concludes today's conference call. Thank you all for your participation. You may now disconnect your lines.

今天的電話會議到此結束。感謝各位的參與。現在您可以掛斷電話了。