The global insurance industry is in the midst of a ground-breaking course that will redefine businesses. A digital transformation is currently sweeping the landscape, and this revolution is unveiling a market whose value is worth trillions of dollars. Many enterprises in the field are now leveraging advanced analytics, Internet of Things, as well as machine learning, to create fresh business models, increase revenue streams and profits, and reduce operational costs. The key is to understand when to tap into this potential while continuing to focus on greater collaboration between traditional insurance companies and newer InsurTech firms.
In a growing number of countries, while there are many known hazards to commerce and the economy, the most significant risk is often the threat of business disruption. Given that times are tumultuous, the insurance industry can still thrive if it embraces opportunities and establishes measures to deal with various risks involved.
Enter Argo Group, a specialty insurance provider committed to helping businesses stay in business. With a sense of urgency in everything it does, the firm helps ensure a prosperous future for its business partners and customers by being more efficient, creative, agile, and finely attuned to the needs of its clients in a rapidly changing environment.
Making Customers’ Lives Easier and Their Businesses Better
Argo Group is a diverse, global underwriter of specialty insurance and reinsurance products in the casualty and property market. Based in Bermuda, the firm had its humble beginnings in 1948 at San Francisco as Argonaut Insurance Exchange. Focused on underwriting workers compensation for the California construction industry, the company was acquired by Teledyne Technologies in 1969. From there, the enterprise expanded its product lines and later acquired Great Central Insurance, the first amongst many other acquisitions. Recently, Argo celebrated its 70th anniversary, but right from the outset and through all its ups and downs in the last seven decades, Argo has always focused on looking ahead and constantly innovating to meet its customers’ needs.
The firm has a remarkably talented leadership team led by Mark Watson, the Chief Executive Officer (CEO). Watson first invested in Argonaut in 1998 as a board member. With his extensive industry knowledge and expertise, he began carefully reviewing Argonaut’s performance in detail and realized that though the company was struggling, it had great potential. Watson suggested at the time to evolve the firm completely into a specialty insurer, and in the year 2000, Watson took on the role of CEO and started running the company.
Through Argo Group’s operating subsidiaries, the company offers a comprehensive line of products and services designed to meet the unique coverage and claims handling needs of its clients. With a distinct specialty property, casualty insurance, reinsurance, and managed risk solutions platform, Argo is committed to working together with its independent agents, and wholesale and retail brokerage partners to deliver innovative products for niche markets.
Argo has major insurance centers across Bermuda, London, and the United States, through a differentiated specialty franchise, namely Lloyd’s Syndicate Operations. Additionally, the company is located in selected international insurance centers across Europe, Asia, Central America, South America, and the Middle East. Besides establishing a strong presence in the most desirable markets, Argo also has broad and strong producer relationships with its agents, brokers, wholesalers and cover holders. As a result, Argo has trailing twelve months gross written premiums of $3 billion. The firm also has the A.M. Best rating of ‘A’ (Excellent) with a stable outlook and an S&P rating of ‘A-’ (Strong) with a positive outlook.
Bespoke Products and Solutions that Help Power Businesses to Drive the World Economy
Argo offers a full spectrum of products in the categories of specialty, structured alternative solutions, property treaty, property retro, international treaty casualty, and clean energy. These products are distributed through a widespread network of appointed as well as non-appointed brokers, agencies and other capital bases throughout the US, Bermuda and other markets around the world. Additionally, Argo’s notable solutions and services include the following:
- Developed Argo Risk Tech, a customizable, sensor-based technology that aids restaurateurs and retailers to manage risks by reducing on-premise accidents
- Created Protector, an in-house digital platform based in Brazil to handle BRL 50.2 million in gross written premiums
- Partnered with Coalition, a start-up cybersecurity MGA, for Argo’s cyber book of business
- Devised a self-serve digital portal to drive engagement with brokers and insureds
- Funded a start-up that helps brokers focus on risk advisory through custom-built digital tools and automation of back-office tasks
- Incubated a start-up that enables stronger membership engagement for affinity groups and associations
- Invested in the largest payment processor of cryptocurrencies to explore blockchain and insurance applications in the space
Staying Ahead of the Game with Key Differentiators and Strategies
One of Argo’s key differentiator which sets it apart from its competitors, is that Argo is a truly global insurance organization. As listed below, the company derives many benefits from being global:
- Enjoying enhanced relationships with its distribution partners, thereby having increased relevance and influence with global brokers
- Seizing profitable growth opportunities to spread risk and reduce the volatility of insurance cycles, while having the freedom to use capital more efficiently
- Amplifying its share of wallet through expanded product and service offerings to multinational clients and more sophisticated buyers of risk management solutions
- Fostering innovation and facilitating high-quality talent acquisition and development enables the firm to gather insights across multiple platforms and leverage best practices throughout a broad and diverse organization
- Taking advantage of tax and capital efficiencies as a result of access to various platforms
Another of Argo’s distinguishing feature is its digital strategy. The strategy has three pillars – digitize distribution and secure less expensive alternative channels, leverage data to become the fastest and smartest risk assessor, and automate processes to free up the workforce for high-value work. The digital strategies that have been outlined significantly improve underwriting efficiency and consistency. Digitization and automation benefit the company’s top line growth and the expense ratio, while also providing a platform to drive scale and efficiency. Moreover, Argo’s digital strategy has also made its brokers’ routines more straightforward and more profitable. More than 97% of brokers who tried the new system last year mention that Argo is now their preferred way of doing business. Even when the company declines a submission, Argo’s response is now so fast - sometimes within a minute - that brokers get immediate feedback on Argo’s current risk appetite, a critical element in brokers’ day-to-day operations.
Argo has further expanded the technology to other areas of operation such as claims. It introduced two new digital platforms into the market in 2018, with each platform logging in more than $100 million in premium. A critical factor which echoes Argo’s competitive advantage in the insurance market is an award (second year running) for Risk Innovation of the Year in the Re/Insurer Category in the Insurance ERM Awards.
Empowering Clients to Be Future Ready
Ever since its beginning, Argo has made it a part of its organization’s DNA to add value to customers by knowing, understanding, and predicting their behaviors. The cases highlighted below reflect how Argo’s knowledge of specialized disciplines gave its clients an edge in risk management, as well as improved its client’s safety and corporate profitability.
Some of the earliest recipients of Argo’s services included the date farmers of California’s Coachella Valley. To add value to the customers, Argo provided far-reaching safety training to date farmers once they had learned the methods they used to harvest the fruit from the date trees, which was incredibly dangerous at the time. Using Argo’s novel harvesting techniques, date farming operations in California significantly reduced work time loss, injury and death.
Another case includes Argo’s U.S. Grocery and Retail business. Grocery retailers in states including Oregon and Washington used Argo’s tailormade Risk Tech App to reduce customer accidents within the store premises significantly.
Elsewhere in Pennsylvania, Argo’s incredible insights into the coal mining industry keep work losses at an all-time low even today. As a matter of fact, Argo’s mining-insurance services have been sought and praised by operators for more than five decades.
Embracing A Radically Dynamic Industry with Forward Thinking
Guided by Argo’s own in-house team of process and product specialists, the company brought digital technology into almost every corner of the company in the U.S. As a result, the company has come to some fundamental conclusions about the steps it must take in the coming months and years.
By incorporating an extensive range of digital tools, Argo hopes to streamline processes required for a policyholder to secure coverage or settle a claim, thereby, making it less time-consuming. Furthermore, digital tools give companies the potential for constant improvement in acquiring business through online interfaces and for selecting risks and honoring claims. These technologies offer practical and cost-effective ways for customers to keep their businesses running. Argo knows that great customer service is not about how quickly the company corrects a problem, but rather ensuring the company takes every necessary step to avoid that problem in the first place. That is what becoming digital must accomplish. With tech-driven process improvements, Argo is finding better and quicker ways to get customers exactly what they need so they can operate confidently. That is the only way to make the customer experience simple, personal, and exceptional.
Argo’s strategy of focusing on portfolio investment, disciplined capital allocation, and profitable underwriting and relationships are undoubtedly delivering value to all of its stakeholders. While the company has developed differentiated businesses across the world’s key markets, it continues to build competitive scales for each of its operations. Argo’s focus on building and investing in its business, including in digital technology, has generated strong growth and is improving operating efficiencies in challenging market conditions in recent years.
Argo certainly has not been waiting around for the markets to turn. Rather, the company has been building a business that thrives in various market cycles and strongly considers the future five to ten years down the road. This will always be the company’s path forward. Argo will not lose sight of how the business will perform over the long haul despite any pressures to make short-term decisions and changes.