Argo Group International (ARGO-PA) 8-K Regulation FD Disclosure

Investor Presentation

May 2009

Exhibit 99.1

2.

Forward-Looking Statements

This

presentation

contains

“forward-looking

statements”

which

are

made

pursuant

to

the

safe

harbor provisions of the Private Securities Litigation Reform Act of 1995.  The forward-looking

statements are based on the Company's current expectations and beliefs concerning future

developments and their potential effects on the Company. There can be no assurance that actual

developments will be those anticipated by the Company. Actual results may differ materially from

those projected as a result of significant risks and uncertainties, including non-receipt of the

expected payments, changes in interest rates, effect of the performance of financial markets on

investment

income

and

fair

values

of

investments,

development

of

claims

and

the

effect

on

loss

reserves, accuracy in projecting loss reserves, the impact of competition and pricing environments,

changes in the demand for the Company's products, the effect of general economic conditions,

adverse state and federal legislation, regulations and regulatory investigations into industry

practices,  developments relating to existing agreements, heightened competition, changes in

pricing  environments, and changes in asset valuations.  The Company undertakes no obligation

to publicly update any forward-looking statements as a result of events or developments

subsequent to the presentation.

3.

The Argo Group Story

An international specialty underwriter of property/casualty

insurance and reinsurance focused on niche markets

Headquartered in Bermuda

Operations in 50 states and worldwide

Total capitalization of $1.8 billion

Operations conducted through four business segments

Our Strategy

Deploy capital in the international specialty market for maximum

return

Continuous focus on new business development and organic growth

Grow strategically through acquisitions

Prudent management of our balance sheet and investment portfolio

Major business

segment locations

Headquarters

Bermuda

Brussels

London

Maximize shareholder value through our focus on Return on Capital

Successful Strategy Execution

Goal

Execution

Status

•

Expand US Excess and Surplus

franchise and broaden US

specialty platform

•

Acquired Colony and Rockwood in 2001

•

Acquired the assets of Interstate and

Grocers in 2005 and 2003

•

Launched Public Entity business in 2001

•

Acquired Massamont and Insight in 2008

•

Completed 9 acquisitions of companies

and asset purchases over eight years

•

PXRE transaction in 2007

•

Launched Argo Re in 2008

•

Establish Bermuda Platform

•

Establish Lloyd’s Platform

•

Heritage acquisition in 2008

•

Enhance Argo’s risk profile

•

Significantly managed down run-off / A&E

exposures

•

Significantly reduced non-earning assets

•

Proactively reduced sub-prime exposure in Q4:07

•

Sold PXRE’s legacy casualty exposure in 2008

•

Hired CFO in 2008

•

Hired Andrew Carrier as Argo Re President and

Nigel Mortimer as head of Excess Casualty in

2008

•

Gained significant management talent from

Heritage acquisition

•

Bolster management ranks

4.

5.

Argo Today –

A Diversified Business Model

US        International

1

as of March 31, 2009

Note: Based on gross written premiums (GWP)

Insurance       Reinsurance

Admitted        E&S

Property         Casualty

11%

89%

29%

71%

24%

76%

~70%

~30%

6.

What We Do?

Combined

Ratio*

Insureds

Segment Profile

Excess and

Surplus Lines

•Commercial Property and

Casualty

•Primarily on a non-admitted

basis

•Distribution through wholesale

agents and brokers

Commercial

Specialty

International

Specialty

•Heritage Underwriting Agency

plc

•Short-tail risks with an emphasis

on commercial specialty, and

non-US professional indemnity

insurance

91%

57%

Reinsurance

•Insureds include US regional

carriers and international multi-

line carriers

•Argo Re (class 4 specialty

reinsurance platform out of

Bermuda)

•Provides property CAT

reinsurance, property per risk

reinsurance, and proportional

property reinsurance

97%

*

GWP and Combined Ratio for Q1 2009

%

GWP*

29%

22%

11%

37%

95%

•Insureds include restaurants,

contractors, day care centers,

apartment complexes, and

others

•Commercial Property and

Casualty

•Primarily on an admitted basis

•Distribution through select

independent agents, brokers,

wholesalers and program

managers

•Food and hospitality, specialty

retail, religious institutions,

grocery stores, mining industry

and public entities

•Insureds include US and

international small/medium

commercial businesses,

transportation, fine arts and

specie, financial institutions and

others

7.

Pre-Tax Operating Income

($mm)

Excess & Surplus Lines

Largest and Most Profitable Segment

Status

Combined

ratio in low 90% range

Colony, Argonaut Specialty & Argo Pro

Competitive advantages

Excellent

infrastructure –

broad

geography

Underwriting

expertise

Broad

product portfolio for small

account underwriters

Controlled

distribution

Wholesale

agents

Rated

‘A’

(Excellent) by A.M. Best

89%

89%

93%

$102

$113

$98

$24

2006

2007

2008

Q1 2009

95%

Combined Ratio

8.

Pre-Tax Operating Income

($mm)

Commercial Specialty

Fastest Growing Segment

Status

2008

Gross

Written

Premium

up

21%

Primarily

admitted, retail-driven

Competitive advantages

Expertise

in niche markets

–

grocery stores

–

mining operations

–

laundry & dry cleaners

–

small/medium-size public entities

–

Religious institutions

Rated

“A”

(excellent) by A.M. Best

89%

89%

97%

$50

$61

$43

$16

2006

2007

2008

Q1 2009

91%

Combined Ratio

9.

Status

•

Began 2008 with ~ $1.3B in capital

•

Appointed Andrew Carrier as Argo Re

President and Nigel Mortimer as head of

Excess Casualty

•

New underwriting team in place

Competitive advantages

•

Utilize established infrastructure

•

Built diversified book of business

•

Proven record of leadership

•

Rated ‘A’

by A.M. Best

Reinsurance: Argo Re

First Successful Year

$25

$10

2008

Q1 2009

57%

78%

Pre-Tax Operating Income

($mm)

Combined Ratio

10.

Status

•

Acquired Heritage in May 2008

•

Worldwide property

•

Direct and Facultative

•

North American and International

Binding Authority

•

Non-U.S. liability

•

Professional indemnity

•

General liability

Competitive advantages

•

Specialist knowledge

•

Access to decision makers

•

Rated ‘A’

A.M. Best, ‘a+’

S&P

International Specialty

Lloyd’s Underwriting Agency

97%

102%

Pre-Tax Operating Income

($mm)

$11

$4

2008¹

Q1 2009

Note:

1

Heritage data is for the full year ending Dec. 31, 2008

Combined Ratio

11.

Combined Business Mix

Unique platform to prudently write business

worldwide and penetrate niche markets

Specialty Insurance

Excess

& Surplus Lines

Commercial

Specialty

Reinsurance

Quota

share reinsurance

of business partners

Property

reinsurance

Prospective

insurance

opportunities

International Specialty (Lloyd’s)

Worldwide

property

Non-U.S. liability

12.

$3

$63

2001

2008

Impressive Growth Story

Net Premium Earned

Gross Written Premium

Net Income

Investment Income

$186

$1,602

2000

2008

31%

CAGR

$125

$1,127

2000

2008

32%

CAGR

$62

$150

2000

2008

12%

CAGR

($mm)

46%

CAGR

13.

Solid and Constantly Improving Underwriting Profitability

Combined Ratio for Ongoing Segments

89.9%

89.1%

89.0%

90.0%

2.7%

6.3%

90.0%

2005¹

2006²

2007²

2008³

Target Across

Cycles

Ongoing Segments, excluding hurricane losses

Hurricane losses

92.6%

89.1%

89.0%

96.4%

Notes:

1

Includes only Commercial Specialty and Excess and Surplus Segments

2

Includes only Commercial Specialty, Excess and Surplus and Reinsurance Segments

3

Includes only Commercial Specialty, Excess and Surplus, Reinsurance  and seven months of International Specialty Segments

14.

2008 Hurricane and Capital Markets Losses

(1) Hurricane Losses include CAT losses from hurricanes Gustav and Ike

(2) Peer

set

includes:

ACGL,

AHL,

AWH,

AXS,

WRB,

ENH,

HCC,

INDM,

MKL,

MXGL,

NAVG,

RLI,

SIGI

(3) Investment Portfolio Losses include realized and unrealized losses

$ in millions

% of Q2 Equity

% Change YoY

Argo Group

Hurricane Losses

(1)

$74

5.3%

-

Investment Portfolio Losses

$42

3.0%

-

BVPS YoY

-

-

(2.1%)

Peer Set

(2)

Hurricane Losses

Mean

$123

5.3%

-

Median

113

3.8%

-

Investment Portfolio

Losses

(3)

Mean

$269

11.4%

-

Median

230

9.4%

-

BVPS YoY

Mean

-

-

(8.9%)

Median

-

-

(2.4%)

15.

Significant Increases in Capital Relative to Operating Metrics

$1,820

$1,624

$1,816

$2,203

$2,558

$3,598

$4,001

$4,066

$496

$992

$1,782

$1,754

$860

$717

$567

$1,602

$1,181

$1,156

$1,056

$903

$788

2.2x

2.6x

2.9x

2.5x

2.2x

2.1x

2.6x

0.9x

0.7x

1.2x

1.2x

1.3x

1.4x

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2003

2004

2005

2006

2007

2008

Q1 2009

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

Total Capitalization

Earning Assets

Gross Premiums Written

EA Multiple

GPW Multiple

($mm)

16.

Conservative Investment Portfolio

Fixed income (95%)

Equities (5%)

Total: $3.8bn

Total: $0.2bn

•

Average Rating of AA+

•

Duration of 2.8 years

•

Less than 1% subprime

•

Internally and externally managed

•

Conservative focus on large cap

30%

15%

21%

15%

15%

U.S. Government

State / Muni

Corporate

Structured

Short Term

Other

4%

Financials

Industrial & Other

13%

75%

Unitized/Mutual Funds

12%

17.

Minimal Sub-prime and CMBS/ABS Exposure

Total Argo Group Investment Portfolio -

$4.1 billion

Sub-prime/Alt-A Exposure only 1.7% of Shareholder Equity

–

Total exposure approximately $23M (< 1% of total portfolio)

–

42% Alt-A / 58% Sub-prime

–

74% are AAA or AA rated

–

Only 17% are 2005-2006 Vintage

CMBS/ABS securities represent 4.1% of the investment portfolio

–

96.5% of CMBS securities are AAA rated

–

Remaining $5.9mm of CMBS is AA or below, but all is above

investment grade

–

CMBS exposure mostly in seasonal deals significantly enhanced by

structural subordination and a % of loans that are defeased

–

ABS collateral includes auto loans, prime consumer credit cards,

commercial equipment leases, railcar leases and other

18.

$39.08

$33.51

$30.35

$27.22

$23.40

$45.15

$44.18

$45.16

2002

2003

2004

2005

2006

2007

2008

Q1 2009

*

Book

value

per

common

share

-

outstanding,

includes

the

impact

of

the

Series

A

Mandatory

Convertible

Preferred

Stock

on

an as if converted basis.  Preferred stock had fully converted into common shares as of Dec. 31, 2007.

Growth of Book Value

Book Value Per Share

11%

CAGR

19.

Argo Group 2008 Financial Highlights

2007

2008

Change

Gross Written Premium

$ 1.18B

$ 1.60B

36%

Net Earned Premium

$ 860M

$ 1.13B

31%

Total Revenue

$   1.0B

$ 1.25B

25%

Net Investment Income

$ 134M

$ 150M

12%

Net Income Per Share

$ 5.58

$ 2.05

172%

20.

Argo Group Q1 2009 Financial Highlights

Q1 2008

Q1 2009

Change

Gross Written Premium

$ 346.6M

$ 496.1M

43%

Net Earned Premium

$ 218.7M

$ 343.4M

57%

Total Revenue

$   258.1M

$ 371.1M

44%

Net Investment Income

$ 38.1M

$ 39.3M

3%

Net Income Per Share

$ 1.20

$ 0.88

26%

21.

Dec 31, 2008

2,997

24.1%

1,782

1,353

6,382

$4,001

429

$44.18

Dec 31, 2007

2,245

21.0%

1,754

1,385

5,124

$3,598

369

$45.15

Strong Balance Sheet and Capital Base

Reserves

Total Leverage

Total Capital

Shareholders’

Equity

Total Assets

Investment Portfolio

Indebtedness

Book Value Per Share

In millions, except for book value and leverage data

Mar 31, 2009

3,062

23.9%

1,820

1,384

6,480

$4,066

435

$45.16

22.

Drivers for Future Growth and Profitability

•

Expand US specialty presence and product offerings by

leveraging indemnity “know-how”

•

Capitalize on international platform to drive premium growth

and profitability

•

Prudently and opportunistically increase reinsurance writings

•

Continue balance sheet optimization and capital

redeployment

efforts

•

Improve expense management

•

Continue prudent acquisition strategy of companies and

assets to complement organic growth

23.

Why Argo?

•

Broadly diversified insurance and reinsurance platform

•

Deep product expertise in niche focus areas

•

Proven track record of growth and profitability

•

Proven ability to manage through insurance cycle

•

Prudent risk management and controls

•

Strong leadership

•

Significant room for future growth

•

ROE driven focus

Thank you

Q&A