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

Investor Presentation

May 2010

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

The Company

Argo Group is an international specialty underwriter of

property/casualty insurance and reinsurance focused in niche

markets.

The Objective

To maintain our profitable growth record while maximizing on the

opportunities afforded us through our international platform.

The Strategy

Apply our proven business model to deploy capital in attractive

niche markets that offer opportunities for maximum return.

4.

Argo Group Today

Major business segment locations

Bermuda Headquarters

Specialty underwriter in attractive niche areas of P&C insurance

and reinsurance markets

Headquarters: Bermuda

–

Operate in 50 states and internationally

–

View the specialty market as a single marketplace

Total capitalization of $2.0 billion

Four ongoing business segments

–

Excess and Surplus Lines (U.S.)

–

Commercial Specialty (U.S.)

–

Reinsurance

–

International Specialty

Brussels

London

5.

Four

Business

Units

1.

3.

2.

4.

Strategic

Business

Plan

Focus:  Specialty underwriter in niche markets

Growing an International Specialty Underwriter

Growth and Profitability

Four

Business

Units

6.

A Recap of Our Successful Strategic Business Plan

1.

Target attractive

niche markets

2.

Develop leading,

differentiated

positions

3.

Expand position

–

organically

–

geographically

–

selective acquisitions

4.

Results: growth

in

premiums, earnings

and book value

7.

ATTRACTIVE NICHE MARKETS

A Different Type of Approach

Key Criteria In Selecting Niche Markets

Higher margin and return

Market leadership in a reasonable time frame

Disciplined underwriting

Sustained, profitable organic growth

8.

P/C insurance for independent grocery stores

Leader

Workers’

compensation for coal mines in

Pennsylvania and Maryland

Leader

Insurance for the retail dry cleaning industry

Leader

Commercial insurance for small / medium

public entities

Leader

E&S market top-tier

Leader

Lloyd’s direct and facultative market

Leader

DEVELOP LEADERSHIP POSITIONS

Examples of Leadership Positions

9.

$378M

$1.4B

2002

2009

Earned Premiums

$2.0B

$622M

2002

2009

Gross Written Premiums

18.1%

CAGR

20.8%

CAGR

RESULTS: GROWTH

An Impressive Growth Record…

10.

$53M

$146M

2002

2009

15.5%

CAGR

$3M

$118M

2001

2009

Net Income

Net Investment Income

68.9%

CAGR

RESULTS: GROWTH

Improved Bottom Line Results…

11.

$53.81

$52.36

$44.18

$45.15

$23.40

$27.22

$30.36

$33.52

$39.08

2002

2003

2004

2005

2006

2007

2008

2009

2010-Q1

RESULTS: GROWTH

…and Consistent Growth of Book Value

BVPS Growth Since 2002

12.2%

CAGR

*

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.

12.

1.

3.

2.

4.

Strategic

Business

Plan

Growth and Profitability

Four

Business

Units

Focus:  Specialty underwriter in niche markets

Growing an International Specialty Underwriter

13.

Excess & Surplus

Lines

International

Specialty

•

2009 GWP $706M

•

Lloyd’s platform

•

2009 GWP $642M

Excess & Surplus

Lines

Reinsurance

•

2009 GWP $163M

•

Bermuda platform

•

Includes Excess

Casualty Unit

Commercial

Specialty

•

2009 GWP $476M

Four Growth Platforms

14.

EXCESS & SURPLUS LINES:

Highly Competitive

Status

Standard market expanding risk appetite

New entrants building market share

Argo maintaining underwriting discipline

Competitive advantages

Colony, Argonaut Specialty & Argo Pro

Excellent infrastructure –

broad geography

Underwriting expertise

Broad product portfolio for small acct U/Ws

Controlled distribution

–

Wholesale agents

Benefits from a category XII ‘A’

(Excellent)

rating by A.M. Best

Pre-Tax Operating Income

($M)

Combined ratio

* Includes $12.7M of losses from 2008 hurricanes.

92.6%

88.9%

89.3%

$58

$102

$113

$98

93.3%

2010 Three Months: $12.7M

2009 Three Months: $24.0M

$65

99.6%

2005

2006

2007

2008*

2009

15.

COMMERCIAL SPECIALITY:

Specialty Niche Segment

Status

Performed well given competition

Primarily admitted, retail-driven

Competitive advantages

Expertise in niche markets

–

grocery stores

–

mining operations

–

laundry & dry cleaners

–

small/medium-size public entities

Benefits from a category XII ‘A’

(Excellent) rating by A.M. Best

Pre-Tax Operating Income

($M)

Combined ratio

* Includes $2.8M of losses from 2008 hurricanes.

92.6%

89.4%

88.7%

$38

$50

$61

$43

96.5%

2010 Three Months: $7.9M

2009 Three Months: $15.7M

$46

95.6%

2005

2006

2007

2008*

2009

16.

$24

$50

Status

Underwriting on $1.2

billion of capital

Achieved desired diversification year two

Reported favorable development related

to Hurricane Ike

Added Casualty and Professional Risks

business in early 2009

Competitive advantages

Utilized established infrastructure

Built diversified book of business

Proven record of leadership

Benefits from a category XII ‘A’

(Excellent) rating by A.M. Best

REINSURANCE:

Argo Re –

Well Established

Pre-Tax Operating Income

($M)

77.9%

52.3%

2008

2009

Combined ratio

2010 Three Months: $  7.6M*

2009 Three Months: $10.1M

*Includes $6.5M of losses from earthquakes.

17.

Status

Acquired Heritage in 2008;      

rebranded to Argo International

Enoizi

to CEO; Carrier to U/W director

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

Carries the Lloyd’s market ratings of

‘A’

(Excellent) rating by A.M. Best, and

‘A+’

by S&P

INTERNATIONAL SPECIALTY:

Argo International (Lloyd’s)

Year Ended

Dec. 31, 2009

($M)

$24

$424

$706

Operating

Income

Earned

Premium

Gross Written

Premium

2009 Combined ratio 95.8%

2010 Three Months OI: ($10.7M)*

2009 Three Months OI: $4.2M

*Includes $18.8M of losses from earthquakes.

18.

Combined Business Mix

Established platform to write business

worldwide and penetrate niche markets

Specialty Insurance

Excess & Surplus Lines

Commercial Specialty

Reinsurance/Insurance

Quota share reinsurance

of business partners

Property reinsurance

Excess casualty and

professional liability insurance

56%

14%

30%

International Specialty (Lloyd’s)

Worldwide property

Non-U.S. liability

GWP as of March 31, 2010

19.

Diversified Business Model

Reinsurance

Insurance

86%

14%

As of  March 31, 2010

Note: Based on gross written premiums (GWP)

Casualty

~70%

~30%

Property

14%

20.

Argo Group 2009 Financial Highlights

2008

2009

Change

Gross Written Premium

24%

Net Earned Premium

25%

Total Revenue

24%

Net Operating Income Per Share

35%

Net Income Per Share

86%

** Impacted by $17.4M of pre-tax losses from U.S. storms in Q2 and $74M from hurricanes Gustav and Ike in Q3.

Net Investment Income

3%

YTD Growth in Book Value Per Share

$  1.6B

$  1.1B

$  1.2B

$   3.17

$   2.05**

$ 150M

(2.1%)

$  2.0B

$  1.4B

$  1.5B

$   4.28

$   3.81

$ 146M

18.5%

21.

2009

Three

Months

2010

Three

Months

Change

Gross Written Premium

$

496M

18%

Net Earned Premium

$

343M

6%

Total Revenue

$

370M

1%

Net Operating Income Per Share

$ 

1.13

72%

Net Income Per Share

$    0.88

24%

Net Investment Income

$ 

39M

14%

YTD Growth in Book Value Per Share

(2.2%)

Argo Group 2010 First Quarter Results

$

405M

$

324M

$

372M

$ 

0.32

$    0.67

$ 

34M

2.8%

22.

Dec 31, 2009

3,203

19.1%

1,996

1,615

6,897

$4,334

381

$52.36

Dec 31, 2008

2,997

24.1%

1,782

1,353

6,382

$3,995

429

$44.18

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

*Includes $311mm of Junior Subordinated Debentures

Mar 31, 2010

3,232

1,610

6,632

$4,289

$53.81

377

1,987

19.0%

23.

Conservative Investment Portfolio

Fixed income (94%)

Equities (6%)

Total: $3.9bn

Total: $0.3bn

•

Average Rating of AA

•

Duration of 3.2 years

•

Internally and externally managed

•

Conservative focus on large cap

34%

15%

17%

17%

7%

U.S. Government

State / Muni

Corporate

Structured

Short Term

Other

10%

Financials

Industrial & Other

14%

86%

24.

Capital Deployment Strategy

Support balance sheet, mainly loss reserves

Growth of core business

–

Deploy capital opportunistically across all four segments

–

Reduce reliance on third-party reinsurance

Pursue attractive market opportunities

–

Selective acquisitions that complement existing business lines

–

Books of business and companies

Repatriate capital depending on capital position and stock price

–

$120M

authorized

stock

repurchase

program

remaining

should

above

opportunities

fail

to

appear/Repurchased

$30M

of

common

stock

in

Q1:2010

–

Instituted

a

quarterly

cash

dividend

of

12

cents

per

share

25.

I

N  S

U

M

M

A

R

Y

A Strong and Well-Positioned Specialty Underwriter

Proven and successful strategic business plan

–

Strong growth record

–

Capital management

–

Expanded, proven leadership team

Powerful competitive force in specialty lines market

–

Flexible international platform

–

U.S., Bermuda and London advantages

–

Diversified business mix

–

Growth though geographic and product diversification

Focus on profitable growth

–

Effective capital deployment + high-margin focus = ROE improvement

–

Consistent increase in book value per share over time