Argo Group International (ARGO-PA) 8-K This presentation contains “forward-looking statements” which are made pursuant to the safe harbor

Investor Presentation

Mark E. Watson III, CEO

March 5, 2012

Exhibit 99.1

Forward-Looking Statements

2.

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.

Argo Group –

Niche Specialist With Global Platform

•

Underwriter

of

specialty

P&C

insurance

and

reinsurance

worldwide

through

four distinct business segments

•

Global footprint with operations strategically located in the major insurance

centers –

U.S., Bermuda, London, Brazil, Dubai and Continental Europe

•

A leader in the U.S. Excess & Surplus lines market

•

Among the largest Syndicates at Lloyds by stamp capacity

•

One of only a few international insurance groups authorized to operate

locally

•

Broad and deep relationships with retailers, wholesalers and Lloyds brokers

•

Focused on underwriting excellence and well positioned for growth

•

Conservatively capitalized by any measure

•

Financial strength is excellent as indicated by A.M. Best rating

1

of ‘A’

Evolution to a Global & Diversified Specialty U/W

$1,544

$23.03

400

800

1,200

1,600

2,000

2001

•

Acquired Colony

and Rockwood

•

Founded Trident

2005

•

Sold Risk 

Management

business

2007

•

Rebranded Argo Group

•

Completed merger

with PXRE

•

Formed Argo Re

2008

•

Acquired Lloyds

Syndicate 1200

2011

•

Established  local

presence in Europe,

Brazil & Dubai (part

of Int’l Specialty)

$1,530

$1,987

$1,605

$1,180

$1,153

$1,056

$903

$788

$622

$272

$186

13%

28%

28%

4.

1

Excludes GWP recorded in runoff and corporate & other.

International Specialty

Syndicate 1200

Commercial Specialty

Trident (rolled into Com. Specialty in 2007)

Risk Management (sold in 2005)

Excess & Surplus Lines

31%

$23.39

$27.22

$30.36

$33.50

$39.08

$45.15

$44.18

$52.36

$58.41

$56.21

Total Capital (Millions)

$328

$567

$717

$860

$992

$1,754

$1,782

$1,996

$2,003

$1,856

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

BVPS

UNITED

STATES

BRAZIL

EUROPE

MENA

Dubai

Rio de Janeiro

Sao Paulo

Bermuda

Barcelona

Brussels

London

Malta

Paris

Zurich

Key offices:

Atlanta

Boston

Chicago

Denver

Houston

Los Angeles

New York

Portland

Richmond

Rockwood

San Antonio

Scottsdale

Argo Group Global Footprint

5.

Maximize shareholder value through growth in book value per share

Our Strategy

•

Become a recognized worldwide leader of custom insurance and

reinsurance solutions for our clients

•

Create a competitive advantage through superior customer service,

product innovation and underwriting knowledge

•

Achieve profitable growth organically and/or through opportunistic

acquisitions throughout the cycle

•

Manage capital and risk appropriately / maintain strong ratings

•

Hire top tier talent to support our strategy

6.

Maximizing

Shareholder

Value

–

BVPS

Growth

*

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.

1 Price / book calculated at 52-week high and most recent book value per share. Stock price and book value adjusted for PXRE merger

for 2006 and prior years.

$45.15

$44.18

$52.36

$58.41

$56.21

$39.08

2008

2009

2010

2011

2006

2007

2005

2004

2003

2002

$23.39

$27.22

$30.36

$33.50

1.1x

1.1x

1.2x

1.6x

1.7x

1.2x

0.9x

0.8x

0.7x

0.7x

= Price/Book

1

7.

0

10

20

30

40

50

60

70

80

8.

4Q GWP Trending Favorably Across All Segments

Reflects impact of strategic initiatives taken, rate increases and improved retention

$119.0

$120.5

$20.9

$24.8

$89.9

$93.7

$60.3

$102.8

8.

$115

$117

$119

$121

$123

$125

4Q10

4Q11

Excess & Surplus Lines

$18

$20

$22

$24

$26

$28

$30

International Specialty

$87

$89

$91

$93

$95

$97

4Q10

4Q11

Commercial Specialty

4Q10

4Q11

$40

$60

$80

$100

$120

4Q10

4Q11

Syndicate 1200

Consolidated GWP up 18.3% in 4Q11 vs. 4Q10

Commercial Specialty

Pre-Tax Operating Income and Combined Ratio

About Us

•

Designs customized commercial insurance

programs for grocers, fabricare, restaurants

and other specialty retail clients

•

2

nd

largest provider of commercial insurance

to small and midsize U.S. public entities

•

2

nd

largest provider of commercial insurance

to the coal mining industry

•

Distributes products directly through

wholesalers and independent agents

GWP by Business Unit

Argo

Insurance

U.S.

Retail

25%

Restaurants 5%

Grocery 12%

Fabricare 5%

Other Industries 3%

Rockwood

18%

Other 15%

Public Entity 30%

Commercial

4%

Programs...…

Argo

Surety

7%

Involuntary

AIC/AGC

1%

Alteris

45%

$10.8

$12.7

$19.3

$38.0

$50.4

$1.8

100.0%

98.5%

97.2%

92.5%

89.4%

88.7%

96.5%

96.5%

99.0%

108.2%

$61.3

$43.0

$45.8

$33.1

9.

2008

2009

2010

2011

2006

2007

2005

2004

2003

2002

(40.0)

(20.0)

-

20.0

40.0

60.0

80.0

110%

100%

90%

80%

FEE

CATS

PYD

NII

AY U/W Results

Pre-Tax Operating Income and Combined Ratio

About Us

•

A leader in the U.S. Excess & Surplus

lines market

•

Strong relationships with national,

local and regional wholesale brokers

•

Target market is non-standard

(hard-to-place) risks

•

U/W expertise is a competitive advantage

GWP by Business Unit

Casualty

32%

Transportation

18%

Environmental

3%

Allied

Medical

5%

Professional

7%

Property

8%

Contract

24%

E&O

3%

$18.5

$41.1

$36.9

$57.7

$101.4

$112.7

$98.3

$64.7

$69.1

$72.9

94.7%

91.1%

94.8%

92.6%

88.9%

89.3%

93.3%

99.6%

97.8%

95.7%

Excess & Surplus Lines Segment

10.

2008

2009

2010

2011

2006

2007

2005

2004

2003

2002

110%

100%

90%

80%

(40.0)

(20.0)

-

20.0

40.0

60.0

80.0

100.0

120.0

CATS

PYD

NII

AY U/W Results

Syndicate 1200

Pre-Tax Operating Income and Combined Ratio

About Us

•

Established multi-class platform at

Lloyds of London

•

Primary classes of business include:

•

Property (Facultative, Binders)

•

Specialty (Energy, Yachts & Hull)

•

Liability (Professional Indemnity, GL)

•

Aerospace (Aviation, Space)

•

Lloyd’s market ratings:

•

‘A’

(Excellent) by A.M. Best

•

‘A+’

(Strong) by S&P

GWP by Line of Business

Property

57%

Liability

28%

$30.0

($63.0)

Specialty

12%

Aerospace

2%

140%

90%

60%

130%

Run

Off

<1%

Prof. Indemnity 14%

Med. Malpractice <1%

Legal Expenses <1%

General Liability 11%

Financial Instit. <1%

Directors & Officers 2%

Int’l Property Treaty 5%

Mortgage Impairment 1%

NA & Int’l Binders 13%

Personal Accident 12%

Property FAC  23%

Real Estate Owned 2%

Transport 2%

Gross Written Premium

112.3%

95.8%

115.3%

131.4%

$282.9

$706.0

$389.9

$438.5

11.

120%

110%

100%

80%

70%

($28.1)

($5.2)

2011

2010

2009

2008

2011

2010

2009

2008

(100.0)

(80.0)

(60.0)

(40.0)

(20.0)

-

20.0

40.0

60.0

FEE

CATS

PYD

NII

AY U/W

0

100

200

300

400

500

600

700

800

International Specialty

About Us

•

Underwrites property CAT, short tail per

risk and proportional treaty reinsurance

worldwide, excess casualty & professional

liability underwritten out of Bermuda.

•

Building diversity through international

expansion:

•

Established regional office in Dubai

•

Established operations in Brazil

•

Established operations in Euro zone

•

Distributes through brokers

GWP by Line of Business

Property

CAT

55%

Casualty

7%

Professional

3%

Other

Assumed

2%

Property

XOL

17%

Gross Written Premium

$11.1

$34.3

$126.4

$162.9

$188.9

$200.8

Pre-Tax Operating Income* and Combined Ratio

$0.8

$8.1

$23.6

$50.3

$35.6

200%

160%

80%

0%

120%

40%

($68.4)

77.9%

52.3%

72.8%

178.5%

86.1%

82.1%

12.

2011

2010

2009

2008

2007

2006

2007

2006

2008

2009

2010

2011

(140.0)

(120.0)

(100.0)

(80.0)

(60.0)

(40.0)

(20.0)

-

20.0

40.0

60.0

80.0

CATS

PYD

NII

AY U/W Results

0

50

100

150

200

250

CATS & Other

Losses

2

PY Reserve Activity

(Favorable) / Unfavorable

3

Combined Ratio

Excl. CATS & PYD

Excess & Surplus Lines

95.7%

1.9%

-8.3%

102.1%

Commercial Specialty

108.2%

7.1%

2.7%

98.4%

International Specialty

178.5%

123.9%

-4.8%

59.4%

Syndicate 1200

131.4%

24.5%

4.0%

102.9%

Consolidated Group

119.9%

20.2%

-1.1%

100.8%

Pre-tax Operating

Income

1

CATS & Other

Losses

2

PY Reserve Activity

(Favorable) / Unfavorable

3

Adjusted Pre-tax

Op. Inc.

Excess & Surplus Lines

$     64.6

$     (7.8)

$ (33.8)

$ 38.6

Commercial Specialty

(3.2)

(23.6)

8.4

28.8

International Specialty

(71.8)

(121.2)

(4.6)

44.8

Syndicate 1200

(66.2)

(64.5)

10.4

8.7

Run-off & Other

(32.0)

0.0

7.9

(24.1)

Consolidated Group

$ (108.6)

$ (217.1)

$ (11.7)

$ 96.8

1 Pre-tax operating income (loss) is defined as pre-tax income (loss) excluding any foreign currency exchange gains or losses, impairments of intangible

assets and realized investment gains or losses.

2 Catastrophe and other losses are net of reinstatement premium and include losses related to aggregate reinsurance covers.

3 Prior year reserve development (PYD) are net of premiums and losses.

Operating

Results

–

FYE

2011

2011 Was a Year of Significant Catastrophe Activity

13.

Strategic Actions Taken in 2010 & 2011

•

Significantly reduced Argo’s worldwide (non-U.S.) property

exposure both at Syndicate 1200 and International Specialty

•

Maximum exposure to any single CAT program was reduced

from $65 million of potential loss to $35 million

•

Prohibited writing business below a 2% rate on line,

regardless of exposure parameters

•

Curtailed multi-territory contracts

14.

Reported Combined Ratio

Impact of Strategic

Actions

2

Proforma Results

Excess & Surplus Lines

95.7%

0.0%

95.7%

Commercial Specialty

108.2%

0.0%

108.2%

International Specialty

178.5%

34.4%

144.1%

Syndicates 1200

131.4%

9.3%

122.1%

Consolidated Group

119.9%

5.5%

114.4%

Pre-tax Operating Income

1

Impact of Strategic

Actions

2

Proforma Results

Excess & Surplus Lines

$     64.6

$  0.0  

$   64.6

Commercial Specialty

(3.2)

0.0  

(3.2)

International Specialty

(71.8)

35.0

(36.8)

Syndicates 1200

(66.2)

24.0

(42.2)

Run-off & Other

(32.0)

0.0  

(32.0)

Consolidated Group

$ (108.6)

$ 59.0

$ (49.6)

1 Pre-tax operating income (loss) is defined as pre-tax income (loss) excluding any foreign currency exchange gains or losses, impairments of intangible

assets and realized investment gains or losses.

2 Estimated benefits to pre-tax earnings of strategic actions taken in 2010 & 2011 not reflected in 2011 results.

Proforma

Operating

Results

–

FYE

2011

Adjusted for Impact of Strategic Actions Taken in 2010 & 2011

15.

ROE (Major Drivers)

Higher U/W margins required to offset low investment yields

ROE Sensitivity Table

1.0%

3.7%

5.9%

8.0%

10.2%

12.4%

0.0%

4.4%

6.6%

8.8%

10.9%

13.1%

-1.0%

5.1%

7.3%

9.5%

11.7%

13.8%

-2.0%

5.9%

8.1%

10.2%

12.4%

14.6%

-3.0%

6.6%

8.8%

11.0%

13.1%

15.3%

-4.0%

7.3%

9.5%

11.7%

13.9%

16.0%

-5.0%

8.1%

10.3%

12.4%

14.6%

16.8%

-6.0%

8.8%

11.0%

13.2%

15.3%

17.5%

-7.0%

9.5%

11.7%

13.9%

16.1%

18.2%

-8.0%

10.3%

12.4%

14.6%

16.8%

19.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

Change in Investment Yield

16.

Argo Group -

Recap of Major Highlights

Argo is an established carrier in the international specialty

insurance and reinsurance markets

•

U.S. and international platforms well-positioned to take advantage

of a hardening market

•

International platform supports diversification and future growth strategy

•

Recent strategic initiatives are beginning to yield positive results

•

Underwriting focus and talent are key competitive advantages

Management is committed to maximizing shareholder value

•

Achieved double digit book value per share growth since 2002

•

Quality of capital and balance sheet is excellent

•

Will continue to repatriate capital as appropriate

17.

Argo Group -

A Compelling Valuation

Current stock price doesn’t reflect strength of balance sheet

or underwriting platform

•

AGII’s stock price trading at approximately half of book value

Balance sheet characteristics:

•

Adequately reserved

•

Excellent asset quality

•

Average rating of fixed maturity portfolio is ‘AA-’

•

Exposure to questionable sovereigns is immaterial

•

Average rating of reinsurance recoverable balances is ‘A’

•

Intangibles and goodwill less than 4% of total assets

•

Use of financial leverage is modest at 20.3% (12/31/11)

18.

Management is an active buyer of the stock

19.