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

2Q 2012 Investor Presentation

August 2012

Exhibit 99.1

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.  

2.

3.

Argo Group –

Niche Specialist With International Platform

•

Underwriter

of

specialty

P&C

insurance

and

reinsurance

worldwide

through

four distinct business segments

•

Global footprint with operations strategically located in 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 in Brazil

•

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’

1

Argo P/C insurance & reinsurance operations (Class Size XII)

4.

Evolution to an International & Diversified Specialty U/W

$1,544

$23.03

$501.1M

400

800

1,200

1,600

2,000

2001

•

Acquired Colony

and Rockwood

•

Founded Trident

(Public Entity)

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

$788

$622

$272

$186

13%

31%

27%

29%

4.

1

Excludes GWP recorded in runoff and corporate & other.

Risk Management (sold in 2005)

Commercial

Specialty

(includes

Trident)

Excess & Surplus Lines

International Specialty

Syndicate 1200

$903

$1,660

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

12/2Q

TTM

BVPS

$23.39

$27.22

$30.36

$33.50

$39.08

$45.15

$44.18

$52.36

$57.82

$55.60

$58.74

Total Capital (Millions)

$328

$567

$717

$860

$992

$1,754

$1,782

$1,996

$1,986

$1,840

$1,868

5.

Argo Group International Footprint

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

6.

Argo Group Business Mix

6.

GWP by Segment

Excess &

Surplus Lines

Commercial

Specialty

Syndicate

1200

International

Specialty

31%

13%

27%

29%

GWP by Product

Property

Casualty

67%

33%

GWP by Business Type

Primary

Insurance

Reinsurance

15%

85%

GWP by Geography

North

America

Europe

Rest

of

World

7%

12%

81%

*Data is based on TTM as of June 30, 2012.

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 underwriting cycle

•

Manage capital and risk appropriately / maintain strong ratings

•

Hire top tier talent to support our strategy

7.

Maximizing

Shareholder

Value

–

BVPS

Growth

$45.15

$44.18

$52.36

$57.82

$58.74

$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

0.5x

= Price/Book

1

8.

2Q 12

0.7x

$55.60

-

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

* Book value per common share - outstanding, includes the impact of the Series A Mandatory Convertible Preferred Stock as if on a 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.

Note the book value amounts for 2011 and 2010  reflect the effect of the Company’s adoption of new guidance related to accounting for costs associated with acquiring

or renewing insurance contracts.  2009 and prior periods have not been restated.

9.

Consolidated GWP up 16.6% in 2Q12  vs.  2Q11

2Q GWP Trending Favorably Across All Segments

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

$131.8

$143.9

$62.9

$84.3

$88.2

$92.7

$123.8

$153.2

9.

$115

$120

$125

$130

$135

$140

$145

$150

2Q11

2Q12

Excess & Surplus Lines

$80

$85

$90

$95

$100

2Q11

2Q12

Commercial Specialty

$50

$60

$70

$80

$90

$100

2Q11

2Q12

International Specialty

$110

$120

$130

$140

$150

$160

2Q11

2Q12

Syndicate 1200

10.

Commercial Specialty

Pre-Tax Operating Income and Combined Ratio

About Us

Designs customized commercial insurance

programs for grocers, dry cleaners

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

Argo Insurance U.S. Retail  24%

Restaurants 6%

Grocery 11%

Dry Cleaners 4%

Other Industries 3%

Mining 18%

Other 1%

Public Entity 35%

Commercial 3%

Programs...…

Argo Surety  7%

Alteris 36%

Commercial

Programs 12%

*YTD as of June 30, 2012.

Combined

Ratio

Total

PTOI

NII

AY U/W

Results

PYD

CATS

FEE

GWP

by

Business

Unit

–

TTM

6/30/12

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

Seasoned U/W expertise is a competitive

advantage

Target market is small, medium and

large non-standard (hard-to-place) risks

underwritten on both an admitted and

non-admitted basis

GWP

by

Business

Unit

–

TTM

6/30/12

Casualty 31%

Transportation 19%

Environmental 4%

Allied Medical 5%

Management Liability <1%

Property 9%

Contract 24%

Errors & Omissions 8%

Excess & Surplus Lines Segment

*YTD as of June 30, 2012.

Combined

Ratio

Total

PTOI

NII

AY U/W

Results

PYD

CATS

12.

Syndicate 1200

Pre-Tax Operating Income and Combined Ratio

About Us

•

Established multi-class

platform at Lloyds of London

•

Ranked among the largest

Syndicates at Lloyds by Stamp

Capacity

•

Lloyd’s market ratings:

•

‘A’

(Excellent) by A.M. Best

•

‘A+’

(Strong) by S&P

GWP by Business Unit –

TTM 6/30/12

Property

49%

Liability

31%

$30.0

Specialty

16%

Aerospace

4%

140%

90%

60%

130%

Run

Off

<1%

‘11

‘10

‘09

‘08

Prof. Indemnity 11%

General Liability 12%

Directors & Officers 2%

Other  6%

Int’l Property Treaty 4%

NA & Int’l Binders 9%

Personal Accident 11%

Property FAC  20%

Other 5%

Gross Written Premium

‘11

‘10

‘09

‘08

$282.9

$706.0

$389.9

$438.5

12.

120%

110%

100%

80%

70%

112.3%

95.8%

115.3%

131.4%

($63.0)

($28.1)

($5.2)

’12/2Q*

$514.3

’12/2Q*

101.0%

$7.9

*Data is based on TTM as of June 30, 2012.

*YTD as of June 30, 2012.

(100.0)

(80.0)

(60.0)

(40.0)

(20.0)

-

20.0

40.0

60.0

Total PTOI

NII

AY U/W

Results

PYD

CATS

FEE

Combined

Ratio

0

100

200

300

400

500

600

700

800

13.

International Specialty

About Us

•

Bermuda team underwrites property CAT,

short tail per risk and proportional treaty

reinsurance worldwide, excess casualty

& professional liability

•

Building diversity through international

expansion:

•

Established primary operations in Brazil

•

Established operations in Euro zone

•

Established regional office in Dubai

•

Distributes through brokers

GWP by Business Unit –

TTM 6/30/12

Property CAT 46%

Casualty 22%

Professional 8%

Other Assumed 3%

Property Pro Rata 6%

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%

($68.4)

’12/2Q*

‘10

‘09

‘08

‘07

‘06

13.

160%

80%

0%

120%

40%

Combined

Ratio

Total

PTOI

NII

AY U/W

Results

PYD

CATS

77.9%

52.3%

72.8%

178.5%

86.1%

82.1%

‘11

80.1%

$17.4

’12/2Q*

‘10

‘09

‘08

‘07

‘06

‘11

$212.6

*Data is based on TTM as of June 30, 2012.

*YTD as of June 30, 2012.

Risk XS 3%

U.S. Management Liability 1%

Emerging Markets 11%

(140.0)

(120.0)

(100.0)

(80.0)

(60.0)

(40.0)

(20.0)

-

20.0

40.0

60.0

80.0

0

50

100

150

200

250

14.

2Q 12    vs.   2Q 11

YTD 2Q12  vs. YTD 2Q 11

Gross Written Premiums

$474.2.

$406.7.

$870.5.

$754.5.

Net Written Premiums

361.5.

283.3.

602.7.

527.7.

Earned Premiums

290.2.

271.7.

567.5.

533.1.

Losses & LAE

175.8.

191.0.

341.6.

464.8.

Other Reinsurance-Related Expenses

6.9.

0.4.

13.8.

0.4.

Underwriting, Acquisition and Insurance Expenses

114.6.

105.4.

228.3.

210.5.

Underwriting Income / (Loss)

($7.1)

($25.1)

($16.2)

($142.6)

Net Investment Income

30.0.

32.9.

61.4.

66.3.

Fee Income, net

0.5.

0.3.

1.8.

0.4.

Interest Expense

5.5.

5.5.

11.2.

10.9.

Operating Income / (Loss)

$17.9.

$2.6.

$35.8.

($86.8)

Foreign Currency Exchange Gain / (Loss)

9.8.

(3.4)

6.9.

(13.0)

Net Realized Investment Gains / (Losses)

(2.7)

31.5.

10.4.

33.8.

Pre-Tax Income / (Loss)

$25.0.

$30.7.

$53.1.

($66.0)

Income Tax Provision (Benefit)

1.0.

9.1.

9.5.

6.5.

Net Income / (Loss)

$24.0.

$21.6.

$43.6.

($72.5)

Operating

Income

(Loss)

per

Common

Share

(Diluted)

1

$0.55.

$0.08.

$1.09.

($2.69)

Net Income (Loss) per Common Share (Diluted)

$0.92.

$0.78.

$1.66.

($2.64)

Loss Ratio

2

62.1%

70.4%

61.7%

87.3%

Expense Ratio

3

40.4%

38.9%

41.2%

39.5%

Combined Ratio

102.5%

109.3%

102.9%

126.8%

1

Per diluted share at assumed tax rate of 20% in 2012 and 15% in 2011.  Tax rate adjusted in the current quarter to reflect the distribution of results.

2

Defined as Losses & LAE / (Earned Premiums less Other Reinsurance-Related Expenses).

3

Defined as Underwriting, Acquisition and Insurance Expenses / (Earned Premiums less Other Reinsurance-Related Expenses).

All data in millions except for per share data and ratio calculations.

2Q & YTD Operating Results -

2012 vs. 2011

14.

15.

ROE (Major Drivers)

Higher U/W margins required to offset low investment yields

ROE Sensitivity Table

1.0%

0.8%

3.2%

5.5%

7.8%

10.1%

0.0%

1.6%

3.9%

6.2%

8.6%

10.9%

-1.0%

2.4%

4.7%

7.0%

9.3%

11.7%

-2.0%

3.1%

5.4%

7.8%

10.1%

12.4%

-3.0%

3.9%

6.2%

8.5%

10.8%

13.2%

-4.0%

4.6%

6.9%

9.3%

11.6%

13.9%

-5.0%

5.4%

7.7%

10.0%

12.4%

14.7%

-6.0%

6.1%

8.5%

10.8%

13.1%

15.4%

-7.0%

6.9%

9.2%

11.5%

13.9%

16.2%

-8.0%

7.6%

10.0%

12.3%

14.6%

16.9%

-1.0%

0.0%

1.0%

2.0%

3.0%

Change in Investment Yield

15.

** Based

on

the

latest

2012

consensus

estimate

and

June

30,

2012

shareholders

equity.

16.

17%

16.

Conservative Investment Strategy

As of June 30, 2012

•

Duration of 3.2 years

•

Average rating of ‘AA-’

•

Average yield of 3.6%

•

Very liquid

•

Conservatively managed

Portfolio Characteristics

Equity Investments by Sector

10% Healthcare

Energy

23%

3% Industrials

11% Funds

5% Financials

9% Info Tech

4% Materials

6% Consumer

Discretionary

Consumer Staples

Asset Allocation

7% Other Long Term

Invest.

Fixed

74%

Maturities.

7% Short Term Invest.

12% Equities

Total:

$4.1B

Total:

$0.5B

Fixed Maturities by Type

9% Short Term

Corporate

33%.

21% Gov.

19% Structured

State/Muni

18%.

Total:

$3.4B

29%

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 improving market

•

International platform supports diversification and future growth strategy

•

Recent strategic initiatives are beginning to yield 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 return 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%(6/30/12)

18.

Management is an active buyer of the stock