Despite releasing two separate second-quarter income statementslast night, executives of Argonaut Group and PXRE participatedtogether in an earnings conference call signaling the completion oftheir merger.

The merged entity–Argo Group International Holdings, Ltd., whichis now headquartered in Bermuda–also reported that Andrew Carrier,a 23-year reinsurance market veteran, is joining the firm to becomepresident of Peleus Re, the company's reinsurance arm.

During the call, Mark Watson, who was formerly president andchief executive officer of Argonaut Group, and now holds thosepositions with Argo Group, said: “The combination of the twocompanies provides for a stronger balance sheet with total assetsof over $5 billion, investment portfolio of $3.6 billion andshareholders equity of $1.3 billion.”

“This transaction should be viewed as both the acquisition of anew business segment [reinsurance] as well as the acquisition of anew strategic platform [in Bermuda] from which to expand ouroperations,” said Mr. Watson.

Looking to the future, he said Argo Group will continue to focuson excess-and-surplus lines business and specialty business throughthe excess & surplus and select markets divisions that nowexist at Argonaut, adding a third unit devoted to internationalspecialty.

He said he envisions that the third unit, which initially willbe comprised of reinsurance business written in Peleus, willeventually participate in insurance market opportunities globallyas well.

“We believe strong pricing currently in the property reinsurancemarket presents Peleus with near-term opportunities as it buildsits portfolio. However, we will be cautious withproperty-catastrophe business,” he said.

Mr. Watson said Argo will seek to deploy its capital by pursuingmergers and acquisitions in the United States and other parts ofthe world, and also that the company plans to write more pro-ratareinsurance with business partners, which include general agentswriting excess and surplus lines business.

For the quarter just completed, PXRE reported a net loss of$11.6 million with no meaningful in-force business left in therunoff of the prior property-catastrophe reinsurance operations,producing $7 million of negative earned premium adjustments and $1million of unfavorable loss development.

Argonaut's second-quarter earnings fell to $21 million, or 61cents per share, from $23.4 million, or 69 cents per share in lastyear's second quarter. This year's second-quarter figure included a$7 million charge related to compensation of keyofficers–accelerating the vesting of outstanding equity awards theexecutives held in Argonaut Group.

This non-cash expense item added 4.9 points to the combinedratio, which came in at 98.9. Excluding the expense, the resultingcombined ratio of 94 was 0.8 points better than last year's.

In the quarter, Argonaut Group also reported a 7.5 percent jumpin net written premiums to $200.7 million.

In conjunction with the announcement that Mr. Carrier will jointhe company as president of Peleus Re at the end of the year, Argoannounced that Barbara Bufkin, currently in that role, will move tothe position of senior vice president of corporate businessdevelopment for Argo Group–a title she previously held atArgonaut.

Robert Myron, who was formerly chief financial officer of PXRE,will be CFO of Argo Group, while Argonaut's CFO Mark Haushill wasnamed CFO of Argo's U.S. operations.

Jeff Radke, PXRE's former president and CEO, will serve as aconsultant.

Mr. Carrier joins Argo Group after serving for seven years asthe Active Underwriter for the Kiln Group's Catastrophe Syndicate557 at Lloyd's.