VOCE Capital Comments on ISS Argo Report

Urges Argo Shareholders to Vote on the BLUE
Proxy Card FOR Voce’s Highly-Qualified Nominees and FOR Its Proposals

SAN FRANCISCO–(BUSINESS WIRE)–Voce Capital Management LLC (“Voce”), the beneficial owner of
approximately 5.6% of the shares of Argo Group International Holdings,
Ltd. (NYSE:ARGO) (“Argo” or the “Company”), today issued the following
statement in response to the recommendation by Institutional Shareholder
Services (“ISS”) regarding Argo’s upcoming 2019 Annual Meeting:

“While we respect the team at ISS, and have been before them several
times in the past, its formulaic conclusions regarding Argo are baffling
to us. We have acknowledged from the beginning that Argo’s stock price
has appreciated over time. If that’s the end of the inquiry, as it
appears to have been for ISS, then with all due respect, there’s no need
for a third-party to analyze or weigh in on this proxy contest. The far
more relevant questions are why has Argo’s stock performed the way that
it has, should it have done better and can it improve going forward?

Corporate governance is neither a checklist nor an algorithm. In order
to properly assess corporate governance, one must evaluate the context
and culture in which a company’s governance structure operates and the
way in which it is applied. What is so puzzling, and in our view
erroneous, about ISS’s report is that it acknowledges many of the
governance concerns that we have identified, yet then fails to consider
them at all in reaching its lopsided recommendation.

Most fundamentally, if TSR is as paramount and decisive as implied by
ISS’s report then why do all of the leading institutional investors and
ISS itself spend so much time talking and writing about corporate
governance? If this campaign – which has been sharply fought and
centered over corporate governance from the very beginning – can be
dismissed simply by consulting the stock price, then what does that say?
At a minimum, it would imply that shareholders should limit themselves
to challenging underperforming companies rather than those that are
governed poorly, no matter how egregiously so. If so, a large part of
the corporate governance community, of which Voce proudly considers
itself a member, would be nugatory. We disagree with such a narrow and
cramped definition of corporate governance in the strongest possible
terms.

ISS’s commentary acknowledged Argo’s inflated expense structure, lack of
adequate disclosure to investors, cherry-picking of metrics, misaligned
executive compensation and the risks represented by the comingling of
the CEO’s self-promotion and the Company’s marketing – yet apparently
none of the following conclusions by ISS were sufficient to warrant the
replacement of even a single legacy Director with one selected by
shareholders:¹

• ‘The dissident campaign has raised relevant
  questions, especially regarding executive compensation and
  perquisites, that have benefitted shareholders by refocusing the
  board’s attention. To its credit, the dissident also recruited
  a slate of credible nominees seemingly well-suited to effect positive
  change…’
• ‘Where Argo fails, relatively speaking, is that it
  spends more money to achieve poorer results. Argo has a
  relatively high expense ratio that is coupled with a relatively high
  loss ratio.’
• ‘Equally frustrating is when the Argo board is unnecessarily cherry-picking
  in an effort to make the company look better. Choosing to
  report a return on average equity metric that shows a 20.1 percent
  return in Q1, when the 2018 return on equity was a defensible 7.1
  percent, is an easily spotted example of selective reporting.
  Similarly, emphasizing the 5-year gross written premium CAGR of 9.4
  percent is fine, but citing an expense-free figure when the dissident
  is highlighting excessive expenses demonstrates an
  unfortunate lack of awareness.’
• ‘The company returns frequently to the phrase “best in class” to
  describe itself. And while it has shown in its operating metrics that
  it is a good performer, it’s a stretch to
  describe Argo as best in class relative to its peer group.’
• ISS noted that ‘there is room for improvement in regard to Argo’s
  disclosures to shareholders.’
• ‘For a business that requires constant risk-assessment, it’s
  ironic that none of the directors saw the risk in a self-promoting CEO
  whose interests and hobbies were inextricably intertwined with Argo’s
  marketing budget. Some degree of complacency, perhaps as a
  byproduct of the company’s Bermuda domicile, may have played a role
  here.’

Voce urges its fellow shareholders to vote on the BLUE
proxy card FOR its highly-qualified nominees – Bernard C. Bailey,
Charles H. Dangelo, Admiral Kathleen M. Dussault, Carol A. McFate and
Nicholas C. Walsh – and FOR its proposals. For more information,
investors can visit www.Argo-SOS.com.”

About Voce Capital Management LLC

Voce Capital Management LLC is a fundamental value-oriented,
research-driven investment adviser founded in 2011 by J. Daniel
Plants. The San Francisco-based firm is 100% employee-owned.

Additional Information and Where to Find It

Voce Catalyst Partners LP, Voce Capital Management LLC, Voce Capital
LLC, and J. Daniel Plants, (collectively, the “Participants”) filed with
the Securities and Exchange Commission (the “SEC”) a definitive proxy
statement and accompanying form of proxy on April 12, 2019 to be used in
connection with the solicitation of proxies from the members of Argo
Group International Holdings, Ltd. (the “Company”). All members of the
Company are advised to read the definitive proxy statement and other
documents related to the solicitation of proxies by the Participants
when they become available, as they will contain important information,
including additional information related to the Participants and
information about the Participants’ director nominees. The definitive
proxy statement and an accompanying proxy card will be furnished to some
or all of the Company’s stockholders and are, along with other relevant
documents, available at no charge on the SEC website at http://www.sec.gov/.

Cautionary Statement Regarding Forward-Looking Statements

All statements contained in this press release that are not clearly
historical in nature or that necessarily depend on future events are
“forward-looking statements,” which are not guarantees of future
performance or results, and the words “anticipate,” “believe,” “expect,”
“potential,” “could,” “opportunity,” “estimate,” “plan,” and similar
expressions are generally intended to identify forward-looking
statements. The projected results and statements contained in this press
release that are not historical facts are based on current expectations,
speak only as of the date of this press release and involve risks that
may cause the actual results to be materially different. In light of the
significant uncertainties inherent in the forward-looking statements,
the inclusion of such information should not be regarded as a
representation as to future results. Voce disclaims any obligation to
update the information herein and reserves the right to change any of
its opinions expressed herein at any time as it deems appropriate. Voce
has not sought or obtained consent from any third party to use any
statements or information indicated herein as having been obtained or
derived from statements made or published by third parties.

Contacts

Investor:
Okapi Partners LLC
Bruce H. Goldfarb /
Patrick J. McHugh
(212) 297-0720 or Toll-free (877) 259-6290
info@okapipartners.com

Media:
Sloane & Company
Dan Zacchei / Joe Germani
(212)
486-9500
dzacchei@sloanepr.com
/ jgermani@sloanepr.com