Before Houston Street became home to Geekdom, the fast-growing tech district, and the focus of developers like Weston Urban, AREA Real Estate, and GrayStreet Partners, it became home to a multibillion-dollar, global business you may have never heard of.
Argo Group U.S. is a division of the Bermuda-based specialty insurance underwriter, Argo Group International Holdings Ltd., which also operates out of New York City, London, Singapore, Dubai, Brazil, and several European cities.
Argo Group President and CEO Mark Watson III relocated the U.S. division from Menlo Park, Calif. to San Antonio in 2001 and opened up shop near the San Antonio International Airport. Then, four years ago, lured by city leaders anxious to fill the void left by AT&T in 2008, Argo moved its operations downtown to the former AT&T headquarters building, the IBC Centre at 175 E. Houston St.
Today, there are more than 200 Argo employees working on the top four floors of the building known for its historic Texas Theater facade, and where an even larger IBC Centre tenant, local vision group HVHC Inc., took up residence in early 2012.
Yet Argo has kept a fairly low profile in the San Antonio business community. It attracts little media coverage beyond its earnings reports, and few people outside the downtown civic and business community seem to be aware of the company’s presence.
Formed in 1986 as Argonaut Insurance Exchange, Argo is an international underwriter of specialty insurance and reinsurance products. “If you see it on CNN, chances are that we insure that incident in some way,” Watson said. “We insured most of the operators that were involved in that BP well, for example.”
With total assets of $6.63 billion in 2015, the company reported gross written premiums of more than $2 billion the same year. In November, Argo entered into an agreement to acquire Ariel Re, a global underwriter of insurance and reinsurance business, for approximately $235 million cash.
Watson was born in San Antonio, the oldest of five children, and raised here and in Houston. Early on, he worked for his father’s property and casualty group, Titan Holdings, Inc., and later as a venture capitalist. Watson invested in Argo in 1998, joined the board in 1999, and took the reins as CEO in 2000. A year later, seeking to lower costs and attract top talent, the Texas native relocated the company to San Antonio and chose office space near the airport for the ease of clients.
“Most people in the corporate community in San Antonio don’t know we exist. We’re more well-known in London and New York than we are in San Antonio,” Watson said. “I can’t do anything in Bermuda without it being a headline and my photograph in the newspaper, and we’re not one of the largest companies there. Ironically, if you look at the list of large companies, we’re higher up the list here in San Antonio than in Bermuda.”
Watson is now one of the longest serving CEOs of a publicly traded company in San Antonio (AGII, NASDAQ, $64), and, at age 52, one of the youngest chief executives in the industry.
“I’m not sure what that says about our industry, but there is a changing of the guard now. It’s funny – we’ve been growing and transforming since I first invested in the company,” he explained. “Just now we’ve got a platform built where we can really go head-to-head with the global companies that are ten times our size, and we do every day.”
An avid climber and yachtsman, Watson is both the architect of the international holding company and the design-conscious maestro of the downtown offices designed by ford, powell & carson that is also home to one of the city’s best corporate art collections.
It includes stunning pieces by Texas artist Chuck Ramirez and Mexico’s Graciela Iturbide as well as works by Key-Sook Geum of Korea and noted photographer Dan Borris. Recently, Watson traveled to Florida to add to the impressive collection at Art Basel Miami Beach, a major contemporary art show.
Watson’s artistic stamp on the Argo office also reflects his appreciation of San Antonio history across at least two centuries. Meeting rooms are named after defenders of the Alamo, while the main conference room is named for Ed Whitacre, the celebrated AT&T CEO and chairman, because it occupies the space that was once his corner office. After all, it was a conversation with Whitacre that convinced Watson to choose San Antonio over Dallas, Houston, and other cities, when Argo moved from California to Texas.
“I really wanted to be in this building,” Watson said of the eventual move to Houston Street. “We are right on the edge between all the touristy stuff and the business district. If you go into our other offices, you’ll feel a certain vibe, particularly our office in New York, which is on the corner of Broadway and Houston. You walk in and there are ‘tech-heads’ running around or all of these venture capitalist wannabees, and then there are traditional insurance underwriters, so it’s kind of the whole mixed bag. I wanted this place to have the vibe of that place.”
Watson spends a great deal of time in Bermuda, the British island territory where Argo has had an office since 2007. The picturesque island of pink sandy beaches, world-class golf courses, and historically business-friendly laws was once considered the hub of the industry. “We made the decision to move there because all of our business partners and all of our competitors were based there. You couldn’t afford not to be there,” he said.
Next May and June, Bermuda will host the 2017 America’s Cup, the pinnacle of international sailing competitions. Sailors in that contest are often former winners of the Argo Group Gold Cup, one of the biggest yachting regattas in the world, which is sponsored by Argo.
“It’s been a nice opportunity to share innovation and ideas, believe it or not, and it’s been an awesome way for us to entertain our clients,” Watson said. “In our industry, everyone goes on a golf outing, so we’re always trying to find ways to be unique and different.”
That drive to be different also shows in the offices on Houston Street. Watson looks at it as a “blank canvas” to showcase not only the art, but also the collaboration among the people who work there — as seen through the glass walls and open areas — and in San Antonio’s growing tech scene.
“I think the next 10 years have a lot more opportunity than the last 10. Technology is going to play a huge role,” Watson said. “For more than a decade, I’ve been thinking and saying that I thought technology would disrupt the value chain of our industry, and it’s finally happening slowly. The rate of change is just extraordinary.
“The level of collaboration you can see today versus a year ago is just insane. I think we’re going to be on the winning side of that.”