MONDAY, JUNE 25: The Argus Group is back in the black. The company announced a net profit of $1.7 million for the year ended March 31, 2012, compared to a net loss of $6.1 million in the prior year.
It has been a struggle for Argus as it posted losses of $18.4 million in 2010 and $115 million in 2009.
The last year it had a profit prior to this one was in 2008, when it was in the black to the tune of $15.5 million.
The insurer had been hampered by several investment issues, which it has struggled to overcome.
Alison Hill, CEO of the Argus Group, said: “It is our belief that this result, although modest, represents a significant milestone marking the end of challenging legacy issues in the investment arena.
“Despite less than favourable investment market conditions, the lingering recession and an increasingly competitive marketplace, we have attained our overall business targets and delivered a strong operating performance for the year ended March 31, 2012.
“Without investment-related losses during this period, the earnings would have produced net income in the region of $18 million for the year, generated once again through the achievement of very high client retention levels and substantially exceeding our new business targets across most business lines.
“In addition, we have made good strategic progress, focusing on markets where we can grow and earn higher returns. The balance sheet now faces substantially less exposure to risks arising from non-core investments as we continue to optimise the Balance Sheet and capital structure in a considered and orderly fashion.
“At year-end, Shareholders’ Equity stood at $83.8 million, substantially in excess of the statutory capital required to conduct the Group’s various insurance businesses.”
Ms Hill added: “Net premiums written increased by eight per cent. This is as a result of a combination of new business and appropriate adjustments to premiums in order to achieve acceptable underwriting ratios. Overall, claims, policy and contract liability benefits increased by 7 per cent over the prior year due primarily to higher claims in local and overseas health care services and our property and casualty businesses.
“Investment Income, Change in Fair Value of Investments and Share of (Loss)/Earnings of Investments in Associates continued to present challenges during the year ended March 31, 2012.
“The main contributory factors that suppressed investment earnings in the year were the provision of $11 million against the Group’s investment in Northstar Group Holdings Limited, which was recognised at the half year, reductions of $2 million in the equity pick up from investments in associates in Bermuda due to the depressed local economy and net realised losses of $3 million on the sale of certain equities.
“Revenues from commissions, management fees and other income rose by 7 per cent compared to 2011, primarily reflecting the increase in the market value of assets under management in our various investment-related businesses and the continued growth of ceding and profit commissions earned by our property and casualty operations.
“The increase in Operating Expenses and Amortisation and Depreciation is largely attributable to additional investment in the infrastructure of our European operations.
“The Argus Group now has assets of $1.7 billion under its administration.”