The Argus Group turned in record six month earnings of $17.3 million yesterday — a $4.2 million or 32 percent increase over the same period in 2005.

The profit increase for the six months to the end of September, 2006 came as revenues jumped by $5.5 million or 8.5 percent to $70.5 million while expenses were held in check, rising $1.36 million or 2.6 percent to $53.2 million.

The company, Bermuda largest insurance and pension group by market capitalisation, said that barring unforeseen catastrophic events, it expected to exceed 2005’s full year profit of $27 million.

Argus chief executive officer Gerald Simons said the result was achieved in part because of a lack of major hurricanes in the period and because medical insurance claims were lower than expected.

He said: “These results reflect our continuing efforts to produce profitable lines of business in each of our insurance operations.

“Thanks to appropriate adjustments to premiums and increased deductibles, we have achieved acceptable underwriting ratios in all business areas, including the motor account.”

Argus said total premiums earned, net of reinsurance, rose by 8.4 percent to $46.4 million while investment income improved slightly to $14.5 million compared with the corresponding period in 2005 which enjoyed realised investment gains of $2.8 million from the sale of an overseas equity investment.

“This year’s gain to date was primarily as a result of increased returns from the Argus Group’s portfolio of local investments,” Argus said.

“Increased investment in information systems and business analysts impacted operating expenses which, together with commissions, rose by 12.4 percent in this period and are equivalent to 22.8 percent of the Argus Group’s total income, compared to 22.0 percent in the corresponding period last year.”

In an interview with Mr. Simons yesterday, he said the decline in claims and benefits from $37.5 million in 2005 to $37.1 million this year was due to a drop in the number of premature babies, whose treatment and care can be highly expensive.

He said stricter underwriting in the motor insurance sector, which he described as an area of difficulty for all local insurers, had improved performance, and he said the Datatag initiative and a fall in bike thefts had also helped.

Argus has also been expanding overseas, and Mr. Simons said those acquisitions now contributed a “small but significant” amount of revenue.

Saying it was less than ten percent of revenues now, he added: “We anticipate that growing. It has Far greater potential in the long run than our domestic business.”

Earnings per share rose to 89 cents from 67 cents on a fully diluted basis while cash dividends rose to $4.7 million from $3.7 million. During the period, Argus issued a stock dividend valued at $1.76 million.