Argus Insurance yesterday reported "slightly" decreased earnings for the six months ending September 30, 2001.

Net earnings, at more than $6.4 million, were down three percent over net earnings for the same period last year, of nearly $6.65 million.

The unaudited results showed however that Argus' gross revenue jumped by more than $40 million from the same period in 2000, with revenue of $78.2 million this period compared to $37.4 in 2000.

But, the gross revenue increase was offset by a more than $40 million increase in claims and benefits.

Premiums (net of reinsurance) rose from $27 million in the six months of 2000, to over $64.8 million in the six months ending September 30, 2001.

Mr. Simons said the increase was in respect of some transfer of pension liabilities to the Argus Group (which) came in as premiums. But he said: "There was also a large increase in our claims and benefits as we established an actuarial reserve for these pensions that we are now paying."

The company also reported commissions and management fees of close to $4.2 million.

Looking at the factors affecting the group's results for the period, Argus reported: "Earnings decreased slightly from the corresponding period last year. Health and motor insurance underwriting results deteriorated but the group's investment income benefited from the increase in value of equity holdings of companies listed on the Bermuda Stock Exchange, mainly the two largest banks and two utility companies. "

In addition, life and pension business was said to be very competitive and the investment environment remains a challenging one, especially for those pension plan members whose funds are invested mutual funds.

The company also reported that health insurance claims, in general, had increased dramatically for the period.

In particular, Argus experienced significant claims in respect of neonatal healthcare costs. Mr. Simons said: "There were a few births which were very expensive - costing well over $1 million."

Mr. Simons also referred to some restructuring of the company: "As we reported last year our continuing significant investment in infrastructure and modernising products has caused operating expenses to rise by 19 percent. We now face the challenge of improving efficiencies in all areas of our operation and reducing staff to normal levels following the implementation period."

Looking forward, Mr. Simons said: "Assuming that over the next four months there are no catastrophic claims and no deterioration of investment markets we expect satisfactory earnings for the year ended March 31, 2002 at a level approaching earnings of the previous financial year."