The Argus Group's net income for the fiscal year ended March 31, 2005 increased 6.6 percent to $17.7 million over $16.6 million in the previous year on a strong performance from the group's insurance operations.

Investment income for 2005 decreased 23 percent to $19.68 million compared with $25.5 million in 2004, due to the "lacklustre nature" of world investment markets. The company said in its year-end financial results that its portfolio of Bermuda equities, which contributes almost two thirds of the total, continued to be an excellent source of value for the Argus Group. At the year end, realised and unrealised gains in this portfolio of $29.5 million were deferred for recognition in future years under Canadian accounting rules.

Gerald Simons, president and chief executive officer of the Argus Group said: "These increased earnings are particularly pleasing given that investment income had declined compared to the previous year and despite continuing poor results in the motor portfolio. Fortunately, insurance operations in most other areas made a strong contribution to consolidated earnings.

"The year just ended has been an eventful one for the Argus Group's property and casualty operations with the acquisition of the Bermuda portfolio of Aviva plc, thereby increasing considerably the Group's local portfolio. In addition Argus acquired a Gibraltar property and casualty company.

" Both of these acquisitions were effective on January 1, 2005 and have made satisfactory contributions to Group earnings.

"Fortunately, we were spared any catastrophic claims."

Mr. Simons continued: "Health insurance results improved over last year as a result of lower than anticipated claims especially for overseas neo-natal care and refinements to our claims handling processes.

"Our concerns over the continuing escalation of healthcare costs and increased utilisation persist."

The Argus Group reported that results from life and annuity blocks of business were satisfactory, with improved earnings from all areas including our pensions and international life insurance operations.

The 2005 year saw commissions, fees and other income increase 45 percent from the $8.85 million recorded in 2004 due to the increase in ceding commissions from enlarged property and casualty portfolios, higher management fees arising from the growth in assets under management in the pension business and fees for administration services provided for new business acquired in the year.

Operating expenses and commissions increased by 15 percent in the 2005 year which the company said reflected the incorporation of three months of expenses from our Gibraltar subsidiary, the expansion of local operations and the ever increasing cost of operating in Bermuda

General account assets of the Argus Group at March 31, 2005 totalled $427 million. Separate account assets under the group's control were $789 million. Shareholders' equity at year-end had risen to $132 million.