Argus profit hit by market volatility
Insurance company Argus has announced profits of $7.3 million for the year to the end of March — down $8.7 million on the $16 million recorded for the previous year.
It reported unrealised investment losses of $8 million, put down to short-term volatility in global investment markets.
Argus said that underlying earnings from business operations “remain strong” with net earnings of $15.3 million before the unrealised investment losses were taken into account.
Net benefits and claims increased by $9 million to $109.6 million over the period, attributed to claims returning to a normal level after a “unusually low claims” the previous year.
Alison Hill, CEO of the Argus, said: “The long-term financial strength of our operations is underpinned by our three strategic pillars of growth, advocacy and innovation.”
She said the company had introduced its Thrive wellness programme, as well as new pension fund options.
Ms Hill added: “We believe that these investments in our business infrastructure, which support the physical and financial health of our customers, is core to generating long-term sustainable growth.”
And she said Argus' overseas growth had gained “considerable momentum” as a result of the acquisition of Millennium Insurance Agency's client portfolio and the recent buy-up of Island Insurance Brokers both in Malta.
Ms Hill added: “Our financial results were positively impacted by our strategic focus, which led to strong sales and high client retention during the year.
“Our ability to retain and acquire new clients in a competitive and complex regulatory market is testament to the strength of our people and our operations.
“These actions have had a positive effect on our net premiums earned of $139.2 million, an increase of 1 per cent when compared with the prior year.”
Investment income totalled $1.5 million — down $13.3 million on the previous year's total of $14.8 million.
But Argus said that the losses related to high quality bonds, which were expected to increase over their remaining life.
Ms Hill said: “The group's investment portfolio is well-positioned to deliver on our policy holder commitments and deliver appropriate long term yields.
“While some investment income volatility is inherent, we are taking steps to reduce the income volatility and allow the underlying strength of the business to shine through.”
Shareholder equity over the year increased to $122.6 million and the company said that was “well in excess” of the capital level set by regulators to support the insurance and investment activities of the group.
Argus's statement said: “The strong capital growth has allowed the board to increase the interim dividend to 9 cents per share.”
The dividend will be paid on August 4 to shareholders of record on July 11.