Bermuda-based the Argus Group has announced that it made a net loss of $18.6 million over 2017, as it operated against a backdrop of market uncertainty caused by global change and a low growth Bermuda economy.
According to the company the loss was caused by the combination of a large number of major medical claims and the actions it took to complete the restructuring of the Group’s balance sheet.
“My job is to deliver long-term sustainable value to shareholders, customers, staff and community,” said Alison Hill, chief executive officer of the Argus Group. “Uncertainty in global geopolitics continues to drive economic challenges around the world. This in turn drives caution from consumers, reduces spending and further exacerbates economic constriction.
“In most developed nations, rapidly ageing population coupled with declining birth rates impacts economic growth, and despite health education initiatives in most nations around the world, chronic disease continues to rise, bringing with it a plethora of health issues. In all of the territories in which we do business, we find that economic challenges, demographic changes and the healthcare system are having a profound impact.
“However, our actions to de-risk the balance sheet have placed us in a strong financial position, validated by AM Best who in December 2017 upgraded the group’s financial strength rating to A- Excellent. The rating upgrade reflected the Group’s appropriate enterprise risk management framework, consistent favourable operating performance and the strength of our balance sheet. We have continued our balance sheet optimisation strategy during the year with the sole focus of putting our capital to its best use while ensuring long term sustainable value. We are pleased that our diligent capital planning means that, despite our reported loss for the current year, the group remains in a healthy capital position and we are able to sustain our dividend to shareholders at 9 cents per share.”
Hill added that just before to the year-end Argus signed an agreement to sell its private placement life business. This non-core business segment had been a drag on group resources for many years, and Argus looks forward to being able to redirect these resources to support profitable growth and diversification. The terms of the deal will mean a gain of up to $6 million will be reported over the next three years, based on the persistency of the business. The transaction is subject to receipt of all required regulatory approvals and expected to be completed prior to September 30, 2018.
Argus concluded by stating that its focus over the forthcoming year will include global expansion as it invests overseas to enable it to bring profit back to Bermuda, as well as driving dividends, job creation and economic growth, In addition it will see to reduce the cost of employee benefits administration, invest in healthcare innovation, increase efficiency through digitisation and optimise its management team.
Argus Group, 2017, loss, medical malpractice, claims, Bermuda, economy, backdrop, challenges