Bermuda-based insurer Argus Group Holdings has announced a profit of $12 million for the year ended March 31, 2017, a 64 percent increase on the $7.3 million profit it made the previous year.
However, net premiums written came to $128.8 million, a decrease of 7.8 percent year on year while net benefits and claims of $105.7 million decreased by 3.6 percent. According to Argus both were impacted by its health business as a result of pricing actions taken in the short term to ensure the sustainability of the Bermuda health care system in the mid to longer term and maintain profitability of this important business to the Group.
The company added that its health claims have returned to a more normal level after the unusually low claims in the previous two years. While Argus has seen growth in the insured population, it said it had also experienced an increase in claims costs as more insureds have been encouraged to use preventative and diagnostic benefits.
“We remain deeply concerned about the unsustainable cost of the health care system in Bermuda,” said Alison Hill, CEO of the Argus Group. “As a result, we are proactively investing in several groundbreaking health management initiatives in the short term to help ‘bend the trend’ of escalating health costs and to deliver long-term benefits to our health clients.
During the year we invested in an innovative diabetes reversal programme, which is aimed at reducing the prevalence of Type 2 diabetes in Bermuda, and the new Argus Health Benefit portal, which gives our clients the ability to better manage their employee benefits through 24/7 access to reports and benefit plans.”
Argus said that its global property and casualty division performed well overall, despite the impact of hurricane Nicole in Bermuda and the emergence of some old liability claims in Europe. The company said that it was pleased that the financial impact to the group of significant events has been mitigated through the strength of what it described as its comprehensive reinsurance arrangements.
Investment income increased by $16.9 million compared to the prior year. Argus claimed that these results were robust and that they reflected stronger performance from its selected investment managers, with all managers meeting or outperforming their target returns. The investment income benefitted from one-time realised gains of $4.9 million from the sale of certain Bermuda equities.
“We are pleased with this solid result, which is underpinned by disciplined, long-term underwriting strategies and strong investment performance against a backdrop of geopolitical turmoil and market disruption,” said Hill. “We believe our role is one of careful stewardship of our shareholders’ assets and long-term custodianship of our business for future generations. We are pleased with our continued progress to diversify the Group’s sources of earnings across products and geographies, including the acquisition of Island Insurance Brokers in Malta.”
Argus Group Holdings, Results, Alison Hill, Bermuda