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Argus Releases Six Month Report

Hamilton, Bermuda: 29 November, 2001 €” The Argus Group has submitted to the Bermuda Stock Exchange (BSX), the following unaudited summary of consolidated statement of operations for the six months ended 30 September 2001.

Mr. Gerald Simons, President and Chief Executive Officer of The Argus Group, today announced earnings of $6,439,000 for the six months ended September 30, 2001 compared to $6,649,000 for the same period in 2000.

ARGUS earnings decreased slightly from the corresponding period last year. Health and motor insurance underwriting results deteriorated but the Group's investment income benefitted from the increase in value of equity holdings of companies listed on the Bermuda Stock Exchange, mainly the two largest banks and the two utility companies. Income from commissions and management fees again provided a very satisfactory contribution to the Group's earnings.

Life and pension business continues 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 significant increase in premium income recorded in this half year was mainly attributable to non-recurring premium in respect of annuity liabilities assumed. Health insurance premiums also increased substantially as a result of the acquisition of new business. Unfortunately, health insurance claims increased dramatically in the period as, in addition to a higher than expected increase in claims levels generally, we also incurred claims costing over $1,000,000, in respect of neonatal healthcare costs.

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

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

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.