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Argus Issues Letter To Shareholders
"I am pleased to inform you that at its February 15 meeting, your Board of Directors declared a dividend of 22 cents per share payable on April 15, 2004 to shareholders of record on March 31, 2004.
Each year in April the fees for services provided in the local hospitals and the insurance premium to be charged for these services are set by government. We also review the experience of our health insurance portfolio at this time. For the third year in succession the increase in health insurance premiums will exceed the rate of inflation in Bermuda by a factor of three. The standard premium, which covers public ward accommodation primarily, will increase by 12% although it should be noted that government's actuary recommended an increase of 22%! The cost of other insured benefits is rising by similar amounts. Clearly, employers and their employees who, in most cases, share these costs cannot tolerate increases of this magnitude indefinitely.
We are encouraged that the government is pressing ahead with plans to create a health council which will oversee and regulate the health care industry. We have called for such a body for years. As the largest health insurer in Bermuda we will play our part to ensure its success.
After over 30 years of service with the Argus Group Larry Osborne, Vice President, Property & Casualty, has taken early retirement. Under his leadership Argus has become a major player in this market. Larry has been succeeded by Bob Anderson who brings a wealth of experience to this position having previously served as Head of Operations, International Business (CGU plc). Over a 40-year career in insurance he has held several roles including manager of the Commercial Union's branches in Edinburgh and London.
The recent sale of the Bank of Bermuda caused the Argus Group to realize a significant capital gain. Under Canadian accounting rules used by the Group this gain, together with the special dividend paid at the time of sale, contributed some $3 million to earnings for the year ended March 31, 2004, and served to offset the negative earnings effect of Hurricane Fabian. In light of the strong performance in most areas of our business we expect earnings for the year ended March 31, 2004 to exceed the level achieved last year."
Signed by: Gerald D. E. Simons, President & Chief Executive Officer