The Argus Group Announces Earnings Of $27 Million

Hamilton, Bermuda: June 8, 2006 -- Argus Group Holdings Limited today announced earnings for the year ended March 31, 2006 of $27 million up 52% from the previous year representing a 20.5% return on opening shareholders' equity.

In November 2005, Argus Group Holdings Limited replaced Argus Insurance Company Limited as the parent company of the Argus Group and now owns all the subsidiary companies of the Group.  The re-organisation did not alter the underlying assets, business or ultimate ownership of the companies of the Argus Group.

Gerald Simons, President and Chief Executive Officer of the Argus Group, comments:

"This year has been a time of consolidation and continued growth for all operating areas of the Argus Group. All of the Group's investment portfolios, especially local equities, performed strongly, easily surpassing last years contribution to the overall results.

Argus Financial Limited, the new majority-owned Argus subsidiary, was launched in July 2005 and has made a small contribution to earnings.  Initially, it concentrated on the streamlining and rationalisation of assets under administration already within the Group.  Argus Financial Limited will this year extend its services to provide private investors as well as local and international businesses with a range of managed investment opportunities.

The Argus Group's local property and casualty book of business continued to improve due to refinements in the selection and rating of the portfolio, whilst the absence of severe storms assisted in the success of the division.  Once again the motor account did not produce an adequate return and the Group continues to express concerns over the cost of claims relative to premium volume.  The Gibraltar and Malta portfolios both made satisfactory contributions to the results.

The health insurance division performed in line with expectations with claims volumes returning to more typical levels.  Proactive management, especially in the area of neonatal care, held premium increases in 2006-2007 at the lowest levels in several years.  To tackle rising health insurance premiums due to increased costs and utilisation of healthcare services, the Argus Group launched the island's first insurance-led wellness programme in April 2005.  Currently, 25% of those insured with Argus are benefiting from the advice and support offered through the programme.

The pension division experienced growth in the past year with assets increasing by 20% as a result of improved investment performance and significant new business.  In November 2006, the Group launched a new prescribed retirement product, the Individual Retirement Plan, for employees who are terminating or retiring from a registered pension plan.

International life operations were boosted in the year by the recruitment of additional specialist staff and the implementation of new technology in the division.

Investment income increased by 55% to $30.5 million during the period, making up the bulk of the company's consolidated earnings.  Both international and Bermuda investments performed strongly during the period, as equity markets worldwide and rates on fixed interest securities improved in the year.

Commissions, fees and other income rose by 13% as the increased fees earned in the pension division offset the loss of commission income from the property and casualty division as the Bermuda-based agency business moved in-house following its acquisition last year.

The Group reported that operating expenses and commissions increased by 39% over the period as the expenses for the full year of Gibraltar operations were absorbed and local operations expanded.

General account assets of the Argus Group at March 31, 2006 totalled $470 million and separate account assets under its control were $966 million.  Overall the Group now has assets of $1.4 billion under administration. Shareholders' equity at year-end had risen to $148.6 million from $131.6 million the previous year.

Basic Earnings Per Share for the year was 1.57 versus 1.02 in 2005.

For further information, log on to www.argus.bm.

Media Contacts: 

Gerald Simons

President & Chief Executive Officer     

Telephone:                    298-0810

E-mail:                          gsimons@argus.bm

David Pugh

Chief Financial Officer                                     

Telephone:                    298-0832

E-mail:                          dpugh@argus.bm