"THE ARGUS GROUP is pleased to announce earnings of $6,649,000 for the six months ended September 30, 2000 compared to $6,016,000 for the same period in 1999.
ARGUS increased its earnings by 10.5% over the corresponding period last year as underwriting results remained strong and investment earnings, boosted by the increase in value of equity holdings in Bermuda's two largest banks, increased by 15.5%. Income from commissions and management fees again provided a very satisfactory contribution to the Group's earnings. Life and pension business continued to do well in what has become a very competitive market. Mandatory pension legislation, which came into effect in January, 2000, provided the opportunity to acquire new business and ARGUS gained significant market share.
In the period under review ARGUS replaced its group health and life computer system, its pension system and its general ledger system. It also incurred significant expenses for the implementation of the Group's new approach to health insurance. Not surprisingly, this led to an increase in operating expenses which have risen by 12%. We are confident, however, that this investment in the Group's systems and its products will enhance profitability in years to come.
Given no catastrophic claims and no deterioration of investment markets we expect that earnings for the year ended March 31, 2001 will be broadly in line with those of the previous financial year."
UNAUDITED SUMMARY OF CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2000 (in Bda$ 000's)
2000 1999
Premiums
(net of reinsurance) $ 27,078 $ 25,801 Investment income 6,036 5,225
Commissions & management fees 4,281 3,888
37,395 34,914
Claims & benefits 22,786 21,777
Commissions & operating expenses 7,960 7,121
30,746 28,898
Earnings for the period $ 6,649 $ 6,016
Earnings per share
- basic $ 1.08 $ 0.98
- fully diluted $ 1.06 $ 0.97