The Argus Group has posted earnings of approximately $4.9 million for the six-month period ended September 30, showing the insurer weathered Hurricane Fabian with only a 4.4 percent drop in profits.

Although the company said it suffered its greatest ever gross windstorm losses following the devastating September 5 storm, reinsurance protection reduced the impact on its earnings meaning it only posted a net Fabian loss of $2.5 million.

Excluding the effects of Hurricane Fabian, a six-month report to shareholders from CEO Gerald Simons, described the results as “encouraging” despite disappointing returns from Hospital Insurance Benefits and in motor lines where claims ratios were “unacceptably high”.

The company saw its earnings fall off slightly in spite of an overall increase in income with premiums moving up from $47.3 million to $52.1 million period over period.

The company reported that earnings were impacted by a rise in payouts, which shot up nearly $4 million to $47.2 million compared to $43.3 million the year before.

Argus' total assets as of September 30 stood at $339 million while shareholders' equity was almost $112 million.

Investment income for the period rose from $6.8 million the previous year to $9.4 million for the six month period in 2003.

“The expectation that interest rates will rise in the not-too-distant future is currently bringing much uncertainty to the fixed interest markets.

Similarly the somewhat fragile recovery of overseas equity markets does little to boost investor confidence, “ Mr. Simons said, adding that the expectation for the year period, which ends March 31, was profits that would “at least match those of the prior year”.

The report said the period represented the first contribution to earnings from the company's international life operations and said sales of US compliant products, which had been adversely affected by the September 11, 2001 attacks, were now “beginning to rebound”.

Figures were affected by an increase of nearly $20 million in provisions for unpaid and reported claims, which mainly accounts for an increase in liabilities from $193.7 million to $226.9 million.

Operating expenses for the period decreased by five percent from the equivalent period the year before, the report pointing out that this was partly a result of increased efficiency due to new computer hardware and software and new accounting rules.