Argus Group of Companies is on course to equal or exceed last year's record earnings, according to managing director and CEO John Sainsbury.

Mr. Sainsbury made the forecast in the company's six month report to shareholders, with the caveat: "Our business is subject to claim and a lot can happen in the meantime.'' For the six months ended September 30, Argus had net profits of $4.9 million, up four percent from $4.7 million in the same period in 1995. For the full year in 1995, Argus made $9.7 million, the fourth consecutive year of increased profits.

For the six month period, general and health premium income increased $1.5 million or 11 percent to $15.5 million from $13.9 million.

On pensions, Argus said it continued to benefit from its dominant position.

Argus has seen a "considerable transfer of (pension) funds'' from other carriers, Mr. Sainsbury said.

In 1995, Argus reported the transfer of $17 million in pension funds from other carriers and in the 1996 annual report the company said an additional $10 million had been transferred.

"Acceptance in the market of Bermuda Life's new capital accumulator pension plan has been gratifying,'' the company added.

The new pension plan, launched in June, 1995 after a year of limited marketing, is a defined contribution plan that provides for investments in equity markets. It is a step beyond the company's interest accumulator plan in which assets were invested in fixed income securities, like bonds and mortgages.

The company also reported improved investment income of $3 million compared to $2.9 million.

And results benefited from "considerably lower'' property claims but it was offset by an increase health claims.

Windstorm property claims, including the property and auto damage from hurricane Felix, was to blame for last year's higher claims.

Offsetting gains was an increase in health claims.

General and health insurance benefits rose to $11.7 million from $10.7 million.

And at subsidiary Somers Isles Insurance Company Ltd., underwriting surplus will be 15 percent below last year's.

Operating expense was up significantly to $5.2 million compared to $4.7 million.

"Bermuda Life's new pension system and a strategic review of all of the Group's computer operations created significant expense in the period.'' Total expenses were $19.8 million compared to $17.9 million.

Life and annuity premiums were unchanged at $1.9 million.

Argus also reported that, over the six month period, $654,000 in interest expense has accumulated on the old Bermudiana Hotel site.

ACE Ltd./EXEL Ltd. and Argus have agreed in principle to acquire the site.

The $654,000, or carrying cost, has been included in that agreement.