Argus Group Holdings Ltd reported a net loss of $5.7 million for the year ended March 31, 2011, due primarily to the deterioration in value of some of its investments in Bermuda, and suspended its dividend payment.Despite recording net earnings of $6.6 million during the first half of the year to September 30, 2010, the insurer suffered a $9 million loss in the value of its equity portfolio, in part from potential non-performing investments in the hospitality sector and local mortgages.Argus Insurance Company loaned $20 million to Castle Harbour Ltd (CHL), an operating subsidiary of holding company Bermuda Properties Ltd, the owner of the Rosewood Tucker’s Point development in 2007, with the loans due at the end of last year.But the net loss was lower than last year’s net of $18.4 million, as the company’s core operations posted earnings of about $20 million.Alison Hill, CEO of the Argus Group, said: “Every one of our seven business units recorded excellent results for the period, generating earnings in the region of $20 million against the backdrop of a continued recession.“We were disappointed that a further deterioration in the value of certain of our investments, primarily in Bermuda, resulted in a net loss of $5.7 million for the year ended March 31, 2011.“Shareholders’ equity stood at $82 million, substantially in excess of the statutory capital required to conduct the Group’s various insurance businesses. All business units continue to deliver strong performance, are producing steady cash flows and are well placed to capture growth as the local and global economies start to recover.“At September 30, 2010, the half year, we reported net earnings of $6.6 million and we were optimistic of meeting our annual earnings target. However, in the second half of the year the further diminution in value of $9 million to our equity portfolio, principally in local investments and $17.5 million against potential non-performing investments in the hospitality sector and local mortgages, have combined to produce negative earnings.”Ms Hill added that the Argus balance sheet now “faces substantially less exposure to material risks arising from non-core investments”. Stripping out the investment-related losses the earnings would have produced net income in the region of $20 million for the year.“The reduction in value of local investments over recent years has led to the diminution in surplus capital available for distribution to shareholders as a dividend,” he added. “In light of this and to ensure that we continue to maintain a capital base that is well in excess of minimum statutory requirements, the dividend payment to shareholders will be temporarily suspended.“During the year shareholders’ equity was reduced to $82 million by the net loss of $5.7 million, cash dividends of $8.4 million and other comprehensive loss of $1 million.”Ms Hill, who took over her role from Argus president Gerald Simons in January, said that net premiums written also increased by four percent, arising from new business and the Argus’ continuing efforts to achieve acceptable underwriting ratios through appropriate adjustments to premiums.Overall, claims, policy and actuarial benefits decreased by six percent over the prior year due to lower than anticipated claims experience in overseas health care costs and the company’s property and casualty businesses, partially offset by the trend of increasing local health care costs, she said.Revenues from commissions, management fees and other income rose by 6.3 percent versus 2010. The company ended the year with total general fund assets of $522 million and $1.7 billion under administration.