Bermudians are getting unhealthier - and that poses as big a threat to the Island's economy as a monster hurricane, according to Argus Group chief executive officer Gerald Simons.The boss of one of the Island's biggest health insurers is seeing increasing numbers of people in their 30s and 40s suffering from what used to be regarded as the ailments of the elderly.Apart from the likelihood of continuing increases in the cost of health care, Mr Simons sees the trend of deteriorating health leading to a situation in which middle-aged people will be competing for health care resources with their elders.In an end-of-year interview with The Royal Gazette, Mr Simons reflected on a challenging 60th anniversary year for Argus, in which the company suffered impacts from the contraction of the local economy, as well as three-month voluntary suspension in the trading of its shares on the Bermuda Stock Exchange (BSX), after the company failed to give its shareholders sufficient notice of its annual general meeting, according to its own by-laws.The number of people with Argus health insurance policies fell by between four and five percent this year, perhaps the result of job losses and people leaving the Island.“The state of the health of the Bermudian population is one of the greatest risks the Island faces,” Mr Simons said. “We can't continue to have a situation where health care costs are rising at seven or eight percent every year, while general inflation is two or three percent.“The fundamental driver of that is poor health. Bermuda's not unique in this. The levels of obesity are rising so quickly that people are experiencing in their 20s, 30s and 40s, diseases and conditions that a generation or two ago, they would not suffer until their 40s, 50s and 60s. It's not uncommon for people to have amputations because of diabetes in their 30s and 40s.”Given current health trends, Mr Simons, 63, added that in 20 years, he, as an 83-year-old, would be competing for health care resources with people 30 years his junior.Low Bermuda birth rates of around 800 per year, compared to around 1,200 per year in the 1950s, pointed towards a shrinking working population to bear the burden of the expanding retired population.“People are well aware of the risks of a category 4 or 5 hurricane and they prepare for it, but this risk, which is just as large is more insidious and people are less aware of it,” Mr Simons added.Looking back at 2010, Mr Simons said the two major challenges for Argus had been the effects of the recession and a further fall in the shares of Butterfield Bank.“We have seen a slow decline in the number of health insureds, as people don't have their work permits renewed, lose their jobs or leave the Island,” he said.“Another thing we've noticed is that there's a far greater interest among employers in identifying ways to modify their health insurance programmes to reduce their premiums, particularly in the construction and hospitality industries.”In nearly 40 years in the industry, Mr Simons has seen typical health insurance coverage evolve from basic to extensive. He estimated that 90 percent of employees now had coverage that included prescription drugs, vision care and access to top-class overseas hospitals when necessary.“I was at Johns Hopkins recently and spoke with Dr Griffith, a cardiologist who's treated 3,300 Bermudians,” Mr Simons said. “He told me that Bermudians have better health insurance than most Americans. I think a lot of Bermudians don't realise that.”Many employers are seeking ways to keep health care costs down, without reducing the level of care. One way to do that was to ensure value for money from treatments, as costs vary widely between overseas providers. Mr Simons gave the example of one specific surgical procedure, which cost between $15,000 and $36,000, depending on which leading hospital you went to.The plunging value of Butterfield Bank shares has had a substantial impact on Argus' earnings. The insurer owned a seven percent stake in the bank, which has been diluted to around 1.8 percent, according to Bloomberg data, following the issuance of new equity in March, when a group of investors ploughed $550 million into the bank.In the second half of Argus' last fiscal year, ended March 31, the company suffered from a $29 million hit from the bank's plunging share price, the main driver behind Argus' $18.4 million full-year loss. The first half of the current year, through September 30, produced a $6.6 million profit, strong operating results and the company continued to pay a dividend.On the three-month trading suspension, Mr Simons said: “Most people could not understand why an apparently minor oversight had such significant consequences,” he said.“It was unusual and unexpected. But there was never any doubt that we would work our way through this.”Chief operating officer Alison Hill said shareholders' had responded generally positively at last month's long-delayed AGM to the company's explanation of the administrative error and its repercussions.The share price was $6.30 at the start of the suspension on August 2. Since the resumption of trading in early November, Argus dropped as low as $5.16, but has since recovered to $5.75.The company bolstered its management ranks in 2010 to improve corporate governance and to keep pace with the increasing complexity of regulation by the Bermuda Monetary Authority, the Pensions Commission and the BSX. Onesimus Nzabalinda was appointed head of compliance and risk management, Gary Hitchens director, global sales and marketing, and George Jones company secretary.Argus had managed to win business, no little achievement in a shrinking market, something that Ms Hill attributed to meeting the customers' needs, and treating staff and customers well.In September, the group acquired Fogg Insurance Agencies in Malta, expanding its interests in Europe. It also has a business in Gibraltar. Insurance penetration in Malta is lower than the average in the European Union.“Malta has a population of 400,000, which is not big enough to be attractive to big companies in Europe,” Mr Simons said. “For us, it presents opportunities. Also it does not get hurricanes.”