Argus Group Holdings Limited made a $700,000 loss for the six months to the end of September. The underlying earnings in its core business operations were $12 million.

The company said Covid-19 had “materially affected the business and individuals we serve and challenged the Argus team to find new products and innovative ways” to deliver services.

Alison Hill, chief executive officer, said: “When we look at the underlying earnings it is evident that the Argus Group has had a strong six months of financial performance. The modest net loss – driven by short-term market factors that impact reported net income under current accounting rules – only tells part of the story. Once the corresponding investment gains – reported within equity – are factored in, our overall book value has grown by $22.5 million over the past six months.”

She added: “The growth in value of our business has been achieved through solid operational earnings, strategic acquisitions and revenue diversification whilst maintaining a high client retention rate and continued commitment to careful and diligent custodianship of policyholder and shareholder assets.”

Shareholders’ equity increased 18 per cent from $122.1 million to $144.6 million, during the six-month period.

Argus made a $31.3 million return from its investment portfolio, which includes $23.9 million of unrealised gains reported as other comprehensive income on its balance sheet.

Argus said the Bermuda Health Financing Reform, which took effect in June 2019, and a reduction in the insured population, were the primary drivers for a decline in net insurance premiums during the period. Core business claims for the six months declined $12.3 million, or about 29.4 per cent, compared to the prior year.

In July, Argus acquired two Bermudian-based medical practices, Island Health Services and the Family Practice Group. It said this was a strategy to improve the resilience and diversification of our business by increasing the sources of fee-based income.

“We are therefore pleased that our recent acquisitions have helped increase our fee income for the six months by $4.8 million or approximately 49.4 per cent compared to the prior year,” the company said in a statement.

Argus said its annuity business reported a net loss of $11.5 million during the six months, with the year-on-year volatility “the result of accounting and valuation rules which we currently must follow”.

Ms Hill said: “Our strong operations allowed us to support the communities where we operate with donations and in-kind support for many individuals and organisations. Together we strive to operate a responsible and sustainable business, working with local market partners to promote social and economic development for tomorrow’s society and environment.

“We remain committed to reinvesting in the business – balancing profitability, risk, growth and strategic investments for the long-term benefit of our customers, our shareholders, our colleagues and our community.”