Argus Group Holdings Limited has announced earnings of $13.2 million for the year ended March 31 2014, compared to $12.8 million in the prior year.

A press release announcing these results stated that “These positive earnings have been achieved against a backdrop of global economic challenges that have lingered for several years and continued volatility in investment markets. In addition, the board has declared an interim dividend of seven cents per share.”

Argus also said: “A benign claims year n relation to the health and property and casualty portfolios” resulted in a net benefits and claims decrease of seven percent.

This was against a background of investment income and share of earnings of associates decreasing significantly when compared to the prior year.

Argus explained in their release: “The accounting policy under International Financial Reporting Standards requires the valuation of the majority of investments to be made at fair value, which can and often does lead to significant volatility of financial results, especially in life and annuity businesses. As a result, the Group reported an unrealised loss on its fixed income portfolios of $5.3 million compared to a $2.7 million gain in the prior year.

“This arose as the increase in interest rates in the year served to decrease the fair value of the Group’s extensive fixed income portfolios.”

The insurer also reported that commissions, management fees and other revenue fell two percent compared to the prior year due to decreased profit commissions offset by an increase in management fees in line with the rise in assets under management.

Alison Hill, chief executive officer of the Argus Group, was quoted saying: “These positive results are underpinned by strong business fundamentals including continued strong performance by our core business operations, high client retention levels despite fiercely competitive markets and efficient management of operating expenses. In addition, we continue to follow strong governance and risk management processes and to optimise the balance sheet and capital structure in a considered and orderly fashion.

“The board and management believe that there are signs that the economic downturn in Bermuda and elsewhere may have bottomed out, but economic recovery will be slow. The group continues to make progress with its strategic goal of focusing on markets where Argus can grow and earn higher returns within acceptable risk tolerances. Accordingly, we remain confident that the Argus Group is well positioned for the future.”

Argus also reported that shareholders’ equity now stands at $106.9 million, representing an increase from $94.4 million one year ago, which is substantially in excess of the statutory capital required to conduct the Group’s various insurance and investment related businesses. The result for the year represents a return on average shareholders’ equity of 13.2 percent compared to 14.5 percent for the previous year. The earnings per share for the year were $0.63 compared to $0.61 last year. As at March 31, 2014, total assets including segregated fund assets stood at $2.1 billion.

The insurer also reported that net premiums written increased by $3.0 million or two percent: “arising from a combination of new business and very high client retention levels.”

Argus also said that operating expenses have decreased by three percent over the prior year reflecting the tight budgetary control and monitoring processes exercised by management. Based upon the financial results of the group for the year ended March 31, 2014, the board declared an interim dividend of seven cents per share payable on September 15, 2014 for shareholders of record on August 11, 2014.