where many failed in the six months to September 30 -- beating back a downturn in the investment markets and marginally improving last year's $3.86-million investment income to a $4-million investment income contribution to earnings.

Meanwhile, Argus convinced Government to increase its insurance protection, encouraging an increase in sums insured, which maintained premium income in an environment of downward pressure on premium rates, and hence commission income.

The Government spent about $6.4 million for insurance costs in 1996, with $4.6 million alone in premium for an all risk policy for Government's billion dollar property portfolio and hurricane cover.

That cover would have been expected to be renewed with their longtime insurer.

The Commercial Union agency was in place to deal with the Government business.

The maintenance of the level of premium payments meant that Centurion Insurance Services, through its Commercial Union agency, had a successful start to the year.

Centurion's brokerage activities also increased, with additional liability risks being placed in the London market.

But while Argus has reported good news to shareholders that their general and health premium income grew 13.3 percent or by $2.3 million in the six months to September 30, the bad news was that in the same period, claims rose 20.1 percent or $2.8 million as a result of the significant increase in major medical claims.

Lower premium rates in a soft market for property cover was offset by the relatively satisfactory claims level.

The Argus Group's property and casualty account performed well, as the Island remained hurricane-free for the second year in a row.

And president and CEO Gerald D.E. Simons reported: "Despite the turmoil in the investment markets, investment income increased in this period.

"The total market value of equity investments held for our own account was down by approximately 14 percent at September 30, 1998, but despite some permanent losses in emerging market funds, a substantial recovery was made in October and November.

"Income from commissions and management fees again made a very satisfactory contribution to the group's earnings.

"Operating expenses dropped by 6.1 percent from $5,792,000 to $5,438,000, partly due to the absence of Argus International Management, following the sale of its business last year, but also reflecting the group's strong control in this area.

"Operating expenses have steadily reduced over the years to the very acceptable level of 17.6 percent of total income.'' Argus survives markets' mayhem Argus' life and pension business continued to do well in an increasingly competitive market.

The group remains Bermuda's dominant pension provider through products provided by Bermuda Life.

Argus reported earnings for the six months ending September 30 of $5,128,000, marginally lower than the $5,323,000 recorded for the same period in 1997.

Mr. Simons reported the company belief that there are no Year 2000 issues with any of its internal systems that will affect business relationships with clients or business partners.

Argus shares last traded December 22 at $17.75.