Argus Group Holdings Ltd. recorded net income of $6.6 million during the six months through the end of September, the company announced yesterday.

The company's core insurance businesses wrote more premium, while claims, policy benefits and actuarial benefits fell by seven percent.

Argus's net earnings fell by about 45 percent compared to the $12.2 million earned in the same period last year. This was principally due to the fact that the fair value of investments climbed $10.2 million last year as financial markets rebounded after the crash of 2008. In comparison, this year the value of investments fell $525,000.

Argus president and chief executive officer Gerald Simons said: "In this, our 60th year of operations, the strength of our core businesses continues to give us confidence for the future despite the ongoing lacklustre performance of investment markets in Bermuda and globally."

Trading of Argus shares on the Bermuda Stock Exchange has been suspended since August because of an administrative error in informing shareholders in sufficient time of the company's annual general meeting.

The suspension is expected to be lifted pending shareholders' approval of measures to solve the problem at the AGM next Monday.

Argus said that claims received as a result of Hurricane Igor on September 20, 2010 were not as severe as anticipated as the storm weakened to Category 1 by the time it reached Bermuda.

Health insurance claims fell to "normal levels" after what Argus described as the "excessively high overseas claims costs" of last year.

Operating expenses jumped to $19.8 million from $18 million last year. Argus attributed the 10.4 percent increase to the consolidation into the firm of the newly acquired Fogg Insurance Agencies.

The operating expenses of the Malta-based operation, which has more than 20 staff, were consolidated into the group for the first time. Previously, Argus paid the agency a commission for business produced.

Argus said it was continuing to "de-risk" its balance sheet "in a measured and orderly fashion" to mitigate the effect of the volatility experienced in worldwide investment markets in recent years. Investment income increased by 14.4 percent in the period.

Commissions, management fees and other income increased by three percent in line with the modest recovery in the value of assets under management in various investment-related businesses.

In the six months to September 30, 2010, Argus recorded net unrealised gains of $4.3 million under other comprehensive income compared to gains of $12.8 million for the corresponding period for the prior year. These unrealised gains arose from market movements on financial assets classified as "available for sale".

Total assets increased by $22.3 million to $541 million during the six-month period, while segregated funds assets stand at $1.2 billion.

The Argus Group now has assets of $1.7 billion under its administration. Shareholders' equity at September 30, 2010, rose to $107 million, up from $97.5 million at March 31, 2010.