Rebounding financial markets helped Argus Group Holdings Ltd. achieve a $12.2 million profit for the six months ended September 30 this year — a $54 million swing from the loss the company suffered in the same period last year.

A $10.2 million increase in the fair value of the insurer and pension provider's investments — compared to a $56 million fall in the same period last year — was the major factor in the swing to profit.

The company's total assets rose by $36.2 million, while shareholders' equity rose by $20 million.

Investment income decreased by 47 percent to $6 million because of reduced dividends and fixed interest yields. Argus chief executive officer Gerald Simons said: "While we have been disappointed with the performance of Bermuda equities in the recent past we are pleased to see a recovery in global investment markets which have benefited the company greatly." According to Bloomberg data, Argus owns a 7.3 percent stake in Butterfield Bank, whose common share price has fallen by more 60 percent this year. Although net premiums increased by six percent, Argus's health business was impacted by a large increase in claims — a factor in the 13.4 percent rise in the cost of total claims and benefits.

In its earnings statement, Argus said: "This increase is well above the recent levels of medical inflation and has been caused by a combination of increased utilisation and a change in referral patterns resulting in more patients being treated in more expensive facilities abroad. Management is working to create a cost-effective solution." Rival insurer BF&M Ltd. said last month that it had experienced a 47 percent increase in health insurance claims through the first nine months of the year. It said that overseas claims had been higher than expected because of the frequency and severity of claims.

Commissions, management fees and other income fell by 7.8 percent during the period in line with the reduced value of assets under management in various investment-related businesses. Operating expenses increased during the period by 9.6 percent due to continuing investment in information systems and one-off costs associated with the relocation of staff to the new corporate headquarters. Argus said "the containment of operating expenses remains a high priority of management".

Argus recorded net unrealised gains of $13.8 million under other comprehensive income compared to a loss of $8.9 million for the corresponding period in the prior year. These unrealised gains arose from gains and losses on financial assets classified as "available for sale" together with the foreign currency translation adjustment of the company's self-sustaining foreign operations.

On the balance sheet, total assets increased to $565.2 million, whilst segregated funds assets stand at $1.1 billion. The Group now has assets of $1.67 billion under its administration. Shareholders' equity at September 30, 2009 rose to $134.3 million and is now five times the minimum capital requirement set by the company's regulators.

Mr. Simons added: "The strength and diversity of the business operations of the Argus Group during very difficult times give us confidence for the future."