Bermuda insurance firm Argus has announced a net profit of $3 million for the six months to the end of September — down more than $7.5 million for the same period last year.

The firm posted a net profit of $10.6 million for the corresponding period in 2014.

Argus CEO Alison Hill said: “Although modest, the net earnings are underpinned by continuing strength in our core business operations through a mix of prudent underwriting and high client retention levels in increasingly competitive markets. The leadership team continues to prioritise and focus on activities that will generate long-term sustainable value.”

She added that an increase in long-term interest rates over the six-month period had hit the group’s fixed-income portfolio, resulting in unrealised losses of $8.3 million reported for the period.

Ms Hill said: “This is in contrast with the decline in long-term interest rates during the corresponding prior year period that resulted in an increase in the fair value of the group’s fixed income portfolio.

“Partially offsetting these unfavourable investment results was the decline in future liabilities as a result of the group’s asset liability matching policy.

“While interest rate volatility has had a short-term impact, as stated before, our focus is to generate long-term sustainable shareholder value.”

And she added: “Our strategic priorities include creating business solutions that will benefit our clients and communities as stated in our brand position ‘Our Interest Is You’.

“While the rising costs of healthcare continue to be a concern in Bermuda, Argus is becoming a driving force in taking action to promote healthy communities and lower healthcare costs.

“Additionally, the group continues to make progress to diversify and grow our business by focusing on opportunities to expand in Europe.”

Argus also declared a dividend of eight cents per share payable on February 5, 2016 for shareholders of record on January 22, 2016.

This represents a final dividend based upon the audited financial statements of the Group for the year ended March 31, 2015.

Due to a one-time new business transaction, net premiums earned over the six month period dropped by $7.1 million, while net benefits and claims fell by $8 million in the life and pensions division of Argus, where the reserves are increased in close proportion to the premiums received.

Operating expenses increased by $228,000 or one per cent over the prior period.