Full year profit at insurance company Argus Group Holdings Ltd has soared to $12 million, increasing from $7.3 million the previous year.

Investment income increased by $16.9 million year-on-year.

The results for the year to March 31 represent a return on average shareholders’ equity of 9.5 per cent, up from 6 per cent.

Earnings per share were 57 cents, up from 32 cents the prior year. The company has announced an interim dividend of nine cents per share payable on August 23.

Alison Hill, chief executive officer, said: “We are pleased with this solid result, which is underpinned by disciplined, long-term underwriting strategies and strong investment performance against a backdrop of geopolitical turmoil and market disruption.

“We believe our role is one of careful stewardship of our shareholders’ assets and long-term custodianship of our business for future generations. We are pleased with our continued progress to diversify the group’s sources of earnings across products and geographies, including the acquisition of Island Insurance Brokers Limited in Malta.”

Net premiums written were $128.8 million, down 7.8 per cent, while net benefits and claims of $105.7 million, down 3.6 per cent. The company said both numbers were impacted by its health business as a result of “pricing actions taken in the short term to ensure the sustainability of the Bermuda healthcare system in the mid-to-longer term and maintain profitability of this important business to the group”

Argus said health claims had returned to “a more normal level” after the unusually low claims in the previous two years.

And while the group has seen growth in the insured population, it has also experienced an increase in claims costs as more people have been encouraged to use preventive and diagnostic benefits.

Ms Hill warned about the “unsustainable cost” of Bermuda’s healthcare system.

She said: “As a result, we are proactively investing in several groundbreaking health management initiatives in the short term to help ‘bend the trend’ of escalating health costs and to deliver long-term benefits to our health clients.

“During the year we invested in an innovative Diabetes Reversal programme, which is aimed at reducing the prevalence of Type 2 diabetes in Bermuda, and the new Argus Health Benefit portal, which gives our clients the ability to better manage their employee benefits through 24/7 access to reports and benefit plans.”

Argus’s total assets, including segregated fund assets, stood at $2.2 billion. Shareholders’ equity stands at $130.2 million and is well in excess of the capital level required by regulators to support the insurance and investment activities of the group.

The company said its global property and casualty division performed well overall, despite the impact of Hurricane Nicole in Bermuda and the emergence of some old liability claims in Europe.

Argus’s combined fee income was $18.9 million comprising fees for service generated by our pensions, insurance brokerage, health administration and wealth-management businesses.

That was down 5.5 per cent, and is mostly attributable to fee reductions within pension business that were delivered to Argus’s pension members as part of a fund transformation initiative. The company said that, as a result, its pension offering attracted new clients with pension assets totaling $70 million in the year.

The increase in investment income “reflected stronger performance from our selected investment managers, with all managers meeting or outperforming their target returns”, the company stated.

The investment income benefited from one-time realised gains of $4.9 million from the sale of certain Bermuda equities.

Meanwhile, operating expenses increased by $3.7 million primarily due to the addition of Island Insurance Brokers Limited and “significant investment in delivering our strategic goals of innovation, advocacy and growth through diversification outside of Bermuda”.

Ms Hill said: “Despite competitive markets and environmental changes, we remain optimistic about the future.

“The group’s three strategic priorities are positioning the group to thrive in uncertain times and to be resilient to whatever global forces push our way.

“Our advocacy and innovation strategies are creating the value our clients are looking for, which helps support long-term margin squeeze.”

She added: “Our growth strategy will diversify the group’s sources of revenue and bring economies of scale. Underpinning these strategies are our highly engaged team and our culture of doing the right thing, for everyone, always.”