Argus Annual Report 2021

Argus Group Holdings Limited / Annual Report 2021
Further.
Faster.
ANNUAL REPORT
2021
1
CONTENTS
Message from the Chair 03

Message from the Group Chief Executive Officer 08
Message from the Group Chief Financial Officer 13
Argus Americas Regional Report 23
Argus Europe Regional Report 29
Environmental, Social and Governance Report 34
Financial Statements 48
SECTION 01
Message from
the Chair
David A. Brown
Chair
Argus Group
3
Message from
the Chair
Dear Shareholders, our relatives, friends and neighbours.

It’s important to me that we treat all of
This is my first letter to you since taking them equitably. Over the years, Argus
on the role of Chair of the Argus Group has strived to do just that.
Board of Directors in April this year. I
follow in the exemplary footsteps of As I assume this role, Argus is in fine
Sheila Nicoll who will be stepping down shape. This is in no small part due to
in September 2021 after serving on the the guidance, professionalism and
Board for over 15 years, the last ten as determination that Sheila provided over
Chair. her many years of service.
There are many things about Argus that Three years ago, Sheila led the Board
attracted me to this position. It’s an and Argus’ Management team in making
“
iconic Bermuda institution that, during some difficult decisions in order to
its 71-year history, has cemented its position the Company for long-term
reputation as a caring employer and profitable, sustainable growth. Under
health care provider. her stewardship, obstacles to achieving It’s an iconic Bermuda
this growth were identified and a plan
I’ve always admired the Argus ethos of for addressing the issues was outlined. institution that, during
doing the right thing for its customers,
its employees, the community and, of It’s impressive to arrive at the start of its 71-year history,
course, its shareholders. Argus calls this the fiscal year 2022 and realise that
its ‘everyone wins’ philosophy and you’ll virtually every roadblock has been has cemented its
read more about it throughout this
report.
removed – all the more meaningful
because of the dire impact the last 18
reputation as a caring
In a small island community like
months has had on global health care employer and health
systems, the insurance industry and
Bermuda, we rub shoulders with people capital markets. care provider.
from each of these groups. They are
4
Of particular note: • We’ve established a thriving client for the fiscal year ended March 31, 2021,
• We sold underperforming assets, administration operation in Canada and our robust enterprise risk management
reinvesting the proceeds to fund our we’re the largest employee benefits and financial planning, and our
growth and diversification plans. provider in Bermuda. operational excellence mindset.
• W
e reorganised our business units You’ll find more detail and insight about • O
ne of Argus’ boldest and most
to better support our development these developments in the updates from notable achievements was the June
as a global company, embedding our Management team included in this 2020 acquisition of the two largest
a commitment to operational annual report. Some of the highlights in medical practices in Bermuda. This
efficiency throughout the Argus these sections: groundbreaking development signalled
Group and leveraging product and Argus’ enduring belief in the power
service digitisation to accelerate the • In her Group CEO report, Alison Hill of shifting health care’s focus from
execution of our business plans. outlines what our ‘everyone wins’ sickness to wellness. The benefits of
philosophy looked like in practice
“
integrating Island Health Services and
throughout the fiscal year ended March The Family Practice Group into the
31, 2021; how our new organisational Argus Group represent the beginning
One of Argus’ boldest design is enabling our focus on of our own integrated health care
efficiency and improved customer
and most notable service; and how our commitment to
evolution. You can read more about this
signature move in Argus Americas Chief
achievements was the affordable, accessible health care is
helping to redefine the health care
Executive Peter Lozier’s report.
June 2020 acquisition industry in Bermuda. s we continue our product and

• A
geographic expansion, we’re pleased
of the two largest • Group CFO Peter Dunkerley notes
in his report that, since 2018, our
with the progress made this year by
Argus Europe Chief Executive Tyrone
medical practices in shareholders’ equity has increased from Montovio. You can read more in the
$105.9 million to $149.7 million as of
Bermuda. March 31, 2021. Peter also provides key
Argus Europe Regional report.
metrics that illustrate our strong results

5
“
A critical aspect of building a company
that delivers enduring value to its
shareholders, employees and customers
is the quality of its governance.
hroughout the pandemic, we were

T and Garrett Curran to the Argus
undeterred in our commitment to our Board. Costas and Garrett join
employees and the communities in which an experienced, committed group
we do business. of Directors and enhance an already
considerable skillset with a wealth of
For the first time, we’re presenting this experience, as well as expertise, in the
section under an Environmental, Social re/insurance and financial services
and Governance (ESG) heading. While the sectors. Their respective backgrounds
ESG acronym is a new reference in the will enable them to play key
Company’s annual report, the desire to roles in moving our strategy
make a meaningful, positive impact has for growth forward.
been a constant at Argus for 71 years.
It goes without saying that a critical

aspect of building a company that delivers
enduring value to its shareholders,
employees and customers is the quality
of its governance. In this regard, I’m very
pleased to welcome Costas Miranthis
66
Speaking of moving forward, you’ll have • W

e continue to deliver on our goal In closing, I again want to express my
noticed that the theme of this year’s of increasing returns on equity, deep regard and appreciation to Sheila
annual report is Further. Faster. growing book value per share and for all that she has done to bring Argus
improving the quality of our assets. It to this exciting point in its development.
Having “cleared the decks,” so to speak, has been heartening to see some of She’s left an enduring legacy and helped
over the last three years, we believe that this reflected in the share price which to ensure that, as Argus charts its path
the components for building a profitable has approximately doubled in the last to a global presence, it remains an iconic
global company are firmly in place. While twelve months. institution in Bermuda.
the impact of COVID-19 will be with us
for some time to come, the obstacles Regarding our share price, we know that
to Argus’ growth have largely been Argus stock is trading at a discount – well Sincerely,
removed. below the level warranted by a company
with our performance. We will be working
As a result, we believe we can deliver hard to remedy this over the next few DAVID A. BROWN
on an accelerated pace of growth years. For example, one of the capital CHAIR, ARGUS GROUP
and change – going further, faster in management tools available to Argus is
executing our plans – over the next three the repurchase of our own shares. While
years: we don’t recommend that shareholders
• We’ve entered the 2022 fiscal year with sell their shares at the current prices,
a laser focus on delivering meaningful we do recognise that some shareholders
value to everyone who invests in, works require liquidity. So from time to time,
for and does business with the Argus we will be aiding available liquidity by
Group. purchasing shares in the open market. As
we continue to monitor our performance
• We remain committed to reinvesting in in this regard, we will maintain and grow
the business – balancing profitability, the dividends we pay to shareholders
risk, growth and strategic investments. whenever possible.
7
SECTION 02
Message from the Group

Chief Executive Officer
Alison S. Hill
Group CEO
Argus Group
8
Chief Executive Officer
Dear Shareholders, However, we remain acutely focused on the

world around us. On the social and economic
As I compose my report to you, I am struck upheaval of the past 12 months and how it
by what Argus has achieved during a impacted all of those around us. On Black
time that defies all description. None of Lives Matter and the increased focus on
us expected that, midway through 2021, social injustice. On how far we still need to
the world would still be in the throes of a travel to achieve parity and inclusion.
pandemic – yet here we are.
We wouldn’t be true to our ‘everyone
Perhaps it’s the sheer enormity of COVID- wins’ philosophy if building an inclusive
19’s continuing impact that heightens my company didn’t matter as much as building
gratitude for the manner in which every a profitable one. As we continue to execute
member of the Argus Group – from the our strategic plans, we’ve also embarked
Board to Management to each employee – on our own journey to address inequity
worked to achieve the goals and objectives at Argus. This year we included targeted
that we set for the year. As always, they’ve diversity and inclusion questions in our
stayed true to our culture and our values. annual Employee Engagement survey and
While a first, a second, and then a third the honest and candid responses from our
wave of infection paralysed the world, and colleagues show that we still have work to
demands for social justice echoed across the do. As a result, I’m working with a Group-
continents and fissures of inequity opened in wide team of employees to ensure that
so many of our institutions, Argus celebrated recruitment and development policies, as
our 70th anniversary, implemented a new well as other aspects of working at Argus,
operating model, enabled meaningful health are truly inclusive and equitable – where
care reform, and embarked on bold plans for every opinion is encouraged and valued,
profitable growth. and everyone feels safe in speaking up.
9
“
Making Sure We delivered attractive net earnings of
Everyone Wins $10.1 million, declared dividends of $3.9
million with a dividend yield of 5.9 percent.
Because of Argus’ sound For our shareholders, we delivered attractive team in Bermuda worked closely with
net earnings of $10.1 million, and declared clients during the annual health policy
growth strategy and dividends of $3.9 million with a dividend yield renewal process, extending a $5 million
of 5.9 percent, resulting in a dividend yield premium rebate to qualifying group and
now 71-year heritage, of 4.2 percent based on the closing share individual policyholders that reflected lower
we have been able to price as of March 31, 2021. Our share price
has climbed to a high of $5 over the period,
claims activity during the pandemic.
adapt quickly to the better reflecting the value of our business. We For our colleagues, our ongoing
commitment to providing a highly engaging
also intensified our focus on providing clear
seismic economic and and frequent communications so that current and rewarding workplace was underscored
in our annual survey by 83 percent of our
and potential shareholders and investors
societal shifts of the past understand and are excited by our plans. employees noting they were engaged and
80 percent would recommend Argus as a
year. Nothing deterred For our customers, our ongoing investment great place to work.
in digitisation helped us to provide better,
us – not even a global more customised service for our health For the sixth consecutive year, these
scores place Argus in the top five percent
pandemic – from our care and wealth management clients. Our
impressive market growth in Europe, coupled measured against the Decisionwise global
“
goal of building a global with our high retention and expansion benchmark of 30 million responses.
of product offerings to existing clients in
profitable, sustainable Bermuda, has reinforced our reputation for
Our share price has
being a client-centric company.
company that puts climbed to a high of $5
Our broad-based response to the global
people at the heart of pandemic included rapid product development over the period, better
as well as financing measures to support
every decision we make. our loyal clients through severe economic reflecting the value of
challenges. I’m particularly proud of how our
our business.
10
For our communities, we continued to Through the acquisition of these two Bermuda-
work with local partners to promote social based medical practices in June 2020, as
and economic development. We care about well as the acquisition of One Team Health,
the communities in which we do business our Canadian-based care and network
and strive to maintain the relationships management business, we have created a
we’ve established in Bermuda, Canada, truly unique healthcare ecosystem focused Global growth; regional autonomy
Malta and Gibraltar. In our ESG report, you on delivering quality integrated health care
will find examples of how we supported solutions that encourage healthy outcomes The fiscal year that ended March 31, 2021,
dozens of non-profit organisations and while managing health cost inflation and over- proved that our new operating model,
the manner in which we have been, and utlilisation of treatments. As David said, we which created a global and regional
will continue to be, a prominent and are shifting the health care paradigm from sick construct, is effectively and efficiently
active government ally in the fight against care to health care, from illness to wellness, enabling the delivery of the short and long-
COVID-19. We were at the forefront in our from treatment to prevention. term plans we have in place.
support of government-led vaccination While some centralisation is necessary in
programmes, deploying manpower, donating We call this triumvirate of insurance/health
care/case management our Better Health a company operating across legislative
funds to make sure these critical initiatives and regulatory jurisdictions, the markets
were successful and providing pro-bono Partnership. By aligning insurance and health
care, we aim to make quality care more we do business in, and the products and
primary care. services we offer in those markets, suit a
affordable to more people.
more decentralised approach to running
Our Better Health Partnership
In the intervening months since the our different businesses. The reports from
The acquisition of The Family Practice Group acquisition, we’ve moved quickly to integrate Argus Americas Chief Executive Peter Lozier
and Island Health Services is one of the the medical practices into the Argus Group, and Argus Europe Chief Executive Tyrone
developments in the fiscal year that ended ensuring that operating efficiencies as well as Montovio, detailing the impressive progress
March 31, 2021, that gave me the greatest our intensified focus on wellness, are having a made in these two regions, underscore the
satisfaction. positive impact on patients and clients. value of empowering our teams.
11
While Argus Americas’ signature Thank you, Sheila Throughout our wonderful company, it is
achievement was the Better Health our people who make Argus the exuberantly
Partnership, Argus Europe continued to Before I close, I must join David in extending resilient place that it is. During an impossibly
implement plans for the region’s growth gratitude and appreciation to Sheila Nicoll difficult year, everyone at Argus worked
and diversification through product and for all that she has contributed to Argus. I tirelessly to do the right thing, the right
distribution development. have personally benefited from Sheila’s calm way, for our shareholders, our customers,
counsel and unfailing support, and Argus is our clients and our communities – ensuring
A key aspect of this planning was the work the greater for having had her at the helm that everyone wins – all with authenticity,
done in Malta to prepare for the merger for the past decade. empathy and a strong sense of belonging.
of two local brokerages. During the fiscal Whilst we yearn to work face to face again,
year of 2022, these two businesses – Island In honour of her legacy, I am pleased to
the people-centric culture we’ve built and
Insurance Brokers Limited and FirstUnited announce the establishment of the Sheila
cherish shows through.
Insurance Brokers Limited – will merge to Nicoll Argus Award. This award, for a period
form the largest and fastest growing broker of up to three years, will provide financial I am humbled by my colleagues’ work ethic,
in Malta. assistance to a student who is pursuing an inspired by their innovation and creativity,
undergraduate degree in a relevant field of and forever grateful to serve beside them
This merger is very much part of our study. More details will be outlined when and with them. A sincere and heartfelt
intention to leverage our existing broking we formally launch the scholarship in April thank you to them all – for what they
capabilities in the Maltese market to 2022. In the meantime, we’re delighted that do and what they will continue to do,
further diversify, expand and strengthen we have the opportunity not only to honour each and every day.
our international presence in Europe. Our Sheila but to also demonstrate our enduring
goal is to become a professional, customer- commitment to the communities in which we
obsessed, digitally enabled, risk advisory do business and to their future.
broker in existing and new markets. ALISON S. HILL
GROUP CEO
12
SECTION 03

Chief Financial Officer
Peter Dunkerley
Group Chief Financial Officer
Argus Group
13
Message from the

Chief Financial Officer
2020–2021 has been another strong year capital management have allowed us to
of financial performance and growth in invest in our strategy to create long-term
shareholders’ equity for the Argus Group. sustainable value and growth. In addition,
our statutory capital remains well in excess
Our operating earnings – which is our key of the capital required by regulators.
measure of the profitability of the Group –
is $21.1 million for the fiscal year ended
March 31, 2021 compared to $19.1 million in OPERATING EARNINGS ($ MILLIONS)
the prior year.
21.1
Since March 2018, our shareholders’ equity 19.0 19.1
has increased from $105.9 million to $149.7
million as of March 31, 2021. During this 14.2 14.2
time, we have returned $15.3 million to
10.1
shareholders through dividends. SHAREHOLDERS’ EQUITY
GROWTH ($ MILLIONS)
The growth in our shareholders’ equity
has been achieved through solid operating
149.7
earnings, strategic acquisitions and
revenue diversification, achieved while 121.9 122.1
maintaining a high client retention rate 105.9
MARCH MARCH MARCH
and continued commitment to careful and 2019 2020 2021
diligent custodianship of policyholder and
shareholder assets. NET OPERATING EARNINGS*
NET EARNINGS
Our track record for increasing the
shareholders’ equity has been solid against *Net Operating Earnings – refers to net earnings excluding the
impact of external market factors and/or one-off events such
a backdrop of unusually challenging times. as the yield curve impact on the Annuity business, change MARCH MARCH MARCH MARCH
However, a strong balance sheet and careful in fair value of investments and investment properties, asset 2018 2019 2020 2021
workouts and asset impairments.
14
Key Performance
Metrics
Our reported net earnings for the year The key performance metrics for the Argus For the year to March 31, 2021, the
to March 2021 is $10.1 million and total Group for the year have remained strong combined operating ratio for the insurance
comprehensive income is $30.7 million. despite the economic and operational businesses within the Group was a healthy
This includes the growth in the value of challenges that exist across the world today. 70.4 percent compared with 80.8 percent
the Argus Group’s assets. However, the for the year ended March 2020.
headline net earnings for the year only The strength in our insurance operations
tells part of the story. To understand is reflected in the combined operating Diligent treasury management has ensured
the financial results for the year, we ratio, which is a metric to track the overall operating cash flows during the period have
must separate out the long-term annuity performance of our underwriting operations remained strong with a net operating cash
business. This aspect of our operations by comparing premium income to the cost inflow of $28.2 million compared to net
generates attractive long-term profits of claims and operating expenses. inflow of $30.3 million over the previous year.
and returns on capital deployed, but
the accounting and valuation rules we
currently must follow introduce a lot of
CAPITAL Cash Surplus Capital Available Surplus
volatility in the reported net income figure, COVERAGE Group Solvency Capital Capital $40.0 million
especially over shorter periods. Requirement
Other Net Tangible Liabilities
Group Solvency
Capital Requirement
Bonds
Total Insurance Liabilities
We have capital that

exceeds the regulatory
Equities requirement
Mortgages & Loans
Property
ASSETS LIABILITIES
15
Core Business
Performance
Our core business, which consists of all COMPONENTS OF THE GROUP’S REPORTED
lines of business except annuity business NET EARNINGS ($ MILLIONS)
and private placement life business which is
held-for-sale, has demonstrated incredible 20.9
resilience during a period of extreme
economic and operational upheaval,
delivering net earnings for the year of 10.1
$20.9 million (2020 – $12.7 million) and
total comprehensive income of $27.8 million
(2020 – $4.5 million).
(1.1) *Divestments – refers to
COVID-19 has materially affected many of the private placement life
the businesses and individuals we serve, business which is held-for-
(9.7) sale. See Note 4 of the
and the Argus team has worked tirelessly financial statements.
to retain and acquire new clients through CORE ANNUITY DIVESTMENTS* TOTAL
excellent client management and bespoke BUSINESS BUSINESS REPORTED
EARNINGS
solutions for clients and industries hardest
hit by the pandemic.
Brexit became a reality and our businesses

in Europe have had to navigate the long
and complex process of operating on both
sides of the Brexit divide, with Malta in the
EU and Gibraltar in the UK.
16
Core Revenue
$23.3M
16%
Revenue in the fiscal year ending March 31, 2021, from GROSS PREMIUMS $83.8M
net insurance premiums in our core health, domestic WRITTEN –
CORE BUSINESS 57%
life and property and casualty (P&C) insurance business
declined $10.1 million or approximately 9 percent
21%
compared to the prior year. Our special premium HEALTH $31.4M
rebate programmes, the June 2019 Bermuda hospital
P&C BERMUDA
financial reform, and a reduction in the insured health
population were the primary drivers for the decline in P&C EUROPE
net insurance premiums during the period. 6%
DOMESTIC LIFE
$8.6M
Commission and fee income generated by our core
business, as shown in the adjacent chart, has increased
by $16.9 million or approximately 53 percent compared
to the prior year. We have a deliberate strategy to $5.5M
improve the resilience and diversification of our COMMISSION &
11%
business by increasing the sources of fee-based FEE INCOME – 21%
$3.4M $10.2M
income. We are pleased with the strong growth in this CORE BUSINESS
7%
type of income during the year.
Significantly contributing to the growth in fee HEALTH

income are the acquisitions of the medical practices P&C BERMUDA $10.3M
in Bermuda in June 2020 and the acquisition of an
BROKERAGE EUROPE 21%
additional insurance brokerage business in Malta in 29%
September 2019. WEALTH MANAGEMENT
$14.4M
P&C EUROPE
Income from our European insurance brokerage
operations has remained robust and income from DOMESTIC LIFE 8%
2%
our asset management and pension administration PENSIONS $4.2M
businesses have benefited from the investment $1.0M
market growth we’ve seen this year. 17
Core Claims
We continued to deliver on our Limitations to health care access during We are analysing emerging health data to
commitment to put our customers at the the first wave of COVID-19 (notably, elective understand the potential for an increase in
heart of everything we do. This philosophy overseas medical procedures) and cost- the frequency or severity of future health
drove many of our decisions to support containment measures undertaken claims as a consequence of the lower
our personal lines customers through an following the acquisition of One Team utilisation of standard and preventative
exceptionally difficult year. Health, contributed to the decrease in the benefits during the past year.
“
insurance claims during the period.
For example, reduced traffic on roads due
to COVID-19-related lockdowns resulted in It is anticipated that underutilisation
a decrease in claims incurred in our motor during periods of shelter-in-place or travel We will continue to work
insurance business. We passed some of
these savings back to our clients in the form
restriction will cause an uptick in claims
over the coming years, as many procedures
closely with our clients to
of rebates offered to car, motorcycle and have been deferred rather than cancelled. ensure plan benefits fit
small business customers on their motor
insurance policy premiums.
NET CATASTROPHE LOSSES ($ MILLIONS)
their evolving needs so
In March 2021, we launched a $5 million
9.0
they can continue to focus
premium rebate scheme for our qualifying
health insurance policyholders in on what matters most.
recognition of the impact COVID-19-related
restrictions have had to health care access.
As far as property insurance is concerned,
Insurance claims within our core business Bermuda experienced a busy 2020
for the year were notably lower than 2.5 NIL hurricane season. Hurricane losses incurred
1.6
normal, primarily due to lower economic CATASTROPHE during the year from Hurricanes Paulette
0.2 LOSSES
activity caused by the COVID-19-related and Teddy were mitigated by our robust
lockdowns and travel restrictions. Core reinsurance programme.
MARCH 2021 MARCH 2020 MARCH 2019
business claims for the year declined
$19.5 million or approximately 25 percent
GROSS CLAIMS NET CLAIMS
compared to the prior year. 18
Core
Operating Annuity Business
Expenses ANNUITIES: TOTAL COMPREHENSIVE
INCOME ($ MILLIONS)
3.3
2.0 2.1
We remain committed to the careful As noted earlier, our annuity business
and judicious management of operating generates attractive long-term profits and
expenditure. Our recent acquisitions returns on capital deployed, but current
have added to the overall operating accounting and valuation rules introduce a lot
cost base of our core business by $14.0 of volatility in the reported net income figure, MARCH MARCH MARCH
million when compared to the prior year. especially over shorter periods. 2019 2020 2021
Elsewhere in our operations, we have
taken meaningful steps to reduce the The annuity business remains well managed
and governed, supported by best-in- gains that are reported through ‘other
ongoing cost of doing business. These
class investment managers and a team of comprehensive income’. The chart shows
steps include investments in technology
professional actuaries. The Argus Group’s the meaningful contribution of the annuity
that enable the ongoing digitisation of
high-quality fixed income portfolio remains business to Group net earnings and total
product and service delivery.
aligned to the interest rate sensitivity of our comprehensive income over many years.
longer-term annuity liabilities. The year-on-year volatility in the reported
“
net earnings is not indicative of a change
Our annuity business reported a net in the underlying profitability; rather, it’s
Elsewhere in our loss for the year of $9.7 million and total
comprehensive income of $2.1 million. The
the result of accounting and valuation
rules which we currently must follow.
operations, we have net loss contributed by our annuity business
– driven by short-term market factors that This means that, for at least another
taken meaningful steps impact reported net income under current two years before the new international
accounting rules – only tells part of the story. accounting standards IFRS 17 and IFRS
to reduce the ongoing 9 are introduced, users of financial
A more representative view of the economics statements are required to pull together
cost of doing business. and underlying profitability of the annuity the pieces to see that the annuity business
business is shown in the Annuities: Total has good fundamental economics,
Comprehensive Income chart, which brings contributing positive long-term profits
together the impact of the increase in the and returns on capital deployed.
annuity liability and the investment portfolio
19
Divestments Investments
As David Brown notes in his Letter to Our commitment to careful and diligent Against this backdrop, the Group’s
Shareholders, the Argus Group has custodianship of policyholder and portfolio generated positive returns.
made some difficult decisions to put the shareholder assets is central to the Argus Combined investments generated a total
Company on the path to sustainable, Group’s investment philosophy. return of $31.9 million – $13.1 million
profitable growth. One of these decisions reported through the income statement,
was to dispose of businesses that Our investment portfolio is designed to and $18.8 million of unrealised gains
weren’t a good strategic fit for Argus. ensure funds are readily available to satisfy reported as other comprehensive income
our obligations to policyholders and to on the balance sheet.
We’re pleased to announce that, enhance shareholder value by generating
subsequent to the year end, the Group appropriate long-term, risk-adjusted yields.
entered into an agreement to dispose of We have a clear objective to maximise
our private placement life business. returns without taking inappropriate
levels of risk.
The sale was completed on July 1, 2021.
The total consideration for the sale is During the year we have taken further
equal to the audited book value at March steps to realise value from our remaining
31, 2021 plus a premium of $2.0 million. less liquid legacy assets and reinvested the
proceeds in global securities in line with
For the year ended March 31, 2021, our Group investment policy statement.
the private placement life business
contributed a net loss of $1.1 million COVID-19 has profoundly affected global
and total comprehensive income of markets. During the last quarter of fiscal
$0.9 million. year 2020, we saw markets in turmoil as
the impacts of the virus unfolded globally.
However, the current fiscal year saw a rapid
recovery in equity and credit markets as
lockdown measures eased, and there were
signs of economic recovery.
20
INVESTMENT ASSETS AT FIXED INCOME PORTFOLIO

31 MARCH 2021 RATINGS AT 31 MARCH 2021
1% 3% 2% 6%
2%
The Argus Group 4%
1%
continues to hold 26%
a high quality,
diversified, global
investment portfolio.
33%
89 percent of the
Group’s investments
are in fixed income
bonds, of which 98
percent are classified 89%
33%
as investment grade.
Fixed income
Assets held-for-sale AAA
Mortgages, Loans & Receivables AA
Global Equities A
Investment Properties BBB
Bermuda Equities BB or lower

21
Dividends
The Board has declared a dividend of DIVIDEND YIELD EARNINGS PER SHARE
ten cents per share payable on August 27,
2021 for shareholders of record on Based on dividends declared relating to Based on dividends declared during
July 28, 2021. the fiscal year and average share price the fiscal year and average share price
5.9% $0.47
This results in a 6 percent increase in the 2020: 6.1% 2020: $0.67
dividends declared for the 2020-21 fiscal
year compared to the prior fiscal year. 2019: 4.9% 2019: $0.67
PETER DUNKERLEY DIVIDENDS DECLARED

GROUP CFO
9C 9C 10 C
INTERIM DIVIDEND
9C 9C 9C
FINAL DIVIDEND
2018 / 2019 2019 / 2020 2020 / 2021
22
SECTION 04
Argus Americas
Regional Report
Peter Lozier
CEO
Argus Americas
23
Argus Americas
Regional Report
Dear Shareholders, Our success is evident in our ability

to react to the challenges imposed by
We now have a full year under our belt COVID-19. In an unprecedented short
since we began implementing Argus’ period of time, we delivered valuable
new operating model and I’m delighted new products and services to better
to report that the wisdom of adopting suit the needs of a COVID-impacted
the new model becomes more and more market while simultaneously pivoting
evident with each passing day. our administration to a remote
By establishing two regional hubs – delivery model.
Argus Americas and Argus Europe – and As evidenced in the financial statements,
working in partnership with a central we translated this agility into net new
global core, the Company has combined sales achievements in all lines while
judicious corporate oversight with a effectively lowering expenses in almost
disciplined local focus on Argus’ region- all areas.
specific products and services. This
duality has increased our ability to be
nimble and proactive as we execute our
respective growth strategies. As David
noted in his Letter to Shareholders,
there’s a reason the theme of this year’s
annual report is Further. Faster.
24
Efficiency, Innovation
and Expansion “ We were able to find meaningful and
empathetic solutions to support our
clients and our community
At Argus Americas Our immediate key business imperatives

are to maintain the value in our existing
A few examples:
• We provided free telehealth to the Bermuda
(which includes Bermuda core business while leveraging community when people needed access
our current investments in health care so to care but were anxious about leaving
our Bermuda and that we can establish a foundation that’s their homes during the many phases and
ready for significant development. fluctuations of the global pandemic.
Canada operations)
The three watchwords for Argus • We offered a significant rebate to qualifying
we’ve developed a Americas are efficiency, innovation, and health insurance clients to acknowledge the
expansion: efficiency, because we aim positive impact lower claims activity had on
specific vision to to drive efficiency through everything our balance sheet.
guide our growth and we do, maximising value and minimising
risk; innovation, because we aim to use • We delivered a premium rebate to the
customers of our Auto Insurance.
development: we aim technology to constantly optimise our
products and processes as well as the • W
e launched SafeGuard™, a health coverage
to build a lean, agile, customer experience and our competitive portfolio for Bermuda hospitality industry
difference; and expansion, because our
consistently profitable, broader reach expands where and to
employers who have been devastated
by the economic impact of global travel
multi-jurisdiction, whom we offer services through our
fee-based entities, One Team Health (OTH)
restrictions. Priced at cost, this programme
provides essential health benefits to protect
diversified financial and our medical practices. employees during their time of need.
services and population By keeping these three watchwords at the

forefront throughout the year ended March
e continued to sponsor much-needed
• W
community events like the Bermuda Day Half
management operation. 31, 2021, we were able to find meaningful Marathon Derby.
and empathetic solutions to support our
clients and our community. • W
e expanded our service footprint of OTH
to include clients from Europe and the
Caribbean.
25
ArgusGroup
Argus GroupHoldings
HoldingsLimited
Limited//Annual
AnnualReport
Report2021
2021
Transforming
Health Care
This past year, most For too long, a fragmented, unsustainable

system has enabled costs to spiral out
We acquired the two largest medical
practices in Bermuda in the fiscal year
significantly, we of control with decreasing benefit to ended March 31, 2021, and One Team
patients. We know there are better ways Health in 2020 financial year, that
completed a series of to provide quality, affordable care. established the template for an integrated
model that’s tailored to the needs of an
acquisitions designed Integrated health care isn’t a new concept. island community and sets the stage for
Over the past three or four decades, many
to support positive and countries have adopted the model in one
expansion to other jurisdictions.
“
form or another, recognising that health
much-needed change care that offers a coordinated continuum
in the Bermuda health focused on positive outcomes elevates a
community’s well-being far better than An integrated care
care model by taking one in which care and treatment are
model can only
provided in silos.
meaningful steps According to a 2016 report by the World be successful if
towards creating a Health Organization, an integrated
it ‘accounts for
care model can only be successful
value-based, integrated if it “accounts for unique needs and unique needs and
characteristics of the population it aims
health care model. to serve.” characteristics of
the population it
aims to serve’.
26
The Family Practice Group and Island

Health Services, now a part of the Argus
Group, represent over 40 percent of
primary care in Bermuda. One Team
Health is our Canada-based, overseas
health care manager.
Adding these three businesses to the

“
This coming year, we’ll
continue to weave
together solutions that
bring sustainable, healthy
Argus Group will change how health
living to Bermuda.
care in Bermuda is not only funded
but delivered. By putting the patient at
the centre of both the insurer and the We are excited about a pilot programme
deliverer of health care, we can align the that will be launched during fiscal year
desired outcome of managing cost and 2022 with Island Health Services that aims
delivering better outcomes. to tackle the high incidence of diabetes in
Bermuda and help those suffering with this
And through One Team Health, we’ve disease to regain their health.
seamlessly connected the excellent
care available in Bermuda with the
coordination of specialised off-island
treatment that can become necessary
from time to time.
27
Powering our
Employees’ Potential
While I paid tribute earlier to the And, as Alison noted in her message, we
dedication of Argus employees in working will continue to build a truly inclusive
diligently throughout the pandemic to working environment, one where every
achieve our goals, we recognise how employee feels welcomed, respected
difficult the past year has been and how and valued.
important it is to create an environment
that bolsters our colleagues’ well-being We’ve laid a rock-solid foundation at
and provides exciting career development Argus Americas, one where everyone
opportunities. wins – true to Argus’ ethos. We’re
partners in creating better solutions
In the coming year, every Argus employee for our clients, our colleagues and the
will have a growth component in his or community, knowing that our shared
her performance objectives. We’ll also be interests become our shared successes.
offering company-wide training in how
to be client-centric as well as digitally
literate. We’ll provide opportunities for PETER LOZIER
learning new skills to support the needs CEO, ARGUS AMERICAS
presented by our growth and expansion.
“We’ll provide opportunities for learning

new skills to support the needs presented
by our growth and expansion.
28
SECTION 05
Argus Europe
Regional Report
Tyrone Montovio
CEO
Argus Europe
29
Argus Europe
Regional Report
Dear Shareholders,
From our base in Gibraltar and working

closely with our colleagues in Malta,
we’ve spent the past year evaluating the
manner in which Argus’ new operating
model can be leveraged to its full
advantage. As Alison has noted in her
“
From our base in
Gibraltar and working
closely with our
colleagues in Malta,
report, regional autonomy is a hallmark we’ve spent the past
of the model. This construct has provided
us with the opportunity to closely year evaluating the
scrutinise our books of business as well
as our operational structure, make some
manner in which
impressive key hires and to upgrade our Argus’ new operating
systems and other platforms.
model can be
leveraged to its full
advantage.
30
As the member of the While we were ensuring that our

foundation for growth is sound, that
legislative and tax implications
for Gibraltar, given the shift in its
Argus Group charged the business on our books is good, and relationship to the EU by virtue of its
that we continue to enhance our current status as a British Overseas Territory.
with propelling the operations, we continued to look forward. We’re diligently working our way through
Planning for the product and distribution the issues presented by Brexit, taking
Company’s growth as diversification is a priority component of advantage of the good partnership we
a global business, we our strategic plan. have with the local governments and
regulatory bodies.
As with every member company of the
have exciting plans for Argus Group, this was done during the
Europe. As a result, most trying of times. Gibraltar and Malta
weren’t left unscathed by the global
we made it a priority pandemic – far from it.
during the last 12 The pandemic coincided with Brexit,

which presented its own set of
months to make sure challenges for our businesses. While
Malta remained a member of the
we’re fit for purpose. EU, there have been regulatory,
31
A Year of Solid
Performance
Even though we were balancing current This initiative is part of our strategy of • It has significant potential in the non-life
imperatives and future plans, we leveraging our existing broking capabilities insurance market, exhibited by its strong
produced strong results for the year in the Maltese market to further diversify, growth in GDP and property and
ended March 31, 2021. These include a expand and strengthen our international casualty insurance premiums
44 percent increase in net earnings, presence in Europe.
year over year. • It’s demonstrated that it’s crisis-resilient,
Why Malta? making it one of the best countries to do
Our two Maltese brokers, Island business in.
Insurance Brokers and FirstUnited As Alison noted in her report, our goal is to
Insurance Brokers, continued to provide become a professional, customer-obsessed, • It had an explosion of 33,000 new
their clients with the attentive, responsive digitally-enabled, risk advisory broker in businesses added to the Maltese registry
service for which Argus is known as we existing and new markets. Malta, in particular, between 2012 and 2017.
laid the groundwork for their merger has exactly the right characteristics for a
• In 2019, Malta had an unemployment
during the current fiscal year of 2022. target market for Argus:
rate of 4.1 percent, compared to the EU
Once this merger is completed, we will average of 7.2 percent, and its average
• It’s one of the fastest growing countries
have formed the largest and fastest annual inflation rate is 1.2 percent.
in the EU in terms of both GDP and
growing broker in Malta.
population growth.
32
ArgusGroup
Argus GroupHoldings
HoldingsLimited
Limited//Annual
AnnualReport
Report2021
2021
Building Value
At the same time We have a three-pronged strategy for

building value in Argus Europe:
We’ll deliver digital capabilitiesby:
• establishing a firm foundation with our

that we’re developing We’ll enhance the customer experience by: new broker platform
our European broker • developing a white label product to be • digitising personal and Small and
proposition, we’re also offered by our Argus carrier Medium-sized Enterprise products,
including the home and motor personal
• leveraging our specialist expertise in
enhancing our carrier target segments
lines, offered by our carrier
capabilities in Gibraltar • promoting quality risk advisory services

I am so proud of the whole team in Europe.
They’ve adapted quickly and nimbly to the
and Malta, making it xpanding our network of partners to
• e new ways of working forced upon them
increase the choice of products and by the pandemic while staying client
easier for our partners services focused throughout. They’re a testament
to Argus’ people-centric culture and are
and clients to do We’ll improve operational excellenceby: poised, like the rest of the Argus Group,
business with us. • embedding a mindset, toolset and
to go further, faster.
skillset that puts the customer at the

heart of our decision-making
TYRONE MONTOVIO
• focusing on delivering value for our CEO, ARGUS EUROPE
customers, eliminating waste and
continuously improving our processes
and performance
33
SECTION 06
Environmental,
Social and
Governance Report
34
Environmental, Social
and Governance Report
The last 12 months But Argus has been able to navigate

the past year with its commitment to its
have thrown environ- people, and the communities in which it
does business, intact.
mental, social and
Our strategic decision-making in the
governance – or ESG – health care and insurance sectors
is guided by a holistic view of our
issues into stark relief. stakeholders’ needs. We take the same
approach in evaluating our impact
No company, including through an ESG lens, recognising the
interconnectedness of environment,
Argus, has been left social and governance factors.
untouched by the
ravages of the global
pandemic and climate
change, issues of
equality and equity,
and challenges to the
corporate status quo.
35
35
Our Company
and ESG
At the Board level,

as the torch is passed
from one Chairman to
another, 40 percent of
experience in these sectors. Costas
and Garrett join an already diverse,
accomplished group who are committed
to steering the organisation to profitable,
sustainable success while adhering to the
caring philosophy that remains one of
Argus’ hallmarks.
“
The commitment to ESG
principles at Board level
translates to operational
policies and practices in
our Directors represent A key area of governance focus for our businesses.
Argus is the underlying philosophy of
women and persons its investments strategy. In that regard,
of colour. over 80 percent of Argus’s portfolio
is managed to guidelines with specific
ESG criteria, positively targeting above-
Our committees are composed entirely of, average ESG ratings and using negative
and are chaired by, independent directors. screens to exclude exposures to coal,
The average age of the Board is 58. tobacco and guns.
During the 2021-2022 fiscal year, the
Board plans to announce the recruitment In addition, all Argus investment
of a woman of colour with a health care managers are signatories to the United
background to serve on the Argus Group Nations Principles of Responsible
Board of Directors. Investing and use ESG metrics as part of
their investment analysis process.
In April 2021, Argus further enhanced
the insurance and financial skillset of its The commitment to ESG principles at
directors by adding two members, Costas Board level translates to operational
Miranthis and Garrett Curran, with vast policies and practices in our businesses.
36
We were rocked, as was the rest of race, racial injustice, racial inequality As the world grappled with the impact
the world, by the Black Lives Matter and inequity. We’ve provided additional of COVID-19, we enabled our employees
movement, and as a result have developed resources to help increase knowledge of in adopting, almost overnight, a work
a plan for engaging our employees in the Black experience. Our managers will from home protocol. As we learned
conversation about the manner in which be receiving training support as they lead how to meet and do business virtually,
this and other issues related to social and/or create environments where open we discovered innovative ways of
justice had impacted them. While our discussion about race is welcomed and interacting with each other, with our
annual employee survey indicates that encouraged. customers and with our shareholders.
84 percent of our colleagues feel they are
treated equally, additional feedback led us At the regional level, and consistent with While a screen will never replace the
to kickstart discussions at a deeper level. programmes in place in Bermuda, Argus face-to-face relationships we hold
Europe has provided all employees with dear at Argus, these discoveries will
Led by Group CEO Alison Hill as the online D&I training and have embedded drive not only greater flexibility for our
executive sponsor of Argus’ diversity the training in their orientation employees but also greater efficiencies
and inclusion (D&I) initiative, a Group- programme for new hires. Our staff in throughout the company.
“
wide employee committee is finalising Gibraltar and Malta are also being offered
a framework and a phased, 90-day D&I training in discrimination, harassment
roadmap that will guide us in ensuring and sexual harassment as are our
that, throughout its global operations, employees in Bermuda. We strive to make
Argus is an inclusive, equitable place
to work. While we adapt to a world in a state of Argus an inclusive,
rapid change, we’re not only monitoring
As we implement our D&I strategy, we’ve the culture that we’re developing – we’re equitable place
created an internal communications also keeping a close eye on how Argus
channel accessible to all employees to impacts the environment. to work.
enable informal communications on
37
Our headquarters in Bermuda represent In addition to making sure our workspaces

the largest operations in the Argus Group. don’t contribute to climate change, we’re
There, our buildings feature an energy adapting our spaces as well as our policies
management system that automates to meet the challenges and opportunities
building controls and also monitors and of a post-COVID world. Our experience
manages heating, ventilation and lighting. with remote working has proven that
We’ve reduced our real estate footprint increased flexibility in where and how we
in Bermuda by surrendering leased office work offers our employees options that
spaces and moving employees into Argus- help them meet their professional as well
owned facilities. as personal responsibilities.
In Bermuda, Gibraltar and Malta, LED However, even before COVID-19, we

lighting is used throughout newly recognised that we needed to modify
renovated spaces; triple-glazed tinted our physical spaces to encourage
windows reduce the amount of energy contemporary ways of working. As
needed to cool and heat the floors; and, a result, we’re continuing our move
in most offices, hot water heaters are towards highly networked, shared,
powered by solar panels. multi-purpose environments that
improve collaboration between teams.
Throughout our businesses, all offices
have dedicated recycling bins. Our
employees have embraced a “no plastic
cup” ethos.
38
Our Communities
and ESG
As is so often the struggling Bermudian residents. These

charities included the Bermuda Community
case in times of crisis, Foundation, Meals on Wheels and Christ
Church Warwick.
the critical role played Also in Bermuda, Argus employees
by the non-profit organised a Christmas lunch, gifts and
necessities for teenage girls supported by
sector came to the the charity Teen Haven. This event was
further supported by a personal donation
fore during Covid-19. from Argus Americas senior staff.
Under the umbrella of “Our Future is You,”

Argus distributed $519,000 during
seven organisations received programme
the 2021 fiscal year to charitable
funding, positively impacting the lives of
organisations in Bermuda, Gibraltar and We also continued
many young people.
Malta, allocating funding to programmes to support non-profits
targeting those hit hard by Covid. Our Gibraltar office sponsored the Lincoln with whom we have an
Football Club Grassroots Football Teams ongoing relationship. One such
These programmes included services
and the Bayside School Basketball Team. organisation is Ignite Bermuda, a
that enabled testing and vaccination;
The office also made a corporate donation Bermuda-based registered charity that
addressed food insecurity; and ensured
to Clubhouse Gibraltar to support the nurtures entrepreneurs and assists
that young people had access to
building of a new mental health centre. Our them with the planning, marketing and
activities promoting healthy living.
Malta colleagues undertook their annual execution of their business plans.
For example, $37,500 was donated collection of food for Foodline Lifeline
to organisations providing meals to Foundation, a local food bank.
39
As our Group CFO Peter Dunkerley

noted in our 2019 Annual Report,
“Our commitment (to the communities
in which we operate) goes beyond
charitable donations by creating enduring
partnerships that help educate, empower
and promote positive action that will
“
While we’re proud that many
ESG considerations have been
embedded for years in the way we
do business, we know there’s still
result in long-term sustainable benefit.” much to be done.
Housed in Argus office space that’s
donated free of charge to Ignite, the
overarching mission of the programme –
to create jobs and economic diversity for
Bermuda – aligns with Argus’ holistic view
of well-being.
While we’re proud that many ESG

considerations have been embedded for
years in the way we do business, we know
there’s still much to be done. Having
said that, the commitment and will to be
best-in-class in this regard permeates the
Argus Group. We have no doubt that our
next Annual Report will feature significant
progress in this regard.
40
40
Our Board of DAVID A. BROWN, CPA, FCA BARBARA J. MERRY, BA, ACA
Directors Chair Independent Director
KEITH W. ABERCROMBY,
BSC, FIA CONSTANTINOS MIRANTHIS, MA
Independent Director Independent Director
Our Directors are
dedicated to promoting
collaboration and
PETER R. BURNIM, MBA SHEILA E. NICOLL, FCII
innovation throughout Independent Director Independent Director
the Company. They
are focused on the GARRETT P. CURRAN
EVERARD BARCLAY
goal of ensuring Independent Director
Managing Director, Equilibria SIMMONS, LLB, MBA
exceptional service for Capital Management Independent Director
our customers and are KIM R. WILKERSON, JP, CPCU

Independent Director
committed to setting TIMOTHY C. FARIES, BA, LLB, LLM
Independent Director Senior Vice President, Regional
Head of Claims Insurance
Argus apart as a leader Managing Partner, Appleby XL Bermuda Ltd.
(Bermuda) Limited AXA XL
in the industry.
PAUL C. WOLLMANN,
ALISON S. HILL, MBA, CPCU, ARE, ARM
FCMA, CGMA
Independent Director
Chief Executive Officer, Argus President & Chief Underwriting
Group Holdings Limited Officer, Essent Reinsurance Ltd.
41
Officers &
Committees
ARGUS GROUP HOLDINGS LIMITED BOARD COMMITTEES
David A. Brown (Chair) Audit Committee

Keith W. Abercromby Keith W. Abercromby (Chair)
Peter R. Burnim David A. Brown
Garrett P. Curran Garrett P. Curran
Timothy C. Faries Paul C. Wollmann
Alison S. Hill
Barbara J. Merry People, Compensation &
Constantinos Miranthis Governance Committee
Sheila E. Nicoll Sheila E. Nicoll (Chair)
E. Barclay Simmons Timothy C. Faries (Deputy Chair)
Kim R. Wilkerson Barbara J. Merry
Paul C. Wollmann Kim R. Wilkerson
Risk Committee
OFFICERS E. Barclay Simmons (Chair)
Peter R. Burnim
Chair – David A. Brown Barbara J. Merry
Deputy Chair – Peter R. Burnim Constantinos Miranthis
Chief Executive Officer – Alison S. Hill
Chief Financial Officer – Peter J. Dunkerley
Chief Investment & Governance Officer – Simon J. A. Giffen
Company Secretary – Elizabeth A. Hutton
42
Argus
Argus Group
Group Holdings
Holdings Limited
Limited // Annual
Annual Report
Report 2021
2021
Our Leadership
Team
ALISON S. HILL PETER DUNKERLEY

Chief Executive Officer, Argus Chief Financial Officer, Argus
Group Holdings Limited Group Holdings Limited
SIMON GIFFEN PETER LOZIER TYRONE MONTOVIO

Chief Investment & Chief Executive Officer, Chief Executive Officer,
Governance Officer Argus Americas Argus Europe
ONESIMUS NZABALINDA HANNAH ROSS DAVID SIMONS

Chief Global Compliance & Chief Strategy & Managing Director
Audit Officer Capital Officer Centre of Excellence
SHEENA SMITH
NIK SMALE
Chief Human Capital
Chief Digital Officer & Culture Officer
43
Our Principal
Operating Subsidiaries
ARGUS AMERICAS
BERMUDA SUBSIDIARIES
Argus Insurance Company Limited Island Health Services
Paul C. Wollmann (Chair) Alison S. Hill (Chair)
David A. Brown Dr. Gerhard L. Boonstra
Peter J. Dunkerley Peter J. Dunkerley
Alison S. Hill Peter Lozier
Peter Lozier Dr. Louise White
Dr. Basil N. Wilson
Centurion Insurance Services Limited
Argus Wealth Management Limited
Alison S. Hill (Chair)
Andrew H. Bickham Peter R. Burnim (Chair)
Peter J. Dunkerley Peter J. Dunkerley
Timothy C. Faries
Bermuda Life Insurance Company
Limited CANADA SUBSIDIARIES
Timothy C. Faries (Chair) One Team Health, Inc.
Peter J. Dunkerley Alison S. Hill (Chair)
Alison S. Hill Peter J. Dunkerley
Sheila E. Nicoll Peter Lozier
E. Barclay Simmons
Kim R. Wilkerson
44
ARGUS EUROPE
GIBRALTAR SUBSIDIARIES MALTA SUBSIDIARIES

Argus Insurance Company Island Insurance Brokers Limited FirstUnited Insurance
(Europe) Limited Brokers Limited
Barbara J. Merry (Chair)
Keith W. Abercromby (Chair) Garrett P. Curran (subject to regulatory approval) Alison S. Hill (Chair)
Peter R. Burnim Peter J. Dunkerley Salv Mifsud Bonnici
Alison S. Hill Alison S. Hill Peter J. Dunkerley
Michael Macelli Tyrone Montovio (subject to regulatory approval) Kevin Galea Pace
Tyrone Montovio Sheila E. Nicoll Peter Grima
Constantinos Miranthis Lawrence Pavia
Sheila E. Nicoll
WestMed Insurance Services Limited

Alison S. Hill (Chair)
Tyrone Montovio
45
Five-Year Summary
for Shareholders
TOTAL REVENUE ($ MILLIONS) EARNINGS ATTRIBUTABLE TO SHAREHOLDERS EARNINGS PER SHARE

($ MILLIONS) – Fully Diluted ($)
192.2 14.2 14.2 0.67 0.67
176.4 179.6 177.2 12.0 0.57
167.0 10.1 0.47
2018 2018
2017 2019 2020 2021 2017 2019 2020 2021
2017 2018 2019 2020 2021
(18.6) (0.89)
SHAREHOLDERS’ EQUITY ($ MILLIONS) TOTAL GENERAL FUND ASSETS ($ MILLIONS)

149.7
130.2 733.2 717.1 729.7
121.9 122.1 670.3 673.5
105.9
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021
46
Five-Year Summary
for Shareholders
RETURN ON SHAREHOLDERS’ EQUITY SHARES IN ISSUE OUTSTANDING SHARES
12.6%
11.6%
9.5%
22,451,224
22,259,760
22,105,225
21,901,634
21,728,151
7.4%
21,558,307
21,325,000
21,174,430
20,983,850
21,012,389
2018
2017 2019 2020 2021
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021
(15.8%)
BOOK VALUE PER SHARE ($) DIVIDENDS DECLARED ($ MILLIONS) EMPLOYEES
6.94 3.8 3.8 3.8 3.8 3.9 336

6.20 285
5.76 5.73 263
5.05 232 234
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021
47
SECTION 07
Financial
Statements
48
Management’s Responsibility
for the Financial Statements
The accompanying consolidated financial Charter and the Group’s Internal Audit Plan. Board of Directors acting through the Audit
statements and other financial information The Chief Global Compliance & Audit Officer Committee, which is comprised of directors
in this Annual Report have been prepared reports directly to the Audit Committee. who are not officers or employees of the
by the Group’s Management, which is Group. The Audit Committee, which meets
responsible for their integrity, consistency, These consolidated financial statements have with the auditors and Management to
objectivity and reliability. To fulfil this been prepared in conformity with International review the activities of each and reports
responsibility, the Group maintains policies, Financial Reporting Standards and, where to the Board of Directors, oversees
procedures and systems of internal control appropriate, reflect estimates based on Management’s responsibilities for the
to ensure that its reporting practices, and Management’s judgment. The financial financial reporting and internal control
accounting and administrative procedures information presented throughout this Annual systems. The auditors have full and direct
are appropriate, such that relevant and Report is generally consistent with the access to the Audit Committee and meet
reliable financial information is produced information contained in the accompanying periodically with the committee, both with
and assets are safeguarded. These controls consolidated financial statements. and without Management present, to
include the careful selection and training of discuss their audit and related findings.
KPMG Audit Limited, the independent
employees, the establishment of well-defined chartered professional accountants appointed These consolidated financial statements
areas of responsibility and accountability by the shareholders, have audited the were authorised for issue by the Board of
for performance, and the communication of consolidated financial statements set out Directors on July 7, 2021.
policies and a code of conduct throughout on pages 51 through 128 in accordance with
the Group. In addition, the Group engages auditing standards generally accepted
PricewaterhouseCoopers Advisory Limited
in the United States of America to enable
(“PwC”) to provide internal audit co-sourcing
them to express to the shareholders their
services. Under the internal audit co-
opinion on the consolidated financial
sourcing engagement PwC provides support statements. Their report is shown opposite.
to the Chief Global Compliance & Audit Alison S. Hill Peter J. Dunkerley
Officer by performing internal audit projects, The consolidated financial statements have Chief Executive Officer Chief Financial Officer
in accordance with the Internal Audit been further reviewed and approved by the July 7, 2021
49
Independent Auditor’s responsibility We believe that the audit evidence we have
Auditor’s Report Our responsibility is to express an opinion on

these consolidated financial statements based
on our audits. We conducted our audits in
obtained is sufficient and appropriate to
provide a basis for our audit opinion.
accordance with auditing standards generally Opinion

accepted in the United States of America. In our opinion, the consolidated financial
Those standards require that we plan and statements referred to above present fairly,
perform the audit to obtain reasonable in all material respects, the financial position
assurance about whether the consolidated of Argus Group Holdings Limited and its
To the Shareholders of Argus Group
financial statements are free from material subsidiaries as of March 31, 2021 and 2020,
Holdings Limited and its Subsidiaries.
misstatement. and the results of their operations and their
We have audited the accompanying cash flows for the years then ended in
consolidated financial statements of Argus An audit involves performing procedures to accordance with International Financial
Group Holdings Limited and its subsidiaries obtain audit evidence about the amounts and Reporting Standards as issued by the
(the “Company”), which comprise the disclosures in the consolidated financial International Accounting Standards Board.
consolidated balance sheets as of March 31, statements. The procedures selected depend
on the auditor’s judgment, including the Other matter
2021 and 2020, and the related consolidated
assessment of the risks of material Our audit was conducted for the purpose
statements of operations, comprehensive
misstatement of the consolidated financial of forming an opinion on the consolidated
operations, changes in equity, and cash flows
statements, whether due to fraud or error. In financial statements as a whole. The
for the years then ended, and the related notes
making those risk assessments, the auditor information in the Annual Report from
to the consolidated financial statements.
considers internal control relevant to the pages 1 to 49 is presented for the purpose of
Management’s responsibility for Company’s preparation and fair presentation additional analysis and is not a required part
the financial statements of the consolidated financial statements in of the consolidated financial statements.
Management is responsible for the preparation order to design audit procedures that are Such information has not been subject to
and fair presentation of these consolidated appropriate in the circumstances, but not for the auditing procedures applied in the audit
financial statements in accordance with the purpose of expressing an opinion on the of consolidated financial statements, and
International Financial Reporting Standards effectiveness of the Company’s internal accordingly, we do not express an opinion
as issued by the International Accounting control. Accordingly, we express no such or provide any assurance on it.
Standards Board; this includes the design, opinion. An audit also includes evaluating the
implementation, and maintenance of internal appropriateness of accounting policies used
control relevant to the preparation and fair and the reasonableness of significant
presentation of consolidated financial accounting estimates made by management, Chartered Professional Accountants
statements that are free from material as well as evaluating the overall presentation Hamilton, Bermuda
misstatement, whether due to fraud or error. of the consolidated financial statements. July 7, 2021
50
Consolidated Balance Sheets

MARCH 31 MARCH 31 MARCH 31 MARCH 31
(In $ thousands) Note 2021 2020 (In $ thousands) Note 2021 2020
Assets Liabilities
Cash and short-term investments 5 74,554 71,501 Insurance balances payable 16 24,650 18,158
Interest and dividends receivable 2,448 2,741 Payables arising from investment transactions 17 - 3,546
Assets held-for-sale 4 26,433 31,549 Liabilities held-for-sale 4 15,699 15,269
Investments 6,7 467,105 445,586 Taxes payable 376 345
Receivable for investments sold 2,710 74 Accounts payable and accrued liabilities 18 40,017 20,713
Insurance balances receivable 8 24,543 19,941 Lease liabilities 14 5,095 3,960
Reinsurers’ share of: Insurance contract liabilities 19 241,851 231,969
Claims provisions 19 12,099 16,507 Investment contract liabilities 20 248,244 253,555
Unearned premiums 19 11,552 10,662 Post-employment benefit liability 21 3,938 3,670
Other assets 9 11,507 5,813 TOTAL GENERAL FUND LIABILITIES 579,870 551,185
Deferred policy acquisition costs 10 1,753 1,473
Investment properties 11 2,899 2,899 Segregated fund liabilities held-for-sale 4 519,222 460,449
Investment in associates 12 3,093 2,831 Segregated fund liabilities from
Property and equipment 13 56,749 51,507 continuing operations 34 1,182,550 866,100
Right-of-use assets 14 4,813 3,750 TOTAL SEGREGATED FUND LIABILITIES 1,701,772 1,326,549
Intangible assets 15 27,469 6,617
TOTAL LIABILITIES 2,281,642 1,877,734
TOTAL GENERAL FUND ASSETS 729,727 673,451
Equity
Segregated fund assets held-for-sale 4 519,222 460,449 Attributable to shareholders of the Company
Segregated fund assets from Share capital 17,611 17,161
continuing operations 34 1,182,550 866,100 Contributed surplus 54,005 53,502
TOTAL SEGREGATED FUND ASSETS 1,701,772 1,326,549 Retained earnings 69,580 63,493
TOTAL ASSETS 2,431,499 2,000,000 Accumulated other comprehensive income/(loss) 25 8,526 (12,013)
TOTAL EQUITY ATTRIBUTABLE TO
SHAREHOLDERS OF THE COMPANY
149,722 122,143
Approved by the Board of Directors Attributable to non-controlling interests 135 123
TOTAL EQUITY 149,857 122,266
TOTAL EQUITY AND LIABILITIES 2,431,499 2,000,000

David A. Brown Alison S. Hill
Chair Chief Executive Officer
The accompanying notes form part of these consolidated financial statements.

51
Consolidated Statements of Operations

For the years ended March 31 (In $ thousands, except per share data) Note 2021 2020
Revenue
Gross premiums written 155,496 161,840
Reinsurance ceded (38,870) (38,230)
Premium rebates 19 (4,964) -
Net premiums written 111,662 123,610
Net change in unearned premiums 19.3 (592) 134
Net premiums earned 111,070 123,744
Investment income 6 12,842 19,516
Share of earnings of associates 261 25
Commissions, management fees and other 27 53,043 36,324
177,216 179,609
Expenses
Policy benefits 16,805 16,047
Claims and adjustment expenses 73,395 91,563
Reinsurance recoveries 28 (16,251) (13,378)
Gross change in contract liabilities 29 505 (10,049)
Change in reinsurers’ share of claims provisions 29 5,505 10,787
NET BENEFITS AND CLAIMS 79,959 94,970
Commission expenses 6,352 5,568
Operating expenses 30 73,158 57,801
Amortisation, depreciation and impairment 13,14,15 6,602 6,359
166,071 164,698
EARNINGS BEFORE INCOME TAXES 11,145 14,911
Income tax expense 33 1,001 645
NET EARNINGS FOR THE YEAR
10,144 14,266
Attributable to:
Shareholders of the Company 10,132 14,198
Non-controlling interests 12 68
10,144 14,266
Earnings per share: 26
Basic 0.47 0.67
Fully diluted 0.47 0.67
52
Consolidated Statements of Comprehensive Operations

For the years ended March 31 (In $ thousands) Note
2021 2020
Net Earnings for the Year 10,144 14,266
OTHER COMPREHENSIVE INCOME/(LOSS)

Items that will not be reclassified to net earnings:
Post-employment medical benefit obligation remeasurement 21 (340) (401)
Items that are or may subsequently be
reclassified to net earnings:
Change in unrealised gains/(losses) on
available-for-sale investments 18,847 (9,628)
Change in unrealised gains/(losses) on translating
financial statements of foreign operations 2,032 (603)
OTHER COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR 20,539 (10,632)
COMPREHENSIVE INCOME FOR THE YEAR 30,683 3,634
OTHER COMPREHENSIVE INCOME/(LOSS) ATTRIBUTABLE TO:
Shareholders of the Company 20,539 (10,632)
Non-controlling interests - -
20,539 (10,632)
COMPREHENSIVE INCOME ATTRIBUTABLE TO:
Shareholders of the Company 30,671 3,566
Non-controlling interests 12 68
30,683 3,634

53
Consolidated Statements of Changes in Equity

For the years ended March 31 (In $ thousands except the number of shares) Note 2021 2020
Share Capital
Authorised:
25,000,000 common shares of $1.00 each (2020 – 25,000,000) 25,000 25,000
Issued and fully paid, beginning of year 22,259,760 shares
(2020 – 22,105,225 shares) 22,260 22,105
Add: Shares issued under the dividend reinvestment plan 191,464 shares
(2020 – 154,535 shares) 191 155
Deduct: Shares held in Treasury, at cost 892,917 shares (2020 – 934,760 shares) (4,840) (5,099)
BALANCE, NET OF SHARES HELD IN TREASURY, END OF YEAR 17,611 17,161
Contributed Surplus
Balance, beginning of year 53,502 53,161
Stock-based compensation expense 148 176
Treasury shares granted to employees (131) (159)
Shares issued under the dividend reinvestment plan 24 486 324
BALANCE, END OF YEAR 54,005 53,502
Retained Earnings
Net earnings for the year 10,132 14,198
Dividends (3,893) (3,829)
Loss on treasury shares granted to employees (152) (146)
Accumulated other Comprehensive Income/(Loss)
Balance, beginning of year (12,013) (1,381)
Other comprehensive income/(loss) 20,539 (10,632)
BALANCE, END OF YEAR 8,526 (12,013)
TOTAL ATTRIBUTABLE TO SHAREHOLDERS OF THE COMPANY 149,722 122,143
Attributable to Non-controlling Interests
Balance, beginning of year 123 55
Net earnings/(loss) for the year 12 68
TOTAL EQUITY ATTRIBUTABLE TO NON-CONTROLLING INTERESTS 135 123
TOTAL EQUITY 149,857 122,266
54
Consolidated Statements of Cash Flows

MARCH 31 MARCH 31 MARCH 31 MARCH 31
(In $ thousands) 2021 2020 (In $ thousands) 2021 2020
OPERATING ACTIVITIES Interest income received 11,024 13,754

Earnings before income taxes 11,145 14,911 Dividend income received 396 2,014
Income tax paid (1,020) (540)
Adjustments to reconcile net earnings to cash basis
Bad debt expense 1,169 815 CASH GENERATED FROM OPERATING ACTIVITIES 28,187 30,292
Interest income (12,073) (15,197)
INVESTING ACTIVITIES
Dividend income (396) (2,014)
Purchase of investments (528,784) (930,986)
Investment income related to deposit
Sale, maturity and paydown of investments 529,183 928,901
administration pension plans 1,364 1,764
Purchase of subsidiary, net of cash acquired (16,539) (1,739)
Net realised and unrealised gains on investments (3,165) (9,967)
Purchase of property and equipment (5,545) (2,002)
Amortisation of mortgages and net premium of bonds 1,601 1,281
Net impairment losses on investments 238 1,146 CASH USED IN INVESTING ACTIVITIES (21,685) (5,826)
Share of earnings of associates, including impairment (261) (25) FINANCING ACTIVITIES
Net realised and unrealised (gains)/losses Dividends paid to shareholders (3,222) (3,507)
on investment properties 260 3,901 Acquisition of shares held in Treasury - (6)
Amortisation, depreciation and impairment 6,602 6,359 Principal demand loan payments (49) -
Expense on vesting of stock-based compensation 148 178 Principal lease payments (763) (586)
Interest expense on leases 336 193
CASH USED IN FINANCING ACTIVITIES (4,034) (4,099)
(4,177) (11,566)
EFFECT OF FOREIGN EXCHANGE RATE CHANGES
Change in operating balances ON CASH AND SHORT-TERM INVESTMENTS 1,929 (471)
Insurance balances receivable (4,877) (149)
NET INCREASE IN CASH AND
Reinsurers’ share of:
SHORT-TERM INVESTMENTS 4,397 19,896
Claims provisions 5,186 10,692
CASH AND SHORT-TERM INVESTMENTS, beginning of year 74,251 54,355
Unearned premiums (532) (1,193)
Other assets (3,804) 949 CASH AND SHORT-TERM INVESTMENTS, end of year 78,648 74,251
Deferred policy acquisition costs (125) (130) Cash and short-term investments from
Insurance balances payable 5,774 387 continuing operations 74,554 71,501
Accounts payable and accrued liabilities 7,762 (1,415) Cash and short-term investments held-for-sale 4,094 2,750
Insurance contract liabilities 6,818 (9,153)
78,648 74,251
Investment contract liabilities (5,311) 11,773
Post-employment benefit liability (72) (42)
10,819 11,719

55
CONTENTS
Notes to the Consolidated Financial Statements
NOTES PAGE NOTES PAGE
1 Operations 57 21 Post-Employment Benefit Liability 106

2 Significant Accounting Policies 57 22 Group Composition 107
3 Acquisitions 74 23 Risk Management 109
4 Assets and Liabilities Held-for-Sale 75 24 Dividends 119
5 Cash and Short-term Investments 76 25 Components of Accumulated
6 Investments 76 Other Comprehensive Loss 119
7 Fair Value Measurement 82 26 Earnings Per Share 120
8 Insurance Balances Receivable 88 27 Commissions, Management Fees and Other 120
9 Other Assets 88 28 Reinsurance Recoveries 121
10 Deferred Policy Acquisition Costs 89 29 Net Change in Contract Liabilities 121
11 Investment Properties 89 30 Operating Expenses 122
12 Investment in Associates 89 31 Stock-based Compensation 122
13 Property and Equipment 90 32 Related Party Transactions 123
14 Right-of-Use Assets and Lease Liabilities 91 33 Income Tax Expense 123
15 Intangible Assets 92 34 Segregated Funds and Separate Accounts 125
16 Insurance Balances Payable 93 35 Operating Segments 126
17 Payables Arising from Investment Transactions 94 36 Commitments and Contingencies 127
18 Accounts Payable and Accrued Liabilities 94 37 Comparative Figures 128
19 Insurance Contract Liabilities 95 38 Subsequent Events 128
20 Investment Contract Liabilities 105
56
Notes to the Consolidated

Financial Statements
March 31, 2021 1 Operations 2 Significant Accounting Policies

(Amounts in tables are expressed in Argus Group Holdings Limited (the The significant accounting policies used
thousands of Bermuda dollars, except for Company) was incorporated in Bermuda in the preparation of the consolidated
per share amounts and where otherwise with limited liability on May 26, 2005, as financial statements are discussed below
stated) a holding company and has its registered and are applied consistently.
office at the Argus Building, 14 Wesley
Street, Hamilton HM 11, Bermuda. The 2.1 STATEMENT OF COMPLIANCE
Company’s shares are traded on the The consolidated financial statements
SHARE OWNERSHIP Bermuda Stock Exchange. At March 31, 2021, have been prepared in accordance with
it has 1,376 shareholders, 83.6 percent of International Financial Reporting Standards
9%
whom are Bermudian, holding 91.0 percent (IFRS) as issued by the International
of the issued shares. Accounting Standards Board (IASB) and
in accordance with the provisions of the
91%
The Company and its subsidiaries (the Bermuda Companies Act 1981, as amended.
Group) operates predominantly in Bermuda,
Gibraltar, Malta and Canada underwriting These consolidated financial statements,
life, health, property and casualty insurance as at and for the year ended March 31, 2021,
(P&C). The Group also provides investment, were authorised for issue by the Board of
savings and retirement products, Directors on July 7, 2021.
administrative services, health care and 2.2 BASIS OF PRESENTATION
insurance broker services. Refer to Note 22 2.2.1 Basis of measurement
for details on the composition of the Group The consolidated financial statements have
and Note 35 on Operating Segments. been compiled on the going concern basis
BERMUDIAN NON-BERMUDIAN and prepared on the historical cost basis
57
except for the following material items on 2.2.3 Use of critical estimates, judgments 2.3 BASIS OF CONSOLIDATION
the Consolidated Balance Sheets: and assumptions 2.3.1 Business combinations
• Financial assets and financial liabilities The preparation of the consolidated financial The Group uses the acquisition method to
at fair value through profit or loss statements requires Management to make account for the acquisition of subsidiaries.
(FVTPL) are measured at fair value; judgments, estimates and assumptions that At the date of acquisition, the Group
• Available-for-sale financial assets are affect the application of accounting policies recognises the identifiable assets acquired
measured at fair value; and the reported amounts of assets, and liabilities assumed as part of the
• Derivative financial instruments are liabilities, revenues and expenses. Actual overall business combination transaction at
measured at fair value; results may differ from those estimates. their fair value. Recognition of these items
• Investment properties are measured at is subject to the definitions of assets and
fair value; Estimates and underlying assumptions are liabilities in accordance with the IASB’s
• Segregated fund assets and liabilities reviewed on an ongoing basis. Revisions to Framework for the Preparation and
are measured at fair value based on net accounting estimates are recognised in the Presentation of Financial Statements. The
asset values reported by third parties, period in which the estimates are revised Group may also recognise intangible items
such as fund managers or independent and in any future periods affected. not previously recognised by the acquired
custodians; entity, such as customer lists. Transaction
Information about critical judgments in
• Life and annuity policy reserves are based costs that the Group incurs in connection
applying accounting policies that have the
on actuarial valuation using the Canadian with a business combination are expensed
most significant effect on the amounts
Asset Liability Method (CALM); as incurred.
recognised in the consolidated financial
• Provision for unpaid and unreported
statements is included in the following notes: Amalgamation transactions
claims are actuarially determined and
represents the best estimate of the Under a business combination where
Note 2.10 – Insurance, Investment and
ultimate costs of claims in the course of entities under common control are
Service Contracts;
settlement and claims incurred but not amalgamated, the carrying values of the
Note 11 – Investment Properties; and
yet reported; and assets and liabilities of the entities are
Note 12 – Investment in Associates.
• Post-employment benefit liability is combined. Transactions arising from the
measured at the present value of the Information about assumptions and amalgamation of the entities under
defined benefit obligation. estimation uncertainties that have a common control are eliminated in the
significant risk of resulting in a material Group’s consolidated financial statements.
The Consolidated Balance Sheets are adjustment within the next financial year
presented in order of decreasing liquidity. is included in the following notes: 2.3.2 Subsidiaries
Subsidiaries are entities controlled by the
2.2.2 Presentation currency Note 2.8 – Impairment of Assets; Group. The Group controls an entity when it
All amounts are in Bermuda dollars, which is Note 6 and Note 20 – Investments and is exposed to, or has rights to, variable
the Group’s presentation currency, and which Investment Contract Liabilities; and returns from its involvement with the entity
are on par with United States (U.S.) dollars. Note 19 – Insurance Contract Liabilities. and has the ability to affect those returns
58
through its power over the entity. The between 20 and 50 percent of the voting 2.4 FOREIGN CURRENCY
results and financial position of subsidiaries power of another entity. Other indicators REMEASUREMENT AND
are included in the consolidated financial that may provide evidence of significant TRANSLATION
statements from the date on which control influence include representation on the 2.4.1 Remeasurement of transactions
commences until the date on which control board of directors of the investee, in foreign currencies
ceases. participation in policy-making processes The individual financial statements of the
and provision of technical information. Company and its subsidiaries are prepared
The Group’s consolidated financial in the currency in which they conduct their
statements include the financial statements Investment in associates is initially ordinary course of business, which is
of the Company and its subsidiaries after all recognised at cost, which includes referred to as the functional currency.
intercompany accounts and transactions transaction costs. Thereafter, these Monetary assets and liabilities denominated
have been eliminated. The accounting investments are measured using the in currencies other than the functional
policies of subsidiaries have been changed equity method. Under the equity method, currency of the Company or its subsidiaries
where necessary to align them with the the Group records its proportionate share are remeasured into the functional
policies adopted by the Group. of income and loss from such investments currency using rates of exchange at the
on the Consolidated Statements of balance sheet date. Income and expenses
2.3.3 Non-controlling interests Operations and its proportionate share of
Non-controlling interests are measured at are translated at average rates of exchange.
Other Comprehensive Income on the
their proportionate share of the acquiree’s Consolidated Statements of Comprehensive Foreign exchange gains and losses are
identifiable net assets at the acquisition Operations. Certain associates have reflected in Operating expenses on the
date. Changes in the Group’s interest in a different accounting policies from the Consolidated Statements of Operations.
subsidiary that do not result in a loss of Group and, as a result, adjustments have
control are accounted for as equity been made to align the associate’s 2.4.2 Translation to the presentation
transactions. accounting policies with the Group. currency
The financial statements of foreign
Losses applicable to the non-controlling Investments in associated companies are operations are translated from their
interest in a subsidiary are allocated to derecognised when the Group loses respective functional currencies to
non-controlling interests even if doing so significant influence. Any retained interest Bermuda dollars, the Group’s presentation
causes the non-controlling interests to have in the entity is remeasured at its fair value. currency. Assets and liabilities are
a deficit balance. The difference between the carrying translated at the rates of exchange at the
amount of the retained investment at the balance sheet date, and income and
2.3.4 Investment in associates
date when significant influence is lost and expenses are translated using the average
Associates are those entities in which the
its fair value is recognised in Share of rates of exchange. The accumulated gains
Group has significant influence, but not
earnings in associates on the Consolidated or losses arising from translation of
control, over the financial and operational
Statements of Comprehensive Operations. functional currencies to the presentation
policies. Significant influence is normally
currency are included in Other
presumed to exist when the Group holds
59
Comprehensive Income on the Consolidated arising from insurance contracts that are Group becomes a party to the
Statements of Comprehensive Operations. measured on the same basis as the contractual provisions of the instrument.
insurance assets and liabilities from Balances pending settlement as a result of
2.5 CASH AND SHORT-TERM continuing operations. Once classified as sales and purchases are reflected on the
INVESTMENTS held-for-sale, these assets will no longer Consolidated Balance Sheets as Receivable
Cash and short-term investments include be depreciated. for investments sold and Payable arising
cash balances, cash equivalents, time from investment transactions.
deposits and other short-term highly liquid See Note 4, Assets and Liabilities Held-For-
financial assets with original maturities of Sale for more details. (i) Financial assets at FVTPL
three months or less, and bank overdrafts. A financial asset is classified as FVTPL
Interest on these balances is recorded on 2.7 FINANCIAL INSTRUMENTS if it is determined to be held-for-trading
the accrual basis and included in 2.7.1 Financial assets or is designated as such upon initial
Investment income. 2.7.1(a) Classification and recognition of recognition. Financial assets are
financial assets designated at FVTPL if the Group
Cash includes restricted cash being held The Group has the following financial manages such investments and makes
on behalf of clients in order to comply with assets: (i) financial assets at FVTPL, purchases and sale decisions based on
regulatory requirements in Malta. These (ii) available-for-sale financial assets, their fair value in accordance with the
amounts are not available for use in the (iii) held-to-maturity financial assets and Group’s documented risk management
Group’s daily operations. (iv) loans and receivables. Management and investment strategies.
determines the classification of financial
2.6 ASSETS AND LIABILITIES assets at initial recognition and is Attributable transaction costs upon
HELD-FOR-SALE dependent on the nature of the assets initial recognition are recognised in
Disposal groups, which are comprised of and the purpose for which the assets Investment income on the Consolidated
assets and liabilities, are classified as held- were acquired. Statements of Operations as incurred.
for-sale if it is highly probable that they will FVTPL financial instruments are
be recovered primarily through sale. All financial assets are required to be measured at fair value, and changes
measured at fair value with the exception therein are recognised in Investment
The sale is highly likely if, on the reporting of loans and receivables, debt securities income on the Consolidated Statements
date, Management has committed to detailed classified as held-to-maturity, and available- of Operations. Interest or dividend
sales plans, is actively looking for a buyer, for-sale equity instruments whose fair value income earned from these financials
has set a reasonable selling price, and the cannot be reliably measured. The Group assets is recorded in Investment income
sale is highly likely to occur within a year. recognises loans and receivables at their on the Consolidated Statements of
Disposal groups are measured at the lower date of inception. All other financial assets
of their carrying amount and fair value less Operations. Interest income is net of
(including assets designated at FVTPL) are investment management fees.
costs to sell, except for assets and liabilities recognised on the trade date at which the
60
(ii) Available-for-sale financial assets value due to its short-term nature and payments that are not quoted in an
Available-for-sale financial assets include high liquidity. Interest income is net of active market. Such assets are
equity investments and debt securities. investment management fees. recognised initially at fair value plus
Equity securities classified as available- any directly attributable transaction
for-sale are carried at fair value except (iii) Held-to-maturity financial assets costs. Subsequent to initial recognition,
unquoted equities, which are carried at Held-to-maturity investments are receivables are measured at amortised
cost. Debt securities in this category are non-derivative debt securities with fixed cost using the effective interest
carried at fair value and are intended to or determinable payments and fixed method, less any impairment losses.
be held for an indefinite period of time maturities that the Group has the Amortisation of interest is included in
and may be sold in response to needs positive intent and ability to hold to Investment income on the Consolidated
for liquidity, in response to changes in maturity. Held-to-maturity financial Statements of Operations.
market conditions, or in response to assets are recognised initially at fair
requirements to stay within investment value plus any directly attributable For the purposes of this classification,
guidelines. transaction costs. Subsequent to initial loans and receivables are comprised
recognition, held-to-maturity financial of mortgages and loans, Interest and
After initial measurement, available-for- assets are measured at amortised cost dividends receivable and other
sale financial assets are subsequently using the effective interest method, less receivables included in Other assets
measured at fair value with unrealised any impairment losses. Amortisation of on the Consolidated Balance Sheets.
gains or losses recognised in Other premiums and accretion of discounts are
included in Investment income on the 2.7.1(b) Derecognition and offsetting
comprehensive income and presented
Consolidated Statements of Operations. The Group derecognises a financial asset
on the Consolidated Statements of when the contractual rights to the cash
Comprehensive Operations. When an Any sale or reclassification of a more flows from the asset expire or it transfers
investment is derecognised, the than insignificant amount of held-to- the rights to receive the contractual cash
cumulative gain or loss in Other maturity investments not close to flows of the financial asset in a transaction
comprehensive income is transferred their maturity would result in the in which substantially all the risks and
to the Consolidated Statements reclassification of all held-to-maturity rewards of ownership of the financial asset
of Operations. investments as available-for-sale, and are transferred, which is normally the trade
Amortisation and accretion of premiums prevent the Group from classifying date. Any interest in transferred financial
and discounts and interest income on investment securities as held-to- assets that is created or retained by the
available-for-sale debt securities are maturity for the current and the Group is recognised as a separate asset
calculated using the effective interest following two financial years. or liability.
rate method and are recognised in
(iv) Loans and receivables Financial assets and liabilities are offset
current period net investment income. Loans and receivables are financial and the net amount presented on the
The carrying value of accrued interest assets with fixed or determinable Consolidated Balance Sheets when, and only
income approximates estimated fair
61
when, the Group has a legal right to offset transactions, Insurance balances subsequently carried at estimated fair
the amounts and intends either to settle on payable and Accounts payable and value. Changes in the estimated fair value
a net basis or to realise the asset and settle accrued liabilities. Such financial of instruments that do not qualify for hedge
the liability simultaneously. liabilities are recognised initially at fair accounting are recognised in Investment
value plus any directly attributable income on the Consolidated Statements of
2.7.2 Financial Liabilities transaction costs. Subsequent to initial Operations. The Group does not hold any
2.7.2(a) Classification and recognition of recognition these financial liabilities are derivatives classified as hedging
financial liabilities measured at amortised cost using the instruments. Derivative financial assets and
The Group has the following financial effective interest method. liabilities are reported net under Investments
liabilities: (i) financial liabilities at FVTPL and on the Consolidated Balance Sheets.
(ii) other financial liabilities. Management Payables arising from investment
determines the classification of financial transactions and Accounts payable and 2.7.4 Investment income
liabilities at initial recognition. accrued liabilities are considered short- Interest is recorded in Investment income
term payables with no stated interest. on the Consolidated Statements of
(i) Financial liabilities at FVTPL Operations as it accrues, using the
The Group’s financial liabilities at FVTPL All other financial liabilities (including effective interest method. Dividend income
relate to deposit accounted annuity liabilities designated at FVTPL) are is recognised on the date the Group’s right
policies shown under Investment recognised initially on the trade date at to receive payment is established, which, in
contract liabilities on the Consolidated which the Group becomes a party to the the case of quoted securities, is normally
Balance Sheets. Contracts recorded at contractual provisions of the instrument. the ex-dividend date.
FVTPL are measured at fair value at
inception and each subsequent reporting 2.7.2(b) Derecognition 2.8 IMPAIRMENT OF ASSETS
period. Changes in fair value of The Group derecognises a financial liability 2.8.1 Impairment of financial assets
investment contract liabilities are when its contractual obligations are The carrying amounts of the Group’s
recorded in Gross change in contract discharged, cancelled or expired. financial assets, except those classified
liabilities on the Consolidated under FVTPL, are reviewed at each reporting
2.7.3 Derivative financial assets
Statements of Operations (Note 2.10.2). date for impairment and reversal of
Investments in derivative instruments are
previously recognised impairment losses.
(ii) Other financial liabilities measured at FVTPL and are considered to
These assets are considered impaired if
All remaining financial liabilities are be held-for-trading. Derivatives are initially
there is objective evidence of impairment as
classified as other financial liabilities, recognised at estimated fair value on the
a result of one or more loss events that have
which include Investment contract date into which a contract is entered. The
an impact that can be reliably determined
liabilities related to the deposit attributable transaction costs are recognised
based on estimated future cash flows of the
administration pension plans and in Investment income on the Consolidated
asset. Objective factors that are considered
self-funded group health policies (Note Statements of Operations as incurred. These
when determining whether a financial asset
2.10.2), Payables arising from investment investments in derivative instruments are
62
or group of financial assets may be impaired significant are collectively assessed for 2.8.1(b) Available-for-sale financial assets
include, but are not limited to, the following: impairment by grouping together assets When there is objective evidence that an
• negative rating agency announcements with similar risk characteristics. Available-for-sale asset is impaired, the
in respect of investment issuers and loss accumulated in Other comprehensive
debtors; In assessing collective impairment, the income is reclassified to the Consolidated
• significant reported financial difficulties Group uses historical trends of the Statements of Operations in Investment
of investment issuers and debtors; probability of default, the timing of income. The cumulative loss that is
• actual breaches of credit terms, such recoveries and the amount of loss incurred, reclassified from Other comprehensive
as persistent late payments or actual adjusted for Management’s judgment as income to Investment income is the
default; to whether current economic and credit difference between the amortised cost and
• the disintegration of the active market(s) conditions are such that the actual losses the current fair value less any impairment
in which a particular asset is traded or are likely to be greater or less than loss recognised previously in Investment
deployed; suggested by historical trends. If there is income on the Consolidated Statements of
• adverse economic or regulatory objective evidence that an impairment loss Operations. Impairment losses on Available-
conditions that may restrict future cash on held-to-maturity financial assets or loans for-sale equity securities are not reversed.
flows and asset recoverability; and receivables has been incurred, the
• the withdrawal of any guarantee from amount of the loss is measured as the 2.8.1(c) Investment in associates
statutory funds or sovereign agencies difference between the asset’s carrying When there is objective evidence that an
implicitly supporting the asset; and amount and the present value of estimated Investment in an associate is impaired, an
• significant or prolonged decline in the future cash flows (excluding future credit impairment loss is measured by comparing
fair value of an investment in an equity losses that have not been incurred) the recoverable amount of the investment
instrument below its cost. discounted at the financial asset’s original with its carrying value. The recoverable
effective interest rate. The impairment loss amount is determined in accordance with
2.8.1(a) Held-to-maturity financial assets is recognised in Investment income on the Note 2.8.2.
and Loans and receivables Consolidated Statements of Operations and
The Group considers evidence of reflected in an allowance account against An impairment loss is recognised in Share
impairment for held-to-maturity investment the held-to-maturity financial assets or of earnings of associates on the
assets and loans and receivables at both a loans and receivables. When an event Consolidated Statements of Operations.
specific asset and collective level. All occurring after the impairment was Reversal of a previously recognised
individually significant held-to-maturity recognised causes the amount of impairment loss is made if there has been a
financial assets and loans and receivables impairment loss to decrease, the decrease favourable change in the estimates used to
are assessed individually for impairment. in impairment loss is reversed in Investment determine the recoverable amount.
Those found not to be impaired are then income on the Consolidated Statements
2.8.2 Impairment of non-financial assets
collectively assessed for impairment. of Operations.
The carrying amounts of the Group’s non-
Held-to-maturity financial assets and loans
financial assets comprised of Property and
and receivables that are not individually
63
equipment, Right-of-use assets and grouped together into the smallest group 2.10 INSURANCE, INVESTMENT AND
Intangible assets are reviewed at each of assets that generates cash inflows from SERVICE CONTRACTS
reporting date to determine if there is continuing use that are largely independent 2.10.1 Insurance contracts
objective evidence of impairment. Objective of the cash inflows of other assets. Insurance contracts are those contracts
factors that are considered when where the Group has accepted significant
determining whether a non-financial asset 2.9 INVESTMENT PROPERTIES insurance risk from the policyholders by
may be impaired include, but are not limited Investment properties are real estate and agreeing to compensate the policyholders
to, the following: real estate fractional units primarily held if a specified uncertain future event (the
• adverse economic, regulatory or to earn rental income or held for capital insured event) adversely affects the policy-
environmental conditions that may appreciation. Properties that do not meet holders.
restrict future cash flows and asset these criteria are classified as Property
usage and/or recoverability; and equipment (Note 2.12). Rental income 2.10.1(a) Premiums and acquisition costs
• the likelihood of accelerated from investment properties is recognised Premiums written on most life, annuity and
obsolescence arising from the on a straight-line basis over the term of the health insurance contracts are recognised
development of new technologies and lease. Expenditures related to ongoing as revenue when due from the policyholder.
products; and maintenance of properties subsequent to For short-term insurance contracts,
• the disintegration of the active acquisition are expensed as incurred. premiums written are earned on a pro-rata
market(s) to which the asset is related. Investment properties are initially basis over the terms of the policies. The
recognised at the transaction price reserve for unearned premiums represents
If objective evidence of impairment exists, including acquisition costs on the that portion of premiums written that
then the asset’s recoverable amount is Consolidated Balance Sheets. These relates to the unexpired terms of the
estimated. An impairment loss is recognised properties are subsequently measured at policies and is included in Insurance
in Amortisation, depreciation and fair value with changes in values recorded contract liabilities on the Consolidated
impairment on the Consolidated Statements in Investment income on the Consolidated Balance Sheets. Costs related to the
of Operations if the carrying amount of an Statements of Operations. acquisition of insurance premiums are
asset exceeds its estimated recoverable charged to the Consolidated Statements of
amount. The recoverable amount of an Fair values are evaluated regularly by an Operations over the period of the policy.
asset is the greater of its value-in-use and accredited independent valuation specialist, Acquisition costs are comprised of
its fair value less costs to sell. In assessing who holds a recognised and relevant commissions and those associated with
value-in-use, the estimated future cash flows professional qualification and who has unearned premiums are deferred and
are discounted to their present value using recent experience in the valuation of amortised to income over the periods in
a pre-tax discount rate that reflects current properties in Bermuda. which the premiums are earned. This is
market assessments of the time value of shown as Deferred policy acquisition costs
money and the risks specific to the asset. on the Consolidated Balance Sheets. Policy
Assets that cannot be tested individually are acquisition costs related to unearned
premiums are only deferred to the extent
64
that they can be expected to be recovered 2.10.1(c) Reinsurance 2.10.1(d) Insurance contract liabilities
from the unearned premiums. If the Reinsurance ceded premiums comprise the Insurance contract liabilities shown on the
unearned premiums are insufficient to pay cost of reinsurance contracts into which the Consolidated Balance Sheets include (i) life
expected claims and expenses, a premium Group has entered. Reinsurance ceded is and annuity policy reserves and (ii) provision
deficiency is recognised initially by writing recognised from the date the reinsurer for unpaid and unreported claims.
down the deferred acquisition cost asset and has contracted to accept the risks and the
by subsequently establishing a provision for amount of premium can be measured (i) Life and annuity policy reserves
losses arising from liability adequacy tests reliably. The Reinsurers’ share of unearned Life and annuity policy reserves are
(the unexpired risk provision). Deferred premiums represents that part of determined by the Group’s actuaries
policy acquisition costs written off as a reinsurance premiums ceded, which are and represent the amounts, which,
result of this test cannot subsequently estimated to be earned in future financial together with future premiums and
be reinstated. periods. Unearned reinsurance commissions investment income, are required to
are recognised as a liability using the same discharge the obligations under life
2.10.1(b) Receivables and payables related principles and are shown under Insurance and annuity contracts and to pay
to insurance contracts balances payable on the Consolidated expenses related to the administration
Receivables and payables related to Balance Sheets. The Reinsurers’ share of of these contracts. These reserves are
insurance contracts are recognised when claims provisions is estimated using the determined using generally accepted
due and measured on initial recognition same methodology as the underlying losses. actuarial practices according to
at the fair value of the consideration These represent the benefit derived from standards established by the
receivable or payable. Subsequent to initial reinsurance agreements in force at the Canadian Institute of Actuaries (CIA).
recognition, Insurance balances receivable financial statements reporting date. The CIA requires the use of the
and Insurance balances payable are Amounts due to or from reinsurers with Canadian Asset Liability Method (CALM)
measured at amortised cost. The carrying respect to premiums or claims are included for the valuation of actuarial liabilities
value of Insurance balances receivable is in Insurance balances payable or Insurance for all lines of business. The policy
reviewed for impairment whenever events balances receivable on the Consolidated actuarial liability reserves under CALM
or circumstances indicate that the Balance Sheets. are calculated by projecting asset and
carrying amount may not be recoverable, liability cash flows under a variety of
with the impairment loss recorded in The Group periodically assesses any interest rate scenarios using best-
Operating expenses on the Consolidated reinsurance assets for impairment, with any estimate assumptions, together with
Statements of Operations. impairment loss recognised in Operating margins for adverse deviations with
expenses on the Consolidated Statements respect to other contingencies pertinent
Insurance balances receivable and Insurance of Operations in the period in which any to the valuation. The policy actuarial
balances payable are derecognised when the impairment is determined. liability reserves make provision for the
derecognition criteria for financial assets expected experience scenario and for
and financial liabilities, as described in Note adverse deviations in experience.
2.7.1(b) have been met.
65
(ii) Provision for unpaid and unreported Liabilities for investment contracts are 2.10.3 Other service contracts
claims measured at FVTPL or amortised cost Fee income from service contracts is
Provision for unpaid and unreported (Note 2.7.2). recognised as revenue when services are
claims arising from Health and P&C rendered at either a point in time or over
contracts represents the best estimate The following contracts are the investment time. The Group’s performance obligations
of the ultimate cost of claims in the contract liabilities of the Group: are generally satisfied over time as the
course of settlement and claims (i) Deposit administration pension plans customer simultaneously receives and
incurred but not yet reported. The consumes the benefits of the services
are plans where the Group’s liability is
provision is continually reviewed and rendered.
linked to contributions received, plus a
updated by Management and the predetermined and guaranteed rate Fee income from pension administration,
Group’s actuaries. Any adjustments of return. The liability related to these policyholder administration under
resulting from the review process, as plans is carried at amortised cost. segregated fund arrangement and
well as differences between estimates
and ultimate payments, are reflected in investment management services are
(ii) Self-funded group health policies are
Claims and adjustment expenses and refund accounting agreements that recognised based on a percentage of assets
Gross change in contract liabilities provide for the retroactive adjustment under management or another variable
on the Consolidated Statements of of premiums based upon the claims metric. Asset-based fees vary with assets
Operations in the year in which they experience of the policyholder. Under under management, which are subject to
are determined. these agreements, any surplus arising is market conditions and investor behaviours
set off against future deficits or returned beyond the Group’s control.
Provision for unpaid and unreported
to the policyholder. Any deficit that may Certain service contracts in the Group’s
claims are not discounted.
arise is set off against future surpluses brokerage business include profit
2.10.2 Investment contracts or may be recovered in full, or in part, by commission, which is recognised on the
Contracts issued that do not transfer lump sum payments from policyholders. underlying performance of the covered
significant insurance risk, but do transfer As these agreements do not transfer policies at the end of the underwriting
financial risk from the policyholder, are insurance risk, funds received under cycle. Revenue is recognised when it is
financial liabilities and are accounted for as these agreements are accounted for highly probable that a significant reversal
investment contracts. Service components as investment contracts. Assets and in the amount of the revenue recognised
of investment contracts are treated as liabilities arising from these types of will not occur.
service contracts. Fees earned from the policies are measured at amortised cost.
service components of investment 2.11 SEGREGATED FUNDS
(iii) Deposit accounted annuity policies Segregated funds are lines of business in
contracts are included on the Consolidated
relate to policies that do not transfer which the Group issues a contract where
Statements of Operations under
significant insurance risk but do transfer the benefit amount is directly linked to the
Commissions, management fees and other.
financial risk from the policyholders and reported net asset values of the investments
are measured at FVTPL. held in the particular segregated fund.
66
Although the underlying assets are Segregated fund assets are recorded at fair fiscal year, and adjusted if appropriate.
registered in the name of the Group and the value based on net asset values reported by Where the carrying amount of an asset
segregated fund policyholder has no direct third parties, such as investment managers is greater than its estimated recoverable
access to the specific assets, the contractual and fund administrators. amount, it is considered to be impaired
arrangements are such that the segregated and is written down immediately to its
fund policyholder bears the risks and Segregated fund assets may not be applied recoverable amount. In the event of an
rewards of the fund’s investment against liabilities that arise from any improvement in the estimated recoverable
performance. The Group derives fee income, other business of the Group. The investment amount, the related impairment may be
which is included within Commissions, results are reflected directly in segregated reversed. Gains and losses on disposal of
management fees and other on the fund assets and liabilities. property and equipment are determined by
Consolidated Statements of Operations. 2.12 PROPERTY AND EQUIPMENT reference to their carrying amount, and are
Deposits to segregated funds are reported recognised in Commissions, management
Owner-occupied properties and all other
as increases in Segregated funds liabilities fees and other on the Consolidated
assets classified as Property and equipment
and are not reported on the Consolidated Statements of Operations.
are stated at cost less accumulated
Statements of Operations. depreciation and impairment. Subsequent 2.13 INTANGIBLE ASSETS
For certain entities within the International costs are included in the assets’ carrying Intangible assets refer to customer lists,
Life Division, which are registered amount only when it is probable that future non-compete agreements and goodwill.
segregated accounts companies, a economic benefits associated with the item Customer lists are initially measured at fair
segregated account is linked to each will flow to the Group and the cost of the value by estimating the net present value
variable universal life insurance policies item can be measured reliably. The costs of of future cash flows from the contracts in
issued to policyholders who require U.S. the day-to-day servicing of Property and force at the date of acquisition. These are
compliant private placement life insurance equipment are included in Operating amortised on a straight-line basis over their
and annuity products (Note 4). Insurance expenses on the Consolidated Statements estimated useful lives. Goodwill is measured
premiums arising from these policies are of Operations. at cost less accumulated impairment losses.
treated as deposits and are not recorded as Depreciation is calculated so as to write the
revenue on the Consolidated Statements of Subsequent expenditures are capitalised
assets off over their estimated useful lives
Comprehensive Operations. Fees charged only when they increase the future
at the following rates per annum:
to policyholders, related to insured risk and economic benefits embodied in the specific
Buildings 2.5%
associated administrative costs are asset to which they relate. All other
Computer equipment 10% – 33%
recorded in Commissions, management fees expenditures are recognised in Operating
Furniture, equipment
and other on the Consolidated Statements of expenses on the Consolidated Statements
and leasehold improvements 10% – 20% of Operations as incurred. Annually,
Comprehensive Operations. These fees are
recognised as revenue from each period in The assets’ residual values, useful lives and Management reviews the remaining portion
accordance with the terms of the contract. method of depreciation are reviewed of Intangible assets based upon estimates
regularly, at minimum at the end of each of future earnings and recognises any
67
permanent impairment in Amortisation, plan there are no further legal or income, in which case the current and
depreciation and impairment on the constructive obligations to the Group. deferred taxes are also recognised in Other
Consolidated Statements of Operations in Contributions are recognised as employee comprehensive income.
the year in which it is identified. benefits on the Consolidated Statements of
Operations under Operating expenses in Current taxes are based on the taxable
2.14 EMPLOYEE BENEFITS the period to which they relate. result for the period. The taxable result for
Post-employment benefits the period differs from the result as
The Group operates a post-employment Stock-based compensation reported on the Consolidated Statements of
medical benefit plan for the benefit of its The Restricted Stock Plan is accounted for Operations because it excludes items that
employees. The plan is closed to new under the fair value method. The fair value are non-assessable or disallowed and it
entrants effective April 1, 2011. The Group of each share granted under the Restricted further excludes items that are taxable or
accrues the cost of these defined benefits Stock Plan is based upon the market price deductible in other periods. It is calculated
over the periods in which the employees at the date of grant. The estimated fair using tax rates that have been enacted or
earn the benefits. The post-employment value is recognised as an expense pro rata substantively enacted by the end of the
benefit liability is calculated using the over the vesting period, adjusted for the reporting period.
projected unit credit actuarial cost method. impact of any non-market vesting conditions.
This is included in the Operating expenses Deferred taxes are generally recognised
The present value of the defined benefit
on the Consolidated Statements of for all temporary differences. Deferred tax
liability is determined by discounting the
Operations and in the Contributed surplus assets are recognised to the extent that it
estimate of future cash flows using interest
on the Consolidated Statements of Changes is probable that taxable profits will be
rates of AA-rated corporate bonds that have
in Equity. available, against which deductible
terms to maturity that approximate the
temporary differences can be utilised. The
terms of the related post-employment
At each reporting date, the Group reviews carrying amount of deferred tax assets is
benefit liability. Remeasurements of the net
its estimate of the number of shares that reviewed at the end of each reporting
defined benefit liability, which comprise
are expected to vest. It recognises the period and reduced to the extent that it is
actuarial gains and losses, are recognised
impact of the revision of original estimates, no longer probable that sufficient taxable
in Other comprehensive income on the
if any, on the Consolidated Statements of profit will be available to allow all or part
Consolidated Statements of Comprehensive
Operations, and a corresponding adjustment of the asset to be utilised. Deferred tax is
Operations. Interest expense and other
is made to Contributed surplus over the calculated at the tax rates that are
expenses related to the post-employment
remaining vesting period. expected to apply to the period when the
medical benefit plan are recognised in
asset is realised or the liability is settled,
Operating expenses on the Consolidated 2.15 TAXATION based on tax rates that have been enacted
Statements of Operations. Current and deferred taxes are recognised or substantively enacted by the end of the
on the Consolidated Statements of reporting period.
Pensions
Operations, except when they relate to
The Group operates a defined contribution
items recognised in Other comprehensive
plan. On payment of contributions to the
68
Current tax assets and liabilities are offset 2.17 LEASES payments. The discount rate used in the
when the Group has a legally enforceable Leases are recognised as Right-of-use valuation is the interest rate implicit in the
right to set off the recognised amounts and assets and corresponding liabilities at the lease, or if this rate is not available, at the
intends either to settle on a net basis, or to date the lease assets are available for use incremental borrowing rate. Subsequently,
realise the asset and settle the liability by the Group. For the year ended March 31, Lease liabilities are recorded at amortised
simultaneously. Deferred tax assets and 2021, Right-of-use assets and Lease cost using the effective interest method
liabilities are offset when the Group has a liabilities are presented as separate lines and the related interest expense is
legally enforceable right to settle its current in the Consolidated Balance Sheets, this recognised in Operating expenses on the
tax assets and liabilities on a net basis. represents a change in presentation from Consolidated Statements of Operations.
the prior year. The 2020 comparatives The Group has elected to recognise lease
2.16 SHARE CAPITAL have been restated to conform with the payments for short-term and low-value
Common shares current presentation. contracts on a straight-line basis over the
Common shares are classified as equity. lease term in Operating expenses.
Incremental costs directly attributable to 2.17.1 Right-of-use assets
the issue of common shares are recognised Right-of-use assets are recorded at cost, 2.18 EARNINGS PER SHARE
as a deduction from equity. which is the initial amount of the lease Basic earnings per share is presented on
liability, less accumulated amortisation. the Consolidated Statements of Operations
Treasury shares Right-of-use assets consist of ﬁxed assets and is calculated by dividing net earnings
When share capital recognised as equity such as rental space and other assets by the time-weighted average number of
is repurchased, the amount of the arising from leases recognised at the shares in issue during the year.
consideration paid, which includes direct commencement date of the contract, which
attributable costs, net of any tax effects, is when the leased asset is made available 2.19 SEGMENT REPORTING
is recognised as a deduction from equity. for the Group. The Group calculates The Group is organised into operating
Repurchased shares are classified and depreciation using the straight-line segments based on their products and
presented under Treasury Shares on the method and is presented in Amortisation, services. These operating segments mainly
Consolidated Statements of Changes in depreciation and impairment on the operate in the financial services industry.
Equity. When Treasury Shares are Consolidated Statements of Operations. The Chief Executive Officer and the Board
subsequently sold or reissued, the amount of Directors review the business and make
received is recognised as an increase in The depreciation period is based on the strategic decisions primarily by operating
equity, and the resulting surplus or deficit estimated useful life, which is the lease segments.
on the transaction is presented in period. Right-of-use assets are amortised
Contributed surplus on the Consolidated over periods ranging from 2 to 10 years. Effective April 1, 2020, the Group amended
Statements of Changes in Equity. the structure of the reportable segments to
2.17.2 Lease liabilities reflect the geographical areas, the change
At the commencement date of the contract, in the management structure and internal
Lease liabilities are recognised based on the financial reporting of the Group.
discounted value of the outstanding lease
69
The Group’s new reportable segments segment as well as those that can be 2.21 APPLICATION OF NEW AND
are as follows: allocated on a reasonable basis. Segment REVISED ACCOUNTING
(i) Americas employee benefits and health operating revenue is derived primarily STANDARDS
– comprised of health insurance, from insurance premiums and fees and 2.21.1 New and revised standards
pensions, annuities, local life, long-term commission income. effective April 1, 2020
disability insurance and health care The Group has applied the following new
providers within the Americas region; 2.20 THE IMPACT OF COVID-19 ON and revised standards, relevant to the
(ii) Americas wealth management – THE GROUP Group, which are issued by IASB that are
including investment and asset In early 2020, many countries experienced mandatorily effective for the accounting
management, and financial planning an outbreak of the COVID-19 disease, which period beginning April 1, 2020.
within the Americas region; was later declared to be a global pandemic
(iii) Americas property and casualty by the World Health Organization. Measures 2.21.1(a) 2018 Conceptual Framework
insurance – including fire and windstorm adopted by governments in countries Effective April 1, 2020, the Group adopted
(home and commercial property), all worldwide to mitigate the spread have the revised Conceptual Framework for
risks, liability, marine, motor coverage, significantly impacted the global economy, Financial Reporting (2018 Conceptual
employer’s indemnity coverage and the which could deepen if the pandemic is Framework) which was issued in March
related brokerage services in the prolonged. The Group continues to monitor 2018. The amendments were applied
Americas region; and evaluate the impact of the pandemic on retrospectively. The 2018 Conceptual
(iv) Europe property and casualty insurance its business which, includes stress and Framework provides revised definitions
– including fire and windstorm (home scenario testing, and has implemented of an asset and a liability, as well as new
and commercial property), all risks, processes for the continuation of operations guidance on measurement, derecognition,
liability, marine, motor coverage, and to support the well-being of customers, presentation and disclosure. The adoption
employer’s indemnity coverage and the employees and broader communities. The of these amendments did not have a
related brokerage services in Gibraltar; risks associated with the COVID-19 pandemic significant impact on the Group’s
(v) Europe brokerage companies – are being managed in accordance with the Consolidated Financial Statements.
comprised of insurance brokers in Group’s existing risk management
framework. Business continuity plans are in 2.21.1(b) Amendments to IFRS 3 Business
Malta; and
effect across the Group, with a significant Combination
(vi) All other – representing the combined
majority of employees continuing to work Effective April 1, 2020, the Group adopted
operations of the remaining components
remotely to provide service to customers the amendments to IFRS 3 Business
of the Group comprising of management
and maintain operations and technology Combinations which were issued in October
companies and a holding company.
functions. The Group’s statutory capital 2018. The amendments were applied
The Group evaluates performance of remains well in excess of its minimum retrospectively. The amendments revised
operating segments on the basis of profit regulatory requirements and has sufficient the definition of a business and provide a
or loss from operations. Segment results margin to absorb the potential impact of simplified assessment of whether an
include items directly attributable to a this event. acquired set of activities and assets
70
qualifies as a business. The adoption of

EFFECTIVE DATE
these amendments did not have a significant
TOPIC FOR THE COMPANY EXPECTED IMPACT
impact on the Group’s Consolidated
Financial Statements. Amendments to IFRS 16
COVID-19-related Rent Concessions April 1, 2021 No significant impact
2.21.1(c) Amendments to IAS 1 Presentation
of Financial Statements and IAS 8 Annual Improvements to
Accounting Policies, Changes in IFRS Standards 2018-2020 April 1, 2022 No significant impact
Accounting Estimates and Errors
Effective April 1, 2020, the Group adopted Amendments to IFRS 3
the Amendments to IAS 1 Presentation of Business Combination April 1, 2022 No significant impact
Financial Statements and IAS 8 Accounting
Policies, Changes in Accounting Estimates Amendments to IAS 16
and Errors. The amendments were applied Property Plant and Equipment –
retrospectively. The amendments clarify Proceeds before Intended Use April 1, 2022 No significant impact
the definition of ‘material’ and provide
Amendments to IAS 37
guidance to improve consistency in its
Provisions, Contingent Liabilities and
application in IFRS standards. Adoption
Contingent Assets – Onerous Contacts –
of these amendments did not have a
Cost of fulfilling a Contracts April 1, 2022 No significant impact
significant impact on the Group’s
Consolidated Financial Statements. IFRS 9 Financial Instruments April 1, 2023* Impact assessment in progress
2.22 FUTURE ACCOUNTING AND IFRS 17 Insurance Contracts April 1, 2023 Impact assessment in progress
REPORTING CHANGES
* Deferral option was exercised, refer to discussion in 2.22.6
There are a number of accounting and
reporting changes issued under IFRS,
including those still under development by
the IASB. A summary of the recently issued
new accounting standards that will impact
the Group in 2021 and beyond is as follows:
71
2.22.1 Amendments to IFRS 16 amendments update reference to the old 2.22.5 Amendments to IAS 37 Provisions,
COVID-19 Related Rent version of the Conceptual Framework with Contingent Liabilities and
Concessions a reference to the latest version issued in Contingent Assets
In May 2020, the IASB issued amendments March 2018 and added an exception to its In May 2020, the IASB issued Onerous
to IFRS 16 COVID-19 Related Rent requirement for an entity to refer to the Contracts – Cost of Fulfilling a Contract,
Concessions; effective for annual periods Conceptual Framework to determine what which includes amendments to IAS 37
beginning on or after June 1, 2020, constitutes an asset or a liability. Adoption Provisions, Contingent Liabilities and
with earlier application permitted. The of these amendments are not expected to Contingent Assets. The amendments
amendment provides lessees with a have a significant impact on the Group’s specify that the ‘cost of fulfilling’ a contract
practical expedient to not account for Consolidated Financial Statements. comprises the ‘costs that relate directly to
COVID-19-related rent concessions as the contract’. Costs that relate directly to
lease modifications. Adoption of these 2.22.4 Amendments to IAS 16 Property a contract can either be incremental costs
amendments are not expected to have a Plant and Equipment – Proceeds of fulfilling that contract or an allocation of
significant impact on the Group’s before Intended Use other costs that relate directly to fulfilling
Consolidated Financial Statement. In May 2020, the IASB issued Property, contracts. The amendments are effective
Plant and Equipment – Proceeds before In- for annual periods beginning on or after
2.22.2 Annual Improvements to IFRS tended Use, which includes amendments to January 1, 2022. Adoption of these
Standards 2018-2020 IAS 16 Property, Plant and Equipment. The amendments are not expected to have
In May 2020, the IASB issued Annual amendments prohibit deducting from a significant impact on the Group’s
Improvements to IFRS Standards 2018–2020, the cost of an item of property, plant and Consolidated Financial Statements.
which includes minor amendments to equipment any proceeds from selling items
three IFRS standards applicable to the produced while bringing that asset to the 2.22.6 IFRS 9, Financial Instruments
Consolidated Financial Statements. The location and condition necessary for it to In July 2014, the final version of IFRS 9
amendments are effective for annual be capable of operating in the manner Financial Instruments (IFRS 9) was issued,
periods beginning on or after January 1, intended by Management. The amendments which replaces IAS 39 Financial Instruments:
2022, with earlier application permitted. are effective for annual periods beginning Recognition and Measurement (IAS 39)
Adoption of these amendments are not on or after January 1, 2022, with earlier and will be applied retrospectively or on a
expected to have a significant impact on the application permitted. Adoption of these modified retrospective basis. The project
Group’s Consolidated Financial Statements. amendments are not expected to have a has been divided into three phases:
significant impact on the Group’s classification and measurement, impairment
2.22.3 Amendments to IFRS 3 Business Consolidated Financial Statements. of financial assets, and hedge accounting.
Combinations IFRS 9 provides that financial assets are
Amendments to IFRS 3, Business classified and measured on the basis of the
Combinations were issued in May 2020, entity’s business model for managing the
and are effective for business combinations financial assets and the contractual cash
occurring on or after January 1, 2022, with flow characteristics of the financial assets.
earlier application permitted. The
72
IFRS 9 also introduces an impairment model liabilities exceeds 90 percent. For the 2.22.7 IFRS 17, Insurance Contracts
for financial instruments not measured at purpose of calculating the predominance In May 2017, the IASB issued IFRS 17,
fair value through profit or loss that requires ratio, liabilities connected with insurance which replaces IFRS 4. IFRS 17 establishes
recognition of expected losses at initial include segregated fund liabilities of $1.5 the principles for the recognition,
recognition of a financial instrument and billion. measurement, presentation and disclosure
the recognition of full lifetime expected of insurance contracts. IFRS 17 provides
losses if certain criteria are met. The Group will continue to apply IAS 39 comprehensive guidance on accounting
until April 1, 2023. To enable a comparison for insurance contracts. For non-life
Revisions issued in July 2014 replace the with entities applying IFRS 9, entities that insurance contracts, IFRS 17 introduces
existing incurred loss model used for apply the deferral approach are required mandatory discounting of loss reserves
measuring the allowance for credit losses to disclose the following information: as well as a risk adjustment for non-
with an expected loss model. In October financial risk. Further, IFRS 17 will change
2017, the IASB issued narrow-scope • Fair value and changes in fair value
the presentation of insurance contract
amendments to IFRS 9. The amendments separately for: (a) those financial
revenue. Gross written premium will no
clarify the classification of certain assets that pass the solely payments
longer be presented in the Statement of
prepayable financial assets and the of principal and interest (SPPI) test,
Comprehensive income.
accounting of financial liabilities following excluding any financial asset that
modification. Management is assessing meets the definition of held-for- For long-duration life insurance contracts,
the impact of this standard on the trading in IFRS 9, or that is managed IFRS 17 is expected to have a significant
consolidated financial statements. and whose performance is evaluated impact on actuarial modelling, as more
on a fair value basis and (b) all other granular cash flow projections and regular
To address concerns about differing financial assets, including financial updates of all assumptions will be
effective dates of IFRS 9, which was assets that are managed and whose required, either resulting in profit or loss
effective on January 1, 2018, and IFRS 17 performance is evaluated on a fair or impacting the “contractual service
Insurance Contracts, which is effective on value basis. Refer to Note 6.1. margin”, a separate component of the
January 1, 2023, amendments to IFRS 4 • Credit ratings of financial assets that insurance liability representing unearned
Insurance Contracts was issued, which pass the SPPI test. Financial assets profits from in-force contracts.
provide companies whose activities are which pass the SPPI test are assets
predominantly related to insurance an with contractual terms that give rise In order to evaluate the effects of
optional temporary exemption from on specified dates to cash flows that adopting IFRS 17 in the consolidated
applying IFRS 9 until the effective date of are solely payments of principal and financial statements, a joint IFRS 17 and
IFRS 17. Based on an analysis performed as interest on the principal amount IFRS 9 Group Implementation Programme
of March 31, 2019, the Group is eligible to outstanding. Refer to Note 6.1. was set up and third-party consultants
apply the temporary exemption as the were hired. A steering committee
predominance ratio reflecting the share of comprising Senior Management from
liabilities connected with insurance to total Finance, Actuarial, Risk, Operations and
73
Investment Management oversees the work The Group is expecting that adoption of The fair value of the identifiable net assets
performed by the third-party consultants this standard will have a significant impact acquired and the goodwill arising from the
and the working group. The third-party on the Group’s Consolidated Financial acquisition were as follows:
consultants work with the technical Statements.
committee in the assessment of the Group’s As at Acquisition Date
accounting policies and methodologies
and for assessment of systems implications 3 Acquisitions Net assets at fair value 3,740
Intangibles arising on acquisition 19,835
and data flows.
Effective June 30, 2020, Island Health TOTAL CONSIDERATION 23,575
The Group is evaluating the impact of Services (including the Family Practice
adopting IFRS 17 on the financial Group assets) and I.H.S Laboratories
The Group incurred acquisition-related
statements which includes: became wholly owned subsidiaries of Argus
costs of $0.3 million on legal fees and
• drafting the accounting policy position Group Holdings Limited. The acquisition of
due diligence costs, which are shown in
papers and methodologies; and these Bermuda-based medical practices is
Operating expenses on the Consolidated
• modelling the transition impact on in line with the Group’s strategy to diversify
Statements of Operations.
equity based on IFRS 17 and IFRS 9 its operations and create a better health
accounting policy options and working partnership. From date of acquisition to March 31, 2021,
assumption. the newly acquired companies generated
The purchase consideration is subject to
revenues of $11.9 million and net profit of
The Group’s implementation programme is certain adjustments dependent on the
$3.4 million.
progressing in line with expectations. IFRS 17 future profitability of the business. $17.0
is currently expected to be effective for the million cash was settled on June 30, 2020,
Group on April 1, 2023, and is to be applied while the remaining balance is payable over
retrospectively to each group of insurance the next four years. The fair value estimate
contracts unless impracticable. If, and only of the contingent consideration as of March
if, it is impracticable to apply IFRS 17 31, 2021 is $7.1 million. The contingent
retrospectively for a group of insurance consideration is based on the achievement
contracts, an entity shall apply IFRS 17 using of performance-related milestones and the
a modified retrospective approach or a fair range of undiscounted payment outcomes
value approach. is between zero and $8.5 million.
In November 2018, the IASB decided to defer

the effective date of IFRS 17 and IFRS 9 by
one year, to April 1, 2022. In March 2020,
IASB decided to further defer the effective
date by another year, to April 1, 2023.
74
4 Assets and Liabilities Held-for-Sale

In March 2018, Management committed to
AS AT MARCH 31 2021
2020
a plan to sell the International Life Division,
including the related assets and liabilities. Cash and short-term investments 4,094 2,750
The Group is currently active in the market Investments 13,247 18,969
to locate potential buyers, has distributed Reinsurers’ share of:
offering documents and has signed Claims provisions 2,868 2,972
non-disclosure agreements with interested Unearned premium 97 67
parties. Subsequent to year end, the Other assets 1,022 1,426
Group entered into a Sales and Purchase Investment properties 4,240 4,500
Intangible assets 865 865
Agreement with an unrelated party and the
sale was completed on July 1, 2021. Refer to Total General fund assets held-for-sale 26,433 31,549
Segregated fund assets held-for-sale 519,222 460,449
Note 38.2 for details.
545,655 491,998
Management also committed to a plan for
the settlement of an outstanding mortgage LIABILITIES
Life and annuity policy reserves 10,568 10,454
loan receivable, which is fully collateralised
Insurance balances payable 4,771 4,576
via a first mortgage over the Whitecrest
Accounts payable and accrued liabilities 360 239
properties situated in Bermuda. The
Total General fund liabilities held-for-sale 15,699 15,269
settlement of the outstanding loan is
Due to related parties – net (1) 1,767 660
dependent upon the sale of the collateral
Segregated fund liabilities held-for-sale 519,222 460,449
property. The sale of the Whitecrest
536,688 476,378
properties, previously presented as held-
for-sale, was completed in March 2021. (1) The divestment plan of the International Life Division includes the settlement of the Due (to)/from related parties – prior to the effective date of sale.
Management also committed to a plan for

the sale of certain property units held by
the Group as investment properties,
discussions are ongoing.
The following table shows the assets and

liabilities held-for-sale measured at
carrying value.
75
5 Cash and Short-term 6 Investments

Investments
6.1 CARRYING VALUES AND ESTIMATED FAIR VALUES OF INVESTMENTS
AS AT MARCH 31 2021 2020 MARCH 31, 2021 MARCH 31, 2020

Carrying Fair Carrying Fair
Cash at bank and in hand 64,492 62,129 Value Value Value Value
Short-term investments 10,062 9,372
Available-for-sale
74,554 71,501 Bonds 415,054 415,054 409,985 409,985
Equities 14,377 14,377 10,402 10,402
Included in Cash at bank and in hand is 429,431 429,431 420,387 420,387
restricted cash of E3.7 million ($4.5 million)
Investments at FVTPL (1)
(2020 – E3.3 million ($3.7 million)). Certain
Bonds 21,012 21,012 4,769 4,769
subsidiaries have arrangements in place
Equities 1,441 1,441 1,254 1,254
on behalf of clients in order to comply with
22,453 22,453 6,023 6,023
regulatory requirements in Malta.
Loans and receivables
$5.0 million (2020 – $7.7 million) of cash at Mortgages and loans 15,180 16,188 15,332 16,270
bank and in hand is held to support the Policy loans 41 41 43 43
investment contract liabilities associated 15,221 16,229 15,375 16,313
with deposit administration pension plans Derivatives
(Note 20), while no amount (2020 – $1.7 Other (2) - - 3,731 3,731
million) is held as collateral related to Foreign currency forward contracts - - 70 70
derivative transactions as there are no - - 3,801 3,801
derivatives held at March 31, 2021. TOTAL INVESTMENTS 467,105 468,113 445,586 446,524
Bank overdrafts that are repayable on (1) Fair value through profit or loss (FVTPL)
(2) Other consists of interest rate swaps, credit default swaps, options and futures. However, no derivatives were held in the portfolio at end
demand and form an integral part of the
of the year.
Group’s cash management are included as a
component of Cash at bank and in hand.
As of March 31, 2021 and 2020, the Group’s
bank overdraft position is not material.
76
INVESTMENT COMPOSITION During the year, certain fixed income and Investments that meet the SPPI criterion
(In millions)
equity investments classified under the As discussed in Note 2.22.6, the Group has
held-for-trading category were sold due to investments of $405.1 million (2020 –
436.1
414.8 portfolio reallocations, as the Group seeks $378.6 million) that meet the SPPI criterion.
to simplify and diversify its investment This refers to bonds, mortgages and loans,
holdings. All investments purchased and policy loans. The change in the fair
during the year were classified under value of these invested assets during the
available-for-sale. This is in consideration of year is a gain of $4.5 million (2020 – loss
Management’s intent to hold the investments of $6.2 million). In terms of credit quality
for an indefinite period of time and use the of such assets (excluding mortgages), 98
15.8 11.7 15.2 15.4 0.0 3.8 investments for strategic asset/liability percent (2020 – 98 percent) investments
management purposes, which may be sold are above investment grade assets and the
BONDS EQUITIES MORTGAGE OTHER
AND LOANS from time to time to effectively manage remaining 2 percent (2020 – 2 percent) are
interest rate exposure, prepayment risk below investment grade assets.
and liquidity needs.
Investments with a carrying value of $46.2
Included in Bonds are investments that million (2020 – $51.5 million) do not have
INVESTMENT CLASSIFICATION support the investment contract liabilities SPPI qualifying cash flows as at March 31,
(In millions)
associated with deposit administration 2021. The change in the fair value of these
pension plans (Note 20) of $226.3 million invested assets during the year is a gain of
429.4
420.4 (2020 – $230.3 million). These investments $1.4 million (2020 – loss of $1.6 million).
are maintained under a separate account
to provide the policyholders certain Equities with a carrying value of $15.9
protections from creditors of the Group. million (2020 – $15.5 million, including
derivatives) do not meet the SPPI criterion
Equities include investment in certain as at March 31, 2021.
companies domiciled in Bermuda of $1.4
22.5
6.0 15.2 15.4 0.0 3.8 million (2020 – $2.5 million) where the Investments presented as assets held-
Group has more than 20 percent interest. for-sale with a carrying value of $13.2 million
AVAILABLE- INVESTMENTS LOANS AND DERIVATIVES
However, there is no significant influence (2020 – $19.0 million), refer to mortgages
FOR-SALE AS FVTPL RECEIVABLES
over the investee’s operational and and loans and bond funds, and do not have
financial policies. This is due to restrictive SPPI qualifying cash flows as at March 31,
voting rights and limited access to the 2021. The change in the fair value of these
2021 2020 technical information of these investees. invested assets during the year is a gain
of $1.9 million (2020 – $0.8 million).
77
6.2 DERIVATIVE FINANCIAL The net earnings/(losses) arising from the Group’s derivative financial instruments, recognised
INSTRUMENTS as Investment income on the Consolidated Statements of Operations, are as follows:
The Group’s investment guidelines
permit the investment managers to utilise AS AT MARCH 31 2021 2020
exchange-traded futures and options
Derivative financial instruments
contracts, over-the-counter (OTC)
Foreign currency forward - 315
instruments, including interest rate swaps,
Other derivatives (1) - 2,400
credit default swaps, swaptions and forward
TOTAL NET INCOME/(LOSSES) FROM DERIVATIVE
foreign currency contracts. Derivatives are
FINANCIAL INSTRUMENTS - 2,715
used for yield enhancement, duration
management, interest rate and foreign (1) Other derivatives consist of futures, options, interest rate swaps, credit default swaps and swaptions.
currency exposure management, or to obtain

an exposure to a particular financial market. 6.2.1 Futures
These positions are monitored regularly. Futures provide the Group with estimated daily and the margin is adjusted
The Group principally may have exposure participation in market movements, accordingly with unrealised gains and/or
to derivatives related to the following types determined by the underlying instrument losses settled daily in cash and/or
of risks: foreign currency risk, interest rate on which the futures contract is based, securities. A realised gain (loss) is
risk and credit risk. without holding the instrument itself or the recognised when the contract is closed.
individual securities. This approach allows
The Group has the following transactions the Group more efficient and less costly Futures contracts expose the Group to
and balances related to its derivative access to the exposure than would be credit, market and liquidity risks. The
activities: available by the exclusive use of Group is exposed to credit risks to the
individual fixed income and money market extent that the counterparties are not
AS AT MARCH 31 Note 2021 2020 securities. Futures contracts may also be able to perform under the terms of the
used as substitutes for ownership of the contract. Market risk arises when adverse
Derivative assets - 3,801 changes occur in the estimated fair values
Derivative liabilities 17 - (3,546) physical securities. All futures contracts
are held on a non-leveraged basis. An initial of the underlying securities.
Collateral (1) - 1,783
margin is provided, which is a deposit of Liquidity risk represents the possibility
(1) Collateral refers to cash held in favour of third parties.
cash and/or securities in an amount equal that the Group may not be able to rapidly
to a prescribed percentage of the contract adjust the size of its forward positions at
value. The fair value of futures contracts is a reasonable price in times of high
78
volatility and financial stress. Exchange- 6.2.3 Interest Rate Swaps 6.2.4 Credit Default Swaps
traded futures are, however, subject to a Swaps are used to manage interest rate Credit default swaps (CDS) are used to
number of safeguards to ensure that exposure, portfolio duration or capitalise on manage exposure to the market or certain
obligations are met, including the use of anticipated changes in interest rate sectors of the market. A CDS contract
clearing houses, the posting of margins volatility without investing directly in the provides protection against the decline in
and the daily settlement of unrealised gains underlying securities. Swaps are recorded the value of the underlying assets as a
and losses and counterparty credit risk at estimated fair values at the end of each result of specified credit events, such as
evaluation. Credit, market and liquidity period with unrealised gains and losses default or bankruptcy. CDS requires the
risks and how these risks are mitigated recorded in Investment income on the purchaser to pay a premium to the seller
are disclosed in Note 23.3. Consolidated Statements of Operations. of the CDS contract in return for payment
contingent on the occurrence of a credit
At March 31, 2021, the Group has no Interest rate swap agreements entail the event. The protection purchaser has
outstanding futures (2020 – long positions exchange of commitments to pay or receive recourse to the protection seller for the
of $65.4 million and short positions of interest, such as an exchange of floating difference between the face value of the
$54.3 million). rate payments for fixed rate payments, with CDS contract and the fair value of the
respect to a notional amount of principal. underlying asset at the time of the
6.2.2 Options These agreements involve elements of
The Group’s investment guidelines settlement. Neither the purchaser nor the
credit and market risk. Such risks include seller under the CDS contract has recourse
permit the use of exchange-traded and the possibility that there may not be a
OTC options, which are used to manage to the entity that issued the reference
liquid market, that the counterparty may assets. At March 31, 2021, the Group has
exposure to interest rate risk and also to default on its obligation to perform or that no opened CDS contracts (2020 – long
hedge duration. Exchange-traded options there may be unfavourable movements in positions of $5.8 million and short positions
are held on a similar basis to futures and interest rates. Credit risk is mitigated by
are subject to similar safeguards. Options of $8.4 million).
making collateral calls to mitigate exposure
are contractual arrangements that give the and counterparty credit risk evaluation. 6.2.5 Foreign Currency Forward
purchaser the right, but not the obligation, Credit, market and liquidity risks and how A foreign currency forward contract is a
to either buy or sell an instrument at a these risks are mitigated are disclosed in commitment to purchase or sell a foreign
specific set price at a predetermined future Note 23.3. currency at a future date, at a defined rate.
date. The Group may enter into option The Group may utilise currency forward
contracts that are secured by holdings in At March 31, 2021, the Group has no open contracts to gain exposure to a certain
the underlying securities or by other means interest rate swaps (2020 – long positions currency or market rate or manage the
which permit immediate satisfaction of the of $nil and short positions of $13.2 million). impact of fluctuations in foreign currencies
Group’s obligations. At March 31, 2021, the on the value of its foreign currency
Group has no options (2020 – long positions denomination investments.
of $nil and short positions of $6.3 million).
79
The notional amount of a derivative 6.3 REVERSE SALE AND

contract is the underlying quantity upon REPURCHASE AGREEMENTS
which payment obligations are calculated. During the year, the Group entered into
A long position is equivalent to buying reverse sale and repurchase agreements
the underlying currency, whereas a short (reverse repos) on investments. The money
position is equivalent to having sold the received from these agreements where the
underlying currency. Group is the borrower (i.e. where the Group
is under an obligation to take the securities
At March 31, 2021, the Group had no open back) is shown on the Consolidated Balance
foreign currency forward contracts. Sheets as a Payable arising from reverse
repos. The securities delivered to the lender
MARCH 31, 2020 Notional Short Notional Long
continue to be reported in Investments
on the Consolidated Balance Sheets in
South Korean Won 514,577 521,005
Japanese Yen 49,501 49,700
accordance with their relevant category.
Indian Rupee 25,996 25,649
During the year, cash flows arising from
Sterling 3,637 1,808
these agreements amounted to sales and
Euro 1,867 353
Australian Dollar 596 602
purchases of $68.6 million (2020 – $304.0
Swiss Franc 335 332
million), which are shown net in cash used
in investing activities in the Consolidated
Statement of Cash Flows.
At March 31, 2020, the U.S. dollar equivalent
and notional value of these outstanding Transactions arising from these agreements
foreign currency forward contracts with are subject to a master netting agreement
long positions and short positions amounted that creates a contingent right of offset
to $4.6 million and $8.5 million respectively. that does not qualify for offsetting.
As of March 31, 2021 and 2020, the Group

does not hold any outstanding balances
arising from reverse repos.
80
6.4 INVESTMENT INCOME 6.5 INVESTMENT CLASSIFICATION

Effective April 1, 2016, the Group
AS AT MARCH 31 2021 2020 redesignated certain fixed-income
investments with a carrying value and fair
Interest income
Bonds – available-for-sale 11,323 13,730 value of $318.6 million from the held-for-
Bonds – at FVTPL 82 131 trading to the available-for-sale category.
Bonds – held-to-maturity - 24 The valuation of these investments is based
Mortgages and loans 55 626 on Level 2 and 3 inputs in the fair value
Cash and other 613 686 hierarchy, as defined in Note 7.
12,073 15,197
To the extent possible, Management
Dividend income intends to hold the investments for an
Equities – available-for-sale 396 2,012
indefinite period of time, taking into
Equities – at FVTPL - 2
consideration the use of the assets for
396 2,014
strategic asset/liability management. These
Net realised and unrealised gains/(losses) on investments investments are not held for the purpose of
Bonds – available-for-sale 5,732 7,411 being sold or repurchased in the near term,
Bonds – at FVTPL (2,617) 389 with the intention of profiting from short-
Equities – at FVTPL 186 (503) term price changes. Management believes
Equities – available-for-sale (27) 94
that the users of the financial statements
Derivative financial instruments (109) 2,576
are better served by redesignating these
Investment properties (260) (3,901)
investments to available-for-sale.
2,905 6,066
Other Management redesignated these
Amortisation of mortgages and net premium on bonds investments to the available-for-sale
(1,601) (1,281)
Rental income and other category as allowed by IAS 39 Financial
671 430
Impairment charges (1) (238)
Instruments. The investments were (1,146)
(1,168) (1,997) redesignated at their fair values as of April
INVESTMENT INCOME BEFORE DEDUCTIONS 14,206 21,280 1, 2016 and the effect of the change was
Deductions applied prospectively in these financial
Investment income relating to Deposit administration pension plans (1,364) (1,764) statements from the date of redesignation.
INVESTMENT INCOME 12,842 19,516
The carrying value of the redesignated
(1) The Group recorded an impairment on certain non-residential mortgages, classified under Assets-held-for-sale (Note 4). The impairment investments as of March 31, 2021 is $26.1
recognised is the difference between the carrying value and the recoverable value, which is determined based on market value of the underlying million (2020 – $42.2 million).
collateral property.
81
The table below sets out the amounts If the investments had not been 7 Fair Value Measurement
recognised as Investment income (interest/ redesignated, $2.3 million gain (2020 – $0.3
dividend income and amortisation) on the million loss) would have been recognised A number of the Group’s accounting policies
Consolidated Statements of Operations and as Investment income on the Consolidated and disclosures require the measurement
Other comprehensive income in respect Statements of Operations. of fair values, for both financial and non-
of investments redesignated out of the financial assets and liabilities.
held-for-trading category. The effective interest rates on trading
investments redesignated as available- Fair value is defined as the price that would
AS AT MARCH 31 2021 for-sale investments at April 1, 2016 and be received to sell an asset or paid to
Consolidation Other still held at the reporting date ranged from transfer a liability in an orderly transaction
Statements of Comprehensive
3.1 percent to 6.3 percent (2020 – 3.0 between market participants at the
Operations Income
percent to 5.3 percent), with expected measurement date.
Investment Income 1,425 - recoverable cash flows of $18.2 million
Net unrealised gains/ The Group determines the estimated fair
(2020 – $72.1 million).
(losses) on investments - 2,341 value of each individual security utilising the
1,425 2,341 highest level inputs available. Prices for the
majority of the Group’s investment portfolio
AS AT MARCH 31 2020 are provided by a third-party investment
Consolidation Other accounting firm whose pricing processes
Statements of Comprehensive
Operations Income
and the controls thereon are subject to an
annual audit on both the operation and the
Investment Income 2,144 - effectiveness of those controls. The audit
Net unrealised gains reports are available to clients of the firm
on investments - (339) and the report is reviewed annually by
2,144 (339) Management. In accordance with their
pricing policy, various recognised reputable
INVESTMENT INCOME INCREASE DECREASE pricing sources are used, including
(In millions)
broker-dealers and pricing vendors. The
pricing sources use bid prices where
$19.5
available, otherwise indicative prices are
$0.2 $12.8
quoted based on observable market-trade
$0.9
$(2.4) $(0.6) data. The prices provided are compared
$(1.6)
to the investment managers’ pricing. The
$(3.2)
Group has not made any adjustments to
any pricing provided by independent pricing
services or its third-party investment
MARCH INTEREST INTEREST DIVIDEND NET REALISED IMPAIRMENT OTHER MARCH
2020 INCOME – INCOME – INCOME AND UNREALISED RECOVERY/ 2021
BONDS, NET MORTGAGES GAIN/(LOSS) (LOSS)
OF DEDUCTIONS AND OTHER
82
managers for either year ended March 31, Other similarly quoted instruments or default assumptions, which have market
2021 and 2020. market transactions may be used. observable inputs. Accordingly, Investment
contract liabilities are classified under
Level 1 investments are securities with The Group determines securities classified Level 2.
quoted prices in active markets. A financial as Level 2 to include short-term and fixed
instrument is regarded as quoted in an maturity investments and certain The fair value of the majority of the
active market if quoted prices are readily derivatives, such as: investments for accounts of segregated
and regularly available from an exchange, • U.S. corporate bonds; fund holders is based on net asset values
dealer, broker, industry group, pricing • Municipal, other government and reported by third parties, such as
service or regulatory agency, and those agency bonds; investment managers and fund
prices represent actual and regularly • Foreign corporate bonds; administrators. The fair value hierarchy of
occurring market transactions on an arm’s • Mortgage/asset-backed securities; direct investments within investments for
length basis. The Group determines • Bond and Equity Funds with listed accounts of segregated fund holders, such
securities classified as Level 1 to include underlying assets; and as short-term securities, local equities and
highly liquid U.S. treasuries, certain highly • Derivatives, such as options, forward corporate debt securities, is determined
liquid short-term investments and quoted foreign exchange contracts, interest according to valuation methodologies and
equity securities. rate swaps and credit default swaps. inputs described above in the respective
asset type sections.
Level 2 investments are securities with The fair value of investment properties
quoted prices in active markets for similar was determined by external independent The Group determines whether transfers
assets or liabilities or securities valued using property valuers, having appropriate, have occurred between levels of the fair
other valuation techniques for which all recognised professional qualifications and value hierarchy by re-assessing the
significant inputs are based on observable recent experience in the location and categorisation at the end of each reporting
market data. Instruments included in Level 2 category of the property being valued. period, based on the lowest level input that
are valued via independent external sources The independent valuers provide the fair is significant to the fair value measurement
using modelled or other valuation methods. value of the Group’s investment properties as a whole.
Such methods are typically industry-accepted annually. Fair value is based on market
standard and include: data from recent comparable transactions. Level 3 investments are securities for
• broker-dealer quotes; These assets are classified as Level 2. which valuation techniques are not based
• pricing models or matrix pricing; on observable market data. The Group
• present values; Fair value of the Investment contract classifies unquoted/private equities as
• future cash flows; liabilities (Deposit accounted annuity Level 3, as the valuation technique
• yield curves; policies) is determined by using valuation incorporates both observable and
• interest rates; techniques, such as discounted cash flow unobservable inputs. These investments
• prepayment speeds; and methods. A variety of factors are may be subject to certain lock-up
• default rates. considered in the valuation techniques, provisions. The type of underlying
including yield curve, credit spread and investments held by the investee, which
83
MARCH 31, 2021 Total

Level 1 Level 2 Level 3 Fair Value
form the basis of the net asset valuation,
Cash and short-term investments 74,554 - - 74,554
include assets such as private business
Interest and dividends receivable - 2,448 - 2,448
ventures, to which the Group does not have
Available-for-sale investments
access. The Group considers net assets value Bonds
as a reasonable approximate of fair value. U.S. government 43,306 - - 43,306
U.S. corporates - 215,201 - 215,201
The Group has an established control
Municipal, other government and agency - 52,721 - 52,721
framework with respect to the measurement Foreign corporates - 15,449 - 15,449
of fair values. This includes an investment Mortgage/asset-backed securities - 56,942 - 56,942
validation team that has overall Other (1) - 31,435 - 31,435
responsibility for overseeing all significant Total Available-for-sale bonds 43,306 371,748 - 415,054
fair value measurements, including Level 3
Equities
fair values, and reports directly to the Chief
Global listed equities 2,526 - - 2,526
Financial Officer. The Group’s investment Investment in equity funds - 9,929 - 9,929
validation process includes a review of price Private equity funds and unquoted equities - - 1,922 1,922
movements relative to the market. Any Total Available-for-sale equities 2,526 9,929 1,922 14,377
significant discrepancies are investigated TOTAL AVAILABLE-FOR-SALE INVESTMENTS 45,832 381,677 1,922 429,431
and discussed with investment managers
FVTPL
and a valuation specialist. The process also
Bonds
includes regular reviews of significant
U.S. government 21,012 - - 21,012
observable inputs and valuation adjustments.
Total Bonds at FVTPL 21,012 - - 21,012
Significant valuation issues are reported to
the Board of Directors. FVTPL
Equities
7.1 ASSETS AND LIABILITIES Private equity funds and unquoted equities - - 1,441 1,441
MEASURED AT FAIR VALUE Total Equities at FVTPL - - 1,441 1,441
The following table presents fair value of TOTAL INVESTMENTS AT FVTPL 21,012 - 1,441 22,453
the Group’s assets and liabilities measured Receivable for investment sold - 2,710 - 2,710
at fair value in the Consolidated Balance Investment properties - 2,899 - 2,899
Sheets, categorised by level under the fair TOTAL ASSETS AT FAIR VALUE 141,398 389,734 3,363 534,495
value hierarchy.
LIABILITIES
Investment contract liabilities - 328 - 328
TOTAL LIABILITIES AT FAIR VALUE - 328 - 328
SEGREGATED FUNDS
From continuing operations 4,984 1,177,566 - 1,182,550
Held-for-sale 48,849 296,752 173,621 519,222
TOTAL SEGREGATED FUNDS 53,833 1,474,318 173,621 1,701,772
(1) Investment in bond funds.
84
MARCH 31, 2020 Total

Level 1 Level 2 Level 3 Fair Value
7.1 ASSETS AND LIABILITIES
MEASURED AT FAIR VALUE – Cash and short-term investments 71,501 - - 71,501
continued Interest and dividends receivable - 2,741 - 2,741
Available-for-sale investments
Bonds
ASSET FAIR VALUE LEVELLING 2021 U.S. government 79,921 - - 79,921
3% U.S. corporates - 196,980 - 196,980
Municipal, other government and agency - 41,015 - 41,015
Foreign corporates - 14,197 - 14,197
26% Mortgage/asset-backed securities - 47,967 - 47,967
Other (1) - 29,905 - 29,905
Total Available-for-sale bonds 79,921 330,064 - 409,985
Equities
Global listed equities 1,529 - - 1,529
Investment in equity funds - 6,882 - 6,882
Private equity funds and unquoted equities - - 791 791
Total Available-for-sale equities 1,529 6,882 791 9,202
71% TOTAL AVAILABLE-FOR-SALE INVESTMENTS 81,450 336,946 791 419,187
FVTPL
Bonds
ASSET FAIR VALUE LEVELLING 2020 U.S. government 4,769 - - 4,769
Equities
3%
Private equity funds and unquoted equities - - 1,254 1,254
TOTAL INVESTMENTS AT FVTPL 4,769 - 1,254 6,023
30% Derivatives - 3,799 - 3,799

Receivable for investments sold - 74 - 74
Other financial assets under Other assets - 3,619 - 3,619
Investment properties - 2,899 - 2,899
TOTAL ASSETS AT FAIR VALUE 157,720 350,078 2,045 509,843
LIABILITIES
Investment contract liabilities - 526 - 526
Payables arising from investment transactions - 3,546 - 3,546
67% TOTAL LIABILITIES AT FAIR VALUE - 4,072 - 4,072
SEGREGATED FUNDS
From continuing operations 3,571 862,529 - 866,100
LEVEL 1 LEVEL 3 Held-for-sale 64,483 232,735 163,231 460,449
LEVEL 2 NOT MEASURED AT FAIR VALUE
TOTAL SEGREGATED FUNDS 68,054 1,095,264 163,231 1,326,549
(1) Investment in bond funds.
85
7.2 ASSETS AND LIABILITIES NOT

The following table provides a roll forward for the General fund assets measured at fair value for
MEASURED AT FAIR VALUE
which significant unobservable inputs (Level 3) are used in the fair value measurement.
For assets and liabilities not measured at
MARCH 31, 2021 Available- fair value in the Consolidated Balance
At FVTPL for-sale
Equities Equities Total Sheets, the adjacent table discloses
summarised fair value information
Balance, beginning of year 1,254 791 2,045 categorised by the level in the preceding
Included in Investment income 187 - 187 hierarchy, together with the related
Included in Other comprehensive income - (180) (180) carrying values.
Purchases - 1,311 1,311
1,441 7.3 TRANSFERS OF ASSETS AND
1,922 3,363
LIABILITIES WITHIN THE FAIR
VALUE HIERARCHY
MARCH 31, 2020 Available-
At FVTPL for-sale The Group’s policy is to record transfers of
Equities Equities Total assets and liabilities between levels at their
fair values as at the end of each reporting
Balance, beginning of year 1,876 1,062 2,938
period, consistent with the date of
Included in Investment income (520) (128) (648)
determination of fair value. Assets are
Included in Other comprehensive income - (48) (48)
Purchases - 26 26 transferred out of Level 1 when they are no
Sales/Write Off (102) (121) (223) longer transacted with sufficient frequency
1,254 791 2,045 and volume in an active market. Conversely,
assets are transferred from Level 2 to
Level 1 when transaction volume and
frequency are indicative of an active market.
There were no transfers between Levels 1, 2
and 3 during the year ended March 31, 2021
and 2020.
86

MARCH 31, 2021 Total Carrying
Level 1 Level 2 Level 3 Fair Value Value
ASSETS
Mortgages and loans (1) - 16,188 - 16,188 15,180
Policy loans - 41 - 41 41
TOTAL ASSETS DISCLOSED AT FAIR VALUE - 16,229 - 16,229 15,221
LIABILITIES
Investment Contract liabilities (2) - 245,461 - 245,461 247,916
TOTAL LIABILITIES DISCLOSED AT FAIR VALUE - 245,461 - 245,461 247,916
MARCH 31, 2020 Total Carrying

Level 1 Level 2 Level 3 Fair Value Value
ASSETS
Mortgages and loans (1) - 16,270 - 16,270 15,332
Private equities - - 1,200 1,200 1,200
Policy loans - 43 - 43 43
TOTAL ASSETS DISCLOSED AT FAIR VALUE - 16,313 1,200 17,513 16,575
LIABILITIES
Investment Contract liabilities (2) - 251,609 - 251,609 253,029
TOTAL LIABILITIES DISCLOSED AT FAIR VALUE - 251,609 - 251,609 253,029
(1) Fair value of mortgages and loans is determined by discounting expected future cash flows using current market rates.
(2) Fair value of Investment contract liabilities is based on the following methods:
• Deposit administration pension plans – based on a discounted cash flow method. Factors considered in the valuation include current yield curve, plus
appropriate spreads which have market observable inputs; and
• Self-funded group health policies – the carrying value approximates the fair value due to the short-term nature of these investment contract liabilities.
87
8 Insurance Balances Receivable

Insurance balances receivable is comprised of:
MARCH 31, 2021 Employee Americas Europe Europe

Benefits and Wealth Property and Property and Brokerage
Health Management Casualty Casualty Companies Total
Due from policyholders, 2,787 - 4,984 5,021 7,313 20,105

agents and brokers
Due from reinsurers 3,862 - 576 - - 4,438
TOTAL INSURANCE
BALANCES RECEIVABLE 6,649 - 5,560 5,021 7,313 24,543

Benefits and Wealth Property and Property and Brokerage
Health Management Casualty Casualty Companies Total
Due from policyholders,

agents and brokers 2,450 48 4,263 4,333 4,392 15,486
Due from reinsurers 3,558 - 897 - - 4,455
TOTAL INSURANCE
BALANCES RECEIVABLE 6,008 48 5,160 4,333 4,392 19,941
9 Other Assets
AS AT MARCH 31 2021 2020
Other financial assets

Fees receivable 2,044 1,849
Lease receivable 450 -
Notes and others 3,271 1,770
TOTAL OTHER FINANCIAL ASSETS 5,765 3,619
Income taxes receivable 235 13
Prepaid expenses 5,507 2,181
TOTAL OTHER ASSETS 11,507 5,813
88
10 Deferred Policy Acquisition Costs 12 Investment in Associates

The reconciliation between opening and closing Deferred policy acquisition costs is shown below: The Group’s investment in associates of
$3.1 million (2020 – $2.8 million) comprised
AS AT MARCH 31 2021 2020 of equity interests in a number of
individually immaterial associates. The
Deferral during the year 5,486 4,622
Group’s share in earnings of associates as
Expense for the year (5,361) (4,492) at March 31, 2021 amounts to $0.3 million
Foreign exchange rate movements 155 14 (2020 – $0.03 million).
12.1 CONTINGENCIES AND
RESTRICTIONS
Included in Investment in associates is a
11 Investment Properties 40.7 percent interest (2020 – 40.7 percent)
in a private company domiciled in Bermuda.
Fair Value The Group has entered into operating leases The carrying value of this investment as at
for certain investment properties. The rental March 31, 2021, is $2.8 million (2020 – $2.6
Balance, April 1, 2019 11,300 income arising during the year amounted to million). The Group has issued a guarantee
Unrealised gains/(losses) $0.5 million (2020 – $0.5 million), which is in respect of its proportionate share of a
on investment properties (3,901) included in Investment income on the term bank loan facility totalling $4.7 million
Reclassified as held-for-sale (4,500) Consolidated Statements of Operations. (2020 – $4.9 million).
BALANCE, MARCH 31, 2020 2,899 Direct operating expenses included within
Unrealised gains/(losses) Investment income arising in respect of such
on investment properties - properties during the year were $0.7 million
BALANCE, MARCH 31, 2021 2,899 (2020 – $1.0 million).
There are no restrictions on the investment

Investment properties are held primarily for
properties. The Group has no contractual
resale and for rental income under operating
obligations to purchase, construct or
lease agreements. All other investment
develop the investment properties other
properties are stated at fair value. Included
than normal service charge arrangements.
in the Group’s investment properties are
condominium units, fractional apartment
units and a residential property.
89
13 Property and Equipment

Furniture
Land and Computer and other
buildings equipment equipment Total
Gross carrying amount

Balance, March 31, 2019 78,512 40,155 7,007 125,674
Additions 178 1,498 326 2,002
Acquisition of subsidiary 133 56 282 471
Retirements (1) (295) (26,134) - (26,429)
Disposal - (134) (35) (169)
Foreign exchange rate movements (30) (13) (17) (60)
BALANCE, MARCH 31, 2020 78,498 15,428 7,563 101,489
Additions 2,006 2,599 940 5,545
Acquisition of subsidiary 4,497 276 1,185 5,958
Retirements (1) (14) (102) - (116)
Disposal - (87) - (87)
Reversal of impairment loss 202 - - 202
Foreign exchange rate movements 87 51 91 229
BALANCE, MARCH 31, 2021 85,276 18,165 9,779 113,220
Accumulated depreciation
Balance, March 31, 2019 34,766 29,729 6,616 71,111
Depreciation charge for the year 2,368 2,255 201 4,824
Acquisition of subsidiary 125 38 232 395
Retirements (1) (295) (26,134) - (26,429)
Disposals - (30) (35) (65)
Impairments 202 - - 202
Foreign exchange rate movements (28) (14) (14) (56)
BALANCE, MARCH 31, 2020 37,138 5,844 7,000 49,982
Depreciation charge for the year 1,906 2,436 264 4,606
Acquisition of subsidiary 1,190 156 526 1,872
Retirements (1) (14) (142) - (156)
Foreign exchange rate movements 74 34 59 167
BALANCE, MARCH 31, 2021 40,294 8,328 7,849 56,471
Net carrying amount:

As at March 31, 2020 41,360 9,584 563 51,507
AS AT MARCH 31, 2021 44,982 9,837 1,930 56,749
(1) Certain computer, furniture and other equipment were retired. These assets were fully depreciated and were no longer used by the Group.
90
14 Right-of-use Assets and Lease Liabilities

Right-of-use Assets Lease Liabilities Lease Receivable
The Group sub-lease an office building that
Land and AS AT MARCH 31 2021 2020
Building has been presented as part of right-of-use
Undiscounted cash flows assets. The lease and sub-lease expires in
Gross carrying amount 2029. The lease receivable from the
Within 1 year 1,114 905
Balance, April 1, 2019 2,552 sub-lease agreement is included in Other
After 1 year but
Additions (1) 1,895 assets on the Consolidated Statement of
not more than 5 years 3,293 2,423
BALANCE, MARCH 31, 2020 4,447 More than 5 years 1,852 1,419 Balance Sheets.
Additions 602 Undiscounted balance 6,259 4,747
Acquisition of subsidiary 1,299 Effect of discounting 1,164 787
The following table sets out the maturity
Derecognition of right-of-use asset (267) analysis of the lease receivables, showing
LEASE LIABILITIES 5,095 3,960
Foreign exchange rate movements 402 the undiscounted lease payments to be
BALANCE, MARCH 31, 2021 6,483 received after the reporting date.
The exemption on short-term leases was
Accumulated amortisation and applied to certain office rentals which
AS AT MARCH 31 2021
impairment losses resulted in recognising $0.2 million (2020
Depreciation charge for the year 714 – $0.3 million) leases expense in the Undiscounted cash flows
Foreign exchange rate movements (17) operating expenses. Within 1 year 72
BALANCE, MARCH 31, 2020 697 After 1 year but not more than 5 years 288
Depreciation charge for the year 876 The interest expense recognised in More than 5 years 234
Foreign exchange rate movements 97 Operating expenses on the Consolidated Total undiscounted lease receivable 594
BALANCE, MARCH 31, 2021 1,670 Statements of Operations for the year Unearned financial income (144)
ended March 31, 2021 amounted to $0.3
Net carrying amount: LEASE RECEIVABLE 450
million (2020 – $0.2 million).
As at March 31, 2020 3,750

AS AT MARCH 31, 2021 4,813 For the year ended March 31, 2021, interest
income on lease receivable recognised in
(1) The additions pertain to office space rentals in the Americas
Employee Benefits & Health operating segment and Europe Investment income on the Consolidated
Brokerage operating segment. Statements of Operation amounted to $0.02
million (2020 – $nil).
91
15 Intangible Assets
Non-compete As disclosed in Note 3, goodwill was a
Note Customer List Goodwill Agreement Total result of business acquisition in the
Employee Benefits and Health operating
Gross carrying amount
segment of the Group. Goodwill has an
Balance, March 31, 2019 15,329 - - 15,329
indefinite useful life and represents the
Additions 3,080 756 - 3,836
Foreign exchange adjustments (34) - - (34) value of expected synergies arising for the
acquisition, the expertise and reputation of
BALANCE, MARCH 31, 2020 18,375 756 - 19,131
the assembled workforce of the acquired
Additions 3 - 19,835 2,339 22,174 companies. The benefits were not
Foreign exchange adjustments (264) - - (264) recognised separately from goodwill
BALANCE, MARCH 31, 2021
18,111 20,591 2,339 41,041 because they do not meet the recognition
Accumulated amortisation and impairment losses
criteria for identifiable assets.
Balance, March 31, 2019 11,942 - - 11,942 Customer List and the Non-compete
Amortisation charge for the year 619 - - 619 agreement arose from business acquisitions
Foreign exchange adjustments (47) - - (47) in Europe. Customer List is amortised over
12,514 - - 12,514 the remaining useful life which ranges from
Amortisation charge for the year 777 - 545 1,322 4 to 9 years. The Non-compete agreement
Foreign exchange adjustments (264) - - (264) is amortised over the remaining period of
13,027 - 545 13,572 restriction as defined in the agreement,
which ranges from 2 to 4 years.
Net carrying amount:
As at March 31, 2020 5,861 756 - 6,617 No impairment charges were recognised
AS AT MARCH 31, 2021 5,084 20,591 1,794 27,469 on all intangible assets for the years ended
March 31, 2021 and 2020.
92
16 Insurance Balances Payable

Insurance balances payable is comprised of:

Benefits Property and Property and Brokerage
and Health Casualty Casualty Companies Total
Due to policyholders, agents

and brokers 5,283 1,819 1,054 8,283 16,439
Due to reinsurers 1,165 906 1,341 - 3,412
Deferred commission income - 2,674 1,055 1,070 4,799
TOTAL INSURANCE BALANCES
PAYABLE 6,448 5,399 3,450 9,353 24,650

Benefits Property and Property and Brokerage
and Health Casualty Casualty Companies Total
Due to policyholders, agents

and brokers 2,851 1,225 836 6,161 11,073
Due to reinsurers 1,647 122 1,182 - 2,951
Deferred commission income - 2,353 881 900 4,134
TOTAL INSURANCE BALANCES
PAYABLE 4,498 3,700 2,899 7,061 18,158
A reconciliation of the change in deferred commission income is shown below:
AS AT MARCH 31 2021 2020

Deferral during the year 18,005 12,977
Income for the year (17,233) (12,657)
Foreign exchange rate movements (107) 40
93
17 Payables Arising from 18 Accounts Payable and Accrued Liabilities

Investment Transactions
AS AT MARCH 31 Note 2021 2020
AS AT MARCH 31 Note 2021 2020

Accrued staff benefits 7,600 6,080
Derivatives 6.2 - 3,546 Commission payables 230 152
Investment trades Payables and other accrued expense 23,946 14,481
awaiting settlement - - Contingent liability arising from business acquisition 3 7,062 -
Demand loan 1,179 -

- 3,546
TOTAL ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 40,017 20,713
On August 16, 2016, Island Health rate plus two percent per annum. The
Services Limited (the “Borrower”) secured loan is secured by property with carrying
a $750,000 demand loan to finance the value of $2.7 million at March 31, 2021. In
purchase and renovation of 12 Dundonald addition, three directors and IHS
Street building. On January 16, 2019 the Laboratories Ltd have provided the lender
facility letter was amended to increase the with guarantees to cover the full demand
demand loan by $600,000. The total loan loan. At March 31, 2021, the Borrower has
facility is payable in full by February 2032, met all the covenants associated with the
and interest is charged at the bank’s based demand loan.
94
19 Insurance Contract Liabilities

The Group’s Insurance contract liabilities MARCH 31, 2021 Note
Gross Ceded Net
and Reinsurers’ share of claims provisions
and unearned premiums are comprised of: Life and annuity policy reserves 19.1 181,126 3,534 177,592
Provision for unpaid and unreported claims 19.2 34,253 8,565 25,688
INSURANCE CONTRACT LIABILITY 215,379 12,099 203,280
COMPOSITION – GROSS (In millions) Unearned premiums 19.3 21,508 11,552 9,956
Premium rebates liabilities 4,964 - 4,964
181.1
174.1 TOTAL INSURANCE CONTRACT LIABILITIES 241,851 23,651 218,200
MARCH 31, 2020 Note Gross Ceded Net
Life and annuity policy reserves 19.1 174,073 3,110 170,963

Provision for unpaid and unreported claims 19.2 38,679 13,397 25,282
34.3 38.7 212,752 16,507 196,245
21.5 19.2
5.0
Unearned premiums 19.3 19,217 10,662 8,555
0.0
TOTAL INSURANCE CONTRACT LIABILITIES 231,969 27,169 204,800
LIFE AND PROVISION UNEARNED PREMIUM
ANNUITY FOR UNPAID AND PREMIUMS REBATE
POLICY UNREPORTED LIABILITIES In March 2021 the Group launched a $5.0 million premium rebates scheme for all its health
RESERVES CLAIMS insureds in recognition of the impact COVID-19-related restrictions have had to health care
access. The premium rebates measurement criteria, period of measurement applied to
INSURANCE CONTRACT LIABILITY determine the qualified policyholders and the basis of allocation were determined and approved
COMPOSITION – NET (In millions) by the Bermuda Life Insurance Company Limited Board. The premium rebates measurement
177.6 171.0
criteria consider the policyholders’ loss ratio experience and policy renewal condition. The
amounts will be refunded in equal monthly installments over the policy year, with the amounts
netted against the monthly premiums due from the policyholders. Premium rebates are presented
in the Consolidated Statements of Operations.
25.7 25.2
10.0 8.6 5.0 0.0
LIFE AND PROVISION UNEARNED PREMIUM

ANNUITY FOR UNPAID AND PREMIUMS REBATE
POLICY UNREPORTED LIABILITIES
RESERVES CLAIMS
2021 2020 95
19.1 LIFE AND ANNUITY POLICY MARCH 31, 2021 Group Life and
RESERVES Insurance Pensions Total
The adjacent table sets out the Group’s Life Annuities - 174,257 174,257
and annuity policy reserves shown by type Long-term disability 5,045 - 5,045
of product within the Employee Benefits Life - 1,824 1,824
operating segment:
Life and annuity policy reserves 5,045 176,081 181,126
Reinsurers’ share of claims provisions (3,712) 178 (3,534)
LIFE AND ANNUITY POLICY RESERVES,
NET OF REINSURANCE 1,333 176,259 177,592
MARCH 31, 2020 Group Life and

Insurance Pensions Total
Annuities - 167,266 167,266

Long-term disability 4,396 - 4,396
Life - 2,411 2,411
Life and annuity policy reserves 4,396 169,677 174,073
Reinsurers’ share of claims provisions (3,326) 216 (3,110)
LIFE AND ANNUITY POLICY RESERVES,
NET OF REINSURANCE 1,070 169,893 170,963
96
The majority of the Life and annuity policy MARCH 31, 2021 Mortgage Land and
reserves relate to policies issued to Cash Bonds and loans Equities buildings Total
individuals domiciled in Bermuda. The Annuities 1,652 142,660 9,109 5,110 15,726 174,257
Reinsurer’s share of claims provisions were Long-term disability 174 931 - 228 - 1,333
assessed for impairment at year end and Life 328 1,345 - 329 - 2,002
no impairment was identified. LIFE AND ANNUITY POLICY
RESERVES, NET OF REINSURANCE 2,154 144,936 9,109 5,667 15,726 177,592
The composition of the assets supporting
the net liabilities is as follows:
MARCH 31, 2020 Mortgage Land and
Cash Bonds and loans Equities buildings Total
Annuities 6,571 136,090 9,018 3,855 11,732 167,266

Long-term disability 180 806 - 84 - 1,070
Life 442 1,979 - 206 - 2,627
LIFE AND ANNUITY POLICY
RESERVES, NET OF REINSURANCE 7,193 138,875 9,018 4,145 11,732 170,963
The Group examines the assumptions used the projected value of policy cash flows and, $6.7 million (2020 – $6.7 million). These
in determining the Life and annuity policy therefore, to the Life and annuity policy amounts are net of the impact of the
reserves on an ongoing basis to ensure they reserves. reinsurance assets on policyholder
appropriately reflect emerging experience liabilities of $3.5 million (2020 – $3.1 million).
and changes in risk profile. Annually, the The net impact of changes in actuarial The changes in the net Life and annuity
Group conducts a comprehensive review methods and assumptions was an increase policy reserves for the year are as follows:
of all actuarial methods and assumptions. in reserves backing policyholder liabilities of
Changes to actuarial methods and
AS AT MARCH 31 2021 2020
assumptions used in determining Insurance
contract liabilities will result in a change to Balance, beginning of year 170,963 167,186
Changes due to:
Issuance of new policies 8,282 10,350
Normal in-force movement (8,379) (13,178)
Mortality/morbidity assumptions (1,762) (360)
Interest rate assumptions 8,790 7,057
Expense assumptions (302) -
Other - (92)
97
19.1.1 Key Assumptions – Life and annuity policy reserves
ASSUMPTION, METHODOLOGY AND SENSITIVITIES RISK MANAGEMENT
The risks associated with insurance contracts, and in particular with life and In conjunction with prudent business practices to
annuity insurance contracts, are complex and subject to a number of variables manage both business and investment risks, the
that complicate quantitative sensitivity analysis. selection and monitoring of appropriate assumptions
To recognise the uncertainty involved in determining the best estimate are designed to minimise the Group’s exposure to
assumptions, a Provision for Adverse Deviation (PfAD) is established. The PfAD measurement uncertainty.
is determined by including a margin for conservatism for each key assumption
to allow for possible deterioration in experience and to help ensure the policy
reserves will be adequate to pay for future benefits.
(a) Mortality and morbidity risk

Mortality refers to the likelihood of death. The mortality assumption is based The Group maintains underwriting standards to
on industry standard life insurance and standard annuity past and emerging determine the insurability of applicants. Claim trends
experience. The volume of the Group’s life insurance and annuity business is not are monitored on an ongoing basis. To offset some of
sufficient to use company specific mortality tables. the mortality risk, the Group cedes a portion of the risk
A five percent decrease in the best estimate assumption for annuitant mortality to reinsurers.
is estimated to increase the policy reserves by $4.1 million, 2.4 percent (2020 – Mortality and morbidity are monitored regularly.
$3.9 million, 2.4 percent).
Morbidity refers to the incidence of accident and sickness as well as the
recovery from the incidence. The morbidity assumptions are based on industry
standard morbidity tables for the long-term disability business. The frequency
of claims is low and the risk is substantially reinsured.
(b) Investment returns and interest rate risk

Assets are allocated to the different operating segments. For each significant The Group’s policy of closely matching the cash flows
operating segment, CALM is used to project the cash flows from the supporting of assets with those of the corresponding liabilities is
assets and the cash flows from the liabilities. The projected asset cash flows are designed to mitigate the Group’s exposure to future
combined with the projected cash flows from future asset sales and purchases changes in interest rates. Rate risk is monitored on
to determine the expected investment returns for all future years. an ongoing basis. Under CALM, the reinvestment rate
is developed using interest rate scenario testing and
The CIA prescribes several representative reinvestment scenarios for use in
reflects the interest rate risk positions.
CALM to determine the sensitivity of the Group’s business to possible
reinvestment risk. These represent a wide variety of interest rate scenarios.
98
ASSUMPTION, METHODOLOGY AND SENSITIVITIES RISK MANAGEMENT

To provide a representative example, a 100 basis points increase in the Bonds, equities, real estate and other non-fixed income
best estimate investment return assumption decreases the total Life and assets are used to support long-dated obligations in the
annuity policy reserves by $14.9 million (2020 – $14.2 million). A 100 basis Group’s life and annuity businesses, and for long-dated
points decrease in the best estimate assumption increases the total Life insurance obligations on contracts where the
and annuity policy reserves by $17.5 million (2020 – $16.6 million). investment return risk is borne by the Group.
(c) Credit risk

Credit risk is provided for by reducing investment yields assumed in the For certain policies, the premiums and benefits reflect
calculation of the policy reserves. Past Group and industry experience the Group’s assumed level of future credit losses at
over the long term, in addition to ongoing reviews of the current contract inception or most recent contract adjustment
portfolio, are used to project credit losses. In addition to the allowances date. The Group holds explicit provisions in actuarial
for losses on invested assets due to interest rate risk, the policy reserves liabilities for credit risk including PfAD.
include a provision of $2.2 million (2020 – $2.2 million) to provide for
future asset defaults and loss of asset value on current assets and
future purchases.
(d) Expenses
Operating expense assumptions reflect the projected costs of servicing The Group prices its products to cover the expected costs
and maintaining the in-force policies. The assumptions are derived from of servicing and maintaining them. In addition, the Group
internal reviews of operating costs and include an allowance for inflation. monitors expenses quarterly, including comparisons of
actual expenses to expense allowances used in pricing
A 10 percent increase in the best estimate assumption for unit expenses
and valuation.
is estimated to increase the policy reserves by approximately $0.6 million
(2020 – $0.7 million).
99
19.2 PROVISION FOR UNPAID AND U NREPORTED CLAIMS

The table below sets out the Provision for unpaid and unreported claims shown by type of product
and by reportable segment. The majority of these insurance contracts are of a short-term nature.
MARCH 31, 2021 Employee Americas Europe

Benefits and Property and Property and
Health Casualty Casualty Total
Health care 7,736 1,644 - 9,380

Property - 1,280 1,580 2,860
Motor - 6,393 10,840 17,233
Accident and liability - 698 3,630 4,328
Marine - 120 332 452
Provision for unpaid and unreported claims, gross 7,736 10,135 16,382 34,253
Reinsurers’ share of claims provisions - (5,048) (3,517) (8,565)
PROVISION FOR UNPAID AND UNREPORTED
CLAIMS, NET OF REINSURANCE 7,736 5,087 12,865 25,688

MARCH 31, 2020 Employee Americas Europe
Benefits and Property and Property and
Health Casualty Casualty Total
Health care 8,733 1,278 - 10,011

Property - 987 1,767 2,754
Motor - 4,699 16,425 21,124
Accident and liability - 649 3,566 4,215
Marine - 262 313 575
Provision for unpaid and unreported claims, gross 8,733 7,875 22,071 38,679
Reinsurers’ share of claims provisions - (3,065) (10,332) (13,397)
PROVISION FOR UNPAID AND UNREPORTED
CLAIMS, NET OF REINSURANCE 8,733 4,810 11,739 25,282
100
The reconciliation of the Provision for unpaid and unreported claims is as follows:
MARCH 31, 2021 Provisions for Reinsurers’

unpaid and share of
unreported claims
claims provisions Net

Claims and adjustment expenses incurred
Current year 71,913 8,427 63,486
Prior years (2,096) 1,187 (3,283)
Total Claims and adjustment expenses incurred 69,817 9,614 60,203
Claims and adjustment expenses paid
Current year (51,505) (4,588) (46,917)
Prior years (24,084) (10,297) (13,787)
Total Claims and adjustment expenses paid (75,589) (14,885) (60,704)
Foreign exchange adjustments 1,346 439 907
BALANCE, END OF YEAR 34,253 8,565 25,688
MARCH 31, 2020 Provisions for Reinsurers’

unpaid and share of
unreported claims
claims provisions Net

Claims and adjustment expenses incurred
Current year 94,013 13,700 80,313
Prior years (10,102) (8,593) (1,509)
Total Claims and adjustment expenses incurred 83,911 5,107 78,804
Claims and adjustment expenses paid
Current year (72,908) (10,062) (62,846)
Prior years (20,986) (3,018) (17,968)
Total Claims and adjustment expenses paid (93,894) (13,080) (80,814)
Foreign exchange adjustments (650) (501) (149)
BALANCE, END OF YEAR 38,679 13,397 25,282
101
19.2.1 K
ey Assumptions – Provision for unpaid and unreported claims
ASSUMPTION,
ASSUMPTION, METHODOLOGY
METHODOLOGY AND
AND SENSITIVITIES
SENSITIVITIES RISK
RISK
MANAGEMENT
MANAGEMENT

The risks associated with insurance contracts are complex and subject to a The Group has policies and procedures in place to reduce
number of variables that complicate quantitative sensitivity analysis. the risk exposure, which includes strict claims review
Uncertainty over the timing and amount of future claim payments necessitate policies to assess all new and ongoing claims, regular
the holding of significant reserves for liabilities that may only emerge a detailed review of claims handling procedures and frequent
number of accounting periods later. investigation of possible fraudulent claims. Further, the
The key assumptions underlying the application of the actuarial methods Group enforces a policy of actively managing and promptly
and the estimate of unpaid claim liabilities are the expected development of pursuing claims in order to reduce its exposure to
paid and reported losses and the derivation of initial expected losses. Paid unpredictable future developments that can negatively
and reported loss development patterns are based on the Group’s historical impact the business.
claims experience. These patterns are updated as of each annual valuation to The Group has also limited its exposure by imposing
incorporate and reflect the most recent claims experience. The estimate of maximum claim amounts on certain contracts as well as
initial expected losses is most significant for immature policy periods, where the use of reinsurance arrangements in order to limit
it is given the greatest weight in determining unpaid claim liabilities. Initial exposure to catastrophic events (e.g., hurricanes,
expected losses are derived based on the Group’s historical experience earthquakes and flood damage). The purpose of these
adjusted for the impact of inflationary trends on claims costs. As the underwriting and reinsurance strategies is to limit
experience in each policy year matures, the weight assigned to the initial exposure to catastrophes based on the Group’s risk
expected losses decreases with greater weight assigned to actual loss appetite as determined by Management.
experience. Estimates of losses are continually reviewed and
The actuarial analysis performed by the Group’s actuaries employs commonly modified to reflect current conditions. Although
used actuarial techniques for estimating the Group’s provision for unpaid and Management believes, based on the recommendations of
unreported claims. These include the Paid and Reported Loss Development the Group’s actuaries, that the provision for unpaid and
Methods, the Bornhuetter-Ferguson Method (applied to both paid and unreported claims will be adequate to cover the ultimate
reported losses), and the Estimated Loss Ratio Method. The particular cost of losses to the balance sheet date, the provision is
methods employed in the analysis of each reserve segment are judgmentally necessarily an estimate and claims may ultimately be
selected based on the applicability of each method and the availability of data settled for greater or lesser amounts. It is reasonably
to use each particular method. possible that Management will revise this estimate
There have been no significant changes in the assumptions or methodology significantly in the near term. Any subsequent differences
underlying the actuarial analysis in the year under review. are recorded in the Gross change in contract liabilities on
the Consolidated Statements of Operations in the period
in which they are determined.
102
19.2.2 Claims Development Table

The following tables show the estimates of cumulative incurred claims, including both claims notified and incurred but not reported (IBNR)
reserves for each successive accident year at each reporting date, together with cumulative payments to date.

Gross claims:
Accident year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Total

Estimate of gross ultimate liability (1)
as at end of accident year 89,464 92,637 94,436 124,579 89,022 91,994 97,475 99,467 93,794 71,913 -
one year later 84,894 82,573 88,401 120,880 91,331 89,576 96,498 94,877 89,874 - -
two years later 83,318 81,806 88,096 120,516 91,404 93,112 96,948 97,615 - - -
three years later 83,251 81,913 87,248 137,712 91,577 92,905 96,379 - - - -
four years later 83,484 81,939 87,071 137,987 91,384 92,594 - - - - -
five years later 83,390 82,002 86,771 129,137 91,214 - - - - - -
six years later 83,180 81,946 86,577 130,022 - - - - - - -
seven years later 83,107 81,427 86,554 - - - - - - - -
eight years later 83,009 81,416 - - - - - - - - -
nine years later 83,022 - - - - - - - - - -
Current estimate of cumulative liability 83,022 81,416 86,554 130,022 91,214 92,594 96,379 97,615 89,874 71,913 920,603
Cumulative payments to date (82,924) (81,160) (86,449) (129,720) (90,709) (91,712) (94,588) (94,549) (83,044) (51,505) (886,360)
Reserves in respect of prior years - - - - - - - - - - 10
Total gross liability 98 256 105 302 505 882 1,791 3,066 6,830 20,408 34,253
Net claims:
Accident year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Total

Estimate of net ultimate liability (1)
as at end of accident year 84,285 86,713 86,134 83,912 83,385 83,279 90,358 93,766 81,432 63,486 -
one year later 79,556 76,876 79,679 81,117 86,602 81,272 89,988 88,076 75,500 - -
two years later 77,939 75,903 79,730 80,760 86,605 84,804 90,653 90,786 - - -
three years later 77,894 76,039 79,565 81,228 86,694 84,652 90,120 - - - -
four years later 77,700 76,042 79,498 81,051 86,608 84,543 - - - - -
five years later 77,652 76,047 79,330 80,769 86,769 - - - - - -
six years later 77,642 76,184 79,438 80,786 - - - - - - -
seven years later 77,643 75,819 79,433 - - - - - - - -
eight years later 77,562 75,847 - - - - - - - - -
nine years later 77,568 - - - - - - - - - -
Current estimate of net cumulative liability 77,568 75,847 79,433 80,786 86,769 84,543 90,120 90,786 75,500 63,486 804,838
Cumulative payments to date (77,456) (75,592) (79,310) (80,511) (86,299) (83,848) (88,982) (88,542) (71,705) (46,917) (779,162)
Reserves in respect of prior years - - - - - - - - - - 12
Total net liability 112 255 123 275 470 695 1,138 2,244 3,795 16,569 25,688
(1) Adjusted for revaluation of foreign currencies at the exchange rate as at year end.
103
19.3 UNEARNED PREMIUMS

AS AT MARCH 31 2021 2020
Reinsurer’s Reinsurer’s
share of share of
Unearned Unearned Unearned Unearned
premiums premiums Net premiums premiums Net
Balance, beginning of year 19,217 10,662 8,555 18,830 9,598 9,232

Premiums written during the year 150,532 38,870 111,662 161,840 38,230 123,610
Net premiums earned (149,348) (38,278) (111,070) (161,109) (37,365) (123,744)
Movement from Assets held-for-sale - 30 (30) - 5 (5)
Change in unearned premiums 1,184 622 562 731 870 (139)
Foreign exchange movement 1,107 268 839 (344) 194 (538)
BALANCE, END OF YEAR 21,508 11,552 9,956 19,217 10,662 8,555
Movement in the unearned premiums insufficient to meet the related future

include foreign exchange movement arising policy cost. Evaluations are performed
from the translation of Sterling and Euro regularly to estimate future claim costs,
denominated balances to Bermuda dollars. related expenses, and expected profit in
relation to unearned premiums. There were
The Group is exposed to a pricing risk to the no premium deficiencies identified at
extent that unearned premiums are March 31, 2021 or 2020.
104
20 Investment Contract Liabilities

Carrying values and estimated fair values of the Investment contract liabilities are as follows: 20.2 INVESTMENT CONTRACT
LIABILITIES AT FVTPL
AS AT MARCH 31 2021 2020 The change in investment contract liabilities
Carrying value Fair value Carrying value Fair value
at FVTPL is a result of the following:
At amortised cost:
Deposit administration pension plans 231,348 228,893 238,166 236,746 AS AT MARCH 31 2021 2020
Self-funded group health policies 16,568 16,568 14,863 14,863
247,916 245,461 253,029 251,609 Balance, beginning of year 526 704
At FVTPL: Included in net earnings (1) 9 23
Deposit accounted annuity policies 328 328 526 526 Deposits 14 143
Withdrawals (221) (344)
TOTAL INVESTMENT CONTRACT LIABILITIES 248,244 245,789 253,555 252,135
BALANCE, END OF YEAR 328 526
(1) Amount is recorded under Change in contract liabilities

20.1 INVESTMENT CONTRACT LIABILITIES AT AMORTISED COST on the Consolidated Statements of Operations.
The change in Investment contract liabilities measured at amortised cost is a result of the following:
AS AT MARCH 31 2021 2020

Deposits 76,820 81,290
Withdrawals (74,281) (65,720)
Transfers to Segregated funds 185 (128)
Fees deducted (3,491) (3,744)
Interest 2,129 2,384
Other (6,475) (2,131)
For the year ended March 31, 2021, the net gain relating to investment contracts measured at
amortised cost is $5.5 million (2020 – net gain of $4.6 million).
105
21 Post-Employment Benefit Liability

The Group operates a post-employment As at March 31, 2021, the present value of AS AT MARCH 31 2021 2020
medical benefit plan in Bermuda, which the defined benefit obligation was comprised
provides medical benefits to eligible retired of $0.6 million (2020 – $0.7 million) relating Discount rate 2.8% 2.6%
employees and their spouses. The amount to active employees and $3.4 million Health care cost trend rate 5.5% 5.5%
of benefits provided depends on future cost (2020 – $3.0 million) relating to members
escalation and the Company meeting the ben- in retirement. The discount rate assumption has a
efit payment obligation as it falls due. Actuar- significant impact on the value of the
ial valuation to determine the defined benefit Components of the change in benefit obligation. A one percent increase in this
obligation is performed quarterly. liabilities year-on-year and other employee rate would reduce the present value of the
future benefit expense are as follows: defined benefit obligation by $0.4 million
The plan exposes the Group to risks, such as (i) Current service cost represents benefits (2020 – $0.4 million).
longevity risk, interest rate risk and earned in the current year. These are
health care cost inflation risks. Responsibility determined with reference to the Health care cost calculations are based on
for governance of the plan lies with the current workforce eligible for benefits trend rate assumptions which may differ
Company. Risks are managed through plan and the amount of benefits to which from actual results. Changes in trend rate
design and eligibility changes, which limit they will be entitled upon retirement, assumptions by one percent in either
the size and growth of the defined benefit based on the provisions of the Group’s direction will change the health care cost
obligation. benefit plan. as follows:
(ii) Interest cost on benefit liability
The movement in the defined benefit liability represents the increase in the liability MARCH 31, 2021 Increase Decrease
is as follows: that results from the passage of time.
Aggregate of current service 5 (4)
(iii) Each quarter, the actuaries recalculate
AS AT MARCH 31 2021 2020 cost and interest cost
the benefit liability and compare it to Accrued benefit liability 484 (410)
Balance, beginning of year 3,670 3,311 that estimated as at the prior period end.
Movements during the year Any differences resulting from changes
in assumptions, or from plan experience MARCH 31, 2020 Increase Decrease
recognised in Operating expense:
Current service cost 32 35 being different from expectations of Aggregate of current service
Interest cost on benefit liability 98 82 Management at the previous year end, cost and interest cost 6 (5)
130 117 are considered actuarial gains or losses. Accrued benefit liability 483 (405)
Remeasurement during the year
The significant actuarial assumptions in
included in Other comprehensive income: The methods and types of assumptions used
measuring the Group’s accrued benefit
Actuarial loss arising from in preparing the sensitivity analysis did not
experience adjustment 340
liability are estimated as follows:
401 change compared to the previous year.
Benefit payments (202) (159)
106
Argus Insurance Newstead

Belmont Hills Development
Company Limited
Company No. 2 Ltd.
(Bermuda) (Bermuda)
22 Group Composition
Argus Insurance Company Argus Insurance
22.1 LIST OF SIGNIFICANT (Europe) Limited Agencies Limited (2)
(Gibraltar) (Malta)
SUBSIDIARIES AS AT
MARCH 31, 2021
Argus Management Somers Isles Management
All subsidiaries are included in the Group Services Limited Services, Inc.
consolidated financial statements. The (Bermuda) (Canada)
Group’s voting rights percentages are the

NBHH (Keepsake)
same as the ownership percentages. All Limited
entities are 100 percent owned except for (Bermuda)
Argus International Life Insurance Limited,

Trott Property Argus International Life
as specified below. Limited Insurance Limited (1)
(Bermuda) (Bermuda)
Argus International Bermuda Life

Life Bermuda Limited Worldwide Limited
(Bermuda) (Bermuda)
Argus Group
Argus Wealth Management Argus Investment
Holdings Nominees Limited
Limited
Limited (Bermuda) (Bermuda)
(Bermuda)
WestMed Insurance
Services Limited
(Gibraltar)
Centurion Insurance
Services Limited
Nature of business: (Bermuda)
EMPLOYEE BENEFITS & HEALTH
WEALTH MANAGEMENT Island Insurance
P&C Brokers Limited
BROKERAGE COMPANIES (Malta)
DISPOSAL GROUP
ALL OTHERS
FirstUnited Insurance
Brokers Limited
(1) Argus International Life Insurance Limited (AILIL) is 74 percent owned by the (Malta)
Group with the remaining 26 percent owned by the non-controlling interests. Island Health Services Ltd.
Argus International Life Bermuda Limited also owns 100 percent of AILIL’s (includes assets of
Bermuda Life Insurance The Family Practice Group)
preference shares. (Bermuda)
(2) Effective December 2020; as part of a restructuring exercise as a result of Company Limited
(Bermuda)
BREXIT, the company was placed into voluntary liquidation. All
unrestricted assets and liabilities were transferred to the Malta Branch of I.H.S. Laboratories Ltd.
Argus Insurance Company (Europe) Limited. All remaining restricted assets (Bermuda)
and liabilities will be transferred upon completion of the windup. One Team Health Inc
(Canada)
107
22.2 SIGNIFICANT RESTRICTIONS AISFL and the Group also share common
The Group does not have significant directors and officers. Although the Group
restrictions on its ability to access or use has power to govern AISFL’s financial and
its assets and settle its liabilities other than operating policies by virtue of the
those resulting from the regulatory investment management contract, it does
requirements within the jurisdiction in which not earn investment management fee
they operate. See Note 5 and Note 23. income, nor does it have significant variable
returns from AISFL. Accordingly, AISFL was
The carrying amounts of the insurance not consolidated as part of the Group.
subsidiaries’ General Fund Assets and
General Fund Liabilities are as follows: AISFL’s net assets as at March 31, 2021,
of $920.3 million (2020 – $659.6 million)
AS AT MARCH 31 2021 2020 include the Group’s Segregated Funds of
$904.1 million (2020 – $646.9 million).
General fund assets 689,296 651,384 However, the Group does not have exposure
General fund liabilities 556,134 538,018 to losses on these Segregated Funds as the
contractual arrangements for these funds
22.3 INVOLVEMENT WITH are such that the Segregated Funds’
UNCONSOLIDATED policyholder bears the risk and rewards
STRUCTURED ENTITIES of AISFL’s investment performance. The
A subsidiary of the Company acts as Group does not bear the risks and
investment manager to Argus Investment rewards. Refer to Note 34 for Segregated
Strategic Fund Ltd. (AISFL), an investment Fund disclosures.
fund that is a structured entity not
consolidated by the Group. A structured
entity is an entity that has been designed
so that voting or similar rights are not the
dominant factor in deciding who controls
the entity, such as when any voting rights
relate to administrative tasks only, and the
relevant activities are directed by means of
contractual arrangements.
108
23 Risk Management
23.1 GOVERNANCE FRAMEWORK meets regularly to approve any 23.2 OPERATIONAL RISK AND
The Group prioritises the development of commercial, regulatory and CAPITAL MANAGEMENT
a forward-looking risk management organisational requirements of such Capital Management
framework to deal appropriately with policies. These policies define the The Group’s capital base is structured so
changes in the economic, social and Group’s identification of risk and its as to exceed regulatory targets, maintain
regulatory environment in which it interpretation, and set out the risk satisfactory credit ratings, align the profile
operates. The risk management deployed profiles for the Group to ensure the of assets and liabilities taking account of
by the Group is based on the principles set appropriate quality and diversification risks inherent in the businesses, provide
down below, which are aligned with the of assets and alignment of underwriting flexibility to take advantage of growth
Group’s strategy and take into account the and reinsurance strategy to the opportunities and provide an adequate
regulatory requirements, as well as the best corporate goals. return to shareholders. Capital is managed
market practices. on a consolidated basis under principles
• Three Lines of Defence model that consider all the risks associated with
• A comprehensive risk management The Group has adopted the Three Lines the businesses. It is also managed at the
policy, with a forward-looking approach of Defence model as shown below, which operating segment level under the
The Board of Directors approves the addresses how specific duties related principles appropriate to the jurisdiction
Group’s risk management policies and to risks and controls are managed and in which it operates. The Group’s capital
coordinated within the Group. base consists of Share capital, Contributed
surplus, Retained earnings and
Accumulated other comprehensive income/
(loss) as disclosed on the Consolidated
B OA R D O F D I R ECTO R S / R I S K & AU D I T CO M M I T T E ES Balance Sheets.
S E N I O R E X ECU T I V E M A N AG E M E N T ( T H E C-S U I T E ) The Bermuda Monetary Authority (BMA)

is the regulator of the Group. The laws
External Auditors
1st Line of Defence 2nd Line of Defence 3rd Line of Defence
and regulations of Bermuda require that
Regulators
Operational Management Internal Monitoring & Oversight Internal Audit
Financial Controls the Group maintain a minimum amount of
Management Internal
Security
Internal Audit
statutory capital and surplus based on the
Risk Management
Controls Controls
Quality Assurance
enhanced capital requirement. As of March
Monitoring 31, 2021 and 2020, the amount of group
Compliance statutory capital and surplus exceeds this
regulatory requirement.
The operations of the Group are also

subject to regulatory requirements within
the jurisdictions in which they operate.
109
Such regulations not only prescribe The Bermuda Solvency Capital Requirement limits the maximum amount of annual
approval and monitoring of activities, but is the prescribed form of capital and dividends and distributions that may be
also impose certain restrictive provisions solvency reporting in Bermuda, which was paid by the Group’s insurance subsidiaries.
(e.g. capital adequacy) to minimise the risk revised under new legislation enacted in Before reducing by 15 percent or more of
of default and insolvency on the part of the 2008. The BSCR includes a standardised statutory capital, and surplus by 25 percent
regulated entities and to meet unforeseen model used to measure the risk associated or more, as set out in the prior year’s
liabilities as these arise. with an insurance subsidiary’s assets, financial statements, these insurance
liabilities and premiums, and a formula to subsidiaries shall request the approval of
Management monitors the adequacy of take account of catastrophe risk exposure. the BMA. In addition, the Bermuda
the insurance subsidiaries’ capital from The BMA requires all insurers to maintain Companies Act 1981 limits the Group’s
the perspective of Bermuda, Gibraltar their statutory capital and surplus at a ability to pay dividends and distributions
and Malta statutory requirements. The target level, which is 120 percent of the to shareholders if there are reasonable
Bermuda Insurance Act 1978 and Related amount calculated in accordance with the grounds for believing that the Group would
Regulations, the Gibraltar Insurance BSCR. As of March 31, 2021 and 2020, the be unable to pay its liabilities as they
Companies Act 1987 and the Malta statutory capital and surplus of the become due, or if the realisable value of its
Insurance Intermediaries Act 2006 (the insurance subsidiaries exceeded this assets would be less than the aggregate
Acts) require the Group’s insurance regulatory requirement. of its liabilities, issued share capital and
subsidiaries to file an audited annual contributed surplus accounts.
statutory financial return and meet In addition, minimum liquidity ratios must
minimum solvency margins and minimum be maintained by Bermuda entities writing Argus Insurance Company (Europe)
liquidity ratios. general business, whereby relevant assets, Limited (AICEL) is regulated by the
as defined by the Acts, must exceed 75 Financial Services Commission (FSC) in
The statutory capital and surplus and percent of relevant liabilities. The Bermuda Gibraltar. On January 1, 2016, the Solvency
minimum solvency margin of the Group’s Insurance Act 1978 and Related Regulations II capital requirements came into force.
insurance subsidiaries are shown below: The Solvency Capital Requirement (SCR)
is the amount of funds that insurance and
MARCH 31, 2021 Bermuda Europe Total reinsurance undertakings are required
to hold in the European Union. The SCR
Statutory capital and surplus 99,228 18,309 117,537
should reflect a level of eligible own funds
Minimum solvency margin 26,775 4,651 31,426
that enables insurance undertakings to
absorb significant losses and that gives
MARCH 31, 2020 Bermuda Europe Total reasonable assurance to policyholders and
beneficiaries that payments will be made
Statutory capital and surplus 91,063 11,834 102,897
as they fall due. AICEL is in compliance
Minimum solvency margin 28,038 3,958 31,996
with the Solvency I and Solvency II
requirements and exceeds the Required
110
Minimum Margin and SCR. The Solvency parameters within which the Group’s tolerance, an adjustment in asset allocation
II return and SCR are not required to be external investment managers must may be made. Conversely, if the risk profile
audited. operate. Important parameters include is expected to move outside of tolerance
guidelines on permissible asset classes, levels, adjustments may be made to reduce
The BMA has been declared by the duration ranges, credit quality, currency, the risks in the portfolio.
European Commission to be fully equivalent maturity, sectors, geographical, sovereign
to Solvency II. Consequently, Bermuda shall and issuer exposures. Compliance with The Risk Committee meets quarterly to
be considered by all European Member guidelines is monitored on a quarterly basis. ensure that the Group’s strategic and
States as applying an equivalent statutory Any adjustments to the investment policy tactical investment actions are consistent
insurance regime in accordance with the are approved by the Risk Committee of the with investment risk preferences, appetite,
requirements of Solvency II. The FSC in Board of Directors. The Group’s fixed risk and return objectives and tolerances.
Gibraltar has confirmed that it recognises maturity portfolios are managed by two
the BMA as the Group’s Supervisor and the 23.3.1(a) Credit Risk
external investment managers. The The Group has exposure to credit risk,
FSC will focus its supervision on AICEL as Group also has a diversified low volatility
a solo entity. which is the risk that a counterparty will
multi-strategy portfolio of bond and equity suffer a deterioration in financial strength
funds and a small equity portfolio. The
Each one of the Group’s insurance or be unable to pay amounts in full when
performance of the managers is monitored
subsidiaries meets all requirements of due. The concentration of credit risk
on an ongoing basis.
the Acts and there are no additional exposures held by insurers may be
restrictions on the distribution of retained All portfolios’ duration is matched to the expected to be greater than those
earnings. duration of the insurance liabilities within associated with other industries, due to the
an agreed range. The portfolios are invested specific nature of reinsurance markets and
23.3 FINANCIAL INSTRUMENT RISK the extent of investments held in financial
in fixed maturity securities, fixed maturity
MANAGEMENT markets. By the nature of the business,
funds and cash and cash equivalents. The
The Group has policies relating to the reinsurers interact with similar customers
portfolios may, at times, contain assets
identification, measurement, monitoring, in similar markets. However, the Group uses
significantly in excess of those required to
mitigation, and control of risks associated a panel of reinsurers with global operations
meet insurance liabilities or other defined
with financial instruments. The key risks and diversified portfolios and limits its
funding needs.
related to financial instruments are credit exposure to any one reinsurer.
risk, liquidity risk and market risks, which The Group reviews the composition,
include currency, interest rate and other duration and asset allocation of its Reinsurance is placed with counter-
price risks, including equity risk. investment portfolio on a regular basis in parties that have a strong credit rating.
order to respond to changes in interest Management regularly monitors and
23.3.1 Investment Risk performs an assessment of creditworthi-
rates and other market conditions. If certain
Investment policy is established by the ness of reinsurers.
asset classes are anticipated to produce
Risk Committee of the Board of Directors
a higher return within Management’s risk
to manage this risk. Investment policy sets
111
23.3.1(b) Maximum Exposure to Credit Risk In response to the COVID-19 pandemic,

The following table summarises the Group’s maximum exposure to credit risk related to financial during the year ended March 31, 2021, the
instruments and insurance contracts. The maximum credit exposure is the carrying value of the Group temporarily offered a number of
financial assets and insurance assets net of any allowances for losses. support initiatives for qualifying
policyholders. The support was granted
AS AT MARCH 31 Note 2021 2020 after careful consideration of the impact
of the COVID-19 pandemic on the credit-
Cash and short-term investment 74,554 71,501
worthiness of each qualifying policyholder,
Interest and dividends receivable 2,448 2,741
Bonds – Available-for-sale and FVTPL 6.1 436,066 414,754
who was subsequently monitored for any
Mortgages and loans 6.1 15,180 15,332 further credit deterioration.
Policy loans 6.1 41 43
23.3.1(c) Concentration of Credit Risk
Derivative financial instruments 6.1 - 3,801
Receivable for investments sold 2,710 74
Concentrations of credit risk arise from
Insurance balances receivable 8 24,543 19,941 exposures to a single debtor, a group of
Other financial assets included in Other assets 9 5,765 3,619 related debtors or groups of debtors that
Reinsurers’ share of claims provisions 19 12,099 16,507 have similar credit risk characteristics,
TOTAL CONSOLIDATED BALANCE SHEET such as operating in the same geographical
MAXIMUM CREDIT EXPOSURE 573,406 548,313 region or in similar industries. The
characteristics are similar in that changes
in economic or political environments may
Credit risk is mitigated by entering into manages credit risk by its specific
impact their ability to meet obligations as
collateral agreements for mortgages and investment diversification requirements,
they come due.
loans. The amount and type of collateral such as investing by asset class, geography
required depends on an assessment and industry, review of credit quality
of the credit risk of the counterparty. ratings for portfolio investments and an
Management monitors the value of the active credit risk governance, including
collateral, requests additional collateral independent monitoring and review and
when needed and performs an impairment reporting to Senior Management and
evaluation on a regular basis. The Group the Board.
112
The following tables provide details of the AS AT MARCH 31 2021 2020

carrying value of bonds and derivative
financial instruments by industry sector and Geographical distribution of bonds is as follows:
geographical distribution. United States of America 304,256 288,638
United Kingdom 19,610 23,362
AS AT MARCH 31 2021 2020 Cayman Islands 22,554 12,704
France 7,499 6,286
Bonds issued or guaranteed by: Netherlands 5,631 6,005
Government and Agency 88,975 106,678 Canada 3,565 5,379
Banking and Finance 102,581 103,978 Ireland 3,146 4,895
Asset-backed Securities 79,381 60,770 Switzerland 5,169 3,685
Communications and Mexico 4,771 5,242
Technology 33,239 22,595 SupraNational 4,571 3,336
Oil and Gas 17,768 18,329 Australia 2,007 1,373
Manufacturing 17,329 13,802 India - 1,029
Pharmaceutical 14,299 11,507 Japan 6,796 4,183
Transportation 5,671 9,983 Other (1) 46,491 48,637
Utilities and Energy 11,156 9,624 TOTAL BONDS 436,066 414,754
Insurance 5,073 5,913
SupraNational 4,571 3,336 Geographical distribution of derivative financial
Mining 3,695 2,193 instruments is as follows:
Other (1) 52,328 46,046 United States of America - -
TOTAL DERIVATIVE
TOTAL BONDS 436,066 414,754
FINANCIAL INSTRUMENTS - -
Derivative financial instruments
(1) Other includes investment with less than $2.0 million of
issued or guaranteed by: concentration of credit risk by geographical distribution
Other (1) - - which totals $15.1 million and bond funds of $31.4 million
as disclosed in Note 7.1 (2020 – $29.9 million)
TOTAL DERIVATIVE
FINANCIAL INSTRUMENTS - -
BONDS BY INDUSTRY 2021 2020
(1) Other includes investment with less than $2.0 million of (In millions)
concentration of credit risk by industry sector which totals
$20.9 million and investment in bond funds of $31.4 million 106.7 102.6 104.0
as disclosed in Note 7.1 (2020 – $29.9 million). 89.0
79.4 82.5
77.1
60.8
33.2
22.6
17.8 18.3 14.3 11.5 17.3 13.8
T G D ONS GAS AL ING E R

MEN KIN E CKE ATI AND UTIC TUR OTH
ERN ENCY BAN INANC T-BA TIES NIC OLOGY ACE FAC
G OV
AG F S E
AS CURI M U OIL ARM ANU
AND AND SE COM TECH
N PH M 113
AND
Mortgages comprise first mortgages on real 23.3.1(d)(ii) Allowance for credit losses on
property situated in Bermuda. Residential impaired investments
mortgages include mortgages for both single Mortgage and loans
and multiple family dwellings. As at March Changes in the allowance for credit losses
31, 2021, the Group’s mortgages and loans in the Group’s Mortgages and loans,
amount to $15.2 million (2020 – $15.3 million). including assets classified as held-for-sale,
are as follows:
23.3.1(d) Asset Quality
23.3.1(d)(i) Bonds and derivative financial AS AT MARCH 31 2021 2020
instruments by credit rating
The following table provides an analysis of Balance, beginning of year 2,917 1,771
the carrying value of bonds and derivative Net provision made
financial instruments by rating. during the year –
Mortgage and loans 238 1,146
Provision written off
AS AT MARCH 31 2021 2020
during the year (1,164) -
Bond portfolio quality: BALANCE, END OF YEAR 1,991 2,917
AAA 143,019 139,613
AA 25,888 14,334
A 114,054 118,222
BBB 145,669 135,259
BB or lower 5,991 7,322 BOND RATINGS
Not rated 1,445 4 (In millions)
TOTAL BONDS 436,066 414,754
Derivative financial instruments quality: 143.0 139.6 145.7
135.3
Not rated - 3,801
114.1 118.2
TOTAL DERIVATIVE
FINANCIAL INSTRUMENTS - 3,801
25.9
14.3
6.0 7.3
1.4 0.0
AAA AA A BBB BB OR NOT RATED

LOWER
2021 2020
114
23.3.1(d)(iii) Age analysis of financial assets past due well as by current operating cash flows.
Historically, the Deposit administration
MARCH 31, 2021 Past due but not impaired pension plan liabilities renew for further
Less than 90 to 180 days
90 days 179 days or more Total periods upon maturity and remain with the
Group. Longer duration cash flows are also
Mortgage and loans and certain mortgages backed by a broader range of asset
and loan included in Assets held-for-sale - - 4,315 4,315 classes, including equity and other non-
Other receivables included in Other assets 592 166 149 907
fixed income assets.
BALANCE, END OF YEAR 592 166 4,464 5,222
Reinvestment strategies and policies are
in place for maturing assets backing
MARCH 31, 2020 Past due but not impaired
Less than 90 to 180 days longer-term liabilities and are reflected
90 days 179 days or more Total in the Life and annuity policy reserves.
Based on the Group’s historical cash
Mortgage and loans and certain mortgages
flows and current financial performance,
and loan included in Assets held-for-sale - - 12,069 12,069
Other receivables included in Other assets 11 17 236 264 Management believes that the cash flow
from the Group’s operating activities will
BALANCE, END OF YEAR 11 17 12,305 12,333
continue to provide sufficient liquidity
for the Group to meet its contractual
Past due financial assets have an allowance available to cover its expected funding obligations and to pay other expenses as
of $0.2 million (2020 – $1.1 million) because requirements. The Group invests in various they fall due.
the fair value of the collateral or the types of assets with a view to matching
expected future cash flows are below the them with its liabilities. To strengthen its The COVID-19 pandemic did not have a
carrying value of these financial assets. liquidity further, the Group actively material negative impact on the Group’s
manages and monitors its capital and asset liquidity position. As disclosed in the
23.3.2 Liquidity risk levels, the diversification and credit quality Consolidated Statements of Cash Flows,
Liquidity risk is the risk that the Group of its investments, cash forecasts and the operations generated positive cash
will not be able to meet all cash outflow actual amounts against established targets. flows of $28.2 million during the year
obligations as they come due. The Group’s (2020 – $ 30.3). The Group also maintains
asset-liability management process allows The short-term (less than one year) a revolving loan facility which expires in
it to maintain its good financial position by liquidity needs are adequately met by September 2022. At March 31, 2021, this
ensuring that sufficient liquid assets are maturing bonds, mortgages and loans, as credit facility remains undrawn.
115
Liability maturity profile: MARCH 31, 2021 Within 1 year 2-5 years 6-10 years Over 10 years Total
The following is an analysis by liability type
of the estimated timing of net cash flows Life and annuity policy reserves
based on the Group’s liabilities. The – net of reinsurance 14,602 53,894 55,828 102,061 226,385(1)
settlement profile is based on current Provision for unpaid and unreported claims
– net of reinsurance 16,222 7,681 1,478 307 25,688
estimates and historical trends and the
Insurance balances payable 24,650 - - - 24,650
actual timing of future cash flows may differ
Investment contract liabilities 53,789 34,492 38,323 105,051 231,655(1)
materially from the following disclosure.
Taxes payable 376 - - - 376
Accounts payable and accrued liabilities 38,946 432 540 99 40,017
Lease liabilities 1,114 3,293 1,852 - 6,259(1)
Post-employment benefit liability 191 803 985 2,540 4,519(1)
TOTAL FROM GENERAL FUND LIABILITIES 149,890 100,595 99,006 210,058 559,549
(1) The amounts shown above are based on estimated net cash flows, which differ from the amounts shown on the Consolidated Balance
Sheets, which are based on discounted cash flows.
MARCH 31, 2020 Within 1 year 2-5 years 6-10 years Over 10 years Total
Life and annuity policy reserves

– net of reinsurance 14,394 53,668 57,283 120,004 245,349(1)
Provision for unpaid and unreported claims
LIABILITY MATURITY PROFILE – net of reinsurance 17,188 6,363 1,449 196 25,196
(In millions) Insurance balances payable 18,158 - - - 18,158
Payables arising from investment transactions 3,546 - - - 3,546
234.4
210.1 Investment contract liabilities 54,410 35,484 37,267 111,541 238,702(1)
Taxes payable 345 - - - 345
149.9 Accounts payable and accrued liabilities 20,713 - - - 20,713
129.8 Lease Liabilities 905 2,423 1,419 - 4,747(1)
100.6 98.6 99.0 98.3 Post-employment benefit liability 156 690 886 2,667 4,399(1)
TOTAL FROM GENERAL FUND LIABILITIES 129,815 98,628 98,304 234,408 561,155
(1) The amounts shown above are based on estimated net cash flows, which differ from the amounts shown on the Consolidated Balance
Sheets, which are based on discounted cash flows.
WITHIN 2-5 YEARS 6-10 YEARS OVER

1 YEAR 10 YEARS
2021 2020
116
23.3.3 Market Risk MARCH 31, 2021

Change in Impact on The Group manages these risks through:
Market risk is the risk that the fair value variables equity • Asset allocation and diversification of
or future cash flows of a financial the investment portfolio;
Currency:
instrument will fluctuate as a result of Sterling +/- 10% +/- 1,356 • Investing in fixed income assets that
changes in market factors. Market factors Euro +/- 10% +/- 386 closely match the life product liability
include three types of risk: currency risk, CAD +/- 10% +/- 48 cash flows for products with fixed and
interest rate risk and equity risk. highly predictable benefit payments;
and
23.3.3(a) Currency Risk MARCH 31, 2020
Change in Impact on
• Quantifying and reviewing regularly the
variables equity
Currency risk is the risk that the fair risk associated with the mismatch in
value of future cash flows of a financial Currency: portfolio duration and cash flow.
instrument will fluctuate because of Sterling +/- 10% +/- 1,220
changes in foreign exchange rates. The Euro +/- 10% +/- 371 The impact of interest rate risk for the
following policies and procedures are in CAD +/- 10% +/- 23 Group’s actuarial liabilities and the assets
place to mitigate the Group’s exposure to supporting those liabilities is included
currency risk: The previous analysis shows the impact in Note 19.
• The Group regularly monitors the effect on equity due to changes in the fair value
of currency translation fluctuations; The Group issues unit-linked investment
of currency sensitive monetary assets and
• Investments are normally made in the policies in a number of its operations. The
liabilities, including insurance contract
same currency as the liabilities policyholder bears the investment risk
liabilities, is performed for reasonably
supported by those investments; on the assets held in the unit-linked fund.
possible movements in foreign exchange
• The majority of the Group’s assets, The value of the policy benefits is directly
rates with all other variables held constant.
liabilities and earnings are denominated linked to the value of the assets in the fund.
The correlation of other variables will have
in Bermuda or U.S. dollars; and The Group’s exposure to market risk on
a significant effect in determining the
• The assets and liabilities of the foreign this business is limited to the extent that
ultimate impact on market risk.
operations are held in their appropriate income arising from asset management
functional currency. The net currency 23.3.3(b) Interest Rate Risk charges is based on the value of assets in
exposure arising from the net equity Interest rate risk is the potential for the fund.
within these operations amounts to financial loss arising from changes in
The Group issues deposit administration
£13.5 million, $3.8 million and CAD 0.4 interest rates. Changes in market interest
pension plans with a short-term
million (2020 – £12.2 million, $3.7 million rates can impact the reinvestment of
guaranteed rate of return. To the extent
and CAD 0.2 million). matured investments, as the returns
that the actual rate of return on the
available on new investments may be
underlying funds differs from the
significantly different from the returns
guaranteed rate, the risk and rewards are
previously achieved.
borne by the Group. At March 31, 2021, the
117
sensitivity of Other comprehensive income 23.3.4 Limitations of sensitivity analysis The Group purchases reinsurance as part
to a 100 basis point parallel increase in The sensitivity information given in Note of its risk mitigation programme.
interest rates would have been a $6.4 million 23.3 and in Note 19 demonstrates the Reinsurance is placed on both a proportional
decrease (2020 – $5.5 million decrease). For estimated impact of a change in a major and non-proportional basis. The majority of
a 100 basis point parallel decline in interest input assumption while other assumptions proportional reinsurance is quota-share
rates the sensitivity to net income would remain unchanged. In reality, there are reinsurance, which is taken out to reduce
have been a $6.4 million increase (2020 – normally significant levels of correlation the overall exposure to mitigate both risk
$5.5 million increase). For this plan type, between the assumptions and other frequency and risk severity of the Group to
the Group ensures (i) the liability and asset factors. It should also be noted that these certain classes of business. Non-proportional
cash flows are closely matched, and (ii) the sensitivities are non-linear and larger or reinsurance is primarily excess-of-loss
valuation of the liability and asset are smaller impacts should not be interpolated reinsurance designed to mitigate the Group’s
monitored regularly. or extrapolated from these results. net exposure to catastrophe losses. Retention
Furthermore, estimates of sensitivity may limits for the excess-of-loss reinsurance vary
23.3.3(c) Equity Risk become less reliable in unusual market by product line and territory.
Equity investments are held in accordance conditions, such as instances when risk-free
with the Group’s investment policy as part interest rates fall towards zero. Amounts recoverable from reinsurers are
of the well-diversified asset portfolio that estimated in a manner consistent with the
are appropriate for the operating segment. 23.4 INSURANCE RISK outstanding claims provisions and are in
Equity risk is the uncertainty associated with MANAGEMENT accordance with the reinsurance contracts.
the valuation of assets arising from changes The principal risk the Group faces under Although the Group has reinsurance
in equity markets. If actual returns are lower insurance contracts is that the actual claims arrangements, it is not relieved of its direct
than the expected returns, the Group’s Life and benefit payments, or the timing thereof, obligations to its policyholders and thus a
and annuity policy reserves will increase differ from expectations. This is influenced credit exposure exists with respect to ceded
and will reduce the Group’s net earnings. by the frequency of claims, severity of insurance to the extent that any reinsurer is
Overall, it is expected that the impact of claims, actual benefits paid and subsequent unable to meet its obligations assumed
an immediate 10 percent increase in value development of long-term claims. Therefore, under such reinsurance agreements. The
across all equity markets would be an the objective of the Group is to ensure that Group’s placement of reinsurance is
increase in Net Earnings and Other sufficient reserves are available to cover diversified such that it is neither dependent
comprehensive income of $1.6 million these liabilities. on a single reinsurer nor are the operations
(2020 – $1.2 million); conversely the impact of the Group substantially dependent
of a 10 percent decrease would have an The risk exposure is mitigated by upon any single reinsurance contract.
equal but opposite effect. The direct diversification across a large portfolio of For details on insurance risk management
exposure to equity markets generally falls insurance contracts. The variability of risks policies of the Group’s insurance operating
within the risk-taking philosophy of the is monitored by careful selection and segments, see Note 19.
Group’s investment policy and is regularly implementation of underwriting guidelines,
monitored by Management. as well as the use of reinsurance
arrangements.
118
24 Dividends
AS AT MARCH 31 2021
Amount of
Record date Per share amount dividends Payment date
July 27, 2020 August 28, 2020

0.09 1,937
December 31, 2020 January 28, 2021
0.09 1,956
0.18 3,893

AS AT MARCH 31 2020
Amount of
Record date Per share amount dividends Payment date
July 25, 2019 0.09 1,912 August 23, 2019

December 31, 2019 0.09 1,917 January 28, 2020
0.18 3,829
As a result of the Dividend Reinvestment Plan, share capital and contributed surplus as at March
31, 2021 increased by 0.2 million and $0.5 million (2020 – $0.2 million and $0.3 million),
respectively.
25 Components of Accumulated Other Comprehensive Income/(Loss)
AS AT MARCH 31 2021 2020
Remeasurement of post-employment medical benefit obligation (1,335) (995)

Available-for-sale investments (1) 11,955 (6,892)
Translation of financial statements o
f foreign operations (2,094) (4,126)
NET ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS) 8,526 (12,013)
(1) As at March 31, 2021, $1.6 million (2020 – $0.3 million) of the accumulated other comprehensive income arose from the International
Life Division’s available-for-sale investments (Note 4).
119
26 Earnings Per Share AS AT MARCH 31 2021 2020
The adjacent table reflects the net earnings Net earnings for the year 10,132 14,198
and share data used in the basic and diluted
earnings per share computations:
AS AT MARCH 31 (Number of shares) 2021 2020
Weighted average outstanding c ommon shares 21,438,128 21,228,785
Common shares and common share equivalents 21,558,307 21,325,000
27 Commissions, Management AS AT MARCH 31, 2021 Employee Americas Europe Europe

Benefits and Wealth Property and Disposal Property and Brokerage
Fees and Other Health Management Casualty Groups Casualty Companies Total
Commissions, management fees and other Fee income from service contracts
income recognised during the year are as Pensions and policyholder
follows: administration 25,894 - - 4,146 11 - 30,051
Investment management - 2,988 - - - - 2,988
Brokerage income - - 815 - 696 5197 6,708
Total fee income from
service contracts 25,894 2,988 815 4,146 707 5,197 39,747
Reinsurance commission income 1,274 - 9,405 - 2,617 - 13,296
27,168 2,988 10,220 4,146 3,324 5,197 53,043
AS AT MARCH 31, 2020 Employee Americas Europe Europe

Benefits and Wealth Property and Disposal Property and Brokerage
Health Management Casualty Groups Casualty Companies Total
Fee income from service contracts

Pensions and policyholder
administration 13,245 - - 3,950 - - 17,195
Investment management - 2,925 - - 2,925
Brokerage income 105 - 874 - 767 3,314 5,060
Total fee income from
service contracts 13,350 2,925 874 3,950 767 3,314 25,180
Reinsurance commission income 1,780 - 6,919 - 2,445 - 11,144
15,130 2,925 7,793 3,950 3,212 3,314 36,324
120
28 Reinsurance Recoveries
AS AT MARCH 31 2021 2020
Claims and adjustment expenses r ecovered from reinsurers (14,885) (12,968)

Policy benefits recovered from reinsurers (1,366) (410)
TOTAL REINSURANCE RECOVERIES (16,251) (13,378)
29 Net Change in Contract Liabilities
AS AT MARCH 31, 2021 Americas Employee Europe

Property and Benefits and Disposal Property and
Casualty Health Group Casualty Total
Gross change in contract liabilities

Insurance contracts 2,260 6,075 (432) (7,389) 514
Investment contracts - (9) - - (9)
Total 2,260 6,066 (432) (7,389) 505
Change in reinsurers’ share of
claims provision (1,983) (424) 602 7,310 5,505
NET 277 5,642 170 (79) 6,010
AS AT MARCH 31, 2020 Americas Employee Europe

Property and Benefits and Disposal Property and
Casualty Health Group Casualty Total
Gross change in contract liabilities

Insurance contracts 1,502 (2,328) (1,543) (7,657) (10,026)
Investment contracts - (23) - - (23)
Total 1,502 (2,351) (1,543) (7,657) (10,049)
Change in reinsurers’ share of
claims provision (1,012) 2,324 490 8,985 10,787
NET 490 (27) (1,053) 1,328 738
121
30 Operating Expenses 31 Stock-based Compensation

Operating expenses incurred during the year Employee benefits expense during the year The Group has the 2017 Restricted Stock
are as follows: is comprised of: Plan in place. The purpose of the Restricted
Stock Plans is to enhance the Group’s ability
AS AT MARCH 31 2021 2020 AS AT MARCH 31 Note
2021 2020 to attract and retain the services of certain
key employees and to incentivise such
Employee benefits expenses Salaries and other
persons to devote their utmost effort and
(see following table) 42,409 33,483 short-term benefits (2) 41,193 32,267
skill to the growth of the Group by providing
Professional fees 14,500 8,191 Pension costs (1) 1,140 1,080
Post-employment
them with an interest in its long-term
General and corporate
expenses 5,418 5,294 medical benefits 21 (72) (42) growth and stability. Under each of the
IT-related expenses 3,880 2,864 Stock-based compensation 31 148 178 Restricted Stock Plans, the maximum
Building-related expenses 2,383 2,828 TOTAL EMPLOYEE number of shares that may be granted is
Marketing expenses 1,032 751 BENEFITS EXPENSE 42,409 33,483 250,000 over the five-year life of each plan.
Other expenses 3,536 4,390
(1) Pension costs arise from the Group’s defined contribution Shares granted under the Plan vest at the
TOTAL OPERATING pension plan covering all full-time employees in Bermuda,
EXPENSES 73,158 57,801 Gibraltar and Malta. rate of 33.3 percent at the end of each year
(2) In 2021, the Group incurred an additional $7.5 million in for three years after the date of grant. The
salaries and other short-term benefits expenses related to
newly-acquired Bermuda-based medical practices
fair value of each share granted is based
(see Note 3) and FirstUnited Brokers Limited. upon the market price at the date of grant.

OPERATING EXPENSES
The details on shares granted and forfeited
(In millions) during the year are as follows:
42.4 AS AT MARCH 31 2021 2020
33.5 Number of shares granted 51,200 45,450

Fair value per share 2.56 3.25
Number of shares forfeited 3,018 760
14.5
8.2 The following table summarises information
3.9 5.4 5.3
2.9 2.4 2.8 3.5 4.4 about the outstanding stock grants:
1.0 0.8
S TED D
EES SES FEE AND ES ATE TIN
G
ENS
ES RESTRICTED SHARES VESTING Number of shares
LOY N NAL ELA RAL XPENS REL RKE XP
EMP S EXPE S I O IT-R ENSES N E
GE ATE E N G - S MA ENSE
S
RE
FES EXP LDI SE
EXP OTH
E
EFIT PRO R BUI EXPEN July 2020 46,367
BEN CORPO
July 2021 31,617
July 2022 17,067
2021 2020
TOTAL 95,051
122
32 Related Party Transactions 33 Income Tax Expense

32.1 TRANSACTIONS WITH compensation of key management Bermuda
SIGNIFICANTLY personnel for the year is as follows: Certain entities domiciled in Bermuda
INFLUENCED INVESTEES received an undertaking from the Bermuda
32.1.1 The Group provided insurance- AS AT MARCH 31 2021 2020 Government exempting these companies
related products and services to various from all Bermuda local income, withholding
Salaries and other
significantly influenced investees. The and capital gains taxes until 2035. At
short-term benefits 3,710 2,575
premiums and fees received from these the present time no such taxes are levied
Post-employment benefits (1) 140 127
transactions totalled $0.1 million (2020 – Stock-based compensation 24 26 in Bermuda.
$0.1 million) in the year and are shown as
TOTAL KEY MANAGEMENT Europe
Gross premium written and Commission, PERSONNEL COMPENSATION 3,874 2,728
management fees and other on the Subsidiaries domiciled in Gibraltar are
Consolidated Statements of Operations. (1) Includes pension costs. subject to normal Gibraltar corporation tax
at a rate of 10 percent on all taxable profits.
There were no receivables and payables 32.3 DIRECTORS’ AND OFFICERS’ The subsidiary domiciled in Malta is subject
arising from insurance contracts and service SHARE INTERESTS AND to normal Malta corporation tax at a rate of
contracts with significantly influenced CONTRACTS 35 percent on all taxable profits. Malta
investees as at March 31, 2021 and 2020. The total interest of all Directors and operates a tax refund system whereby,
Officers of the Company in the shares of upon distribution of dividends out of
32.1.2 The Group rented office premises the Company at March 31, 2021, was 98,626 taxable profits, the shareholders are
from a significantly influenced investee (2020 – 90,092) shares. generally entitled to a 6/7th refund of tax
paying a total of $0.2 million (2020 – $0.3 paid by the distributing company subject
million) in rent and service charges in With the exception of the employment to the satisfaction of certain criteria. The
the year, which are shown in Operating contract with the Chief Executive Officer, effective tax rate after approval of the tax
expenses in the Consolidated Statements Ms. A. S. Hill, and a consultancy agreement refund is five percent.
of Operations. with a non-executive director, there were no
other service contracts with the directors U.S.
32.2 COMPENSATION OF KEY during the year. Argus International Life Insurance Limited
MANAGEMENT PERSONNEL (AILIL), a Bermuda domiciled subsidiary,
Key management personnel have been The Group has extended mortgage loans to has elected under section 953(d) of the U.S.
identified as the Board of Directors and certain Officers totalling $0.7 million as at Internal Revenue Code (IRC) to be taxed as
Officers of the Company. These individuals March 31, 2021 (2020 – $1.9 million). a U.S. domestic corporation. AILIL is subject
have the authority and responsibility for to a U.S. corporate income tax rate of 21
planning, directing and controlling the percent for the fiscal year ended March 31,
activities of the Group. The summary of 2021, due to U.S. tax reform (2020 –
21 percent).
123
Canada 33.2 CURRENT INCOME TAXES RECONCILIATION

Subsidiaries domiciled in Canada are Tax applying the statutory domestic income tax rate and the tax charge for the year are
subject to Canada Revenue Agency reconciled as follows:
corporate income tax rates, rules and
regulations. The statutory income tax rate AS AT MARCH 31 2021 2020
for subsidiaries domiciled in Canada is
(Loss)/earnings before income taxes 11,145 14,911
26.5% on all taxable profits.
Less: (Loss)/earnings not subject to taxes 7,147 11,749
33.1 INCOME TAXES FOR THE YEAR EARNINGS SUBJECT TO TAXES 3,998 3,162
Income taxes at the application rate 874 634
AS AT MARCH 31 2021 2020 Tax effect of:
Income attributable to overseas branch -
Income taxes for the year 1,004 651
Expenses not deductible for tax purposes 40 (16)
Deferred taxes (3) (6)
Adjustment to taxes related to prior year (43) 12
TOTAL INCOME TAX EXPENSE 1,001 645 Difference between depreciation and capital allowances 22 30
Effect of tax losses brought forward 108 (9)
Unrecognised temporary difference - (6)
TOTAL CURRENT INCOME TAXES 1,001 645
33.3 UNRECOGNISED DEFERRED TAX ASSETS

Deferred tax assets have not been recognised in respect of the following items, because it is not
probable that future taxable profit will be available against which the Group can use the benefits
therefrom.
AS AT MARCH 31 2021 2020
Tax losses carried forward 768 630

Capital allowances carried forward 11 42
Deductible temporary differences 1 (25)
NET UNRECOGNISED DEFERRED TAX ASSETS 780 647
As of March 31, 2021, the Group has net operating loss carryforwards of $3.5 million (2020 –
$3.0 million). Of the total net operating loss carryforwards of the Group, $0.1 million (2020 – $0.1
million) is subject to limitations under IRC section 382. $2.1 million of the Group’s net operating
loss carryforwards will expire in 2022 through 2032 under the current U.S. tax legislation. Net
operating losses incurred from December 31, 2018 onwards do not expire.
124
34 Segregated Funds and Changes to Segregated Funds are as follows:

Separate Accounts
AS AT MARCH 31 2021 2020
The assets for contracts held under the
Additions to Segregated Funds
Segregated Funds are allocated to Separate
Contributions and transfers 119,912 115,594
Accounts as authorised by the Bermuda
Return on investments 435,323 (58,471)
Life Insurance Company Limited Segregated funds acquired 1,721 2,278
(Separate Accounts) Consolidation and
556,956 59,401
Amendment Act 1998 and the Argus
International Life Insurance Limited Deductions from Segregated Funds
Consolidation and Amendment Act 2008. Withdrawals, benefit payments and transfers to the General Fund 164,888 246,825
Operating expenses 16,845 16,907
181,733 263,732
Net additions/(deductions) to Segregated Funds for the year 375,223 (204,331)
Segregated Funds, beginning of year 1,326,549 1,530,880
SEGREGATED FUNDS, END OF YEAR 1,701,772 1,326,549
SEGREGATED FUNDS CLASSIFIED UNDER HELD-FOR-SALE,
END OF YEAR (519,222) (460,449)
SEGREGATED FUNDS FROM CONTINUING OPERATIONS,
END OF YEAR 1,182,550 866,100
125
35 Operating Segments
35.1 RESULTS BY SEGMENT
AMERICAS EUROPE

AS AT MARCH 31
Employee Benefits Wealth Property Disposal Property Consolidated
and Health Management & Casualty Groups Total and Casualty Brokerage Total All other Elimination Total
Segment revenues 2021 118,653 4,153 21,141 1,710 145,657 19,107 5,517 24,624 1 (6,169) 164,113
2020 118,859 3,991 18,755 1,598 143,203 18,361 3,470 21,831 - (4,966) 160,068
Investment income 2021 12,632 5 159 434 13,230 120 8 128 238 (754) 12,842
2020 21,675 188 481 673 23,017 478 2 480 (2,806) (1,175) 19,516
Share of earnings of 2021 - - 261 - 261 - - - - - 261
associates 2020 - - 25 - 25 - - - - - 25
TOTAL SEGMENT 2021 131,285 4,158 21,561 2,144 159,148 19,227 5,525 24,752 239 (6,923) 177,216
REVENUES 2020 140,534 4,179 19,261 2,271 166,245 18,839 3,472 22,311 (2,806) (6,141) 179,609
Amortisation, depreciation 2021 3,683 77 77 251 4,088 471 174 645 881 988 6,602
and impairment 2020 3,139 - 675 251 4,065 480 136 616 1,307 371 6,359
Income tax expense 2021 - - - - - 305 706 1,011 8 (18) 1,001
2020 - - - - - 356 313 669 - (24) 645
Segment earnings/(loss)
attributable to 2021 20,179 285 9,076 (1,022) 28,518 2,344 568 2,912 (20,632) (666) 10,132
shareholders, after tax 2020 26,759 310 4,217 (28) 31,258 2,185 634 2,819 (18,869) (1,010) 14,198
(1) Disposal groups refer to certain groups of assets and liabilities, which are held-for-sale (Note 4).
- 4%
3%
GEOGRAPHIC INFORMATION ON SEGMENT REVENUES:
SEGMENT REVENUES 12%
AS AT MARCH 31 Bermuda Europe Total
AMERICAS EMPLOYEE
BENEFITS & HEALTH 1%
Segment revenues 2021 152,464 24,752 177,216
AMERICAS WEALTH
2020 157,298 22,311 179,609 MANAGEMENT
AMERICAS P&C 13%
DISPOSAL GROUPS
Management considers its external customers to be the individual policyholders EUROPE P&C
and corporations and, as such, the Group is not reliant on any individual customer. EUROPE BROKERAGE
3%
ELIMINATION & OTHERS
72%
126
35.2 ASSETS AND LIABILITIES BY SEGMENT

AMERICAS EUROPE

Employee Benefits Wealth Property Disposal Property Consolidated
and Health Management and Casualty Groups Total and Casualty Brokerage Total All other Elimination Total
MARCH 31, 2021:

Total General Fund Assets 533,869 606 57,447 26,433 618,355 55,984 16,462 72,446 189,006 (150,080) 729,727
Segregated Fund Assets 1,182,550 - - 519,222 1,701,772 - - - - - 1,701,772
Total General Fund Liabilities 465,060 (1,321) 26,476 17,466 507,681 36,083 12,819 48,902 22,061 1,226 579,870
Segregated Fund Liabilities 1,182,550 - - 519,222 1,701,772 - - - - - 1,701,772
MARCH 31, 2020:

Total General Fund Assets 508,846 305 48,062 31,549 588,762 53,424 10,883 64,307 156,426 (136,044) 673,451
Segregated Fund Assets 866,100 - - 460,449 1,326,549 - - - - - 1,326,549
Total General Fund Liabilities 453,925 (287) 21,325 15,929 490,892 38,700 9,349 48,049 12,857 (613) 551,185
Segregated Fund Liabilities 866,100 - - 460,449 1,326,549 - - - - - 1,326,549
36 Commitments and
Contingencies
36.1 OPERATING LEASES Future annual minimum lease rental
Group as a lessor receivable under non-cancellable operating
The Group has entered into non-cancellable leases as at March 31, 2021, are as follows:
commercial property leases on several
floors of the Group’s office buildings. These AS AT MARCH 31 2021 2020
leases have remaining terms of between one
and two years. All leases include a clause to Within one year 1,488 1,560
enable upward revision of the rental charge After one year but not more
than five years - 1,488
upon expiration according to prevailing
market conditions.
36.2 CONTINGENCIES
The Group is contingently liable with
respect to certain litigation and claims that
arise in the normal course of business.
127
37 Comparative Figures 38 Subsequent Events

Certain of the 2020 comparative figures 38.1 DIVIDENDS
have been reclassified to conform to the Based upon the audited financial results of
presentation adopted for 2021. the Group for the year ended March 31, 2021,
the Directors have declared a dividend of
10 cents per share (2020 – nine cents per
share) payable on August 27, 2021 for
shareholders of record on July 28, 2021.
38.2 DIVESTMENT
On May 27, 2021, the Group entered into a
Sales and Purchase Agreement (SPA) with
an unrelated party to sell the International
Life Division which includes Argus
International Life Bermuda Limited and
its subsidiaries, Argus International Life
Insurance Limited and Bermuda Life
Worldwide Limited (the “Division”). The
sale was completed on July 1, 2021. The full
settlement of the sale price consideration
is subject to certain conditions of the SPA
being met by both parties on or before
September 30, 2021. The total consideration
for the sale of the Division is equal to the
audited book value at March 31, 2021 plus
a premium of $2.0 million.
38.3 SHARES REPURCHASE

PROGRAMME
Effective July 1, 2021, the Group initiated a
share repurchase programme to buyback
up to 415,000 of its shares at the market
price on the Bermuda Stock Exchange. The
repurchase programme extends over the
next year and shares buyback is at the
discretion of the Group.
128
In line with our commitment to reduce Argus’

carbon footprint, this report has been produced
in a digital format.
Registered Office
The Argus Building, 14 Wesley Street,
Hamilton HM 11, Bermuda
Mailing Address
P.O. Box HM 1064, Hamilton HM EX, Bermuda
Customer Service Centre

T (441) 298-0888
[email protected]
argus.bm
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Argus Group Holdings Limited / Annual Report 2021

Message from the Chair 03

Dear Shareholders, our relatives, friends and neighbours.

June 2020 acquisition industry in Bermuda.  s we continue our product and

metrics that illustrate our strong results

 hroughout the pandemic, we were

It goes without saying that a critical

Speaking of moving forward, you’ll have • W

Message from the Group

Dear Shareholders, However, we remain acutely focused on the

Message from the Group

Message from the

We have capital that

Brexit became a reality and our businesses

Significantly contributing to the growth in fee HEALTH

INVESTMENT ASSETS AT FIXED INCOME PORTFOLIO

Mortgages, Loans & Receivables AA

Investment Properties BBB

Bermuda Equities BB or lower

PETER DUNKERLEY DIVIDENDS DECLARED

2018 / 2019 2019 / 2020 2020 / 2021

Dear Shareholders, Our success is evident in our ability

At Argus Americas Our immediate key business imperatives

services and population By keeping these three watchwords at the

This past year, most For too long, a fragmented, unsustainable

The Family Practice Group and Island

Adding these three businesses to the

“We’ll provide opportunities for learning

From our base in Gibraltar and working

As the member of the While we were ensuring that our

during the last 12 The pandemic coincided with Brexit,

At the same time We have a three-pronged strategy for

• establishing a firm foundation with our

capabilities in Gibraltar • promoting quality risk advisory services​

skillset that puts the customer at the

The last 12 months But Argus has been able to navigate

At the Board level,

Our headquarters in Bermuda represent In addition to making sure our workspaces

In Bermuda, Gibraltar and Malta, LED However, even before COVID-19, we

As is so often the struggling Bermudian residents. These

Under the umbrella of “Our Future is You,”

As our Group CFO Peter Dunkerley

While we’re proud that many ESG

Directors Chair Independent Director

our customers and are KIM R. WILKERSON, JP, CPCU

ARGUS GROUP HOLDINGS LIMITED BOARD COMMITTEES

David A. Brown (Chair) Audit Committee

ALISON S. HILL PETER DUNKERLEY

SIMON GIFFEN PETER LOZIER TYRONE MONTOVIO

ONESIMUS NZABALINDA HANNAH ROSS DAVID SIMONS

GIBRALTAR SUBSIDIARIES MALTA SUBSIDIARIES

WestMed Insurance Services Limited

TOTAL REVENUE ($ MILLIONS) EARNINGS ATTRIBUTABLE TO SHAREHOLDERS EARNINGS PER SHARE

2017 2019 2020 2021 2017 2019 2020 2021

2017 2018 2019 2020 2021

SHAREHOLDERS’ EQUITY ($ MILLIONS) TOTAL GENERAL FUND ASSETS ($ MILLIONS)

RETURN ON SHAREHOLDERS’ EQUITY SHARES IN ISSUE OUTSTANDING SHARES

2017 2019 2020 2021

BOOK VALUE PER SHARE ($) DIVIDENDS DECLARED ($ MILLIONS) EMPLOYEES

6.94 3.8 3.8 3.8 3.8 3.9 336

June 2020 acquisition industry in Bermuda. s we continue our product and

hroughout the pandemic, we were

• establishing a firm foundation with our

capabilities in Gibraltar • promoting quality risk advisory services