BF&M Post Earnings of $10.2M For Q2 2013
BF&M Limited today [Sept 17] announced shareholders’ net income for the six month period ended 30 June, 2013, of $10.2 million, resulting in an annualized return on shareholders’ equity of 10%. Shareholders’ net income for the comparative six month period of 2012 was $12.2 million.
President & CEO, John Wight stated that “Financial results for the first six months of 2013 were down from the corresponding period in 2012, principally as a result of further impairments on Bermuda based properties where BF&M holds a first mortgage, and the rise in interest rates in the 2nd quarter that decreased the value of BF&M’s bond portfolio.
“The Company’s core operations relating to insurance and investment advisory and administration services continued to perform well, despite the ongoing challenges that impact our individual, commercial, and group customers in Bermuda, Barbados, and Cayman, where the majority of the business is operated from.”
Mr. Wight added that “the Company’s balance sheet continues to be very strong. Equity attributable to shareholders at 30 June 2013 was $213.4 million. General fund assets totaled $1.1 billion of which $94.5 million was held in cash and short term deposits. Based on the Company’s strong balance sheet, the Board of Directors maintained the dividend of 20c per share for shareholders of record at 30 September 2013.”
BF&M said they were very pleased to have A.M. Best reaffirm last week the A (Excellent) financial strength ratings of its two principle Bermuda based subsidiaries, BF&M General Insurance Company Limited and BF&M Life Insurance Company Limited.
A.M. Best cited BF&M’s “consistent positive net income, steady premium growth, high level of capital, and strong market share.” BF&M’s other two principal operating businesses, the Insurance Corporation of Barbados Limited, and Island Heritage Insurance Company Ltd, have previously received financial strength ratings of A- Excellent.
Gross premiums written for the period were $184.1 million, an increase of 16% over 2012. Investment income for Q2 reflected a $17.3 million decrease in the value of investments for the period as the marginal increase in interest rates decreased the fair value of the company’s extensive fixed income portfolio. Offsetting this was a $17.2 million decrease in the value of policyholder benefits as a result of the company’s disciplined asset liability matching policy which limits volatility of reported earnings as a result of interest rate swings in either direction. Commission and other income increased 16% to $19.8 million. Short term claims and adjustment expenses increased by 26.7% to $13.4 million and life and health policy benefits decreased by 36% to $32.5 million. Operating expenses increased 10% to $33.0 million.
