BF&M Reports First Quarter Earnings Of $8.2M

June 16, 2015

John Wight 2014BF&M Limited today [June 16] reported shareholders’ net income for the three month period ended 31st March 2015 of $8.2 million, resulting in an annualized return on shareholders’ equity of 13.0%. Shareholders’ net income for the comparative three month period of 2014 was $11.4 million.

President & CEO John Wight [pictured] stated that “2015 has started off with strong financial results in the first three months. The core operating earnings in the first three months of 2015 were in line with the corresponding period in 2014.

“However, there were certain anomalies in the prior year results, such as one-time gains and the timing of certain revenues that occurred in the first quarter of 2014 that were not repeated in 2015.

“In addition, the financial effects of Hurricanes Fay and Gonzalo in Bermuda carried over to 2015 by reducing reinsurance commission income from reinsurance contracts.”

“In April, Valor Group Ltd acquired BF&M’s offshore life insurance business, Bermuda International Insurance Services Limited, following the company’s decision to focus its full attention on our core domestic insurance and investment advisory businesses in Bermuda and the Caribbean.

“Diversification, both geographically and by line of business, continues to reap economic benefits for the Group as there is no dependence on any one island or any one line of business. The Company currently underwrites insurance business in Bermuda and fifteen islands in the Caribbean. This diversification is fundamental to the Group’s success.”

Current A.M. Best financial strength ratings for BF&M’s four main operating businesses are as follows;

  • BF&M General Insurance Company Limited – A [Excellent]
  • BF&M Life Insurance Company Limited – A [Excellent]
  • Island Heritage Insurance Company Ltd – A [Excellent]
  • Insurance Corporation of Barbados Limited – A- [Excellent]

“There is no insurance company or group in Bermuda or the Caribbean writing domestic insurance business with a stronger rating,” BF&M said.

“Equity attributable to shareholders at 31st March 2015 was $246.9 million. General fund assets totaled $1.1 billion of which $77.5 million was held in cash and cash equivalents.

“Gross premiums written for the three months were $80.9 million, an increase of 1% over 2014. Investment income for the three months reflected a $7.2 million increase in the value of investments for the period as interest rates and credit spreads fell increasing the fair value of the company’s extensive fixed income portfolio.

“Offsetting this was a $6.1 million increase 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.

“Commission and other income decreased 8% to $9.2 million on lower reinsurance commission income. Short term claims and adjustment expenses increased by 5% to $6.0 million. Life and health policy benefits decreased by 13% to $27.8 million. Operating expenses decreased slightly to $15.2 million.”

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