BF&M Reports Six Month Earnings Of $11.4M

September 14, 2015

BF&M John WightBF&M Limited today [Sept 14] reported shareholders’ net income for the six month period ended 30th June 2015 of $11.4 million, resulting in an annualized return on shareholders’ equity of 9.8%. Shareholders’ net income for the comparative six month period of 2014 was $17.5 million.

President & CEO John Wight [pictured] said, “Financial results in the first half of 2015 continued to be strong. The core operating earnings in the first six 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 half of 2014 that were not repeated in 2015, including a net fair value gain in 2014 of $4.1 million compared to a net fair value loss of $1.0 million in 2015.”

“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. This diversification is fundamental to why the Group has achieved such consistently solid annual returns in Bermuda and the Caribbean.”

Equity attributable to shareholders at 30th June 2015 was $248.8 million. General fund assets totaled $1.1 billion of which $84.1 million was held in cash and cash equivalents.

Gross premiums written for the six months were $181.2 million, a decrease of 2% from 2014. Investment income for the six months reflected a $5.6 million decrease in the value of investments for the period as global concerns of a Greek default and increasing long term US interest rates negatively impacted the fair value of the company’s extensive fixed income portfolio.

Partially offsetting this was a $4.6 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. Commission and other income increased 5% to $20.4 million from improved reinsurance commission income. Short term claims and adjustment expenses decreased by 12% to $10.5 million.

Life and health policy benefits, which are recorded at fair value, decreased by 28% to $46.1 million. Operating expenses increased by 1% to $32.2 million.

Earlier this month, A.M. Best announced that it had affirmed the financial strength ratings for BF&M’s four principal operating companies:

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

A.M. Best cited “The ratings of BF&M Life and BF&M General reflect their consistently positive net income, solid capitalization, strong market positions and increased business diversification. The ratings for Island Heritage reflect its strong risk – adjusted capitalization and excellent profitability whilst ICBL’s ratings reflect the company’s strong risk – adjusted capitalization, low underwriting leverage and solid performance.”

Mr. Wight stated that “We were very pleased to be informed by A.M. Best of the ratings for our group companies. There is no domestic insurance group in Bermuda or the Caribbean with stronger ratings.”

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