BF&M: Shareholders Net Income Of $23.9 Million

April 12, 2016

BF&M Limited today reported shareholders’ net income for the year ended 31st December 2015 of $23.9 million, resulting in a return on shareholders’ equity of 9.6%. Shareholders’ net income for the comparative twelve month period of 2014 was $21.8 million.

President & CEO John Wight stated that “earnings from BF&M’s core businesses of insurance and investment advisory services performed extremely well overall in Bermuda and the 15 islands in the Caribbean where the Group operates.

“The company’s success in 2015 was due to a combination of factors including lower than normal claims, with no major storm activity in Bermuda and the Caribbean. This followed an active storm year in Bermuda in 2014.”

“2015 was also a successful year for the Group in repositioning the use of its capital to improve future profitability. BF&M acquired Kitson Insurance Services Ltd, a successful brokerage company that has operated in Bermuda since 1947. This will increase our P&C business meaningfully in Bermuda.

“In addition, the Company sold its investment in Bermuda International Insurance Services Limited, a business that’s volatility in earnings from year to year exceeded our comfort level.”

“BF&M is a well diversified insurance and investment advisory Group. It has four main insurance operating companies, with the following A.M. Best financial strength ratings;

  • 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

Mr. Wight stated that “there is no domestic insurance group in Bermuda or the Caribbean with stronger ratings.”

“Equity attributable to shareholders at 31st December 2015 was $257.5 million. General fund assets totaled $1.1 billion of which $96.2 million was held in cash and cash equivalents. Gross premiums written for the year were $336.1 million, a decrease of less than 1% from 2015.

“Investment income for the year reflected a $6.5 million decrease [2014 ‐ $20.3 million increase] in the value of investments for the period on increasing long term US interest rates. This interest rate increase negatively impacted the fair value of the company’s extensive fixed income portfolio.

“Partially offsetting this was a $5.3 million decrease [2014 ‐ $17.9 million increase] in the value of life and health 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.

The Group also reported impairment expenses totaling $6.6 million relating to its mortgage and loan investment portfolio. Commission and other income increased 19% to $47.0 million from improved reinsurance commission income.

Short term claims and adjustment expenses decreased by 19% to $22.6 million due to limited storm activity.

Life and health policy benefits, which are recorded at fair value, decreased by 20% to $97.5 million, primarily as a result of the previously mentioned interest rate increases and the Group’s asset liability matching policy. Operating expenses decreased by 2% to $62.9 million.

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  1. …..and what about our public schools? Repeated emphasis on MONEY…MONEY…MONEY!!
    Bermuda’s children are much more important than millions of dollars.
    When will they GET IT??????