BF&M Reports Six Month Earnings Of $13.2M
BF&M Limited today [Sept 12] reported shareholders’ net income for the six month period ended 30th June 2016 of $13.2 million, resulting in an annualized return on shareholders’ equity of 9.9%. Shareholders’ net income for the comparative six month period of 2015 was $11.4 million.
President and CEO John Wight [pictured] stated: “Financial results in the first half of 2016 continue to be strong. The core operating earnings were largely in line in the first six months of 2016, exclusive of fair value accounting for movements in the company’s investments and reserves, with the corresponding period in 2015.”
BF&M operates in 15 jurisdictions across the Caribbean, including Bermuda. In the second quarter, approximately 50% of the company’s earnings were generated in Bermuda, and 50% throughout the Caribbean.
“Approximately 50% was generated from property and casualty business, and 50% from health, life, annuities, pensions, and investment advisory services. This model of diversification has served the Company extremely well in the past and will continue to in the future,” the company said.
The BF&M Group 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 30th June 2016 was $266.9 million. General fund assets totaled $1.1 billion of which $113.2 million was held in cash and cash equivalents.
Gross premiums written for the period were $183.5 million, an increase of 1% from the corresponding 2015 period.
Investment income for the six months reflected an $18.9 million increase [2015 - $5.6 million decrease] in the value of investments for the period on falling US interest rates. This interest rate decrease positively impacted the fair value of the company’s extensive fixed income portfolio.
Offsetting this was a $21.6 million increase [2015 - $4.7 million decrease] in the value of life and health policyholder benefits as a result of the company’s disciplined asset liability matching policy which looks to limit volatility of reported earnings as a result of interest rate swings.
Commission and other income was in line with the prior year at $20.4 million.
Short term claims and adjustment expenses increased 14% to $12.0 million due to increases in reported motor and miscellaneous accident claims as well as more unfavourable development on that group of claims compared to the prior year. A large fire claim that occurred in Bermuda will be recorded in the Quarter 3 financial statements.
Life and health policy benefits, which are recorded at fair value, increased by 64% to $75.7 million, primarily as a result of the previously mentioned interest rate decreases and the Group’s asset liability matching policy. The increase can also be attributed to higher local health claims reported in Bermuda.
Operating expenses increased by 4% to $33.3 million.
Read More About
Category: All
