BF&M records $25.2m profit for 2013

BF&M has reported a profit for 13 straight years after recording net income of $25.2m for 2013.

Shareholders’ net income for the comparative period of 2012 was $21.9 million. President and CEO, John Wight, stated that “this marked the thirteenth straight year that BF&M has achieved a return on equity of 10 per cent or greater. For the first time, over half of BF&M’s profits came from businesses outside of Bermuda. Island Heritage Insurance Company, headquartered in Cayman and operating in 13 Caribbean countries, had recordprofits. Financial results from Bermuda based businesses were good but continue to reflect the ongoing challenges that still impact certain of our individual, commercial, and group customers. There are certain signs of recovery in theBermuda economy which is encouraging.”

Mr. Wight added that “the company’s balance sheet continues to be very strong, both in terms of capitalization and liquidity. Equity attributable to shareholders at 31st December 2013 was $227.8 million. General fund assets totaled $1.1 billion of which $74.0 million was held in cash and cash equivalents. Based on the company’s strong balance sheet, the Board of Directors maintained the dividend of 20c per share for shareholders of record at 31st March 2014”.

Gross premiums written for the year were $345.6 million, an increase of 8.6 per cent over 2012. Investment income for the year reflected a $22.5 million decrease in the value of investments for the period as the increase in interest rates decreased the fair value of the company’s extensive fixed income portfolio.

Offsetting this was an $20.5 million decrease in the reserve held in respect of future 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 decreased 16.0 per cent to $40.0 million. Short term claims and adjustment expenses increased by 21.3 per cent to $22.2 million and life and health policy benefits decreased by 21.7 per cent to $83.8 million. Operating expenses increased 10.0 per cent to $63.1 million.