BF&M Ltd posted a $6.7 million profit for the first six months of this year — less than half the earnings the company reported in the first half of 2017.

John Wight, the insurer and pension provider’s chief executive officer, said: “BF&M reported solid earnings for the first half of 2018, and our operating results were strong.

“Our earnings reflected adjustments made to our reinsurance programme in 2017, as we placed additional reinsurance coverage as a precautionary measure to further protect our balance sheet.”

Shareholders’ net income for the comparative six-month period of 2017 was $13.9 million.

Investment income reflected a $12.5 million decrease in the fair value of investments, compared to an $8.3 million increase in the same period of last year.

BF&M stated: “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 the company reported a $1.2 million net gain on the difference between the fair value of investments which support certain liabilities and reported reserves.”

Gross premiums written for the period through June 30 were $179.7 million, an increase of 2 per cent from 2017’s first half as a result of planned rate increases on certain properties following the 2017 storms.

The company operating expenses fell by 7 per cent to $31.1 million.

Equity attributable to shareholders at June 30, 2018 was $264.7 million. General fund assets totalled $1.4 billion of which $184.6 million was held in cash and cash equivalents.

Commission and other income increased from the prior year by 3 per cent to $23.1 million.

Last year’s hurricanes continued to negatively impact commission income in the current year, but the impact was more than offset by commissions earned on additional reinsurance coverage and higher levels of proportional reinsurance ceded due to changes in the reinsurance programme and profit share reported on non-property business.

Short-term claims and adjustment expenses increased 7 per cent to $13.1 million from unfavourable claims experience.

Life and health policy benefits decreased by 32 per cent to $38.2 million. “Life and health policy benefits” includes changes in life insurance reserves which decreased in 2018 compared to a smaller increase in 2017 in the same period. These reserve movements were primarily driven by differences in market interest rates over the respective periods.

Mr Wight added: “AM Best ratings for the group have just been reaffirmed, citing balance sheet strength, robust risk management and a history of positive operating results – even in years of catastrophic storms such as 2017. The BF&M Group continues to hold the highest ratings of any domestic insurer in Bermuda or the Caribbean. This is the cornerstone of our promise to pay and to be there for our policyholders over the long term.”