Insurer BF&M Ltd posted net income of $19.2 million for the first nine months of the year, nearly $2 million up from the first three quarters of last year.

The company said claims from a large commercial fire in Bermuda were included in the third quarter. BF&M insured the Ann Cartwright DeCouto Building on Front Street, which was gutted by fire on July 21.

However, claims resulting from Hurricane Nicole, which hit Bermuda in October, and Hurricane Matthew, which ravaged some areas among the 15 islands the company insures in the Caribbean, will be accounted for in the fourth quarter.

The results amounted to a 9.6 per cent return on shareholders’ equity for the Bermuda Stock Exchange-listed company.

John Wight, BF&M’s chief executive officer, said: “Financial results for the first nine months of 2016 continue to be strong. The core operating earnings were largely in line in the first nine months of 2016, exclusive of fair value accounting for movements in the company’s investments and reserves, with the corresponding period in 2015.”

The company said 70 per cent of its earnings were generated in Bermuda. Around 54 per cent was generated from property and casualty business, 40 per cent from health, life, annuities, pensions, and investment advisory services, and 6 per cent from Bermuda real estate.

Mr. Wight stated: “Our strategy of diversification by geography and by line of business continues to serve us well. Our financial strength ratings are the strongest in Bermuda and the Caribbean for a domestic insurance group. These factors, together with long-established relationships with our partners and customers, are the cornerstones of our success. We are well-positioned for the rest of 2016 and for the years to come.”

Equity attributable to shareholders at September 30, 2016 was $271 million, while general fund assets totalled $1.1 billion, of which $118.9 million was held in cash and cash equivalents.

Gross premiums written for the period were $274.4 million, an increase of 5 per cent from the corresponding 2015 period.

Investment income for the nine months reflected a $19.1 million increase in the value of investments for the period on an overall year-to-date decline of US interest rates.

This interest rate decrease positively impacted the fair value of the company’s fixed-income portfolio. Offsetting this was a $19.6 million increase 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 were in line with the prior year at $30.4 million.

Short term claims and adjustment expenses increased 6 per cent to $18 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. Life and health policy benefits, which are recorded at fair value, increased by 43 per cent to $111.1 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 3 per cent to $48.8 million.