BF&M Ltd took a $10 million hit from hurricanes in 2016, the most active storm year the insurer has ever experienced.

However, the island-based firm was still able to post full-year net income of $14.4 million — down from the $23.9 million profit in 2015.

Some of the storm claims were related to Hurricane Nicole, which battered Bermuda last October, causing an estimated $15 million in total insured losses on the island.

Just days before, Hurricane Matthew had ravaged the Bahamas, one of 15 Caribbean islands where BF&M operates.

John Wight, BF&M’s chief executive officer, said the combined financial impact of the two hurricanes on the group was $10.1 million.

“BF&M’s results were particularly pleasing given that 2016 was the most active hurricane season that the group has ever seen collectively,” Mr Wight said in a statement.

“Our performance in 2016 is a testament to the group’s consistent strategy of diversification, both geographically and by line of business, and of careful preparation. We are in the business of paying claims and we plan for years like this.”

BF&M said gross premiums written totalled $347.8 million, up 3 per cent on 2015.

Shareholders’ equity at the end of last year was $264.5 million. General fund assets totalled $1.1 billion of which $108.9 million was held in cash and cash equivalents.

Investment income for the year reflected a $0.7 million decrease (2015 — $6.5 million decrease) in the value of investments for the period.

The firm said that as a result of its asset-liability matching policy, which looks to limit volatility of reported earnings as a result of interest rate swings, BF&M reported a $1.5 million net gain — compared to $0.3 million loss in 2015 — on the difference between the fair value of investments and reserves.

Commission and other income declined from the prior year by 13 per cent to $41 million due to the impact of 2016 hurricanes on reinsurance profit commissions.

Short-term claims and adjustment expenses increased 37 per cent to $31 million primarily due to the 2016 hurricanes as well as claims arising from the Front Street fire in July.

BF&M added that life and health policy benefits, which are recorded at fair value, increased by 20 per cent to $117.1 million, attributed to higher local health claims reported in Bermuda and an increase to reserves on new annuity business written.

Operating expenses increased by 3 per cent to $64.3 million.

Three of BF&M’s insurance operating companies have an A financial strength rating from AM Best, while the fourth, the Insurance Corporation of Barbados Ltd, has an A- rating.

Mr Wight said: “There is no domestic insurance group in Bermuda or the Caribbean with stronger ratings. Our financial strength means we can be there for our customers when they need us most and 2016 was certainly a year in which this was demonstrated.”