A double whammy from Hurricanes Fay and Gonzalo cost insurer BF&M more than $7 million.

But the firm still made a profit of close to $22 million last year, despite the massive payout.

BF&M CEO John Wight said: The financial effects of Hurricanes Fay and Gonzalo in Bermuda turned an otherwise great financial year into a good one.”

But Mr Wight said that BF&M — which operates in 15 Caribbean islands as well as Bermuda — had made “positive earnings” from its insurance, investment advisory and pension administration services, despite “seemingly endless recessionary pressures” that continued to hit the region.

He added: “While there has been some moderate improvement in certain islands, it is fair to say that there is a new reality for the economies of Bermuda and the Caribbean for the foreseeable future.”

Mr Wight was speaking after the firm revealed its full-year results for the year ending December 31, 2014.

He added that diversification — both geographic and in lines of business — was the key to a successful performance in a difficult economic climate.

The firm said: “This diversification is fundamental to why the group has achieved such a constant annual return on equity above our competitors in the Bermuda and Caribbean region.

“With the exception of 2014’s return on equity of 9.3 per cent, which was impacted by two hurricanes, the company has exceeded 10 per cent returns for 13 consecutive years.”

Operating expenses for the year rose by 4 per cent on 2013 to $64.5 million.

The firm posted 2014 equity attributable to shareholders at year end of $240.5 million, while general fund assets totalled $1.1 billion of which $53.8 million was held in cash and cash equivalents.

Gross premiums for the year amounted to $338.2 million, down 2 per cent on 2013.

But the value of investments was up $20.3 million as interest rates and credit spreads fell in during the year increasing the fair value of the company’s extensive fixed-income portfolio.

The firm’s statement, however, said: “Offsetting this was a $17.9 million increase in the value of policyholder benefits as a result of the company’s asset liability matching programme, which limits volatility of reported earnings as a result of interest rate swings.”

And commission and other income fell one per cent to $39.5 million, while short term claims and adjustment expenses increased 25 per cent to $27.8 million — mostly due to the two 2014 hurricanes.

Life and health policy benefits rose by 51 per cent to $121.3 million — a result of the increase in value policyholder benefits.

The 2014 report added that ratings agency AM Best had earlier affirmed financial strength rating of A (excellent) for BF&M’s two main Bermuda subsidiaries, the general insurance and life insurance arms.

The report added: “There is no insurance company in Bermuda domestic insurance business with ratings this strong.”

BF&M’s Cayman-based Island Heritage Insurance was upgraded to A (excellent) at the same time, while the Insurance Corporation of Barbados retained its A minus (excellent) score.