AM Best has affirmed the financial strength ratings of BF & M and its subsidiaries citing its consistent overall profitability and leading market position in Bermuda.“The ratings of BF & M Life reflect its consistent favourable operating results, premium growth and strong level of capital and sizeable market share in Bermuda,” AM Best said.“Net income has remained positive over the last five years and has contributed to the company’s strong capital level through retained earnings while still maintaining a dividend to BF & M.“During 2012, the loss ratio at BF & M Life improved substantially and was primarily driven by lower health claims costs.” AM Best continued: “Partially offsetting these positive rating factors are BF & M Life’s margin pressure due to competition and economic conditions as well as the effect of the low interest rate environment on its pension business and investment income.“BF & M Life mainly operates in the local Bermuda market, which concentrates its business geographically and limits domestic growth opportunities.“The ratings for BF & M General recognise its favourable underwriting performance, excellent capitalisation and consistent overall profitability.In addition, BF & M General continues to maintain a leading market position in the domestic Bermuda market.” AM Best added: “Partially offsetting these positive rating factors are the geographic concentration of BF & M General’s business in Bermuda, its level of intra-group receivables and similar to its domestic peers, reliance on reinsurance to protect its earnings and capitalisation.“BF & M Life and BF & M General are well positioned at their current rating levels. Factors that can lead to negative rating actions include deterioration of operating performance and/or capitalisation, weakening within their business profiles (especially as it relates to BF & M Life’s health line of business) as well as potential losses in the mortgage portfolio of BF & M Life.”AM Best affirmed the A (Excellent) and issuer credit ratings(ICR) of “a” of BF & M Life Insurance Company Limited (BF & M Life) and BF & M General Insurance Company Limited (BF & M General).The agency also affirmed the ICR of “bbb” of the parent, BF & M Limited (BF & M).The outlook for all ratings is stable.