Insurance company BF&M put last year's legal problems behind it yesterday when it announced $5 million half year profits.
In a release issued last night, net earnings were listed as $5,001,142, a 41 percent increase over the same period last year.
Glenn Titterton, president and CEO of BF&M Ltd. said in the statement: "This result demonstrates the underlying strength of our business even after the enormous expenses of 1999.'' In 1999 BF&M agreed to a $35 million settlement with liquidators and creditors of the failed Bermuda Fire & Marine Insurance Company Ltd.
The company also paid out legal costs of $41.7 million in connection with the case.
Those expenses resulted in BF&M realising a loss of $29.6 million dollars in its last financial year.
Mr. Titterton explained the impact those payouts made on the company in the statement, which was not accompanied by an income statement or balance sheet.
"The payment reduced the surplus funds that we have available for investment, with the obvious result that there is a reduction in investment income,'' he said. "Secondly, because part of the settlement was financed through a bank loan, the cost of servicing that loan increases our expenses.
"These changes in income and expenses impact the financial results of each of the profit centres and are mirrored in the consolidated results of the parent company,'' he added.
John Wight, BF&M's executive vice president of finance said: "Gross premiums increased to $35.3 million but increased reinsurance costs and reduced investment income resulted in total income reducing by one percent to $34.1 million.
"Total expenses increased by four percent principally because of the loan costs mentioned.'' At June 30, 2000 total assets stood at $155 million with shareholder equity at $41 million.
"Leaving our legal difficulties behind us in 1999,'' said Mr. Titterton in his letter to shareholders, "we entered 2000 with enthusiasm and with a plan of action.
"This plan is now being implemented at a rapid pace and our success in introducing Bermuda's first insurance online quote and buy web facility is a tangible sign of our forward planning and our aggressive new image.'' Good results: Glen Titterton
