BF&M’s purchase of Cayman insurer Island Heritage helped push its profit for the first half of the year up by 7 percent to $12.2 million compared to $11.4 million in the six months to June 30, 2011, resulting in an annualised return on shareholders’ equity of 12 percent.Second-quarter profit rose from $5.7 million to $7.7 million.The insurance company said yesterday fewer people went overseas for treatment this year so far.“We were pleased overall with the financial performance of the company, which included the results of Island Heritage Holdings Ltd., a leading Cayman based company that writes property and casualty insurance in the Caribbean through one of its subsidiary companies,” BF&M president and CEO John Wight said yesterday.“BF&M’s recent 30 March, 2012 acquisition of Island Heritage further strengthened BF&M’s position as a strong regional insurer in the Caribbean, operating in thirteen countries, with three principal offices in Bermuda, Barbados, and Cayman.”Mr. Wight added that “the company’s balance sheet continues to be very strong. Equity attributable to shareholders at 30 June, 2012 was $202.3 million. Assets, including segregated funds, totaled $1.5 billion of which $85.8 million was held in cash and short term deposits. Based on the company’s strong balance sheet, the Board of Directors maintained the dividend of 20c per share for shareholders of record at 28 September, 2012.”BF&M reported a drop in life and health policy benefits.While many factors played into this drop, Mr. Wight said: “Health care costs, both in Bermuda and overseas, were at reasonable levels for the first six months of 2012.“Fewer overseas visits by our customers and less severe treatments in general resulted in a drop in the overseas claim costs versus 2011.“Local claims, particularly those from King Edward Memorial Hospital, increased period over period but not at the double digit rate it had in the past years.“BF&M is monitoring claims costs to determine whether the current more moderate level of claims is reflective of a trend, or the volatility that often occurs from quarter to quarter.”Earlier this week ratings firm AM Best reaffirmed the financial strength ratings of A (Excellent) for BF&M’s two principal operating subsidiaries in Bermuda; BF&M General Insurance Company Limited and BF&M Life Insurance Company Limited.BF&M’s two other principal operating businesses, Insurance Corporation of Barbados Limited, and Island Heritage Insurance Company Ltd., are both rated A- (Excellent) by A.M. Best.