BF&M reports nine-month earnings of $21.1m
BF&M today released this press statement regarding the company’s results for the nine months up to September 30 this year.
BF&M reports earnings for the 9 month period to 30th September 2014 of $21.6 million
BF&M Limited today reported shareholders’ net income for the nine month period ended 30th
September 2014 of $21.6 million, resulting in an annualized return on shareholders’ equity of 12.1%.
Shareholders’ net income for the comparative nine month period of 2013 was $15.8 million.
President & CEO John Wight stated that “the core operating earnings in the first nine months of 2014
were slightly improved over the corresponding period in 2013. There were however certain anomalies
such as the change in interest rates, which moved in the company’s favor for the first nine months of
2014 which were outside of the company’s core operations, that benefitted our overall financial results”.
Mr. Wight added that “the financial impact of Hurricane’s Fay and Gonzalo will be recorded mostly in
Q4. The amount of claims incurred by BF&M resulting from the storms since the end of the third
quarter is not inconsequential. The Company has paid out over $10 million in respect of the storms thus
far. The Company does however have a conservative reinsurance program which limits the effects on
earnings to a manageable level”.
Following the approval of the third quarter financial results, the Board of Directors announced a
dividend of 22c per share for shareholders of record 31st December 2014. This 22c per share dividend
continues the increased quarterly dividend that the Board had approved earlier this year.
Equity attributable to shareholders at 30th September 2014 was $244.6 million. General fund assets
totaled $1.1 billion of which $80.2 million was held in cash and cash equivalents.
Gross premiums written for the period were $265.9 million, a decrease of 3% over 2013. Investment
income for Q3 reflected a $13.0 million increase in the value of investments for the period as interest
rates and credit spreads fell in during the year increasing the fair value of the company’s extensive fixed
Offsetting this was a $9.8 million increase in the value of policyholder benefits as a result of the
company’s asset liability matching program which limits volatility of reported earnings as a result of
interest rate swings. Commission and other income decreased 4% to $28.7 million. Short term claims
and adjustment expenses decreased by 13% to $15.8 million and life and health policy benefits increased
by 47% to $88.8 million, reflecting the increase in the value of policyholder benefits mentioned above.
Operating expenses increased 4% to $48.5 million.
Last quarter A.M. Best announced that it had affirmed financial strength ratings of A (Excellent) to
BF&M’s two principal Bermuda based insurance subsidiaries, BF&M General Insurance Company
Limited and BF&M Life Insurance Company Limited. There is no insurance company in Bermuda
writing domestic insurance business with ratings this strong. A.M. Best cited “BF&M General’s
favorable underwriting performance, excellent capitalization, and consistent overall profitability”. They
further cited “BF&M Life’s strong level of capital, consistent favorable operating results and sizeable
market share in Bermuda”.
A.M. Best had recently upgraded the financial strength rating of BF&M Limited’s Cayman based
company, Island Heritage Insurance Company Ltd. to A (Excellent) and affirmed the financial strength
rating A- (Excellent) for BF&M Limited’s Barbados based company the Insurance Corporation of
BF&M was recently awarded the Investors in People U.K. Gold Standard, a world-wide standard which
rewards best business practices of companies that successfully increase the productivity of its
organization to achieve success through its employees. BF&M was the first business in Bermuda to be
awarded this honor and now the first to be recertified.