The management of Allshores Ltd, the merged entity of Argus and BF&M, is wary of the impact of looming pension reforms on the business, and the domestic insurer is facing pressure on health insurance claims.

The company revealed this during its first quarter trading update filed with the Bermuda Stock Exchange, in which it was said that operating profit for the first quarter of 2025 was in line with management expectations.

Full-year results are expected to include a significant one-time “bargain purchase gain” in accordance with acquisition accounting standards, reflecting the group’s amalgamation at the beginning of the year.

Allshores said: “While this will result in a notable uplift in reported profit, we continue to view pre-gain profit as a more meaningful indicator of underlying business performance.

“The company will report its financial results for the first half of 2025 in the latter part of August. This will be the first time that combined accounts reflecting the results of both legacy businesses (BF&M and Argus) will be published.”

Directors declared a dividend of 28 cents per common share for the first quarter of 2025, payable to shareholders of record of Allshores Limited as of close of business on June 16, with payment scheduled on or around June 30.

The company reported strong core investment income, with growing interest income driving robust core investment income and fair market value gains driving total returns.

The statement said: “The balance sheet was defensively positioned during the quarter, and our multi-asset portfolios delivered positive returns despite broader equity market declines.

“While the outlook for the remainder of the year remains uncertain due to ongoing macroeconomic volatility, we believe our current positioning equips us well to navigate potential turbulence in public markets.”

Pensions performance was consistent with the prior year, although looking forward, management said it is mindful of the impact of the forthcoming pension reforms on business.

With regard to the health insurance business, margins for the consolidated health book remain tight, with Q1 experiencing a higher frequency of high-cost overseas claims.

Although local claim volumes have moderated in recent months, the average cost per claim remains elevated compared to the same period last year.

The statement continued: “Annual pricing adjustments continue to be necessary to offset inflationary pressures affecting claims. At the same time, targeted claims management initiatives are being introduced to enhance cost control and operational efficiency as part of the integration of the legacy BF&M and Argus businesses.

“These actions mark the first phase of a broader programme aimed at leveraging our scale to improve service delivery and ultimately moderate the growth trajectory of claims costs.”

The Bermuda property & casualty business performed in line with expectations, and European P&C business benefited from favourable actuarial reserve developments in the quarter.

In the Caribbean, the company said: “P&C business in Q1 was negatively impacted by elevated motor claims in a number of jurisdictions. More broadly, the Caribbean property business is operating in an environment where the cost of reinsurance has risen markedly over recent years. Accordingly, we are reviewing our regional portfolio to address margins that are below longer-term expectations.”