BF&M Limited reported record half year results yesterday with a 169 percent increase in earnings of $8.9 million for the period ended June 30, 2005 compared with $3.3 million for the first six months in 2004.

The year-on-year difference for the domestic insurer is due mostly to fewer major group health claims in the first half of 2005 compared to the first half of 2004 which saw more severe and frequent claims, according to president and CEO John Wight.

"We had to increase premiums appropriately in response to increases put through by the Hospital Board effective April 1, but it has been more a case of fewer catastrophe claims (in the 2005 period)."

Last year, the company saw three premature baby claims that were very expensive for BF&M.

Thus far this year, it has not had any premature baby claims and as compared to the 2004 period, it has also have had less severe claims for patients directed overseas for service for such things as cancer and heart attacks.

"For the first six months of 2005 claims experience returned to more reasonable and expected levels. We continue however to be concerned about the rising cost of health care in Bermuda," Mr. Wight said.

BF&M also saw strong performance in all other insurance and non insurance lines of business.

"Every line of business is performing well whether it be the general business consisting of property and casualty, motor marine or life, health, annuity, pension, asset management or real estate. They all had very good results for the first six month period," he said.

Return on shareholders equity was 19 percent in the first half of 2005 versus nine percent in the 2004 period. Total assets for the consolidated group at June 30, 2005 were $293.7 million. Shareholders equity was $78.7 million.

Gross premiums written for the six month period increased 14 percent over 2004 to $60 million. Claims, benefits and claim expenses decreased by 1 percent to $32 million.

The first six months of 2005 also saw BF&M include several strategic initiatives to reallocate capital and focus the group on areas of profitability and growth.

These included the acquisition of the Canada Life Assurance Company Limited's individual life business in Bermuda, the incorporation of a new BF&M company called Bermuda International Insurance Services Limited to promote the sale of life insurance products to high net worth individuals in the international marketplace, and the acquisition of seven Sun Life Assurance Company agents to write new business through BF&M.

The company continues to negotiate with the Government of Barbados to acquire a majority interest in Insurance Corporation of Barbados Ltd. (ICBL) Mr. Wight hopes to conclude the agreement within the next 30 days.

BF&M's board increased the quarterly dividend by 2 cents to 14 cents per share as a result of the strong earning performance. The dividend is payable on October 14 to shareholders of record on September 30.