Hurricane and storm losses brought record claims for BF&M Ltd last year and their impact continued to be felt by the company in the shape of higher reinsurance costs during the first quarter.

The company has reported a net income of $3.1 million for the first three months of the year, down from $6 million in the same period last year.

“BF&M reported solid earnings for the first quarter of 2018, after one of the most challenging years in the group’s history. While impacted by higher reinsurance costs driven by the 2017 storms, our results reflect strong earnings in our life and health business and a return to profitability in our property and casualty lines,” said John Wight, president and chief executive officer.

He added: “The BF&M group continues to hold the highest ratings of any domestic insurer in Bermuda or the Caribbean. The company’s performance in 2017, after the most active storm season ever in the Caribbean, attested to the significance of our financial strength ratings. With the 2018 hurricane season under way, our customers can be confident that BF&M will be there for them when

The BF&M group consists of four main insurance operating companies, AM Best has assigned financial strength ratings of A (excellent) to Bermudian-based BF&M General Insurance Company Limited and BF&M Life Insurance Company, and Cayman Islands-based Island Heritage Insurance Company Ltd, with an A- (excellent) to Barbados-based Insurance Corporation of Barbados Limited.

Equity attributable to shareholders at the end of March was $262.7 million. General fund assets totalled $1.7 billion of which $267.5 million was held in cash and cash equivalents.

The group had gross premiums written for the period of $77.9 million, down 3 per cent year on year. This was due to a reduction in premiums on certain commercial properties and from premium rates pressure in some territories.

Investment income for the year reflected a $10 million decrease in the fair value of investments for the period.

BF&M said in a statement: “As a result of the company’s disciplined asset liability matching policy, which looks to limit volatility of reported earnings as a result of interest rate swings, the company reported a negligible net loss on the difference between the fair value of investments which support certain liabilities and reported reserves.”

Commission and other income increased from the prior year by 26 per cent to $12.9 million.

The company said the impact of hurricanes Irma and Maria, last year “continued to negatively impact commission income in the current year, but the impact was more than offset by additional reinsurance coverage and higher levels of proportional reinsurance ceded due to changes in our reinsurance programme and profit share reported on non property business”.

Short term claims and adjustment expenses decreased 11 per cent to $5.8 million from favourable claims experience. Life and health policy benefits decreased by 42 per cent to $16.2 million. Operating expenses decreased 6 per cent to $15.3 million for the year.