BF&M Ltd generated $10.4 million of shareholders’ net income in the first half of this year, down from $11.4 million in first six months of 2019, the company announced today.

John Wight, the insurer’s group chairman and chief executive officer, said the results from operations had exceeded expectations during the pandemic-impacted period.

“Our focus, during a time that has been so challenging for so many, has been on dialogue with our clients to be there at their time of need, and on the optimisation of our operations,” Mr Wight said.

He added: “We were able to report strong operating results for the first half of 2020.

“Both our property and casualty operations and our life and health businesses performed well, supported by solid investment rebounds.

“Our results from insurance operations and investment advisory services were better than expected.” The results include those from the Insurance Corporation of Barbados Ltd, a group company that was sold, effective last week. BF&M said on September 2 that it had sold its 51 per cent stake in the Barbadian insurer to Paynes Bay Finance.

Gross premiums written for the period decreased from the prior year by 10 per cent to $149.2 million. BF&M said this was driven by an expected shift of health premiums between the company and the amounts allocated to the Bermuda Government as part of Bermuda’s health financing reforms, along with lower property and casualty premiums and life premium stemming from Covid-19 impact.

Short-term claims and adjustment expenses decreased 36 per cent to $4.2 million. Life and health policy benefits decreased by 27 per cent to $55.7 million.

The fall in health benefits also relates to government reforms.

The company explained: “Government’s health financing reform came into effect on June 1, 2019, which resulted in local health insurers no longer being responsible for most of the services provided by the Bermuda Hospitals Board.

“Those services are no longer charged through premiums and paid for through health benefits. Thus premiums and life and health benefits are lower for the six months ended June 30, 2020 versus the same period for 2019.”

BF&M said equity attributable to shareholders at June 30, 2020, was $287.1 million, suggesting that the insurer’s shares are trading at only about 56 per cent of their book value.

BF&M’s shares last changed hands on the Bermuda Stock Exchange at $18, giving the insurer a market capitalisation of about $160.6 million.

General fund assets at June 30 totalled $1.5 billion, of which $119.2 million was held in cash and cash equivalents.

Operating expenses increased 10 per cent to $26.3 million for the period.

All of the group’s main insurance operating companies, BF&M General Insurance Company Ltd, BF&M Life Insurance Company Ltd and Island Heritage Insurance Company Ltd of the Cayman Islands, have an financial strength rating of A (excellent) from AM Best.