BF&M Ltd has reported net income of $13.9 million for the year ended December 31, 2024, about half of its 2023 net income of $27.2 million.

The lower number comes as insurance financials will soon begin to incorporate wider business in reflection of the company’s combination with its former domestic rival, the Argus Group.

Operating income, excluding the impact of external market factors such as the change in the fair value of investments and/or one-off exceptional gains or costs, was $17.9 million for the period, in line with the year ended December 31, 2023 (2023: $18.7 million).

Operating expenses, excluding expenses relating to the combination with Argus Group, remained flat at $56.5 million, as opposed to the prior year’s $57.2 million.

BF&M said: “These results announced today are in respect of BF&M Ltd on a stand-alone basis and do not reflect the combination with Argus Group Holdings that was completed on January 6, 2025.”

Core Investment income was strong at $19.3 million, and ahead of the prior year ($18.2 million). This gain largely resulted from increased bond and bank income on the group’s investment portfolios.

Property and casualty insurance contributed income before allocated expenses of $7.6 million, down from the prior year (2023: $22.6 million).

The company said: “While the business in Bermuda and Cayman benefited from attractive original property rates, this was offset by the continuing high cost of reinsurance.

“Performance in the Caribbean business was mixed. Given the high capital intensity of that business, we are reviewing our business in those Caribbean jurisdictions where returns on capital were below target levels. Finally, the P&C business, taken as a whole, benefited from the absence of significant catastrophe losses in 2024.”

Pensions contributed profit before allocated expenses of $16.6 million, ahead of the prior year (2023: $13.3 million). This rise reflected an increase in assets under management, primarily driven by investment performance.

Health insurance reported income before allocated expenses of $3.6 million, but the company noted the rising costs: “The business continues to experience rising claim costs year over year.

“Looking forward into 2025, a key focus will be on managing the cost of claims by leveraging the scale and systems of the enlarged group.”

Abigail Clifford, group president and chief executive, stated: “The profitability of the BF&M group overall in 2024 was in line with our expectations, supported by the strong performance of our investment portfolios, and resilient performances in both P&C Bermuda and our pensions business.

“In 2024 we continued to face the challenge of ever-growing health claims costs, but the combination with Argus now gives us greater scale to address that challenge as an enlarged business.

“2025 will be a transformational year as we combine our businesses and reshape our future. We look forward to the coming year with confidence.”

Fair-value adjustments had a net positive income impact of $17.7 million. This comprises $7.6 million from ALM portfolios — net change in fair value of assets less reserves — and $10 million from general insurance and surplus portfolios. In addition, the 2024 results benefited from exceptional profits arising from the sale of property.

The board has declared a dividend of $0.28 per BF&M share for all those on the share register as of March 28. This dividend is expected to be paid on April 11.