Report to shareholders
Abigail Clifford
Group President and Chief Executive Officer
L. Anthony Joaquin
Group Chair
As we mark the halfway point of this year, we are pleased to present our six month report, detailing our financial performance and the strategic steps we are taking to bring our customers peace of mind and create value for shareholders.
As we mark the halfway point of this year, we are pleased to present our six month report, detailing our financial performance and the strategic steps we are taking to bring our customers peace of mind and create value for shareholders.
A resilient first six months
We are pleased with the company’s performance in the first half of the year, particularly our ability to sustain earnings in the face of ongoing macroeconomic headwinds and to push forward with internal efficiency projects to further modernise our operations.
We reported a consolidated net income for the six months of $7.5 million. The Company’s combined insurance service and net investment result was a gain of $21.6 million, driven by higher core investment income, reduced but favourable reserve and ALM movement, and an increase in the insurance result within our Life and Health business. This compared to a net income of $13.9 million in the same period in 2023. Shareholders’ equity remains strong at $301.9 million, an increase over 31 December 2023, supported by our high-quality general fund asset portfolio totaling $962.3 million.
BF&M’s investment portfolio performed well in the first half of the year, driven by strong market fundamentals and higher bond and interest rates, which bolstered our core investment income. We anticipate that our investment income will continue to benefit from the higher interest rate environment over the next several years.
Our Property and Casualty business was impacted by higher reinsurance costs and losses from a limited number of individual property events at Island Heritage. These were partially offset by higher investment, property and motor insurance revenue, and commission income which generated favourable results.
Within our Life and Health business, we remain committed to mitigating the impacts of rising loss trends in our Group Health business. As we continue to navigate this challenging environment, we reported a slight improvement in our Group Health and Life results during the second quarter, enabling us to generate a positive insurance service result.
Our Pension business continues to be a strength, with positive financial contributions and a healthy influx of new business.
A resilient first six months
We are pleased with the company’s performance in the first half of the year, particularly our ability to sustain earnings in the face of ongoing macroeconomic headwinds and to push forward with internal efficiency projects to further modernise our operations.
We reported a consolidated net income for the six months of $7.5 million. The Company’s combined insurance service and net investment result was a gain of $21.6 million, driven by higher core investment income, reduced but favourable reserve and ALM movement, and an increase in the insurance result within our Life and Health business. This compared to a net income of $13.9 million in the same period in 2023. Shareholders’ equity remains strong at $301.9 million, an increase over 31 December 2023, supported by our high-quality general fund asset portfolio totaling $962.3 million.
BF&M’s investment portfolio performed well in the first half of the year, driven by strong market fundamentals and higher bond and interest rates, which bolstered our core investment income. We anticipate that our investment income will continue to benefit from the higher interest rate environment over the next several years.
Our Property and Casualty business was impacted by higher reinsurance costs and losses from a limited number of individual property events at Island Heritage. These were partially offset by higher investment, property and motor insurance revenue, and commission income which generated favourable results.
Within our Life and Health business, we remain committed to mitigating the impacts of rising loss trends in our Group Health business. As we continue to navigate this challenging environment, we reported a slight improvement in our Group Health and Life results during the second quarter, enabling us to generate a positive insurance service result.
Our Pension business continues to be a strength, with positive financial contributions and a healthy influx of new business.
Anchoring the business in disciplined underwriting and unparalleled service
For over a century, BF&M has been guided by the desire to help our customers in Bermuda and the international communities we serve to protect what matters most. The past few years have been difficult for our industry, and we have been transparent about the challenges we are facing – including the impacts of rising reinsurance costs and diminishing reinsurance capacity, as well as soaring healthcare costs and increased utilisation.
Against this backdrop, our focus continues to be on enhancing our financial resilience through prudent risk selection and rate action. We are committed to ensuring adequate compensation for every risk that we write.
In Property and Casualty, BF&M had a successful reinsurance renewal on April 1st, navigating once again through a difficult market. We have continued to advance our product harmonisation efforts, which are on track for completion this year.
We also proactively de-risked certain elements of our property portfolio, which we believe will benefit our underwriting results over the long-term. And at the same time, we continue to innovate – preparing to launch a new Marine Cargo product in Cayman in September that is currently being socialised with brokers.
In Life and Health, our primary focus is on cost containment strategies. This includes negotiating with our overseas healthcare providers to secure lower fees for our customers. Meanwhile, our efforts to keep care on island have led to a new partnership with Arscott Surgical Suite, enabling select surgeries to be completed locally.
We have also been dedicated to empowering our insureds through informative presentations aimed at educating them on market conditions, the factors driving the rising costs of premiums, and strategies for managing healthcare expenses. As always, we remain committed to helping our insureds stay healthy and avoid costly treatments in the future by offering a robust suite of preventative care and wellness benefits.
Anchoring the business in disciplined underwriting and unparalleled service
For over a century, BF&M has been guided by the desire to help our customers in Bermuda and the international communities we serve to protect what matters most. The past few years have been difficult for our industry, and we have been transparent about the challenges we are facing – including the impacts of rising reinsurance costs and diminishing reinsurance capacity, as well as soaring healthcare costs and increased utilisation.
Against this backdrop, our focus continues to be on enhancing our financial resilience through prudent risk selection and rate action. We are committed to ensuring adequate compensation for every risk that we write.
In Property and Casualty, BF&M had a successful reinsurance renewal on April 1st, navigating once again through a difficult market. We have continued to advance our product harmonisation efforts, which are on track for completion this year.
We also proactively de-risked certain elements of our property portfolio, which we believe will benefit our underwriting results over the long-term. And at the same time, we continue to innovate – preparing to launch a new Marine Cargo product in Cayman in September that is currently being socialised with brokers.
In Life and Health, our primary focus is on cost containment strategies. This includes negotiating with our overseas healthcare providers to secure lower fees for our customers. Meanwhile, our efforts to keep care on island have led to a new partnership with Arscott Surgical Suite, enabling select surgeries to be completed locally.
We have also been dedicated to empowering our insureds through informative presentations aimed at educating them on market conditions, the factors driving the rising costs of premiums, and strategies for managing healthcare expenses. As always, we remain committed to helping our insureds stay healthy and avoid costly treatments in the future by offering a robust suite of preventative care and wellness benefits.
Moving forward together
In June 2024, we announced our decision to sign an amalgamation agreement with Argus Group, which we expect to close in the fourth quarter of 2024 subject to regulatory and shareholder approval.
Our future with Argus is built on our shared heritage as Bermudian businesses and commitment to developing innovative solutions that improve the quality of life for our island and ensure expansive access to care. Together, we are planning to build a multi-line insurer with an enhanced portfolio of businesses across key geographies, greater scale to help mitigate rapidly rising costs, and the ability to invest in enhanced digital offerings – in addition to a higher quality earnings profile and strong capitalisation.
We are extremely excited for what lies ahead as we pursue this amalgamation. We entered the proposed combination with the goal of meaningfully accelerating our progress across BF&M’s three strategic pillars – growth, efficiency, and service. As one unified enterprise, we will do just that, and be in an even better position to navigate an evolving insurance landscape for the benefit of our customers, shareholders, and the community.
Moving forward together
In June 2024, we announced our decision to sign an amalgamation agreement with Argus Group, which we expect to close in the fourth quarter of 2024 subject to regulatory and shareholder approval.
Our future with Argus is built on our shared heritage as Bermudian businesses and commitment to developing innovative solutions that improve the quality of life for our island and ensure expansive access to care. Together, we are planning to build a multi-line insurer with an enhanced portfolio of businesses across key geographies, greater scale to help mitigate rapidly rising costs, and the ability to invest in enhanced digital offerings – in addition to a higher quality earnings profile and strong capitalisation.
We are extremely excited for what lies ahead as we pursue this amalgamation. We entered the proposed combination with the goal of meaningfully accelerating our progress across BF&M’s three strategic pillars – growth, efficiency, and service. As one unified enterprise, we will do just that, and be in an even better position to navigate an evolving insurance landscape for the benefit of our customers, shareholders, and the community.
Moving forward together
In June 2024, we announced our decision to sign an amalgamation agreement with Argus Group, which we expect to close in the fourth quarter of 2024 subject to regulatory and shareholder approval.
Our future with Argus is built on our shared heritage as Bermudian businesses and commitment to developing innovative solutions that improve the quality of life for our island and ensure expansive access to care. Together, we are planning to build a multi-line insurer with an enhanced portfolio of businesses across key geographies, greater scale to help mitigate rapidly rising costs, and the ability to invest in enhanced digital offerings – in addition to a higher quality earnings profile and strong capitalisation.
We are extremely excited for what lies ahead as we pursue this amalgamation. We entered the proposed combination with the goal of meaningfully accelerating our progress across BF&M’s three strategic pillars – growth, efficiency, and service. As one unified enterprise, we will do just that, and be in an even better position to navigate an evolving insurance landscape for the benefit of our customers, shareholders, and the community.