BF&M first half income drops on reinsurance costs

Bermuda domestic insurer BF&M said net income dropped 46% in the first half of the year as the company increased its property reinsurance. 

The insurer, which plans to merge with rival Argus, said net income fell to $7.5 million for the six months ended June 30, compared to $13.9 million in the same period in 2023.

The company said its combined insurance service and net investment result under IFRS 17 was $21.6 million versus $31.3 million in 2023. 

It said the increase in net reinsurance expenses for property offset favourable but reduced net fair value surplus and favourable reserve release. 

"We are pleased with our company’s performance in the first half of the year, despite ongoing macroeconomic headwinds," said Abigail Clifford, Group President and CEO. "Our core investment income was strong, continuing to benefit from higher-for-longer interest rates and a robust stock and bond market environment. 

"Our pension business also performed well in this buoyant investment climate, delivering excellent results. 

"On the insurance side, we observed slight improvements in our group health and group life results as we navigate an extremely challenging environment alongside our customers. 

"Earlier this year in P&C, we proactively de-risked certain elements of our property portfolio, which, as anticipated, led to a short-term impact on our underwriting results."

Clifford said the planned merger with Argus was "a compelling opportunity to build a stronger, more diversified organisation that will benefit all stakeholders and enhance our ability to serve our customers, shareholders, and the community". 

The merger is expected to be completed in the fourth quarter and require shareholder and regulatory approval. 

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