Profits at Bermuda insurer BF&M, which operates across much of the Caribbean, were hit hard by losses from Hurricanes Irma and Maria in the third quarter. This had a knock-on effect on its nine-month results.
The insurer made a net profit of $5.2 million in the nine months to September 30, 2017, a steep drop on the $19.2 million it made in the same period a year earlier.
Short term claims and adjustment expenses at the company increased by 57 percent to $28.3 million due to the 2017 catastrophe losses. Life and health policy benefits decreased by 24 percent to $82 million though this included changes in life insurance reserves which increased significantly in 2016 compared with a much smaller increase in 2017 in the same period.
Gross premiums written for the period were $256.6 million in the period, reflecting a decrease of 6 percent from the corresponding 2016 period as a result of a reduction in premiums on certain commercial properties. The company said the reduction had little impact on its bottom line.
John Wight, president and CEO of BF&M, said: “BF&M has operations in Bermuda and across the Caribbean. Although Bermuda was fortunate in avoiding a major hurricane this year, many of our Caribbean customers suffered dramatic losses from Hurricanes Irma and Maria.
“This significantly impacted BF&M's earnings in the third quarter. As an insurer, we are in the business of paying out claims after a catastrophe and we prepare for events of this magnitude. Our robust reinsurance programme limited the net impact of the storms on operating results at 30 September to $14.9 million. Excluding the impact from the storms, BF&M's results were strong on favourable non-catastrophe loss experience and positive fair value gains in the investment markets.”
Wight added: “Just over a month ago, and taking the impact of the 2017 hurricanes into account, AM Best reaffirmed our ratings. This reflects AM Best's confidence in our ability to be there for our customers when they need us. BF&M continues to hold the strongest ratings of any domestic insurance group in Bermuda and the Caribbean.”
BF&M, Caribbean, Cat losses, Hurricane Irma, Maria, Third quarter 2017 results, Bermuda